GFT Technologies : Nonfinancial group report 2023

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Dear reader,

The past year marked a decisive turning point in the evolution of technology: just as the advent of the internet revolutionised the way we access information and do business, the dynamic development of artificial intelligence (AI) promises to reshape our world to an unprecedented degree. This innovation conceals tremendous potential, but also uncharted challenges which we as a society must carefully navigate.

At GFT, we have always regarded ourselves as pioneers - keen to promote an open discourse on innovative and ethical technology development. With a view to safeguarding the success and resilience of our company and business model, we aim to be at the forefront of this new development. And our mission­

goes far beyond the mere application of AI: we want to unlock the untold potential of AI for our clients while also establishing firm principles for its responsible use. These principles are being continuously refined in line with legislation and technological develop- ments. Ultimately, "responsible AI" also means constantly weighing up the benefits and risks.

Launched in 2023, our GFT AI.DA Marketplace helps clients select and seamlessly integrate the right AI solutions for their needs. GFT has implemented over 200 AI projects over the past few years, and demand for predictive and generative AI technology is growing exponentially.

We are also continuing to expand our in-house AI expertise. Our "AI first" programme promotes a culture

in which employees familiarise themselves with AI and learn to use it responsibly. For example, we introduced GFT Assist, an AI-supported search ­engine for the intranet, and developed guidelines for the safe use of ChatGPT.

In view of this rapid technological change and the current volatile environment, it is all the more important for us to stick to our ambitious sustainability targets - for example, with regard to climate protec- tion. We made encouraging progress in this regard in 2023. Our greenhouse gas emissions fell by 10 per cent year on year. In the CDP Climate Rating, our CDP score improved from C to B - exceeding the benchmark for the IT & Software Development segment. Our science-based emissions reduction targets for

We are proud to have received the "Great Place to Work" award for the second time in a row in 2023 and strive to continuously improve as an employer. In the reporting period, we initiated a number of meas- ures, such as modernising our career model, expanding our range of training opportunities and introducing local Diversity Equality & Inclusion programmes.

Our "Grow tech talent worldwide" initiative promotes IT talent inside and outside the company and aims to inspire more people to join the tech industry. In 2023, we emphasised our commitment to attracting and promoting women in particular with a series of events and initiatives.

The core element of our employer branding campaign "Make your mark", launched in 2023, is a commitment to empowering all employees to make a unique and lasting mark within our vibrant ecosystem. The international campaign - which incidentally has been very well received both internally and externally - has once again significantly strengthened the GFT employer brand.

The regulatory requirements for sustainability reporting continue to grow. Since 2022, environmentally sustainable economic activities have been defined by EU Taxonomy - a classification system designed to increase transparency, counteract greenwashing and channel funds into sustainable investments. The CSRD, which came into force in 2023, represents a further pillar of the EU's sustainable finance strategy and regulates the obligations for sustainability reporting.

What does this all mean for GFT? The new regulations will impact the nature and scope of our report- ing. However, we do not see this as a burden, but as an opportunity to put transparency and responsibility at the heart of our activities. This is reflected in our sustainability objective "Professional Integrity". Sustainability aspects are being systematically integrated into our financial planning and management and are an integral part of our corporate strategy. This integrative sustainability management approach will lay the foundation for more qualitative sustainability communication.

To put it simply: the relevance of sustainability is growing, and this will be reflected in our reporting. Social, ecological and ethical aspects are a key component of our strategy and firm guard rails on our path to sustainable growth. I cordially invite you to join us on this journey and to help shape the digital future in a responsible manner.

Best regards,

Marika Lulay

CEO of GFT Technologies SE

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About this report

In accordance with sections 315b and 315c HGB (German Commercial Code) in conjunction with ­sections 289c to 289e HGB, this unaudited non-­ financial report contains the relevant disclosures on environmental, employee and social matters, as well as on respect for human rights, and combating corruption and bribery.

The report contains information regarding environmentally sustainable economic activities in accordance with Art. 8 of Regulation (EU) 2020/852 of

18 June 2020 on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).

The website links used in this document contain further information and are not a constituent part of

this report. Exceptions are marked as such. The report was prepared on the basis of the GRI Standards(2022) of the Global Sustainability Standards Board (GSSB). The GRI Content Index can be found in the annex of this report. Moreover, in preparation for the implementation of the requirements of the EU's ­Corporate Sustainability Reporting Directive (CSRD), reference is also made in some cases to the Euro- pean Sustainability Reporting Standards (ESRS).

The data and information contained in this report relate to the financial year 2023 (1 January to 31 De- cember 2023) and correspond to the scope of consolidation for financial reporting. For a complete list of subsidiaries and other affiliated companies, please refer to section 3 of the notes to the consolidated financial statements.

The emission data in the section "Greenhouse gas emissions" (chapter 3 "Environment & technology") refer to the financial years 2022 and 2023 - a corresponding reference can be found in the text.

Figures stated in the section "Employees" (chapter 4 "Society & technology") correspond to the consolidated group used in financial reporting but only refer to active employment contracts.

The relevant financial information can be found in the combined management report and consolidated financial statements 2023. The corresponding documents are available at www.gft.com/financialreports.

A non-financial performance indicator for the

GFT Group is the productive utilisation rate. Detailed information on this figure is published in the combined management report for 2023 (2.2 "Manage- ment system" and 2.4 "Personnel").

References to persons are to be understood as

­gender-neutral. For ease of readability, we refrain from using multiple mentions or paraphrases in certain passages - this does not imply any judgement.

The GFT Group

Sustainability at GFT

www.gft.com/sustainability

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The GFT Group

GFT is a digital transformation pioneer. By leveraging next-generation technologies, we enable clients to boost their productivity with intelligent software solutions. We focus on Digital Finance, Enterprise AI & Data Solutions, and Platform Modernisation. GFT's strengths include deep technological excel- lence, a strong ecosystem of partners, and industry expertise. GFT talents create, implement and manage software applications to enable innovative businesses while complying with regulations.

Founded in 1987, GFT had 45 locations in 16 countries in Europe, Asia, North and South America at the end of the reporting period on 31 December 2023. An overview of all GFT locations is presented on the corporate website. The global GFT team comprised 9,134 full-time employees (2022: 8,842) and 1,140 freelancers (2022: 1,275). Details on the international distribution of employees are provided in the combined management report (2.4 "Personnel").

In April 2023, GFT acquired targens GmbH, a consultancy with expertise in banking, compliance and digital innovation based in Stuttgart, Germany. This included a software solution for banking clients called SMARAGD. It comprises the following components:

• Transaction Controlling & Monitoring (TCM) with real-time screening of payments & customer data
• Monitoring & Detection System (MDS) with rule- based monitoring of customers,
  payments & accounts

• Compliance Risk System (CRS) with daily detection of customer risks.

For 2024, GFT plans to pool all its software products in a new dedicated legal unit called GFT Software Solutions.

In its financial year 2023, the GFT Group generated revenue of €801.74 million (2022: €730.14 million). 73% of revenue was generated in the Banking sector (2022: 72%), 16% in the Insurance sector (2022: 18%) and 11% in the Industry & Others sector (2022: 10%). Adjusted earnings before interest and taxes (adjusted EBIT1) amounted to €73.33 million (2022: €67.48 million) and pre-tax earnings (EBT) to €68.00 million (2022: €66.05 million).

In 2023, the GFT Group's total carbon footprint amounted to 19,641 tCO2e (2022: 21,674 tCO2e).

The parent company of the GFT Group (GFT) is the listed company GFT Technologies SE. It has a one-tier management and control structure with an Administrative Board as its management and control body.

The GFT Technologies SE share is listed on the Prime Standard segment of the Frankfurt Stock Exchange and in the SDAX index. The company's largest shareholders are company founder Ulrich Dietz (around 26%) and Maria Dietz (almost 10%).

Detailed information on business activities and the business model can be found in the combined management report 2023 in the chapter "Basic principles of the GFT Group". For a complete list of subsidiaries and other affiliated companies, please refer to section 3 of the notes to the consolidated financial statements.

As a service provider, we generate most of our added value ourselves. Our main suppliers are highly skilled IT specialists who support our core business. As our IT infrastructure purchasing is limited in scale, the possibility to audit suppliers or influence their business practices is restricted. In the case of services for our business operations, however, we are able to influence environmental and social criteria. Further information on the supply chain can be found in section 5 of the notes to the consolidated financial statements.

Sustainability in the

GFT Group

Every company bears responsibility for its business and social environment. Corporate Social Responsibility (CSR) is the contribution that GFT makes to sustainable development. It is the process of integrating environmental, social and governance (ESG) aspects into our operations and strategic alignment, as well as a commitment to transparent reporting. Our "GFT Next" strategy, evolving since 2017, harnesses agile practices and responsible technological development to ensure long-term profitable growth while adhering to eco-friendly and ethical standards.

Launched in 2017, our corporate strategy "GFT Next" aims to diversify growth and align the company more closely with market trends in order to reduce de­ pendency on individual clients. It focuses on profitable growth, delivery excellence and agile practices. A "glocal" structure fosters global collaboration with local accountability. Constant portfolio renewal is geared towards technological leadership. Strategic mergers and acquisitions and stakeholder value play a key role.

The GFT Group

GFT AI.DA Marketplace

Enterprise AI & Data

More >>

"GFT Next 2.0" advances this by incorporating AI, as evidenced by the launch of the AI.DA Marketplace in September 2023. The company's strategy is evolving from technology sectors to business solutions in areas like Enterprise AI, NextGen Finance and Platform Modernisation. GFT's global collaboration accelerates this technology uptake, emphasising generative AI's transformative impact. The growing significance of blockchain technology was also anticipated, positioning GFT as a leader in emerging tech trends and innovation.

Integrating sustainability into the corporate strategy involves several key initiatives that align with GFT's core values (see section "Professional integrity" in this chapter) and objectives. These are:

• Sustainable software design and algorithmic transparency.
• Training IT specialists not only in new technologies but also sustainable practices.
• Establishing clear policies that prioritise ethical practices and sustainability.
• Adopting a climate protection programme and promoting green infrastructure.

By weaving these sustainability aspects into the fabric of GFT's corporate strategy, we can strengthen our commitment to social responsibility while continuing to innovate and lead in the tech industry. This approach not only addresses the environmental impact of our operations but also positions GFT as a forward-­ thinking and responsible leader, attracting and at the same time involving our key stakeholders - clients, partners, investors and employees.

CSR agenda

As a technology service provider, our CSR agenda focuses on sustainability in software design and the development of specialists with technological expertise. Our business activities are based on responsible corporate governance and an ambitious climate protection programme:

• Our climate protection targets (chapter 3 "Environ- ment & technology") are scientifically based and in line with the Paris Agreement on Climate Change: by 2030, operational greenhouse gas emissions (Scopes 1 and 2) are to be continuously reduced by 50% compared to the base year 2020. In addition, emissions along the value chain (Scope 3) are also to be reduced: these emissions are to be reduced by 60% per euro of value added by 2030 com- pared to the base year 2020.
• The sustainability by design objective blends three critical facets to address environmental, ethical-­ legal and social inclusion challenges within software development and technology application. "Green- Coding" emphasises environmental responsibility through resource-efficient programming to reduce environmental impact (chapter 3 "Environment & technology"). "Privacy by Design" embeds ethical and legal considerations by integrating privacy safeguards into the design of IT systems and busi- ness practices (chapter 1 "The GFT Group"). The "Inclusive Coding" initiative complements these by promoting accessible software and services for all, in particular for people with disabilities, ensuring technology serves as a tool for universal participa- tion (chapter 4 "Society & technology").

• Our grow tech talent worldwide objective (chap- ter 4 "Society & technology") is aimed at promoting IT talent both externally and internally. Across company boundaries, GFT is committed to support- ing various target groups within the global tech community in order to improve their future opportu- nities through the development and expansion of technology skills. Internally, we support the contin- uous development of our employees. We want to advance each and every one of our employees in order to position GFT as effectively as possible in the competition to attract the best talent. As an IT service provider, we generate most of our value added ourselves - the performance, expertise and motivation of our employees have a decisive influ- ence on the quality of our services, client satis­ faction and thus the business success of GFT. We believe that a working environment based on diversity, equality and mutual respect is the founda- tion for this approach.
• We drive sustainability in corporate governance with our professional integrity objective (chapter 1 "The GFT Group"). For us, this means achieving long-term profitable growth in compliance with applicable law and fair market conduct - in harmony with our ecological and social objectives and to- gether with our stakeholders.

Responsibility & control

The Administrative Board of GFT Technologies SE is responsible for corporate strategy and all major decisions, including fundamental sustainability issues. It gives appropriate consideration to environmental and social objectives and systematically identifies and evaluates the risks and opportunities associated with social and environmental factors, as well as the ecological and social impact of the company's activities. Moreover, the Administrative Board conducts a review of the annual non-financialreport.

The GFT Group

For further information

please go to

www.gft.com/administrative-board

The Administrative Board comprises seven members, of which three are female (43%) and four are male (57%). The average board tenure in 2023 was

8.43 years. More information on the Administrative Board can be found in the combined management report 2023 (section 2, section 9) and in the Ad­ ministrative Board Report.

GFT Technologies SE has three Managing Directors, of which one is female and two are male. They are appointed by the Administrative Board and responsible for executing corporate strategy, the operational management of the company, controlling and the implementation of risk management. The Managing Directors set sustainability KPIs and monitor their progress. Further information on the Managing Directors can be found in section 9 of GFT's combined management report 2023.

The Group CSR Committee is a Group-wide and cross-functional steering committee chaired by the CEO that supports and reports to the Administrative Board. It convenes three times a year to review progress on the CSR agenda at operating level and to discuss strategies to support the sustainability goals.

The remuneration system for the Managing Directors (for service agreements concluded since 2020) not only includes a growth and return target but also an ESG target as part of annual performance-relatedremuneration. These targets are set annually by the Administrative Board. In 2023, the ESG target com- prised: training and education of employees (40%), promotion of external IT talent (30%) and training employees in GreenCoding (30%). Details on the remuneration system are presented in the Remuneration Report, published atwww.gft.com/governance. Moreover, performance-relatedremuneration for several members of the senior management team also includes sustainability targets.

Inclusion of stakeholders

At GFT, we actively involve our stakeholders under the motto "Let's shape and simplify the digital world together." Our most important direct stakeholders are:

• Clients: as the recipients of our services, they are central to our business model.
• Employees and freelancers: being a people
  business,­ they are vital internal stakeholders.
• Shareholders and investors: as our financial
  backers,­ they are essential for funding.
• CSR Committee: this internal body plays a
  crucial­ supervisory and controlling role.
• Main suppliers (by spend): they are critical for providing GFT with the necessary goods and services.
• Commercial partners: they play a key role in our business activities.

We listen and respond to their needs and expectations via feedback from discussions with clients, partners and investors, as well as employee suggestions (see chapter "Society & technology", section "Employees"). Moreover, we assess our role in the

supply chains of our clients, as well as investor re- quirements. Communication is conducted via surveys, newsletters, PR, social media, meetings and events.

Authorities and ESG rating agencies are key indirect stakeholders and the broader context of politics, society and the environment is also considered.

Significant non-financial aspects and risks

The annually reviewed materiality assessment determines which aspects of our business activities have a decisive influence on sustainability aspects (inside-­out or impact perspective) and which sustainability aspects have an impact on our business activities, our corporate strategy and our business model (outside-­inor financial perspective). We analyse the environ­ mental and social effects of digitalisation with sector-­specific reference to the technology consulting sector and how GFT addresses these (new) challenges. We consider relevant topics and expectations from the perspective of our most important direct and indirect stakeholders.

We consider sustainability aspects to be material if they can, directly or indirectly, have a significant impact on the Group's financial 2 position and perfor- mance, as well as its reputation and resources, in the short-, medium- and long-term time horizons. From an impact perspective 3, we also consider the direct and indirect effects of our business activities on all selected sustainability aspects in the short-, medium- and long-term time horizons.

Starting in the financial year 2024, GFT will be subject to the Corporate Sustainability Reporting Directive (CSRD). In order to meet these reporting require- ments, we conducted a detailed materiality assessment in 2023 in accordance with the principles and criteria laid down in the European Sustainability

The GFT Group

Table 1  Sustainability aspects

Reporting Standards (ESRS), specifically ESRS 1 section 3.

The starting point for the analysis were the topics used for the previous materiality assessment. These topics were then mapped with the ESRS and supplemented with any additional topics required by ESRS. Entity-specific topics that go beyond the requirements of the ESRS have also been included on the list: responsible technological development, information security & resilience, and data protection. To ensure that the most material topics within the sector had been considered, a peer analysis was conducted but did not lead to any further additions.

The IRO 4 assessment was performed to fulfil the requirements under ESRS 1 section 3. The results of the IRO assessments were discussed internally at validation workshops with those responsible for the respective topics at GFT.

The assessment is based on the methodology outlined in ESRS 1. Suitable scales for assessing IROs according to the ESRS requirements were adopted as such from the existing scales in the Group-wide risk management system with regard to probability and financial impacts. The other scales were defined from 0 to 5.

For actual negative impacts, materiality is based on severity (assessed by the scale, scope and irreversibility of the impact), while for potential negative impacts it is based on the severity and likelihood of the impact.

In the case of a potential negative human rights impact, the severity of the impact takes precedence over its likelihood.

For positive impacts, materiality is based on the scale and scope of the impact for actual impacts, or scale, scope and likelihood for potential impacts.

The materiality of risks and opportunities is assessed on the basis of a combination of the likelihood of occurrence and the size of the potential financial impact.

Finally, the material topics for GFT were derived from the impact and financial perspectives using a threshold value of 40% of the maximum possible valuation, both from an impact and financial perspective. Compared to 2022, we can generally confirm the list of sustainability aspects. Certain aspects were reformulated under the influence of the ESG trends and priorities defined by the GFT Group.

Matters acc. to 289c HGB

Environmental matters

Employee matters

Social matters

Respect for human rights

Anti-corruption and bribery matters

GFT sustainability aspect

GHG emissions

Energy consumption reduction through services provided

Working conditions

Remuneration

Training

Equal opportunity

Contributing to an inclusive society, including gender equality Information security

Checking compliance

Employee data privacy

Combating corruption

Fair competition

GRI standards (2022)

305 No equivalent

403

102−35, 102−36 404 405, 406

No equivalent

418.1

412 No equivalent

205

206

UNGC principles

7, 8, 9 8, 9

3, 4, 5, 6

6

1, 6, 9

10

1, 2 1, 6

10

10

SDGs

12.6, 13.2 8.4, 9.4, 12.6

8.5, 8.8 5.1, 8.5 4.3, 10.3 5b, 10.3

4.3, 4.4, 5b, 12.6, 17.6

16.10

8.7, 8.8 8.8, 16.10

16.5

16.5

ESRS

E1 Climate Change

E1 Climate Changel

S1 Working Conditions

S1 Training

S1 Working Conditions,

S1 Diversity

S1 Diversity

Company-specific

S1 / S2

S1

G1 Business Conduct

The frameworks we refer to are the GRI Standards (2022) of the Global Sustainability Standards Board (GSSB), the principles of the United Nations Global Compact (UNGC) and the United Nations Sustainable Development Goals (SDGs), in particular the subgoals and indicators of the respective SDGs. A preliminary allocation to the ESRS has been added.

Sustainability risks are integrated into the Group- wide risk management system. Within this framework, an assessment was made for all significant sustainability aspects with regard to their probability of occurrence and the extent of the potential negative impact.