Kuehne und Nagel International : Sustainability Report 2023

Dear Readers,

We are one year into our new Roadmap 2026 strategy that sets us on the path to achieve our Vision 2030 of becoming the most trusted supply chain partner supporting a sustainable future.

Creating a sustainable future is at the core of our company's beliefs and is integral to our daily activities.

We are making great progress with our Roadmap 2026 strategy, and with sustainability at its core, we will continue to pioneer new solutions and be at the heart of collaborative sustainability partnerships with customers and partners, which are essential to enact change.

I would like to take this opportunity to thank our 81,000 colleagues for their outstanding performance to achieve our sustainability targets whilst supporting our customers in a continually volatile logistics marketplace.

Dealing with complexity has become the norm and what our colleagues can do well, leading the Kuehne+Nagel Group to have a great 2023-year performance.

We invite you to read the report and be part of our sustainability story.

Stefan Paul

CEO

Dear Readers,

It is an honour to introduce you to our Sustainability Report for the year 2023 and share our progress, initiatives and commitment to environmental, social and governance (ESG) matters.

In my first year at Kuehne+Nagel, I have experienced firsthand the dedication and commitment of our employees to sustainability.

We are proud that Living ESG is an integral part of our Roadmap 2026 strategy. It encapsulates our commitment to ESG and guides our actions to support a sustainable future.

In 2023, we have proven our commitment to environmental aspects, such as investing in renewable electricity or the deployment of biofuels to reduce emissions.

We also turned our attention to the social dimensions of Living ESG. We achieved high participation in our company-wide employee engagement surveys and developed a robust social framework to positively impact society and the environment.

On top, we strengthened our sustainability governance to ensure we have an aligned approach across the organisation to deliver the best outcomes for employees, customers, and partners.

Moving forward, we will continue to focus on reducing emissions along the value chain and providing our partners with actionable insights based on emission data. Simultaneously, we will continue to carefully listen to our customers and employees as we strive to create an extraordinary experience.

With this report, I invite you to explore how we have integrated ESG principles into our business practices and learn about our progress and achievements.

I hope you will join us on this journey to support a sustainable future!

Sarah Kreienbühl

CHRO with additional responsibility for ESG and QSHE

Who we are

From family-run companies to multinational enterprises, Kuehne+ Nagel's 81,000 employees in 94 countries provide transportation and logistics services to customers worldwide. Bridging continents, we address customers' immediate and long-term needs by shaping a more innovative supply chain.

Number of sites by region

Through our global network, Kuehne+Nagel specialises in complex, end-to-end, multimodal supply chain solutions for Sea, Air, Road and Contract and Integrated Logis- tics. The organisation is recognised as one of the world's largest sea and air freight forwarders based on managed volumes.

Our ultimate holding company,

Kuehne + Nagel International AG (KNIN), is registered in Schindellegi, Switzerland and listed on the SIX Swiss Exchange.

1. data-drivenand asset-light business model
   Servicing over 400,000 customers, Kuehne+Nagel favours working with trusted providers. Rather than investing in proprietary fleets, we partner with pre- ferred shipping carriers, airlines and road hauliers. Capital investments are made to address gaps in geographical coverage, reinforce our service offering or drive sup- ply chain innovation. The 2023 acquisitions of the leading African perishable goods

Employees by region

Kuehne+NagelMarket

ExperiencePotential

Launching Roadmap 2026

As one of the leading global logistics pro- viders, we recognise the responsibility we have towards our customers, colleagues, wider society and the environment.

As such, our Vision 2030 is to 'become the most trusted supply chain partner supporting a sustainable future'.

Laying the foundations of this vision is Roadmap 2026. This four-year strategy builds upon the experiences and achievements of our previous strategy which extended our offering from supply chain to value chain services. Roadmap 2026 comprises four cornerstones. Combined, they are the ingredients for our success over the coming years.

The four cornerstones all feed into our sustainability vision.

Kuehne+Nagel Experience

The Kuehne+Nagel Experience cornerstone is designed to ensure a globally consistent customer and employee journey. Its goal is greater customer satisfaction and retention, as well as higher employee satisfaction, motivation, and retention. It is, therefore, closely linked to many of the social aspects of Living ESG.

Market Potential

The Market Potential cornerstone is about using industry-specific, value added solutions and a wider geographic footprint to grow our business. A good example of this is Renewable Energy Logistics, a growing market and enabler for the energy transition.

Digital Ecosystem

The Digital Ecosystem cornerstone centres on connecting people and goods with the right information at the right time. It capitalises on the power of technology to drive our vision, accelerating the move to data- driven, optimised and ultimately more sustainable supply chains.

Living ESG

The Living ESG cornerstone recognises and now firmly anchors environmental, social and governance topics into our overarching business strategy. Business and functional units integrate Living ESG into their own roadmaps and business goals, ensuring close alignment and the integration of sustainability practice.

In practice, Living ESG focuses on measuring and reducing emissions for our customers, offering sustainable fuels and renewable alternatives and strengthening supplier engagement. It puts in place targets and KPIs that will ensure Kuehne+Nagel's employees feel part of a safe and fair workplace and that their contribution and development is valued. Finally, Living ESG seeks to ensure governance that safeguards our business and the livelihoods

of our employees.

Since 2020, Kuehne+Nagel has been committed to the UN Global Compact corporate responsibility initiative and its principles in the areas of human rights, labour, environment and anti-corruption.

As such, the objectives of Living ESG are in alignment with, and seek to contribute to, the UN Sustainable Development Goals. Living ESG also reinforces our commitment to the Science Based Targets initiative (SBTi) and our continued work to achieve emission reduction targets as outlined the Environment section of this report.

Human Rights

Treating everyone with fairness and respect, wherever we operate.

Health, Safety

and Wellbeing

Promoting the health and wellbeing of our employees for an engaged and thriving workforce.

Our social impact framework

2023 ESG achievements

In 2023, we made progress across all sustainability areas. Sustainability now firmly integrated into business strategy, we strengthened its governance by developing a sustainability blueprint to ensure that Living ESG is cascaded throughout the organisation via business units, as well as regional (and in some cases national) sustainability leads. We also re-adjusted our materiality matrix to reflect the Group's impact on sustainability matters more accurately. Maintaining - and improving - our notations with key ratings agencies further supports our ESG performance (more details in the table on page 10). Highlights of our progress in environmental, social and governance topics are as follows:

Environment

Kuehne+Nagel's commitment to address climate change remains central to our sustainability strategy. Underpinning this, our net-zero ambition was included in our updated environmental policy statement, its validation with the SBTi planned for 2024. Our latest 'B' score by the Carbon Disclosure Project (CDP) also confirms our progress in the management of climate- related issues.

Compared to 2022, absolute reported emission figures decreased by 11% to 14.422 million tonnes in 2023. Despite this notable drop, the Group continues to recognise the importance of deep emission cuts along its value chain in order to transition to a low-carbon and, ultimately, net-zero aligned business model. We have, therefore, taken a number of actions in the reporting year to address emissions. Within our immediate sphere of influence, we increased the share of hybrid and electric company cars from 17% to 32% as well as that of electric trucks in our own fleet to 1.5%.

On-site electricity production using photovoltaics also increased by 5%, producing the equivalent of 20% of the electricity consumption handled directly on our pre- mises. Together with investments in Energy Attribute Certificates (EACs), this led to 100% renewable electricity usage for Kuehne+Nagel sites (98% including recent acquisitions). 2023 also saw the roll-out of Smart Meters on selected sites; continuing in 2024, this real-time energy monitoring system will track electricity, gas and water consumption, allowing us to optimise our energy usage.

Supporting customers in their transition to a low-carbon economy, we developed a industry leading sustainable aviation fuel (SAF) certification programme and extended our Book and Claim offer to Road Logis- tics. In 2023, together with our partners, we sourced 13,391 tonnes of sustainable marine fuel, 26 million litres of sustainable aviation fuel and used 0.8 million litres

of hydrotreated vegetable oil. Compared to 2022, this increased sustainable fuel sourcing by more than 90% and reduced emissions by approximately 110,000 tonnes compared to using conventional fuels. We also collaborate with carriers to decarbonise logistics. A noteworthy development announced in 2023 is our participation in a government-funded programme to decarbonise Heavy Goods Vehicles that will accelerate road freight electrification in the UK and contribute to reducing supply chain emissions over the coming years. In addition, Kuehne+Nagel was named official Freight Forwarding and Logistics Partner by COP28, underpinning not only our operational excellence, but our commitment to decarbonise logistics.

Social

In terms of social factors, 2023 saw Kuehne+Nagel develop a number of strategic approaches, including our social impact framework within Living ESG and our HR Roadmap. The former defines our ambitions for a range of topics, including health and safety, human rights and diversity, equity and inclusion (DEI), and evaluates where we stand today. This evaluation will help to further prioritise actions. In addition, the HR Roadmap has defined new workstreams as part of Roadmap 2026. As a result, HR's functional identity is set to shift from one led by transaction to one that leads the way in transformation.

Progress regarding our Employee Experience non-negotiables provided some of the highlights of 2023. For example, we launched our Voice of the Employee framework, which involved conducting two surveys, including a Great Place To Work (GPTW) survey in November. Response rates were very positive, and Kuehne+Nagel has now been certified a GPTW in 53 coun- tries. Based on the feedback gathered from both surveys, we will define concrete steps to improve the employee experience in 2024, and as a result will continue to focus on employee development, performance enablement and transparent communication across the organisation.

Our health and safety performance also improved in 2023, demonstrating better than ever results. There were zero fatalities in our own operations or concerning suppliers working within them. In the diversity, equity and inclusion (DEI) area, we made modest steps to increase female role model visibil- ity, enhancing awareness and communication activities while shaping an environment that embraces and respects diversity.

Business-minded governance Accountability, fairness and transparency define our governance topics such as business integrity and data privacy and security. They are key to achieving our environmental and social sustainability ambitions.

In 2023, 96% of employees completed annual confirmation training of the Kuehne+Nagel Code of Conduct, demonstrating the company's commitment to establishing loyal and trustworthy relationships with our customers, suppliers and employees. We also completed an online training campaign on anti-bribery and anti-corruption basic awareness for around 7,000 people managers and will conduct advanced training in 2024.

Underpinning Kuehne+Nagel's responsibility to secure data management, 2023 saw us achieve ISO 27001 information

security certification in Germany and launch a generative AI policy.

ESG governance

As sustainability questions and practices progress in scope, complexity and impor- tance, so do Kuehne+Nagel's management structure and corporate culture evolve.

Kuehne+Nagel has a two-tier management system comprising a Management Board and a Board of Directors. The former approves the ESG strategy and monitors performance. Usually, the Chief Executive Officer (CEO) and/or the Chief Financial Officer (CFO) represent the Management Board at quarterly meetings of the Board of Directors, along with other functional and business unit executives.

Since April 2023, and in line with the integration of Living ESG as a cornerstone of Kuehne+Nagel's Roadmap 2026, our Chief Human Resource Officer (CHRO) has also been responsible for ESG and QSHE at Management Board level. The Global Head of Sustainability and the corporate sustainability team report to the CHRO. They are charged with cross-business unit coordination, regional and national strategy alignment for Living ESG and performance monitoring and reporting.