The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The financial materiality criteria were aligned to Vestas’ existing enterprise risk management (ERM) programme, including short, medium and long-term time frames and ranges that were adopted into a model from 1-5 (similar to Impacts). Rating for likelihood and financial impact was assessed for each time frame and topic, resulting in an expected ranking of risk and opportunity. See the information on page 69 in Basis for Preparation for more information.

The financial threshold for material was aligned with ERM to ensure that relevant sustainability-related risks and opportunities are included and prioritised along with general Vestas-specific topics. Consequently, sustainability-related topics were integrated in overarching annual decision making in alignment with the risk annual reporting wheel.

Connections between impacts, risks, opportunities and dependencies Most of the topics assessed for financial materiality were derived from the material impacts identified. Additionally, some were added and assessed based on dialogues with subject matter experts across the organisation. Financial effects such as fines, lost working hours or delays were identified and assessed by Group Finance.

In doing so, it was possible to list material financial sub-sub-topics on par with the material impacts, and assessing the interlinked financial risk and opportunity in a double materiality perspective. Vestas’ dependency on social and natural resources was also assessed by looking into key inputs such as social resources and key raw materials versus the current and future market situation.

The process to identify IROs started with our CSRD workforce reviewing all the sustainability matters in ESRS-1, Appendix A. Impacts were described and assessed in a tool including the entire gross list where materiality of each matter is determined by its positive or negative nature, actual or potential impact (most topics were actual) and the severity and likelihood of impact. The topics were listed to be assessed on a sub-sub-topic level.

Negative impacts are prioritised based on severity (considering scale, scope and irremediability) and likelihood. Positive impacts are prioritised based on scale, scope, and likelihood. Our impact threshold honours the principles: Inclusion of all impacts with "critical" severity and severity taking precedence over likelihood – all within timeframes consistent with the ESRS. This is the process to assess and prioritise impacts supported by a quantitative scoring methodology.

Examples of core activities in our upstream value chain are related to extraction of raw materials, refineries, smelters, components assembly and transport. Activities in our operations relate to project development, construction, manufacturing and service. Our downstream value chain mostly comprises activities in our customers’ scope, decommissioning and end-of-life solutions.

As demand for renewable energy is increasing, it also means that our value chain will scale significantly. It is therefore important that we address the risks that come with scaling and the heightened adverse effects across the value chain that come with growth. After assessing specific activities, business relationships, geographies, and other factors, the topics of climate change, circularity, biodiversity, human rights and health and safety have been found to represent overarching adverse impacts across our value chain and these are addressed in our current sustainability strategy and mitigation measures.

We have, however, found that more work is needed to assess our ability to influence biodiversity downstream. In addition, it is necessary to continuously manage risks when moving into new geographies and involving new business relationships.

The main assessment of our impact on people is informed by our Corporate-Wide Human Rights Assessment (CW-HRA), a high-level due diligence process to identify and assess negative human rights risks and impacts across our entire value chain.

Our CW-HRA involves consultations with external experts representing relevant rightsholders such as indigenous peoples, workers, affected communities, Vestas’ senior management and internal subject matter experts, to ensure we understand how affected stakeholders are impacted and that we adhere to local as well as international expectations. For more information about our CW-HRA see page 120.

The main assessment of our impact on the environment is informed by a global environmental mapping, which outlines the primary environmental risks across our business areas, and the processes and mitigating measures in place to manage them. The environmental due diligence mapping covers areas such as pollution prevention, energy efficiency, GHG emissions, biodiversity conservation, cultural heritage, and cumulative impacts. See the section Additional Information for our Statement on Due Diligence, page 211.

The social and governance specific assessments have been supported by materials such as our CW-HRA and social due diligence process, Vestas’ Employee Engagement Survey, our incident management system, EthicsLine cases, supplier assessments, audits, assessments of lobbying activities, rating platforms (DJSI, CDP and EcoVadis) and consolidated ESG data.

During 2024, we finalised our first double materiality assessment (DMA). The outcome of the process confirmed our current path and added a few new topics to our scope of materiality. Going forward, Vestas will revisit the DMA process annually to ensure we continuously monitor material impacts, risks, and opportunities (IROs).

We have, however, found that more work is needed to assess our ability to influence biodiversity downstream. In addition, it is necessary to continuously manage risks when moving into new geographies and involving new business relationships.

Vestas has adopted policies to manage material sustainability matters, focusing on climate change mitigation and adaptation. The general objectives of the policy include promoting risk-based thinking and managing material impacts related to climate change mitigation and adaptation. The policy addresses risks such as climate change mitigation, climate change adaptation, energy efficiency, and renewable energy deployment. The process for monitoring these elements involves the SQHE Policy and HSE Framework, which work together to ensure that the organization manages environmental IROs identified throughout the environmental sections of the sustainability statement.