Sustainability Report – Environmental Information

The EU Taxonomy is a classification system for determining sustainable economic activities in the real economy. The following disclosures are the mandatory disclosures of the Continental Group in accordance with Art. 8 of the EU Taxonomy Regulation (EU) 2020/852.

Specific Information on the Implementation of Disclosure Requirements in Accordance with the EU Taxonomy

In line with the EU Taxonomy Regulation (EU) 2020/852, the Climate Delegated Act (EU) 2021/2139 and Environmental Delegated Act (EU) 2023/2486, companies must provide information on the eligibility and alignment of their activities with the EU Taxonomy with regard to the following environmental objectives:

• Climate change mitigation
• Climate change adaptation
• Sustainable use and protection of water and marine resources
• Transition to a circular economy
• Pollution prevention and control
• Protection and restoration of biodiversity and ecosystems

Commission Delegated Regulation (EU) 2023/2485 amending the Climate Delegated Act, which was published at the same time as the Environmental Delegated Act (EU) 2023/2486, amended the Climate Delegated Act. Besides amendments related to the existing activities for the two climate objectives, new economic activities were added, including:

• Category 3.18 (Manufacture of automotive and mobility components);
• Category 3.19 (Manufacture of rail rolling stock constituents).

Furthermore, the EU Commission explicitly clarified in Recital 10 of Commission Delegated Regulation (EU) 2023/2485 (amending Delegated Regulation (EU) 2021/2139) that tire manufacturing is considered Taxonomy-eligible due to its potential to reduce greenhouse gas emissions in the transport sector. It is currently to be assigned to category 3.6 (Manufacture of other low-carbon technologies).

On January 28, 2026, several amendments to the EU Taxonomy Regulation and its corresponding delegated acts came into effect, which are relevant for Continental. Companies have the option to apply these changes either for the 2025 reporting year or starting in 2026.

Considering the significant organizational changes at Continental AG due to the spin-off of the former Automotive and Contract Manufacturing group sectors, the interpretation of uncertainties associated with the new provisions and possible further revisions, Continental chooses not to exercise the option of applying the new regulations for the 2025 reporting year. Instead, Continental continues to report under the same regulatory framework as in the prior year.

In general, reporting under the EU Taxonomy remains associated with uncertainties for Continental. These uncertainties mainly result from continued ambiguities and imprecise wording in the regulations and guidance. They are related to the determination of Taxonomy eligibility and especially Taxonomy alignment, as well as the calculation of indicators for turnover, capital expenditure and operating expenditure for the economic activities relevant to Continental.

As a result, the current regulatory situation continues to leave room for interpretation from Continental’s perspective.

In interpreting the regulation, Continental takes into consideration – besides officially published documents – the statements from industry associations in the supplier and automotive industries as well as unofficial assessments of various experts.

Taxonomy-Eligible Economic Activities

Assessment of Taxonomy eligibility

In the reporting year, Continental applied the same methodology to assess Taxonomy eligibility as in the previous year.

As in the previous year, all activities involved in tire manufacturing were classified as Taxonomy-eligible under category 3.6 (Manufacture of other low-carbon technologies). In Recital 10 of Delegated Regulation (EU) 2023/2485 (amending Delegated Regulation (EU) 2021/2139), the European Commission makes it clear that tire manufacturing has the potential to reduce greenhouse gas emissions in the transport sector and can contribute to a more circular economy. Until specific technical assessment criteria are defined for this activity, tire manufacturing remains a Taxonomy-eligible activity under category 3.6. It is Continental’s opinion that this clarification refers to the manufacture of tires of all kinds, without any restrictions in terms of specific properties, label classes or drive system technologies. Alternative interpretations were examined, but Continental found them to be unsuitable, particularly with regard to Recital 10.

As in the previous year, all economic activities involved in the manufacture of automotive and mobility systems and components for road vehicles, with the exception of tires, but also extending beyond components for zero-tailpipe-emission vehicles, were allocated to category 3.18. Continental is of the opinion that the manufacture of all components, irrespective of the vehicle’s drive system, is Taxonomy-eligible for all vehicle classes listed in the category. This classification is based on the fact that, from Continental’s perspective, the activity description does not entail any restrictions in terms of components, for example in relation to function or drive system, and the corresponding components, parts and systems are intended for use in road vehicles. The qualifying characteristic (criterion) contained in the description of activity 3.18 of being essential for improving environmental performance is not exhaustively clearly defined. In Continental’s view and based on the supporting documents of the European Commission (e.g. “A User Guide to Navigate the EU Taxonomy for Sustainable Activities” published in June 2023), this criterion is part of the assessment of substantial contribution to climate change mitigation for the evaluation of Taxonomy alignment and not Taxonomy eligibility.

As in the previous year, all economic activities involved in the manufacture of rail rolling stock constituents were allocated to category 3.19. This classification is based in particular on the fact that, from Continental’s perspective, the reference to activity 3.3 does not impose any restrictions on components in relation to the function or drive system of rail vehicles for which the components are manufactured, provided that the components and systems are essential for the operation and functioning of rail vehicles. Furthermore, the activity designation does not entail any restrictions on components, for example in relation to function or drive system.

As in the previous year, Continental classified several industrial activities as Taxonomy-eligible. In the reporting year, these primarily comprise the manufacture of energy-efficient conveyor belts and components for wind turbines. Continental allocates these activities to category 3.6 (Manufacture of other low-carbon technologies), since they pursue substantial reductions and therefore make significant contributions to energy saving or expansion of renewable energies. For these classifications as well, Continental believes it is irrelevant which functions are fulfilled by the supplier technologies in the end products, as long as the end product facilitates the goals set out in Art. 10 (1) of the EU Taxonomy Regulation (EU) 2020/852.

The activities mentioned are not identified as Taxonomy-eligible under Annex II to the Climate Delegated Act (EU) 2021/2139 (environmental objective “climate change adaptation”).

All other economic activities of the Continental Group that are not included in the aforementioned economic activities were classified as Taxonomy-non-eligible for the reporting year. Accordingly, Continental currently has not allocated any economic activities to the other environmental objectives under Annex I: Sustainable use and protection of water and marine resources, Annex II: Transition to a circular economy, Annex III: Pollution prevention and control or Annex IV: Protection and restoration of biodiversity and ecosystems of Commission Delegated Regulation (EU) 2023/2486.

Continental bases the classification on the information publicly available at the time the report was prepared.

Taxonomy-eligible turnover

The information on turnover is prepared in accordance with Section 1.1.1 of Annex 1 to the Delegated Regulation on Disclosure Obligations (EU) 2021/2178 in compliance with IFRS accounting principles (see tables at the end of this non-financial statement). Through the accounting methodology selected by Continental, double counting is avoided.

A total sum of €15.0 billion was reported as Taxonomy-eligible turnover in the reporting year (PY: €34.1 billion), which is equivalent to a 76.3% share of consolidated sales (PY: 85.8%). The significant reduction in absolute Taxonomy-eligible turnover compared to the previous year is due to the spin-off of the former Automotive and Contract Manufacturing group sectors and the resulting change in the scope of consolidation. The breakdown of Taxonomy-eligible turnover by category is shown in the tables at the end of this section.

Information on the Continental Group’s total turnover (the denominator of the metric calculation) can be found in the Consolidated Statement of Income of the Consolidated Financial Statements under “Sales”.

Taxonomy-eligible capital expenditure and operating expenditure

Taxonomy-eligible capital expenditure and operating expenditure have been compiled in accordance with the Delegated Regulation on Disclosure Obligations (EU) 2021/2178 and taking into account the clarifications made by the European Commission in October 2022.

The figures for Taxonomy-eligible capital expenditure and operating expenditure under category a are allocations based on the proportion of Taxonomy-eligible turnover. For reasons connected to the business model, the equipment, machinery and buildings of the Continental Group are thus used both for Taxonomy-eligible activities and for other activities.

The allocation takes place at group sector level, and not at the level of individual locations, in order to avoid double counting, to take into account intercompany business and consolidation effects as well as to reflect the matrix structure of the Continental Group. This allocation of turnover reflects the distribution of Continental’s production. The Platform on Sustainable Finance also recommends such an approach to allocation in its report to the European Commission dated October 2022. For enabling activities, it states that capital expenditure and operating expenditure should be reported on the basis of their proportion of turnover, if the activities include both Taxonomy-eligible and Taxonomy-non-eligible activities.

A total sum of €1,048 million was reported as Taxonomy-eligible capital expenditure in the reporting year (PY: €1,892 million), which is equivalent to a 79.6% share of total capital expenditure (PY: 85.8%). The significant reduction in absolute Taxonomy-eligible capital expenditure compared with the previous year is due to the spin-off of the former Automotive and Contract Manufacturing group sectors and the resulting change in the scope of consolidation. The breakdown of Taxonomy-eligible capital expenditure by category is shown in the tables at the end of this section.

The information on capital expenditure is prepared in accordance with Section 1.1.2 of Annex 1 to the Delegated Regulation on Disclosure Obligations (EU) 2021/2178 in compliance with IFRS accounting principles. Information on the Continental Group’s total capital expenditure can be found in Note 1 of the Notes to the Consolidated Financial Statements. The information refers to capital expenditure in the intangible assets (Note 13), property, plant and equipment (Note 14) and leases (Note 15) presented in the Notes to the Consolidated Financial Statements.

Operating expenditure was defined in accordance with Section 1.1.3 of Annex 1 to the Delegated Regulation on Disclosure Obligations (EU) 2021/2178 and was calculated on an imputed basis as described above. For the denominator of the metric calculation for operating expenditure, Continental takes into account direct, non-capitalized costs incurred in the reporting year as a result of research and development (net), building renovation measures, short-term leasing, as well as maintenance and repairs.

A total sum of €416 million was reported as Taxonomy-eligible operating expenditure in the reporting year (PY: €3,421 million), which is equivalent to a 32.1% share of total operating expenditure (PY: 85.8%). The significant reduction in absolute Taxonomy-eligible operating expenditure compared with the previous year is due to the spin-off of the former Automotive and Contract Manufacturing group sectors and the resulting change in the scope of consolidation. The breakdown of Taxonomy-eligible operating expenditure by category is shown in the tables at the end of this section.

Continental notes that, from its perspective, various interpretations with respect to the requirements concerning capital expenditure and operating expenditure, particularly for category c and for operating expenditure more generally, continue to result in uncertainty when determining Taxonomy-related information.

Taxonomy-Aligned Economic Activities

Assessment of Taxonomy alignment

For all economic activities reported under category 3.6, specific comparative life cycle assessments are required by the technical screening criteria on substantial contribution to climate change mitigation. These must demonstrate substantial savings to life cycle greenhouse gas emissions compared with the best performing alternative technology or solution available on the market or the best performing alternative product available on the market. The life cycle assessments and their external verification should be in orientation with certain guidelines and recommendations.

Such comparative life cycle assessments were not available to Continental in the reporting year; therefore, these economic activities cannot currently be classified as Taxonomy-aligned. For this reason, the Do No Significant Harm (DNSH) criteria and the minimum safeguards along the value chain were not assessed at the level of specific economic activities.
Continental evaluated whether its Taxonomy-eligible activities in categories 3.18 and 3.19 meet the qualifying characteristics and other criteria for making a substantial contribution to climate change mitigation.

From Continental’s perspective, the qualifying characteristic (criterion) in the description of activity 3.18 in the current regulation leaves room for interpretation. This leads to considerable uncertainty regarding the appropriate methodology to assess whether a product is essential for delivering and improving the environmental performance of the vehicle. In view of this fact, Continental considers its products listed in the European Commission Delegated Regulation (EU) 2023/2485 in Recital 9 to be in line with the description of activity 3.18 and the qualifying characteristic contained in it. These products were included in the further Taxonomy alignment assessment.

The qualifying characteristic (criterion) in the description of activity 3.19 on the essentiality of components for the functioning of rail rolling stock allows Continental to include its entire rolling stock portfolio in the further alignment assessment.
However, applying the technical screening criteria for substantial contribution to climate change mitigation for activities 3.18 and 3.19 means that solely products developed for zero-tailpipe-emission vehicles undergo detailed evaluation regarding compliance with DNSH criteria.

According to the EU Taxonomy Regulation, an activity can only be classified as Taxonomy-aligned if it meets all respective relevant DNSH criteria. For categories 3.18 and 3.19, this includes in particular a pollution prevention and control criterion, as explained in more detail in Appendix C to Delegated Regulation (EU) 2023/2485. Meeting this DNSH criterion requires substitution tests and corresponding documentation for certain substances, which goes beyond the currently applicable regulatory frameworks. At present, Continental’s management systems do not provide sufficient information to fulfill these additional requirements of the EU Taxonomy with regard to monitoring of used substances and performing substitution tests for the substances listed in Appendix C. Following an internal analysis of the technical screening criteria and in view of the existing uncertainties related to their interpretation, Continental does not currently classify any of its activities as Taxonomy-aligned under categories 3.18 and 3.19.

Taxonomy-aligned turnover, capital expenditure and operating expenditure

Since Continental does not currently report any activities as Taxonomy-aligned, no Taxonomy-aligned capital expenditure or operating expenditure according to categories a and b are reported. Since no Taxonomy-eligible capital expenditures or operating expenditures under category c were identified, no Taxonomy-aligned disclosures are provided either.

Templates in Accordance with the EU Taxonomy

For the following overviews of Taxonomy information, it should be noted that these were prepared in accordance with the guidelines for the templates in Annex 2 to the Delegated Regulation on Disclosure Obligations (EU) 2021/2178. Given the uncertainties and interpretations of the EU Taxonomy Regulation, this note is relevant since it means, for example, that the designations as environmentally sustainable or non-environmentally sustainable activities only relate to the assessment as per the EU Taxonomy Regulation and not more generally.

 

Nuclear and fossil gas related activities

	Nuclear energy related activities	Yes/No
1.	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	No
2.	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	No
3.	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	No
	Fossil gas related activities	Yes/No
4.	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	No
5.	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	No
6.	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	No

Download Templates in Accordance with the EU Taxonomy.