Vestas' governance bodies consider impacts, risks, and opportunities supported by the structure of the Enterprise Risk Management (ERM) programme. The structure of the ERM Annual Wheel supports them in overseeing strategy, risk management, and trade-offs related to impacts, risks, and opportunities.

The features of the annual risk management and internal control systems are aligned with the annual integrated reporting process. Relevant information from the double materiality assessment and other operational areas feeds into the risk reviews and thereby also the annual information flow managed by the ERM, involving the Risk Committee, Executive Management Team, Audit Committee, and Board of Directors.

The scope of risk assessments for all relevant areas in terms of strategic, financial, operational, and compliance risks, including material sustainability topics such as climate change mitigation and adaptation, anti-corruption and bribery, working conditions, and human rights. In terms of risk prioritisation, they are aiming at enhancing methodologies for identifying, assessing, and managing risks. Our risk prioritisation methodology is based on an assessment of risk severity (based on likelihood and impact) and mitigation efficiency (evaluating the effectiveness of current mitigation actions). The final discussion of prioritisation related to persistent risks takes place in the Risk Committee. The long-term emerging risks and opportunities are further aligned with the overall strategy process.

The remuneration of the Executive Management team is linked to the results of Vestas’ financial and sustainability performance, through incentives. The annual process for selecting KPIs and setting targets for the incentives is based on Vestas’ strategic direction, and the KPIs are approved by the Board in the second quarter of the annual meeting cycle. The process includes input from each business area and leads to consolidated strategic prioritisation from the Executive Management and the Board when deciding KPIs and targets. For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.

The remuneration of the Executive Management team is linked to the results of Vestas’ financial and sustainability performance, through incentives. The annual process for selecting KPIs and setting targets for the incentives is based on Vestas’ strategic direction, and the KPIs are approved by the Board in the second quarter of the annual meeting cycle. The process includes input from each business area and leads to consolidated strategic prioritisation from the Executive Management and the Board when deciding KPIs and targets. For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.

For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.

For the Executive Management team, 10 percent of the short-term incentive scheme is linked to climate-related KPIs in the form of the KPI 'GHG emissions avoided.' During the year, no short-term incentives were paid to the Executive Management team linked to climate-related targets as the said targets were not met. The long-term incentives are not linked to sustainable targets, nor is the base remuneration. For the Board, 0 percent of the remuneration is linked to climate-related considerations.

The KPIs for the incentive schemes are approved by the Board in the second quarter of the annual meeting cycle.