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  • 日产汽车(NISSAN MOTOR)2023年ESG报告(英文版)(165页).pdf

    Introduction The ESG data book 2023 is a tool to demonstrate Nissans policies and performance in the.

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    How can we advance sustainability?2024 Environmental Sustainability Report Reporting on our 2023 fi.

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    CrossroadsSustainability report 2023Contents03 Foreword by the board of management 06 strategy and m.

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    Corporate Governance Report 2023Compensation Report 2023Articles of Association of Nestl S.A.Amended.

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    Creating Shared Value and Sustainability Report 2023Advancing regenerative food systems at scaleCont.

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    FY23 Environmental,Social and Governance ReportNow is the momentTo drive greater impact for business.

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  • 丸红株式会社(MARUBENI)2024年可持续发展报告(英文版)(204页).pdf

    GLOBALCROSSVALUEPLATFORMMarubeni CorporationSUSTAINABLE DEVELOPMENT REPORT 2024CONTENTSContents 1Editorial Policy 2Our Views on Sustainability3Our Views on Sustainability 4Organization 5Assessment of Sustainability Risk 6Engagement with Stakeholders 10Participation in International Initiatives 11Materiality for Marubeni Group 21The Idea of Materiality for Marubeni Group 22Fundamental Materiality 23Environmental&Social Materiality 24Identification and Review Process of Materiality 26Environment 27Environmental Management 28Climate Change 35Sustainable Forestry 43Conservation of Biodiversity and Habitats 50Water Management 55Environmental Data 59Social 69Respect for Human Rights 70Occupational Health and Safety 78Health and Productivity Management 85Responsibility to Customers 94HR Management 104Diversity Management 111Social Data 120Supply Chain 126Policy 127Group-wide Initiatives 129Sustainability Surveys to Suppliers 132Initiatives for Individual Commodities 135Governance 139Appendix Corporate Governance Report I Basic Views on Corporate Governance,Capital Structure,Corporate Profile and Other Basic Information II Business Management Organization and Other Corporate Governance Systems regarding Decision-making,Execution of Business,and Oversight in Management III Implementation of Measures for Shareholders and Other Stakeholders IV Matters Related to the Internal Control System V OtherExternal Recognition 195Green Bond 200ESG Content Index 201Marubeni Corporation Sustainable Development Report 20241Provides contents of the Sustainable Development Report 2024 and relevant information to supplement the Sustainable Development Report.List of Relevant Website InformationOur Company https:/ ContentsMarubeni Management PhilosophyVision for the Marubeni of the Future Directors,Audit&Supervisory Board Members,and Executive OfficersMid-Term Management StrategyOrganizationMajor Group CompaniesSustainabilityhttps:/marubeni.disclosure.site/en/Main ContentsOur Views on SustainabilityEnvironmentSocialGovernanceTo Investors https:/ ContentsFinancial ResultsIR Meeting on Financial Results Consolidated Financial Statements with Independent Auditors ReportIntegrated ReportBusiness ReportOur Business https:/ Development Report 2024 summarizes information pertaining to each ESG item that we disclose on our Sustainability Website and in the Integrated Report,etc.Our views on sustainability and related policies and initiatives that appear in this report were first considered and discussed by the Sustainability Management Committee and have been reported to and adopted with the approval of the Board of Directors.We will continue to improve the report to serve as a tool for communicating with stakeholders and gaining the trust of greater society.Reporting PeriodThe information covered in this report is primarily from FYE 3/2023(April 1,2022 to March 31,2023).Parts of the report also cover policies and initiatives from before and after the reporting period,mainly as of January 31,2024.Please refer to our website for the latest information.Reporting ScopeThe scope of this report covers Marubeni Corporation and its consolidated subsidiaries.Guidelines ReferencedSDGs(Sustainable Development Goals)GRI Sustainability Reporting Standards(GRI Standards)IFRS Foundation:International Integrated Reporting FrameworkLatest report from the Recommendations of the Task Force onClimate-related Financial Disclosure(TCFD)Publication DateApril 2024(English version)Disclaimer Regarding Forward-Looking Statements and Original LanguageThis report contains forward-looking statements about the future performance,events or management plans of Marubeni Corporation and its Group companies(the Company)based on the available information,certain assumptions and expectations at the point of disclosure,of which many are beyond the Companys control.These are subject to a number of risks,uncertainties and factors,including,but not limited to,economic and financial conditions,factors that may affect the level of demand and financial performance of the major industries and customers we serve,interest rates and currency fluctuations,availability and cost of funding,fluctuations in commodity and materials prices,political turmoil in certain countries and regions,litigation claims,changes in laws,regulations and tax rules,and other factors.Actual results,performances and achievements may differ materially from those described explicitly or implicitly in the relevant forward-looking statements.The Company has no responsibility for any possible damages arising from the use of information in this report,nor does the Company have any obligation to update these statements,information,future events or otherwise.This report is an English language translation of the materials originally written in Japanese.In case of discrepancies,the Japanese version is authoritative and universally valid.Editorial PolicyMarubeni Corporation Sustainable Development Report 20242Our Views on Our Views on SustainabilitySustainabilityOur Views on Sustainability 4Organization 5Assessment of Sustainability Risk 6Engagement with Stakeholders 10Participation in International Initiatives 11Marubeni Corporation Sustainable Development Report 20243Our Views on SustainabilityOrganizationAssessment of Sustainability RiskEngagement with StakeholdersParticipation in International InitiativesOur Views on SustainabilityOur Views on SustainabilityCompany CreedFairness:Act with fairness and integrity at all times.Innovation:Pursue creativity with enterprise and initiative.Harmony:Give and earn the respect of others through cooperation.In accordance with the spirit of the Company Creed of“Fairness,Innovation,and Harmony,”the Marubeni Group is proudly committedto social and economic development and safeguarding the global environment by conducting fair and upright corporate activities.Our Management Philosophy clearly expresses our views on sustainability.To us,sustainability means proactively engaging inenvironmental and social issues and challenges,delivering solutions through innovation,and living by the Management Philosophy.Corporate value is composed of financial and non-financial value;non-financial value in particular is steadily growing in importance.Withregard to sustainability,such issues as climate change,the depletion of forestry resources and human rights issues pose grave threats tosocial and environmental sustainability.Adopting and implementing clear medium-and long-term corporate policies regarding theseissues is directly related to increasing non-financial value and corporate value.Until now,to increase corporate value,each of our businesses has generally created its own innovative business model in anticipation ofthe challenges facing society.From now on,however,we will further fortify our traditionally strong businesses(vertical evolution)and also leverage internal and externalexpertise in order to generate better results than would otherwise be possible(horizontal expansion).This is the concept of our Globalcrossvalue platform;it will provide solutions for social and environmental problems and guide us in working toward a better tomorrow byproviding a framework for promoting social and economic development and conserving the global environment.Click here for ESG Content IndexMarubeni Corporation Sustainable Development Report 20244OrganizationOur governance structure allows for adequate Board supervision of important sustainability-related issues.Specifically,the Sustainability Management Committee,reports to the President,leads on the formulation of strategy,evaluation ofprogress and revision and monitoring of metrics and targets relating to sustainability,including climate change,water management,pollution prevention,sustainable forestry,biodiversity,circular economy,occupational health and safety,respect for human rights,contribution to local communities,supply chain management and responsibility to customers.The Committee reports important matters tothe Corporate Management Committee and the Board of Directors once a year as a minimum,which are then deliberated and voted on.The Sustainability Management Committee is chaired by the CSDO(Chief Sustainable Development Officer)and Outside Officers are alsocounted as members of the committee in an advisory role to support the management and supervision of sustainability-related mattersfrom an independent external perspective.Starting April 1,2019,we take the following steps to enhance our sustainability management organization:A Chief Sustainable Development Officer serves as the head of the Sustainability Management Committee.A Sustainability Management Department is newly established within the Corporate Staff(CS)Group to coordinate sustainability managementamong the Business Divisions,the CS Group,and our branches,offices and local subsidiaries.A Sustainability Leader in charge of sustainability management is appointed in each Business Division,each department within the CS Group,andat each branch,office and overseas corporate subsidiary.A Sustainability Manager is also appointed in each business department.Sustainability Management OrganizationMarubeni Corporation Sustainable Development Report 20245Assessment of Sustainability RiskESG Risk Research/AnalysisAs part of our efforts to strengthen ESG risk management,we have established the following framework for conducting research andanalysis.Risk Analysis of Existing Businesses1.ESG Risk AnalysisMarubeni conducted research and analysis of all products and projects handled by the Company for potential ESG risks,throughcollaboration with an external consultant with objective perspectives and methods.For the risk analysis,we referred to the ESG risk-related data published by international organizations,government organizations,research institutions,NGO organizations,etc.,then narrowed down the focus to approximately 30 products and projects that are generallylikely to have potential ESG risks,and carried out detailed risk analysis on them.For more information,please refer to the ESG RiskResearch/Analysis Process below.2.Sustainability of Consolidated SubsidiariesIn order to ensure sustainable business operations at the Marubeni Groups consolidated subsidiaries around the world,we conducted asustainability survey of our consolidated subsidiaries from the fiscal year ended March 31,2020 to the fiscal year ended March 31,2021.No problems requiring immediate action were identified as a result of this survey.Since then,based on this result,we have continued tomonitor risk factors,including the presence or absence of changes in their business models that could affect their sustainability riskprofile.Click here for more information on the sustainability surveys for consolidated subsidiaries3.Researching Supply Chain RisksMarubeni communicates its Basic Supply Chain Sustainability Policy(hereinafter“Basic Policy”)to its suppliers,and requests theirthorough understanding,as well as cooperation and compliance with the Basic Policy.We conduct due diligence analysis and riskassessment of all suppliers,new and existing,through questionnaires and on-site surveys.When a case of non-compliance is confirmed,we provide guidance or review our business with the supplier.By ensuring widespread and thorough understanding of the Basic Policy,wework to reduce social and environmental risk.Sustainability Risk Assessment of Development Projects and Financing/InvestmentIn the fiscal year ended March 31,2021,Marubeni adopted a“Sustainability Assessment Tool”based on international risk managementstandards such as the Global Slavery Index and Corruption Perceptions Index,in order to conduct prior assessments of sustainability risksinvolved in new investments and development projects environmental and social,particularly occupational health and safety,andhuman rights to inform the decision-making procedure and respond to the needs of society.Marubeni Corporation Sustainable Development Report 20246Previously,we had been using an environmental assessment toolfor projects to identify environmental risks but in recent years ESG-based risk management with a broader scope and perspective isbeing called for reflecting the growing expectations and demandsof the stakeholders.Consequently,we have adopted this tool as away of assessing and identifying overarching sustainability risks.Projects which are deemed to pose risks as a result of these checksare followed up with further inquiries and this process is repeateduntil all concerns have been dispelled.Furthermore,when considering investment or loan projectsinternally,we quantify and visualize the carbon price as a referencevalue,based on the assumed GHG emissions(Scope 1 and Scope 2)of each project.The carbon price used is a theoretical value which iscomprehensively reviewed and calculated in-house using data fromvarious external institutions.For the fiscal year ended March 31,2023 the annual average price was about 80/t-CO2.The following table shows the number of assessments of risksidentified through the application of this risk assessment tool toassess new projects in the fiscal year ended March 31,2023.Process of Managing Sustainability Risk in Investments and LoansNumber of Sustainability Risk Assessments in the Fiscal Year Ended March 31,2023 by Risk TypeEnvironmentalClimatechangeWaterpollutionAirpollutionSoilpollutionNoise/Vibration/OffensiveodorChemicalsBiodiversityWaterresourceWasteOtherenvironmentalissuesTotal19960100675062Occupational Health and SafetyMachine safetyFires andexplosionsToxic substanceexposureInfectionHazardousoperationsOther safety issuesTotal201110120163Marubeni Corporation Sustainable Development Report 20247SocialForced labor andhumantraffickingChild laborWorking hoursWages andemploymentcontractsDiscriminationHarassment atwork anddisciplinarymeasuresRespect fordiversityFreedom ofassociation andthe right tocollectivebargaining251664180010Land issuesNegative socialimpact on localcommunitiesIndigenouspeoples andculturalheritageConflictmineralsPrivacyAnimal welfareResponsiblemarketingMitigationmeasures andadministrativeprocedures(supply chain)Total218000011101We also monitor the environmental and social impact of business projects initiated by our consolidated subsidiaries through the annualSustainability Information Survey and conduct risk assessments.In addition,we are working to further strengthen the governance of theMarubeni Group through communication of the Marubeni Group Governance Policy and sharing its aims with Group companies,as wellas strengthening their management by clarifying the roles of the Group companies and Marubeni as shareholder/owner.ESG Risk Research/Analysis ProcessMarubeni shares the Basic Supply Chain Sustainability Policy(hereinafter“Basic Policy”)with the suppliers,and thoroughly requests themto comprehend,as well as cooperate and comply with the Basic Policy.We conduct due diligence analysis and risk assessment throughquestionnaires and on-site surveys,to all suppliers,new and existing.When a non-compliance case is confirmed,we provide guidance orreconsider doing business with the supplier.By ensuring widespread and thorough understanding of the Basic Policy,we work to reducesocial and environmental risk.1.Preparation for ESG Risk EvaluationReview and organize all products/projects handled by the Company2.Conduct ESG Risk Primary Evaluation/AnalysisStep 1:Conduct ESG risk evaluation for all products/projects Specify high-riskproducts/projectsStep 2:Conduct risk evaluation of high-risk products/projects by ESG issue Narrow down to the final list of high-risk products/projectsMarubeni Corporation Sustainable Development Report 202483.Conduct ESG Risk Secondary Evaluation/AnalysisStep 1:Create risk profiles of the final high-risk products/projectsStep 2:Conduct general ESG country risk analysis for Marubenis supplier/project countriesGeneral Environmental/Social Risk Evaluation in Supplier/Project Country(for image only)General ESG countryrisk evaluationSupplier/project countryCountry ACountry BCountry CCountry DCountry EEnvironmentBiodiversityhighlowvery highhighlowWater usemoderatemoderatemoderatelowhighClimate changelowlowhighhighlowNatural disaster/pollutionhighlowmoderatelowhighSocialWorking hoursmoderatehighmoderatelowlowWageslowlowlowlowhighForced laborlowlowhighlowlowChild laborhighlowmoderatelowmoderateGovernanceCorporategovernancemoderatehighmoderatevery highmoderate*The levels for each country in the chart are not representations of actual research results.*The levels/areas are not representations of actual research results.Marubeni Corporation Sustainable Development Report 20249Engagement with StakeholdersThe Marubeni Group conducts business with the support of various stakeholders throughout the world.Marubeni recognizes theimportance of diligently listening to the opinions of stakeholders,and moving forward together,based on an understanding ofstakeholder interests and concerns,as well as the impact of the Companys activities on society and the environment.We conduct sustainability-specific interviews with various stakeholders to exchange views on environmental issues,includingenvironmental management,as well as climate change,biodiversity,human capital,supply chain management,human rights,andoccupational health and safety.StakeholdersApproachEngagement methodsCustomers&BusinessPartnersAiming to be a company that enjoys the trust andconfidence of customers and business partners,westrive to develop and offer products and services thatare useful to society as well as safe.Furthermore,weconstantly strive to improve satisfaction and earn trustby responding sincerely to feedback from ourcustomers and business partners.Integrated reports,official websiteResponding sincerely based on the Marubeni Corporate Principlesand Basic Supply Chain Sustainability PolicyWebsite inquiry and contact pageSupply Chain Sustainability SurveyShareholders&InvestorsMarubeni is dedicated to meeting shareholdersexpectations.We strive thus to enhance our corporatevalue by responding to changes in the businessenvironment and maintaining stable profitability.Inaddition,we work to boost corporate value from socialand environmental perspectives,and also disclosepertinent information in a fair and timely manner.Integrated reports,official website and Shareholders ReportsGeneral Meeting of ShareholdersBriefings for retail investorsIR activitiesResponse to ESG investment Index survey organizationLocalCommunityWe aim to become a valued member of the localcommunities where we do business,and to contributeto the creation of robust local districts throughimprovement of living standards,creation of jobopportunities for the local community,includingyouths,and offering employment with diversity andinclusion,being aware of gender and disabilities.Overseas,we respect local laws,cultures and customs,and strive to operate our businesses in a way thatcontributes to local development.Furthermore,weare firmly opposed to antisocial forces and groupsthat threaten the order and safety of society.Social welfare funding by the Marubeni FoundationSupport through scholarships and donations overseasAssociation with NGOs and NPOsStakeholder dialoguesActivities implemented through business and industry groups Receiving company toursCultural contributions through the Marubeni CollectionEmployeesWe respect the individual values and life goals of eachand every employee.We also work hard to eliminateall forms of discrimination and foster an atmospherethat is pleasant for all.Employee Awareness surveysCompliance Access Point(Marubeni Hotline(formerly,“Door of Courage”)Marubeni Group magazine,company intranetDialogue between management and employeesDiscussions with the Marubeni Employee UnionTrainings*1In accordance with the view of Japan Business federation(Keidanren)that corporate political donations play an important role as part of thecontribution to society,and its high evaluations on Liberal Democratic Party of Japan in terms of policy making,Marubeni makes politicaldonation as follows.Organization to donate:The Peoples Political Association(political fund organization of Liberal Democratic Party of Japan)Political donation:FYE 3/2022:28 million yen/FYE 3/2023:28 million yen(The donation in each year is only to The Peoples Political Association)We confirm that these donations are not in violation of our anti-corruption provision,“Prohibition on Bribes and Administration of Entertainmentand Gifts”,stipulated in our Compliance Manual.Additionally,the Groups consolidated subsidiaries,and overseas branches and offices do not make political contributions,as stipulated by thePolitical Funds Control Act in Japan,and thus no such contributions were made in FYE 3/2023.*1Marubeni Corporation Sustainable Development Report 202410Click here to view the UNGlobal Compact web siteHuman RightsLaborEnvironmentAnti-CorruptionParticipation in International InitiativesGeneralClimate ChangeSustainable ForestryConservation of Biodiversity and HabitatsRespect for Human RightsSupply ChainResponsibility to CustomersGeneralParticipation in the UN Global CompactMarubeni Group declares its support for the UN Global Compact.The compact was proposed in 1999 by then UN Secretary-General KofiAnnan,and formally launched in the following year.Participating corporations seek to support and practice 10 principles relating to theareas of human rights,labor,environment,and anti-corruption.Marubeni Group is working to realize the ideals of the UN Global Compactby supporting these 10 principles.The UN Global Compacts 10 PrinciplesPrinciple 1:Businesses should support and respect the protection ofinternationally proclaimed human rights;andPrinciple 2:make sure that they are not complicit in human rightsabuses.Principle 3:Businesses should uphold the freedom of association andthe effective recognition of the right to collective bargaining;Principle 4:the elimination of all forms of forced and compulsory labor;Principle 5:the effective abolition of child labor;andPrinciple 6:the elimination of discrimination in respect of employmentand occupation.Principle 7:Businesses should support a precautionary approach toenvironmental challenges;Principle 8:undertake initiatives to promote greater environmentalresponsibility;andPrinciple 9:encourage the development and diffusion ofenvironmentally friendly technologies.Principle 10:Businesses should work against corruption in all its forms,including extortion and bribery.Marubeni Corporation Sustainable Development Report 202411Marubeni Corporation engages in activities as a Corporate Member of the Global Compact Network Japan(GCNJ),the local network ofUnited Nations Global Compact in Japan.Working Groups,which are organized by theme,are held mainly by the network members of GCNJ.Marubeni takes part in the followingWorking Groups.In FYE 3/2023Committee of Supply ChainCommittee of Environmental ManagementCommittee of Human Rights Due DiligenceCommittee of Disaster Risk ReductionCommittee of ESGCommittee of Corporate ReportingThrough the Human Rights Due Diligence Working Group,we study due diligence best practices for preventing human rights violationsand apply these in initiatives for ensuring respect for human rights within the Company and throughout our supply chain.Sustainable Development Goals(SDGs)SDGs are shared goals of the international community,with the aim of achieving sustainable development socially,economically andenvironmentally.In 2015 the UN adopted an agenda of 17 goals,with 169 targets to be achieved by 2030.SDGs are goals shared by governments,theprivate sector and civil society for achieving sustainability and leaving the world a better place for future generations.We have identifiedfour categories of Environmental and Social Materiality in which the Marubeni Group can make a valuable contribution.Click here to view the SDG websiteMarubeni Corporation Sustainable Development Report 202412TCFDRecognizing the importance of climate-related financial disclosures,the Marubeni Groupaffirmed the recommendations of the TCFD in February 2019.We are endeavoring toevaluate risks and opportunities engendered by climate change and to enhance relateddisclosure.In addition,we joined TCFD Consortium of Japanese companies that affirmthe recommendations of the TCFD.Endorsement of ISSBs Statement“Championing the ISSBsclimate global baseline”Marubeni endorsed the following statement on climate-related disclosure standardsissued by the International Sustainability Standards Board(ISSB)at the 28th Conferenceof the Parties to the United Nations Framework Convention on Climate Change(COP28).CDPCDP(an international environmental non-profit organization)analyzes and assessesthe collected information,and makes it available to investors.Marubeni has participatedin the initiative of CDP since 2007.In 2022 Marubeni continued from the previous yearto receive A-grades in the areas of climate change and forest protection by CDP.And theCompany was selected as an A-list company in their water security program.Climate ChangeDisclosure in line with the Recommendations of the TCFDStatement“Championing the ISSBs climate global baseline”Climate risks are increasingly having a real effect on companies and capital.Therefore in response to calls for climate action at COP28 we support the establishment of market infrastructure to enable consistent,comparable climate-related disclosures at a global level.We are committed to advancing the adoption or use of the ISSBs Climate Standard as the climate global baseline.For more details,please see the IFRS websiteCDP A-List and other published scores can be found at here*2*3The Task Force on Climate-related Financial Disclosures(TCFD)was established by the Financial Stability Board(FSB).*2Click here to view the TCFD Consortium website*3*4International Financial Reporting Standards(IFRS)Standard 1(S1):General Requirementsfor Disclosure of Sustainability-related Financial Information and IFRS Standard 2(S2):Climate-related Disclosures*4*5CDP(an international environmental non-profit organization formerly known as the Carbon Disclosure Project)Founded in the United Kingdom in 2000,CDP has worked with more than 680 investors representing over US$130 trillion in assets to pioneerenvironmental disclosure,greenhouse gas emissions reduction,water conservation,and forest protection for companies through capitalmarkets and corporate procurement activities.In 2022,nearly 20,000 organizations around the world,including more than 18,700 companiesworth half of global market capitalization and over 1,100 cities,states and regions,disclosed environmental information through CDP.CDP hasthe worlds largest fully TCFD-compliant environmental database,and CDP scores are widely used to drive investment and procurementdecisions to achieve a zero-carbon,sustainable and resilient economy.CDP is a partner in the Investor Agenda and a founding member of theNet Zero Asset Managers Initiative.*5Marubeni Corporation Sustainable Development Report 202413Joining the GX League to Address Climate ChangeMarubeni has joined the Green Transformation League(GX League)established by the Ministry of Economy,Trade and Industry.The GX League includes companies working towards decarbonization as well as government bodies,academia,and the financial sector,and aims to bring about changes in economic and social systems.As such it will focus on emissions trading(GX-ETS)and the creation ofsustainable markets.Marubeni will contribute to decarbonization and the reduction of Japans greenhouse gas emissions by participatingin the GX Leagues discussions on the formation of market rules(regarding voluntary credits and carbon offsets,etc.),utilizing our globalexpertise and know-how spanning a broad range of sectors,which is one of the strengths of a general trading company.Plan for achieving the Low-Carbon SocietyAs a member of the Japan Foreign Trade Council(JFTC),Marubeni agrees with the Low-Carbon Society Plan proposed by Japan BusinessFederation(Keidanren),and takes part in the working groups and public meetings on climate change held by Keidanren and JFTC.Marubeni takes climate change countermeasures in accordance with the policies of Keidanrens commitment to a Low-Carbon Society.Wehave set the goal of reducing the energy use(electricity and gas)at the Tokyo Head Office by 10%or more in FYE 3/2026 relative to FYE3/2016,by introducing energy-saving facilities etc.The Global Environment Committee of The Japan Foreign Trade Council(JFTC)Marubeni takes part in discussions related to environmental initiatives of trading companies,as a member of the Global EnvironmentCommittee of the Japan Foreign Trade Council(JFTC).At the Committee,we make plans for the Voluntary Action on the Environment(Commitment to a Low Carbon Society and a Recycling-Based Society)for the trading company industry,grasp energy consumption,promote the 3R(reduce,reuse,recycle)activity,andincorporate new energy through our business activities.Click here to view Energy Conservation,Natural Resource Conservation,and Waste Reduction ActivitiesCommittee on EnvironmentWe participate in the Committee on Environment,an environment-and energy-related committee of the Japan Business Federation(Keidanren)which promotes the mainstreaming of climate change countermeasures,circular economy,biodiversity,and the improvementof environmental regulations and systems,and works towards the realization of environmental policies that are compatible with theeconomy.Japan Climate InitiativeThe Marubeni subsidiary Mibugawa Power Company takes part in the Japan Climate Initiative and promotes renewable energy projectswith the aim of creating a society that leaves a minimal carbon footprint.Eco Action 21Since 2005,Mibugawa Power Company has been participating in Eco Action 21,a program of the Ministry of the Environment.Inregistering for certification under this system,the company continues to“establish and operate effective and efficient methods forenvironmental initiatives,set environmental goals,take action,summarize,evaluate,and report results.”In 2015,the Eco Action 21Central Secretariat presented the company with a letter of appreciation and a commemorative gift in recognition of these efforts.Thecompany will continue to take positive action to protect the global environment by reducing waste,maintaining water quality,conservingenergy,and resources,and conducting local environmental activities.Marubeni Corporation Sustainable Development Report 202414Japan Sustainable Fashion Alliance(JSFA)We have a full membership of the Japan Sustainable Fashion Alliance(JSFA),a platform for corporate collaboration that aims to jointly findsolutions to sustainable fashion issues.With the goals of achieving“zero fashion loss through proper quantity of production,purchasingand recycling”and“carbon neutral of the fashion and textile industries in 2050,”we collaborate to identify solutions to the common issuesthat arise in the fashion and textile industries,and promote the transition to a sustainable fashion industry.As a company that identifiesClimate Change as one of the categories of Environmental&Social Materiality,we participate within a leading role in the JSFA as a fullmember and will contribute to the transition to a sustainable fashion industry through the activities of the alliance.Click here to view the JSFA website(Japanese only)ACT FOR SKYMarubeni is a member of“ACT FOR SKY”,an organization dedicated to the commercialization,dissemination,and expansion ofdomestically produced Sustainable Aviation Fuel(SAF).With the urgent need to reduce CO2 emissions globally in order to tackle globalwarming,the aviation industry must accelerate the technological development,production,distribution,and use of SAF.Also,in responseto the growing global demand for SAF,a stable supply of domestically produced SAF is essential in Japan.Marubeni has identified“ClimateChange”as one of four categories of our Environmental and Social Materiality,and through“ACT FOR SKY”we will accelerate thecommercialization,dissemination,and expansion of domestically produced SAF.At the same time,companies,local governments andothers are acting together in cooperation and collaboration to promote the importance of SAF,carbon neutrality,and resource recycling,and to bring about new behaviors through changing the thinking of citizens and companies.Click here for the ACT FOR SKY website(Japanese only)Sustainable ForestryForest Management and Forestry Certification at Marubeni GroupThe Marubeni Group currently owns forest plantation businesses in the two countries of Indonesia and Australia.Using a controlled cycleof planting,cultivation and management and harvesting focused on eucalyptus hardwoods that mature quickly in 6-10 years,we provide astable and sustainable supply of wood resources for pulp and paper production.Based on the principle of No Deforestation,oursustainable forestry management practices prioritize natural and social capital by not harvesting natural forests.We also undertakeproactive programs jointly with local communities.Group companyLocationNature of businessForestry certificationPT.Musi Hutan Persada(MHP)IndonesiaForest plantationbusinessIndonesian Forestry Certification CooperationSustainable Forest Management certificationWA Plantation Resources Pty.,Ltd.(WAPRES)AustraliaForest plantation/woodchips productionbusinessFSC certificationFM(Forest Management)certificationCoC(Chain of Custody,processing/distribution processes)certificationResponsible WoodSustainable Forest Management certification*6*8*9Indonesian Forestry Certification Cooperation is a forest certification system in Indonesia endorsed and mutually recognized under the PEFC.*6*7The Programme for the Endorsement of Forest Certification(PEFC)is an international system for forest certification that is based on a frameworkfor mutual recognition of national forestry certification schemes.(PEFC/31-32-80)*7The Forest Stewardship Council (FSC)is a non-profit organization that operates an international forest certification scheme with the aim ofpromoting the worldwide adoption of responsible forest management practices.(FSC C016260)*8Responsible Wood is an Australian forest certification scheme endorsed and mutually recognized under the PEFC.*9*7Marubeni Corporation Sustainable Development Report 202415Conservation of Biodiversity and HabitatsParticipation in the TNFD ForumTNFD Forum is an organization which shares the vision and mission of Taskforce on Nature-related Financial Disclosures(TNFD),aninternational organization that builds a risk management and disclosure framework related to natural capital and biodiversity.Marubeniparticipated in the TNFD Forum in March 2022.By participating in the TNFD Forum,Marubeni will continue to contribute to the conservation of biodiversity,which is an urgent issue inthe world along with climate change,through supporting the development of TNFDs framework.Click here to view the TNFD WebsiteSupport of the Declaration of Biodiversity by KeidanrenIn January 2020,the Company announced its agreement with and support of the Revision to“Declaration of Biodiversity by Keidanren andAction Policy”of October 2018 put out by the Keidanren Committee on Nature Conservation.Click here to view the Declaration of Biodiversity by Keidanren and Action Policy(Revised Edition)Marine Eco-Label Japan(MEL)CouncilMarubeni is a full member of Marine Eco-Label Japan(MEL)Council,and promotes initiatives of fisheries,aquaculture,and chain ofcustody that considers environment,biodiversity,and sustainable use of fishery resources.Marubeni will continue to contribute to sustainable fishery that is environmentally and ecologically friendly within our business as well asin our supply chain.Click here to view the Marine Eco-Label Japan(MEL)CouncilSupport for“Sustainable Seafood Week 2023”With increasing concern that seafood is being depleted from seas around the world,efforts are being made to shift toward sustainableuse of marine resources.The Marine Stewardship Council(MSC)Japan and,Aquaculture Stewardship Council(ASC)Japan held theSustainable Seafood Week(SSW)2023 to further spread the awareness of sustainable seafood across Japan in October.The annualcampaign started in 2014 and this time was the 10th year.Sustainable seafood refers to seafood caught in MSC-certified fisheries that are properly managed in consideration of marine resourcesand the environment,or seafood raised in ASC-certified aquaculture farms that minimize environmental and social impacts.Marubeni hasbeen promoting the handling of MSC certified products,which are guaranteed as natural marine products caught with consideration ofmarine resources and the environment,and ASC certified seafood,which are guaranteed as seafood products through environmentallyand socially responsible aquaculture.Marubeni,through our Group company,supports the activities of the Sustainable Seafood Week thataim to spread the practice of sustainable seafood.Click here to view the Sustainable Seafood Week 2023 web site(Japanese only)*10TNFD is an organization to build a risk management and disclosure framework related to natural capital and biodiversity,inspired by the 2019World Economic Forum(Davos Conference).The mission of TNFD is to develop a disclosure framework for organizations to report,which aims tosupport a shift in global financial flows toward nature-positive outcomes.*10Marubeni Corporation Sustainable Development Report 202416Respect for Human RightsThe Industrial Federation for Human Rights,TokyoMarubeni participates in the Industrial Federation for Human Rights,Tokyo and continue to raise awareness of human rights of theDirectors,the Executive Officers and the employees by sharing issues and holding dialogues with its member companies.Supply ChainSedexCia Iguau de Caf Solvel and Marubeni Foods Corporation,Marubenis subsidiary companies,take part in the platform of Sedex forcoffee and other beverage raw materials,and collaborates with suppliers on respect for human rights,occupational health and safety,reduction of environmental impact,and quality assurance in the supply chain.EcoVadisMarubeni America Corporation,Marubeni International(Europe)GmbH,a subsidiary company of Marubeni Europe plc,and Groupcompanies(Marubeni Intex Co.,Ltd.and Marubeni Techno Rubber Corporation)are subscribed to EcoVadis.The Marubeni Group will build sustainable supply chains,strengthen risk management,and expand ethical business practices.RSPOMarubeni Corporation joined RSPO in 2015 to procure certified palm oil sustainably.ISCC(International Sustainability&Carbon Certification)Marubeni Corporation,Marubeni America Corporation,Marubeni Europe plc,Marubeni ASEAN Pte.Ltd.,Marubeni Plax Corporation,Marubeni Petroleum Co.Ltd.and Marubeni Energy Europe Limited(hereinafter referred to as the seven Marubeni Group companies),have obtained accreditation from the ISCC regarding promotion of the sustainable production of biomass(fuels,agricultural products,forest materials,waste and residues,non-living biomass,and recycled carbon materials)in their supply chains,aimed at reducinggreenhouse gas(GHG)emissions,as well as sustainable land use,conserving biodiversity,and progress towards a sustainable society.The seven Marubeni Group companies commit and declare their compliance with the ISCC requirements in accordance with the latestISCC regulations.*11Sedex:A global ethical trading service provider dedicated to improving working conditions in global supply chains.*11*12EcoVadis:A global cloud-based SaaS platform that provides comprehensive corporate social responsibility(CSR)assessment services.*12Marubeni Corporation Sustainable Development Report 202417Responsibility to CustomersPrinciples for Responsible Investment(PRI)Signed by Asset Management CompanyJapan REIT Advisors Co.,Ltd.(Currently Marubeni REIT Advisors Co.,Ltd.)(MRA),a Marubeni Group company in the real estate assetmanagement business,has been conducting the investment management for United Urban Investment Corporation(UUR).In November2018,MRA signed the Principles for Responsible Investment(PRI)and became a PRI signatory.Click here for details on PRINews Release:Japan REIT Advisors Co.,Ltd.Recognized as a Principles for Responsible Investment(PRI)SignatoryAs a diversified J-REIT,UUR aims to reduce various risks and secure medium-to long-term stable earnings by making real estateinvestments in diverse assets and locations in each regional economic zone with the focus on the Tokyo Metropolitan Area.Aiming for therealization of a society that is sustainable,diverse and inclusive,UUR and MRA have been engaged in real estate investment andmanagement with consideration for ESG.Upon acquisition of real estate properties,MRA will conduct adequate due diligence andcarefully examines not only profitability but also impact on the environment(e.g.asbestos,soil contamination),tenants(e.g.antisocialforces,labor environment),and surrounding area(e.g.relationship with the relevant community,influence of traffic congestion onsurrounding environment,etc.)before making investment decisions.One of the metrics to manage climate-related risks and opportunities is the environment certification coverage rate for the portfolio ofUUR.UUR and MRA set a medium-term target of an 80%rate(based on gross floor area)by 2024.As a result of acquiring newenvironmental certifications and continued efforts to re-acquire them for properties for which they would expire,they had reached 77.4%as of November 30,2023.As a result of these initiatives,in the 2023 GRESB Real Estate Assessment,the annual benchmark that assesses sustainability practices inthe real estate sector,UUR received“4 Stars”in GRESB Rating,which is based on GRESB Overall Score and its quintile position relative toglobal participants for the third consecutive year.It also won the“Green Star”designation for the ninth consecutive year by achieving highperformance both in“Management Component”that evaluates policies and organizational structure for ESG promotion,and“Performance Component”that assesses environmental performance and tenant engagement of properties owned.In the MSCI ESG ratings,UUR received an“AA”rating,the second highest of seven ratings,and has been added to the constituents of MSCIJapan ESG Select Leaders Index.UUR and MRA will continue to make further efforts to achieve asset management that considers ESG in the future.Click here to view the United Urban Investment Corporation web siteClick here to view the policies for ESG promotion and initiatives,certification/evaluationClick here to view the Marubeni REIT Advisors Co.,Ltd.web siteJapan Food Additives AssociationThe Japan Food Additives Association(JAFA)is comprised of companies and organizations that are involved in the production,import,saleand use of food additives in Japan.The association was established in October 1982 as a nation-wide consolidated body with the additionof new members.JAFA works under the guidance of the Ministry of Health,Labour and Welfare and other related government agencies with the objectivesof providing members with accurate knowledge pertaining to the production,sale,and use of food additives,and promoting consumerunderstanding of safety and utility.In addition,JAFA seeks to contribute to the sound development of food-related industries,and tobetter consumer dietary habits and public hygiene.The Marubeni Group gathers information about the safety and functionality of food additives from JAFA,and conducts its businessesappropriately,receiving advice on matters such as labeling for food additives and interpretations of the relevant laws.Japan Food Additives AssociationMarubeni Corporation Sustainable Development Report 202418All Japan Coffee Fair Trade ConferenceThe All Japan Coffee Fair Trade Conference formulated the Fair Competition Code for Labeling of Regular Coffee and Instant CoffeeProducts,designed to aid consumers in the purchase of regular coffee and instant coffee products.The code was recognized by the JapanFair Trade Commission on November 13,1991,and a notification was published in the Kanpo(the official gazette of the JapaneseGovernment)on November 27,with full enforcement starting from May 28,1993.On November 29,1991,the conference was inaugurated as a discretionary body with membership consisting of coffee-related businessoperators who agree with the objectives of the conference.It is dedicated to ensuring the fair labeling of coffee products.The Marubeni Group receives advice regarding coffee labeling and related matters from the All Japan Coffee Fair Trade Conference.All Japan Coffee Fair Trade Conference(Japanese only)Japan Soft Drink AssociationThe Japan Soft Drink Association is an industry organization that prioritizes shared benefit and public good.The association aims toensure rigorous compliance with laws and regulations among soft drink manufacturers,sellers,and related businesses,and facilitatessmooth coordination of activities between association members and the government.It also promotes,supports,and provides guidanceon corporate social responsibility,encourages healthy consumption of soft drinks,and spreads awareness and knowledge relating to softdrinks.Through the Japan Soft Drink Association,the Marubeni Group receives advice on matters such as beverage labeling and qualitymanagement.Japan Soft Drink AssociationSociety of Soft Drink Technologists,JapanThe Society of Soft Drink Technologists,Japan was launched in 1992 with the objective of providing a forum for soft drink technologistsand researchers to meet and exchange information,while furthering technological innovation and skill development.The society works toprovide technical support so that the soft drink industry can continue to develop in harmony with the public interest.Through the Society of Soft Drink Technologists,Japan the Marubeni Group receives advice on matters such as beverage labeling andquality management.Society of Soft Drink Technologists,Japan(Japanese only)Association for the Safety of Imported Food,JapanCompanies engaging in the import,production,distribution,or sales of food volunteered to form an association and began activities inNovember 1988.They established this association with the aim of doing all they could to improve problems related to securing importedfood safety.In recognition of its achievements,the association became an incorporated association in September 1992 with the approval of theMinistry of Health and Welfare(now known as the Ministry of Health,Labour and Welfare).Further,on April 1,2011,it was authorized as apublic interest corporation and became the Association for the Safety of Imported Food,Japan.It engages in a wide range of activities tohelp food business operators to fulfill their social responsibility to deliver safe,secure imported food.The Marubeni Group collects information about the safety of imported processed food and fresh food(including information aboutresidual agricultural chemicals,food additives,and genetic modification)through the Association for the Safety of Imported Food,Japan.We reflect the contents of the information in checking new business partners and suppliers and in conducting factory audits of suppliers,thus promoting the safety of imported food.Association for the Safety of Imported Food,Japan(Japanese only)Marubeni Corporation Sustainable Development Report 202419Japan Food Hygiene AssociationThe Food Sanitation Act was established in 1947 to address hazards resulting from eating and drinking and contribute to improving andpromoting public health.On November 1,1948,companies engaged in food-related businesses established the Japan Food HygieneAssociation,an incorporated association(currently a public interest incorporated association),for the purpose of cooperating with thegovernment in line with the purpose of the Food Sanitation Act and implementing voluntary sanitation management.Since its establishment,this association has been engaged in a number of activities for the benefit of the public through its organizationsall over Japan.They include the activities of food hygiene instructors for food business operators,which are aimed at improving foodhygiene and establishing a voluntary management system,food testing and inspection,the promotion of food business operators mutualaid system to be used when paying indemnities,the holding of various training sessions,the distribution and dissemination of books onfood hygiene,the provision of information to consumers,and the promotion of international cooperation and research related to foodhygiene.The Marubeni Group is striving to improve food hygiene and its management systems related to securing the safety of processed food,byreferring to guidelines and the latest information provided by the Japan Food Hygiene Association.Japan Food Hygiene Association(Japanese only)Marubeni Corporation Sustainable Development Report 202420Materiality for Materiality for Marubeni GroupMarubeni GroupThe Idea of Materiality for Marubeni Group 22Fundamental Materiality 23Environmental&Social Materiality 24Identification and Review Process of Materiality 26Marubeni Corporation Sustainable Development Report 202421The Idea of Materiality for Marubeni GroupFundamental MaterialityEnvironmental&Social MaterialityIdentification and Review Process of MaterialityMateriality for Marubeni GroupThe Idea of Materiality for Marubeni GroupMarubeni Corporation Sustainable Development Report 202422Fundamental MaterialityThe Marubeni Group has identified three categories of Fundamental Materiality for living by our Management Philosophy,building abetter tomorrow,and accomplishing the goal of ensuring sustainable growth for the company.1.Human Capital with High Social Value2.Robust Management Foundation3.Governance for Coexistence with Society1.Human Capital with High Social ValueWe regard human resources as our most valuable asset in meeting environmental and social demand,and proactively providing solutions.We define“Human Capital with High Social Value”as individuals who are essential not only to the company but also to society.We willnurture human capital with High Social Value,and thereby bring about innovation and provide solutions.To us,Human Capital with High Social Value means:Individuals who observe laws and act in conformity with accepted international customs,and who also maintain high ethical standards for thegood of society.Innovative individuals with the foresight,insight and creativity needed to anticipate social change.Individuals with sound judgment and the ability to make correct decisions and act quickly.Individuals with the communication skills to truly address the demands of society,with a sense of purpose and responsibility,while also beingattuned to the realities of the marketplace.These attributes are the foundation of decision-making,decisiveness and the ability to execute.2.Robust Management FoundationWe have identified Robust Management Foundation as the second category of Fundamental Materiality,as we believe it is necessary bothfor maximizing the potential of our human capital and for maximizing corporate value.We must build a foundation that facilitates the activities of our human capital and establish a truly Robust Management Foundation.If wecannot accomplish this,our human capital will not be able to continue innovating and providing solutions.Enabling our human resourcesto use our management foundation to the fullest will ultimately lead to maximizing corporate value.To us,Robust Management Foundation means:A fundamentally sound management foundation with a strong brand presence,reputation,sales foundation and network,and financial footing.A corporate climate and culture that is capable of producing abundant Human Capital with High Social Value,and can enable that human capital toengage in meaningful work.An environment that places importance on the ability to create diverse values and generate quality solutions within a diverse and inclusiveorganization.3.Governance for Coexistence with SocietyWe will endeavor to increase corporate value based on a Robust Management Foundation in which Human Capital with High Social Valuedevelops innovative ideas and continues providing solutions.Within that framework,and given social expectations and demands,we believe that strengthening our corporate governance system forimproved coexistence with society is important to all of our stakeholders.We will deepen our engagement with diverse stakeholders,enhance the effectiveness of the Board of Directors oversight function,andbring greater transparency to our management in order to build a governance framework that allows for improved coexistence withsociety and works toward achieving sustainability.Marubeni Corporation Sustainable Development Report 202423Environmental&Social MaterialityThe Sustainable Development Goals(SDGs)adopted by the United Nations in September 2015 are goals for achieving sustainability andleaving the world a better place for future generations shared by governments,the private sector and civil society.In recognition of this,the Marubeni Group has identified the following categories of Environmental and Social Materiality in which it can truly make a valuablecontribution.1.Climate Change2.Sustainable Forestry3.Human Rights&Co-development with Communities4.Sustainable&Resilient Value ChainsIn addition to the 17 goals and 169 targets of the SDGs,and taking into consideration stakeholders expectations and interests as well asthe environmental and social impact of our business,our categories of Environmental and Social Materiality are based on the criteriadescribed below.Building on initiatives set out through our Fundamental Materiality,we will contribute to achieving the SDGs and worktoward building a better tomorrow.1.Climate ChangeClimate change,which is responsible for phenomena such as global warming,changes in the natural environment and more frequentnatural disasters,is a global issue with a broad impact on social and environmental sustainability.Marubeni has business operations throughout the world,and views climate change as a serious risk.However,we also believe that itpresents business opportunities.We see contribution to climate change mitigation and adaptation as a category of Environmental and Social Materiality.We contribute toclimate change countermeasures mainly through the following policies:Coal-fired Power Generation and Renewable Energy Generation BusinessesThe Marubeni Group has 12GW net power generation capacity(as of March 31,2019)and is a leading independent electric poweroperator.We announced our“Policy on Coal-Fired Power Generation and Renewable Energy Generation Businesses”on September 18,2018 as part of our proactive climate change countermeasures.We view climate change-related transfer risk as a business opportunity,and we aim to increase our“Green Revenue”of 700 billion yen inFY2017 to 1.3 trillion yen by 2023.Green revenue,a part of our business contribution to climate change countermeasures,includes the following.Sales of products certified as contributing to sustainable forestry,fisheries,etc.Sales from businesses(real estate,etc.)contributing to lessening environmental impactSales from businesses dealing in power generation from renewable energy sourcesSales from businesses contributing to propagating EV(electric vehicles)Sales from businesses(recycling-related,etc.)contributing to waste reductionSales from businesses(water business,etc.)contributing to efficient use of resourcesThe Marubeni Group recognizes the importance of climate-related financial disclosures.As new measures to counter climate change,inaddition to affirming the recommendations of the TCFD,we will endeavor to better understand the financial impact of both the risksand opportunities brought about by climate change,and also engage in improved climate-related financial disclosure.Climate ChangeDisclosure in Line with the Recommendations of the TCFD*1TCFD(Task Force on Climate-related Financial Disclosures):Established by the Financial Stability Board(FSB).*1Marubeni Corporation Sustainable Development Report 2024242.Sustainable ForestryForests are a precious resource and enrich life on Earth in many ways.The Marubeni Group currently holds around 130,000 hectares oftree plantations across the world(total gross project area is around 300,000 hectares).These forests are run according to managementmethods for sustainable forestry.To build a better tomorrow,we have adopted a Forest Management Policy and a Procurement Policy(for Wood-derived Products)toconserve and sustainably use valuable forest resources.By operating our businesses in accordance with these policies,we will promotesustainable forest management and contribute to forest conservation.Sustainable Forestry3.Human Rights&Co-development with CommunitiesDue to the globalization of economic activity,serious abuses of human rights against workers and local residents are taking place inrelevant countries and regions.Many of these abuses can be remedied or improved by taking human rights into consideration in businessactivities,and there are growing expectations that businesses should play a role in remedying human rights abuses.The Marubeni Group does business in 131 locations domestically and internationally and employs more than 40,000 people of manydifferent nationalities and ethnicities.We are active in a wide range of businesses and conduct global,multi-faceted activities.To create a better tomorrow,we take a sincere approach to dealing with human rights issues facing the international community.As partof our initiatives,we have included the three basic principles of the United Nations Guiding Principles on Business and Human Rights:1)respect for human rights,2)due diligence on human rights,and 3)redress in our Basic Policy on Human Rights.Respect for Human Rights4.Sustainable&Resilient Value ChainsThe Marubeni Group deals with thousands of suppliers in conducting transactions and operating a wide range of businesses on a globalscale.We believe that we make important contributions to sustainability through environmental conservation and sustainable socialdevelopment initiatives throughout our supply chain.To build a better tomorrow,we have identified Sustainable and Resilient ValueChains and working together with our business partners as an essential category of Environmental and Social Materiality.In addition tomanaging the supply chain,we will also involve buyers of our products and enhance the strength and competitiveness of our entire valuechain,which includes not only the Marubeni Group but also our business partners.As part of our sustainability initiatives,together with stakeholders,we,including our business partners,adopted our Basic Supply ChainCSR Policy in 2008 to manage our supply chain.Subsequently,to advance understanding of and cooperation with the spirit of this Policy,we sent the Policy to suppliers,conducted surveys,and dispatched personnel to suppliers manufacturing or production sites to conductdirect on-site inspections.Since we believe that value chain management is important,we will continue taking initiatives toward bothsuppliers and buyers of our products to resolve issues in this area.In addition,we have revised our Basic Supply Chain CSR Policy,adopting a new Basic Supply Chain Sustainability Policy to place moreimportance on climate change countermeasures and respect for human rights.Supply Chain*2*3As of March 31,2023*2Number of employees of the Group:45,995 as of March 31,2023*3*4From FYE 3/2021 to FYE 3/2023,we noticed a total of approximately 23,000 Tier 1 suppliers in the Group of the Basic Supply Chain SustainabilityPolicy and the Marubeni Group Basic Policy on Human Rights.*4Marubeni Corporation Sustainable Development Report 202425Identification and Review Process of MaterialityWe believe that the material issues for sustainability must be constantly reviewed as the society and environment surrounding thecompany continue to change.Specifically,we perform regular reviews through dialogs with stakeholders and confirmations of theexpectations from society,as well as constantly analyzing the impact on our Group.Extract existing/potential environmental and social issuesDialogue and engage with stakeholders and external advisers,confirm expectations from societyIdentify material issues for sustainability(materiality)for the Marubeni Group,based on the following criteria:Importance to stakeholders Impact and scope of our business activities on the environment and society Impact on our earningsReflect in operational goals/targets,implement and review periodicallyThe Sustainability Management Committee under the supervision of the President reports to the Board of Directors at least once a yearon the important matters that it deliberates.These periodic reviews form the basis for the supervision of sustainability-related matters bydirectors.Identification and Review ProcessMarubeni Corporation Sustainable Development Report 202426EnvironmentEnvironmental Management 28Climate Change 35Sustainable Forestry 43Conservation of Biodiversity and Habitats 50Water Management 55Environmental Data 59Marubeni Corporation Sustainable Development Report 202427PolicyTargetsStructures and SystemsInitiativesEnvironmentEnvironmental ManagementPolicyMarubeni Group Environmental Policy(revised in January 2019)Basic PhilosophyIn full awareness of its responsibilities as a good corporate citizen,recognizing the environmental problems as material issues,theMarubeni Group will make every effort to simultaneously pursue both a prosperous society and environmental conservation,while aimingto achieve the sustainable development of society.Basic PrinciplesAs a global corporate entity that engages in diverse business activities across a broad range of sectors,the Marubeni Group will apply theEnvironmental Management System to all the activities,services and products of the Marubeni Group,and observe the followingprinciples it has established for environmental conservation.1.All business activities will be conducted in consideration of their possible impact on the environment.We will contribute tocooperation with stakeholders to the conservation of the environment,the prevention of pollution and the reduction of potentialenvironmental impacts,including efficient use of resources and taking appropriate steps to address climate change and protectbiodiversity and ecosystems,focusing on the four themes below.(1)Compliance with international and local applicable environmental guidelines,laws and regulations,and agreed requirements;(2)Taking measures as necessary to reduce environmental impacts and prevent pollution,particularly in launching new projectsand altering existing projects;(3)Facilitating resource and energy conservation(mineral resources,food and water,etc.),waste reduction,green procurement,and increases in operational efficiency;(4)Promoting business projects,offering products and services,technical development and building social systems that helpprotect and improve the environment.2.In keeping with this Environmental Policy,the Marubeni Groups Environmental Management System will be regularly reviewed toimprove our environmental performance,fully conscious of the importance to comply with its requirements.3.This Environmental Policy will be shared with all Marubeni Group officers and employees,employees of the Groups business partners,and the public.*1*2“Energy conservation”in 1.(3)includes energy conservation in business facilities and logistics.*1The Marubeni Group will conduct appropriate maintenance for“resource and energy conservation,waste reduction”and“increases in operational efficiency”in 1.(3).*2Marubeni Corporation Sustainable Development Report 202428Five Environmental ObjectivesThe Marubeni Group pursues the five objectives below in accordance with the Marubeni Group Environmental Policy in order to help toprotect the environment and to reduce the environmental impact caused by its business activities.Thoroughly implement environmental considerations when promoting projectsExpand initiatives with business partners who consider environmental aspectsPromote environmental consideration among Group companiesPromote environmental businessesConserve energy and natural resources,and reduce wastePolicy on Mine ClosuresThe Marubeni Group understands the importance of reducing the impact on the environment and surrounding communities when closingdown mines.We use a local business entity to communicate with local communities and other stakeholders from the project planningstage,formulate a mine closure plan,conduct an environmental impact assessment,obtain environment-related authorizations fromregulatory agencies,carry out various types of monitoring necessary for maintaining those authorizations,and strive to minimize thesocial and environmental impact when the mine is decommissioned.We also start the necessary rehabilitation before mine closure tolessen the environmental impact after the mine closes.TargetsEstablishment of Environmental TargetsAt the beginning of each fiscal year,Marubeni uses an Environmental Plan/Check Sheet to identify the issues specific to each businessgroup regarding environmental risk management,Group company administration,promotion of environmental business,conservation ofenergy and resource,prevention of pollution,and other such matters.Marubeni then establishes environmental targets for each businessgroup and works towards achieving them.Structures and SystemsThe Marubeni Group promotes environmental considerations in its own business operations under the leadership of the EnvironmentCommittee chaired by the Chief Sustainable Development Officer.The Marubeni Group Environmental Policy was established in 1998 asthe embodiment of the Marubeni Groups firm commitment to environmental conservation.Marubeni Corporation Sustainable Development Report 202429Marubeni Group EMS organizationEnvironmental Management System(ISO 14001)Marubeni has introduced an environmental management system(EMS)based on ISO 14001 as a tool to assist all employees in addressingenvironmental issues based on a common understanding.The PDCA cycle is used in our EMS to promote continuous improvementthrough planning,implementation,operation,inspection,and management review of our environmental initiatives.Based on the survey for FYE 3/2024(as of October 2023),the status of Marubeni Groups acquisition of ISO 14001 environmentalmanagement system is as follows:Number of companies that have acquired ISO 14001 certification(including Marubeni Corporation)56 out of 480 companies in Marubeni Group(11.7%of total Group)The Marubeni Group Multi-site Certificated SubsidiariesThe Marubeni Group in this Policy includes Marubeni Corporation and the subsidiaries listed belowMarubeni CorporationYamaboshiya Co.,Ltd.Marubeni Information Systems Co.,Ltd.Marubeni Chemix CorporationMarubeni Plax CorporationMarubeni Paper Recycle Co.,Ltd.Marubeni Forest LinX Co.,Ltd.Marubeni Power&Infrastructure Systems CorporationMarubeni Service CorporationMarubeni Real Estate Management Co.,Ltd.*We shall publish the Marubeni Group Multi-site Certificated Subsidiaries list together with the Marubeni Group Environmental Policy at all times.Marubeni Corporation Sustainable Development Report 202430InitiativesAssessment of Environmental PerformanceInspectionEach group at Marubeni formulates environmental action plans at the beginning of each fiscal year and self-checks its progress againstthe plan in September and February using the Environmental Plan/Check Sheet.External AuditsOur performance for ISO 14001 is subject to audits every year by LRQA Limited.Marubeni has continuously been certified in FYE 3/2023.Flow of LRQA external auditsISO 14001 certification expires in three years.We undergo ISO certificate renewal once every three years to confirm that the managementsystem has been maintained within the effective period.Internal AuditsInternal environmental audits are conducted every year based on ISO 14001.In FYE 3/2023,audits were conducted on all BusinessGroups,Next Generation Business Development Division,General Affairs Dept.,and four branches(Osaka,Chubu,Hokkaido,Kyushu).The Sustainability Management Department forms an internal audit team,and personnel who have a qualification of internal auditorverify whether the Companys environmental management system is properly operated through interviews and other appropriate meanswith personnel in each group,department,or branch.In addition to legal compliance with environment-related laws and regulations,we strive to prevent environmental risks by multifacetedanalysis on various aspects,such as the management at the point of change in each business.Compliance with Environmental Laws and RegulationsEach department at Marubeni and subsidiaries list applicable environmental laws,regulations,standards,and rules,and perform periodicreviews to ensure compliance with the regulatory requirements.During FYE 3/2023,Marubeni conducted an assessment to determine whether its 94 departments and 127 Marubeni Group companieswere in compliance with the Waste Management and Public Cleansing Act.Marubeni also conducted an e-learning training program on the Waste Management and Public Cleansing Act for all domestic employees,including temporary employees.At the same time,training programs were held on the same topic at the Tokyo Head Office and majordomestic branches(Osaka,Chubu,Hokkaido and Kyushu),where outside experts provided pertinent guidelines and information.470Marubeni Group employees in total participated in the training program.Likewise,the corresponding groups conducted more practicaland hands-on forms of training.As a result of these and other initiatives,there were no serious violations of environmental laws or regulations by the Marubeni Group inFYE 3/2023.Marubeni Corporation Sustainable Development Report 202431Environmental Education and TrainingMarubeni provides environmental education to its employees to help raise their awareness of relevant issues.In FYE 3/2023,Marubeni notonly distributed materials to relevant personnel under the name of“environmental training,”but also organized a variety of programs,including environmental training designed for new employees.Other specific programs include:the Environmental Officers e-learningTraining Program and the ISO 14001 Internal Environmental Auditors Training Program.Environmental Training Programs and Seminars in FYE 3/2023Training Program/SeminarNumber of ParticipantsISO 14001 Internal Environmental Auditors Training Program77Training Program on the Waste Management and Public Cleansing Act470E-learning Training Program on the Waste Management and Public Cleansing Act2,251Group-specific Training Program on the Waste Management and Public Cleansing Act211Environmental Assessment of Development Projects andFinancing/InvestmentFrom FYE 3/2021,we introduced a sustainability assessment tool to identify and assess different kinds of sustainability risks,not onlyenvironmental risks but also social risks such as occupational health and safety and human rights.Click here for more information on the introduction of our sustainability assessment toolPromoting Environmental Consideration at Marubeni Group CompaniesIn an effort to reduce the environmental impact of our overall business operations,Marubeni Group companies are encouraged tosupport and join environmental conservation activities,which are designed in line with the Marubeni Group Environmental Policy.We alsomonitor their ISO 14001 status,emergency response measures,and environmental management systems.In addition,Marubeni Group companies are asked to ensure compliance with regulatory requirements and develop contingency plans foremergencies.Sustainability Data SurveyAiming to reduce the environmental impact of its operations across the Group,the Marubeni Group conducts a survey-based annualreview of Marubeni Group companies environmental performance.This detailed assessment includes identification and status confirmation of elements within our operations that impact the environment,applicable environmental laws and regulations,emergency response measures,and environmental problems.Click here for more information on Environmental DataMarubeni Corporation Sustainable Development Report 202432Internal and External Communications on Environmental Issues,includingEnvironmental Management IssuesIn accordance with the Marubeni Group Environmental Policy,we are committed to and proactive in communicating both internally andexternally regarding environmental issues,including environmental management.We have held meetings with various stakeholdersspecifically on sustainability and exchanged opinions on environmental issues including environmental management,as well as climatechange,biodiversity,human capital,supply chain management,human rights,occupational health and safety,etc.(15 meetings in FYE3/2023).We will continue these efforts in the future.Click here for more information on our Engagement with StakeholdersEnergy Conservation,Natural Resource Conservation,and WasteReduction ActivitiesMarubeni is working for climate change measures in accordance with the policies of Keidanrens Commitment to a Low Carbon Society.The Company set the numerical targets to reduce energy usage(electricity and gas)by 10%or more at the Tokyo Head Office by FYE3/2026 compared to FYE 3/2016.To achieve the numerical targets,the Company carries out initiatives such as introduction of energy-saving equipment,etc.The targets for its energy conservation,natural resource conservation,and waste reduction efforts to be achieved by FYE 3/2026 andresults are shown below.Targets to be Achieved by FYE 3/2026Targets in the FYE 3/2026Results in the FYE 3/2023(1)Energy Consumption at the Tokyo Head OfficeYearly targets:reduce annual average by 1%or moreTargets in the FYE 3/2026:Reduce energy usage by 10%ormore compared to FYE 3/201621.7crease from FYE 3/2016(2)Waste Generation at the Tokyo Head Office50%or more decrease from FYE 3/201655.7crease from FYE 3/2016(3)Waste Recycling Rate at the Tokyo Head Office70%or more75.2%(4)Water Consumption at the Tokyo Head Office50crease from FYE 3/201657.2crease from FYE 3/2016*In September 2016,the Tokyo Head Office moved to a temporary location in Nihonbashi due to the reconstruction of its permanent headquarters.In May2021,the Tokyo Head Office is relocated from Nihonbashi to Takebashi new building.*Water Consumption includes Tap Water only.Environmental Protection at the Tokyo Head Office and Tama CenterMarubeni is taking steps to address the Carbon Reduction Reporting Program based on the Tokyo Metropolitan Ordinance onEnvironmental Preservation.Tokyo Head OfficeMarubeni had submitted plans to the Tokyo Metropolitan Government describing its measures to reduce CO2 emissions volume of theTokyo Head Office by approximately 17%from the reference value(average emissions from April 2002 to March 2005)during the fiveyears from April 2015 to March 2020.However,from FYE 3/2017,Marubeni has not submitted Carbon Reduction Reports after moving theTokyo Head Office to a temporary location in Nihonbashi in September 2016(due to the reconstruction of its permanent headquarters)and has submitted Carbon Reduction Reports of Specified Tenants,etc.to the Tokyo Metropolitan Government through the buildingowner of its temporary location.Marubeni Corporation Sustainable Development Report 202433Due to the relocation of the Tokyo Head Office submission of Carbon Reduction Report of Specified Tenants,etc.was not required for FYE3/2021.In conjunction with the completion of the new Head Office in February 2021,Marubeni submits the Carbon Reduction Reports startingfrom FYE 3/2023 to the Tokyo Metropolitan Government.Tokyo Head Office:Past Submissions of Carbon Reduction ReportsCovering FYE 3/2011-FYE 3/2015Submitted in November 2011Covering FYE 3/2011-FYE 3/2015Submitted in November 2012Covering FYE 3/2011-FYE 3/2015Submitted in November 2013Covering FYE 3/2011-FYE 3/2015Submitted in November 2014Covering FYE 3/2011-FYE 3/2015Submitted in November 2015Covering FYE 3/2021-FYE 3/2025Submitted in April 2023Tokyo Head Office:Past Submissions of Carbon Reduction Reports of Specified Tenants,etc.Covering FYE 3/2016-FYE 3/2020Submitted in October 2017Covering FYE 3/2016-FYE 3/2020Submitted in October 2018Covering FYE 3/2016-FYE 3/2020Submitted in October 2019Covering FYE 3/2016-FYE 3/2020Submitted in November 2020Tama CenterMarubeni submits plans to the Tokyo Metropolitan Government describing its measures to reduce the CO2 emissions volume of the TamaCenter,a training center managed by the Tokyo Head Office,by approximately 27%from the reference value(average emissions from April2005 to March 2008)during the five years from April 2020 to March 2025.The emissions volume in FYE 3/2023 was 2,382 metric tons of CO2,a decrease of approximately 80%compared to the reference value(theemissions volume was calculated based on estimated reference value of 11,831 metric tons of CO2.)Tama Center:Past Submissions of Carbon Reduction ReportsCovering FYE 3/2011-FYE 3/2015Submitted in November 2011Covering FYE 3/2011-FYE 3/2015Submitted in November 2012Covering FYE 3/2011-FYE 3/2015Submitted in November 2013Covering FYE 3/2011-FYE 3/2015Submitted in November 2014Covering FYE 3/2011-FYE 3/2015Submitted in November 2015Covering FYE 3/2016-FYE 3/2020Submitted in November 2016Covering FYE 3/2016-FYE 3/2020Submitted in November 2017Covering FYE 3/2016-FYE 3/2020Submitted in November 2018Covering FYE 3/2016-FYE 3/2020Submitted in November 2019Covering FYE 3/2016-FYE 3/2020Submitted in September 2020Covering FYE 3/2021-FYE 3/2025Submitted in November 2021Covering FYE 3/2021-FYE 3/2025Submitted in November 2022Marubeni Corporation Sustainable Development Report 202434PolicyDisclosure in Line with the Recommendations of the TCFDInitiativesCollaborating with StakeholdersEnvironmentClimate ChangePolicyThe Marubeni Group recognizes climate change as a global and highly urgent social issue,and identifies it as one of its Environmental andSocial Materiality.In our Mid-Term Management Strategy GC2024,which we released in February 2022,we see“strengthening our greenbusiness”and“promoting the greening in all our business domains”as core business for our growth.We aim to transform the totalenvironmental impact of its business activities to a positive one by contributing to low-carbon and decarbonization through our businessactivities while ourselves achieving net-zero GHG emissions.Environmental&Social MaterialityClimate ChangeThe Marubeni Long-Term Vision on Climate Change:Towards Net-Zero GHG Emissions(Formulated in March 2021)Marubeni Corporation(hereinafter,“Marubeni”),based on the Paris Agreement,recognizes the importance and urgency of limitingthe global average temperature increase by the end of this century to 1.5C(hereinafter,the“1.5C pathways”).For the purpose ofmedium-and long-term contributions to measures addressing climate change,Marubeni has formulated a long-term vision onclimate change.In that vision Marubeni has set a goal to strive for net-zero GHG(greenhouse gas)emissions from the Group by2050.To make the goal of net-zero GHG emissions by 2050 an effective one,Marubeni has formulated action plans to beimplemented heading towards 2030.1.Net-Zero GHG Emissions by 2050Marubeni will abate GHG emissions at a level consistent with the said 1.5 pathways.Any residual emissions that cannot beabated will be neutralized(GHG elimination)through internationally recognized nature-based solutions(e.g.,forests,farmland,etc.),or through technological solutions,with the aim of achieving net-zero GHG emissions by 2050.*1Boundary of the net-zero GHG emissions:Scope 1:Direct emissions from owned or controlled sources of Marubeni and its consolidated subsidiaries,such as through burning of fuel,industrial process,etc.Scope 2:Indirect emissions from the generation of purchased energy consumed by Marubeni and its consolidated subsidiaries.Scope 3,Category 15(Investments):Among all other indirect emissions that occur in the Marubeni Groups value chain,Scope 1 and Scope 2 forassociate investees account for using the equity method(hereinafter,“associate investees”).Action Plans towards 2030Marubeni has formulated the following action plans heading towards the year 2030 in order to make the goal of net-zero GHGemissions by 2050 effectively.*1Green business:sustainable businesses which have positive effects on the environment such as decarbonization and the circular economy,and adjacentbusinesses which supply those businesses with non-substitutable materials,etc.*1*1Marubeni Corporation Sustainable Development Report 2024351)Halve the CO2 emissions of FYE 3/2020,about one million tons of CO2,emitted by Marubeni and its consolidatedsubsidiaries(Scope 1 and Scope 2)Marubeni has revised the targeted abatement figure released in September 2020(a 25atement from FYE 3/2019levels by 2030)to make it at a more consistent level to the 1.5C pathways,and will halve its total volume of emissions,which was about one million tons of CO2 in FYE 3/2020 by 2030.2)Reduce by one fifth the CO2 emissions of the FYE 3/2020,about 36 million tons of CO2,emitted by associate investees ofthe Marubeni Group(Scope 3,Category 15(Investments)*2This emissions volume comprises the FYE 3/2020 performance of existing investees plus the estimated emissions from projects alreadycontracted at the current point in time(as for power generation projects,projects for which associate investees of the Marubeni Grouphave entered into power purchase agreements but have not yet achieved commercial operations.)Changes in the emissions volume associated with increased emissions from new investments and fluctuations in theemissions volume by plant load factors,as well as reductions in the emissions volume due to the utilization of newtechnologies(CCS,co-combustion of hydrogen and ammonia,etc.),are not included in the assumptions for the aboveestimation.In the interest of meeting the needs of society as it makes the low-carbon transition,the development of newgas-related projects such as gas-fired power generation businesses will continue.For aspects which could affect theemissions volume by associate investees going forward,we will monitor the progress of abatement of GHG emissions andconduct reviews thereof.In addition,we will continually perform studies with the aim of establishing milestones towardsnet-zero GHG emissions by 2050 that are consistent with the 1.5C pathways.*3CCS:Carbon dioxide Capture and Storage)Move up the timetable to halve the net power generation capacity of our coal-fired power generation businessesBased on our Business Policies Pertaining to Sustainability(In Relation to Our Coal-Fired Power Generation Business andRenewable Energy Generation Business)that Marubeni released in September 2018,and taking into account the progressmade so far in pulling out of coal-fired power generation,we will accelerate our goal of cutting our FYE 3/2019 coal-fired powernet generation capacity in half by 2030 to 2025,and aim for approximately 1.3 GW as our coal-fired power net generationcapacity in 2030(included in the above reduction figure 2)for associate investees),and further,aim for zero by 2050.)Absorb and sequestrate CO2 through our forestsMarubeni will strive to expand the volume of carbon stocks in our forests(currently about 11 million tons of CO2equivalents)and,at the same time,expand the sequestrated volume of carbon through the multi-purpose utilization ofafforested assets.*4By enlarging some of our plantation areas,improving stock volume per-unit area,and through the proper management of managedforests,estimated volume of carbon stocks in our forests will be about 19 million tons of CO2 equivalents in 2030.By executing these actions,by 2030 the Marubeni Group will try to abate its FYE 3/2020 emissions by one fifth over the total scopecovered by our net-zero GHG emissions goal.This plan was formulated to apply to the Marubeni Groups business portfolio at thepresent time and is based on certain assumptions about current international recognition and foreseeable changes in system andtechnological innovations.Marubeni will revise them appropriately in light of any future changes to these premises.2.Contributing to low-carbon/carbon-free goals through business activitiesThe Marubeni Group views the transition to low-carbon/carbon-free goals as a business opportunity,and will use its businessactivities to continue contributing to the abatement of GHG emissions that our society produces.In terms of contribution byenergy supply,Marubeni strives to construct the energy systems that will serve as the foundations for a decarbonized society,and in terms of energy demand,Marubeni will help other emitters to control/abate GHG emissions over a broad range ofindustries.Moreover,in the realm of land use,Marubeni will promote initiatives towards sustainable agri-input businesses andforest management.For further details,please see The Marubeni Long-Term Vision on Climate Change722KB.The Marubeni Group aims to transform the total environmental impact of its business activities to a positive one by contributing tolow-carbon and decarbonization through its business activities while itself achieving net-zero GHG emissions.*2*3*4Marubeni Corporation Sustainable Development Report 202436*The following policy was initially announced in September 2018 and updated based on the latest status as of July 2021.Business Policies Pertaining to Our Coal-Fired Power Generation Business and RenewableEnergy Generation Business(Formulated in September 2018)Marubeni Corporation(hereinafter,“Marubeni”)recognizes that climate change is a major issue shared by all of humanity.It is aproblem that threatens the co-existence of the global environment and society,a problem that has an enormous effect onMarubenis business and its shareholders,and a problem that Marubeni believes must be dealt with swiftly.Therefore,as part ofMarubenis promotion of sustainable management,and in order to contribute to fight against global climate change,Marubeni hasestablished new business policies(hereinafter,“Policies”)regarding its coal-fired power generation business and its renewableenergy generation business.1.The Process of Pulling Out of Coal-Fired Power GenerationAs a global player in the power business,Marubeni will reduce its greenhouse gas emissions volume from its powergeneration portfolio.By 2025,Marubeni will cut its FY2018 coal-fired power net generation capacity of approximately 3GW inhalf,and aim for approximately 1.3GW as our coal-fired power net generation capacity in 2030,and further,aim for zero by2050.Additionally,Marubeni will deploy innovative technologies to increase the efficiency of its portfolio assets,andproactively promote the reduction of its environmental impact.2.The Policy on New Coal-Fired Power Generation BusinessMarubeni will no longer enter into any new coal-fired power generation business.3.Proactive Involvement in Renewable Energy Generation BusinessLooking forward to the expansion of the renewable energy generation business,Marubeni will strive to expand the ratio ofpower generated by renewable energy sources in its own net power supply from approximately 10%to approximately 20%by2023.Furthermore,Marubeni will contribute to the transition towards a low-carbon society by promoting the expansion of thehandled volume of renewable energy sources pertaining to energy trading.An example of this is SmartestEnergy Ltd.,awholly-owned subsidiary located in the United Kingdom that manages approximately 3GW of total energy,which is purchasedfrom independent generators;about 80%of that 3GW is generated by renewable energy sources.Moving toward the achievement of these Policies,Marubeni will work to properly communicate and cooperate with its diversestakeholders,and also proactively disclose updates on Marubenis progress in reaching these goals.Additionally,given thechanges to the external environment,Marubeni will refer to the various international guidelines,beginning with the OECD ExportCredits Arrangement,diligently monitor measures taken by different countries in terms of coal-fired and renewable energygeneration business,as well as the international state of affairs,and use this information to periodically review and rework its ownpolicies from the standpoint of climate change counter measures.In April 2018,Marubeni launched the Sustainability Management Committee(hereinafter,“the Committee”)under the supervisionof the President and CEO,with the aim to strengthen the companys sustainability initiatives.Since its launch,and while solicitingthe opinions of external parties,the Committee has discussed a number of basic policies and measures pertaining to Marubenissustainability initiatives,beginning with identification and periodic review of the materiality.Policies and measures considered as aresult of these discussions will be announced as part of Marubenis ESG related data once it has been compiled.*1*2The Process of Pulling Out of Coal-Fired Power Generation is updated in line with the Marubeni Long-Term Vision on Climate Change:Towards Net-Zero GHG Emissions(formulated in March 2021).*1SmartestEnergy Ltd.,established by Marubeni in the U.K.in 2001,purchases power from small to medium sized independent generators,and resellson the wholesale market or to retail customers.https:/ Corporation Sustainable Development Report 202437Recognizing the importance of climate-related financial disclosures,the Marubeni Groupaffirmed the recommendations of the TCFD in February 2019.We are endeavoring to evaluate risks and opportunities engendered by climate changeand to enhance related disclosure.In addition,we joined TCFD Consortium ofJapanese companies that affirm the recommendations of the TCFD.Disclosure in Line with the Recommendations ofthe TCFDClick here to view the latest disclosure in Integrated Report 2023P.59 Sustainability Management4.0MB,P.60 Climate Change(Disclosure in Line with the Recommendations of the TCFD)4.0MBP.106 Scenario Analysis of Climate Change Risks and Opportunities in Line with the TCFD Recommendations1.2MBClick here to view the 2022 disclosure(September 2022)374KBInitiativesInitiatives for Renewable Energy Power ProjectsIn order to work toward a low-carbon society that mitigates the effects of climate change as part of sustainable development goals,Marubeni is actively pursuing and expanding renewable energy power projects.*2*3The Task Force on Climate-related Financial Disclosures(TCFD)was established by the Financial Stability Board(FSB).*2Click here to view the TCFD Consortium website*3*4Renewable energy power generation currently accounts for approximately 15%of our net generation capacity as of March 2022.We will increase this toapproximately 20%by 2023.*4Marubeni Corporation Sustainable Development Report 202438Initiatives for Solar,Wind and Biomass Power GenerationThroughout Japan,in addition to the development of micro-scale hydro-power generation projects,the Marubeni Group is activelyworking on generation of renewable energy that contributes to conservation of the global environment and biodiversity.Initiatives for Micro-Scale Hydro-Power Generation BusinessThe Marubeni Group considers micro-scale hydro-power generation as an important business area,and has been conducting operationsin this area through Group company,Mibugawa Power Company since 2006.As this business utilizes natural energy sources,consideration for the environment is essential,such as maintenance of water quality,reduction of waste materials,and conservation ofenergy,resources,and other local environment.The Marubeni Group aims to develop about 40 micro-scale hydro-power generationfacilities in Japan by 2025.Across Japan,we are actively working on generation of renewable energy that contributes to conservation of thelocal environment and biodiversity.“Micro-scale hydro-power generation”is a term used to refer to small-scale hydropower generation operations with output of less than1,000 kW.These operations do not require the use of dams or other facilities that entail large-scale construction projects,but rathergenerate power by utilizing rivers or agricultural irrigation canals,thus minimizing the development footprint.The environmental impacton water quality and the water habitat is exceptionally low,and there is no impact on land features or scenic beauty.Once up and running,these operations emit almost no CO2,thereby offering benefits in terms of minimal impact on biodiversity and environmentalconservation.Since it utilizes local water resources,it has the potential to be an effective technology to realize the production andconsumption of local energy,which will be beneficial for the independent development of the region.Moreover,to develop a power plantthat coexists with the local community,we are trying to realize the project with the understanding and cooperation of local organizationand people concerned through holding events on the theme of environment for residents,inviting lecturers,and deepeningunderstanding of the history of the planned site.Marubeni Corporation Sustainable Development Report 202439Producing power locally:Mibugawa PowerCompanyMicro-scale hydro-power station(Hokuto City,Yamanashi Prefecture)In addition to the Mibugawa Power Station No.1 and No.2,the Marubeni Group currently operates the following micro-hydro powergeneration facilities.Micro-Scale Hydro-Power Generation Facilities(as of March 2023)FacilityLocationApproved OutputMibugawa Power Station No.1Ina,Nagano Prefecture23,100kWMibugawa Power Station No.210,800kWMibugawa Power Station No.3260kWMibugawa Power Station No.4480kWTateshina Power StationChino,Nagano Prefecture260kWTateshina Power Station No.2141kWTateshina Power Station No.393kWTateshina Power Station No.4145kWShinmiyagawa Power StationKomagane,Nagano Prefecture195kWHokuto Nishizawa Power StationHokuto,Yamanashi Prefecture220kWHokuto Kagoishi Power Station230kWHokuto Kurabara Power Station200kWHonmonji Power Station No.1Fujinomiya,Shizuoka Prefecture120kWHonmonji Power Station No.2140kWShiroishi Power StationShiroishi,Miyagi Prefecture95kWHananosato Power StationShimogo,Fukushima Prefecture175kWBanyagawa Power Station150kWHimenuma Power StationInawashiro,Fukushima Prefecture160kWMinochigawa Power StationHiroshima,Hiroshima Prefecture180kWSagotani Power Station108kWToyohira Power StationKitahiroshima,Hiroshima Prefecture112kWTsukuyone Power StationWakasa,Tottori Prefecture7,890kWOshika Power Station No.1Misasa,Tottori Prefecture3,700kWOshika Power Station No.2Misasa,Tottori Prefecture4,990kWHinogawa Power Station No.1Hino,Tottori Prefecture4,300kWHozawa Hotaru Power PlantYamagata,Yamagata Prefecture170kW*5*5Mibugawa No.1and No.2 Power Station fall under the category of medium hydraulic power generation.*5Marubeni Corporation Sustainable Development Report 202440Coexistence with Local CommunityMibugawa Power Station has obtained Eco Action 21 certification,the first hydro-power facility to do so.Given that the intake of PowerStation No.2,which is located at the highest elevation,is next to a quasi-national park,and the facilities of the Mibugawa Power Stationare in a region with high biodiversity value,we strive not only to avoid destruction of nature,but also to preserve it.As part of that effort,in addition to conducting river cleanup activities and facility maintenance and emergency response training to be prepared for possible oilspills,Mibugawa Power Station takes measures for protection of biodiversity by conducting water quality inspections twice a year,not onlyto determine whether pollutants are present,but also to check whether the water has the oxygen content required by living organisms.The facility also welcomes local elementary and middle school students and over 100 residents each year for tours of the power station,and presents exhibits of hybrid power generation systems(wind,solar and hydro-power).These and other activities help educate peopleabout renewable energy and pass on the regions traditional culture.At the Hokuto City Murayamarokkamuraseki-Waterfarm,we use existing irrigation canals to supply renewable energy while makingappropriate adjustments to the volume of water used to ensure adequate supplies of irrigation water for farmland and water for household use.At the micro-scale hydro-power station in Shiroishi City,Miyagi Prefecture,the elevation difference in water pipes of water supply facilitiesis used to generate electricity with minimal impact on the surrounding environment.In addition,in selling power through Marubeni Power Retail Corporation,we are helping to improve biodiversity by allocating a portion ofthe electricity fees to forest maintenance and management.M&C Tottori Hydro Power Co.,Ltd.(hereafter,M&C Tottori Hydro Power)believes that building a trusting relationship throughcommunication with local residents is essential for the safe,secure,and stable operation of hydroelectric power generation projects.Tothis end,M&C Tottori Hydro Power has appointed a“staff member in charge of community coexistence”and has made efforts to reflectresidents opinions of its operations on its website.In addition,the company regularly communicates with local stakeholders,including sixlocal municipalities(Wakasa,Yazu,Kurayoshi,Misasa,Nichinan and Hino Town)and various councils on important issues related to theenvironmental impacts,e.g.,on rivers,that may arise from construction,inspections,etc.Thanks to these initiatives,M&C Tottori HydroPower understands each municipalitys needs(including complaints)and business risks and incorporates them into its managementstrategy.In addition,M&C Tottori Hydro Power plans to offer on-site classes and work experience for elementary and junior high schools on thetheme of hydroelectric power generation projects.M&C Tottori Hydro Power contributes to the economic development of the region byimproving the knowledge of local residents and linking it to the development of the next generation of human resources.Marubeni Clean Power Corporation(hereafter,“Marubeni Clean Power”)is“committed to solving local social issues and coexisting with localcommunities and the natural environment.”Therefore,Marubeni Clean Power is developing renewable energies,mainly biomass,with theaim of realizing a“stable energy supply closely linked to the community.”As part of its business activities,Marubeni Clean Power is activelyinvolved in interactions with local stakeholders,such as local environmental fairs and beautification campaigns,conducting power plant toursand distributing solar kits to local elementary school children,and participating in study sessions of the Chamber of Commerce and Industry.Marubeni Clean Power participates in the“Biomass Power Association”(hereafter,the Association)as a regular member(Director Company)and serves as its representative director.The Association,which was primarily established by power generation companies,promotes thebiomass power generation business and the sound development of the biomass industry,working to help build a sustainable,recycling-oriented society and foster global environmental conservation.Marubeni Ina Mirai Denki Corporation provides electric power retail and energy-related services in and around Ina City,NaganoPrefecture,with the aim of offering services that address the challenges of daily life in the community.As part of its investment in thecommunity,the company has installed“quick chargers for cars,”which contribute to the local production and consumption of electricity.The company

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  • 摩根大通公司(JPMORGAN CHASE)2023年ESG报告(英文版)(88页).pdf

    2023 Environmental Social Governance Report We believe in free enterprise.Notes A NOTE ON OUR BUSINESS We dont“boycott.”A NOTE ON OUR TARGETS JPMorgan Chase&Co.provides fnancial services for individuals and industries across geographies regardless of political,social or religious viewpoints.We deal in facts and dont describe our policies,procedures or progress diferently based on whos asking.Our ambition is to work with shareholders,clients,customers and communities around the world to fulfll bankings essential purpose of helping people,businesses of all sizes and vital institutions like schools,hospitals and governments achieve their goals.We support clients around the globe and in every state in the U.S.,across industries,religions and political afliation.We proudly serve more than 82 million consumer customers in the U.S.,6.4 million small businesses and hundreds of thousands of companies in critical economic sectors.We do not make decisions based on political or social agendas.Markets and economies of all sizes beneft when free and fair enterprise thrives creating innovation,competition and maximizing value for shareholders,clients,customers and communities.Government intervention of free market principles,or attempting to use businesses to advance a political or social agenda sets a dangerous precedent.We set targets to do our part in seeking a sustainable and inclusive future using our own independent assessment of what we determine is reasonable,achievable and will serve the best interest of our business and serving our clients.While we pursue these targets,we note that they are subject to other prerequisites and critical considerations,both within and outside our control.These include the necessity of technological advancements;data quality and availability;the evolution of consumer behavior and demand;the business decisions of our clients,who are responsive to their own stakeholders;the need for thoughtful public policies;the potential impact of legal and regulatory obligations;market conditions;and the challenge of balancing short-term targets with the need to facilitate an orderly transition and energy security.We manage risk.We value engagement.Managing risk is critical to the long-term success of our business and required by our regulators.We make risk-based assessments,including legal,credit,market,reputational and regulatory,to drive decisions and advance the interests of our constituencies.We believe the best answers reside in engagement and discourse.When policymakers seek input to tackle challenges,we want to help.We know that our success requires working closely with government and stakeholders on sound public policy that grows the economy and lifts up communities.Throughout our history,we have engaged with ofcials from all parties to address the worlds most pressing needs,and we look forward to continuing to do so.We make independent business decisions for the Firm.We make business decisions to advance the long-term interests of our Firm and its shareholders,including serving our clients,supporting our employees and helping our communities.We work with a broad array of organizations that advance those interests,even if we dont support every position taken.Firm decisions are always made independently and based on business principles.We want to compete.Our ability to compete,in both established and new markets,is critical to the long-term success of our business.We decide where and how we choose to compete by assessing risk and opportunity,not to further political or social agendas.DISCLAIMERS The information provided in this report refects JPMorgan Chases approach to ESG as at the date of this report and is subject to change without notice.We do not undertake to update any of such information in this report.Any references to“sustainable investing”,“sustainable investments”,“ESG”or similar terms in this report are intended as references to the internally defned criteria of the Firm or our businesses only,as applicable,and not to any jurisdiction-specifc regulatory defnition.Our approach to inclusion of disclosures in this report is informed by the Global Reporting Initiative(GRI)and relevant Sector Standards,and the Sustainability Accounting Standards Board(SASB)reporting standards and is diferent from disclosures included in mandatory regulatory reporting,including under Securities and Exchange Commission(“SEC”)regulations.While this report describes events,including potential future events,that may be signifcant,any signifcance does not necessarily equate to the level of materiality of disclosures required under law,including U.S.federal securities law.This report is not intended to,nor can it be relied on,to create legal relations,rights or obligations.This report is intended to highlight some of the work of JPMorgan Chase in the areas of environmental,social,and governance;it is not comprehensive or necessarily representative of all of our activities in those areas.As outlined in our public reporting,JPMorgan Chase continues to work with and has exposure to clients and organizations across industries,including Oil&Gas,Utilities,Metals&Mining,and Chemicals&Plastics.This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.These statements relate to,among other things,our goals,commitments,targets,aspirations,approaches,and objectives,and are based on the current beliefs and expectations of JPMorgan Chases management and are subject to signifcant risks and uncertainties,many of which are beyond JPMorgan Chases control.Expected results or actions may difer from the anticipated goals,approaches,and targets set forth in the forward-looking statements.Factors that could cause JPMorgan Chases actual results to difer materially from those described in the forward-looking statements include the necessity of technological advancements;data quality and availability;the evolution of consumer behavior and demand;the business decisions of our clients,who are responsive to their own stakeholders;the need for thoughtful public policies;the potential impact of legal and regulatory obligations;market conditions;and the challenge of balancing short-term targets with the need to facilitate an orderly transition and energy security.Addi-tional factors can be found in JPMorgan Chases Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q and Current Reports on Form 8-K fled with the SEC.Those reports are available on JPMorgan Chases website(https:/jpmorganchaseco.gcs- on the Securities and Exchange Commissions website(https:/www.sec.gov/).JPMorgan Chase does not undertake to update any forward-looking statements.This report does not include all applicable terms or issues and is not intended as an ofer or solicitation for the purchase or sale of any fnancial instrument or as an ofcial confrmation of any transaction or a recommendation for any investment product or strategy.Any and all transactions(including potential transactions)presented herein are for illustration purposes only.This material does not and should not be deemed to constitute an advertisement or marketing of the Firms products and/or services or an advertisement to the public.No reports,documents or websites that are cited or referred to in this document shall be deemed to form part of this report.Information contained in this report has been obtained from sources,including those publicly available,believed to be reliable,but no representation or warranty is made by JPMorgan Chase as to the quality,completeness,accuracy,ftness for a particular purpose or non-infringement of such information.Sources of third-party information referred to herein retain all rights with respect to such data and use of such data by JPMorgan Chase herein shall not be deemed to grant a license to any third party.The use of any third-party trademarks or brand names is for informational purposes only and does not imply an endorsement by JPMorgan Chase or that such trademark owner has authorized JPMorgan Chase to promote its products or services.Contents Introduction 4 Governance 14 Message from Our Chairman 5 Corporate Governance&ESG Oversight 15 Company at a Glance 6 Stakeholder Engagement 16 Our Approach to ESG 8 Political,Public Policy&Industry Engagement 19 Our$2.5T Sustainable Development Target 9 Managing Environmental and Social Risks 20 Human Rights 20 Data Privacy&Cybersecurity 21 Business Ethics 23 Social 41 Appendices 72 Inclusive Growth 42 List of Acronyms 73 Diversity,Equity and Inclusion 53 Our Key ESG Topics 74 Human Capital 64 Global Reporting Initiative Index 75 Sustainability Accounting Standards Board Index 79 Restricted Activities and Sensitive Business Activities and Locations 82 JPMorgan Chase Annual Sustainable Bond Report 84 Environment 25 Our Environmental Sustainability Strategy 26 Scaling Green Solutions 27 Balancing Environmental,Social and Economic Needs 30 Minimizing Our Operational Impact 33 4 Introduction JPMorgan Chase has branches across 48 states and Washington,D.C.Pictured:Crenshaw Community Branch,Los Angeles,California Message from Our Chairman INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES At JPMorgan Chase,we know that maintaining a healthy and vibrant company that takes care of employees,customers and communities helps build shareholder value.The prior years events,including infation rates,volatile markets and growing political tensions,have demonstrated that our fortress balance sheet and our dedication to excellence in operations and service helped our clients and customers navigate a range of economic and geopolitical challenges.In good and tough times,we remain committed to helping make opportunities happen and foster sustainable,inclusive economic growth which is good for those we serve.In this ESG Report,we explain how we harness business opportunities and mitigate risks,as well as highlight our ongoing eforts to do our part to support the energy transition and sustainable development.We believe our actions help us to continue to earn stakeholders trust and their business.The report highlights the progress toward our Sustainable Development Target,which includes actions that support our Green,Development Finance and Community Development objectives.We believe that economic growth,energy security and sustainability are interconnected.In 2023,amidst ongoing global uncertainty,we continued to support energy security and the ongoing transition to low-carbon energy sources.In 2023,we expanded our Oil and Gas End Use target to an Energy Mix target to refect how our fnancing supports the energy transition and presents a more comprehensive view of the decarbonization eforts of our clients.We also updated our Auto Manufacturing,Electric Power and Oil&Gas Operational emissions intensity reduction targets to align with net zero by 2050 and added two sectors Shipping and Aluminum.We also continued eforts to minimize our environmental impacts across our corporate ofces,data centers and branch network.We remain committed to advancing sustainable community development.For example,while we have served Detroit for more than 90 years,our$200 million investment in the citys economic recovery during the prior decade underscores that sustained community investment is a smart business strategy.Looking back,we see the returns in the strength of our customers and communities in their abilities to access opportunity,plan for the future and pursue their dreams.Since making our initial commitment in 2014,our market share in Detroit has increased,Chase consumer and small business accounts and balances have risen,and mortgage originations have improved.The city is an incubator of ideas,which weve learned from and taken to several other communities to drive lasting change.We do this work because we know healthy communities are important to our business success.Finally,we are focused on doing whats right for our business and our people.Im most proud of our more than 309,000 employees who continue to act with integrity and purpose that drives impact and connects those we serve with products and services that help them achieve their goals.We continue to invest to attract and retain a talented,diverse workforce that will support our Firms eforts into the future.Please read this years ESG Report to learn more about how we bring our expertise,capital,data and resources to meaningfully contribute to the markets we operate in and drive shareholder value.Jamie Dimon Chairman&CEO,JPMorganChase April 2024 5 Operational excellence A great team and winning culture Company at a Glance INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES How We Do Business JPMorgan Chase&Co.(“JPMorgan Chase”,the“Firm”or“we”)is a fnancial services frm based in the United States of America(“U.S.”),with branches in 48 states and Washington D.C.,309,926 employees in 65 countries and$3.9 trillion in assets as of December 31,2023.The Firm is a leader in investment banking,fnancial services for consumers and small businesses,commercial banking,fnancial transaction processing and asset management.Under the J.P.Morgan and Chase brands,the Firm serves millions of customers,predominantly in the U.S.,and many of the worlds most prominent corporate,institutional and government clients globally.JPMorgan Chases activities are organized,for management reporting purposes,into four major reportable business segments1,as well as a Corporate segment.The Firms consumer business is the Consumer&Community Banking(“CCB”)segment.The Firms wholesale business segments are the Corporate&Investment Bank(“CIB”),Commercial Banking(“CB”),and Asset&Wealth Management(“AWM”).The business segments are referred to as“lines of business”(“LOB”).For further information,refer to Business Segment Results on pages 6585 of our Form 10-K for the year ended December 31,2023.PURPOSE AND BUSINESS PRINCIPLES Our Business Principles guide how we do business and unite our company across the globe.Our purpose Make dreams possible for everyone,everywhere,every day knits together our values with our everyday business principles and explains how we have done business for years.We fulfl our purpose through our ongoing dedication to invest in our employees and businesses,further strengthen the market leadership of our franchises,generate long-term value for our shareholders,and help strengthen the broader economy.Exceptional client service 1.Focus on the customer 2.Be feld and client driven and operate at the local level 3.Build world-class franchises,investing for the long term,to serve our clients 4.Set the highest standards of performance 5.Demand fnancial rigor and risk discipline;We will always maintain a fortress balance sheet 6.Strive for the best internal governance and controls 7.Act and think like owners and partners 8.Strive to build and maintain the best,most efcient systems and operations 9.Be disciplined in everything we do 10.Execute with both skill and urgency A commitment to integrity,fairness and responsibility 11.Do not compromise our integrity 12.Face facts 13.Have fortitude 14.Foster an environment of respect,inclusiveness,humanity and humility 15.Help strengthen the communities in which we live and work 16.Hire,train and retain great,diverse employees 17.Build teamwork,loyalty and morale 18.Maintain an open,entrepreneurial meritocracy for all 19.Communicate honestly,clearly and consistently 20.Strive to be good leaders 1 On January 25,2024,JPMorgan Chase announced new responsibilities for several key executives.As a result of these organizational changes,the Firm will be reorganizing its business segments to refect the manner in which the segments will be managed.The reorganization of the business segments is expected to be efective in the second quarter of 2024.6 INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES Consumer&Community Banking Consumer&Community Banking ofers products and services to consumers and small businesses through bank branches,ATMs,digital(including mobile and online)and telephone banking.CCB is organized into Banking&Wealth Management(including Consumer Banking,J.P.Morgan Wealth Management and Business Banking),Home Lending(including Home Lending Production,Home Lending Servicing and Real Estate Portfolios)and Card Services&Auto.Banking&Wealth Management ofers deposit,investment and lending products,cash management,payments and services.Home Lending includes mortgage origination and servicing activities,as well as portfolios consisting of residential mortgages and home equity loans.Card Services issues credit cards and ofers travel services.Auto originates and services auto loans and leases.Corporate&Investment Bank The Corporate&Investment Bank,which consists of Banking and Markets&Securities Services,ofers a broad suite of investment banking,market-making,prime brokerage,lending,and treasury and securities products and services to a global client base of corporations,investors,fnancial institutions,merchants,government and municipal entities.Banking ofers a full range of investment banking products and services in all major capital markets,including advising on corporate strategy and structure,capital-raising in equity and debt markets,as well as loan origination and syndication.Banking also includes Payments,which provides services,that enable clients to manage payments globally across liquidity and account solutions,commerce solutions,clearing,trade and working capital.Markets&Securities Services includes Markets,a global market-maker across products,including cash and derivative instruments,which also ofers sophisticated risk management solutions,prime brokerage,clearing and research.Markets&Securities Services also includes Securities Services,a leading global custodian which provides custody,fund accounting and administration,and securities lending products principally for asset managers,insurance companies and public and private investment funds.Commercial Banking Commercial Banking provides comprehensive fnancial solutions,including lending,payments,investment banking and asset management products across three primary client segments:Middle Market Banking,Corporate Client Banking and Commercial Real Estate Banking.Middle Market Banking covers small and midsized companies,local governments and nonproft clients.Corporate Client Banking covers large corporations.Commercial Real Estate Banking covers investors,developers,and owners of multifamily,ofce,retail,industrial and afordable housing properties.Asset&Wealth Management Asset&Wealth Management,with client assets of$5.0 trillion,is a global leader in investment and wealth management.Asset Management ofers multi-asset investment management solutions across equities,fxed income,alternatives and money market funds to institutional and retail investors providing for a broad range of clients investment needs.Global Private Bank provides retirement products and services,brokerage,custody,estate planning,lending,deposits and investment management to high net worth clients.The majority of AWMs client assets are in actively managed portfolios.Corporate The Corporate segment consists of Treasury and Chief Investment Ofce(“CIO”)and Other Corporate.Treasury and CIO is predominantly responsible for measuring,monitoring,reporting and managing the Firms liquidity,funding,capital,structural interest rate and foreign exchange risks.Other Corporate includes staf functions and expense that is centrally managed as well as certain Firm initiatives and activities not solely aligned to a specifc LOB.The major Other Corporate functions include Real Estate,Technology,Legal,Corporate Finance,Human Resources,Internal Audit,Risk Management,Compliance,Control Management,Corporate Responsibility and various Other Corporate groups.Information about JPMorgan Chases fnancial performance is available in our quarterly earnings materials,as well as quarterly and annual reports on Form 10-Q and Form 10-K,respectively.7 INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES Our Approach to ESG At JPMorgan Chase,we aim to support inclusive,sustainable economic growth because we believe our business thrives when all the communities we serve do the same.The fnance sector can help to address some of the most pressing environmental and social(“E&S”)challenges of our time,primarily by running a healthy and vibrant company;supporting its clients,customers and employees;and providing targeted capital to help scale solutions.With our Purpose and Business Principles in mind,we are leveraging our expertise,capital,data and resources to advance inclusive growth,promote sustainable development,and support the transition to a low-carbon economy.Environmental,Social and Governance(ESG)matters are an important consideration in how we do business,including how we develop our products and services,serve our customers,support our employees and help lift our communities.Our approach to ESG is supported and strengthened by our ongoing eforts to enhance accountability,transparency and engagement.Additionally,we strive to leverage the Firms governance structures to foster sound management and a culture of accountability on ESG matters.This includes defning oversight and management of ESG matters within and across our lines of business.About This Report This ESG Report is designed to consolidate and summarize our work on ESG topics that are important to our business and stakeholders and to guide readers to where they can access more detailed information about specifc topics of interest.All data in this report is as of December 31,2023,unless otherwise noted.Information on how we identifed ESG topics pertinent to our business,operations and stakeholders for the purposes of our ESG reporting can be found in Our Key ESG Topics in the Appendix section.This report has also been informed by the Global Reporting Initiative(GRI)and relevant Sector Standards,as well as the International Financial Reporting Standards(“IFRS”)Foundations Sustainability Accounting Standards Board (SASB)Standards.Our ESG Report Appendices(see pages 7581)on GRI and SASB map our Firms disclosures related to these frameworks indicators and recommendations.Our Firm communicates information about our ESG practices and performance through a number of channels including our Annual Report and Proxy Statement,ESG and Climate reports,regulatory flings,our website,press releases,direct conversations with stakeholders,and various other reports and presentations.We maintain a dedicated ESG Information page on our website to facilitate access to information that we publish on these topics.8 Green Development Finance Our$2.5T Sustainable Development Target INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES We believe creating sustainable economic growth is important to the long-term strength and vibrancy of the global economy,as well as to the prosperity and well-being of people and communities around the world.In 2021,we established our Sustainable Development Target(“SDT”)with a clear purpose:to help catalyze global sustainable economic growth.To us,this means using our capital and expertise to support our clients and customers and help accelerate the global transition to a low-carbon economy,while also contributing to socioeconomic development and inclusive growth.Our goal is to fnance and facilitate more than$2.5 trillion over 10 years from 2021 through the end of 2030 to help advance long-term climate solutions and contribute to sustainable development.Our end-of-2030 goal corresponds with the timeframe we set to meet our net zero-aligned targets for our fnanced emissions(see pages 3031),as well as the timeframe set by the United Nations for achieving the United Nations Sustainable Development Goals(“SDGs”).Our SDT refects the Firms global,diversifed franchise incorporating activity across both our retail and wholesale banking segments and aims to grow and strengthen our business activities across three important objectives:Green,Development Finance and Community Development.Business activities that qualify toward the SDT include transactions in which the Firm is raising capital and/or extending credit,those for which we are providing advisory,risk management and other facilitation services,and principal capital investments made for commercial purposes2.We developed the SDTs criteria and methodology taking into account international market practices and industry standards,such as the SDGs,the International Capital Market Associations Green and Social Bond Principles,and the International Finance Corporations Anticipated Impact Measurement and Monitoring system.We aim to be transparent in our methodology and may recalibrate our approach over time.For more information about our criteria for determining which business activity is eligible to count toward our Sustainable Development Target and how we account for the value of transactions,see Our Approach to Our Sustainable Development Target.Aiming to support climate action,clean energy,and sustainable resource management,with a focus on accelerating the deployment of solutions for cleaner sources of energy and facilitating the transition to a low-carbon economy.We are targeting$1 trillion toward this objective by the end of 2030.Working to support sustainable development in emerging economies,with a focus on mobilizing capital to advance the United Nations Sustainable Development Goals.Community Development Striving to advance economic inclusion in developed markets,with a focus in the United States on Low-to-Moderate Income individuals and communities and closing the racial wealth gap among Black,Hispanic and Latino individuals and communities.This includes many of the actions we are taking as part of our Racial Equity Commitment.2 Activities that we count toward our SDT and that meet the eligibility criteria detailed in our Sustainable Bond Framework may also be included in our Sustainable Asset Portfolio,to which net proceeds from our Sustainable Bond issuances are allocated.For more information on JPMorgan Chases Sustainable Bond issuances,see page 84.9 OUR APPROACH TO TRANSACTIONS THAT SUPPORT MULTIPLE OBJECTIVES USING OUR PRINCIPAL CAPITAL IN SUPPORT OF SUSTAINABLE DEVELOPMENT INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES Progress Toward the Sustainable Development Target3PROGRESS TOWARD THE SUSTAINABLE DEVELOPMENT TARGET5,6$285B$2.5T By the end of 20302021$197B 2022$194B 2023$675B|27%Since 2021We track progress toward our SDT by attributing business activity across the Firm that supports our SDTs objectives.Progress toward our SDT,like our other ESG-related initiatives,is subject to certain prerequisites both within and outside our control.These include market conditions,public policy and technological advancement,among others.Our fnancing and advisory initiatives are also subject to the same macroeconomic conditions that impact our franchise and the broader fnancial markets.ANNUAL PROGRESS(2023)$8BCB$26B$194B TOTAL$15B Community$66B CCB Development Green$194B TOTAL$89BCIB$102B Markets$81BDevelopment CIBFinanceInvestment BankingIn 2023,we fnanced and facilitated approximately$194 b illion toward the SDT:$66 billion toward the Green objective,$102 b illion toward the Development Finance objective and$26 billion toward the Community Development objective.Collectively,since 2021,we have fnanced and facilitated$675 billion toward our SDT,including$242 billion toward our$1 trillion Green objective.Despite a complex global macroeconomic environment during 2023,we continued to make progress toward our SDT and to support our clients.However,challenging mar-ket conditions,including rising interest rates and a decline in global investment bank-ing activities,contributed to slower progress compared to 2022.4Our progress toward our SDT will continue to be infuenced by market conditions,public policy,and technological advancement,and as such,we do not expect our progress to be linear.In line with the Firms approach for the rest of our business,we do not manage the SDT focused on short-term results,but rather,focused on positioning ourselves to drive long-term progress.At JPMorgan C hase,we are focused on supporting our clients through the cycle including in their sustainable development ambitions and we will continue to play our part to help advance sustainable development.In this section,we report our progress in each objective through December 31,2023.CUMULATIVE PROGRESS(20212023)$38B CB$127B$675B TOTAL$69B$242BCommunity CCB$675B TOTAL$258BDevelopment Green CIB Markets$306B$310B Development CIB Finance Investment Banking Note:Totals may not sum due to rounding.3 Reported progress toward the SDT for the year 2023 refects of updates to Our Approach to Our Sustainable Development Target published April 2024.Updates to our Our Approach and determinations regarding eligibility and categorization of transactions into diferent criteria,are overseen by an internal governance group.4 Global investment banking activities(i.e.,M&A,equities,bonds and loans)were down in 2023 by 10%compared to the previous year according to Dealogic.5 On May 1,2023,JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank(“FRB”)from the Federal Deposit Insurance Corporation,as receiver.As of December 31,2023,reported progress toward our SDT and/or any of its objectives does not include transactions executed by FRB prior to acquisition.Post-acquisition,transactions executed by JPMorgan Chase are counted toward our SDT.6 On January 25,2024,JPMorgan Chase announced new responsibilities for several key executives.As a result of these organizational changes,the Firm will be reorganizing its business segments to refect the manner in which the segments will be managed.The reorganization of the business segments is expected to be efective in the second quarter of 2024.The three objectives of our SDT Green,Development Finance and Community Development refect our belief that creating sustainable economic growth requires advancing environmental,economic and social goals.When tracking transactions that support multiple objectives of our SDT,we count transactions only once and toward only one objective in the following order(as applicable):Green,Development Finance or Community Development.With this approach,we seek to avoid double counting,simplify tracking toward our progress,and create clarity in our disclosures.We disclose more information on some of these key areas in the following sections,such as how we track and count sus-tainability bonds,and certain J.P.Morgan Development Finance Institution(“JPM DFI”)and Community Development activities toward our Green objective.We also highlight case studies that overlap across two objectives of our SDT to underscore the benefts that can be created by simultane-ously supporting the advancement of environmental and social issues(see page 13).When done for commercial purposes and aligned with our eligibility criteria,we may count our principal capital investments toward our SDT.We believe our principal capital can help catalyze the growth and success of companies developing solutions to help achieve sustainable development.For example,in 2023,the Firm became an investor in the United Airlines Ventures Sustainable Flight Fund,a frst-of-its-kind investment vehicle designed to support early-stage companies focused on decarbonizing air travel by accelerating the research,production and technologies associated with Sustainable Aviation Fuels.This investment is refected in our reported progress toward the Green objective for the year 2023.10 OUR SUSTAINABLE DEVELOPMENT TARGET IN ACTION:VIRIDI ENERGY AND AMERICAN ORGANIC ENERGY Green PROGRESS TOWARD THE$1 TRILLION GREEN OBJECTIVE Our$1 trillion Green objective is intended to support the development and scaling of climate solutions and sustainable resource management.Developing solutions sufcient to meet the climate challenge will require signifcant capital,including capital to deploy and scale clean energy solutions to meet the worlds growing$242B|25%$106B Since 2021$70B$66B$1T 2021 2022 2023 By the end of 2030 energy needs.Capital is also required to promote the sustainable management of resources,including water and forests.These aims can support each other;certain climate solutions,such as reforestation,can also have positive impacts on nature,biodiversity and the sustainable management of resources.Eligible green activities include areas such as renewable and clean energy,sustainable transportation,sustainable food,water management,and conservation and biodiversity.CUMULATIVE PROGRESS BY LINE OF BUSINESS INTRODUCTION Commercial Banking$2$2$5 In 2023,we fnanced and facilitated approximately$66 billion in support of our Green objective,particularly through green bond underwriting and fnancing for renewable and clean energy.Consumer and Community Banking$1$5$7 2022$B 2023$Bii Cumulative Total$B iMessage from Our Chairman CIB Markets$17$17$66 We support green activities through a variety of business activities around our Firm,such as raising capital for clean technology companies and providing consumer auto fnancing for electric vehicles.Company at a Glance CIB Investment Banking$51$42$165 Our Approach to ESG Many of the eligible transactions counted toward our Green objective can be used for multiple eligible activities (e.g.,a green bond where proceeds can be used for both renewable energy and water conservation)and are,therefore,categorized as“multiple criteria.”We show a breakdown of the types of transactions included in the multiple criteria category in the pie chart on this page.Our$2.5T Sustainable Total$70$66$242 Note:Totals may not sum due to rounding.Development Target i.Total as cumulative progress from 2021 to 2023.ii.Reported progress toward Green objective for the year 2023 includes JPMorgan Chases principal capital investment in the United Airlines Ventures Sustainable Flight Fund(see page 10 for more information).GOVERNANCE CUMULATIVE PROGRESS BY ELIGIBILITY CRITERIA ENVIRONMENTAL CASE STUDY SOCIAL 2022$B 2023$B Cumulative Total$B iIn 2023,JPMorgan Chase provided fnancing of$27.6 million to support the Viridi Energy and American Organic Energy(“AOE”)partnership in the construction of a waste-to-energy facility located in Yaphank,New York.The AOE facility is projected to convert approximately 210,000 metric tons of food waste per year into renewable natural gas(“RNG”)and agriculture products and,once completed,it is expected to be one of the largest facilities of its kind in the U.S.The project also represents a step toward circularity in waste disposal as it is expected to house the frst anaerobic digester to process food waste in the New York City metropolitan area.It also aligns with the food loss and waste reduction domestic goals set by the U.S.Department of Agriculture and U.S.Environmental Protection Agency.In addition,the facility is expected to generate emissions reductions of approximately 100,000 metric tons of CO2e per year and is projected to produce a volume of RNG equivalent to 10 million gallons of gasoline annually.A 2 0-year oftake agreement for renewable energy produced at the facility has been signed by a Canadian energy solutions provider.Renewables and Clean Energy$20$15$50 Total$70$66$242 2023 PROGRESS IN MULTIPLE CRITERIA APPENDICES Clean Technology$4$4$9$20B Green Bonds$12B Sustainability Bonds$3B Emissions Contracts$37B TOTAL$2B Other Note:Totals may not sum due to rounding.Sustainable Transportation$2$6$30 Green Buildings$4$1$7 Water Management$2$2$10 Circular Economy and Waste Management$1$0$1 Multiple Criteria$37$37$134 Note:Totals may not sum due to rounding.i.Total as cumulative progress from 2021 to 2023.11 INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES Development Finance CUMULATIVE PROGRESS BY LINE OF BUSINESS7 2022$B 2023$B Cumulative Total$BiThe Development Finance objective of the SDT highlights the work of the JPM DFI,which works to mobilize capital toward sustainable development in developing countries.The JPM DFI qualifes CIB transactions with anticipated environmental and socioeconomic impacts,including eligible markets transactions such as derivatives(foreign exchange,rates,commodities).The JPM DFI also acts as the development fnance structuring agent(“DFSA”)for a diverse set of corporate and sovereign transactions,which involves assisting clients to measure and communicate the development impact of their transaction with investors and other stakeholders.It also seeks to expand the market for development fnance overall and grow the pool of CIB Investment Banking$39$35$125 CIB Markets$48$67$181 Total$87$102$306 Note:Totals may not sum due to rounding.i.Total as cumulative progress from 2021 to 2023.investors interested in transactions that ofer fnancial returns and advance the SDGs.For more information,see the JPM DFI 2023 Annual Report.In 2023,approximately$102 billion of development fnance activity CUMULATIVE PROGRESS BY REGION qualifed toward the SDT.CASE STUDY OUR SUSTAINABLE DEVELOPMENT TARGET IN ACTION:FONDO MIVIVIENDA S.A.2022$B 2023$B Cumulative Total$B iIn addition to the$102 billion,the JPM DFI qualifed$13 billion which we counted towards the Green objective instead of the Development Finance objective,per our SDT methodology.The$115 billion total is refected in the East Asia&Pacifc$16$21$75 In June 2023,Fondo MIVIVIENDA S.A.(“FMV”),a Peruvian state-owned mortgage lender and provider of afordable housing fnancing,signed an agreement for a line of credit from JPMorgan Chase,guaranteed by the World Bank Groups Multilateral Investment Guarantee Agency.FMV plans to use this line of credit to provide social and green mortgages to low-and middle-income families in Peru.South Asia$2$1$9 Latin America&Caribbean$19$17$72 Eastern Europe&Central Asia$18$23$56 JPM DFI 2023 Annual Report Sub-Saharan Africa$4$3$16 With the loan,FMV plans to accelerate its lending activity in social mortgages through a program that provides direct state-issued subsidies to enable low-income families to buy,build or improve their housing.FMVs mortgages are expected to bolster the real estate and construction markets in Peru,creating direct and indirect employment opportunities in the country and supporting overall housing infrastructure.In addition to providing funding for afordable housing in Peru,FMV aims to improve the environmental sustainability of the housing fnanced by providing green mortgages for homes with lower environmental impact,at lower rates relative to standard mortgages.To monitor the incremental environmental benefts of the green mortgages,FMV has set targets to improve water efciency,increase renewable energy generation,and reduce energy consumption for homes fnanced through the green mortgage program and has committed to report these metrics on an annual basis for the duration of the credit line.Middle East&North Africa$0$0$2 Global Development Institutions$28$37$77 Total$87$102$306 Note:Totals may not sum due to rounding.i.Total as cumulative progress from 2021 to 2023.7 Categorization of activities that count toward the Development Finance objective of our SDT is performed based on the type of activities rather than by the originating LOB.12 INTRODUCTION Message from Our Chairman Company at a Glance Our Approach to ESG Our$2.5T Sustainable Development Target GOVERNANCE ENVIRONMENTAL SOCIAL APPENDICES Community Development Our work in the Community Development objective of our SDT supports areas such as homeownership and afordable housing,small business growth,education and healthcare,with a focus on Low-to-Moderate Income (“LMI”)individuals and underserved communities,and Black,Hispanic and Latino individuals and communities.In 2023,we fnanced and facilitated approximately$26 billion toward this objective.This includes$8 b illion in home ownership,$2 b illion in small business fnancing and$9 b illion for afordable housing.The Community Development objective includes many of the activities we are engaging in as part of our Racial Equity Commitment to help close the racial wealth gap and advance economic inclusion among historically underserved communities in the U.S.,including Black,Hispanic and Latino customers and communities this includes lending and equity investments to help increase homeownership,expand afordable housing and support for vital community institutions,and grow small businesses.Of the$127 billion qualifed to this objective of our SDT since 2021,approximately$28.6 billion counted toward our Racial Equity Commitment.For more detail on our Racial Equity Commitment,see page 5459.CASE STUDY OUR SUSTAINABLE DEVELOPMENT TARGET IN ACTION:CONCERN HOUSING8At JPMorgan Chase,we strive to help provide sustainable and afordable housing for New Yorkers.As part of these eforts,the Firm supported Concern Housing,a non-proft organization that works across the public and private sectors to help individuals and families access afordable and sustainable housing.In 2023,JPMorgan Chase provided an approximately$25 million construction loan to Concern Housing to build Concern Logan,a 66-unit afordable housing development in Brooklyn,New York.Upon completion,in 2025,the development is expected to be submitted for certifcation under the Enterprise Green Communities Criteria(“EGCC”),the comprehensive green building framework developed by Enterprise Community Partners to design afordable housing that provides cost-efective standards for creating healthy,energy-efcient and environmentally responsible homes.The housing development aims to provide safe and consistent housing for adults,including veterans,experiencing homelessness and individuals with psychiatric disabilities.Concern Housing plans to provide support and resources to residents as they transition out of homelessness,including job placement services,counseling and medical care.To learn more about how we support afordable housing,please see page 5455.CUMULATIVE PROGRESS BY LINE OF BUSINESS 2022$B 2023$B Cumulative Total$B iCommercial Banking$13$6$33 Consumer and Community Banking$18$11$62 CIB Markets$4$5$12 CIB Investment Banking$6$4$20 Total$40$26$127 Note:Totals may not sum due to rounding.i.Total as cumulative progress from 2021 to 2023.CUMULATIVE PROGRESS BY ELIGIBILITY CRITERIA 2022$B 2023$B Cumulative Total$B iAfordable Housingii$15$9$42 Home Ownershipiii$16$8$55 Black,Hispanic and Latino$7$5$26 Low-to-Moderate Income$8$4$29 Small Businessiv$2$2$7 Black,Hispanic and Latino$1$1$3 Low-to-Moderate Income$1$1$4 Vital Community Institutionsv$0$1$1 Social Bonds$7$6$23 Total$40$26$127 Note:Totals may not sum due to rounding.i.Total as cumulative progress from 2021 to 2023.ii.Refects total dollar amount of fnancing for the preservation,construction,rehabilitation and/or refnance of afordable housing.Inclusive of loans originated for the refnance or purchase of multifamily afordable housing under the Afordable Housing Preservation Program;fnancing for multifamily government subsidized afordable housing projects or other housing projects benefting to low-to-moderate households;equity commitments to partnerships or limited liability companies that own rental properties that qualifes within in Section 42 of the Internal Revenue Code for Low-Income Housing Tax Credit(“LIHTC”);equity commitments to Preservation Funds and Racial&Income Equity Funds;the full loan origination amount for multifamily afordable housing loans underwritten by JPMorgan C hase through the Fannie Mae DUS Program.Where applicable,our Racial Equity Commitment refects incremental dollar amount measured against 2019 baseline business results for these commitments.See our website for Program-To-Date Progress on our Racial Equity Commitment.iii.Refects total dollar amount of originated home purchase or refnance loans,where applicable,our Racial Equity Commitment refects incremental dollar amount measured against 2019 baseline business results for these commitments.See our website for Program-To-Date Progress on our Racial Equity Commitment.iv.Refects total dollar amount of loans or lines of credit,whereas our Racial Equity Commitment refects incremental dollar amount measured against 2019 baseline business results for these commitments.See our website for Program-To-Date Progress on our Racial Equity Commitment.v.Refects total dollar amount of loans,lines and letters of credit to certifed CDFIs,CDFI-managed funds,and similar afordable housing intermediaries(e.g LIHTC syndicators)and funded Qualifed Equity Investment to New Market Tax Credit(“NMTC”)Investments;whereas our Racial Equity Commitment refects incremental dollar amount measured against 2019 baseline business results for these commitments.See our website for Program-To-Date Progress on our Racial Equity Commitment.8 This transaction supports Green and Community Development objectives.Per our approach to transactions that support multiple objectives,detailed in page 10,this transaction was counted toward the Green objective of our SDT.13 14 Governance We aim to set high standards in our business activities and through engagement with our stakeholders.Our governance structures are designed to promote accountability,transparency and ethical behavior consistent with our corporate standards and Business Principles.Responsibility for oversight and management of ESG occurs at multiple levels within the organization.Pictured:Columbus,Ohio Corporate Governance&ESG Oversight INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES At JPMorgan,our corporate governance practices are designed to serve the diverse interests of our stakeholders,including customers,clients,employees,shareholders and communities we operate in.We frmly believe that continued success is rooted in our steadfast adherence to our Business Principles.These principles,which are centered around strengthening,safeguarding,and growing our company over the long term,are consistently applied across all LOBs and geographies where we operate.As we continue to deepen our understanding of ESG matters,we remain committed to regularly assessing and refning our governance structures,processes and controls.This commitment allows our governance practices to remain efective and aligned with the evolving ESG landscape.Oversight and Management of ESG Responsibility for oversight and management of ESG occurs at multiple levels within the organization.BOARD OF DIRECTORS The Board is responsible for oversight of the business and afairs of the Firm on behalf of shareholders.It is also responsible for setting the cultural“tone at the top”.Its core areas of oversight include strategy,executive performance,talent management and succession planning,fnancial performance and condition,risk management and internal control framework and on ESG matters.The Board considers its composition and needs holistically,determining the diversity of experience,background and perspective required to efectively oversee the Firm,including its present and future strategy.Brief summaries of complex and dynamic skills and experience found among our Board members which include ESG matters can be found in our Proxy Statement.The Board oversees management directly and through its fve standing committees:Public Responsibility Committee Compensation&Management Development Committee Risk Committee Audit Committee Corporate Governance&Nominating Committee Each committee operates pursuant to a written charter and oversees ESG-related matters within its scope of responsibility.These charters and the Firms Corporate Governance Principles guide the Boards governance and oversight functions and can be accessed on our website.Our annual Proxy Statement includes additional information about the membership and responsibilities of each committee.The Board considers ESG-related matters in full Board discussions and com-mittee discussions,as appropriate.In addition,the director education program includes ESG issues,as appropriate.In the past year,discussion and education topics included,among others,ESG-related matters,including sustainability,the Racial Equity Commitment,climate risk management,and diversity,equity and inclusion(“DEI”).SENIOR MANAGEMENT Our management structure is designed to encourage leadership that is consistent with our corporate standards.We manage our Firm on a LOB basis with leaders within each of our LOBs responsible for driving LOB strategy and execution,including relating to ESG matters where applicable,across the Firm.Our Firms most senior management body is the Operating Committee(“OC”)9,which is responsible for developing and implementing corporate strategy and managing operations.The OC is composed of our Chief Executive Ofcer(“CEO”),Chief Risk Ofcer(“CRO”),Chief Financial Ofcer(“CFO”),General Counsel,CEOs of each of the LOBs and other senior executives.The CRO,the Head of Human Resources,the Global Head of Diversity,Equity and Inclusion,the Global Head of Corporate Responsibility,the Global Head of Sustainability and other senior leaders provide periodic updates on ESG initiatives to the OC and Board of Directors.9 In February 2024,our Global Head of Corporate Responsibility joined the Operating Committee.15 Stakeholder Engagement INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Our Firm has a range of stakeholders,including customers and clients,shareholders,employees,communities,regulators and policymakers,suppliers and research analysts.We engage with these stakeholders throughout the year to obtain insight into their needs and perspectives,and to gather feedback on our strategy and performance,including as they relate to ESG matters.Responsibility for engaging with stakeholder groups is widely shared across our Firm,including by the Board,management,and across the LOBs and corporate functions,and we engage through numerous channels.The insight we gain from our engagement with key stakeholders is considered when developing the Firms business strategies,products and services and policies and procedures.We also recognize stakeholders interest in timely information concerning our ESG-related strategies and activities,and we plan to continue to provide information through various channels,including on our website.We intend to continue to leverage market-leading and investor-focused ESG reporting initiatives to inform the development of our ESG and climate-related disclosures.We are also closely monitoring regulatory developments related to mandatory ESG-and climate-related reporting requirements in several jurisdictions around the world.Stakeholder Group How We Engage Engagement Highlights Customers and Clients We are helping our consumer fnance customers and small business,corporate and institutional clients meet their fnancial needs.We regularly solicit and respond to customer and client feedback about our products,services and organization as a whole,and endeavor to build long-lasting relationships based on trust and mutual respect.We engage regularly with our customers in our branches.We seek customer feedback via online and in-branch surveys,with the aim of improving customer interaction and experience,and have a conduct hotline through which our customers can anonymously raise concerns and report misconduct,where permitted by law.We also engage with our clients through one-on-one meetings,roundtables and conferences.We listen and respond to the needs of our customers and clients by ofering certain products and services that consider social and environmental responsibility,including lending for afordable housing and electric vehicles and supporting underserved small businesses through fnancial health programs.We have approximately 300 community-style branches,including our 16 Community Centers,that continue to host community events,fnancial health workshops,skills training and small business pop-up events.These branches are making a diference in our relationship with customers.Customers near community branches report greater consideration of using Chase products and express improved trust in banking with Chase10.For more information on Improving Financial Health and Access to Banking,please see page 56.Employees We engage with our employees through surveys,including our global Employee Opinion Survey,which are conducted periodically,and exit surveys.These surveys allow us to identify areas of strength and opportunities to promote continued employee satisfaction and retention.In 2023,90%of our employees provided valuable insight by participating in our Employee Opinion Survey,and we held our eighth annual Employee Appreciation Week with over 1,500 events across our ofces.Our people are at the heart of JPMorgan Chase and are vital to our success.We work to understand our employees evolving needs and perspectives.We also engage with our employees through various forums,including town halls;small group meet-ings;focus groups;blogs,articles and newsletters;online feedback tools;and others.10 When customers in markets that have a community branch were asked survey questions in Q3 2021 and Q2 2023,they answered more favorably in Q2 2023,compared to results for the same questions and same periods in comparable markets that do not have a community branch.There was an 8-point improvement for the survey question,“How likely are you to consider Chase as a provider the next time youre in the market for a checking or savings account?”and a 13-point improvement for the survey statement,“Chase is a bank I trust.”16 Stakeholder Group How We Engage Engagement Highlights Communities We strive to be a bank for all and consider diverse perspectives in the Firms decisions.INTRODUCTION We are engaging with external stakeholders in a variety of forums.Through our longstanding Chase Advisory Panel program,we facilitate regular conversations among senior JPMorgan Chase executives and consumer policy groups,nonproft organizations,civic leaders,trade associations,think tanks and diverse chambers of commerce,many of which are sources of information and ideas about how the Firm can better understand,promote greater access to fnancial products and services,and better meet the needs of diverse and other communities.In 2023,the Community Engagement Team held 35 Chase Advisory Panels,as well as listening sessions and other convenings with over 130 community stakeholders to share frmwide updates and solicit feedback on products,services,and approaches.Our Community Engagement team identifes,develop and maintains relationships with key stakeholders to inform the Firms approach to serving clients,customers and communities.GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics Investors We engage equity and fixed income investors on notable and timely topics,including corporate gov-ernance,shareholder rights,executive compensa-tion,management-succession planning and ESG-related matters.We communicate with investors through our quarterly earnings materials,Annual Reports and Proxy Statements,Securities and Exchange Commission flings,press releases and the Firms website.In addition,we engage with investors through quarterly earnings calls,investor meetings and conferences,Annual General Meeting and other forums.In 2023,as part of our ongoing investor outreach program,the Investor Relations team solicited feedback through approximately 200 engagements with approximately 120 equity holders that represented approximately 50%of the Firms outstanding common stock.11 We conduct an investor outreach program that includes semi-annual,dedicated opportunities for institutional shareholders to discuss topics that include,but are not limited to,executive compensation,management-succession planning,Board composition and renewal,shareholder rights and other ESG-related matters such as climate change and DEI.During these engagements,management shares information,addresses questions and solicits investors perspectives and feedback.Directors participate in select meetings.The Firm also sponsored investor-facing events throughout the year that featured ESG and sustainability leaders.The events highlighted key themes in the Firms Climate and ESG reports,as well as the Firms strategies that drove progress toward the Firms ESG and climate targets.The Investor Relations team periodically shares equity and fxed income holders areas of focus and feedback with the Board.Ongoing outreach-based and responsive engagements provide the Firm with useful feedback that helps inform processes,practices and strategic direction.ENVIRONMENTAL SOCIAL APPENDICES Regulators and Policymakers We strive to maintain an open,ongoing dialogue with our global supervisory regulators and other policymakers.To run a healthy company and be a responsible corporate citizen demands a strong commitment to a healthy and informed democracy through civic and community involvement.We engage with policymakers on a range of issues,including banking,fnancial services,cybersecurity,workforce development,small business,tax,trade and inclusive economic growth,among others.We engage with regulators as necessary to conduct business and provide commentary on proposed changes to relevant regulations afecting our business.For more information on the Firms political engagement,see page 19.The Firm worked directly and through trade associations to engage regulators and policymakers on over 150 consultations and proposals addressing a wide range of issues impacting banks and the fnancial system.11 Percentage of common shares outstanding per Nasdaq IRI as of September 30,2023.17 Stakeholder Group How We Engage Engagement Highlights ESG Raters We recognize that our clients,shareholders and other stakeholders are interested in our performance on a range of ESG matters.We engage with a number of ESG raters to provide them with information relevant to the Firm.INTRODUCTION We engage in open,transparent dialogue with rating agencies in order to develop our understanding of methodologies and scoring,validate data and provide feedback.Our Corporate Sustainability and Investor Relations teams manage the Firms relationships with ESG rating agencies and lead our eforts to identify and implement enhancements to policies,procedures and practices that can improve our ESG performance.In 2023,we continued to engage with a variety of ESG raters to share information about our Firms ESG activities and maintained an active two-way dialogue during the ESG rating review process.We have participated in sessions hosted by diferent rating agencies to gain a better understanding of ESG ratings methodologies and provide feedback.These sessions also helped us to stay up-to-date with the industry developments and the expectations of corporate issuers on ESG matters.GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Suppliers We engage in dialogue with our key suppliers on topics including our ability to operate efciently and efectively,deliver products and services that meet our clients and customers needs,manage risk and controls,and consider sustainability and diversity,equity and inclusion throughout our supply chain.We interact with our key suppliers on a frequent basis through various channels,including regular business reviews,ad hoc meetings,phone and email.We expect our suppliers to demonstrate high standards of business conduct and integrity and adherence to law,at all times.We aim to work with our suppliers to make a positive impact in the communities where we do business.For more information on our supplier business conduct,see our Supplier Code of Conduct published on our website.Following the establishment of our Supplier Environmental Sustainability Guidelines in early 2023,we provided training to our sourcing managers for carbon-intensive purchasing categories and made ESG-related questions standard in all supplier requests for proposal.Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Research Analysts We strive to meet the information needs of members of the investment community,including portfolio managers,fnancial and ESG analysts,and stewardship teams.We provide information to members of the investment community,including portfolio managers,fnancial and ESG research analysts and stewardship teams,through regulatory flings,quarterly earning materials,reports,presentations,conferences and publications posted to the Firms website.The Investor Relations team also hosts periodic,thematic events for industry analysts,investors and other stakeholders that feature senior,ESG-focused executives.In addition,we respond to select surveys and specifc information requests,and engage with portfolio managers,analysts and stewardship teams throughout the year.In November 2023,Investor Relations hosted a panel event to accompany the release of the Firms 2023 Climate Report.The event featured senior,climate-focused leaders who discussed enhancements to the Firms climate strategy and provided insights about business opportunities and risks that drove those enhancements.A key event highlighted was the Firms disclosure of the diferences between its emissions reporting and the Partnership for Carbon Accounting Financials(“PCAF”)methodology.Specifcally,Firm experts discussed the rationale for reconciling the Firms absolute fnanced and facilitated in-scope emissions with the PCAF framework and underscored that this data-standardization approach helped improve transparency and comparability with the Firms proprietary Carbon Compass methodology.To help buy-and sell-side analysts understand the reconciliation,the event included opportunities to submit targeted questions.18 Political,Public Policy&Industry Engagement INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES To run a strong company and be a responsible corporate citizen,we believe in a commitment to a healthy and informed democracy through civic and community involvement.Our business is subject to extensive laws and regulations,and changes to such laws can signifcantly afect how we operate,our revenues and the costs we incur.Because of the potential impact public policy can have on our businesses,employees,communities and customers,we engage with policymakers holding a range of views on a range of issues including banking,fnancial services,workforce development,small business,tax,trade and inclusive economic growth,among others to advance and protect the long-term interests of the Firm.The Firms political engagement and public policy activities are managed by Global Government Relations.This organization and leadership helps us focus the Firms political engagement eforts on those public policy issues most relevant to the long-term interests of the Firm overall and to our clients and shareholders.The Firm belongs to a number of trade associations that advocate on major public policy issues of importance to the Firm and the communities we serve.The Firms participation in these associations comes with the understanding that we may not always align with all their positions or those of its other members.We make independent decisions as a Firm,and we may provide appropriate feedback on the eforts by these associations.A list of the Firms principal trade associations is disclosed in our Political Engagement Report.The Public Responsibility Committee of our Board of Directors provides oversight of our positions and practices on public responsibility matters,including signifcant policies and practices regarding political contributions,major lobbying priorities and principal trade association memberships that relate to the Firms public policy objectives.Because of our policies and practices,we received a“Trendsetter”ranking in 2023,with an overall score of 97.1%,scoring in the top 20 of Fortune 500 companies for political disclosure and accountability by the Corporate Political Disclosure and Accountability(CPA)-Zicklin Index.The Firm discloses on its website contributions made by the Firms political action committees,contributions of corporate funds made in connection with ballot initiatives,and information about our governance and oversight practices.We engage on public policy issues of importance to the business and the communities we serve.Pictured:Neighborhood visit,Detroit,Michigan 19 Managing Environmental and Social Risks INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES At JPMorgan Chase,our overall objective is to manage our business,and the associated risks,in a manner that balances serving the interests of our clients,customers and investors with protecting the safety and soundness of the Firm.The world today faces environmental and social challenges,such as climate change,biodiversity and ecosystem loss,and human rights issues.If not adequately addressed,these challenges could create risks for society and businesses.An important component of risk management at JPMorgan Chase is assessing our clients approach to,and performance on,E&S matters.Failing to appropriately manage E&S risks can impact our clients operations and long-term economic viability,increase scrutiny from our investors,employees,and regulators,and impact the environment and communities across the world.We have frameworks in place to identify client business models with high concentrations of E&S risk that have the highest potential reputational impact to our Firm.These frameworks include restricted activities related to the environment and human rights,including forced labor,harmful child labor,human trafcking and other types of modern slavery,that fall outside of the Firms appetite.The frameworks also include activities and locations we consider sensitive or in need of enhanced review to facilitate a comprehensive understanding of the associated risks.Client and transaction decisions take into consideration these frameworks,as well as a variety of other client-specifc factors,including,but not limited to,a clients track record and engagement in resolving the identifed issues.We continue to invest in E&S subject matter experts that conduct due diligence on clients commitment and capacity to manage the risks relevant to their activities,including the companies policies,governance,track record,risk management and stakeholder engagement approaches.We strive to support our clients and ofer them information and guidance aimed at furthering their environmental and social objectives.Please see pages 8283 in our ESG Report Appendices for more information on how we manage E&S risk for certain business activities and locations.For more information on the Firms overall approach to risk management,including Climate Risk,see our Form 10-K and 2023 Climate Report.Human Rights GUIDING E&S PRINCIPLES Where relevant,we consider a range of internationally recognized principles to inform our approach in managing certain E&S risks.These include:Equator Principles International Finance Corporation Performance Standards,including Performance Standard 7 on Indigenous Peoples,and World Bank Environmental,Health&Safety Guidelines Relevant International Capital Markets Association/Loan Market Association principles such as the Green Bond Principles,Sustainability Linked Loan Principles,Social/Sustainable/Sustainability Linked Bond Principles,etc.Taskforce on Climate-Related Financial Disclosures Taskforce on Nature-Related Financial Disclosures UN Universal Declaration of Human Rights UN Guiding Principles on Business and Human Rights We recognize that human rights issues are a signifcant global challenge.We acknowledge that our business has the potential to impact surrounding communities and the environment;as such,it is important that we consider human rights issues when making business decisions.While national governments bear primary responsibility to protect the human rights of their citizens,including their safety and security,we strive to respect and promote human rights with our employees,suppliers and clients,as guided by the United Nations Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights.We seek to comply with applicable legal requirements in the jurisdictions in which we operate.It is our policy that we will not knowingly provide fnancial services to clients where we determine that there is substantiated evidence of forced labor,harmful child labor,human trafcking or other types of modern slavery,and where such client has not put into place adequate practices and policies to remediate such human rights abuses.For more information on how we manage human rights and modern slavery-related risks in our operations,business activities of our clients and customers and in our supply chain,please refer to our Human Rights Statement and FY2022 Modern Slavery Act Statement.20 Data Privacy&Cybersecurity As digital solutions continue to evolve and play a role in fnancial services and the economy as a whole,the risk of cyber-attacks and other threats to information security continues to evolve and grow.In addition,the individuals with whom the Firm interacts expect that our data practices are safe and lawful.Data privacy and cybersecurity therefore remain top priorities for our Firm.INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Data Privacy As a global fnancial institution,our Firm collects,processes,uses,shares and dispositions all manner of personal and fnancial information every day,and we have processes designed to manage that data in accordance with the laws,rules and regulations of the jurisdictions in which we operate.We take a multi-faceted approach to addressing privacy and data protection risks,including maintaining and evolving our internal controls,establishing policies covering all stages of the data lifecycle and deploying appropriate technology.Our frmwide internal policy on personal information applies globally to our legal entities,as well as to third parties that handle personal information on our behalf.The policy sets forth minimum requirements,including that per-sonal information is processed for defned purposes.The policy also specifes the use of privacy by design principles,designed to ensure that privacy is taken into account throughout the data lifecycle.Data protection and privacy are key components of our global data risk management program.That program focuses on execution of the compliance and operational risk oversight of data management and privacy governance,controls,and remediation activities in the Firm.The Firms privacy framework outlines roles and responsibilities,sets policies and standards,directs advisory requests,and provides protocols for monitoring,reporting,and escalation of key privacy risks and issues.Our management,including our OC,and our Board of Directors receive periodic updates on the program.Our multi-stakeholder approach to oversight and governance is embedded in our three lines of defense and supported by dedicated data and privacy teams around the world.We provide regular training and awareness to our workforce,not only on core privacy obligations and how to meet them but also on emerging risks,trends and new developments.Information on how we collect,process,use,share and disposition personal information,as well as rights that individuals may have with respect to their personal information and how to exercise them,is available in our disclosures,on our websites and upon request through multiple channels.In addition to traditional privacy notices,we often publish related materials such as frequently asked questions and tips for keeping personal fnancial information safe.We have a wide range of technological,administrative,organizational and phys-ical security measures designed to safeguard the confdentiality,integrity and availability of personal information.Our Code of Conduct and related policies include specifc guidelines on how employees should protect the confdential information of those we have relationships with,including consumers,employ-ees,service providers,commercial businesses or government bodies.We have established processes and procedures to report and respond to suspected or actual data privacy incidents that may compromise the confdentiality,integrity or availability of personal information and provide our employees the ability to make reports through our internal systems.Our centralized process requires escalation to a dedicated incident response team for severity assessment,mitigation,root cause analysis and corrective action.We have processes to notify our regulators,customers and other individuals when reportable incidents occur,as required by applicable law.We regularly engage with lawmakers and civil society on policy issues related to data protection and privacy,including the development and modernization of U.S.federal and state privacy laws.We will continue to support policy that protects people and their personal information,promotes organizational accountability and enables benefcial data-driven innovation.21 INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Cybersecurity Like many fnancial institutions,our Firm experiences numerous cyber-attacks on its computer systems,software,networks and other technology assets on a daily basis from various actors,including groups acting on behalf of hostile countries,cyber-criminals,“hacktivists”(i.e.,individuals or groups that use technology to promote a political agenda or social change)and others.As threats to cybersecurity grow in size and sophistication,protecting our Firm,customers and vendors while enabling innovation is an important,evolving priority.When we enter new businesses and adopt new technologies,these risks and challenges multiply.For example,advances in artifcial intelligence(“AI”),such as the use of machine learning and generative AI have enabled malicious actors to develop more advanced social engineering attacks,including targeted phishing attacks.This is why we devote signifcant resources to cybersecurity.Our eforts are designed to stop malicious actors from infltrating our computer systems to destroy data,obtain confdential information,disrupt service,engage in“ransomware”or cause other damage.We continue to provide clients and customers with resources and educational content to help them address and prevent fraud losses,such as a client ransomware guide and a toolkit to address compromised business emails.To help safeguard the confdentiality,integrity and availability of our infrastructure,resources and information,we maintain a robust Information Security Program.It establishes policies and procedures to prevent,detect and respond to cyber-attacks.Since our employees serve as the frst line of defense,we educate,train and test our employees on how to identify potential cybersecurity risks,protect the Firms resources and information,and report any unusual activity or incidents.Employees are required to complete periodic cybersecurity training and complete quarterly frmwide phishing tests.We also require certain third-party vendors to comply with minimum security and control standards,our Supplier Code of Conduct,and all applicable laws and regulations.The Global Cybersecurity and Technology Controls(CTC)organization,working with each of our lines of business and corporate functions,identifes technology and cybersecurity risks and is responsible for implementing and maintaining controls to manage these threats.CTC assesses changes in global threats and monitors our operations to detect and respond to them,including those among the Firms third-party suppliers.We also conduct periodic internal assessments to identify vulnerabilities,upgrade opportunities and new defense layers.Our cybersecurity incident response plan is designed to allow us to react to attempted breaches,coordinate our response with law enforcement and notify customers,when applicable.The governance structure for the CTC organization is designed to appropriately identify,escalate and mitigate cybersecurity risks.Cybersecurity risk management and its governance and oversight are integrated into the Firms operational risk management framework,including through the escalation of key risk and control issues to management and the development of risk mitigation plans for heightened risk and control issues.The Firms Independent Risk Management function(“IRM”)independently assesses and challenges the activities and risk management practices of the CTC organization related to the identifcation,assessment,measurement and mitigation of cybersecurity risk.The governance and oversight for cybersecurity risk management includes governance forums that inform management of key areas of concern regarding the prevention,detection,mitigation and remediation of cybersecurity risks.The Cybersecurity and Technology Controls Operating Committee(“CTOC”)is the principal management committee that oversees the Firms assessment and management of cybersecurity risk,including oversight of the implementation and maintenance of appropriate controls in support of the Firms Information Security Program.The membership of the CTOC includes senior representatives from the CTC organization and relevant corporate functions,including IRM and Internal Audit.The CTOC escalates key operational risk and control issues,as appropriate,to the Global Technology Operating Committee(“GTOC”)or its business control committee or to the appropriate line of business and Corporate Control Committees.The GTOC is responsible for the governance of the frmwide Global Technology organization,including oversight of frmwide technology strategies,the delivery of technology and technology operations,the efective use of information technology resources,and monitoring and resolving key operational risk and control matters arising in the Global Technology organization.The Firms Board receives periodic updates concerning technology and cybersecurity risk matters.These updates generally include information regard-ing cybersecurity and technology developments,the Firms Information Security Program and recommended changes to that program,policies and practices,and ongoing initiatives to improve information security,as well as any signifcant cybersecurity incidents and the Firms eforts to address those incidents.Our cybersecurity controls,governance and practices are based on recognized industry practices12.We also have adopted the Financial Sector Profle from the Cyber Risk Institute,which provides the framework by which these various recognized practices are aligned with and integrated into our technology and cybersecurity standards.These standards meet the requirements of more than 100 global regulations worldwide and are periodically updated.Cyber-attacks are a threat not just to our Firm but also to our clients,customers and the global fnancial system.We have increased our eforts to educate clients and customers about the importance of disciplined cyber hygiene and protecting themselves against fraud.We also contribute to eforts to build and maintain systemic resiliency.We are a member of the Financial Services Information Sharing&Analysis Center,an intelligence-sharing cooperative for the fnancial services industry.Its more than approximately 5000 member frms in 75 countries share best practices and exer-cises to better secure the sector for the beneft of the public and the resiliency and integrity of fnancial institutions.Our Firm also helped create the Analysis and Resilience Center for Systemic Risk,an industry-funded nonproft organiza-tion designed to mitigate systemic risk to the nations critical energy and fnancial infrastructure.JPMorgan Chase also participates in public-private partnerships and,over the course of 2023,collaborated with the U.S.Government to better protect critical fnancial infrastructure;engaged in the evolution of U.S.National Institute of Standards and Technology(NIST)standards,like zero trust;and responded to the global proliferation of new rules,including operational resilience,cloud and incident notifcation.For additional information concerning the Firms cybersecurity risk management and governance structure,see pages 149150 of our Form 10-K for the year ended December 31,2023.12 Industry recognized practices include ISACA COBIT,ISO 27000 standards,FFIEC guidance,the Information Security Forum Standard for Good Practice,NIST SP800-53 and BSIMIM.22 Business Ethics We strive to be accountable,straightforward and honest in our dealings with customers,employees,suppliers,shareholders and other stakeholders.Our Code of Conduct,Business Principles,and other internal policies and procedures are designed to promote a culture of respect that allows every employee to feel safe at work and empowered to speak up if they have concerns about unethical behavior.INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Code of Conduct Our Code of Conduct highlights the personal responsibility of every employee to operate with the highest standards of integrity,transparency and ethical conduct.It emphasizes the importance of avoiding conficts of interest,protecting confdential information and maintaining a workplace that is free from threats,intimidation and physical harm.Employees must complete Code of Conduct training shortly after their start date and periodically thereafter.Each year,employees must afrm their compliance with the Code.In general,consultants,agents,and contract or temporary workers are expected to comply with the underlying principles of the Code.An additional Code of Ethics for Financial Professionals applies to the CEO,CFO and other fnance,accounting,corporate treasury,tax and investor relations roles.We reinforce these expectations through various channels,including senior leaders communications with employees,town-hall meetings,and culture and conduct-related questions in our employee surveys.In addition,Acting with Integrity is one criterion used to evaluate employees during their annual reviews.Employees are required to raise conduct concerns and report any potential or actual violations of the Code of Conduct,other Firm policies,or any applicable laws or regulations.Employees,directors,suppliers and customers can report known or suspected violations to our Conduct Hotline via phone,online or mobile device.The Hotline is anonymous,except in certain non-U.S.jurisdictions where anonymous reporting is prohibited.It is operated by a third-party service provider and is accessible 24/7 worldwide,with translation services available.The Code of Conduct prohibits intimidation or retaliation against anyone who raises an issue in good faith or assists with an investigation.Reporting obligations to the Firm do not prevent employees from reporting to the government or regulators conduct that they believe violates the law.It is our policy to promptly review all potential violations and take action as appropriate.Under our policy,confdentiality will be maintained to the extent possible consistent with investigations.Ethics and culture are key focus areas of our Board of Directors.The Boards Compensation&Management Development Committee is responsible for reviewing the Firms culture,including thematic feedback from employees and cultural initiatives,as well as reports from management regarding signifcant conduct issues and any related employee actions.The Audit Committee reviews the program established by management that monitors compliance with the Code of Conduct and reviews the record of such compliance.Financial Crimes and Anti-Corruption Our Firm has a principle of zero tolerance for bribery and corruption.Our global Anti-Corruption Policy prohibits ofering or giving anything of value to and soliciting or accepting anything of value from anyone for a corrupt purpose,such as improper payments or benefts to government ofcials or private parties for a business advantage.The program includes a governance structure managed by anti-corruption professionals with senior management oversight,training and awareness activities,and monitoring and testing for compliance.Employees are required to complete anti-corruption training.We are also committed to participating in international eforts to combat money laundering,sanctions evasions and the funding of terrorist activities.We have implemented a risk-based,global Anti-Money Laundering Compliance&Sanctions Program designed to comply with anti-money laundering and sanctions laws and regulations in the U.S.and other jurisdictions where we operate.We are also part of the Wolfsberg Group,an association of banks which seeks to develop frameworks and guidance for the management of fnancial crime risks,including the foundational Wolfsberg Anti-Money Laundering Principles for Private Banking.23 INTRODUCTION GOVERNANCE Corporate Governance&ESG Oversight Stakeholder Engagement Political,Public Policy&Industry Engagement Managing Environmental and Social Risks Human Rights Data Privacy&Cybersecurity Business Ethics ENVIRONMENTAL SOCIAL APPENDICES Fair Lending and Banking Practices JPMorgan Chase seeks to treat all individuals fairly and equitably in the conduct of its lending businesses and in all jurisdictions where it conducts business.This is part of our mission of providing quality fnancial services to existing and prospective customers in accordance with all applicable laws.In the United States,those fair lending laws include the Equal Credit Opportunity Act and the Fair Housing Act,as well as other state and local laws.These laws require,among other things,the equitable treatment of all credit applicants without regard to race,sex(including gender,gender identity and sexual orientation),color,national origin,religion,age,marital status,disability,familial status,the fact that all or part of the applicants income derives from public assistance programs,or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.The expectation around fair treatment of our current and potential customers extends to every aspect of a credit transaction,including not only how we review credit requests but also our advertising,handling of pre-application inquiries,loan disbursements,and ongoing servicing of the loan.Responsible Marketing We believe it is important to be clear and transparent in our advertising and marketing.We seek to comply with applicable laws and regulations on responsible and fair marketing practices.Our sales employees are expected to communicate with customers in a clear,truthful and complete manner and to provide them with relevant information to assist them in making an informed decision.Our lines of business are required to have an estab-lished procedure for reviewing all new and revised marketing materials,terms and conditions,disclaimers and other customer communications.These procedures include multiple layers of review by diferent internal functions for clarity and accuracy.In addition,periodic testing is performed for compliance with the procedures,and if necessary,changes are made to improve processes.Training programs are periodically conducted for marketers to cover topics including marketing claims and regulatory marketing compliance.Supply Chain and Responsible Sourcing We expect our suppliers to demonstrate the highest standards of ethical business conduct and adhere to the law at all times.Our Supplier Code of Conduct sets out expectations for our suppliers and outlines principles that are consistent with the regulatory and legal framework that govern our industry.This includes conducting operations in an environmentally and socially responsible manner.In 2023,we updated our Supplier Code of Conduct to further highlight the importance of ethical conduct and compliance with legal and regulatory obligations,including clarifying suppliers responsibility to ensure their workforce meets the minimum legal age requirements for employment.We also expect our suppliers to promptly report conduct concerns or actual or suspected violations of any law or regulation related to Firm business,the Supplier Code of Conduct or any Firm policy.We seek to provide equitable access to opportunities in the various areas in which we operate,including in our sourcing engagements.Our approach to working with suppliers includes taking a broad lens that includes,without limitation,companies that are owned and operated by women,ethnic minorities,military veterans,people with disabilities and members of the Lesbian,Gay,Bisexual,Transgender,Queer plus(LGBTQ )community.We seek to leverage the strength of our procurement organization and business,while working with community partners,to lower common fnancial barriers often faced by small and historically underrepresented businesses.We help them to understand quali-fcations and support them in meeting frm requirements(such as,for example,providing access to professional cyber-readiness assessments to build a secure cyber infrastructure,and key compliance resources like insurance,bond-ing and other infrastructure and service tools that otherwise might be cost-prohibitive),so that they are prepared to serve fnancial industry and other clients.Our Supplier Diversity program also encourages diversity and inclusion across our portfolio of supply chain business partners.In 2023,our Firm spent approximately$2.3 billion on Tier 1 diverse sup-pliers,who in turn spent$1 billion on our Tier 2 diverse suppliers13,including$2 billion with minority-owned businesses and$1.3 billion with women-owned businesses14.Over 2021 and 2022,our top suppliers increased their own spend with diverse suppliers,generating over$10 billion in new spending with diverse businesses15.For more information on our Supplier Sustainability Program and how we engage with our suppliers to help them adopt enhanced environmental pol-icies and practices,see page 39.For more information on our Supplier Diversity program,please see page 56.13 Tier 1 refers to the amount of spend,or procurement dollars,that JPMorgan Chase spends directly with third parties,known as its suppliers,that provide goods and services in support of its business operations.Tier 2 refers to the amount of spend,or procurement dollars,that JPMorgan Chases suppliers spend with their Tier 1 suppliers.14 Spend totals for minority-owned businesses and women-owned businesses include both Tier 1 and Tier 2 data.15 JPMorgan Chase may not be the sole contributor to a Tier 1 supplier and therefore,there may be multiple contributors to the new spending of$10 billion with diverse Tier 2 suppliers.24 Environment Sustainable global economic growth and the prosperity of communities around the world require a healthy environment,but escalating environmental issues such as climate change and biodiversity loss pose increasing challenges.Addressing these environmental issues is important for preserving our planet and promoting the long-term well-being of communities worldwide,as well as for running a healthy and vibrant company that builds shareholder value.As a global fnancial institution working with clients across the economy,we have a role to play:supporting our clients environmental objectives and helping advance a sustainable global economy.Our environmental sustainability strategy includes:scaling green solutions,balancing environmental,social and economic needs,and minimizing operational impact.Pictured:Jackson,Wyoming 2023 Highlights Financed and facilitated$66 billion in support of the Green objective of our Sustainable Development Target(see page 11)Set net zero-aligned sector targets for Shipping and Aluminum(see 2023 Climate Report)Updated our Oil&Gas Operational,Electric Power and Auto Manufacturing sector tar-gets to align to net zero emissions by 2050(see 2023 Climate Report)and modifed our Oil&Gas End Use sector target:now called Energy Mix(see page 31)Published our absolute fnanced and facilitated emissions for eight sectors of our portfolio(see 2023 Climate Report),as well as our approach to calculating them(see page 32)Published The Methane Emissions Opportunity,describing benefts of immediate action to reduce methane emissions and faring in the Oil&Gas sector and how we support our clients in their reduction eforts Signed long-term agreement to purchase over$200 million in high-quality,durable carbon dioxide removal(see page 37)and published Carbon Market Principles 25 INTRODUCTION GOVERNANCE ENVIRONMENTAL Our Environmental Sustainability Strategy Scaling Green Solutions Balancing Environmental,Social and Economic Needs Minimizing Our Operational Impact SOCIAL APPENDICES Our Environmental Sustainability Strategy JPMorgan Chase helps our clients navigate the challenges and realize the economic opportunities of the transition to a low-carbon economy.We believe support-ing our clients,through capital and advice,to accelerate their low-carbon transition objectives creates positive environmental benefts and generates long-term fnancial return for our shareholders.We also strive to minimize our own carbon footprint and the impact our corporate ofces,bank branches and data centers may have on the environment.These eforts are guided by the three pillars of our environmental sustainability strategy scaling green solutions;balancing environmental,social and economic needs;and minimizing our operational impact all of which is underpinned by our ongoing focus on accountability,transparency and engagement,which helps us continue to evolve and remain responsive to stakeholders.Our Environmental Sustainability Strategy 31 2 SCALING GREEN SOLUTIONS Focusing our efforts to meet client needs and on scaling solutions the world will need for long-term environmental sustainability BALANCING ENVIRONMENTAL,SOCIAL AND ECONOMIC NEEDS Supporting global efforts toward net zero GHG emissions by 2050 while balancing energy access,reliability,security and affordability MINIMIZING OUR OPERATIONAL IMPACT Minimizing the environmental impact of our own operations,including in our buildings,branches and data centers THE CLIMATE-NATURE NEXUS In order to safeguard the planets health and promote global economic prosperity and well-being,the world will need to simultaneously address climate-and nature-related degradation.We look to leverage our knowledge and expertise in the climate space to inform and guide our nature and biodiversity-related initiatives.Our aim is to expand our understanding of how nature degradation,as well as the actions to conserve,restore and promote sustainable use of the resources nature ofers,can result in risks and opportunities for our business and clients.We continue to engage with our clients to advance their goals,including as they relate to nature restoration(see page 28 Brazils$2 Billion Sustainable Bond)and to direct Firm resources to promote nature conservation by selecting nature-based carbon removal credits to address our operational emissions that we are not yet able to eliminate(see page 37).Our focus will continue to be on enhancing our expertise to strategically support solutions that have a positive impact on nature in a way that is aligned with our business goals and benefts our clients.26 Scaling Green Solutions To meet global energy demand and achieve long-term environmental sustainability goals,the world will need to develop and scale a host of clean technologies,business models and other solutions.As a global fnancial institution,we believe we can support these goals by providing fnancing and strategic advice to clients and by helping investors put their capital to work.INTRODUCTION GOVERNANCE ENVIRONMENTAL Our Environmental Sustainability Strategy Scaling Green Solutions Balancing Environmental,Social and Economic Needs Minimizing Our Operational Impact SOCIAL APPENDICES Mobilizing Capital to SupportClimate and Sustainable Solutions Developing solutions to advance the transition to a sustainable,low-carbon economy will require signifcant capital,including capital to deploy and scale clean energy solutions to meet the worlds growing energy needs and capital to promote sustainable management of resources such as water and forests.Our$1 trillion Green target which we set in April 2021 as part of our broader$2.5 trillion Sustainable Development Target(see page 9)intends to support the development and scaling of climate initiatives and sustainable resource management.We also support the market through our own Green Bond issuances.For more detail on JPMorgan Chase Green Bond issuance,see page 84 in our ESG Report Appendices.Supporting Our Clients We continue to broaden our eforts to support the climate-and sustainabili-ty-related banking needs of clients,from early-stage and small companies through to multinationals and other large corporations.We deploy our capital and expertise to assist clients working to transition their business model and operations to reduce emissions.As we expand our capabilities across our LOBs,we aim to provide clients with diverse and innovative solu-tions,while helping to grow the market for green and sustainable fnancing.GREEN ECONOMY BANKING As the need for climate solutions grows,so does the number of companies focused on providing them with each requiring a unique combination of fnancing and advice to achieve its business objectives.Our Green Economy Banking team is called upon to provide subject matter expertise,banking solutions and specialized credit underwriting to companies primarily focused on decarbonization technologies,products and services.The Green Economy Banking team focuses on three coverage areas renewable energy,sustainable fna

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  • 摩根大通公司(JPMORGAN CHASE)2023年气候报告(英文版)(39页).pdf

    Climate Report2023A NOTE ON OUR BUSINESSJPMorgan Chase&Co.provides financial services for individuals and industries across geographies regardless of political,social or religious viewpoints.We deal in facts and dont describe our policies,procedures or progress differently based on whos asking.Our ambition is to work with shareholders,clients,customers and communities around the world to fulfill bankings essential purpose of helping people,businesses of all sizes and vital institutions like schools,hospitals and governments achieve their goals.DISCLAIMERSThe information provided in this report reflects JPMorgan Chases approach to ESG as at the date of this report and is subject to change without notice.We do not undertake to update any of such information in this report.Any references to“sustainable investing”,“sustainable investments”,“ESG”or similar terms in this report are intended as references to the internally defined criteria of the Firm or our businesses only,as applicable,and not to any jurisdiction-specific regulatory definition.Our approach to inclusion of disclosures in this report is informed by the TCFD recommendations and is different from disclosures included in mandatory regulatory reporting,including under Securities and Exchange Commission(“SEC”)regulations.While this report describes events,including potential future events,that may be significant,any significance does not necessarily equate to the level of materiality of disclosures required under U.S.federal securities laws.This report is not intended to,nor can it be relied on,to create legal relations,rights or obligations.This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.These statements relate to,among other things,our goals,targets,aspirations and objectives,and are based on the current beliefs and expectations of JPMorgan Chases management and are subject to significant risks and uncertainties,many of which are beyond JPMorgan Chases control.Expected results or actions may differ from the anticipated goals,approaches and targets set forth in the forward-looking statements.In addition,our ability to measure many of our goals and targets is dependent on data that,in some instances,is measured,tracked and provid-ed by our clients,other stakeholders,and third-party data providers;our ability to measure progress toward our goals and targets is subject to the quality and availability of such data,as discussed in this report.Factors that could cause JPMorgan Chases actual results to differ materially from those described in the forward-looking statements include the necessity of technological advancements,the evolution of consumer behavior,the need for thoughtful climate polices,the potential impact of legal and regulatory obligations,and the challenge of balancing our short-term targets with the need to facilitate an orderly transition and energy security.Additional factors can be found in JPMorgan Chases Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.Those reports are available on JPMorgan Chases website(https:/jpmorganchaseco.gcs- on the Securities and Exchange Commissions website(https:/www.sec.gov/).JPMorgan Chase does not undertake to update any forward-looking statements.This report does not include all applicable terms or issues and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction or a recommendation for any investment product or strategy.Any and all transactions(including potential transactions)presented herein are for illustration purposes only.This material does not and should not be deemed to constitute an advertisement or marketing of the Firms products and/or services or an advertisement to the public.No reports,documents or websites that are cited or referred to in this document shall be deemed to form part of this report.Information contained in this report has been obtained from sources,including those publicly available,believed to be reliable,but no representation or warranty is made by JPMorgan Chase as to the quality,complete-ness,accuracy,fitness for a particular purpose or non-infringement of such information.Sources of third-party information referred to herein retain all rights with respect to such data and use of such data by JPMorgan Chase herein shall not be deemed to grant a license to any third party.The use of any third-party trademarks or brand names is for informational purposes only and does not imply an endorsement by JPMorgan Chase or that such trademark owner has authorized JPMorgan Chase to promote its products or services.NotesWe make independent business decisions for the Firm.We make business decisions to advance the long-term interests of our Firm and its shareholders,including serving our clients,supporting our employees and helping our communities.We work with a broad array of organizations that advance those interests,even if we dont support every position taken.Firm decisions are always made independently and based on business principles.We dont“boycott.”We support clients around the globe and in every state in the U.S.,across industries,religions and political affiliation.We proudly serve more than 80 million households in the U.S,more than 5.7 million small businesses and hundreds of thousands of companies in critical economic sectors.We do not make decisions based on political or social agendas.We manage risk.Managing risk is critical to the long-term success of our business and required by our regulators.We make risk-based assessments,including legal,credit,market,reputational and regulatory,to drive decisions and advance the interests of our constituencies.We want to compete.Our ability to compete,in both established and new markets,is critical to the long-term success of our business.We decide where and how we choose to compete by assessing risk and opportunity,not to further political or social agendas.We believe in free enterprise.Markets and economies of all sizes benefit when free and fair enterprise thrives creating innovation,competition and maximizing value for shareholders,clients,customers and communities.Government intervention of free market principles,for political reasons in the short-term,sets a dangerous precedent thats hard to reverse.We value engagement.We believe the best answers reside in engagement and discourse.When policymakers seek input to tackle challenges,we want to help.We know that our success requires working closely with government on sound public policy that grows the economy and lifts up communities.Throughout our history,we have engaged with officials from all parties to address the worlds most pressing needs,and we look forward to continuing to do so.A NOTE ON OUR TARGETSWe consistently set targets to play our part in creating a sustainable future using our own independent assessment of what we determine is reasonable and achievable,and will serve the best interest of our business and serving our clients.While we pursue these targets,we note that they are subject to other prerequisites and critical considerations,both within and outside our control.These include the necessity of technological advancements,the evolution of consumer behavior and demand,the need for thoughtful climate polices,the potential impact of legal and regulatory obligations and the challenge of balancing short-term targets with the need to facilitate an orderly transition and energy security.ContentsIntroduction 1Message from Our Chairman&CEO 1TCFD Index 2About This Report 3Company at a Glance 3Climate Action to Date 4Governance 5Firmwide Climate-Related Governance 5Board Oversight 5Senior Management 5Strategy 7Our Environmental Sustainability Strategy 7Scaling Green Solutions 7Balancing Environmental,Social and Economic Needs 10Minimizing Our Operational Impact 13Accountability,Transparency and Engagement 14Risk Management 16Our Climate Risk Framework 16Scenario Analysis 19Risk Management by Risk Type 20Metrics&Targets 23Measuring Our Progress 23Scaling Green Solutions 23Balancing Environmental,Social and Economic Needs 24Minimizing Our Operational Impact 31Conclusion&Appendices 33Looking Ahead 33Appendices 34At JPMorgan Chase,we work to power economies around the world and champion opportunity in good and difficult times.A key challenge is meeting governments and companies net-zero emissions goals by 2050 while also meeting the global need for secure,reliable and affordable energy.As I have said before,these objectives are not mutually exclusive.We can and must do both.As a global financial institution,we have an important role to play:providing our clients with the advice and capital they need to advance their decarbonization strategies and drawing on our expertise to help address broader challenges in the low-carbon transition.We believe that a successful transition generates economic growth,preserves energy security and affordability,and mitigates the worst impacts of climate change.In order to successfully achieve that transition,a massive ramp up to the tune of$4 trillion dollars of annual investment will be needed,bringing with it the potential to generate a wave of growth and opportunity the world hasnt seen since the First Industrial Revolution.From where we stand today,there are numerous barriers to deeper decarbonization across the global economy.While capital allocation and investments are crucial,these tools alone cannot overcome the challenges.To develop and scale climate solutions,the world needs thoughtful,well-implemented public policy that incentivizes low-carbon investments;research and development to support swift technological advancements;financially viable clean energy investments;resilient supply chains;and a strong,skilled workforce.As we continue to navigate the complex challenges posed by climate change,the world must work together.We will continue to play our role,supporting todays energy needs and helping our clients through their decarbonization journeys all while creating long-term shareholder value.IntroductionJamie DimonChairman&CEO,JPMorganChase&Co.Message from Our Chairman&CEOWe cannot,however,get there without unprecedented action from governments,states,regulators,policymakers,thought leaders and all corners of the private sector.This Climate Report provides a platform to communicate our progress toward our climate targets.In pursuing the global goal of a transition to a low-carbon economy,we always operate independently and use our own judgment based on the best interest of the Firm and serving our clients and will continue to do so.Since our 2022 report,we have expanded our efforts and focus,including:Establishing two new sectoral targets for Shipping and Aluminum;Updating and adapting our emissions intensity reduction targets to align with the International Energy Agency(IEA)Net Zero Emissions by 2050 Scenario;and Calculating absolute financed emissions for eight sectors of our financing portfolio.In addition,we have expanded the focus of our“Oil&Gas End Use”target,which is now the“Energy Mix”target.This update shows among other things how our financing correlates with the emissions performance of the energy supply sector.We expect this updated target will not only reflect market actions that are needed to support the transition from fossil fuels to low-or zero-carbon alternatives but will also provide a more holistic representation of decarbonization efforts.1TCFD Index This table identifies where to find information related to each of the recommended disclosures from TCFD,both in this report and in our other publicly available documents.RECOMMENDED DISCLOSURECLIMATE REPORT REFERENCESOTHER SOURCE REFERENCESGOVERNANCEBoards oversight of climate-related risks and opportunitiesGovernancea.Board Oversight(pages 5)2022 Form 10-K(pages 8184)2023 Proxy Statement(pages 1012;25;2829)Audit CommitteeCorporate Governance&Nominating CommitteePublic Responsibility CommitteeRisk CommitteeManagements role in assessing and managing climate-related risks and opportunitiesGovernancea.Senior Management(pages 5)2022 Form 10-K(page 141)Center for Carbon TransitionSTRATEGYClimate-related risks and opportunities the organization has identified over the short,medium and long termRisk Managementa.Identifying and Integrating Climate-Related Risks(pages 1718;2022)b.Scenario Analysis(page 19)c.Time Horizons(page 19)2022 Form 10-K(pages 2829;8184)Carbon CompassSMImpact of climate-related risks and opportunities on the organizations businesses,strategy,and financial planningStrategya.Scaling Green Solutions(pages 79)b.Balancing Environmental,Social and Economic Needs(pages 1012)c.Minimizing Our Operational Impact(pages 13)Risk Managementa.Identifying and Integrating Climate-Related Risks(pages 1718;2022)b.Scenario Analysis(page 19)c.Time Horizons(page 19)Metrics&Targets(pages 2332)2023 Proxy Statement(page 4)Carbon CompassSMCenter for Carbon TransitionSustainabilityResilience of the organizations strategy,taking into consideration different climate-related scenarios,including a 2C or lower scenarioStrategya.Balancing Environmental,Social and Economic Needs(pages 1012)Risk Managementa.Scenario Analysis(page 19)b.Time Horizons(page 19)RECOMMENDED DISCLOSURECLIMATE REPORT REFERENCESOTHER SOURCE REFERENCESRISK MANAGEMENTOrganizations processes for identifying and assessing climate-related risksRisk Management(pages 1622)2022 Form 10-K(pages 8184;141)Organizations processes for managing climate-related risksRisk Management(pages 1622)2022 Form 10-K(pages 8184;141)Carbon CompassSMHow processes for identifying,assessing,and managing climate-related risks are integrated into the organizations overall risk managementRisk Management(pages 1622)2022 Form 10-K(pages 8184;141)METRICS AND TARGETSMetrics used to assess climate-related risks and opportunities in line with its strategy and risk management processMetrics&Targets(pages 2332)2023 Proxy Statement(pages 4;57)Carbon CompassSMSustainabilityScope 1,Scope 2,and Scope 3 greenhouse gas(“GHG”)emissionsMetrics&Targets(pages 2432)Carbon CompassSMSustainabilityTargets used by the organization to manage climate-related risks and opportunities and performance against targetsStrategya.Scaling Green Solutions(page 7)b.Balancing Environmental,Social and Economic Needs(pages 1012)c.Minimizing Our Operational Impact(page 13)Metrics&Targets(pages 2332)2023 Proxy Statement(pages 4;57)Carbon CompassSMSustainability2Company at a GlanceJPMorgan Chase&Co.(“JPMorgan Chase”,the“Firm”or“we”)is a financial services company based in the United States of America(“U.S.”),with U.S.branches in 48 states and Washington D.C.,293,723 employees in 63 countries worldwide and$3.7 trillion in assets as of December 31,2022.The Firm is a leader in investment banking,financial services for consumers and small businesses,commercial banking,financial transaction processing and asset management.Under the J.P.Morgan and Chase brands,the Firm serves millions of customers,predominantly in the U.S.,and many of the worlds most prominent corporate,institutional and government clients globally.JPMorgan Chases activities are organized,for management reporting purposes,into four major reportable business segments,as well as a Corporate segment.The Firms consumer business is the Consumer&Community Banking(“CCB”)segment.The Firms wholesale business segments are the Corporate&Investment Bank(“CIB”),Commercial Banking(“CB”),and Asset&Wealth Management(“AWM”).The business segments are referred to as“lines of business”(“LOBs”).For further information,refer to Business Segment Results on pages 6180 of our Form 10-K for the year ended December 31,2022.About This ReportThis Climate Report is informed by the recommendations of the Task Force on Climate-related Financial Disclosures(“TCFD”),including the supplemental guidance for the financial sector and the supplemental guidance on Metrics,Targets,and Transition Plans.1As informed by TCFDs recommendations,this report provides details on:How our corporate governance practices address climate-related risks,opportunities and targets;How our business is responding to climate risks and opportunities,including our evolving strategies and programs to support the transition to a low-carbon economy and our plans and actions to meet our strategic business objectives to align our lending and underwriting activities with the goal of net zero emissions by 2050;How we identify,assess and manage climate risks within our risk management framework;and How we are measuring our performance and making progress toward our climate targets,including for our operational emissions and key sectors of our financing portfolio.JPMorgan Chase also publishes climate-related information annually through multiple channels,including our Environmental,Social and Governance(“ESG”)report,regulatory filings and press releases,and shares climate-related information with stakeholders through direct conversations.All data in this report is as of December 31,2022,unless otherwise noted.1 Implementing the Recommendations of the Task Force on Climate-Related Financial Disclosures.Task Force on Climate-Related Financial Disclosures.October 2021.3Climate Action to Date2 Operational carbon neutrality achieved,in part,using contractual instruments,including applicable Energy Attribute Certificates and carbon credits.2004 Established Office of Environmental Affairs2007 Published first GHG inventorySet first target to reduce Scope 1 and 2(market-based)GHG emissions and began offsetting employee business travel emissions2005 Adopted an Environmental and Social Risk Governance Policy2014 Representatives of the Firm were among the co-authors of the Green Bond Principles2015 Issued first annual ESG report2016 Executed first Virtual Power Purchase Agreement to source renewable energy for our operations2017 Set target to source renewable energy for 100%of global power needs by 2020Announced target to facilitate$200 billion in clean financing through 2025Representatives of the Firm became members of TCFD2019 Published first TCFD-aligned climate disclosure report2020 Set and achieved a target to finance and facilitate$200 billion to support climate action and sustainable development in 2020Announced our intention to set emissions intensity reduction targets for key sectors of our financing portfolioCreated a dedicated Climate Risk team Established the Center for Carbon Transition Launched a Sustainable Solutions team of investment bankers to provide sustainability-related corporate finance advice to CIB clients Issued inaugural$1 billion green bondBecame a founding member of the Climate Leadership CouncilMet goals to source renewable energy to meet 100%of global power needs annually and achieve operational carbon neutrality22021 Announced a 10-year,$2.5 trillion Sustainable Development Target,including$1 trillion to support climate action and other green initiativesPublished J.P.Morgans Carbon CompassSM methodology and emissions intensity reduction targets for Oil&Gas,Electric Power,and Automotive Manufacturing Launched Carbon Assessment Framework for balance sheet transactions with clients covered by J.P.Morgans emissions intensity reduction targets(in-scope clients)Set additional operational sustainability targets,including to reduce Scope 1 and 2(location-based)GHG emissions by 40%by 2030,over 2017 baselineEstablished the CB Green Economy TeamIssued$1.25 billion green bond and published first green bond reportJoined Net-Zero Banking Alliance2022 Launched Carbon Assessment Framework for capital markets transactions with in-scope clientsSet net zero aligned targets for three additional sectors:Iron&Steel,Cement and AviationMet our goal to maintain carbon neutral operations for the third year in a row2Began process of implementing an internal price on carbon for our own operationsBecame a member of the TNFD Forum2023 TO DATE Set net zero aligned targets for two additional sectors Shipping and Aluminum(See page 26)Updated our initial sector targets to align with net zero by 2050:We updated our Oil&Gas Operational(Scope 1 and 2),Electric Power,and Auto Manufacturing emissions intensity reduction targets to align with the International Energy Agency Net Zero Emissions by 2050 Scenario(“IEA NZE”)Modified our Oil&Gas End Use(Scope 3)emissions intensity reduction target:Now called Energy Mix,the target encompasses a broader view of energy supply that better captures the system-wide substitution from oil and natural gas to low-carbon fuels and zero-carbon electricity generation contemplated under the IEA NZE scenario.As with our other targets,the Energy Mix target aligns to IEA NZE scenario(See page 25)Inaugural absolute financed emissions disclosure:Published absolute financed emissions for eight sectors of our financing portfolio(See pages 2930)Reported progress toward our net-zero targets as of December 31,2022:We plan to continue to measure and report annually on our progress(See page 27)Continued development and expansion of Carbon Assessment Framework(“CAF”):We continue to use CAF to assess how each new in-scope transaction may affect progress toward our emissions intensity reduction targets(See pages 1112)4Firmwide Climate-Related GovernanceOur corporate governance practices help us serve the interests of our stakeholders,including shareholders,customers,clients,employees and communities.The Firm believes that our continued success rests on adherence to our Business Principles,which focus on how we strengthen,safeguard and grow our company over time.These principles apply consistently across LOBs and geographies where we operate.We assess our governance structures,processes and controls,as appropriate,as we continue to advance our understanding of climate-related matters.The illustration on page 6 outlines how environmental sustainability and climate-related matters are overseen by the Board of Directors(“the Board”)and senior management,and are managed within the Firms LOBs.GovernanceBoard OversightThe Board is responsible for oversight of the business and affairs of the Firm on behalf of shareholders.Oversight of ESG matters,including those related to environmental sustainability and climate,is an important part of the Boards work.In 2022,some of the topics discussed during Board and Committee meetings included climate risk,climate and ESG disclosure,and laws and regulations regarding access to financial services.In addition,the five standing committees:Public Responsibility Committee,Compensation&Management Development Committee,Risk Committee,Audit Committee and Corporate Governance&Nominating Committee,operate pursuant to written charters and oversee ESG-related matters within their scope of responsibility.These charters can be accessed on our website.Our annual Proxy Statement includes additional information about the membership and responsibilities of each committee.Climate-and ESG-related matters continue to be considered as part of our director education program.In 2022,directors participated in programs on a number of subjects,including sustainability updates,the Firms climate risk management framework and ESG-related disclosure.Senior ManagementOur management structure is designed to encourage leadership that is consistent with our corporate standards.With respect to climate-related matters,senior managements responsibilities include:consideration of climate-related risks in the Firms strategy and operations,as well as the implementation of strategic climate-related business initiatives.Our Firms most senior management body is the Operating Committee(“OC”),which is composed of our Chief Executive Officer(“CEO”),Chief Risk Officer(“CRO”),Chief Financial Officer(“CFO”),General Counsel,CEOs of each of the LOBs and other senior executives.The OC and Board of Directors receive updates from the CRO,the Global Head of Sustainability,the Global Head of the Corporate Advisory and Sustainable Solutions(“CASS”),LOB CEOs and other senior leaders on climate-related initiatives,as appropriate.For more information on CASS,see page 9 in the Strategy section of the report.Utilizing the Firms emerging expertise on environmental topics,various climate related initiatives across LOBs are periodically managed through business reviews to encourage ongoing transition efforts.The Firmwide Environmental Committee(“FEC”)established in 2022 reviews progress on environmental and climate initiatives and targets.Co-chaired by the CRO and the Global Head of Sustainability,the FECs membership includes senior leaders from the LOBs,and the firmwide Climate Risk Executive,among others.The Co-chairs of the FEC are responsible for escalating information to the Board of Directors,as appropriate.5Organizational IllustrationBOARD OF DIRECTORSCorporate Governance&Nominating CommitteeBoard Risk CommitteePublic Responsibility CommitteeExercises general oversight with respect to the governance of the Board of Directors.It also reviews shareholder proposals and proposed responses,including those relating to environmental sustainabilityAssists the Board in its oversight of managements responsibility to implement a global risk management framework reasonably designed to identify,assess and manage the Firms risks,including ESG and climate risksAudit CommitteeAssists the Board in its oversight of managements responsibility to assure that there is an effective system of controls reasonably designed to maintain compliance with the corpora-tions ethical standards,policies,plans and procedures,and with laws and regulations.As part of this oversight,the Audit Committee considers ESG-and climate-related mattersOversees and reviews the Firms positions and practices on public responsibility matters,including sustainabilityRELEVANT OPERATING COMMITTEE MEMBERSResponsible for developing and implementing corporate strategy and managing operations,including ESG and climate-related mattersFIRMWIDEENVIRONMENTALCOMMITTEEProvides oversight and decision-making on the Firms strategy,standards and practices related to environmental including climate initiatives and targets,and escalates information to the Board,as appropriateClimate Risk ExecutiveGlobal Headof SustainabilityChiefAdministrativeOfficerHead of ESG Investor RelationsHead of Green EconomyBanking Global Head of Corporate Advisory&Sustainable SolutionsHead of Global Markets SustainabilityCenterHead of Consumer Banking PracticesAM Head ofSustainableInvestingPB Head ofSustainableInvestingFIRMWIDE SENIOR SUSTAINABILITY LEADERSResponsible for strategy and execution on ESG and climate-related mattersBUSINESS AND FUNCTIONAL TEAMSe.g.,Asset Management Sustainable Investing,Center for Carbon Transition,Climate Risk,Green Economy Banking and Operational Sustainability6StrategyOur Environmental Sustainability StrategyACCOUNTABILITY,TRANSPARENCY AND ENGAGEMENTReporting regularly and engaging with a diverse set of stakeholders to identify and advance best practices and new opportunitiesMinimizing the environmental impact of our own operations,including in our buildings,branches and data centers31SCALING GREEN SOLUTIONSFocusing our efforts to meet client needs and on scaling solutions the world will need for long-term environmental sustainability2BALANCING ENVIRONMENTAL,SOCIAL AND ECONOMIC NEEDSSupporting global efforts toward net zero GHG emissions by 2050 while balancing energy access,reliability,security and affordabilityMINIMIZING OUROPERATIONAL IMPACTOur Environmental Sustainability StrategyJPMorgan Chase helps our clients navigate the challenges and realize the economic opportunities of the transition to a low-carbon economy.We believe supporting our clients,through advice and capital,to accelerate their low-carbon transition objectives creates positive environmental benefits and generates long-term financial returns for our shareholders.These efforts are guided by the three pillars of our environmental sustainability strategy scaling green solutions;balancing environmental,social and economic needs;and minimizing our operational impact all of which is underpinned by our ongoing focus on accountability,transparency and engagement,which helps us continue to evolve and remain responsive to stakeholders.Scaling Green SolutionsTo meet energy demand and global long-term climate and sustainability goals,the world will need to develop and deploy a host of new technologies,business models and other solutions.As a global financial institution,we have an important role to play by providing financing and strategic advice to clients and by helping investors put their capital to work.Mobilizing Capital for Climate ActionDeveloping solutions sufficient to meet the climate challenge will require significant capital,including capital to deploy and scale decarbonization and clean energy solutions to meet the worlds growing energy needs.Our$1 trillion toward Green objective,part of our broader ten-year$2.5 trillion Sustainable Development Target,aims to accelerate deployment of solutions for cleaner sources of energy and facilitate the transition to a low-carbon economy.Page 23 in the Metrics&Targets section provides details of our progress toward our$1 trillion Green objective.To learn more on our$2.5 trillion Sustainable Development Target,including the activities it is designed to support and amplify across our business,see page 6 of our 2022 ESG Report.Sustainable Aviation FuelsWe are focused on helping our clients overcome challenges they face to decarbonize,including by directing our efforts and capital to help scale solutions that we believe play a significant role in driving decarbonization.An example of this is our work in the Aviation sector,a carbon-intensive sector of our financing portfolio,where we are helping advance the development of Sustainable Aviation Fuel(“SAF”).SAF is an alternative fuel that has the potential to achieve up to 80%life cycle emissions reductions compared to fossil-jet fuel,and represents one of the most important levers for decarbonization of the Aviation sector in the near-to-medium term.JPMorgan Chase is a founding member of the Sustainable Aviation Buyers Alliance(“SABA”),an initiative spearheaded by Rocky Mountain Institute(“RMI”)and Environmental Defense Fund(“EDF”).SABAs mission is to accelerate the path to climate neutral air transport by driving investment in high-quality SAF,catalyzing new SAF production and technological innovation,and supporting member engagement in policymaking.To date,the Firm has also purchased 2,200 SAF certificates in support of these objectives.The Firm is also an investor in the United Airlines Venture Sustainable Flight Fund,which is a first-of-its-kind investment vehicle designed to support early-stage companies focused on decarbonizing air travel by accelerating the research,production and technologies associated with SAF.See page 12 for additional levers that we believe help advance decarbonization of key sectors in our financing portfolio.7Supporting Effective Carbon MarketsCarbon markets can play an important role in both reducing and/or neutralizing operational GHG emissions and accelerating the overall transition to a low-carbon economy.At JPMorgan Chase,we believe we can play a part in helping support a more robust and effective voluntary carbon market.JPMorgan Chase participates in the voluntary carbon market in a variety of ways,including providing strategic advice to support clients transition efforts,enhancing liquidity through credit trading,connecting buyers and sellers,deploying capital to promote decarbonization solutions,and purchasing credits as part of our efforts to manage our own operational emissions.To help speed and scale the growth and development of carbon dioxide removal(“CDR”)technologies,in 2023,the Firm signed long-term agreements to purchase over$200 million in high-quality,durable CDR.The CDR from these agreements are intended to remove and store approximately 800,000 metric tons of carbon dioxide equivalent(“t CO2e”)from the atmosphere and to enable the Firm to match every ton of its unabated direct operational emissions with durable carbon removal by 2030,further accelerating JPMorgan Chases operational sustainability efforts.43Our Carbon Market Principles outline our perspective on the role that the voluntary carbon market plays,current market challenges,and how JPMorgan Chase is working to support and enhance a more effective voluntary carbon market.It also presents a set of core principles that we reference when evaluating carbon credits to support the Firms operational sustainability targets and engaging with clients on carbon credit-related transactions.Providing Climate-Related Solutions to Clients and InvestorsOur global and diversified franchise allows us to offer climate-conscious financial options to clients who want them.This includes a growing range of climate-and sustainability-related products and services through our Consumer Banking and Wealth Management businesses,including the J.P.Morgan Global Private Bank.We aim to give individuals and families the tools they need to meet their goals.Supporting Our ClientsWe continue to broaden our efforts to support the climate-and sustainability-related banking needs of clients,from early stage and small companies through to multinationals and other large corporations.We deploy our capital and expertise to assist clients working to transition their business model and operations to reduce emissions.As we expand our capabilities across our LOBs,we aim to provide clients with increasingly diverse and innovative solutions,while helping to grow the market for green and sustainable financing.GREEN ECONOMY BANKING As the need for climate solutions grows so does the number of companies focused on providing them,with each requiring a unique combination of financing and advice to achieve its business objectives.Our CB Green Economy Banking team is called upon to provide subject matter expertise,banking solutions,and specialized credit underwriting to companies primarily focused on sustainable technologies,products and services.The Green Economy Banking team focuses on three coverage areas renewable energy,sustainable finance and Climate Tech with bankers assigned to provide specific sub-industry coverage within each of these areas.The Green Economy banking team serves companies across North America and the Europe,Middle East,and Africa region.Plantible:Helping shape the future of foodJPMorgan Chase is providing financing to support the growth of Plantible,a biology company founded in 2018 that specializes in producing Rubi Protein.Rubi Protein is a nutrient-dense protein that naturally occurs in leafy greens and is intended to be used as a replacement for animal-based proteins.Plantible has strived to build a robust,scalable and sustainable supply chain that uses less water,requires less land,and emits fewer greenhouse gases than the production of conventional meat and dairy alternatives such as soybeans and peas.JPMorgan Chase has provided financial services,including two multi-million dollar venture debt facilities as well as treasury services,to Plantible.Plantible recently opened a commercial-scale facility in Eldorado,Texas that is anticipated to support job creation in the green economy and increase Plantibles production capacity.ASSET MANAGEMENT SUSTAINABLE INVESTINGThe Global Sustainable Investing team at J.P.Morgan Asset Management(“JPMAM”)provides cross-asset research and insights on thematic ESG issues,including climate risk;works with clients to build and implement sustainable investing solutions;and helps lead JPMAM investment stewardship activities,including proxy voting and investee company engagement.At JPMAM,we endeavor to help clients enhance long-term value to their portfolios by considering financially material climate risks and opportunities as part of the investment process and actively engaging with our investee companies,as appropriate.As such,we continue to enhance our climate-related insights to help assess the material implications of climate change within our client portfolios.This includes our efforts in enhancing our climate-related data sets,research capabilities and training.Where aligned with our clients specific investment objectives,we also strive to address climate risks and opportunities through meaningful carbon emissions reductions in client portfolios,including by reducing exposure to the largest carbon-emitting companies or sectors and investing in companies that are on a path to reduce carbon emissions.To learn more about these efforts see the JPMAM 2023 Global TCFD Report.GLOBAL PRIVATE BANK SUSTAINABLE INVESTINGAt J.P.Morgan Global Private Bank,we continue to expand our products,reporting,and thought leadership around climate-related risks and opportunities.In the product suite,we provide high-net-worth clients with access to sustainable investment strategies across equities,fixed income,alternatives,and multi-asset portfolios.In 2023,we launched an impact investing vehicle that invests in climate solutions opportunities across venture capital,growth equity,and private equity.Going forward,we aim to expand our available strategies to include investment funds focused on decarbonization,energy efficiency,resource conservation,and emissions management.We also offer modern,client-friendly sustainability reporting for certain investment strategies.These reports are built through OpenInvest,a values-based investing financial technology company that we acquired in 2021.To demonstrate thought leadership,we continue to speak at high-profile venues,participate in initiatives focused on contributing to the growth of sustainable investing markets,and author white papers that address the investment risks and opportunities presented by climate change.These efforts are aimed to help keep our clients up-to-date on the latest sustainability-and climate-related trends.CASE STUDY3 To learn more on the criteria we prioritize when evaluating the quality and credibility of carbon credits,please refer to Carbon Market Principles paper.4 Durable refers to amount of time for which CO2 can be stored in a stable and safe manner.In this context,durable is defined as 1,000 years of anticipated CO2 storage.8CORPORATE ADVISORY AND SUSTAINABLE SOLUTIONSJPMorgan Chase is committed to helping our clients achieve their long-term strategic goals through the delivery of holistic advice,capital markets solutions,and targeted capital deployment.To best coordinate these efforts,in 2022,the Corporate Advisory and Sustainable Solutions(“CASS”)team was formed.The CASS team is composed of the Corporate Finance Advisory team,the Center for Carbon Transition(“CCT”),the Infrastructure Finance Advisory team and the Sustainable Solutions teams.The CASS team partners with coverage and product groups across the CIB and CB,as well as the Corporate Sustainability team to drive global cross-product coordination and allocate dedicated green capital of the Firm.CENTER FOR CARBON TRANSITION The CCT provides clients globally with low-carbon transition focused advice and expertise,and works with industry coverage and product teams within the CIB and CB on a wide variety of strategic sustainability focused transactions.The team is also responsible for supporting our banking teams in identifying green business opportunities to meet client demands and amplifying our green economy coverage.The combined expertise of the CCT and other banking teams helps provide tailored insights and solutions to clients who seek this advice as they adapt and grow their businesses.This includes providing strategic advice on clients long-term decarbonization plans and working with industry and product teams to structure unique financing solutions in public and private capital markets to help clients drive progress toward their goals.The CCT also works to develop and implement the Firms strategy to align,over time,its financing portfolio with net zero emissions by 2050 and oversees the implementation of our Carbon Assessment Framework(“CAF”),which helps us monitor our progress toward our net zero aligned targets.For more information on our targets and the CAF,see pages 1012 in Strategy and pages 2428 in Metrics&Targets.SUSTAINABLE SOLUTIONSOur Sustainable Solutions team is a specialist group of investment bankers who provide sustainability-related advice and transaction support to advance sustainability solutions for our clients and to provide clients access to sustainability-focused capital across equity,debt and private markets.In Europe,the Middle East and Africa,Sustainable Solutions also coordinates JPMorgan Chases investment banking coverage of clients in emerging green economy sectors.The group works with other investment banking teams across the CIB to identify and execute on ESG-related advisory and product opportunities.GREEN,SOCIAL,SUSTAINABILITY AND SUSTAINABILITY-LINKED BONDSThrough our business,JPMorgan Chase is a leading underwriter of green,social,sustainability and sustainability-linked bonds,many of which our clients intend to use to support their climate-related activities.During 2022,the Firms broker-dealer subsidiaries underwrote over$38.3 billion in green,social,sustainability and sustainability-linked bond debt,including approximately$16.6 billion in green bonds.5CEMEX:Building a Greener FutureIn March 2023,JPMorgan Chase acted as sole green structuring agent for a$1 billion green subordinated notes with no fixed-maturity issuance by Cemex,one of the worlds largest construction materials companies headquartered in Monterrey,Mexico.This issuance is the first-ever green bond issuance from a major construction materials company and one of the largest by a Latin American corporate.6An equal amount to the net proceeds are expected to be allocated to finance or refinance,in whole or in part,one or more new or existing eligible capital,operating,and research and development expenditures that align with Cemexs“Future in Action”program,which aims to reduce direct CO emissions by 47%by 20302 and achieve net zero operations by 2050.Eligible expenditures relate to prevention and control;renewable energy;energy efficiency;clean transportation;sustainable water and wastewater management;and eco-efficient and/or circular economy adapted products,production technologies and processes.7JPMorgan Chase is supporting its clients in high carbon intensity industries,like Cemex,advance their decarbonization goals via innovative financing structures in the international debt capital markets.GLOBAL MARKETS SUSTAINABILITY CENTERWithin CIB Markets,the Global Markets Sustainability Center works with product teams to provide sustainability and climate solutions across asset classes to help clients,who seek to,realize their climate and sustainability strategies and transition their portfolios to a low-carbon economy.An example is Investable Indices that incorporate sustainability and climate considerations to help meet investors specific requirements.These are tradable indices designed to help investors gain exposure to distinct risk and reward profiles,simplify the construction of alternative investments,tailor risk-hedging strategies with greater precision,enhance long-term returns and construct more resilient portfolios.Within equities,we have ESG benchmarks employing both long only and long/short strategies,and we continue to innovate across asset classes including a newly developed methodology that incorporates environmental considerations into a diversified commodity transition index.5 Source:Dealogic Sustainable Finance Report,Syndicated Bonds,Loans&Equity,Full Year 2022.Note that third-party estimates of Green,Social,Sustainability and Sustainability-linked(“GSSS”)bond underwriting may not be the same as JPMorgan Chase-produced data for GSSS bond underwriting in our Sustain-able Development Target.6 Based on annual installed cement production capacity.7 From a 1990 baseline.CASE STUDY9Achieving long-term inclusive and sustainable growth globally requires balancing environmental needs,societal advancement and economic stability.While the world needs to work swiftly toward environmental goals such as achieving net zero GHG emissions by 2050,it needs to do so in a way that supports the worlds growing energy demand to power societal progress and fosters equitable energy access,reliability,security and affordability.For us,recognizing the balance needed to achieve long-term sustainability informs our approach to environmental initiatives.Our initiatives are rooted in how we do business:this means serving our customers,clients and communities while running a healthy and vibrant company.Examples of this work include:using our capital and expertise to support clients in advancing their low-carbon transition goals,and in turn,advancing progress toward our own net zero aligned targets(see pages 1012 and 2428);deploying our philanthropic capital to support initiatives that help vulnerable communities globally advance their resilience to climate change;and evaluating and managing potential risks such as E&S and climate risks within our business(see pages 1622).Addressing Our Financed Emissions Through Our Net Zero Aligned TargetsA key aspect of our environmental sustainability strategy is how we engage with our clients who operate in carbon-intensive industries,with the goal of accelerating the low-carbon transition and encouraging near-term actions that will set a path for global net zero emissions by 2050.In support of our strategy,we are aligning key sectors of our financing portfolio8 with net zero emissions by 2050.To date,we have set net zero aligned targets for eight sectors Oil&Gas,Electric Power,Auto Manufacturing,Iron&Steel,Cement,Aviation and new for this year,Shipping and Aluminum and have published our Carbon CompassSM methodology detailing our approach,including key sectoral considerations,decarbonization pathways,and data and metrics used.Our net zero aligned targets are currently constructed for 2030 as portfolio-level targets by sector,using an emissions intensity reduction metric.We set targets using our own independent assessment of what we determine is reasonable and achievable to serve the best interests of our business and serving our clients while remaining true to our principles.In 2021,when we first established our emissions intensity reduction targets for the Oil&Gas,Electric Power and Auto Manufacturing sectors,we aligned them to the then available International Energy Agency Sustainable Development Scenario(“IEA SDS”),which is consistent with the goals of the Paris Agreement and generally accepted as aiming for achievement of net zero emissions by 2070.As climate science has advanced,this year we are updating our targets for the Oil&Gas,Electric Power,and Auto Manufacturing sectors to align them with the IEA Net Zero Emission by 2050 Scenario(“IEA NZE”)a scenario that has become a widely used benchmark in the financial sector for net zero alignment.While there are a variety of differences between the IEA SDS and IEA NZE scenarios,the shift in ambition from net zero by 2070 to net zero by 2050 is significant reflecting our support for actions toward global achievement of net zero emissions by 2050.In conjunction with updating our targets to the IEA NZE scenario,we have also expanded the boundary of our Oil&Gas End Use(Scope 3)target to include zero-carbon power generation from our Electric Power portfolio.Now called Energy Mix,our expanded target recognizes a singular focus on fossil fuels will not successfully achieve the necessary transition of the global energy system.Therefore,our targets should aim to reflect the reality that we also need to prioritize a significant build-out of clean energy sources.In addition,the build-out of zero-carbon power is taking place primarily in the Electric power sector.Our Energy Mix target therefore builds on our previous Oil&Gas End Use emissions intensity reduction target,reflects our financing of zero-carbon power generation,and provides a clearer view on how our financing relates to the Scope 3 emissions performance of the broader energy system.We believe this revised target better reflects our strategy of supporting the rapid build-out of zero-carbon power,which we expect will help replace fossil fuels and reduce emissions without compromising energy security and affordability.Please see pages 2425 in the Metrics&Targets chapter for additional information.KEY ELEMENTS OF OUR APPROACHOur Carbon CompassSM methodology incorporates and expands upon several related approaches to define robust,decision-useful metrics and science-based targets on a sector-by-sector basis.The following key choices and considerations informed how we designed our approach:We are also setting new net zero aligned targets for the Shipping and Aluminum sectors.Building on the approach and foundation of our other targets,these new targets are also intended to align to the IEA NZE scenario.We aim to continue expanding this work over time for additional carbon-intensive sectors in our financing portfolio,engaging with our clients on their decarbonization journeys,and aligning that work with global climate goals,science-based scenarios,and evolving best practices for the financial sector.Progress towards our targets is subject to market conditions,along with technological and public policy advancements.Below,we summarize key elements of our approach and our strategy for driving progress toward our targets,while in the Metrics&Targets chapter(see pages 2428)we provide details of our net zero aligned targets,baselines and performance to date,including our updated targets and new sector targets.We also include disclosure of our financed emissions on an absolute basis(i.e.,absolute financed emissions)for selected sectors of our portfolio.8 Our financing portfolio refers to 12-month average of our committed balance sheet lending and tax equity transactions,as well as 100%attribution of our share in facilitated capital markets transactions with in-scope clients.Science-based.Our targets build on the transition pathways outlined by the IEA NZE scenario.We also reference a wide range of publicresources,including additional climate scenarios,decarbonization research and other frameworks for assessing alignment with globalemission reduction goals.Sector-specific.Within each sector,we focus on specific activities with material emissions and credible pathways toward decarbonization,enabling us to gain more useful insight and better support our clients in developing and implementing their strategies.Decision-useful.For each sector,we define one or more core metrics that provide insights into companies performance and progresstoward decarbonization,and that are compatible with the benchmark trajectories we use to evaluate alignment to global emissions goals.Robust and consistent data.Each metric is designed to make use of consistent,well-reported and standardized data.Where data availabil-ity is limited,we continue to support improvements while defining processes for use of appropriate alternatives.Balancing Environmental,Social and Economic NeedsHow We Design Our Methodology for Each TargetThe framework below guides how we have sought to reasonably develop metrics and targets that are robust,decision-useful and tailored to each included sector.Define sector activities,emissions and financing in scopeDevelop decision-useful emissions metric(s)Determine appropriate emissions trajectoryDerive 2030 portfolio target(s)Reassess as emissions trajectories change and new data becomes available1234510OUR CARBON ASSESSMENT FRAMEWORKTo bring a climate lens to the way we make financing decisions,we have developed an assessment methodology,the Carbon Assessment Framework(“CAF”).Our CAF aims to provide a consistent,comprehensive,and data-driven approach to assess our clients emissions and decarbonization plans.We use the CAF to assess how new in-scope transactions may affect progress toward our net zero aligned targets.Within the framework,we assess two key scores for each client:a CAF quantitative score and a CAF qualitative score(collectively known as the CAF scores).The quantitative score for each client is comprised of three pillars:(i)their historical emissions reductions;(ii)their current carbon intensity;and(iii)their projected carbon intensity based on their decarbonization targets.The qualitative score considers a variety of factors,including corporate struc-tures for governance and oversight,which enable us to take a holistic view of how the client plans to advance their decarbonization goals.The client-level CAF quantitative and qualitative scores are sourced from our Climate Risk infrastructure.Our Risk teams also use these client-level scores for internal risk analysis purposes,described further on page 20.QUANTITATIVE ASSESSMENTCAF QUANTITATIVE SCORE(15)CAF QUALITATIVE SCORE(15)QUALITATIVE ASSESSMENTBucket 1Bucket 2Bucket 3Bucket 4Bucket 5LOWESTHIGHESTClients integration of climate risk and opportunities in corporate strategyClients investments toward decarbonizationClient is scored relative to JPMorgan Chases sector portfolio target,as applicableForecasted Carbon IntensityHistorical Carbon Intensity ReductionClient is scored based on the 2-year change in its carbon intensityClient is scored relative to JPMorgan Chases applicable portfolioCurrent Carbon IntensityHolistic view of the clients plans and actions to achieve its decarbonization plans including:Clients Board oversight and corporate governance of climate-related mattersKey Aspects of Our Carbon Assessment FrameworkHOW WE ARE USING CAFAs we continue to expand our sector-specific emissions intensity reduction targets,we are also focused on aligning our capabilities and efforts to make progress toward them.Our goal is to use our knowledge and expertise to support clients in navigating the low-carbon transition helping them think through and act on their decarbonization plans while also aiming to achieve emissions reductions across our financing portfolio.Decision-making and Portfolio Management:We consider the CAF as one element of our decision-making for new in-scope transactions in our targeted sectors.The CAF process,and governance around the same,have been integrated into the various deal execution processes for each sector across credit and capital markets financing for all in-scope transactions.While all transactions are assessed on an individual basis with a holistic view of many factors,the CAF allows us to assess how each new transaction may affect progress toward our emissions intensity reduction targets.Accountability for progress toward the targets has been assigned to senior leaders with the relevant banking teams at a regional-and sector-specific level.This senior-level accountability coupled with the CAF is designed to serve as a monitoring mechanism to help senior management oversee progress toward achieving our sector-specific portfolio level targets.Client Engagement:Assessing our clients decarbonization plans through our CAF creates an opportunity for us to engage with our clients,understand their views,plans and constraints,as well as their capital needs.The CCT,together with other banking teams,works closely with clients to help advance clients decarbonization initiatives.11Examples of decarbonization levers across sectorsSECTOREXAMPLE OF DECARBONIZATION LEVEROil and Gas Methane abatement projects(e.g.,venting and flaring)Use of alternative fuels and renewable energy in operations Carbon capture,utilization,and storage(“CCUS”)for operations and customers Producing alternative fuels(e.g.,biofuels,synthetic fuel,etc.)Producing hydrogen,especially green Producing renewable energyElectric Power Renewable energy(solar,onshore/offshore wind farms geothermal,etc.)Nuclear Hydrogen,especially green CCUSAuto Manufacturing Battery electric vehicles Plug-in hybrid electric vehicles Hydrogen fuel cell vehicles Efficiency improvements in internal combustion enginesIron&Steel Electric arc furnaces Hydrogen for direct reduced iron production Use of renewable electricity Scrap recycling and direct re-use(without re-melting)CCUS Extended lifetime of steel outputCement CCUS Decreasing clinker-to-cement ratio of sold cementitious products Producing clinker replacements Use of alternative fuels(non-renewable waste,biomass,renewable waste)Electrification of equipmentAviation Sustainable Aviation Fuels-learn more about our work in advancing SAF development on page 7 Alternative propulsion systems(electric,hydrogen)Fleet replacement Engine efficiency improvements and retrofits Load factor/demand management Flight control and ground operations efficiencyShipping Alternative fuels(biofuels,ammonia,hydrogen,methanol)Fleet replacement Electrification Engine efficiency improvements and retrofits Load factor/demand managementAluminum Use of renewable electricity Electrification of refining Recycling of aluminum Use of inert anodesUPDATES TO OUR METHODOLOGYSince launching CAF in 2021,we have broadened its scope to encompass smaller segments of the applicable portfolio and have refined its methodology with the aim of customizing the framework and generating a sector-specific assessment of a companys decarbonization plans.We believe CAF is a reasonably designed framework,and we aim to continue looking for improvement opportunities and to enhance and mature the CAF methodology over time.We plan to continue to expand the use of CAF assessments to encompass additional sectors and financing that we provide to in-scope clients of our Carbon CompassSM methodology.INTEGRATING CAF ACROSS OUR BUSINESS PROCESSESWe are dedicating resources to enable a technology-based integration of our CAF throughout our relevant business processes.For example,by embedding our CAF into our deal origination processes,we are better enabling our coverage and product deal teams to complete CAF assessments for in-scope transactions,and our risk teams to verify information feeding into the assessments,increasing their robustness and confidence.This integration has also better equipped our client coverage teams to identify areas where we can further strengthen our support to clients in implementing their decarbonization strategies.We recognize that different factors such as technology development and scalability beyond our and our clients control will pose difficulties in the low-carbon journey,and we continue to engage with our clients and support their decarbonization efforts.The table below gives a few examples of areas where we are engaging with our clients to provide additional support by delivering strategic advice,as well as providing capital and structured financing solutions to help them in achieving their decarbonization goals.We see these as levers that advance decarbonization of the different sectors where our clients operate and can contribute to our progress toward our emissions intensity reduction targets.12A key component of our approach to sustainability is managing the environmental impact from our operations.Our reported environmental footprint primarily stems from the operation of our more than 6,000 corporate offices,bank branches and data centers around the world.Our strategy for minimizing this impact focuses on optimizing how we source and use energy,reducing direct and indirect GHG emissions,and enhancing resource management,including in how we design and operate our buildings,and through our supply chain.In support of these efforts,weve set a number of operational sustainability targets.To view our progress toward these targets,our operational GHG emissions data and renewable energy use see pages 3132 in Metrics&Targets.The Firms Chief Administrative Office(“CAO”)provides multiple global services that support the day-to-day operations of the Firms businesses.The CAO includes the Operational Sustainability team,responsible for the Firms operational carbon management strategy and for coordinating the implementation of operational sustainability efforts across the corporate functions;the Global Real Estate team,responsible for the deployment of onsite renewable energy,implementation of energy efficiency and water use minimization measures;and the Supplier Sustainability Team,responsible for providing oversight of the Firms supply chain with respect to ESG matters.Energy Optimization and GHG Emission ReductionWe are pursuing efforts to optimize energy use and reduce our GHG footprint across our global operations,guided by our targets,including reducing Scope 1 and Scope 2 emissions by 40%by 2030 vs.a 2017 baseline,sourcing renewable energy for 100%of our global power needs annually,satisfying at least 70%of our renewable energy goal with on-site generation and long-term renewable energy contracts by 2025,and maintaining carbon neutral operations annually.With these goals in mind,our strategy focuses on the following:9IMPROVING EFFICIENCY AND ACCELERATING ELECTRIFICATIONReducing energy use and using less carbon-intensive energy sources are our first priorities.We continue to undertake a variety of energy efficiency measures,including reducing the physical footprint and power consumption of our data centers and optimizing the use of heating and cooling in our buildings.Another key energy and emissions reduction opportunity is electrification.To this end,we intend to design and build fully electrified retail branches,where feasible,and make greater use of electric transportation,including using vendors who offer electric vehicles and aiming to transition JPMorgan Chases owned vehicle fleet to electric by the end of 2025.10SOURCING RENEWABLES Our second priority is to transition to zero-carbon energy sources,for which we are working to scale our use of renewable energy from both on-site solar installations and long-term energy procurement contracts.We are aiming to increase our commercial on-site solar program to over 90MW by end of 2025,and we have made on-site solar a feature of our new branches with the goal of increasing total solar capacity of our retail locations to over 25MW by end of 2024.11To complement our on-site solar program,we continue to expand our use of long-term power purchase agreements and green power supply contracts across our global operations and have renewable energy agreements serving office locations in Europe and India.PURCHASING ENERGY ATTRIBUTE CERTIFICATES(EACS)AND CARBON CREDITSFinally,to complement our emission reduction strategy,continue to meet our target to source renewable energy for 100%of our global power needs annually and address the remainder of our reported direct and indirect emissions,we purchase applicable EACs(e.g.,Green-E certified Renewable Energy Certificates(RECs),International-RECs)and carbon credits.12In addition to the above efforts,we are exploring and committing capital toward net zero and sustainable design for our branches,smart building management,and other strategies to enhance environmental sustainability of our operations and real estate portfolio.For more information,see pages 1823 of our ESG report.9 Operational carbon neutrality achieved,in part,using contractual instruments,including applicable Energy Attribute Certificates and carbon credits.10 Company use vehicles owned or leased by JPMorgan Chase for use for corporate activities,excluding specialty vehicles and cars that form part of an employees compensation and benefit package.11 On-site solar is a standard feature of our branches provided local regulations and circumstances allow.12 Carbon credits and the market for them are evolving rapidly.Although we endeavor to source high-quality carbon credits verified by independent third parties,the ability to use carbon credits to fully and permanently“offset”emissions or achieve carbon“neutrality”relies on certain assumptions and is subject to debate among experts.For more information on our purchase of carbon credits,please see page 8 in Strategy Chapter and page 21 of our 2022 ESG Report.Minimizing Our Operational Impact13Accountability,Transparency and EngagementWhile we are proud of the steps our Firm has taken to respond to climate-related risks and opportunities in our business,we know that we have more work to do and that we will continue to learn,including from the feedback we receive from stakeholders.Our strategy is supported and strengthened by our ongoing efforts to enhance accountability,transparency and engagement.AccountabilityWe strive to leverage the Firms robust management structures to foster sound management and a culture of accountability on ESG matters.This includes defining oversight and management of climate-related initiatives within and across our LOBs to monitor their progress as part of regular business reviews.We aim for transparency and accountability by reporting progress against key financing and operational targets annually including processes and controls for data disclosure and verification.Public ReportingWe recognize stakeholders interest in timely information concerning our climate-related strategies and activities.We plan to continue to provide information through a number of channels including our Annual Report and Proxy Statement,ESG and Climate reporting,regulatory filings,website,press releases,direct conversations with stakeholders,and various other reports and presentations.We intend to continue to leverage market-leading and investor-focused climate reporting initiatives to inform the development of our climate-related disclosures.We are also closely monitoring regulatory developments related to mandatory climate reporting requirements in several jurisdictions around the world.Stakeholder EngagementOur key stakeholders include customers and clients,shareholders,employees,communities,regulators and policymakers,research analysts and suppliers.We engage with stakeholders throughout the year to obtain insight into their needs and perspectives,as well as to gather feedback on our strategy and performance,including as they relate to climate change.Strengthening Our Sustainability Initiatives Through Employee Engagement We encourage our employees to think about how they can live more sustainably.For example,through our Global Sustainability Series events,we give employees an opportunity to participate in insightful and inspiring discussions showcasing the Firms sustainability leaders and experts from around the globe.Our GoGreen program,a global network of employee-led volunteer teams,works to foster a community of informed,engaged and inspired employees who contribute to our sustainability culture.The mission of the GoGreen teams is to increase employee awareness of sustainability initiatives at JPMorgan Chase,including our sustainability targets,and what the Firm is doing to meet them,as well as offer employees opportunities to learn about and engage in sustainable activities at work,at home and in their communities.During the first half of 2023,GoGreen team events and activities included:Realizing Environmental Benefits through Engagement with Our Suppliers We recognize that the environmental impact of our operations extends to our suppliers practices.As such,we aim to work with suppliers who are working to improve their environmental sustainability.As an example,the Firm recently collaborated with a transportation supplier in Mumbai,India to upgrade commuter buses shuttling roughly 14,000 employees to and from the Firms campuses.The upgraded buses have onboard diagnostic devices that monitor emissions and identify malfunctioning components that could cause problems and affect the vehicles emission performance.These upgrades are expected to lead to an estimated 34%reduction in the upgraded buses annual GHG emissions compared to 2022.To further our efforts,in 2023,we also established new Supplier Environmental Sustainability Guidelines,which are designed to educate our suppliers as to how they can integrate positive environmental practices within their own organizations and to set the foundation for further incorporating environmental considerations into our procurement process.Educating Our Workforce On ClimateWe are enhancing our ability to support our clients in navigating their low-carbon transition journeys,achieving their climate goals and executing on value creation strategies.We provide our banking teams across LOBs with climate-related resources covering a wide range of topics,including climate-related regulatory updates;key technologies,financing options and investment opportunities of the climate transition;and sector-specific decarbonization pathways.Offering hands-on events in support of UN World Water Day where employees learned about water access challenges in developing nations.Hosting local biodiversity themed events around the globe in celebration of UN World Earth Day.Collaborating with local community organizations to host beach and riverbank clean-ups,tree planting,litter clearing and invasive species removal.Staging sustainability fairs to provide employees with opportunities to discover locally made sustainable products and services.Sponsoring learning sessions with sustainability experts on topics such as composting and gardening at home,recycling and waste management,and JPMorgan Chases corporate beekeeping program to provide safe pollinator habitats for honeybees.Participating alongside the Firm and millions of others around the globe in World Earth Hour,going dark for one hour in our homes and within more than 30 JPMorgan Chase build-ings to show our support for climate action.14Policy and Industry EngagementJPMorgan Chase believes that responsible corporate citizenship demands a healthy and informed democracy through civic and community involvement.Our business is subject to extensive laws and regulations,and changes to such laws can significantly affect how we operate,our revenues and the costs we incur.Because of the impact public policy can have on our businesses,employees,communities and customers,we engage with policymakers holding a range of views,on a range of issues including banking,financial services,cybersecurity,workforce development,small business,tax,trade,and inclusive economic growth,among others to advance and protect the long-term interests of the Firm.We recognize the need for thoughtful public policy on climate-and energy-related matters.It can help accelerate the Firms progress on sustainability-related business objectives and contribute to sustainable economic growth.It is among the prerequisites we view as essential to make the achievement of our and others climate targets feasible.We therefore engage with external stakeholders and trade associations on policies that we believe can help make net zero goals achievable,including by mobilizing capital for green technology and solutions,and supporting clients as they navigate the low-carbon transition.Examples of our recent climate-related public policy and industry engagements include:Supporting Rocky Mountain Institute with a grant for their Accelerating Clean Regional Economies initiative,which convenes business,policy,economic development,workforce,and NGO stakeholders to prioritize and advance local clean technology industries(for example,battery and electric vehicle manufacturing in the Great Lakes region).Convening over 30 individuals from community development financial institutions,NGOs,and philanthropies to discuss the implementation of the Inflation Reduction Act(“IRA”)Greenhouse Gas Reduction Fund particularly how its capital can best support underserved communities and the best ways to support applicants seeking funds.The Firm belongs to a number of trade associations that advocate on major public policy issues of importance to the Firm and the communities we serve.The Firms participation in these associations comes with the understanding that we may not always align with all their positions or those of its other members.We make independent decisions as a Firm,and we may provide appropriate feedback on the efforts by these associations.A list of the Firms principal trade associations is disclosed in our Political Engagement Report.Similarly,the Firm may engage with industry initiatives to help address complex global challenges,including climate change,where we are aligned with the initiatives goals and can continue to exercise our own business judgment based on the best interest of the Firm and serving our clients.We also participate in a variety of initiatives focused on advancing sustainability.Three examples are:We made a$2.5 million grant to the EFI Foundation to support their work on the Energy Futures Finance Forum(“EF3”).The initiative,launched at an event hosted by the Bipartisan Policy Center in February 2023,is led by former Secretary of Energy Ernie Moniz.EF3 engages across stakeholder groups to recommend policies intended to increase deployment of key decarbonization technologies.Its initial framing report focused on the need to increase clean energy project financial viability to attract the necessary private capital to fund de-carbonization efforts at commercial scale.A subsequent report applied this framework to carbon capture and storage(“CCS”),and offered policy recommendations such as enhancing federal government support of first-of-a-kind projects on CCS and supporting infrastructure like pipelines;disclosing performance data for taxpayer supported projects;and fostering community engagement as CCS projects develop.The EF3 Advisory Board includes members of JPMorgan Chase,the investor community,and civil society.We contribute to public discourse by voicing our views on certain developments in climate policy.In February 2023,two JPMorgan Chase senior leaders published an op-ed in Fortune describing the Firms approach toward recent laws passed in the U.S.that support climate and clean energy investment,including the IRA and the Bipartisan Infrastructure Law.These federal investments aim to help to reinvigorate do-mestic manufacturing,build resilient supply chains,create jobs,and cut energy costs all while making progress on the climate challenge.We are increasing our engagements with oil and gas companies,technology innovators,non-governmental organizations and multi-stake-holder initiatives to support methane emissions reductions and improved methane emissions data quality.Through our engagements,we encourage adoption of technologies to monitor and measure emissions to improve accuracy and transparency of data,and to foster near-term emission mitigation.Our work with a range of stakeholders supports mobilization of capital for methane emission reduction.15Risk ManagementClimate risk is the risk associated with the impacts of climate change on the Firms clients,customers,operations and business strategy.Climate change is viewed as a driver of risk that may impact existing types of risks(credit&investment,market,operational and strategic)managed by the Firm.Climate risk is categorized into physical risk and transition risk.Our Climate Risk FrameworkThe Firms Climate Risk FrameworkRISK IDENTIFICATIONREPORTING&DISCLOSURESSCENARIO ANALYSISDATA MANAGEMENTRISK GOVERNANCERISK MEASUREMENT Physical risk refers to economic costs and financial loss associated with a changing climate.Acute physical risk drivers include increased frequen-cy or severity of climate and weather events,such as floods,wildfires and tropical storms.Chronic physical risk drivers include more gradual shifts in the climate,such as sea level rise,persistent changes in precipitation levels and increase in average ambient temperatures.Indirect physical risk drivers include the second-order effects of these acute and chronic risks,such as supply chain disruptions or changes to property valuations.Transition risk refers to the financial and economic implications associated with a societal adjustment to a low-carbon economy.Transition risk drivers include possible changes in public policy,adoption of new technologies and shifts in consumer preferences.Transition risks may also be influenced by changes in the physical climate.Our climate risk framework sets forth the capabilities JPMorgan Chase uses to identify,assess and manage the impacts of physical and transition risk drivers on each of our four risk types.This framework is comprised of six core firmwide risk capabilities central to enabling assessment,quantification and management of the climate risks that may manifest across our diverse global footprint.In this chapter,we discuss Risk Governance,Risk Identification,Scenario Analysis,and Risk Measurement capabilities of this framework.Data Management capabilities are described throughout the chapter,while our Reporting and Disclosures capabilities provide senior leadership with periodic,aggregated reporting on physical and transition risks across our existing risk types and contribute to external disclosures and regulatory filings.JPMorgan Chase continues to invest in talent and improve our data and technology resources to support the management of climate,environmental and social risks.16Risk IdentificationAt JPMorgan Chase,LOBs and Corporate are responsible for the identification,assessment and management of climate risks present in their business activities and for adherence to applicable climate-related laws,rules and regulations.We believe that this practice helps support a risk aware business culture and an effective risk management process.We have integrated climate into the firmwide risk identification framework as a driver of existing credit&investment,market,operational and strategic risk types.Supporting this framework is a classification system,illustrated below,that describes how climate risk drivers could translate into potential impacts to our clients and our operations.We continue to enhance the capture of climate risks in the Firms risk inventory.Risk GovernanceThe Climate Risk Management function is responsible for establishing the Firmwide framework and strategy for managing climate risk,and engages across the Firm to help integrate climate risk considerations into existing risk management frameworks,as appropriate.Climate Risk is led by the Firmwide Risk Executive for Climate Risk,who is overseen by the CRO.The Firms approach to managing climate risk is consistent with the Firms risk governance structure.The LOBs and Corporate are responsible for integrating climate risk management into existing governance frameworks,or creating new frameworks,as appropriate.The LOBs,Corporate and Climate Risk Management are responsible for providing management and the Board Committee,as appropriate,with information on significant climate risks and climate-related initiatives.The Firm also has an Environmental and Social(“E&S”)Risk function that establishes the Firms policies,standards,and processes for certain E&S risks that outline the consistent approach for identification,escalation and management of transactions and activities that may present an increase in such risks.For more information on the Firms overall approach to managing E&S risks,see page 56 in our 2022 ESG Report.Translating Climate Risk Drivers into Potential Risks to the Firm13CLIMATE RISKCLIMATE RISK DRIVERSIMPACT TRANSMISSION CHANNELSAvenues of potential impacts through which climate risk drivers manifest into risk typesCategories of risks as outlined in JPMorgan Chases Annual Report on Form 10-KPotential factors that could cause a risk to occurPhysical RiskAcute Physical Risk(e.g.,floods,wildfires,tropical storms)Chronic Physical Risk(e.g.,sea level rise,changing precipitation levels,temperature increases)Transition RiskRegulatory and/or Governmental Policy ChangeGovernmental PolicyMarket PreferenceJPMORGAN CHASE RISK TYPESCredit&Investment RiskOperational RiskMarket RiskStrategic RiskSupply/Demand/PriceFinancial CostsMacroeconomicCountry CompetitivenessPhysical DamagesBusiness DisruptionSocioeconomicBusiness CompetitivenessReputational damageLitigation13 List is not exhaustive.We continue to refine our taxonomy based on an evolving understanding of how climate-related risk drivers may manifest as risks to the Firm.17Examples of Potential Climate Risk ImpactsRISK TYPEPHYSICAL RISKTRANSITION RISKFIRST ORDERSECOND ORDERFIRST ORDERSECOND ORDERCREDIT AND INVESTMENT RISKRisk associated with the default or change in credit profile of a client,counterparty or customer;or loss of principal or a reduction in expected returns on investments,including consumer credit risk,wholesale credit risk and investment portfolio riskIncreasing frequency and severity of weather events leads to customer and/or client property damage and an increased likelihood of defaultOver time,the higher amount of direct damage resulting from severe weather events leads to increased insurance costs,diminishing consumers ability to payA shift in consumer preference away from certain carbon-intensive products leads to reduced profitability for clients slow to adapt to a low-carbon economyA sustained low-profitability environment in local economies reliant on carbon intensive industries leads to lower local economic output,higher unemployment,and increased customer and client default riskMARKET RISKRisk associated with the effect of changes in market factors,such as interest and foreign exchange rates,equity and commodity prices,credit spreads or implied volatilities,on the value of assets and liabilities held for both the short and long termHeat and drought causes variability in agriculture output,or severe weather disrupts commodity supply chains,leading to price volatilityIncreasing frequency and severity of weather events in a high physical risk region leads to a systemic change in the types of commodities produced in those regionsIncreasing consumer demand for electric vehicles(“EVs”)negatively impacts the equity value of slow-to-transition automotive manufacturersSustained EV demand combined with ongoing constraints in the EV supply chain leads to long-term price appreciation and volatility for certain commoditiesOPERATIONAL RISKRisk of an adverse outcome resulting from inadequate or failed internal processes or systems;human factors;or external events impacting the Firms processes or systems.Operational risk includes compliance,conduct,legal,and estimations and model riskA severe weather event such as a flood or tropical cyclone causes damage to JPMorgan Chase building with temporary business disruption and repair costsIncreasingly frequent and destructive weather events in high physical risk regions leads to migration of businesses and residents away from these regions,creating hiring and employee retention challenges for local JPMorgan Chase offices JPMorgan Chases implementation of new climate-related models,reporting against climate related targets,and the emergence of various climate-related regulatory expectations globally leads to increased operational riskFast evolving and ambiguous regulatory and legal landscape on climate topics could lead to more regulatory scrutiny and litigation being brought against the financial sector,leading to increased legal and compliance costsSTRATEGIC RISKRisk to earnings,capital,liquidity or reputation associated with poorly designed or failed business plans or inadequate response to changes in the operating environmentThe Firm continues to invest in properties that are increasingly susceptible to physical damages from severe weather events,leading to reduced profitability for the FirmHigh physical risk in regions where JPMorgan Chase has made strategic investments(e.g.,offices,branches,data centers)causes the Firm to abandon/restructure location strategies in these regionsThe Firm fails to attract green business opportunities as society shifts towards a low-carbon economyThe Firm experiences reputational damage from the real or perceived failure to meet climate-related targetsPhysical and transition risk can manifest in a variety of ways.The infographic below provides examples of different types of physical and transition risks and how they could materialize as direct impacts or indirect impacts across the four major risk types we manage.The term“first-order impacts”refers to impacts that directly affect an individual company,property,or consumer.The term“second-order impacts”refers to secondary impacts to financial markets,local economies,or other businesses.In some cases,the“first-order”impacts may build over time and trigger the“second-order”impacts for example,repeated business disruption following severe weather events may lead to higher insurance costs in the local area although this is not necessarily the case.Physical and Transition Risk18 Medium-term:510 years;aligned with the Firms credit risk assessments.Long-term:More than 10 years;aligned with the Firms strategic risk assessments.Scenario AnalysisTo assess the range of potential climate-driven paths and outcomes,we apply an array of scenarios to our internal risk processes.We use internationally recognized scenarios from the Network for Greening the Financial System(“NGFS”)and the Intergovernmental Panel on Climate Change(“IPCC”)to inform our measurement of the potential financial and economic impacts to the Firm from the manifestation of climate risks.The NGFS and IPCC scenarios represent widely accepted plausible pathways for societys future GHG emissions and consider the complex interactions between global socioeconomic systems and natural Earth systems over time.The average global temperature in 2022 was approximately 1.15C above pre-industrial levels(18501900).We define this as the“current state”of the climate,with assessments of future physical and transition risk based on further warming above this state.14Transition Risk Scenario AnalysisThe Firm applies macroeconomic and industry-specific variables(e.g.,Oil&Gas demand,steel production,etc.)from NGFS scenarios to help assess potential transition risk impacts to the Firm.In order to quantify and understand the range of these impacts,we are using a“baseline”transition risk scenario and a“severe”transition risk scenario from the NGFS.SEVERE SCENARIOThe NGFS Divergent Net Zero(“DNZE”)scenario represents the most severe transition risk scenario.The scenario assumes that global net zero is reached by 2050 through higher carbon prices with a rapid phase-out of fossil fuels,despite divergence in policies introduced by governments across the world.The scenario assumes that global warming is successfully limited to 1.5C by 2100,which limits physical risk impacts.BASELINE SCENARIOThe NGFS Current Policies(“CP”)scenario represents a low-transition risk scenario that captures the current state of global climate policy.The scenario assumes that no future emissions reduction policies are implemented by governments,leading to high physical risks.In this scenario,3C or more of warming could occur by 2100.1516Physical Risk Scenario AnalysisThe Firm applies IPCC-derived physical risk parameters to assess the potential impacts of the increasing frequency and severity of severe weather events on our business operations,credit exposures,and collateral locations.Consistent with the transition risk approach,we utilize both a“baseline”physical risk scenario and a“severe”physical risk scenario to inform the range of outcomes.BASELINE SCENARIOThe IPCC Representative Concentration Pathway(“RCP”)4.5 scenario represents an intermediate,middle-of-the-road scenario where social,economic and technological trends do not shift markedly from historical patterns.Global and national institutions work toward but make slow progress in achieving sustainable development goals;overall,the intensity resource and energy use declines.The scenario assumes that global mean temperature reaches 2.7C warming above pre-industrial levels by 2100.SEVERE SCENARIOThe IPCC RCP 8.5 scenario represents the worst-case,highest emissions scenario.The scenario assumes that global mean temperature reaches 4.4C warming above pre-industrial levels by 2100 due to the continued exploitation of abundant fossil fuel resources and a continued rise in resource-and energy-intensive activities around the world.Under this scenario,there is no transition to a low-carbon economy and GHG emissions continue to rise throughout the 21st century.Time HorizonsThe pace and cumulative effects of climate change are important factors in considering the potential financial and economic implications.We therefore analyze these scenarios over multiple periods.Short-term:Less than 5 years;aligned with the Firms loss and capital adequacy assessments.14 World Meteorological Organization15 NGFS Scenario Portal 16 Temperature increases are relative to global mean temperatures at pre-industrial levels(18501900).19Risk Management by Risk TypeCredit&Investment RiskCredit&investment risk is the risk associated with the default or change in the credit profile of a client,counterparty or customer;or loss of principal or a reduction in expected returns on investments including consumer credit risk,wholesale credit risk,and investment portfolio risk.We leverage our risk identification and scenario analysis to measure the potential adverse impacts the baseline and severe climate risk scenarios may have on our credit portfolios,both today and into the future.We are analyzing the direct impacts of physical and transition risk considering property damage and financial loss due to severe weather events or the potential reduction in profitability of a client,counterparty or customer as a result of a societal transition from a high-carbon to a lower carbon-intensive footprint.We are also considering indirect and longer-term risk drivers,including the potential for reduced availability or increased cost of insurance for clients of JPMorgan Chase in a given geography,adoption of new technologies and shifts in consumer preferences.CONSUMER CREDIT RISKAs of December 31,2022,the Firm had$1.4 trillion of consumer credit exposure,including residential real estate,auto loans and credit cards.The Firm uses catastrophe models to estimate the potential impact of hypothetical severe weather events on its real estate portfolios.For example,retained residential real estate loans,predominantly in the U.S.,made up$238 billion of the total consumer credit portfolio.Today,climate risks for this portfolio are substantially mitigated through geographic diversification of the properties,the prevalence of hazard insurance,and the effective average life of the underlying loans,among other factors.As a result,financial losses due to severe weather events have not been material to the Firm.As we examine the potential for future impacts,we may consider outcomes in which these mitigants are weakened for example,if insurance becomes less prevalent.The cumulative effect of physical climate risk may impact our residential real estate portfolio in several ways,including the following:Greater physical damages:increased likelihood or severity of severe weather events may increase consumer credit losses.Higher insurance premiums:higher insurance premiums may increase living expenses and financial burden for consumers.Reduced coverage or availability of insurance:insurers may further limit types of damage they cover or withdraw coverage from specific geographies.House price impacts:cumulative effect of climate-driven events may adversely impact house prices and local economies in certain geogra-phies,potentially disproportionately impacting lower-income households and communities.Additionally,we continue to examine how the transition to a low-carbon economy may create financial burden on consumers from potentially higher energy prices,pass-through of carbon taxes on goods and services,or result in declines in the value of other assets(e.g.,gas-burning vehicles),which could impact consumers ability to repay credit obligations and may result in additional credit losses to the Firm.WHOLESALE CREDIT RISKAs of December 31,2022,the Firm had$1.2 trillion of wholesale credit exposure.In its wholesale businesses,the Firm is exposed to credit risk primarily through its underwriting,lending,market-making,and hedging activities with and for clients and counterparties,as well as through various operating services(such as cash management and clearing activities),securities financing activities and cash placed with banks.The Firm has built a stress framework to estimate potential impacts from a range of climate transition pathways on client financials and credit ratings.For clients operating in carbon-intensive sectors(e.g.,Oil&Gas,Automotive Manufacturing,Power Generation,Steel and Cement Manufacturing),the Firm estimates the potential impact of a climate transition scenario on their credit rating by projecting detailed cashflows within the context of a transition scenario(see Scenario Analysis on page 19).This estimation takes into account the client-level CAF quantitative and qualitative scores,which,as described on pages 1112,assesses a clients historical emissions reductions,current and forecasted carbon intensity,as well as actions taken to advance their decarbonization.Financial impacts from the transition to a low-carbon economy could manifest in a variety of ways,including weaker demand for carbon-intensive products,resulting in lower revenue,or higher operating costs for carbon-emitting companies,if a carbon tax is implemented.Additionally,companies may need to increase their capital expenditures through investments that improve resilience to the low-carbon transition(e.g.,power companies investing in renewables).To assess the impact of climate transition risk on sectors with relatively lower carbon intensity,the Firm conducts a separate client-specific internal stress analysis.The potential effect on a clients credit rating is estimated by stressing client financials consistent with industry projected performance in the transition scenario,and factoring in the additional costs incurred due to a carbon tax on the companys emissions.17The Firm has also developed risk management capabilities including catastrophe modelling to estimate the potential impact of severe weather events exacerbated by climate change on its Commercial Real Estate portfolio.Damages from hurricanes and floods could cause potential physical damage to the underlying properties,leading to expenses for repairs and disruptions in revenue,as well as changes in overall property values thus impacting the credit quality of the portfolio.We are using our resources to better understand how physical and transition risks may manifest and their potential impacts on the existing risk types the Firm manages.17 Climate transition stress analysis for clients in lower carbon intensity sectors is used for internal climate analysis and not used in client decisioning.20Below is a heatmap of credit exposures using a five-point color scale to indicate carbon intensity of our own lending portfolio to the extent that data is available and sector-level physical risk.The carbon intensity data shown below is one of several inputs to our transition risk framework.The physical risk categorizations are based on an internal methodology that assesses sector-specific characteristics that may lead to physical risk vulnerabilities,such as reliance on outdoor labor,reliance on climate-vulnerable resources,and high geographical concentrations.Note:Data in the above table is as of December 31,2022.The carbon intensity heatmap color is based on the average sector total carbon intensity(Scope 1 2 3)in tCO2e/USD million,weighted by exposure to each counterparty in the sector.The physical risk color is based on internal methodology assessing characteristics of each industry that could lead to physical risk vulnerability.Grey cells indicate sectors and sub-sectors we have not yet scored and/or sectors with insufficient data.Total credit exposure includes retained loans,lending-related commitments and derivative receivables.Our classification of sectors as high-intensity may change over time for various reasons including,for example,as the quality and reliability of emissions data is enhanced in certain sectors and as more companies directly report Scope 3 emissions,thereby displacing the need for reliance on certain data aggregation services that provide Scope 3 emissions estimations.Key:Not analyzedVery LowLowModerateHighVery HighSectorTotal Credit Exposure(USD million)Carbon IntensityPhysical RiskCOMMERCIAL&INDUSTRIAL487,064HighModerateConsumer&Retail120,555ModerateLowRetail34,199LowLowBusiness&Consumer Services31,640HighLowFood&Beverage32,442ModerateModerateConsumer Hard Goods14,052HighModerateLeisure8,222LowLowTechnology,Media&Telecommunications72,286LowLowIndustrials72,483Very HighHighMachinery&Equipment33,575Very HighModerateConstruction&Building Materials16,014HighHighAgriculture,Forest Products&Textiles14,720HighVery HighAerospace&Defense8,174HighModerateHealthcare62,613Very lowLowOil&Gas38,668Very HighHighExploration&Production(E&P)and Oilfield Services22,395Very HighHighOther Oil&Gas16,273Very HighHighAutomotive33,287HighModerateAuto Dealers16,374Very HighLowAuto Manufacturing16,913HighHighUtilities36,218Very HighHighElectric13,460Very HighVery HighGas9,090Very HighVery HighIntegrated&Other Utilities13,668Very HighLowChemicals/Plastics20,030HighHighChemicals14,166HighHighPlastic&Rubber5,864HighHighSectorTotal Credit Exposure(USD million)Carbon IntensityPhysical RiskMetals/Mining15,915Very HighVery HighSteel4,055Very HighHighAluminum1,125Very HighVery HighCoal327Very HighVery HighOther Metals&Mining10,408Very HighVery HighTransportation15,009ModerateLowFINANCIAL INSTITUTIONS181,545ModerateNot analyzedAsset Managers95,656Not analyzedNot analyzedBanks&Finance Cos51,816HighNot analyzedInsurance21,045Very lowNot analyzedFinancial Markets Infrastructure4,962Very lowNot analyzedSecurities Firms8,066LowNot analyzedREAL ESTATE170,857ModerateLowMultifamily99,571Not analyzedLowOffice14,942Very HighLowIndustrial15,929LowLowRetail10,200ModerateLowLodging3,385HighLowOther Income Producing Properties12,852Very lowLowServices and Non Income Producing13,978Very HighLowGOVERNMENT&AGENCIES52,942Not analyzedNot analyzedOTHER INDUSTRIES254,122Not analyzedNot analyzedIndividuals and Individual Entities130,815Not analyzedNot analyzedOther123,307Not analyzedNot analyzedTOTAL1,146,530HighModerateof which:exposure to high-intensity sectors399,356Heatmap of Credit Exposures(as of December 31,2022)21Market RiskMarket risk is the risk associated with the effect of changes in market factors,such as interest and foreign exchange rates,equity and commodity prices,credit spreads or implied volatilities,on the value of assets and liabilities held for both the short and long term.Climate risk drivers may lead to sharp volatility or persistent changes in the prices of commodities and financial assets;for example,companies in carbon intensive industry sectors without credible transition plans may have assets which are viewed as stranded,resulting in materially depressed equity prices.The Firm has established a stress framework to quantify the impact of the transition risk stress scenarios to vulnerable asset classes.We have also analyzed a series of physical drivers to estimate the potential impacts of various acute and chronic physical risk events to markets exposures.Country RiskThe Firm,through its LOBs and Corporate,may be exposed to country risk resulting from financial,economic,political or other significant developments,which adversely affect the value of the Firms exposures related to a particular country or set of countries.The negative implications from climate change may impact a countrys economic,fiscal,monetary or p

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    Kapitelname01Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexResponsible Raw Materials Report 2023Volkswagen Group Responsible Raw Materials Report 2023201Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexContents3 Foreword 5 General Disclosures 6 Responsible Supply Chain(ReSC)System 8 Raw Materials Due Diligence Management System(RMDDMS)11 Social,Human Rights and Environmental Risks in Scope 12 Priority Raw Materials 13 Regulatory Frameworks and Guidelines 16 Main Tools of the RMDDMS 17 Supply Chain Grievance Mechanism18 Limitations 19 Commitment to Initiatives 20 DRIVE Sustainability 20 German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)21 Initiative for Responsible Mining Assurance(IRMA)21 Responsible Minerals Initiative(RMI)22 2023 Highlights 23 Raw Materials 24 Battery Raw Materials 24 Lithium 28 Cobalt 31 Nickel 33 Graphite 35 Conflict Minerals 35 Tin,Tantalum,Tungsten and Gold(3TG)38 Other Raw Materials 38 Aluminum 41 Copper 43 Leather 45 Mica 48 Platinum Group Metals(PGM)51 Natural Rubber 54 Rare Earth Elements(REE)57 Steel 59 Magnesium 60 Cotton 61 Outlook for 2024 63 Annex 64 List of Abbreviations 65 List of Initiatives and Associations 66 List of 3TG Smelters 73 List of 3TG Countries and territories of origin ContentsVolkswagen Group Responsible Raw Materials Report 20233Kapitelname01 Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexForeword01 Volkswagen Group Responsible Raw Materials Report 2023401 Foreword02General Disclosures03Commitment to Initiatives 04Raw Materials05Outlook for 202406AnnexForewordDear readers,The Volkswagen Group pursues the vision of enabling sus-tainable mobility for future generations.As one of the worlds largest automotive groups,we recognize our duty to make a difference to generate meaningful value for both society andthe environment.Our legal,social and environmental responsibilities extend well beyond our Group across all our supply chains.These include more than 63,000 supplier locations in 96 countries around the world.The holistic approach of our regenerate sustain-ability strategy provides the basis for advancing sustainability together with our partners and stakeholders.Focuses include environmental protection and human rights due diligence.We take our responsibility for sustainable procurement of raw materials very seriously and are continuously working with indirect suppliers in upstream supply chains where the challenge is greatest.We identify,assess and address risks through our Responsible Supply Chain System,currently covering 18 priority raw materials and their respective supplychains.We share information across our brands and regions through our Sustainability Procurement Network of more than 110 experts,which serves as a component in managing sustain-ability in our supply chains.To increase traceability,we work with our business partners and their respective suppliers,based on the requirements of our Code of Conduct.We also collaborate with like-minded stakeholders and companies via cross-industry initiatives to develop common standards and approaches to sustainability due diligence.In this report,you will find information on our approach and methodology,the raw materials we have identified as our priority focus and our activities in 2023.It highlights not only our progress in terms of transparency and risk mitigation for raw materials procurement,but also outlines challenges we continue to face in our global,complex and fragmented supply chains.In 2023,the first year in which the Supply Chain Due Diligence Act came into force,the Volkswagen Groups focus was on full and best possible compliance with the obligations imposed by the law.We have updated our procurement processes and keep monitoring new developments to include new regulations such as the EU Battery Regulation and the EU Deforestation Regulation,but also use our global impact to improve supply chain due diligence.We hope you find this report informative and invite you to share your feedback through Dirk Groe-Loheide Member of the Extended Executive Committee,Group ProcurementMember of the Board,Volkswagen BrandVolkswagen Group Responsible Raw Materials Report 20235Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance Mechanism General Disclosures02 Volkswagen Group Responsible Raw Materials Report 2023601Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Responsible Supply Chain(ReSC)System The Volkswagen Group is one of the largest automotive manu facturers globally.In this position we recognize our impact on people and the planet.In order to align our own activities and the activities of the suppliers in our supply chains with leading practice in respecting human rights and the environment,we continue to take proactive steps.Our efforts are part of our broader commitment to fulfilling our legal,social and environmental responsibilities,not only in the Volkswagen Group but also in our supply chains.Our policy on sustainable materials reflected in our Raw Materials Due Diligence Management System(RMDDMS)is based on global normative guidelines including the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas(OECD Minerals Guidance).This Guidance provides a five-step framework with detailed recommendations to ensure that the minerals we use are responsibly mined or sourced,respecting human rights and avoiding contributing to conflict.In accordance with the fifth step of the framework,we there-fore publicly report on our supply chain due diligence policies,processes and practices in this Responsible Raw Materials Report 2023.The report details our approach and covers the raw material-specific human rights and environmental supply chain due diligence activities that were implemented in 2023.It pro-vides an overview of the progress we made with our RMDDMS and lists our activities for 18 high-risk raw materials that we have prioritized for more in-depth risk management.In addition to the 16 raw materials covered in previous years,we have expanded our scope to include cotton and magnesium.While we continue to face challenges in sourcing raw mate-rials responsibly,such as complex and sometimes opaque raw materials supply chains and varying legal requirements around the world for sustainability standards,we are also taking further steps to improve the effectiveness of our risk management.We know that we need to continue to engage with our suppliers,turn our focus increasingly to risk mitiga-tion,and more effectively assess whether the actions we have taken are driving positive impacts for the people and environ-ments affected by our raw material supply chains.We are proud of our progress and the fact that this is our fourth time reporting publicly,although we recognize that,for some issues and raw materials,we are in the early stages.The Responsible Raw Materials Report 2023 is structured as follows:We first present the Volkswagen Groups due diligence approach to supply chains in general and our raw material-specific management system in particular,including governance,scope and main tools used.We then describe the key activities and achievements for our 18 priority raw materi-als in 2023 and conclude with an outlook to 2024.Further information on Environmental,Social and Governance(ESG)topics is available on the Groups corporate website and in the 2023 Sustainability Report.Responsible Supply Chain(ReSC)SystemIn 2022,in preparation for the German Supply Chain Due Dil-igence Act(LkSG),we adapted our management approach in procurement and introduced extensive measures to facilitate compliance.We developed the Volkswagen Group Respon-sible Supply Chain(ReSC)System as an overarching due diligence approach for our supply chains and integrated the existing Raw Materials Due Diligence Management System into the ReSC System as a deep-dive measure for risks in ourupstream supply chain.The aim of the new holistic approach is to further enhance our management of risks occurring along the Volkswagen Groups supply chains.We aim to respect human rights and avoid and minimize social and environmental risks based on a systematic risk analysis and in close collaboration with our suppliers and business partners.The approach also intends to help end breaches and continu-ously improve suppliers sustainability performance.It includes controls and a disclosure system to ensure transparency.A grievance mechanism at Group level to provide an early-warning risk-awareness system is also in place.Implementation of the management approach is mandatory and is enshrined in corresponding policies for the Groups brands and controlled companies.The various procedures and measures that the ReSC System entails are described in detail in our 2023 Sustainability Report(pages 121127).The Responsible Raw Materials Report 2023 focuses on the Raw Materials Due Diligence Management System.Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Responsible Supply Chain(ReSC)System Responsible Supply Chain(ReSC)SystemHuman Rights Focus SystemRisk assessment based on the nature of the suppliers business activitiesIndividual supplier riskStandard measuresDeep diveMeasureslowmediumhighall suppliersmedium-/high-risk suppliershigh-risk suppliersAnalysisAssessmentMitigationImpact evaluationDeep DiveMeasuresProbability and severity of human rights and environmental risksRaw Materials Due Diligence SystemCountry Risk FilterAcross all tiers n tierlowlowhighhigh Code of Conduct for Business Partners Supply Chain Grievance Mechanism Sustainability Rating Supplier TrainingRisk Analysis Media ScreeningVolkswagen Group Responsible Raw Materials Report 20237Volkswagen Group Responsible Raw Materials Report 20237Volkswagen Group Responsible Raw Materials Report 2023801Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Diligence Management System(RMDDMS)Raw Materials Due Diligence Management System(RMDDMS)One deep-dive measure of the ReSC System,specifically used to manage risks along raw material supply chains,is the Volkswagen Groups Raw Materials Due Diligence Manage-ment System(RMDDMS).The RMDDMS covers the 18 raw materials identified as priority raw materials and their respec-tive supply chains.The Volkswagen Groups supply chain is extremely com-plex,globally distributed and subject to constant change.It includes more than 63,000 direct supplier sites in more than 96 countries involving thousands of parts made from a wide range of raw materials.One product supply chain can include as many as nine levels and one single car component can have more than 1,000 suppliers.It is therefore essential that we take a risk-based approach and prioritize areas of focus in our due diligence efforts.The risk-based due diligence provides the steps we should take to identify,prevent and mitigate actual and potential adverse effects in the supply chain.It also ensures that we do not contribute to conflict in our purchasing activities through indirect support to non-state armed groups in the extraction,transport,trade,handling and export of raw materials.Different supply chains tend to have different levels of risk.Raw material supply chains require special focus,as our abstract risk analysis as part of the ReSC System showed a high exposure to human and environmental risks which are often more systematic and prevalent with indirect suppliers.For prioritized raw materials,the RMDDMS includes further assessments which facilitate the deduction of mitigating and preventive measures for systematic risks as well as a review of the effectiveness of these measures.Seeking alignment with the five-step framework of the OECD Minerals Guidance,we developed and implemented the RMDDMS in 2020.It is based on the Volkswagen Group Policy on Sustainable Raw Materials which sets out our com-mitment to responsible and transparent business practices throughout our raw materials supply chains.The policy out-lines our responsibility to respect human rights,the obliga-tion to implement a human rights due diligence process and measures to remediate negative human rights impact.The Volkswagen Group Policy on Sustainable Raw Materials is being reviewed and will be updated in 2024.Through the RMDDMS,we aim to improve transparency in our upstream supply chain,assess and identify risks,and engage with suppliers and stakeholders to prevent and mitigate po-tential negative impact on people and planet.The graphic below provides a visual depiction of our step-by-step approach to raw material due diligence:Volkswagen Group Responsible Raw Materials Report 2023901Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Diligence Management System(RMDDMS)AssessmentMitigationImpact EvaluationIdentification of 18 priority materialsInternal assessment of how the RMDDMS is performingApproach:direct engagement with our direct suppliersEngage in cross-industry initiatives or in-country projectsAssignment of sustainability lead brands for raw materialsAnnual reporting on due diligence efforts in public disclosureSupplier engagement to raise awareness and better understand the risksCollaboration on high-risk supply chains through joint projects and initiativesIdentification of affected vehicle parts and main suppliers to the Volkswagen GroupRisk mitigation measuresStep-by-step approach to raw material due diligence0107AB020804060305RMDDMS GovernanceIn line with the OECD Minerals Guidance,the RMDDMS is overseen by a senior-level Steering Committee comprised of senior management of the Sustainability function from Procurement across all relevant brands and regions of the Volkswagen Group,including the Head of Global Supplier Risk and Sustainability Management of Volkswagen Group Procurement.The Steering Committee meets quarterly.The due diligence activities are coordinated through a Working Group comprising representatives from Sustainability Manage-ment in Procurement departments across the Volkswagen Groups brands.Each of the identified priority materials is assigned to a“Brand Lead”to ensure in-depth knowledge and ongoing engagement with relevant suppliers and stakeholders for each of the raw materials.This Brand Lead is a representa-tive from one of the Volkswagen Groups brands and responsi-ble for coordinating and implementing the RMDDMS activities.In the reporting period,the internal capacities for Sustainability functions in Procurement were strengthened,both in the Volkswagen Group as well as in the respective brands,and thefrequency of Working Group meetings was increased.Volkswagen Group Responsible Raw Materials Report 20231001Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Raw Materials Due Diligence Management System(RMDDMS)RMDDMS GovernanceSenior-Level Steering CommitteeSenior Management of Sustainability from Procurement RMDDMSMeets quarterly as the “Group Staff Meeting Sustainability.”Represents all relevant brands and regions of the Volkswagen GroupWorking GroupRepresentatives or“brand leads”assigned to each priority raw materialMeets bi-weekly to coordinate RMDDMSactivities across the materialsAccountable for all steps according to the RMDDMS and alignment with global best practice.Oversees risk analysis and mitigation measures and their implementation for all relevant high-risk raw materials.For more information on the steering bodies see the detailed version in the 2022 Responsible Raw Materials Report(page6)Risk mitigation (i.e.contractual requirements,audits,on-the-ground projects,training)Risk Analysis (i.e.gather data from suppliers,engage with stakeholders)OverseeFeeds intoVolkswagen Group Responsible Raw Materials Report 20231101ForewordResponsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in ScopePriority Raw MaterialsRegulatory Frameworks and GuidelinesMain Tools of the RMDDMS Limitations02General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406AnnexSupply Chain Grievance MechanismGeneral Disclosures Social,Human Rights and Environmental Risks in Scope Social,Human Rights and Environmental Risks in ScopeEnvironmental Water,including water pollution,water consumption,amount of water(flood or drought)and access to water and sanitation Handling,storage and disposal of waste Production and use of pollutants and hazardous chemicals Air,including air pollution and greenhouse gas emissions Noise and vibrations Destruction of forests and soils Biodiversity,including damage to natural habitats,wildlife,plants and ecosystems,including ecosystem servicesBiodiversityPollutionWasteWaterCommunities Causing harmful soil change,water and air pollution,noise emissions and excessive water consumption,which affect natural resources and health Forced evictions and/or expropriations of land,forests,bodies of water Protection of the rights of indigenous peoplesCommunities rightsSocial&Human Rights Child labor Forced or compulsory labor Discrimination,incl.sexual harassment Direct or indirect support to non-state armed groups and/or public or private security forces Torture Health and safety at work Trade union freedoms and freedom of association Payment of adequate wages/salaries Safety of installationsHuman rightsWorking conditionsThe risk categories are listed in abbreviated form in Section 04 of this report for every raw material.The risks categories used in our RMDDMS are reviewed regularly to reflect legal requirements and best practices.For this Responsible Raw Materials Report,we summarized the risks in scope in seven sub-categories aligned with the European Sustainability Reporting Standards(ESRS):Environmental risks are summarized in the sub-clusters pollution,waste,water and biodiversity.Social risks are covered by the sub-clusters human rights and working conditions.The impact of supply chain activities on local communities is comprised in the sub-cluster communities rights.01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Priority Raw Materials 12Volkswagen Group Responsible Raw Materials Report 2023Raw Material Lead Brands in RMDDMS are Volkswagen|Audi|Porsche|MAN|Scania1 PGM Platinum Group Metals 2 REE Rare Earth Elements Battery Raw MaterialsOther Raw MaterialsConflict Minerals(3TG)AluminumNickelLeather Mica Natural Rubber Steel Tungsten CobaltCopperTantalum NEW CottonGold 20Raw material experts across our groupPriority Raw MaterialsTo address our due diligence obligations in light of the complexities and scale of our raw materials supply chains,we followed the OECD-compliant risk-based approach and developed a methodology to select priority raw materials based on the severity of potential human rights and environmental impacts.For the first risk assessment,we used databases such as Maplecrofts global risk data,raw material-specific risk analyses and other reports that outline ESG risks in supply chains.In addition,we reviewed cases from our grievance mechanism and gathered relevant data through outreach to stakeholders such as NGOs and n-tier suppliers.We also considered our leverage in raw materials supply chains,and at times prioritized raw materials where we considered the risk less severe but where we had high leverage.In these cases,we saw aclear opportunity to make a positive impact.In the reporting period,we reassessed our raw material prioritization.We extended the scope of the RMDDMS and included two additional raw materials with particularly high levels of sustainability risks cotton and magnesium resulting ina total of 18priority raw materials.Tin LithiumNatural GraphitePGM1 NEW MagnesiumREE2 Volkswagen Group Responsible Raw Materials Report 20231301Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Regulatory Frameworks and Guidelines Regulatory Frameworks and Guidelines The Volkswagen Group is committed to adhering to all appli-cable national and international legislation.Beyond this,we confirm our commitment to major international agreements and declarations,which determine important cornerstones for our actions.These include in particular:The UN Universal Declaration of Human Rights,which is codified in the International Covenant on Civil and Political Rights and in the International Covenant on Economic,Social and Cultural Rights The Core Labour Standards of the International Labour Organization(ILO)The UN Guiding Principles on Business and Human Rights The OECD Guidelines for Multinational Enterprises The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas The principles of the UN Global CompactThe Volkswagen Group continuously monitors and adapts its risk management approach in procurement to meet the re-quirements of new laws such as the German Supply Chain Due Diligence Act(LkSG)which came into force on January 1,2023 and prepare for upcoming regulations at both na-tional and international level.Relevant upcoming sustainabil-ity regulations on a European level include for example the EU Battery Regulation(EUBR)and the EU Deforestation Regula-tion(EUDR).Another focus topic is the Corporate Sustainabil-ity Reporting Directive(CSRD),and the associated European Sustainability Reporting Standards(ESRS)will be applied for 2024 reportingof the Volkswagen Group.Preparation for upcoming EU sustainability regulationsIn 2023,we closely monitored proposals for new regulations.However,before final legislative texts are endorsed,the drafts are altered,amended and fine-tuned.Therefore,preparation for the new legislation is a process which will be ongoing until the implementation guidelines and specifications have been defined,open questions resolved and new processes established.In the reporting period,we undertook preparatory measures such as:Identify relevant aspects for the team working on responsible sourcing practices(based on the final versionof the respective regulation).Establish Group-wide working group to coordinate all activities on new sustainability regulations,specifically EUBR and EUDR,across brands and regions.Create shared understanding on the scope of the due diligence requirements and specific legal terms;align with internal departments such as Legal,Customs,etc.Identify parts and suppliers in scope of the due diligencerequirements.Conduct gap analysis to identify potential need for changes in internal processes and systems,agree on working packages and assign responsibilities.Identify necessary updates to contractual requirements such as the battery raw materials specification sheet.Determine suitable tools to support due diligence.In addition,the Volkswagen Group also initiated discussions with suppliers to achieve a common understanding of the regu-lations.Alignment on expectations and tools is required in order to standardize audits and questionnaires and reduce the efforts for suppliers.Here,we also engaged with industry initiatives such as Drive Sustainability and the Responsible Minerals Initia-tive(RMI),with the aim of driving industry-wide good practice.EU Battery Regulation(EUBR)The EU Regulation concerning batteries and waste batteries(EU Battery Regulation)was published on July 12,2023,and will replace the existing Batteries Directive dating from 2006.The EUBR aims to improve current regulations by making batteries used in the EU more environmentally friendly and increasing the lifespan of electronic devices used by consumers.The due diligence chapter of the regulation(chapter VII)will apply from August 18,2025.In view of the expected growth in battery demand,the EU puts battery due diligence obligations on economic operators that place batteries on the Union market or put them into service,going beyond the voluntary efforts from actors in the battery supply chain that are already in place.Annex X of the EUBR provides a list of raw materials and risk categories to focus on when designing and implementing battery due diligence policies.The list of social and environmental risk categories is far more extensive than existing due diligence legislation and will require a thorough review of our RMDDMS.While the Volkswagen Group prepared for the new regulation in the reporting period,sustainability was already a significant fo-cus area in our battery supply chains and our responsible sourc-ing practices before that and a large part of our internal processes are already aligned with the EUBR due diligence requirements.EU Deforestation Regulation(EUDR)The EU Regulation on deforestation-free products(EU De-forestation Regulation)came into force on June 29,2023.It impacts seven specific commodities,including leather and natural rubber as well as derived products.The new EUDR reg-ulation will require any company importing or exporting these commodities and products into or out of the EU as well as plac-ing them on the EU market to prove that the products are not linked to deforestation and have been produced in accordance with the relevant legislation of the country of production.The provisions will enter into application from December30,2024.The Volkswagen Group has started analyzing theEUDR and is taking steps to align its due diligence approach,particularly for leather and natural rubber,with the legisla-tive requirements.Volkswagen Group Responsible Raw Materials Report 20231401Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Main Tools of the RMDDMS Main Tools of the RMDDMSWhile the challenges and solution approaches can vary greatly depending on the high-risk raw material in focus,there are a number of tools that are considered particularly useful in the context of the RMDDMS.These are presented below.Raw Material Specification SheetsThe Volkswagen Group uses a Code of Conduct for Business Partners(CoC BP)as a mandatory component of all contracts with direct suppliers.It sets out our expectations of business partners with respect to key human rights,environmental,social and compliance standards,based on international standards,as well as objectives,rules and policies of the Volkswagen Group.We also call on our tier-1 suppliers to pass these requirements down along the supply chain.As a key component of our raw materials due diligence,we work on developing and implementing contractually binding specification sheets for our high-risk raw materials.The use of the specification sheets defines our raw material-specific human rights and environmental expectations towards our suppliers and ensures that they are fulfilled.For example,specification sheets can include requirements on supply chain transparency and the implementation of certain industry-specific sustainability standards at important pinch points in the supply chain.To date,we have developed specification sheets for the following priority raw materials:Battery raw materials lithium,cobalt,nickel and nat-ural graphite:rolled out across the Volkswagen Group in 2020.Preparing for compliance with the new EU Battery Regulation,the specification sheet for our battery raw materials was updated in 2023 Aluminum:piloted by AUDI AG and Volkswagen in 2022,rolled out across the Volkswagen Group in 2023 Mica:piloted by Porsche,AUDI AG and Scania in 2022,rolled out across the Volkswagen Group in 2023 Leather:rolled out across the Volkswagen Group in 2023 Natural rubber:specification sheet developed in 2023Direct business partners who supply a product that contains any of the raw materials in scope are requested to comply with the specification sheets for all new contracts.However,when rolling out the sustainability specification sheets across the Volkswagen Group for the materials in scope,we strongly encouraged our suppliers with existing contracts to also comply with the specified requirements.We expect our direct suppliers to pass on these requirements to their respective suppliers and into the upstream supply chain alongside theCoC BP.AuditsAudits are one of the key tools for assessing risks in our upstream supply chains and consequently identifying mit-igation measures.They tie in with other tools used for our raw material due diligence and help promote transparency,compliance and a culture of continuous improvement and dialogue throughout the supply chain.Due to the complexity and the large number of suppliers,particularly in our battery supply chain,the Volkswagen Group has established a tiered assessment system with different types of audits to systematically review the sustainability performance of our suppliers.Second-party audits are used to verify,at regular intervals or on a case-by-case basis,that our suppliers are complying with our requirements.They are carried out by qualified audi-tors(internal or contracted consultants).The Volkswagen Group also carries out audits of selected direct suppliers as part of the Sustainability Rating(S-Rating)1.Other audits are performed ad hoc,for example in response to a grievance case,and focus on human rights risks and social standards.The on-site audits can identify gaps in supplier performance,but also risks at indirect suppliers sites that need to be mitigated through the direct supplier.All audits of direct suppliers carried out on behalf of the Volkswagen Group are accompanied by a Corrective Action Plan(CAP),and the effectiveness of the implemented measures is verified by the auditor in re-audits(as part of a desktop review or a further on-site audit).1 Find more information on audits related to the Sustainability Rating in the 2023 Sustainability Report,page 129.Volkswagen Group Responsible Raw Materials Report 20231501Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance Mechanism General Disclosures Main Tools of the RMDDMSInitially,the Volkswagen Groups battery audit program fo-cused on cobalt due to the severity of the human rights risks associated with this mineral.From there,we covered other battery raw materials and have worked our way up the supply chain,moving from our battery suppliers to precursors,refin-ers,treatment units and mine sites.As human rights-related risks are often greatest at the beginning of the supply chain and can be most effectively addressed there,third-party audits and certifications are another part of our strategy.These independent audits are AuditsTin|Tantalum|Tungsten|GoldCobaltLeatherAluminumMicaAudit standardResponsible Minerals Assurance Process(RMAP)(Responsible Minerals Initiative)Customized standard developed by the Volkswagen Group with an external audit company.Draws on the OECD Minerals GuidanceStandard developed by the Leather Working Group(LWG)ASI Performance and ASI Chain of Custody(CoC)Standard developed by the Aluminium Stewardship Initiative(ASI)Global Workplace Standard for Mica ProcessorsScope of risks assessed in the auditAnnex II risks as defined by the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk AreasAnnex II risks(see column to the left),as well as occupational health and safety,and child laborBusiness and operations management,environmental and social impact,occupational health and safety,complianceASI Performance Standard:62 environmental,social and governance principles such as business integrity and transparency,water and biodiversity and human and labor rightsASI CoC standard:requirements for a CoC material,including supply chain due diligence and material accountingEnvironmental management system,occupational health and safety,fair labor practicesTier(s)that have been auditedSmelters and refinersFrom battery cell supplier to treatment unit levelTanneriesAll stages of the aluminum supply chainMica processorsconducted by certification bodies according to a standard set of requirements and verify that the suppliers meet all the requirements of the chosen standard.The Volkswagen Group also uses databases with audits conducted by global initiatives.One example is RMIs“list of RMI-conformant smelters.”Several global initiatives offer voluntary audit-based certifications for suppliers,among them IRMA,ASI and LWG.We also work directly with mine operators to certify mines through international associations.By employing a combination of these approaches,the Volkswagen Group can more effectively oversee its supply chains,ensuring that they live up to rigorous environmental and human rights standards.This table provides an overview of how we use audits across various raw materials in our supply chains:Volkswagen Group Responsible Raw Materials Report 20231601Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures Main Tools of the RMDDMS Supplier DialoguesTo help us establish and strengthen alignment around expec-tations with respect to our raw materials supply chains,we continue to engage directly with key suppliers.Sustainability training and workshopsOne key component is systematic training of suppliers as well as our own employees.Sustainability is an integral part of the skills profile for all procurement employees.Sustainability training delivered in web-based,online or face-to-face for-mats covers topics such as:(i)corporate responsibility;(ii)legal frameworks and requirements;(iii)our internal process-es,such as the Volkswagen Groups sustainability rating and(iv)our management systems,such as the RMDDMS.Part of this training was dedicated to the topic of sustainability in raw materials.The training course on sustainability for procure-ment was held more than 3,700 times worldwide in 2023.In order to support the continuous development of our suppliers,the Volkswagen Group Procurement Sustainabil-ity Management also offered sustainability training courses and workshops with our suppliers at selected locations or online.We also offered web-based on-demand training.7,791 suppliers received such training in 2023.We continued to offer our voluntary human rights training for suppliers,which has been available since 2020.In addition to the training,we created an e-learning module on sustainabili-ty which is available to current suppliers in eight languages.Collaboration with external partners and international initiativesThe Volkswagen Group also aims to address human rights risks in the upstream supply chain beyond its contractual re-lationships.To this end,we engage with various stakeholders as an exercise to increase our leverage while at the same time benefit from the learning and knowledge sharing.We take part in conferences and workshops and meet with NGOs,associations,local partners and media representa-tives.We see value in engaging with NGOs and community representatives,both on a national and international level.In 2023,our Working Group members met with nearly 20 different stakeholders to exchange views on human rights,social and environmental issues.These meetings took place both virtually and in person,included follow-up meetings,and some evolved into recurring working groups.In 2023,we attended over 15 events of relevance to our responsible sourcing of raw materials and spoke at seven events,including conferences related to the automotive industry and its impact on human rights and the environment.During the OECD Forum on Responsible Mineral Supply Chains in April 2023,the Volkswagen Group took part in the DRIVE and the RMI Partner Session and spoke about the EUBR,challenges of implementation and opportunities for an industry-wide alignment.The Volkswagen Group and its brands are also active members in a number of global initiatives both cross-industry and raw material-specific.Together with our partners,we pursue the following objectives:knowledge transfer,development of standardized risk assessment tools and the introduction of standards for responsible raw material supply chains with respect to human rights,the environment and compliance.We believe that these activities are helping us make progress on our path to transparent and sustainable supply chains and advance more responsible business practices worldwide.For a description of selected initiatives of which the VolkswagenGroup is a member,see the section on participation in international initiatives on pages 2021.Volkswagen Group Responsible Raw Materials Report 202317Kapitelname Rohstoffbezeichnung01Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismVolkswagen Group Responsible Raw Materials Report 202317General Disclosures Supply Chain Grievance Mechanism Supply Chain Grievance Mechanism The supply chain grievance mechanism is used to process information on breaches of the Code of Conduct for Business Partners by the Volkswagen Groups direct or indirect suppliers.We believe that grievance mechanisms are important for managing human rights and environmental risks in our supplychains.Through this mechanism,we process concerns others have raised regarding negative human rights and environmental impacts.Hints can be placed anonymously.When a hint is brought to our attention,we investigate incidents relating to breaches or suspected violations by business partners of the Code of Conduct for Business Partners of the Volkswagen Group,including abuses of human rights and environmentalimpacts.More information about our grievance mechanism and KPIs for 2023 can be found in our 2023 Sustainability Report(pages123 and 128).Who can reportWhat is the outcomeHow can reports be madeIn personVia the Compliance contact personOmbudspersons (external lawyers)www.ombudsmen-of-Respective suppliers might be temporarily blocked from being awarded new contractsCan lead to termination of supplier relationship with the Volkswagen GroupRepresentatives of communities in the immediate vicinity of our production locationsCivil society organizationsAll suppliers staff membersBreaches identified and categorized by their severitySerious breachesOnline Reporting Channelwww.bkms- sustainability Mail Central Investigation Office,Mail Box 1717,38436 Wolfsburg/Germany24/7 hotline 49 5361 9 46300 800 444 46300Civil society organizationsVolkswagen Group Responsible Raw Materials Report 20231801Foreword Responsible Supply Chain(ReSC)System Raw Materials Due Diligence Management System Social,Human Rights and Environmental Risks in Scope Priority Raw Materials Regulatory Frameworks and Guidelines Main Tools of the RMDDMS Limitations02 General Disclosures04Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Supply Chain Grievance MechanismGeneral Disclosures LimitationsLimitations2023 marks the fourth year since introducing the RMDDMS at the Volkswagen Group.Over the course of the reporting period,we made improvements across the individual raw materials and undertook steps to strengthen the management system itself.While we are pleased with our progress,we also encountered obstacles along the way.Challenges of multi-tier global supply chainsIn the reporting year,we continued our efforts to work towards greater transparency in our supply chains.It is a particular challenge to identify upstream actors in our supply chains that impede the flow of sustainability and compliance information,as well as risk assessment and mitigation activities in the more remote tiers of the supply chain where the Volkswagen Group does not have a direct contractual relationship with the suppli-er.For example,we found that,in some cases,suppliers were unwilling to disclose the identities of their suppliers because of antitrust and competitionconcerns.Limited responsible sourcing maturity among supplier groupsThrough our battery materials mapping and auditing program we continued to conduct supplier audits against the five-step framework of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals.While many of our suppliers and sub-suppliers are open to adopting the OECD framework,some are reluctant to conduct external audits or are struggling to identify and mitigate risks in their supply chains.Midstream companies in particular are often unable to identifythe existing human rights and environmental risks associated with the mineral commodities they process and are not familiar with international standards.Lack of a level international playing fieldWhile due diligence expectations at the EU and European na-tional level have increased,legal requirements for businesses in many other geographies are not developing at the same speed.This creates a challenge for downstream companies which are unable to address risks much further up their global and fragmented supply chains by themselves.This regulatory imbalance can only be addressed through close collaboration between businesses in various jurisdictions,as well as measures aimed at creating an international level playing field.Another example is that in some cases,national legislation is not in line with,or even contradicts,international best practice(for example,the stakeholder consultation process-es required at mine sites).Upstream companies then face the challenge that while they implement national legisla-tion,it may not be perceived as sufficient by downstream industry actors who expect them to implement international best-practice requirements.Limits of corporate influence and the role of governmentsSome of the issues we face are beyond our sole control.As set out in the UN Guiding Principles on Business and Human Rights,states have a duty to protect human rights,while business enterprises have a responsibility to respect human rights.To create an enabling environment for responsible business conduct,governments play a key role in issues such as ensuring good governance(for example,combating bribery and corruption),enacting and enforcing relevant legal frameworks,and ensuring that human rights are not violated through the deployment of state security forces.However,we recognize the complexities for governments in ensuring human rights and environmental protection.One example of such complexities relevant to the downstream sector is the protection and respect of human rights in regions with artisanal and small-scale mining(ASM).While ASM is associated with poor health and safety standards and child labor and may operate outside the formal economy with little or no regulation,it is an important source of income for a large number of people in the countries concerned.It is therefore a balancing act to exclude poor working and environmental conditions from global supply chains,while at the same time not excluding the most vulnerable groups in society from improving theirlivelihoods.Evolving legislation and management systemsDue diligence management systems require significant resource investment and learning for all businesses,includ-ing ours.This is particularly the case with systems trying to address risks across multiple tiers of long and complex supplychains.In the reporting period,we were able to increase the internal capacities working on the RMDDMS.This required internal capacity development and training.Due to the LkSG and other upcoming legislations,documentation and internal proce-dures became a higher priority in our work.In addition,supply chain compliance obligations continue to grow in complexity.Evolving laws and regulations in different jurisdictions add to the challenge and need to be communicated and implemented in our due diligence processes and tools,as well as rolled out to our supply chains.This is especially challenging when leg-islation is not harmonized,differs from international guidelines or uses undefined legal terms.We are constantly learning along the way and are achiev-ing milestones and measurable positive results for human rights and the environment through longer-term initiatives and engagement.Volkswagen Group Responsible Raw Materials Report 202319Schaubild01Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406Annex Commitment to Initiatives 03 Volkswagen Group Responsible Raw Materials Report 20232001Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommitment to Initiatives DRIVE Sustainability|German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)The Volkswagen Group is involved in various initiatives with a focus on sustainability along the supply chain,some of which are cross-industry initiatives and relevant across a range of raw materials while others are raw material-specific.By participating in these initiatives,we are able to collaborate with other industry actors and increase our leverage across all tiers ofthe supply chain and within the broader industrysector.In 2023,we continued to be involved in several broader ini-tiatives and took part in several of their activities:DRIVE Sustainability The Volkswagen Group is a founding member of the industry-led initiative DRIVE Sustainability under the umbrella of CSR Europe.DRIVE Sustainability is a partnership of 16 leading automotive companies that are leading the transformation to a circular and sustainable automotive value chain by using a common voice in their engagement with suppliers,stakehold-ers and related sectors.As active members,we participate in the Raw Materials Working Group,through which we contributed to further developing the Raw Material Outlook.The platform is a keyini-tiative within DRIVE Sustainability and provides a tool for automotive companies to analyze critical raw materials value chains by mapping stages and actors and identifying salient ESG risks along the supply chain.In 2023,we worked on updating the ten initial raw material profiles of the platform and added five newrisk profiles.Another tool developed by the working group is the Sustain-ability Assessment Questionnaire(SAQ)which is also used by the Volkswagen Group as a basis for our Sustainability Rating(S-Rating)assessment.The common questionnaire standard for auditing sustainability aspects of suppliers is currently used by 13 of the member companies and intends to improve efficiency through a standardized approach.In SAQ version 5.0,revised in 2022,relevant topics were added to prepare for the German Supply Chain Due Diligence Act(LkSG).Drive is the sustainable supply chain platform for automo-tive tier-1 suppliers and supplier associations.Members can engage in a systematic dialogue with Drive Sustainability partners about common sustainability challenges and find joint solutions.In 2023,we took part in two workshops with Drive members on ESG risks of Rare Earth Elements(REE)and Nickel value chains.Together with DRIVE Sustainability,we also participated in several external events in the reporting period 2023 EU-LATAM Convention on Raw Materials,2023 OECD Minerals Forum,the final RE-SOURCING conference and engaged with 50 stakeholders across NGOs,trade unions,industry associations and suppliers.Drive Sustainability and CSR Europe also work locally with a focus on setting up sustainability networks to strengthen responsible sourcing and due diligence practices in the bat-tery value chain.The project“Extractives for Sustainability,”carried out with the support of the Deutsche Gesellschaft fr Internationale Zusammenarbeit(GIZ),addresses ESG issues related to the production of copper and cobalt in the DR Congo and manganese and iron ore in South Africa.The proj-ect,finalized in 2023,helped build local business networks among local mines for collaborative action and dialogue with the downstream part of their supply chains.In 2023,we con-tinued to participate in the project through online meetings and webinars.Other on-the-ground activities in the reporting period included engagement sessions on rare earth elements in Myanmar with NGO Global Witness and on aluminum with Human Rights Watch and Inclusive Development International.We also kicked off a project with global union IndustriALL on human rights due diligence in the Indonesian battery supplychain.DRIVE Sustainability is an associate member of several material-specific initiatives to join forces for more sus-tainable material-specific supply chains,among them the Global Platform for Sustainable Natural Rubber(GPSNR)and ResponsibleSteel.German sector dialogues on the implementation of the National Action Plan for Business and Human Rights(NAP)Since 2020,the Federal Ministry of Labour and Social Affairs(BMAS)has organized Sector Dialogues to help implement Germanys National Action Plan for Business and Human Rights(NAP).These dialogues offer guidance to enterpris-es and support their efforts to implement the NAPs human rights due diligence requirements.One of the sectors is the automotive sector.The Sector Dialogue is a forum compris-ing representatives of the automotive industry and business associations,trade unions,NGOs and several other initiatives.The members have developed a series of guidelines for inte-grating due diligence requirements into business processes,covering both the NAP requirements and the obligations set out in the German Supply Chain Due Diligence Act(LkSG).Fo-cus materials are copper and lithium.In the reporting period,we actively participated in the Lithium Working Group,mainly through Porsches representation.Find more information on the Lithium Working Group in section 04 of this report.Volkswagen Group Responsible Raw Materials Report 20232101Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommitment to Initiatives Initiative for Responsible Mining Assurance(IRMA)|Responsible Minerals Initiative(RMI)Initiative for Responsible Mining Assurance(IRMA)The Volkswagen Group continues to be an active and com-mitted member of the Initiative for Responsible Mining Assurance(IRMA)and is also a member of the IRMA Buyers Group and the Mining Engagement Team.IRMA is a multi-stakeholder alliance that advocates for more socially and environmentally responsible mining.IRMA offers an independent assessment of mines against comprehensive standards.The IRMA stan-dards encompass the protection of human rights including the rights of local communities,the exclusion of corruption,health protection measures,occupational safety and environmental protection.In 2023,public consultation began on two draft updated standards:the Standard for Responsible Mining and Mineral Processing 2.0 and the Chain of Custody Standard for Responsible Mined Minerals.The Volkswagen Group has committed to gradually applying the IRMA Standard for Responsible Mining in its battery sup-ply chains,ensuring that,in high-risk regions,sourcing battery raw materials is restricted to material originating from mines that are audited against the IRMA Standard.The continued scaling of IRMA across the mining industry and raw material supply chains remains critical to unlocking the ability of the Volkswagen Group and other downstream brands to achieve their responsible sourcing goals.We fully support IRMAs efforts to engage with mining-affected communities,civil society and trade unions on how the IRMA system can serve as a tool for meaningful engagement to improve mining practices worldwide.Responsible Minerals Initiative(RMI)The Responsible Minerals Initiative(RMI)of the Responsible Business Alliance(RBA)is a global multi-stakeholder effort to promote responsible sourcing of minerals from conflict-affected and high-risk areas.RMIs Responsible Minerals Assurance Process(RMAP)en-ables companies and their suppliers to determine which smelt-ers and refiners have systems in place to responsibly source minerals in accordance with current global standards.The evaluation is done through an independent third-party audit.Through the RMI,the Volkswagen Group joins forces with oth-er partners,either along the supply chain or from other indus-tries,to promote dialogue and build a common understanding of sustainability expectations and harmonized upstream and downstream due diligence tools.We help drive industry-wide solutions and collaborative efforts to collectively leverage and standardize tools and adopt standardized data points for data exchange that enable downstream and upstream companies to map their supply chains while maintaining business confidentiality.In the reporting period,the Volkswagen Group used Material Insights as a risk radar tool to start the risk identification and due diligence process and continued to encourage suppliers to be assessed against RMI standards.We also played a key role in reviewing the RBA and RMIs Practical Guide to EU Battery Regulation and Battery Ma-terials Due Diligence and supporting documents,working with suppliers to ensure the accurate completion of the information.In addition,we participate in the RMIs Emerging Minerals Working Group,which brings together more than 40companies to map global value chains for sustainable transition,encourage suppliers to be assessed against a standard and use collective leverage where necessary to drive responsible business practices upstream.For more details on our participation in raw material-specific initiatives please see the respective Raw Material Snapshots in section 04 of this report.A full list of our membership and participation in industry groups and initiatives can be found in Annex II at the end ofthis report.Volkswagen Group Responsible Raw Materials Report 20232201Foreword02General Disclosures03 Commitment to Initiatives DRIVE Sustainability German sector dialogues on the implementation of the National Action Plan for Business and Human Rights Responsible Minerals Initiative Initiative for Responsible Mining Assurance 2023 Highlights04Raw Materials05Outlook for 202406AnnexCommitment to Initiatives 2023 Highlights DRIVE SustainabilityMicaPorsche joined the Responsible MicaInitiative pilot project to establish responsible supply chains in Madagascar on behalf of the Volkswagen Group and took part into a field trip toMica Mines inAnsy,Madagascar.See also Raw Material Snapshot on mica,page 45Global Platform for Sustainable Natural Rubber(GPSNR)Capacity-building projects in Indonesia coached 380 smallholders on disease fighting and trained 7,000 smallholders on Good Agricultural Practices.Projects in Thailand educated 100 smallholders on agroforestry and 85 small-holders took part in training workshops on agro-forestry in Cote DIvoire and Indonesia.See also Raw Material Snapshot on natural rubber,page 51Aluminium Stewardship Initiative(ASI)Aluminum specification sheets with ASI requirements rolled out across the VolkswagenGroup.See also Raw Material Snapshot on aluminum,page 38new risk profiles have been ad-ded to the Raw Material Outlook platformworkshops with Drive members on ESG risks in REE and nickel value chains5 2Technical workshops by the”Responsible Lithium Partnership”on water-related challenges in Chile See also Raw Material Snapshot on lithium,page 24112021LithiumPGMScania started supporting the Marikana Youth Centre,a multi-stakeholder project working to provide brighter futures for children in the platinum mining town of Marikana.See also Raw Material Snapshot on PGM,page 48The Leather Working Group(LWG)All of the Volkswagen Groups brands joined the Leather Working Group,following Bentley which became the first automotive member of the LWG in2023 HighlightsSee also Raw Material Snapshot on leather,page 43 Battery Raw Materials Conflict Minerals05Outlook for 202406Annex Other Raw Materials01Foreword02General Disclosure03Commitment to Initiatives 04 Raw Materials 04 Raw Materials Volkswagen Group Responsible Raw Materials Report 20232401Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Lithium LithiumLithium is a soft and light,silvery-white alkali metal found in mineral and brine deposits.The metal is best known for its high energy storage density and its use in rechargeable batteries.Further industrial applications are metallurgy,glass and ceramics,lubricants and drugs.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Protection of the rights of indigenous peoples Pollution,water consumption Loss of biodiversity Destruction of forests and soilsKey material-specific risks241H%6%Countries of origin(Share of global mining/processing)AustraliaArgentinaChinaChile Top 3 mining countries Top 3 smelting and refining/processing countries Both 58%Source:USGS,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20232501Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials LithiumKEY APPLICATION EV batteries Lithium in our supply chainLithium hydroxide and lithium carbonate are the most import-ant lithium products,also for the Volkswagen Group.They are used as raw material for cathodes for battery manufacturing.Owing to the expansion of e-mobility,our demand for lithium as a key material for batteries is expected to grow in the coming years.In 2023,the Volkswagen Group did not directly source any battery raw materials,including lithium.Instead,we buy bat-tery cells from suppliers which are themselves up to several supply chain steps away from the raw material origin.We collaborated with our main battery suppliers,for which we use a mandatory EV battery raw materials specification sheet.The main lithium producing countries are Australia,Chile,China,Argentina and Brazil.In the reporting period,PowerCo entered into purchasing agreements with suppliers of battery raw materials that will begin supplying PowerCo in 2025.PowerCo,founded in 2022,vertically integrates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start manufacturing in 2025.More information is available in the 2023 Sustainability Report(pages54-55).Risk Assessment The systemic and salient risk area identified for lithium is related to water.The water consumption for mining and processing,which is particularly relevant in high water stress areas,can be related to adverse environmental impacts on soil and biodiversity as well as adverse impacts on neigh-boring communities.However,the water-related challenges are manifold and vary depending on the lithium deposit(hard rock or brine)and the extraction process and the technologies used.Another important risk in the context of lithium extraction relates to the protection of indigenous peoples rights.Many lithium deposits are located on or near indigenous territories and operations affect indigenous livelihoods in different ways.Forced labor was added as a newly identified risk area in 2023 as a result of a grievance case(see below).For all battery raw materials,we engage closely with our bat-tery suppliers in order to collect supply chain data and con-duct thorough risk assessments.During the reporting period,we continued to collect data through our lithium supply chain mapping questionnaire,which we analyzed and assessed to identify any responsible sourcing risks.In addition,publicly available information such as news articles or ESG reports provided useful insights.In 2023,two lithium mine sites in Chile successfully under-went assessments according to IRMA standards and achieved IRMA50 and IRMA75 respectively.Both reports were thor-oughly reviewed to confirm our previous risk assessments.Risk MitigationOur strategy for risk mitigation in the lithium supply chain is multi-faceted.Through cross-industry initiatives such as the Initiative for Responsible Mining Assurance(IRMA)and the activities of the Responsible Lithium Partnership in Chile,we continue to advocate for more responsible mining,positive impact in mining affected regions and an increased share of IRMA-certified material.Contractual requirements for transparency and due diligence set out in our battery raw materials specification sheets are one key element of risk mitigation.The first requirement established in the specification sheet is providing trans-parency on the supply chain which allows us to conduct a comprehensive social and environmental risk analysis,con-duct mapping audits and define and implement risk mitiga-tion measures,if necessary.We use the IRMA reports for our risk assessment,and the IRMA standard is a prerequisite for direct lithium procure-ment.In the reporting period,we continued to promote the IRMA standard among tier-n suppliers and conducted meetings with two lithium mining companies and two mid-stream companies to follow up regarding their progress with IRMA assessment.We also seek a contractual commitment to continuous improvement to increase the IRMA performance level over time.In preparation for the start of the battery production,the Volkswagen Groups procurement team is supporting PowerCo in social and environmental risk assessments of potential direct suppliers of battery raw materials.These so-called“ESG pre-checks”are conducted during the initial dialogue with po-tential suppliers,with a particular focus on mine sites located in high-risk countries.In the reporting period,we conducted one pre-check for lithium.During contract negotiations,we also performed comprehensive on-site human rights due diligence facilitated by industry expert consultants.Stakeholder Engagement Collaboration with local stakeholders participating in the Responsible Lithium Partnership in Chile Participation in lithium working groups of the German Sector Dialogue and the RMI Continued dialogue with direct and indirect suppliersVolkswagen Group Responsible Raw Materials Report 20232601Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Lithium Initiatives and dialogueThe Volkswagen Group is a founding member of the Respon-sible Lithium Partnership in Chile which is coordinated by the German Agency for International Cooperation(GIZ).The partnership focuses on the responsible use of resources and sustainable lithium production in Chiles Salar de Atacama region through local multi-stakeholder partnerships.The plat-form seeks to promote collaboration among stakeholders in the Salar de Atacama watershed to improve long-term natural resource management.In 2023,we contributed to several activities,among them a hydrological study which also covered the potential impacts on biodiversity.We also continued to support the“Respon-sible Lithium Partnership,”a multi-stakeholder partnership(seehighlight boxon page 27).In 2023,we continued to participate in the Lithium Working Group of the German Automotive Sector Dialogue,mainly through our representative from Porsche.The working group has developed recommendations for the lithium industry on how to effectively manage the lithium supply chain risks.These were finalized in alignment with national experts and local organizations and mining companies and published in July 2023.The project also aims to support the cascading of sus-tainability requirements in the supply chain.Through the German Automotive Sector Dialogue,we are also engaged with the International Lithium Association in a dialogue with mining companies(hard rock and brine).The Volkswagen Group also participates in the RMI Work-ing Group on Lithium to foster the uptake of due diligence activities and responsible sourcing across the supply chain.In the reporting period,as a result of collective supply chain mapping and industry engagement efforts,41 lithium facilities were mapped,one facility was successfully assessed against the RMAP standard and three facilities are preparing for assessment in 2024.Research and direct stakeholder engagementIn the reporting period,the Volkswagen Group funded re-search on social risks associated with lithium in the so-called“lithium triangle”in South America(Argentina,Bolivia,Chile);a potential second phase of the project with academia in Australia and Chile is currently being discussed.We also continued to engage with NGOs in order to deepen our understanding of the situation of local stakeholders in Chile.During the German-Chilean Raw Materials Forum 2023,we met representatives of the Atacamea Women Alliance to learn about their actions to strengthen the role of the Lickanantay women in the Salar de Atacama and understand their priorities while facing increasing lithium extraction in Northern Chile.Grievance case on forced laborForced labor was identified as a new salient risk area for lithium in 2023.A grievance case was opened to address the alleged relationship to the allegations through one of the Volkswagen Groups suppliers.As a consequence,we commissioned a series of audits in the lithium supply chain.Following the audits,the grievance case was closed since the auditors did not confirm the alleged supply chain connections.For more information,see the Volkswagen Group website on ESG controversies.Outlook 2024We plan to:Further promote the IRMA standard for responsible lithium mining and gather feedback from stakeholders around IRMA-certified lithium mines Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR Continue supporting local stakeholders in Chile through the Responsible Lithium Partnership Continue expanding our lithium supply chain mapping in close collaboration with our major batterysuppliers Engage in dialogue with relevant internal and external stake holders on newly identified risks in the lithium supply chain and emerging lithium producing countries For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Volkswagen Group Responsible Raw Materials Report 20232701Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Lithium HIGHLIGHTThe Responsible Lithium Partnership on the ground in ChileIn the reporting period,we continued to support the Responsible Lithium Partnership,a multi-stakeholder partnership in Chile,facilitated by GIZ in the context of the Responsible LithiumPartnership.Participation is very broad and the format is unique in the region since it brings together representatives from local tourism and agriculture associations,lithium mining companies,indigenous communities and local authority representatives.Several activities have been implemented by the roundtable on two major focus areas:Technical data:A project to source technical data on lithium production as well as water use and demand in the region,in order to reduce potential scientific uncertainties.Furthermore,11 technical workshops on water-related challenges and potential solutions were held throughout 2023.Water resources:One of the first focus areas of the roundtable,resulting in a series of measures,including a cadastre of water rights on the river basin;geological and hydrological mapping of the Vilama River;awareness campaigns and capacity-building program;providing access to data and resources through website and social media;irrigation pilot;monitoring of streams;grey water use;plan for sustainable tourism;support to stakeholders for public funding for water-related projects;and investment in upgrading a freshwater plant.The Responsible Lithium Partnership enables dialogue between organizations,indigenous com-munities and institutions that carry out productive,social and/or cultural activities in the Salar de Atacama basin.The members seek to collabora-tively resolve information gaps on the basin and reach agreement on priority issues related to the sustainability of the region,mainly focused on water-related issues.11on water-related challenges in 2023.technical workshopsVolkswagen Group Responsible Raw Materials Report 20232801Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Cobalt CobaltCobalt is a hard,lustrous,silvery metal,found in rocks only in a chemically combined form.The vast majority of cobalt is extracted as a by-product of existing nickel and copper mining.Cobalt is primarily used in lithium-ion batteries and in the manufacture of magnetic high-strength alloys.Social&Human RightsCommunities Forced or compulsory labor Child labor Discrimination Health and safety Trade union freedoms Payment of adequate wages Causing harmful change Protection of the rights of indigenous people Production and use of pollutants Pollution,water consumption Handling and disposal of waste Loss of biodiversity Destruction of forests and soilsKey material-specific risks74%DR CongoRussia4%7%Indonesia8%Finland4nadaChina72%Countries of origin(Share of global mining/processing)Top 3 mining countries Top 3 smelting and refining/processing countriesSource:USGS,Cobalt Institute,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20232901Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials CobaltKEY APPLICATION EV batteries Cobalt in our supply chainCobalt hydroxide,cobalt sulphate and cobalt metal are the main inputs for EV battery cell production.Cobalt plays an essential role in batteries,improving vehicle range and safety by providing thermal stability in cathode chemistry.In 2023,the Volkswagen Group did not directly source any battery raw materials,including cobalt.Instead,the Volkswagen Group buys its battery cells from suppliers which are themselves up to nine supply chain steps away from the raw material origin.Our main sourcing countries for cobalt are DRCongo,Turkey,Indonesia and New Caledonia(France).In the reporting period,PowerCo entered into purchasing agree-ments with suppliers of battery raw materials that will begin supplying PowerCo in 2025.PowerCo,founded in 2022,vertically integrates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start manufacturing in 2025.More information is available in the 2023 Sustainability Report(pages54-55).Risk Assessment The Volkswagen Group has identified human rights and ad-verse environmental impacts as the systemic and salient risks for cobalt.This is due to the majority of the worlds cobalt being mined in the southern area of the DR Congo.While mining is a primary source of income for the region,cobalt is partially mined in labor-intensive artisanal and small-scale mining(ASM)with low wages,poor working conditions and little to no safety.The lack of law enforcement is also related to adverse environmental impact on the neighboring communities.Supply chain traceability is low due to the many actorsinvolved.In 2023,the Volkswagen Group continued to engage with battery cell producers and collected data through our cobalt supply chain mapping questionnaire,which we analyzed and assessed to identify any responsible sourcing risks.Working closely with our battery suppliers through our cobalt supply chain mapping and audit program,we have identified and prioritized certain suppliers.Risk MitigationWhile cobalt supply chains are complex,we continued to focus on working with our battery suppliers on securing sus-tainability in the supply chain.The Volkswagen Group strictly avoids sourcing cobalt from artisanal mining operations,a strategic decision aimed at mitigating the inherent risks associated with such activities in the DR Congo.Through our battery raw materials specification sheets,we request our suppliers to adhere to internationally recognized responsible sourcing practices such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Af-fected and High-Risk Areas.We seek contractual commitment to international standards such as those developed by IRMA or RMI(RMAP).By incor-porating the IRMA standard into its supplier requirements,the Volkswagen Group/PowerCo reaffirms its commitment to responsible sourcing practices and underscores the impor-tance of maintaining ethical standards in the cobalt supply chain.Following a suppliers commitment,we continuously monitor the suppliers progress towards its IRMA certification.While it remains the responsibility of the supplier to achieve IRMA certification,we remain closely involved.As part of this ongoing supplier engagement,one priority topic has been the safe management of hazardous substances,including miningtailings.However,compared to lithium,the cobalt supply chain contains additional challenges regarding standards:Cobalt is often mined as a by-product of large-scale copper(mainly in DR Congo)or nickel mines(e.g.Indonesia).The respective copper-cobalt mining companies are new to the IRMA stan-dard and sometimes favor alternative standards.In the reporting period,the Volkswagen Group also remained on the advisory board of a responsible mining standard,known as CERA 4in1 Performance standard,which was piloted in 2021.The CERA 4in1 pilot project was completed in2023 but is now on hold due to the roll out of IRMA.Stakeholder Engagement Ongoing engagement with on-the-ground projects such as Cobalt for Development(C4D)Dialogue with direct suppliers of cobalt through PowerCo Participation in RMI Working Groups on cobalt and emerging minerals OECD Forum on Responsible Mineral Supply ChainsVolkswagen Group Responsible Raw Materials Report 20233001Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Cobalt In preparation for the start of the battery production,the Volkswagen Groups procurement team is supporting PowerCo in social and environmental risk assessments of potential direct suppliers of battery raw materials,including cobalt.These so-called“ESG pre-checks”are conducted during the initial dialogue with potential suppliers to assess the situation on the ground.In the reporting period,we con-ducted one pre-check for cobalt.In high-risk contexts,the checks are complemented by on-site due diligence facilitated by industry expert consultants,to ensure that suppliers comply with recognized standards on a range of human rights and environmental topics.We also leverage media screening and supply chain moni-toring solutions to actively monitor media hints of any issues occurring at our cobalt suppliers.For any issues,we seek responses and remediation plans when relevant,which are then monitored by the company.Initiatives and dialogueIn 2023,we continued to engage with Cobalt for Development(C4D),a cross-industry initiative implemented by GIZ that works to support communities dependent on artisanal cobalt mining in the DR Congos Lualaba Province.In C4D,we work together with partners for improved working and living condi-tions for small-scale cobalt miners and their communities.The pilot project aims to strengthen compliance with laws and improve health and safety conditions and social well-being for people locally.Outlook 2024We plan to:Further promote the IRMA standard for responsible cobalt mining Continue expanding our cobalt supply chain mapping in close collaboration with our major batterysuppliers,implementing new digital tools to improve the management of the collected supply chain information Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Volkswagen Group Responsible Raw Materials Report 20233101Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Nickel NickelNickel is a metallic element with a silvery appearance which occurs naturally in soil and water.Primary nickel is produced and used as ferro-nickel,nickel oxides and other chemicals.Stainless steel is by far the most important use of nickel,but it is also used in other alloys,plating and batteries.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Child labor Direct or indirect sup-porttoarmed groups Discrimination Health and safety Payment of adequate wages Trade union freedoms Causing harmful change Forced evictions and/or expropriations Protection of rights of indigenous people Production and use of pollutants Pollution,water consumption Handling and disposal of waste Destruction of forests and soilsKey material-specific risks6%Countries of originNew CaledoniaPhilippinesIndonesia33P%Japan7%RussiaChina6%Countries of origin(Share of global mining/processing)Top 3 mining countries Top 3 smelting and refining/processing countries Both Source:USGS,EU RMIS,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20233201Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials NickelKEY APPLICATION EV batteries Nickel in our supply chainNickel sulfate provides a source of nickel ions for the cathode material of lithium-ion batteries,such as Nickel-Cobalt-Aluminum(NCA)and Nickel-Cobalt-Manganese(NCM)batteries,contributing to the batterys overall performance,energy density and stability.In EV batteries,nickel-rich cathodes improve energy density and stability while reducing costs.Thus,nickel is a strategically important raw material in the electrification of transportation,in addition to its other uses in stainless steel,alloys and plating.For the Volkswagen Group,EV batteries are by far the largest field where nickel is required,and we did not directly source any nickel for this use in 2023.Our main sourcing countries for nickel are Australia,China,Papua New Guinea,Indonesia and New Caledonia(France).In the reporting period,PowerCo entered purchasing agreements with suppliers of battery raw materials that will begin supplying PowerCo in2025.PowerCo,founded in 2022,vertically integrates the develop-ment and production of battery cells within the Volkswagen Group and is expected to start manufacturing in 2025.More information is available in the 2023 Sustainability Report(pages 54-55).Risk Assessment The most serious risk areas associated with nickel are environmental impacts of open pit mining such as destruc-tion of forests and soils,water pollution and waste handling,particularly in seismically active areas such as Indonesia.Additionally,nickel production is a greenhouse-gas and energy-intensive process.For locations of a number of nickel mines as well as smelting and refining companies,human rights risks have been identified,including working condi-tions,health and safety,and forced labor.Risk MitigationContractual requirements for transparency and due diligence set out in our battery specification sheets are one key ele-ment of risk mitigation.Furthermore,the VolkswagenGroup has undertaken a broad sectoral analysis of the nickel supply chain and is continuing its supply chain mapping and auditing program.The Volkswagen Group joined IRMA in 2022 and has since rolled out the IRMA standard across the battery supply chains through contractual obligations.However,regarding standards,the nickel supply chain con-tains additional challenges compared to lithium,as nickel mining companies are new to the IRMA standard and some-times favor alternative standards.In preparation for the start of the battery production,the Volkswagen Groups procurement team is supporting PowerCo in social and environmental risk assessments of potential di-rect suppliers of battery raw materials.These so-called“ESG pre-checks”are conducted during the initial dialogue with po-tential suppliers,with a particular focus on mine sites located in high-risk countries.In the reporting period,we conducted six pre-checks for nickel.In high-risk contexts,during contract negotiations,we also perform comprehensive on-site human rights and environmen-tal due diligence facilitated by industry expert consultants.Stakeholder Engagement Participation in the nickel working group of RMI Ongoing dialogue with industry peers and direct and indirect suppliers Dialogue with affected stakeholders and NGOs Dialogue with direct suppliers of nickel through PowerCo Outlook 2024We plan to:Continue expanding our nickel supply chain mapping and audit program in close collaboration withour major battery suppliers Progressively apply the IRMA standard for responsible nickel mining and promote IRMA audits in the nickel supply chain Plan and engage in an on-the-ground partnership project in Indonesia to mitigate environmental and social risks and raise industry standards on sustainable manage-ment of nickel mining and refining Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Volkswagen Group Responsible Raw Materials Report 20233301Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials Graphite GraphiteGraphite is a soft,crystalline form of carbon with a metallic luster and a dark grey color.With its thermal and electrical conductivity,it is suitable for many industrial applications.Synthetic and natural graphite are used on a large scale in pencils,lubricants and electrodes.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Child labor Direct or indirect sup-porttoarmed groups Discrimination Health and safety Payment of adequate wages Trade union freedoms Causing harmful change Forced evictions and/or expropriations Protection of rights of indigenous people Production and use of pollutants Pollution,water consumption Handling and disposal of waste Destruction of forests and soilsKey material-specific risks6%6%MadagascarMozambiqueChina77%Countries of origin(Share of global mining)Top 3 mining countries Source:USGS,2023 estimates.Volkswagen Group Responsible Raw Materials Report 20233401Foreword02General Disclosure04 Raw Materials03Commitment to Initiatives 05Outlook for 202406Annex Battery Raw Materials Lithium Cobalt Nickel Graphite Conflict Minerals Other Raw MaterialsBattery Raw Materials GraphiteKEY APPLICATION EV batteries Graphite in our supply chainNatural graphite is contained in a vast number of vehicle parts,most importantly in the anodes of EV batteries,but also in brake discs and precision parts,graphite powders,etc.EVbatteries are by far the largest field where graphite is required,and the Volkswagen Group did not source any graphitefor this use in 2023.With more electric vehicles being produced,we expect the demand for graphite to keep rising.China is the worlds lead-ing supplier of natural graphite.Given its strategic importance for the energy transition and its high supply risk,natural graphite is listed by the EU as a critical raw material.Risk Assessment The Volkswagen Group has identified human rights and ad-verse environmental impacts as the main systemic and salient risks,particularly occupational health and safety,air pollution and negative impacts to local communities.Risk MitigationWe take a multi-layered approach to risk mitigation,focusing on our six battery suppliers as well as the future direct suppli-ers of natural graphite to PowerCo.Contractual requirements for transparency and due diligence set out in our battery specification sheets are one key element of riskmitigation.In the reporting period,the Volkswagen Group has undertaken a broad sectoral analysis of the graphite supply chain and has continued its supply chain mapping and auditing program.The Volkswagen Group joined IRMA in 2022 and is com-mitted to rolling out the IRMA standard across the battery supply chains through contractual obligations.This applies to both our current battery suppliers and the new suppliers for PowerCo.Outlook 2024We plan to:Continue expanding our graphite supply chain mapping and audit program with our battery suppliers Engage with our suppliers to develop and roll out tools to sup-port compliance with the EUBR For more information on the EU Battery Regulation(EUBR)see page 13 of thisreport.Stakeholder Engagement Ongoing engagement in industry initiatives Dialogue with direct suppliers of graphite through PowerCo05Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Disclosure03Commitment to Initiatives 04 Raw Materials Conflict Minerals 3TG35 3TGTin,tantalum,tungsten and gold(3TG)are referred to as“conflict minerals”due to their role in violent conflicts in the Democratic Republic of the Congo(DRC)and neighboring countries,where their extraction and trade are used to fund armed groups while fueling human rights abuses,corruption and money laundering.3TG metals are used in a wide range of everyday electronic products.Child labor Direct or indirect sup-port to armed groups Discrimination Forced or compulsory labor Forced evictions and/or expropriations Protection of the rights of indigenous peoples Production and use of pollutants Air pollution Safety of installations Handling and disposal of waste Pollution,water consumption TIN,TANTALUM,TUNGSTEN AND GOLDSocial&Human RightsCommunitiesEnvironmentalKey material-specific risks Destruction of forests and soils Loss of biodiversity Noise and vibrations Health and safety Payment of ade-quate wages Because 3TG are four different raw materials with a large total number of countries of origin,we decided against visualizing them on a world map.Instead,the 3TG smelters and the countries and territories of origin we identified are listed in Annexes III and IV ofthisreport.Volkswagen Group Responsible Raw Materials Report 20233605Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsConflict Minerals 3TGKEY APPLICATIONS Various automotive parts Electronics 3TG in our supply chain 3TG metals(tin,tantalum,tungsten and gold,collectively called 3TG or also conflict minerals)are used in tiny quantities in a wide array of automotive parts and components.This lack of focal parts to concentrate on creates a key challenge for 3TG due diligence in automotive supply chains.Tracing the upstream supply chains becomes even more challenging considering that the raw materials are typically added to our supply chains several levels upstream where we have no direct contractual relations.The Volkswagen Group does not directly purchase 3TG metals.However,we request our suppliers to ensure that only responsibly sourced conflict minerals are part of their supply chains.As stated in our contractually binding Code of Con-duct for Business Partners(CoC BP),business partners may only use 3TG from smelters or refiners that meet the require-ments of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas,as assessed by the Responsible Minerals Initiative(RMI)or similar organizations.These assessments are carried out according to the RMIs Responsible Minerals Assurance Process(RMAP).We expect our suppliers to avoid all minerals from conflict affected smelters.Nevertheless,in line with OECD Guidance,the aim is not to ban the procurement of conflict minerals that originate in conflict-affected and high-risk areas,but to pro-mote sourcing from responsible sources within those regions.Risk Assessment As part of the annual general risk assessment,the Volkswagen Group identified human rights risks including child labor and support to non-state armed groups and/or public or private security forces as outstanding systemic social risks.Salient environmental risks are pollutants and hazardous chemicals.However,almost all risk categories according to our RMDDMS apply to these conflict minerals.As with most other minerals,the highest risks occur at the mining level.For 3TG due diligence,the“choke-point approach”in alignment with the OECD Minerals Guidance is best practice.The approach aims to first identify smelters and refiners(choke points)and then ensure that those smelters and refiners source responsibly.In 2023,we continued working towards transparency along our 3TG supply chain by collecting relevant supplier data.We used the RMIs Conflict Minerals Reporting Template(CMRT).The CMRT is a standardized reporting template that facilitates the transfer of information through the supply chain regard-ing mineral country of origin and the smelters and refiners used.The template also supports identifying which smelters and refiners should undergo an audit according to RMIs RMAPstandard.In addition,we continued partnering with Assent,a supply chain management solution which includes a third-party database,to manage and improve the quality of the transpar-ency data we receive from suppliers delivering nearly 200,000 different parts.The response rate increased to above 70%,a significant improvement compared to last years campaign.We expanded our supplier outreach in line with our ongoing due diligence process.Through collective industry out-reach,including our partner Assent and using the CMRT,we identified and engaged with a greater number of relevant tier-1 suppliers compared with previous years around 4,000 suppliers delivering nearly 200,000 different parts.The response rate increased to above 70%,a significant improve-ment compared to last years campaign.We have determined country of origin data for the majority ofthe smelters in our supply chain.Lists identifying our smelt-ers and countries of origin can be found in Annexes III and IV of this report.Stakeholder Engagement Member of RMIs smelter engagement and gold team Ongoing dialogue with NGOs Enhanced due-diligence outreach to tier-1 suppliers Encouraging smelters to undergo RMAP auditsVolkswagen Group Responsible Raw Materials Report 20233705Outlook for 202406Annex Battery Raw Materials 3TG Other Raw Materials Conflict Minerals01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsConflict Minerals 3TG Outlook 2024We plan to:Continue to work on increasing transparency along our 3TG supply chain by collecting data and en-gaging with our most critical tier-1 suppliers(based on the smelter risk profile and/or the quantity of 3TG materials used in their products)Increase the percentage of RMAP-conformant 3TG smelters inour supply chain Risk Mitigation Besides our work on increasing transparency in our 3TG supply chains,we are focusing on increasing the number of RMAP-compliant smelters through our participation in theRMI.In the reporting period,the Volkswagen Group continued to participate in the smelter engagement team and the gold team of the Responsible Minerals Initiative(RMI).Together with other RMI members,we worked with a number of our smelters to encourage them to undergo the RMIs Responsible Minerals Assurance Process(RMAP).Smelters and refiners who face challenges meeting requirements of the RMAP standard can participate in the Extended Corrective Action Plan(CAP)Process of the RMI.This process helps smelters and refiners pursue risk mitigation and continuous improvement.Together with our partner Assent,we launched an enhanced due diligence program for 3TG in 2023 to ensure that the requirement from our CoC BP is enforced.To determine if the suppliers comply with our requirements,we assess whether the smelters are RMAP-conformant and also check for any negative media coverage of the smelter.Through this addi-tional outreach activity 1,500 direct suppliers were requested to ensure that only RMAP-conformant smelters contribute to their supply chains.Of the smelters identified in our supply chain,nearly 63%were RMAP-conformant as of the end of 2023.The slight decrease in RMAP conformance compared to the previous reporting year is due to a reduced number of globally available confor-mant smelters.We continue to look for red flags in accordance with the OECD Guidance that may help identify suppliers from conflict-affected and high-risk areas prone to issues of human rightsviolations.Raw Materials Rohstoffbezeichnung05Outlook for 202406Annex Battery Raw Materials Other Raw Materials Conflict Minerals Aluminum PGM Copper Natural Rubber Leather REE Magnesium Mica Steel Cotton01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsOther Raw Materials Aluminum Volkswagen Group Responsible Raw Materials Report 2023387%BrazilCountries of origin(Share of global mining/processing)Top 3 mining countries Top 3 smelting and refining/processing countries Both Source:USGS,2023 estimates.Aluminum Aluminum is extremely versatile and is therefore used in a variety of applications,often replacing steel due to its light weight.It is strong,nonmagnetic,and conducts heat and electricity.Aluminum is an abundant element in the earths crust but does not occur in its pure form.It has to be extract-ed from bauxite in a resource-intensive process.EnvironmentalSocial&Human RightsCommunities Forced or compulsory labor Protection of the rights of indigenous peoples Production and use of pollutants Air pollution Handling and disposal of waste Key material-specific risks Pollution,water consumption Loss of biodiversity Destruction of forests and soils ChinaAustralia59#%$%GuineaVolkswagen Group Responsible Raw Materials Report 20233905Outlook for 202406Annex Battery Raw Materials Other Raw Materials Conflict Minerals Aluminum PGM Copper Natural Rubber Leather REE Magnesium Mica Steel Cotton01Foreword02General Disclosure03Commitment to Initiatives 04 Raw MaterialsOther Raw Materials AluminumKEY APPLICATIONS Body sheets Die casting&extrusion parts Aluminum in our supply chain Aluminum is used in several key parts of our brands vehicles from engines,chassis,frames and body sheets to wheels.Aluminum is also used in battery compartments,cooling plates and many other smaller components.The most im-portant advantage of aluminum for the automotive industry is its excellent strength-to-weight ratio which helps reduce the weight of vehicles and therefore their energy efficiency/battery range.Thus,the demand for aluminum is expected to further increase in the coming years with the continuing trend towards lightweight construction and electrification of vehicles.The Volkswagen Group sources aluminum alloys both directly and mainly indirectly.As only a few aluminum producers are vertically integrated,i.e.operate their own mines,refineries and aluminum smelters,it is difficult to mitigate the risks in deeper supply chain levels.Risk Assessment The increasing importance of aluminum makes it essential to assess and tackle the risks associated with its upstream supply chain.For aluminum,we have identified three systemic and salient risk areas associated with high risk:the adverse environmental impacts of mining,refining and smelting,adverse impacts on local and indigenous communities,and the occurrence of forced labor in smelting in a certain region

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    100Reasonsto lovethefuture2024 AXA Foresight ReportUlrike DecoeneAXA Group Chief Communication,Brand&SustainabilityAs we say at AXA,life may be full of risks,but the future shouldnt be one of them.Everyone should have the right to be hopeful about the future.And we are acting concretely for it.By identifying and anticipating new risks,were focused on finding new solutions to make life safer,fairer and more inclusive for as many people as possible.In a world of escalating risks,our societies and economies cannot afford to become paralyzed by uncertainty.We are all living through a deep transformation.Far better to embrace it than retreat into anxiety and doubt.What were experiencing today will profoundly reshape the future of protection.Yet,I feel confident that our industry has the necessary expertise and the right people to better understand and tackle these risks.Of course,we dont have all the answers yet.But there are good reasons to be proactive and optimistic too.That sense of optimism runs through all the“100 reasons to love the future”that you can read in this report.These stories show some of the extraordinary advances we can expect when different fields come together,be it science,technology,society,nature and art,powered by a collective confidence to build a more positive vision of the future.Women and young people will emerge as agents of change.Businesses also have a unique opportunity to make a difference in areas such as climate change,diversity,and mind health.Knowledge sharing is the best antidote to the crisis of trust we are experiencing.These remarkable visions of tomorrow bring to life our sincere belief at AXA that by working together,by anticipating risks,by sharing knowledge,we can better protect people,and look at the future with confidence.What are your own reasons to love the future?I hope you will find inspiration in the following pages.Life may befull of risks,but the futureshouldnt beone of them.Everyoneshould havethe right to be hopeful about the future.FOREWORDAbout the AXA FORESIGHT Team Insurance is built on future potential events.Its success is based on understanding and anticipating them through the best possible vision of tomorrow.This is the role of the AXA Foresight team:providing a lens into possible futures by identifying emerging trends for the years ahead to better navigate uncertain times.Examining long-term transformations and their related challenges aims at identifying the ways in which our societies may be affected in the future and what role insurance might play in a fast-changing world.My reason to love the future is simple:I am lucky enough to work in a remarkable company,surrounded by great people,in an industry which can have an incredible impact for human progress and a more sustainable future.2024 AXA Foresight Report2024 AXA Foresight Report 3ContentsIn a time when society is undergoing profound transformations and facing crises on multiple fronts,the act of sharing and promoting innovative imaginaries for the future has never been more crucial.We firmly believe that maintaining a positive outlook on the future increases the likelihood of favorable outcomes.Discover 100 reasons to love the future carefully curated by futurists,experts,business leaders,scientists,writers,artists,NGOs and corporate organizations.Together,lets explore how we can work collaboratively to imagine and build a brighter future,navigating challenges with collective expertise and shared vision.Get ready to be captivated,inspired,and,most importantly,optimistic about what the future holds!Youth perspectives on the future of companies 8 Jasmine Manet,co-founder of Youth Forever:“Young people are ready to own the future!”10YouthDoughnut Economics:theres hope ON the Doughnut!13The Emerging Enterprise:10 models to reinvent the organizations in 2050 14redefining luxury and sustainability through imaginaries-Brune Poirsons call to action 18 Rose-May Lucotte,co-founder of ChangeNow “What we need today is new narratives that give hope”20CorporateimpactMiho Janvier,physicist “Studying the Sun reconfirms the special nature of Earth”23Charting new ways to restore our precious ocean 24Leaving a smaller footprint on your way out by Changeist 30When“100 Reasons To Love The Future”meets GenAI 32Environment&scienceMia Enderby,Forward for Liverpool FC Women player “Why I love the future”44Sibylle Duhautois:“By imagining the future,women help make it fairer for all.”46WomenTrust in the power of collective foresight 50Autism beyond borders 51 Cyber security a remedy,not a poison!54 4142 44Culture&societyInterview with Artist Rocio Berenguer 35“Becoming Human”by Lauren Ducrey Poet,Speaker&AI designer 36The power of sound,Nathalie Birocheau,CEO of Ircam Amplify 38 The Foresight Playlist:25 catchy reasons to listen&love the future 40Art2024 AXA Foresight Report2024 AXA Foresight Report 5In recent years,mind health conditions have become more common among children and young people,who seem disproportionately impacted compared to older generations.In England,for example,the number of those aged 6 to 16 with a probable mind health condition has grown from one in nine to one in six since 2017.Only half of 18-24-year-olds say they dont currently have a mind health condition,according to 2024 AXAs Mind Health report“Mind your health in the workplace”*,which found that younger people are especially concerned about technology addiction,social media,body image and future uncertainty.In fact,without those four negative factors,more 18-24-year-olds would flourish than any other age group,with the exception of the over 64s.Perhaps its little surprise that many younger people feel anxious,stressed or alone,given the disruption to their education and social lives in recent years,at such an important time in their development.However,its also true that children today are more open to talking about mind health and that bodes well for the future.Young people deserve credit for moving the conversation forward on mind health,and appear more comfortable discussing their feelings and personal struggles than previous generations.While stigma does remain,younger people have successfully drawn society into a dialogue about mind health that is unprecedented.Hopefully,having young people who can speak today openly about their mental health could mean healthier adults tomorrow.Knowing that early diagnosis*significantly impacts prognosis and quality of life,particularly within the first five years of the illness.Young peopletoday are more open about their mind health39%of 18-24-year-oldsare experiencing severe or extremely severeforms of anxiety,stress or depression.The importance of the 5 first yearsEarly diagnosis significantly impacts prognosis and quality of life.In a world where climate,employment and social issues are often synonymous with uncertainty while being exposed to many challenges,we believe that the future generations are also the bearers of solutions for transforming the world.Youth2024 AXA Foresight Report2024 AXA Foresight Report 7*AXAs Mind Health report“Mind your health in the workplace”(2024).*World Health Organization:Mental health of adolescents(2021).2345Louise-Apsara Lassailly“My excitement for the future stems from anticipating the transformative impact Gen Z will have on organiza-tional structures and workforce dy-namics.My diverse interactions with global youth have revealed a shared energy to foster unity.As 30%of the global population and projected to constitute 25%of the workforce by 2025 Gen Zs impact is vital.We,as future consumers and em ployees,will shape business models,workforces,and organizational struc tures through a profound cultural tran sition echoing Gen Zs commitment to diversity,inclu-sivity,and responsibi lity.”Claire Jaouen“Mission-driven companies are increas-ingly gaining prominence on the inter-national stage.They reflect a genuine awareness of the need to integrate con-siderations of the common good and social utility into the purposes of orga-nizations.In February 2024,more than 8,000 companies in over 90 countries carry the B Corp label,certifying their commitment to work for the benefit of all,across a wide range of issues.This involvement of organizations suggests a hopeful prospect of evolution,trans-forming them from agents of planetary destruction to potential allies in its re-generation.”Thomas Pilaz“I envision a future where lifelong learn-ing-this second school that extends the first throughout life-has taken on an increasingly prominent role in our lives.Tomorrow,work will no longer be defined by a fixed skill set but by a cer-tain sensitivity for which one must con-tinually train.School,university,and business will merge into a single learn-ing entity.The student and the worker will become one;eternal learners.The future of work will be characterized by the development of new training tech-nologies within all companies.Their promises of flexibility and personalized learning lead me to believe in a world where both employer and employee jointly benefit from the impending learning revolution.”Emilie Nguon“My reason to love the future is know-ing that there are new organizational models matching my expectations re-garding work!In my first internship,my colleagues had been with the company for 15 years.Thats 15 years of sitting at the same desk,riding the same eleva-tor,and heading to the same cafeteria.This pattern used to scare me,but as Ive grown,Ive come to understand the value of long-term commitment to a company:stability,opportunities for growth,and learning How can I acquire these benefits while exploring various career paths?”YOUTH4 students from Paris-Dauphine University share how they envision the future of organizations.“Its thenew generationthat teachesthe past generation.”Franck Courchamp,Ecologist and Research Director at the CNRS Institute AXA Chair in Invasion Biology at the University of Paris-Saclay6.“Its the current generation,the 15 to 25-year-olds,which is probably,for the first time in humanity,the one that has access to all the knowledge.In our pockets,with our smartphones.The current generation is therefore very aware,informed,and engaged.Its a generation that takes action,that takes the lead in front of a political class and a society that has put them in a difficult situation and doesnt act.Its the new generation that teaches the past generation.And it fills me with hope.”7.“One of the main reasons why Im optimistic about the future is that I see every day in my work at universities and higher education in general more and more students but also researchers really being involved and engaged in trying to make meaningful impact and to create change.I think that more and more people are really interested in making this world a better place.”Anne Boring,Assistant Professor of Economics at Erasmus University(Rotterdam)and Head of the Women in Business Chair at Sciences Po Paris,supported by AXA1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 913.Young people are ready to take a standEnvironmental transformation is absolutely on the agenda of many young people,whose futures will be most impacted by global warming.Our generation is also passionate on subjects such as peace,education for all and politics.15.Initiatives like Youth Forever are making a differenceYouth Forever aspires to promote the real potential of Gen Z through our advocacy and training.Were witnessing an increase of intergenerational teamwork among forward-looking companies.Younger voices are being amplified in boardrooms and business conventions.These are early days,but the conversation is widening.Watch this space.Gen Z is rising!8.Young people provide a looking glass,not stereotypesLets start with what Gen Z isnt.Theres a lot of misconceptions around 20-somethings.People say we have commitment issues.Were risk averse.Weve lost touch with reality when it comes to money.We are lazy.Rather than see young people as strange,I believe that youth acts as a looking glass for society.We show whats new and whats coming next.The changes we bring as Gen Z will happen to everybody else in time.Youth is a trendsetter,not a threat.9.Young people are motivated by impactPrevious generations,including millennials and Gen Y,were characterised as needing a quest for meaning.Who am I?Why am I here?Gen Z are more fixated on leaving their mark.We strive to be useful.I do therefore I am.In my experience,young people want to work.We get involved in NGOs and professional organizations.Often,this activity unfolds online,rather than in traditional institutions.Our collective energy bodes well for tackling the challenges of the future.10.Young people are better informedOurs is a generation that has only known the digital information age.We have had access to technology and tools throughout our formative years.We know how to find out stuff and then use it to progress the subjects that are important to us.There are negative impacts of social networks in regard to mind health.But I would argue that the benefits of information-on-demand far outweigh the downsides.11.Young people have a different relationship with timeThe impatience of youth is a truism of every new generation.But for Gen Z,it carries more than the usual restlessness to get on in the world and prove our worth.We have grown up in a much more immediate environment.Everything happens faster.Agile companies can channel this eagerness by creating career tracks based on performance rather than traditional ladders based on time.12.Young people are leading the way on diversity and inclusionOur generation has been exposed to a lot more difference in school and throughout our upbringing than any other.I believe that habitual diversity and inclusion will lead to more cohesive communities and businesses in the future.Young people naturally question the status quo and reject privilege and so Im encouraged that tomorrows society will be more inclusive to all people.Spotlight on 6 young change-makers who are leading efforts to combat the worlds most pressing issues and whose leadership is catalyzing the achievement of the Sustainable Development Goals.16.Varaidzo(Vee)Kativhu?veekativhuEducation activist and founder of Empowered by Vee.Vee empowers underrepresented students through social media and has received recognition for her work,aiming to address the issue of 130 million girls out of school.17.Jamal Hill?swimuphill Paralympic Medalist and Disability Rights Advocate,founder of Swim Up Hill Foundation.He uses his platform to provide swimming education and inspiration to millions,including young people with disabilities.18.Richa Gupta?richashivangigupta Education innovator and social entrepreneur,co-founder of Labhya Foundation.Richa leads a nonprofit that provides essential skills to over 2.4 million underprivileged children in India.19.Lusa Franco Machado?Luhfm Digital rights activist and data justice researcher from Brazil.She leverage social media to gather a global community of over 60,000 youth and facilitate discussions on tech policy,queer rights,and feminism.20.Okan Dursun?okandrsnEducation and social entrepreneur,co-founder of Twin Science&Robotics.Okan is the CEO of Carbon Gate,a climate tech venture focusing on carbon emissions reduction.21.Eddy Frank Vsquez-Snchez?ecodeeddyClimate activist and founder of Juventud Sostenible.Eddy leads marine litter prevention projects and coordinates adaptation efforts for the Alliance of Small Island States in the UNFCCC,prioritizing diverse youth participation for SDG achievement.YOUNG LEADERSOF TOMORROWBy United Nations Jasmine Manet is an entrepre-neur who is committed to her gener-ation.She is the co-founder of Youth Forever,an NGO that works hand in hand with companies and public in-stitutions to empower and enable members of Gen Z to lead the trans-formation into a better tomorrow.She gives 8 reasons to feel optimistic about the next wave.YOUTH14.Young people can inspire an intergenerational futureAll these generational labels can prove a source of division rather than opportunity.If we could combine the energy of all ages,then we would generate a powerful force for good.We would be better equipped to navigate what comes next.Businesses,in particular,need to find ways to build dialogue and deconstruct generational biases.2024 AXA Foresight Report 111234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight ReportDoughnut Economics a solution to the core economic,environmental and social challenges of the 21st Century was devised by Kate Raworth at Oxfam during the 2010s.From ideas to actions!The Dougnut Economics Action Lab is making many ideas,tools and resources freely available for change-makers to use to put the ideas of Doughnut Economics into practice.Check out their principles&guidelines on https:/doughnuteconomics.orgTheresDoughnutDoughnuton theInsuring the circular economy to support the Doughnut.Learn more in this whitepaper!AXA collaborated with Swiss Re,Ikano,Ingka Groups,and BCG to delve into the complexities and possibilities of the expanding recycling sector.Highlighting the pivotal role of recycling in the circular economy,the paper underscores existing limitations in insurability while advocating for enhanced risk management and collaborative efforts.Swiss Re Institute-What goes around comes around:Insuring the circular economy(2023)The simple shape of the sugary treat comprises two concentric rings:ECOLOGICAL CEILING SOCIAL FLOORand an ecological ceiling,to ensure that our species does not overshoot the boundaries that protect Earths life-supporting systems,such as cli-mate change,pollution,biodiversity loss etc.a social floor,to ensure that nobody is left behind in essential needs such as food,water,energy,education,social equity etc;Between these two sets of boundaries lies the sweet cake where humanity can find a happy medium that suits both our needs and those of the planet.To exist within the doughnut,we need to move away from last centurys economic thinking with its obsession with GDP.Doughnut Economics provides a way of thinking to bring about the regenerative and distributive dynamics that this century calls for.Corporate impactThrough responsible practices,companies can be part of the regenerative dynamics and contribute positively to communities and ecosystems,fostering sustainability and long-term prosperity.222024 AXA Foresight Report2024 AXA Foresight Report 132332.The enterprise has entered a period of reinventionIn response to the pressing challenges of climate change,crises,and technological upheavals,The Emerging Enterprise project embarked on a groundbreaking journey to envision the future of corporations and their operations.Collaborating with over 40 businesses,a trade union,researchers,and other stakeholders,the project employed a unique blend of foresight and imagination.Through workshops and the creative input of science fiction writers,participants crafted 12 scenarios depicting companies in 2050.These narratives serve as catalysts for reflection,offering insights into the evolving nature of enterprises and their potential roles amidst change.33.Daniel Kaplans reason to love the future.Co-founder of the Plurality University“At first glance,its hard to love a future where climate change is likely to make life harder for most of us.However,times of crisis are also times of reinvention.Im inspired by the will,the energy and the inventiveness of young people and artists in imagining,and sometimes experimenting,alternative and better worlds.Through them,Ican love a more open,diverse future a future that is not given,but constantly built and rebuilt.”CORPORATE IMPACTDISCOVER 10 MODELS(OR REASONS)TO EMBRACE THE FUTURE.I The MarketrixA Marketrix is dedicated to extending the definition of what is considered a commodity.It firmly believes that price is the best possible indicator of the value a society places on things.II The Private Public ServiceA Private Public Service is the commercial provision of an“essential”service which was previously provided by a public institution.These companies have emerged either as a result of the withdrawal of public bodies,an explicit demand for“disruption”.III The EnterpoceneWhile they do not set out to change the world,they strive to avoid its degradation with a cause no harm mentality.Their day-to-day objective is to reconcile business goals with social and ecological imperatives.IV The Corp BNamed after the B Corp enterprises that flourished in the early decades of the 20th Century,CorpB companies are built around a specific purpose thats considered to be of public interest.The best measure of success for a Corp B is to have fulfilled its purpose,to the point that its existence is no longer necessary.V The ReactivatorIn 2050,the operations and supply chains of many companies are regularly disrupted by lack of energy or water,heatwaves,pandemics,and geopolitical or financial crises.A Reactivator is a company that has transformed these dysfunctions into its business model.VI The ZombIncA ZombInc is a company whose activity clearly no longer corresponds to the needs and constraints of the times,but which nevertheless continues to operate both out of self-interest and because many other ZombIncs have a vested interest in each others survival.VII The Commons ManagerIn 2050,the increasing scarcity of essential resources such as water,energy,and land for agriculture is prompting a growing number of communities to manage them as“Commons.”The Commons Manager manages them on behalf of their communities.VIII The SocietorIn 2050,the traditional mechanisms of society have broken down.Societors enable human groups to form societies on their own terms:defining criteria and signs of belonging,adopting shared rules,creating their own history,culture,and institutions,and even developing their own economy.IX The GuildSimilar to the mediaeval merchant companies,the Guilds of 2050 provide professionals with in-demand skills(IT specialists,marketers,construction craftsmen,maintenance specialists,crisis managers etc)with a stable or even lifelong job.X The Automated Autonomous Organization(AA0)An AA0 is a company that relies on digital technologies,in particular artificial intelligence,cryptography,and blockchain,to automate virtually all tasks.Its end goal is to have zero human employee.Discover more on the Emerging Enterprise on www.plurality-university.orgVIVIIIIIIVIIIXVIVIIIX1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 1535.Demand is growing for new skills to create a sustainable future Creating a world that meets the needs of both humanity and the planet will require a green transition in step with digital transformation,according to the European Commission.Strong education and training systems that provide the appropriate technical and soft skills will be crucial for the viability of these transitions.For instance,reducing the STEM gender gap,essential for both green and digital technologies,might potentially lead to an improvement of EU GDP by up to EUR 820 billion in 2050.From this observation,The Butterfly Project was born,in collaboration with La Jolie Prod,Lumia,and AXA Climate,offering a digital training program for pioneering companies looking to embark on the regenerative journey.The Butterfly Project aims to assist companies in transitioning to regenerative practices,wherein they operate as living systems within planetary limits.Participants are encouraged to reconnect intimately with all living beings,human and beyond,as they navigate the path to regeneration.The Cost of Mind Ill-Health:The direct link between peoples mind health and their productivity at work is well established.In fact,an es-timated12 billion working daysat a cost of US$1 trillion are lost every year globally to depression and anxiety alone,according to the World Health Organization*.Up to 4%of GDP is for-feited due to mind ill-health.*World Health Organization WHO guidelines on mental health at work(2022).The Reality Check:AXAs most recent Mind Health Study*found that three quarters of employ-ees around the world experience at least one work-related psychological issue,such as excessive tiredness,loss of energy,trouble sleeping,feelings of worthlessness and eating disorders.Nearly a quarter of employees(23%)have taken sick leave over the last 12 months,citing their mind health as the cause.This figure rises to more than a third(38%)among young workers.2 out of every 10 employees said they experienced a burnout in the past 12 months and a quarter have needed emergency time off to recuperate during their careers.*2024 AXAs Mind Health report“Mind your health in the workplace”.The Optimistic Horizon:Yet,there are plenty of reasons to be optimistic,as more and more compa-nies are recognizing the tangible ben-efits of protecting the mind health of their employees,both from an indi-vidual and business perspective.Employers are signing up to frame-works and reporting systems that provide guidance and practical tools for supporting employees.Organiza-tions are adapting their culture to en-courage open conversations around mind health,backed by aware-ness-raising sessions and training to reduce stigma and bust common myths.Skills development is especially rel-evant for managers,who are often the first to recognize the early signs of anxiety and depression among team members.With the right train-ing,they can then take measures to reduce stress and signpost people to expert support.Changing work programs and promoting a work-life balance with flexible hours can all help to boost the mind health of em-ployees.By helping their people to flourish,companies improve performance and also retention,as mind health support is increasingly valued by employees as a reason to stay.Pro-gressive companies are taking steps to break down stigma and barriers to healthcare,helping their employees to regain control over the future.34.Companies are boosting the mind health of theiremployeesCORPORATE IMPACT1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 1736.“The hospitalityindustry has a vital role in shaping sustainableimaginaries”Brune Poirsons call to actionCORPORATE IMPACTThrough the lens of a net zeroemissions agenda,what are someof the key sustainability challengesfacing the hospitality industrytoday?The sustainability challenges in the hospitality sector are multifaceted and interconnected.One of the primary challenges lies in reimagining the way we travel.Currently,theres a trend of traveling farther,with more people,and for shorter durations,all facilitated by an aviation industry that isnt aligned with planetary boundaries.To address this,we need to offer alternative travel experiences that are closer to home,longer in duration,and blend business with leisure,thereby reducing the carbon footprint associated with long-distance travel.Additionally,theres a need to tackle the carbon footprint of hospitality buildings,which contribute significantly to global CO2 emissions.This involves rethinking the design and operation of buildings to minimize energy consumption and emissions.Furthermore,the agriculture sector paradoxically plays a significant role in hospitality due to the large volume of meals served 150 million meals a year.Our choices regarding food sourcing,menu construction,and culinary practices directly impact biodiversity and environmental sustainability.Therefore,promoting sustainable agriculture practices and sourcing locally can mitigate these impacts.Ultimately,social responsibility is also a crucial aspect.With a vast workforce in the hospitality industry,its essential to provide opportunities for employment and skill development while ensuring fair labor practices and inclusivity.Redefining luxury experienceshas become intertwined withpromoting sustainability.How doyou see this shift as an opportunityto elevate customers on moresustainable practices?The shift towards redefining luxury experiences as sustainable presents a unique opportunity to educate customers about responsible travel practices.True luxury today lies in experiences or products that enhance well-being without causing harm to the planet or society.I dont see how something can be deemed luxurious if it creates more problems than it solves.By aligning luxury with sustainability,we can challenge the notion that ecological responsibility equates to deprivation.Which in return helps create new imaginaries and desires for more sustainable products and experiences.Luxury hospitality brands have the platform and resources to lead by example and showcase how sustainability can enhance the overall travel experience.Through storytelling and immersive experiences,customers can learn about the environmental and social impacts of their choices while still indulging in luxury.For instance,offering tours of local farms that supply the hotels cuisine allows guests to connect with the source of their food and understand the importance of sustainable agriculture.ambition intoTransforming ambition intoconcrete initiatives on theground is crucial for the future ofhospitality.How Accor is innovatingand implementing new practices at the local level?At Accor we are dedicated to translating this ambition into tangible actions at the local level to advance sustainable hospitality practices.Obviously,we tackle material issues mentioned in question 1.And one significant initiative involves revamping dining experiences by shifting from buffet-style meals,known for their high food waste,to la carte options featuring locally sourced ingredients.This not only about reducing waste but more broadly,to rethink our experience by creating a virtuous circle that also includes supporting local farmers and protecting biodiversity.Additionally,we prioritize offering experiential gifts to guests,such as guided tours of sustainable attractions or visits to local artisans,promoting cultural exchange and environmental awareness.Moreover,we empower employees to lead sustainability efforts through training and recognition programs,ensuring sustainability remains a central focus in our daily operations.In a rapidly evolving world where environmental concerns are taking center stage,the hospitality industry faces significant challenges.From sustainability to redefining luxury,and the need to rethink customer experiences,these complex issues require innovative and committed approaches.Lets delve into the future of hospitality with Brune Poirson,Chief Sustainability Officer at Accor.With experience spanning both public and private sectors,including roles in French Parliament and as Secretary of State for the Ecological Transition,Brune offers valuable insights into the hospitality industrys challenges and opportunities.Finally,what makes you optimisticabout the future,and how wouldyou define your reason for loving it?I find optimism in the face of unprecedented challenges.Were at a pivotal moment where the digital and environmental revolutions intersect,offering significant opportunities.Its a chance for individuals and society to reflect on our responsibilities and shape our collective trajectory.Do we actively engage in guiding these changes,or do we remain passive observers?Personally,I believe in the power of individuals to impact society and shape the course of humanity.Despite the enormity of the task,I remain convinced that we hold the reins of our destiny and have the capacity to influence it significantly.As Camus said,“one must imagine Sisyphus happy”.1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 19of change”.ChangeNOW is a summit that has become in few years the worlds largest event of solutions for the planet.Every year we gather 1,000 solutions that come from all over the world.We gather also around them 30,000 participants,including investors,media,talents,elected representatives,top Executives but also ministers,experts scientists,artists,activists,indigenous people and the general public.I mean people who,in a way,dont usually cross path naturally.Whats more exciting in the corporate world that seeing polarization be broken?That people who can be presented as opposites can be seen talking together?Speaking for myself I strongly believe that the role of cooperation is essential in the transition.At ChangeNOW,we witnessed impactful encounters,like the presidents of COP15 and the Great Green Wall Initiative(a huge project to revegetate Africa from East to West)meeting for the first time.Additionally,an ocean protection fund raised its initial million euros at our summit and grew into the worlds largest fund.Many startups and innovators collaborated with major groups and expanded globally,reaching millions of households across 20-25 countries.The need to invent inspiring new stories So many solutions exist.Many innovations and entrepreneurs are here now.What they need is to be supported,to be discovered and their solutions to be adopted.Beside cooperation there is also something else:today we strongly need enthusiasm.We must have the desire to see the transition happen,the desire to take part in this ecological transition.We must aspire to see the future in a positive way.What we need today is new narratives that give back hope.New narratives that can inspire.Act,here and now,to defeat fatalismMy reason to love the future is to see every year thousands of individuals and companies committed to a better world.Thousands of men and women who want to act and put all their intelligence at the service of what I think is the greatest challenge Humanity has ever faced.We actually all know that for every tenth of a degree of global warming we avoid,we save millions of lives and species.So dont be frighten:we can still act and we need to act!Ill give you an example of something that happened at ChangeNOW.A Slovenian solution called Planet Care showcased microfiber plastic filters for washing machines.These filters combat the release of microplastics into water systems during washing cycles,a major source of ocean pollution.At the event,Planet Care met Brune Poirson,then Secretary of State for ecological and inclusive transition.This encounter led to a new law in France,mandating microplastic filters in all new washing machines by 2025,potentially saving 500 tons of microplastics annually.This example demonstrates the power of concrete actions and collaboration.Lets act together because action brings hope.As President Barack Obama once said,we are the first generation to feel the effects of climate change,but also the last one who can do something to change it now.37.“What we need today is new narratives that give hope”Rose-May Lucotte is the co-founder of ChangeNOW,a key player and facilitator of the environmental and social transition,which for the past 3 years has been organizing the biggest summit for planet solutions.Last October,she guested in Ircam Centre Pompidou to our“100 reasons to love the future”event dedicated to women.She made us aware of the importance of the cooperation between private,public and citizen players,and the role of new narratives in accelerating the ecological and social transition.Rose-May Lucotte at the special womens edition of“100 reasons to love the future”at Ircam Centre PompidouCORPORATE IMPACTI remember my first business school class.It was 18 years ago and I remember clearly when the teacher asked“what is the primary mission of a company?”.After letting his students think about it for a short time,he said in a tone like an offer you cant refuse“the primary mission of a company is to maximize profit”.And that was it.I was 20 at the time and I just couldnt imagine that the next 40 years of my life would be devoted to such a cold mission.So a new quest began for me at the time.A quest for the meaning I would give to my life as well as to my career and the companies I would join.So I started working for eight years in healthcare marketing before embarking in a new entrepreneurial journey serving companies for whom profit is not an end in itself but a means to accomplish a greater mission.We call these companies“our heroes of change”because their mission is to act towards a more sustainable and more humane world.Networking to save the planet at the ChangeNOW summit It was for me quite a logical step when I launched ChangeNow in 2017 in a mission to accelerate the development of“our heroes 1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 21Environment&scienceDelving into the realms of science and innovation holds key to an optimistic future,especially for our planet.Through their synergy,we can develop sustainable solutions,paving the path for a brighter tomorrow.Mihos research centers on solar flares and storms,caused by violent explosions in the Suns atmosphere.Giant clouds of solar material are thrown into space,which can eventually reach the planets of the solar system.“On Earth,we witness these phenomena in the form of beautiful auroras around the poles.But our technology is also vulnerable to these events,with direct impacts on different industries,from civil aviation and navigation systems to electric grids and first emergency response.Through my work,I hope to improve space weather predictions for the future.”One of Mihos personal reasons to love the future is that she works on the ESA/NASA Solar Orbiter project,which is the closest humankind has ever been to the Sun,less than one third of the Sun-Earth distance,withpowerful telescopes on board.“Understanding our Sun goes beyond our own solar system.The knowledge we gain about how the Sun affects the Earth and the other planets of the solar system helps us understand the interactions between planets orbiting other star systems.We now have the capability to explore the atmospheres of these planets and assess whether they could harbor life.”All this talk about distant planets and life elsewhere in the universe may give the impression that Mihos real reason to love the future is the prospect of travelling to these faraway places.“On the contrary,”she says.“I hope,I truly hope that the knowledge we gain about the universe will make us universally conscious about how our planet is the best place we could ever live on,and how we need to protect it.This is our home:our Earth is our past,our present,and our future too.”The secrets of the sunMiho Janvier,Sophie GarcinEditions AlisioMiho Janvier is a physicist at the European Space Agency,who believes humanitycan get closer to the future by reading the signs written in the stars.Actually,just one star,in particular.As a solar storm chaser,Miho studies the star that we cannot seen in the night sky.The unique star that gives us life here on Earth.The Sun.38.Studying the Sun reconfirms the special nature of Earth2024 AXA Foresight Report2024 AXA Foresight Report 23The Ocean Risk and Resilience Action Alliance(ORRAA)is driving the creation of a new global ocean finance ecosystemThis ground-breaking alliance of insurers and financiers wants to protect the critical impact buffers and biodiversity reservoirs that provide food,social and economic security to billions of people and businesses across the world.Their mission is to build the resilience of 250 million climate vulnerable coastal people by 2030,deploying at least USD$500 million of investment into coastal and ocean resilience through the development of at least 50 novel finance and insurance products.For example,Ocean Eye is a unique platform in Indonesia that conserves marine biodiversity by collecting data and financial payments for wildlife sightings.The platform enables marine tourists such as scuba divers,cruise,or resort clients to report animal sightings and make micro payments that benefit coastal communities.As a result,these payments incentivise locals to protect endangered or vulnerable species and ecosystems.By connecting the tourism industry further with conservation driven profits,Ocean Eye will build more sustainable and regenerative livelihood options,influencing good fishing practices.Scientific research can help reverse coastline pollutionEuropes coastlines stretch from the Arctic Circle in Scandinavia down to the warm waters of the Mediterranean Greek islands.Along the way,these unique environments reveal a vast diversity of animal and plant life,culture and heritage.Today,40%of Europes population lives in a coastal region.However,these meeting points of land and sea are also home to growing levels of human-made pollution,including plastics,microplastics,chemicals,pharmaceuticals and pesticides that risk affecting health at a faster rate than climate change.A resilient,Net Zero and economically secure world is not possible without a healthy,regenerating ocean.But with organizations like ORRAA and projects like Tara Europa finding innovative ways to tackle a problem that affects all of humankind,there are reasons to be hopeful.The Tara Europa Expedition led by Tara Ocean FoundationTo slow down and reverse the impact of pollution,scientists on the Tara Europa expedition are exploring the interactions between our planets two major ecosystems to better understand how the organisms within them respond to natural and human-made environmental changes.This innovative research programme on marine biodiversity has a particular focus on adaptation to anthropogenic pollution at the land-sea interface.The schooner TARA has sailed along more than 25,000km of the European coastline,gathering samples from 19 countries to calculate the impact of rivers,agriculture,cities and ports on sea life.More than 40 teams of scientists are measuring the effect of synthetic products on marine microbial communities,developing molecular biomarkers of pollution and using the knowledge gained to explore remedial strategies.Biologists expect to discover many new species and also reveal how the key biodiversity groups functions.The Ocean,one of the planets greatest assets,is in crisis.Each of the challenges it faces from the rising sea temperatures that cause extreme weather events to plastics pollution,overfishing and biodiversity is serious enough on its own.Together,they feel unsurmountable.Yet,thats not the attitude of two far-sighted programmes that aim to rebuild and restore blue nature.39ENVIRONMENT&SCIENCE1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 2541.Edutainment revolution:bridging science and fictionThe emergence of Edutainment as a popular media genre unites Science Fiction talent with real scientists,mak-ing scientific literacy accessible.This strategy combats anti-scientific narra-tives,conspiracies and disinformation warfare and fosters curiosity about the future.42.Life-Centric urbanism:designing for all species Urban design shifts to a life-centric approach,accommodating not only humans but all ecosystem species.This approach fosters circular man-ufacturing,food,and water systems,moving towards a symbiotic relation-ship with naturae.Disregarded life forms like yeasts,fun-gi,lichen,and bacteria are now rec-ognized for their roles in regenerative urbanism and architecture.43.Microbiome health and environmental toxins:a global shift Understanding microbiome health highlights the impact of environmental toxins on human health.Biotechnolo-gy advancements address pollution,promoting global transition to regen-erative economies.44.Pandemic resilience and inclusivity:prioritizing health Resilience strategies prioritize insights from immunocompromised individ-uals and deploy air filtration systems.This proactive approach seeks to mit-igate both immediate mortality and long-term population health damage.45.Inclusive adaptations beyond physical disabilities Adaptations for disabilities and neuro-divergence expand beyond traditional wheelchair,blind,and deaf access in public spaces,led by innovators with diverse experiences.The redesigning of spaces considers chronic pain,mi-graines,ADHD,autism,PTSD-related sensory hypersensitivity,cancer,in-flammatory,and autoimmune condi-tions.This inclusive approach ensures safer,more comfortable,and compas-sionate environments,fostering great-er participation from individuals previ-ously excluded from public life and the economy.46.Transitioning towards wellbeing economiesAs societal values shift,theres an ex-pansion of knowledge,experience,and embodiment economies,moving away from material luxuries towards prioritizing wellbeing.Initiatives for lifelong learning,adult creativity,and play experiences support mental health and community building.Em-phasizing bodily awareness fosters pleasure,joy,and fulfillment.These changes aim to decrease the damaging effects of extractive economies,lead-ing to increased global wellbeing,pop-ulation health,and social satisfaction.The Protopia Futures Framework,developed by Monika Bielskyte,challenges the traditional dichotomy of Utopia and Dystopia by offering a more proactive approach to envisioning livable futures.Unlike Utopias idealism or Dystopias pessimism,Protopia emphasizes continuous re-evaluation and iterative learning,rejecting absolutes for the celebration of human agency and choice.It criticizes both doomerism and techno-solutionism,advocating for solutions rooted in social,cultural,and political change rather than technological fixes alone.Protopia Futures prioritizes the voices of marginalized communities and promotes a shift towards a regenerative paradigm,emphasizing interconnectedness and life-centric design for sustainable human thriving.Here are(some of)her reasons to love the future.ENVIRONMENT&SCIENCEMONIKABIELSKYTE Founder of PROTOPIA FUTURES1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 27Science and scientific discovery are the first steps in technology development.And so much of our everyday lives,today and in the future,are about technologi-cal advance.Im not only thinking about progress in the digital space.Strides have been made in medicine,materials and areas that promote our understand-ing of our role as a species.In any given week,new insights are published about the evolution and adaptation of our species or of insects or other animals that roam this planet.Then there is new knowledge gained through artificial in-telligence tools to develop new antimi-crobial drugs or model the 3D shape of hitherto shapeless proteins.This new knowledge aids in extending our lives,bettering our quality of life or under-standing why we feel the way we do.My great-grandmother lived to be 98 years old,until 1980,20 years before the internet was mainstream.Almost three decades before the first iPhone.And when global life expectancy was 61 years,12 years less than today(she was an outlier).She was a child of the late European 1800s.In relative terms,tech-nological progress then was modest.Most of the changes in her lifetime were tied to wars.Peace generally equates to more economic growth.And economic growth is causally linked to scientific progress.There are positive feedback loops and investments in science drive an economys and social growth,in-cluding life expectancy.Scientific discovery is tied to the tools available and,conversely,science de-velops new tools which will be used in science.This leads to potentially expo-nential scientific returns and economic returns.And,the quantum era has not yet begun.The start of the current AI era will feel transitional when quan-tum tools become available to all.Al-ready now some traditionally analog processes like engineering prototyping are leaping into in silico optimisation thanks to AI.Increasingly complex,be-spoke,and personalised solutions and answers(and questions)will be found instantaneously,with insignificant use of energy and zero carbon.All thanks to scientific advance.So,expect to love the future because some big scientific gains are heading our way.Patrick Noack Executive Director Duba Future Foundation 47.“I feel positive about the future becausewe will see unprecedentedscientific progress,which is a force for good,progress and peace.”ClimateSeed is an enterprise driven by a vision to cultivate a sustainable world for future generations,acknowledging the pressing necessity to address human-induced climate change.With the IPCC highlighting the significant impact of human activities on climate change,achieving a 43%reduction in global greenhouse gas emissions by 2030 is imperative.Recognizing the pivotal role of organizations in emission management and carbon mitigation efforts,ClimateSeed has developed software and expertise to simplify the measurement and reduction of GHG emissions and transparently manage the financial contribution to carbon removal and avoidance projects.Supported by the AXA Impact Fund since 2021,ClimateSeed combines financial and climate expertise to accelerate climate actions globally.Its innovative platform manages emissions and drives climate mitigation,focusing on environmental benefits and UN Sustainable Development Goals.As part of 1%for the Planet,ClimateSeed collaborates internationally,aiming for maximum positive impacts.The journey towards climate action is ongoing,highlighting the significance of emission reduction and impactful projects.ENVIRONMENT&SCIENCE1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report 292024 AXA Foresight Report49.Leaving a Smaller Footprint on YourWay OutScott Smith&Susan Cox-Smith,founders ChangeistOne way to love the future is to leave a smaller physical and environmental footprint in that fu-ture as we exist in the present.We should aspire to become a resource rather than occupying so-matic space,using carbon-intensive materials,and re-entering the environment in less than Earth-friend-ly ways.This approach is precisely what the green funeral movement has been working toward on a person-by-person basis over recent decades and the sustainable practices of this movement have been expanding as laws change,tech-nologies improve,practices become more acceptable and more people wish to depart this world in an environmental-ly-positive,or at least neutral,way.Considering current Western standards for funeral and burials may not be a happy topic,but its a reality all around us.Bear with us here.Presently,somewhere be-tween 55and 60 million people worldwide leave this life each year.In places such as Western Europe and the US,the norm for a funeral is either a traditional burial with embalming and costly coffin,or increasingly,cremation.Thats a lot of energy expended on the way out similar to the way many of us spend our lives,using heat,chemicals and manufactured materials to address our needs.According to data from the funeral industry and various environmental advocacy groups,in the United States for example,around 1.5 million tons of concrete are used for burial vaults,as well as around 100,000 tons of steel.Both of these are carbon intensive in their production.Throw in embalming,which uses 4.3 million gallons of chemicals,and caskets,which use 20 million board feet of hardwood,some of it rainforest wood and we need a lot of the here and now to go on to the Great Beyond.Oh,and these materials(and ourselves)leach chemicals and m etals like iron,cop-per,lead,zinc,and cobalt into the soil and groundwater over time,according to the Green Burial Council.The alternative,cremation,releases 535 pounds of carbon each time.A green burial,by contrast,involves burial in simple card-board or particleboard box,or fabric shroud in a legally designated natural burial area.Unlike a carbon intensive traditional burial,the GBC estimates a green burial se-questers around 25 pounds of carbon,provides nitrogen,phosphorus,and potassium to the soil,and also sequesters additional greenhouse gases.At the moment,green burials account for about 5%to 10%of burials in the US,and similar numbers are estimated for Europe.Now,imagine increasing that number anoth-er 10%alone over the next 50 years.Using an estimate of around 3.37 billion deaths over this timespan,given the data above and estimates of the carbon required on aver-age to produce the materials needed,that additional 10%shift in practices would save 8.4 million tons of concrete,and 561,000 tons of steel.Additionally,taking cremations out of the picture,and adding in those carbon savings,an additional 10%shift would enable a savings of almost 93 million tons of carbon emission over the next 50 years.Doubling or trebling the amount of green burial practices could double or treble the emissions savings.How we are treated at the end of life is obviously a personal choice.More and more people are choosing differently a shift in focus to become part of living systems and not a continuation of personal consumption of resources.It may be strange to think about,but a green burial may be an un-der-considered but powerful way to love the future.ENVIRONMENT&SCIENCE2024 AXA Foresight Report2024 AXA Foresight Report 31123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676869707172737475767778798081828384858687888990919293949596979899100ENVIRONMENT&SCIENCEJoin the journey:Empower Your Future with a Custom GPT Dialogue and Discover Your Reason to Love the Future!https:/ 1STEP 2STEP 3ChatGPT 4ChatGPTTHE SOLAR SYMPHONY OF TOMORROW In the heart of a bustling future metropolis,Miho Janvier,a renowned solar physicist,embarks on a mission to bring the stars closer to Earth through her grand project,the Solar Symphony.Teaming up with visionary artist Rocio Berenguer,they conceive a future where humanity lives in harmony with the sun,culminating in a masterpiece of interconnected satellites transforming solar activity into breathtaking light and sound displays visible from the ground.Their collaboration symbolizes the fusion of science and art,inspiring humanity to embrace the future as a realm of boundless wonder and potential.As the Solar Symphony debuts to global audiences,Miho and Rocio stand together,witnessing the realization of their shared vision.Their creation not only brings the sun nearer but also serves as a poignant reminder that the future,despite its challenges,remains a realm of awe-inspiring beauty,beckoning exploration and appreciation.MidjourneyDALL-EMidjourney Bot BOT “A vibrant and detailed illustration of the future world,showcasing people engaging in various activities like sports,art creation,technology exploration,social interaction,environment protection,all set against an imaginative backdrop filled with futuristic buildings,flying vehicles,solar panels,holographic displays,greenery,and other symbols representing advanced civilization.The illustration focuses on face details,sharp edges,intricate details,and is rendered in a hyper realistic,high-resolution style with HDR,a wide-angle lens,depth of field effects,and cinematic lighting.”We asked ChatGPT to create an image prompt based on the entire magazine content,and then we asked DALL.E to create an image based on that prompt.Then,weve uploaded this image to MidJourney with the feature/describe,it leads toWhen“100 ReasonsTo Love The Future”meets GenAI50.Text-to-image by ChatGPT and DALL.EImage-to-text with Midjourney 52.ChatGPT 4:tell us a story on good reasons to love the future(in a creative style)!51.Reusing this description as a prompt to/imagine a new visual in MidjourneyMidjourneyMidjourney Bot BOT 1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 33What attracts you to the future?I love the future because it is a non-deterministic place.Future is an abstract space,producing the unknown.Future is also a neutral space to talk about today,operating as a perspective tool to understand and change the point of view about our worlds.The way I envision the future is the way I relate to the unknown and unknowable.Future as an unknown remains blurry and viscous,an intangible space for variations,proliferations and multiplicity.Why have you turned from dystopias to utopias?In my early work,I worked on dystopias without knowing it.Im an adult now,Im more responsible,so I should propose the world I would like to live in.Criticizing something is always easier than proposing something new.Reacting out of fear is always easier than acting out of desire and hope.So,I created my first utopia on the future of politics.I imagined a G5 like the G8 or the G20 but instead of the major economic powers,I brought together the worlds major living powers:mineral,plant,animal,human and machine kingdoms.They organized a planetary meeting to discuss and debate the future of life on earth.What is the essence of your work?I like to create prospective narratives,questioning the imaginaries of the future,mainly on the topics of technology and ecology.I write stories,then bring them to life with stage shows and interactive installations.My expertise lies in dramaturgy and staging,on how to translate a vision into a discourse and a discourse into a story and a story into a poetic and aesthetic experience.53.Imagining utopia is more responsible than retreating to dystopia3 questions with Rocio Berenguer,author,artistic director and utopian.ArtWe believe in the power of art to inspire and enrich our lives,as it is crucial for projecting into the future,fostering imagination,serving as a medium of expression,and providing alternative perspectives.2024 AXA Foresight Report2024 AXA Foresight Report 35AI systems with human-competitive intelli-gence can pose profound risks to society and humanity,as shown by extensive research1 and acknowledged by top AI labs.2 As stated in the widely-endorsed Asilomar AI Principles,Ad-vanced AI could represent a profound change in the history of life on Earth,and should be planned for and managed with commensurate care and resources.Unfortunately,this level of planning and management is not happening,even though recent months have seen AI labs locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one not even their creators can under-stand,predict,or reliably control.Contemporary AI systems are now becoming human-competitive at general tasks,3 and we must ask ourselves:Should we let machines flood our information channels with propagan-da and untruth?Should we automate away all the jobs,including the fulfilling ones?Should we develop nonhuman minds that might eventual-ly outnumber,outsmart,obsolete and replace us?Should we risk loss of control of our civili-zation?Such decisions must not be delegated to unelected tech leaders.Powerful AI systems should be developed only once we are confi-dent that their effects will be positive and their risks will be manageable.This confidence must be well justified and increase with the magni-tude of a systems potential effects.OpenAIs recent statement regarding artificial general intelligence,states that“At some point,it may be important to get independent review before starting to train future systems,and for the most advanced efforts to agree to limit the rate of growth of compute used for creating new mod-els.”We agree.That point is now.Therefore,we call on all AI labs to immediately pause for at least 6 months the training of AI sys-tems more powerful than GPT-4.This pause should be public and verifiable,and include all key actors.If such a pause cannot be enacted quickly,govern-ments should step in and institute a moratorium.AI labs and independent experts should use this pause to jointly develop and implement a set of shared safety protocols for advanced AI design and development that are rigorously audited and overseen by independent outside experts.These protocols should ensure that systems adhering to them are safe beyond a reasonable doubt.4 This does not mean a pause on AI de-velopment in general,merely a stepping back from the dangerous race to ever-larger unpre-dictable black-box models with emergent capa-bilities.AI research and development should be refo-cused on making todays powerful,state-of-the-art systems more accurate,safe,interpretable,transparent,robust,aligned,trustworthy,and loyal.In parallel,AI developers must work with pol-icymakers to dramatically accelerate develop-ment of robust AI governance systems.These should at a minimum include:new and capable regulatory authorities dedicated to AI;oversight and tracking of highly capable AI systems and large pools of computational capability;prov-enance and watermarking systems to help dis-tinguish real from synthetic and to track model leaks;a robust auditing and certification ecosys-tem;liability for AI-caused harm;robust public funding for technical AI safety research;and well-resourced institutions for coping with the dramatic economic and political disruptions(especially to democracy)that AI will cause.Humanity can enjoy a flourishing future with AI.Having succeeded in creating powerful AI systems,we can now enjoy an“AI summer”in which we reap the rewards,engineer these sys-tems for the clear benefit of all,and give society a chance to adapt.Society has hit pause on oth-er technologies with potentially catastrophic effects on society.5 We can do so here.Lets enjoy a long AI summer,not rush unprepared into a fall.In the history of commensurate care,recent months have seena race to understandBecoming Human.We must ask the fulfilling ones:should we develop mindsthat number and control our potential?The rate of growth for creating nowshould be key to set shared safety andensure that this does not meanstepping back from powerful art.Pools of water help causeHumanity,a flourishing in summer,which reaps a chance to pause:we can enjoy a long rush.54.How I wrote this poem?This“erasure”poem is entirely made up of words and phrases I took from the open letter published by leading AI experts in 2023 that called for a pause on LLM experiments such as chatGPT.As a poet and AI designer,I believe that Large Language Model(LLM)offer us an uncanny opportunity to be more fully human:as AI takes on more systematic,analytical tasks typically associated with rational intelligence,we can reclaim our emotional sensitivity as the token of our humanity.Long sidelined as“hobbies”,practicing creativity and art turns our sensitivity into emotional intelligence for a more caring approach to ourselves,society and our environment.ART1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 37The Circus(1928)Charlie Chaplin“In January 2024,the first Mickey Mouse cartoon entered the public domain,as well as Charlie Chaplins The Circus movie,Raoul Dufys artwork and early Cole Porters songs.More and more creators are sharing their art online texts,paintings,music using Creative Commons license,building the largest public library the humanity has ever known with an estimated 2.5 billion CC-licensed open works available online in 2022.Challenges are numerous to main-tain such a dynamic:artists must be able to live from their art,and their rights have to be guaranteed facing the growing usage on generative AI.We undoubtedly face a bright and creative future.”Steamboat Willie(1928)Walt DisneyARTCultural knowledge and iconic artworks had never been so easily reachable for anyoneRaoul Dufy(1877-1953)The Visit of the English Squadron to Le Havre,1925FRANCOIS HOUSTE fictionist at Plan.Net France and author of MikrodystopiesCole Porter(1891-1964)At the heart of our world,there exists an uncharted domain,where time flows between the distant shores of the past and the yet-unknown future.Have you ever felt as though you were embarking on a journey through space and time,all while remaining perfectly still?Its a sensation that transcends the boundaries of our physical reality,a phenomenon made possible by the profound power of sound.Think of those moments when a familiar melody stirred something deep within you,carrying you on a wave of emotion to distant memories and unexplored feelings.Music has this incredible ability to transport us,to elevate our spirits,and to connect us to the very essence of our humanity.But what makes sound so impactful,so profound in its ability to shape our perceptions and experiences?Its because sound has become more than just a means of communicationits a gateway to a world of inclusivity,emotion,and connection.In our rapidly evolving world,the landscape of sound is undergoing a transformation.Were entering an era of cross-modal,polysensorial experiences,where sound becomes a medium for innovation and creativity,bridging the gap between the physical and the digital.In a world facing daunting challenges-inequality,climate change,technological disruption-sound emerges as a beacon of hope.It brings people together,engages our primal instincts,and spreads happiness in the face of uncertainty.I am driven by a desire to harness the power of sound,technology,and innovation to create positive change in the world.For me,sound is not just a languageits a tool for transformation,a catalyst for progress,and a beacon of hope in an ever-changing world.And with optimism as my guide,I am determined to make a difference,one sound at a time.Soundscapes:journeying beyond the unreachable through sound www.fragmentsofextinction.org/listen-to-ecosystems/by Nathalie Birocheau,CEO of IRCAM AMPLIFY55.56ART1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report 392024 AXA Foresight ReportARTJEAN-YVES LE PORCHERChief Experience Officer78.Fred AgainRenowned English producer(for Ed Sheeran in particular),he is a pioneer in electronic music who pushes the boundaries of creativity by using vocal samples of unknown individuals found on the internet to shape original songs.Through this approach,he creates an authentic connection with his audience by capturing“real”diversity.79.FlumeFlumes experimental work on“Palaces”,in collaboration with Damon Albarn from Gorillaz,merges the distinctive styles of both artists to create an innovative sonic experience.Flumes artistic director,Jonathan Zawada,explores a design work where he reinvents an imaginary bull into computer-generated images.81.Jamie XXJamie XXs work,founding member of The XX,is a unique fusion of electronic music and experimental pop,characterized by captivating rhythms and atmospheric melodies.80.Oklou“Gods chariot”transports us into a fascinating sonic future through her avant-garde compositions,skillfully blending experimental elements with contemporary aesthetics,thus inviting us to embrace the evolution of music towards new horizons.She offers introspective work where she questions gender issues.77.A.G.COOKA electronic music producer and founder of the label PC Music,known for his futuristic and experimental style.He is one of the emblematic artists of the“hyper pop”style and the artistic director of the pop star Charlie XCX.In the ever-evolving realm of sound and technology,the future holds endless possibilities for innovation and creativity.In this curated selection,we invite you to embark on a journey into music.Featuring 20 tracks and 5 artists carefully chosen by Ircam Amplify for their groundbreaking contributions to the sonic landscape.These songs and artists are 25 good reasons to love the future.57.leavemealoneFred Again USB 2022 3:4258.Make Me FeelJanelle Mone Dirty Computer 2018 3:1459.ImmaterialSophie Oil of every pearls un-insides 2018 3:5260.3D(feat.J.Harlow)(A.G.Cook Remix)Jung Kook 3D:The Remixes 2023 3:0861.911(Charli XCX&A.G.Cook Remix)Lady Gaga Dawn of Chromatica 2021 4:1362.CellophaneFKA Twigs MAGDALENE 2019 3:2463.Palaces(feat.Damon Albarn)Flume Palaces 2022 4:5164.Frontier PsychiatristThe Avalanches Since I left you 2001 4:4765.The Divine ChordThe Avalanches We Will Always Love You 2020 3:0766.Gods ChariotsOklou Galore 2020 3:0367.Dans la radioJacques Palaces 2022 4:5168.SoloLous and The Yakuza Gore 2020 3:1569.InvisibleNTO Invisible 2021 5:4070.NanPolo&Pan Caravelle 2017 3:1071.ParadeRone Tohu Bohu 2012 6:2172.Sur la plancheLa Femme Psycho Tropical Berlin 2013 3:4973.Only One ManMoodod Only One Man 2021 3:1074.GenesisGrimes Visions 2012 4:1575.Piany PianinoThylacine Transsiberian 2015 4:3276.RedboneChildish Gambino Awaken,My Love!2015 5:26Curated by20 titles,1h20 min2024 AXA Foresight Report2024 AXA Foresight Report 4112345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697989910082.In the digital age where innovation drives progress,its imperative to ensure that every voice is heard and every idea has the opportunity to flourish.However,a stark reality persists:women face significant hurdles in accessing the financial support needed to turn their entrepreneurial visions into reality.SISTA,a collective of female entrepreneurs and investors,stands at the forefront of a movement aimed at dismantling barriers and fostering gender equality in the startup ecosystem.Founded in December 2018,SISTA champions the cause of women-led businesses by advocating for increased investment and support.Looking ahead,SISTA has set ambitious goals:to finance 25%of startups founded or co-founded by women by 2025,increasing to 30%by 2030,and ultimately reaching 50%by 2050.These targets reflect not only a commitment to gender parity but also a recognition of the transformative power of female leadership in shaping the digital economy of the future.10%of the total number of startups created7%of the total number of fundraising rounds completed2%of the total amount raised by startups100male teams raise4X LESSthan 100%male teams4Mraised by 100male teams VS 17M raised by 100%male teamsWOMEN ARE UNDERREPRESENTED IN STARTUPS,AT ALL LEVELSThey represent only:Financing women-led businesses will bridge the gender gapSource:Sista x BCG 2023 study WomenLets discover women from diverse backgrounds who share their innovative imaginaries,fostering an inclusive and positive visions.Illustration:Mathilde Vigneau-?la_vignette2024 AXA Foresight Report2024 AXA Foresight Report 43I probably appreciate all this even more looking back at when I was younger.I couldnt go straight into a girls team I was the only girl in a boys team and the parents didnt like it much.You not only had to compete against your peers on the pitch but some of the stigmas off it.Now,as the game has grown,young girls have the access to be whatever they want to be and can enjoy womens football more easily on television or live.When I think about what is to come,I do so with a burgeoning desire to repay those who have helped me in the past.Without my mum,Genna,I simply wouldnt be where I am now.Shes had to sacrifice a lot in her life to have given me so much.That is my motivation every day;to be the best I can be and make sure I can put a smile on her face.My 13-year-old brother has also just started playing football and coming to my games he loves it.I tell him to stick with it,it might be hard sometimes but if you put in the work then the results over time will all be worth it.My other little brother and sister love coming too.Its so special for me to think theyre walking up those steps,being drawn in by the big green pitch and willing me to do well.I just want to be a role model to them.More so than ever,the little girl that I once was,can look to the future and say with conviction“that could be me”.WOMENWomens football continues on an upward trajectory.Incredible strides have been made in recent years to help remove participation barriers for young girls,who now have more female role models than ever to look up and aspire to,as well as those in the mens game.A lot of that is owing to the success of the Lionesses the England womens national football team.More tickets are being sold,were not only playing at mens stadiums but,in some cases,selling them out entirely.That can only be beneficial for everyone through from grassroots to the elite levels.Increasingly,bespoke facilities are now being built and tailored to the needs of us as womens athletes to enable us to perform at the highest level.Getting to come into an amazing fa-cility like the AXA Melwood Training Centre is only going to maximise the chances of myself and others fulfilling their potential.The pitches are great,the equipment in the gym likewise and the staff here behind the scenes put a lot of work in to help us become the best we can be.We have a young,talented squad here and I believe the aim is very much for us to grow and develop together over the next few years.There are several internationals,with different back-grounds,and Im privileged enough to get to tap into their experience and know-how each day.Not just to de-velop on the pitch but to make me a more rounded individual.For me personally,its my first sea-son in the Womens Super League so its about trying to get as many min-utes on the pitch as I can and leaving everything out there for this football club.Representing my country at youth level is also something that has given me an immense amount of pride.Matt Beard has been great as a man-ager and as a person-I honestly love the guy so much.He cares just as much about the human being as their performances when we cross the white line.He knows that sometimes I want ev-erything to happen in the here and now.I can get frustrated on the pitch,but hell put his arm around me,tell me when Im doing well or give me the technical detail on how to fine-tune aspects of my game too.Having a manager like that is important.Official Global Training PartnerWHY I LOVETHE FUTURE Forward Mia Enderby signed for Liverpool FC Women in July 2023 after leaving Sheffield United where she won the Young Player of the Year award in 2021-22.After putting pen to paper with the Reds,she said:“Its like a dream come true.Ever since I was young Ive wanted to play in the Womens Super League.”83.2024 AXA Foresight Report2024 AXA Foresight Report 4512345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697989910084.By imaginingthe future,women help make it fairer for allAs a historian and independent researcher,Sibylle Duhautois has researched how studying the future can bring forward new issues and ideas to influence the future in a beneficial way.Her work has charted the rise of interest in futurology,and especially the role of women in proactively searching for the secrets of tomorrow.By championing their foresight,she is continuing in their footsteps.Sibylle Duhautois,historian&independent researcher“I love the future because its connected to the past.Studying the history of future studies is fascinating.It allows us to understand how imagining positive scenarios can contribute to making them happen.”“During the Cold War,peace activists believed that no nation or company could solve the most important problems of the future alone.On the contrary,discussing long-term issues was vital for international cooperation.For example,they created scenarios that showed how atomic disarmament could release resources to develop newly decolonized countries.”Peace activistsI found that the growing interest for global futures was institutionalized during the seventies and eighties through the creation of foresight programs by Unesco,Unitar and other international organizations.Unesco created its first foresight program in the early 70s.It stopped in 1974 but the same year,a“Project on the future”was created at Unitar,an international institute which was then regarded as the United Nations think tank.The idea that the future had to be studied and discussed at an international level gained momentum,but it became clear that conflicting visions for this global future coexisted and that creating scenarios or models about the future was a way to express ones values and preferences for this shared future.Unesco/Unitar“American sociologist Elise Boulding asserted that women bring a different life experience from men,which is required to develop the skills that men often lack,particularly in the field of peace building.She worked to ensure that womens voices are heard during discussions to think and build the world of the future to create a better place where women have greater responsibilities,equal to those of men.”Elise Boulding“The first international pacifist association to take an interest in future studies was an all womens association:the Women International League for Peace and Freedom.As early as 1962,this association organized conferences in which activists explained that building positive images of a disarmed future was a better way of convincing public opinion and decision-makers than stirring up fear of a nuclear future.”1960s1970sGraciela Chichilnisky“Argentine mathematician and economist Graciela Chichilnisky worked on the creation of models that would optimize global resource distribution so that the countries of the South could develop while still respecting the environment.She insisted on the importance of prioritizing the“basic needs”of all individuals,rather than maximizing the global GDP of each country.”WOMENCOLD WAR8485868788899091929394959697989910012345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182832024 AXA Foresight Report2024 AXA Foresight Report 4787.We will age much better than our predecessors,not just increasing length of life but health of life.There are so many promising innovations when it comes to Alzheimers,cancer and other diseases.86.Humanity will be so much wiser than today,about what it wants to be on this planet,what values matter,what makes a life worth living we are already moving away from a society of having towards a society of being.85.I am also sure that the current conflicts will lead to something better down the line after all,conflict has the function of clearing a disagreement,opening the way for something new.Just as there is post-conflict trauma,there is also post-conflict growth.Florence GAUBResearch Director at NATO&member of World Economic Forum Future Council Culture&societyIn a world where we embrace living together,inclusion and diversity in culture and society become vital.Fueling with optimism and unity,towards a horizon enriched by our differences.Photos Andreas O.Loff2024 AXA Foresight Report2024 AXA Foresight Report 49“The future is a story we tell each other,not a given,”says Daria Krivonos,CEO of the Copenhagen Institute for Futures Studies,which helps people and organizations to use the future for the betterment of society.“If you compare the current situation to the past,well always prefer the current situation.”Initiatives that prioritize future generations through innovative governance demonstrate the power of collective foresight and provide a source of real optimism,says Daria.For example,Wales has appointed a Future Generations Commissioner whose job is to help public bodies and those who make policy to think about the long-term impact of their decisions on e.g.,robotics,AI and longer lifespans.In Finland,the government has identified the need to develop anticipatory innovation governance(AIG),which embraces radical uncertainty and complexity,and adopts a prospective and proactive stance towards them.Daria Krivonos,CEO of the Copenhagen Institute for Futures Studies“Amidst growing dystopian narratives,this global movement offers hope,illustrating that our tomorrows are not deterministic.By empowering youth with foresight as a discipline,we equip them with agency to reimagine and reshape our world,battling the poverty of imagination and ensuring a narrative of hope and possibility for all,”said Daria.Daria welcomed the United Nations 8 Common Principles on Future Generations:Promote a vision for future generations based on human rights and equity Pursue fairness between present and future generations Recognize and foster an interconnected world Think,plan and act with future generations in mind Ensure meaningful representation of future generations and their interests Foster open science,data and knowledge for the future Foster a future-oriented organizational culture and capabilities Strengthen inclusive partnerships and global cooperationCULTURE AND SOCIETYThe Silence des Justes(SDJ)association is dedicated to fostering a more inclusive and supportive society by promoting diagnosis,medical support,and social integration for individuals with autism from childhood to adulthood.With a multidisciplinary team of 480 individuals,the association has developed support methods extendable beyond Frances borders,fostering collaboration worldwide.Participation in the inaugural Autism Africa Expo in Douala in 2023,involving 26 African countries,heralds a new era of cooperation for the common good.It reflects progress and hope in the autism community.Stphane Benhamou (Founder&General Manager of Silence des Justes)&Daoud Tatou (in charge of International Relations at Silence des Justes)“The inclusion of autistic individuals has significantly improved through healthcare professional training,public policies,and school integration.Over 30 years,SDJ has refined its support with internal assessment teams,a research department,and reliable healthcare partners.We emphasize inclusion at all levels,from preschool to the workplace.Ve have extended our efforts beyond borders to Morocco,Senegal,and Mauritania.Knowledge sharing is crucial,and our fight against autism is universal,transcending color,religion,or borders.And our commitment in Africa stems from years of experience.Too many tragedies have compelled us to take action.The association welcomes children from all countries,whose mothers,often alone,leave their homes,families,and friends to find themselves in France in precarious and dangerous situations to save their autistic children.Our ambition is to help African countries address autism and end these unnecessary displacements.Raising awareness,training,establishing diagnostic centers,and sharing our tools are our priorities.The first Autism Expo in Africa was a success.We are preparing the second edition in Morocco in April 2025,with the inauguration of a 2,500 m2 center dedicated to autism close to infrastructure,hospitals,and schools.”891234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 51“To be avant-garde is to know what is dead”wrote Roland Barthes.Well said.Its certainly a good start.Once weve got past the period of stupefaction at the pile-up of crises that are knocking us about,once weve understood that we need to say goodbye to our sense of self-satisfaction,and that no“big thing”will magically usher us into a new era of humanity,we need to embrace the inevitable.Reconnect with the long time scale.The future and the world to come are not just the Olympic Games,and the horizon that must occupy us does not end in 2030.One good reason to love the future is that the world has already turned upside down.And in this new situation,its very exciting to contribute to inventing new approaches,to be part of this moment in history,in the shape of a civilizational turning point.Entering the future,then,means inventing new models that encourage us to enter the future head-on;to draw together new grounds for satisfaction,the curves of new performance indicators,and to continue,in the meantime,to run the store,reassure our customers,and take care to involve our family,friends,colleagues and suppliers.Patiently,resolutely.Step by step.Thats what we aim with“Le Club des Bons Anctres”that we launched last year.A collective that gathers enlightened companies,willed to think about long term with us!Jrme Ruskin and Blaise Mao are the founders,along with Thierry Keller,of Usbek&Rica,a magazine and creative studio that accompanies its readers and partners in exploring major future challenges.For 15 years,they have respectively ensured the general management and editorial direction of Usbek&Rica,with vigilance but optimism.“We can transform our food systems without losing what food gives us in connection,sustenance and joy!”91CULTURE AND SOCIETY“When it comes to food,as with many industries that are re-liably predictable and stable,we often feel stuck between the pull of the future,in more technologically adaptive solutions,and the weight aof history,which reminds us of our traditions.Both are important for our survival and for our happiness.While its easy to think that one leaves us in the past as a atrophying relic,just as easily we could say the other strips us of our humanity.So whether we foray into the history of our ancestry,move forward respecting our cultur-al norms,or run towards synthesized replicas of the analog,we move forward knowing food remains the enabler of our survival,the emotional spark of happiness,and the enduring bonding agent that gives us a reason to be present in a mo-ment with others.It is in this complexity we must see food systems as its the best way we will be able to continue to live maintaining our relationship with food,even if the external conditions around it change.”JOANNA LEPOREForesight expert with over 10 years experience in the food industry901234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 53Annina Lux Senior Manager Head of Strategic Foresight Capgemini Invent Germany*United Nations:Wired for Good:Digital Connectivity for a Sustainable Future93.Secure a digital tomorrow“Our digital tomorrow will be secure.Advances in digital immune systems,dynamic threat intelligence and response as well as cyber resilience will help combat ever-evolving cyber threats.Through these developments,we can be secure even in the increasingly complex cyberthreat landscape and with technological advances,such as artificial intelligence or cyber physical systems.This will enable us to fully leverage technological advances for a positive future for us individually and society as a whole.It will increase our trust in technology,making our digital identity and the digital space in general safe and allowing the digital sphere to become an environment and technology a motor for positive change.”94.Global connectivity momentum“In the future,global connectivity will support us in establishing a diverse and inclusive global community.With the narrowing digital divide,people all over the world will be able to connect,exchange and collaborate.Between 2015 and 2023,we saw a massive rise of people in the least developed countries with access to internet,from 7%to 36%*.More and more people are gaining access to the digital world.This will not only redefine our(geographic)horizons,but will also boost our understanding of each other and multiply our power to solve emerging and future challenges.It will help us create a world truly working together for good.By building and living global connectivity through increasing internet and device access and establishing and embracing exchange formats globally,we can create a positive global tomorrow for and with everyone.”“The Campus attracts talented people from all walks of life,”added Yann.“Im relieved to see the gradual disappearance of the stereotypical hoodie-wearing geek,which deprived us of a whole diversity of profiles.”Annina Luxs 2 REASONS TO LOVE THE FUTURECULTURE AND SOCIETY92.Working together to make cyber a remedy,not a poisonYann Bonnet,founder of Cyber Campus,explained the urgent need for cyber collaboration.“To meet the many challenges facing our society(environment,health,etc.),digital technology can be a remedy,”he said.“But it can also be a poison,as it brings cyber threats that should not be underestimated.Rather than turn a blind eye,we must be aware of these risks and develop the capacity to manage them.”The Cyber Campus is a project initiated by the President of the French Republic to bring together the main national and international players in the field of cybersecurity.The campus hosts companies(large groups,SMEs),public services,training organizations,researchers and associations on the same site,uniting the cybersecurity community and developing synergies between these different players.To date,more than 160 members,from a wide range of sectors,have taken their place on the campus.1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 5595.Building Bridges:Singapores journey towards digital equity96.AfricanLife CentricDesign1.Land As A Co-designer:Honour the living world and anchor all design within it,not merely“on top”of it.Embrace the symbiotic relationship with the ecosystem,considering it as an active participant in the design process.2.Regenerative Co-creation:Design solutions that emulate and honour natures circular processes,fostering restoration,nourishment and renewal.Incorporate intergenerational exchange,drawing wisdom from generations past,and building for the generations to come.3.Communal Interdependence:Recognise how every individual impacts and contributes uniquely to the community,rooting the design process in tangible communal needs and broader human aspirations.4.Recognising Origins:Immerse ourselves in local design histories,integrating Indigenous knowledge and ancestral wisdom into the futuring and foresight practice.5.Centering the Periphery:Prioritise the voices and perspectives of previously marginalised African narratives.6.Design as Ritual:Design valued as a sacred,mindful process connected to larger systems and narratives of human need for creative expression and spiritual belonging.7.Adaptive Resilience:Design for flexibility and adaptability in the face of change.Instead of committing to a static approach,focus on continuous iteration and learning in light of emerging realities.African Life Centric Design Principles include:Written by:Sharmini Johnson,Lead Strategist(Futures)/Smart Nation Strategy Office;Ministry of Communications and Information SingaporeCULTURE AND SOCIETYDigital has intensified as a driving force over the past decade.While the economic dividends have been significant,rapid digital innova-tion and deployment have reinforced existing social vulnerabilities.Fortu-nately,conversations about using dig-ital for social betterment have become more pervasive.There are significant opportunities for governments,busi-nesses,and citizens to co-create a dig-itally inclusive society where no one is left behind.Digital tools have already opened new pathways for digital inclusion hither-to impossible.For example,Chat GPT has been used to bridge the commu-nications gap between those who are neurodiverse and neurotypical.Artifi-cial Intelligence(AI)has enabled cus-tomised learning for students thereby reducing the equity gap.Assistive tech-nologies have enabled persons with disabilities to participate productively in the workforce.Yet not everyone might have access to these benefits.Furthermore,as the use of digital tools becomes more ubiquitous,the inclusion gap could widen if there are no deliberate inter-ventions to uplift the have-nots.This is why digital inclusion is a critical policy outcome to ensure that people are em-powered to participate in digital com-munities,benefit from service delivery and improve their lives through digital.Singapore has adopted a whole-of-government,multi-stakeholder ap-proach to implement policy interven-tions.Policy design has also been par-ticipatory,given the complex nature of digital inclusion.Government agencies work with people and private sector players to promote digital literacy,pro-vide upskilling opportunities for better job prospects,and to design safe online spaces.Policy interventions tend to play catch up with change.Given the fast-evolv-ing digital landscape,foresight is ex-tremely important to anticipate new threats and opportunities in digital inclusion.At MCI,scenarios have been helpful to explore the intersections between AI,culture,and society,to reveal unex-pected outcomes.For example,the Fu-tures team has explored the trade-offs between AI-algorithm decision-mak-ing and policy objectives.We have worked with science fiction authors to build challenging speculative futures in a technology-centric Singapore.Methods such as these complement policy design so that new vulnerabili-ties are identified before they arrive in full force.In a world where there is no set play-book to govern in a digital age,Sin-gapore will continue to explore these approaches to ensure people remain at the heart of technology.User-centered design focused on individuals as users,whereas human centered design considered individual human needs.Offering a shift from the focus on individual human needs,Humanity-centered design recognised the influence of community on human well-being.Finally,Life-centered design ushered in the recognition that all life forms are interconnected and crucial for human thriving.The latter direction has inspired a more regenerative design approach.African Life Centric Design(ALCD)merges Life-centered design principles with African creation philosophies and knowledge.Unlike other futurisms,ALCD envisions futures from the realities of Africans on the continent,not external perceptions.These futures are built on lived experiences,socio-cultural practices,local understanding,and aspirations.Ultimately,ALCD positions African perspectives as central to futures design,with Africans leading the design process.AUTHORS:PUMLA MASWANGANYI,AMUKELANI MUYANGA,MONIKA BIELSKYTE1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 57CULTURE AND SOCIETYTe Korekoreka:navigating futureswith Mori WisdomBy Victoria Mulligan Aotearoa New Zealand Futures NetworkIn Aotearoa New Zealand,matauranga Mori(indigenous science and knowledge)is highlighted in projects like Tokona te Rakis*Te Korekoreka*-a practical guide for future making that integrates the past and the present to support a course of action shifting from ones current reality to a better one.As Tangata Tiriti(someone whose immigrant ancestors became New Zealanders as signatories of the Treaty of Waitangi),Im excited and hopeful about the potential projects like this have to create meaningful progress.The Te Korekoreka model emphasises that the concept of future-making is embedded in Mori tradition through a long-standing practice of adaptation and foresight.Appropriately for a race of master navigators,it acknowledges the courage required to navigate new beginnings,whether in personal journeys,career paths,or community transformations.Further,it suggests that movement towards a desired future must be powered by multi-generational wisdom.A Te Korekoreka approach to futures advocates for a meaningful shift toward frameworks that align with the unique context of Aotearoa New Zealand.By honoring and applying knowledge passed down by their tipuna/ancestors,Mori can create futures that resonate more deeply with their identity and values.Te Korekoreka is less about change and more about a respectful,measured evolution towards futures where Mori wisdom has become a cornerstone of how we live,work,and relate to one another and the environment.This vision offers a profound promise of progress,rooted in the knowledge and practices that have sustained Mori across generations.Its a hopeful,deliberate step toward a future where the richness of Mori heritage shapes an inclusive,thriving Aotearoa.While futures thinking may be novel to the global north,for indigenous cultures such as Mori it is merely a new way of talking about something theyve been doing for millenia.9798.Engaging with the future has transformative potential to foster social inclusion.UNESCOs participatory methodology,implemented via Futures Literacy Laboratories(FLL),applies systems thinking and trends analysis to support individuals and institutions question the status quo and our assumptions about the future,toward collaborative innovation.But why an emphasis on the future when we so urgently need to focus on the present?If we dont plan,prepare,and develop our skills to adapt to the uncertainty the future holds,we risk facing more profound consequences than those we confront today.This can also lead to empowerment and resilience,as opposed to fear and despair.As we navigate through challenging times of rapid change,futures literacy and foresight offer a catalyst for social change.UNESCO has implemented over 115 FLL on various topics as one way of not merely responding to the challenges of the present but actively preparing for the uncertainties of tomorrow.By leveraging the power of futures thinking toward future action,we can achieve better futures for humanity.Christine Kavazanjian,Project Officer,Futures Literacy&Foresight,UNESCODesign your own FLL using this guide.Curious?Futures Literacy LaboratoryAn essentials guide for co-designing a lab to explore how and why we anticipatePlaybook1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798991002024 AXA Foresight Report2024 AXA Foresight Report 59“100 Reasons to love the future”at AXAThen it was picked up by entities all around the world.In Italy,top 100 leaders gather for a day of workshops and discussions with Copenhagen Institute for Future Studies speakers.In Egypt,the concept was used to

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    Our impact in 2023Impact Report 2023Who are we?Our purposeAXA worldwideAbout AXAAs one of the global leaders in insurance and asset management,AXA has always made protection its core business.Through its three business lines property and casualty insurance;life and health insurance;and asset management the Group helps individuals,companies and societies to thrive.AXA has been committed to the greater good since the beginning.Whether through AXA Hearts in Actions charity initiatives,the AXA Research Funds scientific support or AXAs action against climate change,the Group has always been committed to better understanding and preventing risks.Created 39 years ago,the AXA brand positions the Group as a day-to-day partner and encourages people to confidently move forward in life.“Act for human progress by protecting what matters”94customers51countriesAn international leaderin employee benefits1European and#5 global real asset manager147,000employees and agents M#1global leader in P&C commercial lines2European insurer 2U n l o c k t h e F u t u r eCare&Dare Attracting and retaining talents,upskilling our teams and fostering our culture of excellenceStrong capital management Disciplined execution and reinvestment for future growthOur 2024-2026 strategic plan at the service of shared valueA X A a t a g l a n c eOur 2023 performance1.Insurance premiums collected during the period.Other revenues represent premiums and fees collected on activities other than insurance (i.e.,banking,services and asset management activities).2.Subject to approval at the Shareholders Meeting on April 23,2024.Driving growth Promoting structural growth Expanding selectively Growing distributionScaling up excellence Boosting technical capabilities Enhancing operational excellence(new technologies and AI)Expanding AXAs commitment to society Extending our inclusive insurance offers Pursuing our commitments for the climate transition Unlock the Future( 3%vs.2022 IFRS4)( 6%vs.2022 IFRS4)( 8%vs.2022 IFRS4)( 12pts vs.2022)( 16%vs.2022)Gross written premiums1Underlying earningsUnderlying earnings per shareSolvency II ratioDividend per share2CustomersMore than 50Bn in claims paid to our customers450M in climate-related claims paid in FranceEconomyMore than 30Bn invested in the economy each year 11.7Bn paid in tax and social contributions,of which 36%in FranceEmployees8.6Bn in salaries and bonuses paid to our employees17,000 recruitments globallyShareholders3.8Bn in dividends paid to about 300,000 shareholdersAlmost 30%of employees are AXA shareholders,holding 4.34%of the capital1037.63.31 2271.98 Bn Bn%3Relying on strong governanceAXA Board of Directors on December31,20231.Antoine Gosset-Grainville Chairman of AXAs Board of Directors2.Thomas Buberl Chief Executive Officer of AXA3.Martine Bivre Employee Representative4.Helen Browne Employee Shareholder Representative5.Bettina Cramm Employee Representativer6.Clotilde Delbos Director a7.Rachel Duan Director r8.Guillaume Faury Director r9.Ramon Fernandez Director a f10.Andr Franois-Poncet Director1 f r11.Grald Harlin Directorf12.Isabel Hudson Director a f13.Dr Angelien Kemna Director a14.Ramon de Oliveira Directorf15.Rachel Picard Director a16.Marie-France Tschudin Director r716491261038514151311211.Mr.Andr-Franois Poncet,whose mandate will expire at the close of the Shareholders Meeting on April 23,2024,will not be replaced.The composition of the committees will be reviewed during a meeting of the Board of Directors held after the Shareholders Meeting.afrIndependent DirectorAudit CommitteeFinance&Risk CommitteeCompensation,Governance&Sustainability CommitteeDiscover the updated governance on our siteU n l o c k t h e F u t u r e4G o v e r n a n c eComposition of the Boarddirectorsindependent directors1women members2directors out of 16 are non-French nationals average age of directors1662.556859.51.76.92%of directors excluding employee and employee shareholder representatives.2.46%of women excluding employee re and employee shareholder representatives.Committee rolesCompensation,Governance&Sustainability CommitteeEntirely composed of independent members(except the director representing the employees who sits on the Committee pursuant to the Afep-Medef recommendations),this Committee notably issues proposals on:the appointment or reappointment of members of the Board,the Chairman,the members of the Executive Management and the persons who effectively run the company,as well as on the composition of the Board Committees;the compensation of the Chairman of the Board of Directors,the CEO and the Board of Directors.The Committee also reviews(i)the principles and conditions for determining the compensation of the Groups executives and allocating performance shares to employees;(ii)the Groups sustainability strategy as well as any public material sustainability commitments.It also examines certain human resources topics,including AXAs policy with respect to professional equality and equal pay.In 2023 5 meetings 88%attendanceAudit Committee The main missions of this committee,comprised entirely of independent directors,are to:monitor the financial reporting process and the integrity of the publicly reported results;monitor the adequacy and effectiveness of internal control and risk management frameworks;form an opinion on the effectiveness,performance and independence of the Groups internal auditors;make a recommendation regarding the appointment of the statutory auditors and the independent third-party(ies)responsible for providing assurance on the Groups sustainability reporting;monitor the extra-financial reporting process and review the extra-financial performance statement.The Audit Committee receives presentations from the Group Chief Financial,Risk,Operating,Compliance and Security Officers as well as from the Group General Counsel and the Group Head of Internal Audit on financial and non-financial risks.In 2023 7 meetings 97%attendanceFinance&Risk CommitteeComprised of 60%of independent directors,the Finance&Risk Committee examines:significant disposals,acquisitions and strategic partnerships;granting of sureties,guarantees,endorsements or warrantees exceeding a certain amount in favor of third parties;securities issuances giving a claim to the companys share capital,repurchase programs and financing operations that could substantially change the companys financial structure;the impact of the main orientations and limits of the Asset Liability Management policy on the Groups capital and solvency.The Finance&Risk Committee reviews any subject relating to the Groups financial management;the risk appetite framework developed by AXAs Executive Management for financial,extra-financial,insurance,reinsurance and operational exposures as well as AXAs risk strategy and appetite(especially in matters of reinsurance)and overall risk tolerance limits.In 2023 9 meetings 98%attendance%yrsuilding strategic momentumManagement Committee on December31,2023315713101412921611458161.Thomas Buberl Chief Executive Officer of AXA2.Frdric de Courtois Group Deputy Chief Executive Officer,Finance,Operations,Strategy,Risk,Underwriting3.George Stansfield Group Deputy Chief executive Officer General Secretary,oversight of AXA Japan,AXA Greater China(China and Hong Kong)4.Nancy Bewlay Group Chief Underwriting Officer5.Guillaume Borie Chief Executive Officer AXA France6.Helen Browne Group General Counsel7.Patrick Cohen Chief Executive Officer European Markets&Health8.Ulrike Decoene Group Chief Communication,Brand&Sustainability Officer9.Hassan El-Shabrawishi Chief Executive Officer International Markets110.Franoise Gilles Group Chief Risk Officer11.Scott Gunter Chief Executive Officer AXA XL12.Alban de Mailly Nesle Group Chief Financial Officer13.Marco Morelli Executive Chairman AXA Investment Managers14.Karima Silvent Group Chief Human Resources Officer15.Anu Venkataraman Group Chief Strategy Officer,Head of Investor Relations16.Alexander Vollert Group Chief Operating Officer,Chief Executive Officer AXA Group Operations1.Including Africa,India,Turkey,the Middle East,Latin America,Thailand,Indonesia and the Philippines.Discover the updated governance on our siteU n l o c k t h e F u t u r e6G o v e r n a n c eDevelop a strategy for the entire Group,integrating feedback from the fieldManagement CommitteePartners GroupPush the boundaries and widely explore opportunities.Assist the Management Committee with the implementation of strategic action.40 Group leaders,including the 16 members of the Management Committee.Global Leadership NetworkAround 300 AXA Group senior executives,mostly members of entities Executive Committees.Share vision from the field and adapt the Groups strategic priorities to the divisions operational realities.Implement AXAs strategy,meeting the needs of customers as closely as possible in each division.Share priorities,explain and engage:create shared ownership of a strategy aligned with the needs of AXAs markets and stakeholdersEmployees and agentsThese professional experts share the objective of bringing the Groups strategy to life and making it tangible for all AXAs stakeholders.AXA has 147,000 employees and agents worldwide.7“Act for human progress by protecting what matters”AXAs purpose is both a compass for the strategic decisions taken by the Group and its entities,and an everyday framework for our employees.Because we can only manage what we can measure,the Group has introduced a tool for monitoring our action and reinforcing our impact:the AXA for Progress Index.This index reflects the twofold ambition of AXAs sustainability strategy:to be both a leader in the fight against climate change and an inclusive insurer.It is composed of seven commitments that the entities can refer to and the Group can provide data on to monitor the progress achieved.These commitments cover three fields in which AXA intends to set an example:Formulating our purposeManaging our progressAchieving our purposeAs an investor,we want to support the real economy in its transition toward a decarbonized economy.As an insurer,we want to protect populations,particularly the most vulnerable,from risks,as well as accelerate the creation of insurance solutions that support the transition towards a more sustainable and less carbon-intensive economy.As a responsible company,we want to act together to reduce our carbon footprint and increase our positive impact.8U n l o c k t h e F u t u r eE n a b l e r sMeasuring our steps forward:the AXA for Progress Index Maintain our leadership as a responsible company 1.2023 edition of the S&P Corporate Sustainability Assessment(CSA),which measures the sustainability performance of companies.Top performers can be included in the Dow Jones Sustainability Indices(DJSI).CSA/DJSI1 81/1002.0Bn14MReach at least 1.7Bn in premiums on green business products and services by 2023Bring the number of customers covered by inclusive protection to 12million by 2023 Act as an insurerTarget for 2023:1.7BnTarget for 2023:12MAchieved in 2023Achieved in 2023-34%As a part of our long-term goal of achieving carbon neutrality,reduce carbon emissions by 20%by 2025 from our operations(energy,travel and digital solutions)and offset residual emissionsTrain AXA employees in climate issues Act as a responsible companyTarget for 2019-2025:-20%Target for 2023:100hieved between 2019-2023Achieved in 2023-47.6).9BnReduce the carbon intensity of AXAs general account assets by 50%by 2030 Reach 26Bn in green investments by 2023Act as an investorInitial target for 2019-2025:-20%Target for 2019-2030:-50%Target for 2023:26Bn Achieved between 2019-2023Achieved in 20239Events conflicting with the hypotheses used to set the level of our reserves,develop our products or set prices could have repercussions on our results and performance indicators.Unsuitable or faulty processes,controls or systems,as well as human factors and external events could harm our profitability,reputation or performance.The Group and its activities are subject to extensive regulation,in-depth regulatory monitoring and potentially unfavorable legal decisions in the countries in which it operates.Unfavorable conditions on capital and credit markets could impact our ability to meet our liquidity needs and access capital,or increase the cost of capital.A negative change in the economic climate and financial markets at a national,continental or global scale could have an adverse effect on our business and profitability.Managing current risksAnalyzing the risks associated with our activitiesIntegrating non-financial issuesAXA must remain a preferred employer for its employees and adapt to evolving work styles.The Group must ensure employee training and growth,while introducing policies promoting diversity and inclusion to prepare for talent renewal.AXA organizes sponsorship and volunteering initiatives.The Group also takes positive action as an insurer by increasing the share of solutions accessible to vulnerable populations.AXA must reduce its carbon footprint and the emissions from its internal operations(digital solutions,travel and energy).The Group also commits to positively impacting the climate and preserving biodiversity through its activities as an investor and insurer.The Group has a code of conduct and organizes anti-corruption training and processes.It also takes measures to protect its customers data privacy and ensure the responsible and ethical use of data.Market risksEmployer responsibilityRegulatory risksInclusive protectionCredit risksClimate change and biodiversity lossInsurance risksOperational risksBuilding on five priorities to manage our risks1.Independenceand effective riskmanagement2.A common framework for risk appetite3.A systematic second opinion on key processes4.Extensive use of our internal model based on robust capital metrics5.Proactive riskmanagementBusiness ethicsSee our URD1 0U n l o c k t h e F u t u r eE n a b l e r sExperts ranking of top 5 risks since 2018Understanding future risksThe 10th edition of AXAs Future Risks Report surveyed 3,500 experts and 20,000 individuals worldwide.“Polycrisis”is the word that sums up best the last three years,when the global Covid-19 pandemic was followed by numerous critical events:the return of war in Europe and renewed tensions in the Middle East,and increasingly extreme weather events as climate change took hold.In 2023,a new source of uncertainty has demanded attention:the rapid development in artificial intelligence(AI),with the emergence of generative AI and ChatGPT in particular.60of people think that our society needs to take risks to make progress.Key figures from the 2023 Future Risks Report74of people think that insurers will have an important role to play in protecting society from these emerging risks.75of experts agree that risks are becoming increasingly interconnected. 1820192020202120222023 Climate change Climate change Pandemics and infectious diseases Climate change Climate change Climate change Cyber security risks Cyber security risks Climate change Cyber security risks Geopolitical instability Cyber security risks Geopolitical instability Geopolitical instability Cyber security risks Pandemics and infectious diseases Cyber security risks Geopolitical instability Natural resources and biodiversity risk Social tensions and movements Geopolitical instability Geopolitical instability Energy risks Artificial intelligence and big data Social tensions and movements Natural resources and biodiversity risk Social tensions and movements Social tensions and movements Pandemics and infectious diseases Energy risks123451234512345123451234512345AXAs 2023 Future Risks ReportDiscover our 2023 Future Risks Report1 1External stakeholdersInternal stakeholdersCustomers,investors,organizations,regulators,expertsOpening social dialogueAll around the world,AXA is building dialogue with employee representatives,especially through the Groups European Works Council.Conducting internal surveys AXA develops internal surveys to understand employees needs and measure their physical and mental well-being.Surveying panels of experts and the general public Every year,AXA surveys 3,500 experts and 20,000 members of the general public on their perceptions of emerging risks (Future Risks Report),and 30,000 people aged 18 to 74 to assess mental health in the population(Mind Health Report).Building the future togetherWith experts,business leaders,scientists,writers,artists,NGOs and organizations,AXA Foresight explores ways to build a better future and overcome challenges with shared expertise and vision.This is the ambition of our“2024 reasons to love the future”program.Organizing specialist committees AXA organizes dialogue with groups of direct stakeholders to guide its decisions on specific topics.Co-building internallyAXA organizes numerous forums for discussion and best-practice sharing across the Group.Employees,partnersOrganizing dialogue with our stakeholders Supporting the scientific communitySince 2008,the AXA Research Fund,AXAs scientific philanthropic initiative,has supported the production and dissemination of academic research on the major challenges facing society.Read our 2023 Future Risks ReportRead our 2024 Mind Health ReportFind 2024 reasons to love the futureDiscover the AXA Research Fund1 2U n l o c k t h e F u t u r ewith our peersCo-build professionalunderstanding ofto jointContributeImprovewith authoritiesEngage in A leading force against climate change E n a b l e r sEngaging in global and local initiatives for societyUN PRI Principles for Responsible InvestmentUN PSIPrinciples for Sustainable Insurance An inclusive insurer dialogueAct alongsidecivil societystandardsthe challengesinitiativesInsurance Development ForumWomens ForumCollectifdentreprisespour uneconomieplus inclusiveFinancial Alliance for Women Businessfor InclusiveGrowth UN Global CompactTask Force on Climate-Related Financial Disclosures(TCFD)Net-Zero Alliances:Glasgow Financial Alliance for Net Zero(GFANZ),Net-Zero Asset Owner Alliance(NZAOA),Net-Zero Asset Managers Initiative(NZAMI)Task Force on Nature-Related Financial Disclosures(TNFD)Act4natureSustainable Blue Economy Finance InitiativeOcean Risk and Resilience Action AllianceCirculRAct for human progress by protecting what matters1 3Our resources Relational capitalnel94million customers We serve both corporate and individual customers.Human capital147,000 employees and agents Our workforces diverse range of profiles and professions enables AXA to be effective and innovative.We also work closely with our distributors:agents,brokers and bankers.Economic and financial capitalThe funds required for our business come from our equity,as well as our shareholders and bondholders.Stakeholder capitalWe work with external service providers and authorities.Social and environmental capitalWere putting financial inclusion and the climate transition at the core of our strategy,with a commitment to bring value to all our stakeholders in the long term.Our sustainable value creationOur purpose “Act for human progress by protecting what matters”Our balanced position P&C Protecting the tangible and intangible assets of individuals and companies.Life&HealthProtecting our customers health and funding their projects.Asset managementFinancing the real economy and major transitions.Life&Health P&C P&C commercial lines Employee benefitsCompanies:50%Individuals:50%Breakdown of revenues from insurance premiums35 0%1 4U n l o c k t h e F u t u r eVa l u e c r e a t i o nOur strategy Our value creation and sharing in 2023 For our customers More than 50Bn in payments made to our customers 450Bn devoted to handling climate disasters in France 14M customers covered by inclusive protectionFor our workforce 8.6Bn in wages and bonuses paid 17,000 recruitments worldwide eNPS:40 points For our shareholders 3.8Bn in dividends paid to close to 300,000 shareholders 30%employee shareholders(4.34%of the capital)For the economy and society More than 30Bn invested in the economy annually 11.7Bn paid in taxes and social security contributions 36%en France 23.5Bn in donations worldwide 79,482 volunteer acts 256M allocated since 2008 to scientific research through the AXA Research FundOur financial targets Underlying earnings per share 6%to 8%annually between 2023 and 2026 Underlying return on equity 14%to 16%from 2024 to 2026Cumulative cash remittance21Bn from 2024 to 2026Payout ratio75%of underlying earnings per share,including:60%from dividends(with dividend per share at least equal to previous year)and15%from an annual share buy-back programDriving higher growthScaling up our operational and technical excellenceExpanding our commitment to societyPioneering social innovationRigorous capital managementUnlock the Future1 52023Variation vs.20221Driving Progress 2023 targetsGross written premiums and other revenues2102.7Bn 3%Of which P&C53.0Bn 7%Of which Life&Health48.1Bn-2%Of which Asset management1.6Bn-2%Underlying earnings7.6Bn 6%Underlying earnings per share3.31 8%3%to 7%average annual growthCash remittance6.3Bn 1.1Bn2021-2023 cumulative:16.4Bn vs.target of 14BnUnderlying return on equity14.9% 0.4ptTarget range:13%to 15%Solvency II ratio227% 12ptsTarget:190%Dividend proposed per share1.98 16 23Investments in the economy30BnTaxes and social charges paid11.7BnNumber of people benefiting from inclusive coverage14M Our financial indicatorsOur social impact1.2022 results were previously reported under the IFRS4 standard which was replaced by IFRS17 from January 1,2023.2.Insurance premium collected during the period.Other revenues represent premiums and fees collected on activities other than insurance (i.e.,banking,services and asset management activities).Our 2023performanceSee our URDU n l o c k t h e F u t u r e1 62023Total workforce147,000Of which salaried employees113,696Proportion of all professionals44.4%Average age of salaried workforce41.3yearsAverage length of service of salaried workforce10.3yearsExternal recruitments17,000%employees working remotely85.3%employees having received at least one training course100%women among AXA leaders35.3%Employee Net Promoter Score(eNPS)40pts Our role as an employerOur environmental impact2023TargetGreen investments29.9Bn26Bn in 2023Warming potential of the investment portfolio2C in 202211.5C by 2050CO2 emissions linked to AXA operations-34%2-20tween 2019 and 20251.The 2023 warming potential will be available in AXAs 2024 Climate and Biodiversity Report.2.Between 2019 and 2023.P e r f o r m a n c eSee our Climate and Biodiversity Report1 7Recognized performanceFinancial ratingsSocial ratings and ethical indicesVigeoBloombergSustainalyticsSector leaderScore:68/100Included in the Bloomberg Gender-Equality Index in 2023ESG Risk Rating:16.3 Low riskOutlookS&PA StableMoodysAa3StableAM BestA SuperiorStableDJSIMSCICDPScore 81/100AAABSee our financial and non-financial ratingsU n l o c k t h e F u t u r e1

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