General Disclosures (ESRS 2)

Notes on Applying the ESRS

General basis for preparation of the sustainability report

This report was prepared in accordance with the European Sustainability Reporting Standards (ESRS).

For the preparation of this report and based on the set of required formal and content requirements, subject matter experts were identified for quantitative disclosures and qualitative disclosures. The content of the sustainability report was prepared by the relevant subject matter experts and then consolidated and reviewed by the Group Sustainability group function. The report was formally approved as part of the overall financial reporting process. Operational supervision is exercised by the Sustainability Steering Committee, of which also the Executive Board of the Continental Group is a member. Sustainability reporting also falls under the supervision of the Supervisory Board. Further information on supervision can be found in the subsection Consideration of sustainability matters in corporate supervision.

The reported metrics are based on specific definitions, assumptions, and calculations methods. These are presented directly in conjunction with the respective metrics, if relevant. In this regard, it should be noted that especially modelled metrics are subject to uncertainty.

The statement in accordance with ESRS 2.77 that metrics are not subject to validation by an external body other than the independent auditor has not been repeated for each individual metric, as this applies to every metric.

When applying the ESRS, the terminology of the ESRS is used as a general rule while also taking into account terminology comprehensibility and consistency within the management report as well as any existing and potential further adjustments to the ESRS. For example, the terms used include management approach instead of policy, and key actions for target achievement instead of actions and resources as well as Business Conduct and Corporate Governance instead of only Business Conduct (as section headline).

Continental furthermore points out some general uncertainties with regard to the first time application of the ESRS.

Scope of Consolidation

The sustainability report has been created on a consolidated basis for the entire Continental Group.

In principle, Continental applies the same scope of consolidation for this report as for the consolidated financial statements. This sustainability report therefore covers Continental AG and all its subsidiaries (collectively referred to as Continental or the Continental Group).

All disclosures in this report relate to the fiscal year from January 1 to December 31, 2024. Where relevant, information up until the actual publication of this report has been considered.

An overview of the relevant data points that derive from other European legislation and where they can be found in this sustainability report has been included in the Overviews and indexes in accordance with ESRS 2 section.

Upstream and downstream value chain

Continental’s upstream and downstream value chains have been included in the preparation of the sustainability report and the assessment of impacts, risks and opportunities. This includes in particular the consideration of supply chains (see for example impact 18) or the product use phase (see for example 19). The impacts, risks and opportunities material for Continental that follow the materiality analysis in relation to the value chain are presented in the Details of the material impacts, risks and opportunities subsection and described in the topic-related subsections, including the respective management approaches.

Omissions

Continental has not omitted a specific piece of information relating to intellectual property, know-how or the results of innovation.

Continental has not made use of the exemption provided for in Article 19a (3) and Article 29a (3) of Directive 2013/34/EU and Section 289e HGB for the disclosure of imminent developments or matters under negotiation.

Disclosures due to other legislation on sustainability reporting

This sustainability report constitutes, at the same time, the combined non-financial statement in accordance with Sections 289b to 289e and 315b and 315c in conjunction with Sections 289b to 289e HGB, for the Continental Group and Continental AG, for fiscal 2024. Relevant information that goes beyond the ESRS disclosures can be found the section Combined non-financial statement at the beginning of this sustainability report.

Overview of Material Impacts, Risks and Opportunities

Continental has identified and assessed the material actual and potential negative and positive impacts, risks and opportunities (IRO). The detailed results are described in the Details of material impacts, risks and opportunities subsection as well as in the respective topic-related subsections. The methodology of the assessment is further described in the Process for identifying and assessing material IRO subsection.

Material sustainability matters of Continental (on topic level)

The integration of impacts, risks and opportunities into the strategy and the business model is carried out in accordance with the control processes and management approaches described in the Governance subsection of this section and in the respective topic-related sections.

Process for Identifying and Assessing Material IROs

Description of methodology and assumptions

Continental assesses its impacts, risks and opportunities according to the ESRS methodology requirements on double materiality (IRO assessment). Continental’s 2024 IRO assessment has been conducted simultaneously with both impact materiality (inside-out) and financial materiality (outside-in) perspectives.

Double materiality principle

Identification and creation of the longlist of IROs

The list of sustainability matters of the ESRS 1.AR16 formed the starting point of the identification of impacts, risks and opportunities. In addition for risks and opportunities, certain event types (e.g. fines, loss of sales or growth of sales) were considered. These initial scenarios and descriptions of IROs have been identified at topic, sub-topic or sub-sub-topic level and have been aggregated whenever it was relevant and appropriate considering Continental’s business activities, value chain, geographical location, industries, and business models. Company-specific aspects were also considered, all of which could be assigned to the predefined list of sustainability matters. These scenarios specify the matters further for Continental’s value chain and were partially split into individual scenarios for own operations, upstream and/or downstream value chain, whenever relevant.

Initial gross assessment

In an initial step, the IRO scenarios were centrally assessed from a gross perspective. The gross perspective assesses impacts, risks and opportunities in a scenario that does not yet consider the existing management approaches of Continental, as described in the respective topic-related sections. This initial gross assessment comprised various assessments of the severity and magnitude of the effect as well as the likelihood. This assessment was based on the judgement and sustainability expertise of subject matter experts at Group level.

Validation and assessment

In a second step, the longlist of IRO scenarios was assessed from the perspectives of relevant stakeholders. In multiple workshops, different functions of Continental acted as proxies of internal and external affected stakeholders, subject matter experts and/or users of sustainability information. The participants of the workshops received the longlist and further information on the methodology in advance of the workshops and were trained in the methodology during the workshops.

Each workshop included a validation, update and/or extension of the longlist. The IRO scenarios were then defined in greater detail, the gross assessment was validated or updated as appropriate, further information was collected and an initial net assessment was made. The net assessment considers the management approaches of Continental, as described in the respective topic-related sections.

The assessments in the workshops also took the following into account:

• Dependencies on the availability of natural, human, and social resources at appropriate prices and in adequate quality, independent of the potential impacts on those resources
• A primarily relevant time horizon for the definition of IRO scenarios and potential consequences
• Sectors and/or geographical locations where relevant
• External studies and other scientific evidence
• External data (e.g. country risk analyses and industry risk analyses)
• Specific data for Continental or Continental’s value chain (e.g. Scope 3 greenhouse gas emissions)

Consolidation

In an iterative approach based on the assessments during the workshops, an initial consolidation has been prepared by Group Sustainability in close coordination with Group Risk Management. The consolidation was completed especially based on the outcomes of all individual workshops as well as cross-checks with Continental’s general risk assessment.

The materiality threshold has been set after the consolidation of IRO assessments. The materiality of negative impacts and risks was assessed based on the gross perspective to consider where it is relevant to have adequate management approaches and report on them. The materiality of positive impacts as well as of opportunities was assessed based on the net perspective to consider where existing management approaches can contribute to these impacts and opportunities. From an overarching perspective, the materiality threshold for the gross assessment of the severity of negative impacts and risks and for the net assessment of the magnitude of the effect of positive impacts and opportunities was set at high and very high ratings (see the scales used under Impact materiality and financial materiality). Regarding the likelihood of occurrence, no threshold was applied. In cases where an IRO was flagged as a focus topic for the relevant users of Continental’s sustainability information, this IRO has also been evaluated as material and included in the reporting.

Revalidation and formal confirmation

As part of the iterative approach and until finalization of the report, the assessment was validated and updated where required, based on relevant new knowledge or relevant new developments and events. The re-validated assessment was formally confirmed by Continental’s Sustainability Steering Committee.

In conclusion, Continental has identified more than 150 IROs and evaluated 75 as material. More details on the individual material IROs can be found under the individual topic-related sections in the Material impacts, risks and opportunities subsections.

In the IRO assessment, Continental incorporated a set of methodologies and assumptions that reflect both current and projected developments on the basis of profound expert judgment. The main assumptions on which the IRO assessment was based are as follows:

• Continental assumed that environmental factors and social influence will have a general growing impact on business activities, supply chains, and market conditions regarding for example the future availability of resources, the environmental transition and socio-economic trends.
• The financial assessment is based on assumptions regarding future regulatory developments, market trends and technological advancements, among other things. The likely consequences of these regulatory changes were taken into account. Moreover, Continental assumes that technology will continue to advance and support sustainability initiatives. This includes assumptions about the development and introduction of green technologies.
• The assessment of the impacts, risks and opportunities related to Continental’s value chain takes into account, in particular, the specific features of the respective geographical regions, industries, business activities and types of operation.

Continental’s due diligence processes play a key role in identifying, assessing, and managing impacts, risks and opportunities. They are part of the management processes described in this section under Governance as well as in the management approaches in the topic-related sections. The assessment of impacts regarding human rights is supported by the due diligence processes of Continental’s Responsible Value Chain Due Diligence System (RVCDDS), e.g. regarding actual impacts by incidents or the assessment of potential negative impacts (see especially the topic-related Own workforce (ESRS S1) section and Workers in the value chain (ESRS S2) section).

Where specific activities, business relationships, geographical locations or other factors lead to a higher assessment of the impacts, this was essentially taken into account in the description and assessment of the IROs.

Through the holistic approach of the IRO assessment, the impacts have been assessed within Continental’s own operations and in the upstream and/or downstream value chain. The relevant stage of the value chain is described in the respective impacts, risks and opportunities.

As described in the methodology, affected stakeholders were involved in the assessment process by subject matters experts who acted as internal proxies. The stakeholders’ views are incorporated into the respective management approaches as described in the topic-related sections and thus also contribute to the evaluations by the subject matter experts who were involved in the assessment of the IROs.

Impact materiality

The impact materiality is based on the severity or magnitude of the effect of the impact. In the case of potential impacts, the probability was also assessed, but not taken into account in the evaluation of materiality. A five-point scale from “very low” to “very high” was used for both aspects.

The assessment of the severity or magnitude of the effect is based on the following factors:

• the scale,
• the scope, and
• for negative impacts, also the irremediable character of the impact.

The threshold for material impacts follows the general described methodology for thresholds, as laid out in this subsection under Consolidation.

Financial materiality

The integrated approach of the IRO assessment allows Continental to assess risks and opportunities together with the topically related impacts in a combined view. Thereby it was possible to consider interdependencies between risks and opportunities with impacts. In the topic-related sections, the detailed descriptions of impacts, risks and opportunities are grouped into related IRO clusters (e.g. all IROs on Scope 1 and Scope 2 emissions in one IRO cluster).

Also risks and opportunities were assessed according to the level of severity effect and magnitude of financial impacts and the likelihood of occurrence in the short-, medium-, or long-term. The financial impacts were assessed using semi-quantitative guidelines that were defined in consultation with Group Risk Management. Five levels from “very low” to “very high” were used as the rating scale. The financial impacts considered include effects on Continental’s financial position, financial performance, cash flows, access to financing, cost of capital and financial outlook. The threshold for financial materiality follows the general described methodology for thresholds, as laid out in this subsection under Consolidation.

Group Risk Management was closely involved in all steps of the IRO assessment. Before the results were provisionally confirmed, they were iteratively compared with the company’s risk inventory to ensure complete consistency. Further details on the alignment are described in the subsection Integration of IROs in risk management.

The Sustainability Steering Committee was involved in milestones of the IRO assessment, acted as a supervisory body and formally confirmed the results. In addition, the Group’s Governance, Risk and Compliance (GRC) Committee in particular, which manages general risk management, was indirectly involved in the process and was informed in particular about the IRO assessment and the interrelations with risk management.

Integration of IROs in risk management

The IRO assessment has taken into account both the assessments based on the ESRS requirements and the assessments as part of enterprise risk management in accordance with the relevant requirements. To this end, the IRO assessment is continuously coordinated with general risk management.

In view of the major differences in the required methods, consistency checks were carried out. The sustainability-related risks compatible with the methodology relevant for enterprise risk management have been aligned with the risks documented in the general risk assessment reporting system. Impacts not directly related to an identified risk were not considered in the enterprise risk management.

Further information on risk management can be found in the management report in the Main characteristics of the risk management system subsection in the subsection on Continental’s internal control and risk management system in the Report on risks and opportunities section.

The outcome of the IRO assessment confirmed the topic-related focus of Continental’s Sustainability Ambition anchored in Continental’s strategy. The concrete effects of impacts, risks and opportunities on Continental’s business model, value chain, strategy and decision-making as well as how Continental responds and plans to respond to these effects are addressed in more detail in the descriptions of the IROs and management approaches in the respective topic-related section.

Stakeholders and Stakeholder Engagement

Continental maintains regular, ongoing dialogue with various stakeholders via diverse channels.

For Continental, the most important stakeholders with regard to sustainability include in particular:

• Employees and their representatives,
• Customers, consumers, and end-users,
• Capital market participants,
• Policymakers,
• Affected communities and civil society,
• Actors within Continental’s supply chain, and
• Users of Continental’s sustainability reporting.

Stakeholders are involved via the following channels:

• Employees and their representatives: e.g. via works meetings, employee surveys, webcasts, meetings with employee representatives and directly via the HR departments,
• Customers, consumers and end-users: e.g. via sales departments or key account management, partnerships, trade fairs, surveys and customer service centers,
• Capital market participants: e.g. via the Annual Shareholders’ Meeting, webcasts and roadshows,
• Public policymakers: e.g. via public affairs departments,
• Affected communities and civil society: e.g. via engagement projects and open house events,
• Actors within Continental's supply chain: e.g. via the purchasing departments and trade fairs, and
• Users of sustainability reporting: e.g. via published sustainability reporting.

The formats used to involve stakeholders differ depending on the stakeholder group and are organized by the respective functions to suit the individual purpose. For example, employees are involved by the HR departments.

The aim of involving the stakeholders is to bring together different perspectives, discuss any discrepancies in views and learn from each other.

The results of stakeholder engagement in various formats, along with further analyses and new ideas, are continuously being incorporated into the process of further developing our sustainability strategy and reporting. In particular, the results of stakeholder engagement are taken into account in the decision-making process through the management approaches described in the topic-related sections.

In the IRO assessment, an expanded understanding was created for the perspective (including interests and views) of the affected stakeholders as described in the Consideration of stakeholder interests and views subsection.

Consideration of stakeholder interests and views

In general, the views of stakeholders serve as an information basis for the management approaches that are relevant to sustainability and those that are described in the topic-related sections. At the same time, these management approaches in turn create an information basis for the overarching strategy processes with regard to stakeholder views. The described management approaches, market requirements, trends and other factors are taken into account as part of the overarching strategy processes. When changing strategy, the interests and views of stakeholders are therefore mainly included indirectly as one of many factors. Continental did not change its strategy or business models on the basis of the IRO assessment.

Continental amends the strategy and the business models as part of the annual strategy processes and the continuous strategic dialogue in all group sectors as well as part of the topic-related management approaches.

Continental assumes that any changes to strategy or business model has impacts on the relationship with stakeholders and the stakeholders’ views – no matter whether they are based on sustainability- related decision-making or other reasoning. Continuous validation of the views of stakeholders is therefore relevant for the evaluation of impacts, risks and opportunities as well as subsequent strategic decision-making. Further information on this strategy can be found in this management report in the Corporate profile section under the subsection Strategy of the Continental Group.

The identification of opportunities and, in particular, the identification of strategic opportunities as part of the IRO assessment was also linked to strategy processes.

The views and interests of affected stakeholders with regard to the company’s sustainability-related impacts have been considered in the IRO assessment. The IRO assessment considering these views was discussed in the Sustainability Steering Committee as well as in the Supervisory Board’s Sustainability Working Group.

Interests and views of stakeholders relating to own workforce

The interests, views, and rights of Continentals workforce, including the respect for their human rights, are integral to shaping Continental's strategy and business model. To ensure that their perspectives are incorporated into strategic decisions, Continental is in regular contact with employees and their representatives via various channels, such as works councils and co-determination in the Supervisory Board. Further information on the involvement of employees and their perspectives in the overall business processes can be found in the Own workforce (ESRS S1) section. Furthermore, the inclusion of the own workforce is described in the methodology of the IRO assessment.

Interests and views of stakeholders relating to workers in the value chain

The interests, views, and rights of workers in Continentals value chain, including the respect for their human rights, inform Continental's related management approaches regarding a responsible value chain. The involvement of the workers in the value chain is also described in more detail in the methodology of the IRO assessment.

Interests and views of stakeholders relating to affected communities

The interests, views, and rights of affected communities, including the respect for their human rights inform Continental's related management approaches regarding a responsible value chain. The involvement of the affected communities is also described in more detail in the methodology of the IRO assessment.

Interests and views of stakeholders relating to consumers and end-users

The interests, views, and rights of consumers and end-users, including the respect for their human rights, are part of Continental's strategy and business model. Where Continental is a supplier, such as for automotive components, the perspective of consumers and end-users is seen as an integral part of the general feedback from customers, such as car manufacturers. Where Continental directly sells end-consumer products, feedback from consumers and end-users and their representatives is gathered through various channels, especially via customer service centers. In addition, Continental’s Mobility Study informs about the perspectives of end-users in major markets.

The involvement of consumers and end-users is also described in more detail in the methodology of the IRO assessment.

Identification of the Information to Be Disclosed Based on the IRO Assessment

As part of the IRO assessment, Continental has allocated the identified material impacts, risks and opportunities to the corresponding ESRS sustainability matters. This sustainability report only contains information on the sustainability matters respectively topics, sub-topics and sub-sub-topics that have been classified as material, i.e. at least one material impact, material risk or material opportunity has been identified for the respective sustainability matter. The implementation guidelines provided by EFRAG were used as an additional source for the allocation of disclosure requirements for sustainability matters. The identified material impacts, risks and opportunities with their specific descriptions set the focus within the required disclosures, for example on own operations, the supply chain or specific product groups. The perspective of the primary users of financial reporting and other users of sustainability reporting was already taken into account in the IRO assessment.

Where relevant for the understanding of specifics identified by Continental, adequate and meaningful entity-specific disclosures were added to provide sufficient granularity of information, such as additional metrics used in management processes.

The principle of materiality of information was applied in order to calibrate the depth of the information and to omit individual disclosures where these are not material for an understanding of the material impacts, risks and opportunities and for the management approaches described, and are not necessary in order to fulfill the objectives of the corresponding disclosure requirements.

In addition, use was made of the simplification of the phase-in disclosure requirements in accordance with ESRS 1.132. Continental is working on being able to report these phase-in disclosure requirements in accordance with the specified time horizons.

An overview table of the reported disclosure requirements can be found at the end of the sustainability report in the Overviews and indices in accordance with ESRS 2 section.

Details of the Material Impacts, Risks and Opportunities

The actual and potential negative and positive impacts on people and the environment are described in more detail within the respective topic-related sections in the detailed descriptions of the concrete impacts.

Many of the impacts identified are inherent to the industry and are directly related to specific types of business, products, value chains or geographical regions. They can therefore be seen as impacts directly linked to Continental’s strategy and business models. Where applicable, this is also addressed in the concrete descriptions of impacts within the topic-related section.

As described in the methodology of the IRO assessment, Continental used a variety of input parameters to evaluate the IROs, including both quantitative and qualitative data sources such as metrics, internal reports, and external market research.

Continental has defined the following time intervals for potential impacts, risks and opportunities following the ESRS requirements:

• “Short-term” is coherent with the reporting period in the consolidated financial statements (up to one year).
• “Medium-term” corresponds to a period between the end of the short- period and up to five years.
• “Long-term” is defined by a period of more than five years.

Continental considers the primary time horizons to be those in which the strongest impacts or effects are to be expected.

Depending on the topic, material impacts originate from own operations or from business relationships. This information can be found in the respective topic-related sections in the subsections under Material impacts, risks and opportunities and, in general, in this section under the Strategy, business model and value chain subsection.

The current financial effects of the identified material risks and opportunities relating to sustainability aspects include according to Continental’s view, in particular, provisions for specific risks associated with the identified IROs. In particular, these are provisions for warranties (see risk 70 in the Consumers and end-users (ESRS S4) section), which amounted to a total of €388 million as at December 31, 2024. In addition, smaller parts of the provisions for litigation and environmental risks are linked to the risks, but mainly to the impacts from the Pollution (ESRS E2) section. Provisions for litigation and environmental risks amounted to €297 million as at December 31, 2024. Provisions for restructuring are only indirectly linked to the identified material risks and opportunities described in the Own workforce (ESRS S1) section and therefore, from Continental’s perspective, do not represent current financial effects within the definitions of the ESRS.

Furthermore, no significant current financial effects on the recoverability of non-financial assets and inventories were identified in connection with identified sustainability-related and, in particular, climate- related risks.

It should be noted that current financial effects in connection with identified material risks and opportunities relating to sustainability aspects are generally not independent of other associated effects.

Further information is provided in the explanations of the relevant notes to the consolidated financial statements, for example in Note 29 relating to warranties. Further information on the fundamental consideration of sustainability-related aspects in accounting are described in Note 2 of the notes to the consolidated financial statements, particularly with regard to climate-related aspects in the subsection Impact of the macroeconomic environment and climate- related aspects on accounting in the reporting period.

Based on the IRO assessment, taking into account the associated limitations and assumptions as set out in the subsection Process for identifying and assessing material IROs and taking into account the management approaches, targets and key actions for achieving the targets reported in the topic-related sections, Continental considers its business model and strategy to be resilient. The management approaches, targets and key actions for achieving the targets describe Continental’s current ability to reduce its material negative impacts, increase positive impacts, manage risks, and seize opportunities. Continental also assumes that these skills will continue to develop over time.

Further information on risk management can be found in the management report under Main characteristics of the risk management system in the subsection on Continental’s internal control and risk management system in the Report on risks and opportunities section.

The identified impacts, risks and opportunities relate to at least one sustainability matter as defined by the ESRS. The entity-specific disclosure only provides additional granularity but does not contain any new sustainability matters beyond the list of sustainability matters in ESRS 1.AR16. The relation between entity-specific disclosures and specific impacts, risks and opportunities are included in the description of the respective management approaches which follow the same clustering as the impacts, risks, and opportunities (IRO cluster).

As the reporting year 2024 constitutes the first year of reporting on the outcomes of an IRO assessment, there are no outcomes from prior years for comparative analysis.

Continental identified 75 IROs that have been evaluated as material according to the IRO assessment methodology applied by Continental. Material IROs have been identified along the supply chain, own operations, and downstream value chain. Given the different focus of topic-related sections, the distribution of the IROs along the value chain differs (e.g. the Own workforce (ESRS S1) section is, by definition, focused specifically on own operations).

Each material IRO is described in more detail in the respective subsections (Material impacts, risks and opportunities) of the topic-related section in this report, and can be identified with a distinct identifier as shown in the following table.