Heidelberg Materials AG

We acknowledge that our climate commitment also needs to be mirrored in our political engagements at global, regional, and local level in order to support the transformation of our industry. We advocate for comprehensive carbon pricing systems coupled with a level playing field to enhance effective responses to climate change. We ensure global governance and alignment of our advocacy work and our activities in associations through our interdisciplinary task forces, which include experts from Group staff functions and operations. Interdisciplinary working groups comprising experts from different departments are responsible for the topics of CO₂ management, sustainable land management, sustainable construction, social responsibility, sustainability strategy, and risk management, as well as sustainability ratings and reputation. Several of these topics, such as CO₂ management, are further coordinated by steering committees, which report to the Managing Board.

**08. Engaging with stakeholders and advocacy**

Our direct and indirect advocacy activities at group and national levels are in full alignment with the UNFCCC Paris agreement and support the implementation of our climate roadmap. Heidelberg Materials cooperates proactively with policymakers, associations, communities, sectoral business partners, and other stakeholders to advocate for an effective response to climate change based on sectoral and local action.

A key policy for enabling a net-zero transition is the introduction of a carbon price as a recognised measure to incentivise the necessary investments. We advocate at the global, regional, and national levels for the implementation of carbon pricing mechanisms that, in addition, continue to ensure a level playing field.

In associations and policy initiatives of which we are members, we seek alignment with the goals of the UNFCCC Paris Agreement and regularly review our memberships in this context. We have committed to publishing an annual review of major trade organisations to verify that there are no major misalignments.

We also advocate for the uptake of CCUS technologies, and for the creation of lead markets for low-carbon and circular products and renewable energies.

The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the Chief Sustainability Officer (CSO) and the board member responsible for associations.

HeidelbergCement cooperates proactively with policy makers, communities, sectoral business partners and other stakeholders to create the appropriate framework conditions to support the implementation of sustainable solutions for climate change mitigation and adaptation. We have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to one member of the Managing Board who also oversees the comprehensive implementation of this policy. [...] At the same time, we are strengthening our cooperation with associations across our product value chain to move toward net zero carbon buildings by 2050. [...] We will continue to advocate for a predictable and reliable legislative environment that supports the introduction of sustainably produced and performing building materials and fosters the transition towards a climate-neutral society.

In addition, we formulated structures and policies to ensure that our positions remain consistent with those of the industry associations in which we are involved. In particular, we want to ensure that the positions and actions of industry associations are in line with international and European climate protection agreements and the targets set out in our Sustainability Commitments 2030. We have published a new Climate Advocacy and Association Review for 2021. [...] Our lobbying activities represent the positions that HeidelbergCement takes in public. [...] [Climate Advocacy and Association Review 2021](https://www.heidelbergcement.com/sites/default/files/assets/document/dd/54/heidelbergcement_climate_advocacy_and_association_review_2021.pdf)

**Our Group Climate Policy is binding and applicable company-wide aimed at guiding all our advocacy** **activities in the markets we operate in. This includes our direct political engagements as well as broader** **stakeholder outreach with associations, international and societal organisations, communities, and sectoral** **business partners.** [...] **Association Governance** As a company, we have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to the Chief Sustainability Officer and member of the Managing Board. We set up a clear roadmap for all our operations how to reduce CO2 emissions. The progress is tracked and overseen by the Senior Management and responsible Board Members. Operational responsibility for implementing the sustainability and climate protection goals of Heidelberg Materials lies with the respective country management teams. Hence, engagement in national associations is key to help set the framework conditions for a successful transition of our sector. Heidelberg Materials has a strong association management with a global function to provide continuous oversight over industry association advocacy. It confirms alignment with our positions and helps to ensure that our commitment to responsible and constructive advocacy is shared by the associations of which we are a member. A regular exchange with company representatives in trade associations has been established to ensure the associations' lobbying is in line with the goals of the Paris Agreement. The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the company's Chief Sustainability Officer and the board member responsible for associations. [...] **Methodology of reviewing our engagement in associations** We are reviewing our engagement in national trade associations annually. The review includes all countries where we have operations, as well as the associations of all our three main business lines – cement, aggregates and ready-mixed concrete. Additionally, the review includes a global and a European association, each related to cement production. In our 2024 Climate Advocacy & Association Review, it was reconfirmed whether a trade association's lobbying is aligned with the goals of the Paris Agreement or not. Based on internal desk top research and our knowledge from active engagement in the organisations, a pre-assessment of the fulfilment of the criteria was conducted. Representatives of Heidelberg Materials in the national trade associations were consulted to confirm, substantiate, or further elaborate and revise the initial assessment. This information was again cross-checked through our Group Public Affairs function with support of Group Reporting Controlling & Consolidation (RCC). In case of uncertainties, the country representatives were consulted in a second or even third review round. Given their relevance for global GHG emissions, cement trade associations were additionally assessed in more detail. It was examined whether they (1) are aligned with the Paris Agreement; (2) have a corresponding CO2 roadmap; (3) advocate for (the introduction of) carbon pricing; (4) advocate for the support of advanced technologies, e.g. CCUS; (5) advocate for the support of low-carbon products; and (6) advocate for the support of renewable energies. The level of alignment was then categorised based on the outcome of the assessment of the six main criteria: - **Fully aligned: The Association meets all 6 defined criteria.** - **Partially misaligned: The Association meets between 1 to 5 of the defined criteria.** - **Misaligned: The Association does not meet any of the 6 defined criteria.** [...] **Ensuring alignment** Heidelberg Materials will continue to act on the findings raised in this Association Review. Based on the latest standards and best practice, we refine our survey annually. We follow up in case of misalignment, e.g. through bilateral calls with Country Managers. If an association's position on a strategically important issue differs from ours, we will increase our engagement in the association's committees and signal our dissent to improve the alignment or to demand the association not take a position. If the association repeatedly pursues policies and actions that are contrary to Heidelberg Materials' positions or if reasonable measures to advance the goals of the Paris Agreement are repeatedly opposed, we will publicly state our disagreement, assess the association's performance and its membership value, and finally review if exiting the association is appropriate. We believe exiting an association is only appropriate as a last resort since aligning positions as a sector or industry across companies and associations is a precondition for achieving a net-zero economy. Given the climate ambition of Heidelberg Materials we have a vested interest to continuously engage with our associations to align their lobbying activities with the goals of the Paris Agreement.

#### 2.2 Transparency in our climate-related lobbying activities

Heidelberg Materials recognizes the importance of carrying out political engagements in a fair and transparent manner and pursues a constructive dialogue with political stakeholders.

To foster transparency, we report on our activities and publish the names of our representatives in applicable transparency registers and support the implementation of such registers in jurisdictions which have not yet done so. The registers also provide further information, a. o. about meetings conducted and input to public consultations.

- [EU Transparency Register (europa.eu) / Identification number in the register: 81970148701-15](https://ec.europa.eu/transparencyregister/public/consultation/displaylobbyist.do?id=81970148701-15)

- [Registereintrag "HeidelbergCement AG" - Lobbyregister beim Deutschen Bundestag](https://www.lobbyregister.bundestag.de/suche/R001318/2735?backUrl=%2Fsuche%3Fq%3DHeidelbergCement%26page%3D1%26pageSize%3D10%26sort%3DREGISTRATION_DESC)

We conduct any political engagement in compliance with our own code of business conduct and other company policies, such as our climate policy, data protection policy, compliance policy as well as our competition [law and anticorruption guidelines. All documents, including our policy positions, can be found under: ESG Doc-](https://www.heidelbergmaterials.com/en/esg-documents-policies) [uments and Policies | Heidelberg](https://www.heidelbergmaterials.com/en/esg-documents-policies) Materials.

Representatives of Heidelberg Materials will always identify themselves by name and affiliation when acting on behalf of the company. Our representatives will always provide facts-based and accurate information during political engagements. [...] #### 3.1 Association Management

As a company, we have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to a member of the Managing Board. We set up a clear roadmap for all our operations how to reduce CO2 emissions. The progress is tracked and overseen by the Senior Management and Board Members. Operational responsibility for implementing the sustainability and climate protection goals of Heidelberg Materials lies with the respective country management teams.

December 2022 Heidelberg Materials Climate Advocacy and Association Review 2022

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Heidelberg Materials strengthened its association management with a global function to provide continuous oversight over industry association advocacy, confirm alignment with our positions and help ensure our commitment to responsible and constructive advocacy is shared by the associations of which we are a member. A regular exchange with company representatives in trade associations has been established to ensure the associations' lobbying is in line with the goals of the Paris Agreement. The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the Chief Sustainability Officer (CSO) and the board member responsible for associations.

In 2022, Heidelberg Materials financially contributed to the selected cement trade associations with an estimated amount of €10.5 million globally. Thereof these associations used around €2.3 million for lobbying activities. The largest financial contributions in 2022 were made to the German, French & U.S. Cement Trade Association (i.e. VDZ, SFIC & PCA). Heidelberg Materials does not financially contribute to political parties, campaigns, or referendums. [...] #### 3.2 Methodology of Association Review

We reviewed our membership in national trade associations in those countries which meet the following criteria:

a. which cumulatively generate more than 80% of our global revenue,
b. where we are producing clinker, i.e., the most CO2 intensive product in our value chain and,
c. where there is an association established.

Additionally, the review includes a global and a European association, each related to cement production.

For this review, a set of criteria were defined that reflect whether a trade association's lobbying is aligned with the goals of the Paris Agreement or not. Based on internal desk top research, a pre-assessment of the fulfilment of the criteria was conducted. Representatives of Heidelberg Materials in the national trade associations were consulted to confirm, substantiate or further elaborate and revise the initial assessment. This information was again cross-checked through the Group Association Management. In case of uncertainties, the country representatives were consulted in a second and third review round. Government Affairs, Group Communications, and Investor Relations managed the process. The Chief Sustainability Officer and responsible Board Member for Associations supervised the progress and approved the outcome.

We acknowledge that our climate commitment also needs to be mirrored in our political engagements at global, regional, and local level in order to support the transformation of our industry. We advocate for comprehensive carbon pricing systems coupled with a level playing field to enhance effective responses to climate change. We ensure global governance and alignment of our advocacy work and our activities in associations through our interdisciplinary task forces, which include experts from Group staff functions and operations. Interdisciplinary working groups comprising experts from different departments are responsible for the topics of CO₂ management, sustainable land management, sustainable construction, social responsibility, sustainability strategy, and risk management, as well as sustainability ratings and reputation. Several of these topics, such as CO₂ management, are further coordinated by steering committees, which report to the Managing Board.

#### 4.1 Association Governance

As a company, we have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to the Chief Sustainability Officer (CSO) and member of the Managing Board. We set up a clear roadmap for all our operations how to reduce CO2 emissions. The progress is tracked and overseen by the Senior Management and responsible Board Members. Operational responsibility for implementing the sustainability and climate protection goals of Heidelberg Materials lies with the respective country management teams. Hence, engagement in national associations is key to help set the framework conditions for a successful transition of our sector.

Heidelberg Materials has a strong association management with a global function to provide continuous oversight over industry association advocacy. It confirms alignment with our positions and helps to ensure that our commitment to responsible and constructive advocacy is shared by the associations of which we are a member. A regular exchange with company representatives in trade associations has been established to ensure the associations' lobbying is in line with the goals of the Paris Agreement. The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the Chief Sustainability Officer (CSO) and the board member responsible for associations.

Based on our climate commitments and Group Climate Policy, we seek alignment of associations with two of our main advocacy principles:

#### ▪ Full support for the Paris Agreement and its targets,
▪ Polices that support meeting our CO2 reduction target for 2030 and that enable a transition to net-zero by 2050 at the latest.

Heidelberg Materials supports and advocates these principles in our trade associations based on four pillars:

1. Review the association's policy statements and positions and ensure those are aligned with the Paris agreement as included in our Group climate policy.
2. Review policy priorities and the work of associations to ensure that positive and pro-active positions are taken which support a net-zero transition. As the current political framework needs to be adapted to enable the industry's transition toward net zero, it is in the interest of our company that trade associations advocate in line with the goals of the Paris Agreement.
3. Continuously highlight and reinforce the need for an ambitious climate policy and commitment to achieve the goals of the Paris Agreement at all levels of engagement with the association and at main gatherings and public events.
4. Heidelberg Materials' representatives within the associations are asked to clearly communicate expectations, take the appropriate measures if these are not being met, and report any major misconduct. All representatives are encouraged to take an active position within the association.

In 2023, Heidelberg Materials financially contributed to trade associations with an estimated amount of €15.5 million globally. Thereof these associations used around €3.3 million for lobbying activities. Contributions include Heidelberg Materials' memberships in cement, aggregates, and ready-mixed concrete associations. The largest financial contributions in 2023 were made to the German, French & U.S. cement trade associations (i.e. VDZ, France Ciment, PCA). On direct political engagements, the company spent a total of approx. €2 million for the same period. The company does not financially contribute to political parties, campaigns, or referendums.

#### 4.2 Methodology of reviewing our engagement in Association

We are reviewing our engagement in national trade associations annually and pay special attention to key countries. A focus is placed on associations in which we have direct membership and thus greater impact on their positioning. Additionally, the review includes a global and a European association, each related to cement production.

In contrast to our 2022 Climate Advocacy & Association Review, in 2023, we extended our review from cement trade associations to aggregates and ready-mix concrete associations.

It was checked whether a trade association's lobbying is aligned with the goals of the Paris Agreement or not. Based on internal desk top research, a pre-assessment of the fulfilment of the criteria was conducted. Representatives of Heidelberg Materials in the national trade associations were consulted to confirm, substantiate, or further elaborate and revise the initial assessment. This information was again crosschecked through the Group Association Management. In case of uncertainties, the country representatives were consulted in a second or even third review round. The CSO and responsible Managing Board Member for Associations supervised the progress and approved the outcome.

Given their relevance for global greenhouse gas emissions, cement trade associations were additionally assessed more in detail. It was examined whether they (1) are aligned with the Paris Agreement (2) have a corresponding CO2 roadmap, (3) advocate for (the introduction of) carbon pricing, (4) advocate for the support of advanced technologies, e.g. CCUS; (5) advocate for the support of low-carbon products, (6) and advocate for the support of renewable energies.

The cement trade associations' alignment was then categorised based on the outcome of the assessment of the six main criteria:

- **Fully aligned: The Association meets all 6 defined criteria.**

- **Partially misaligned: The Association meets between 1 to 5 of the defined criteria.**

- **Misaligned: The Association does not meet any of the 6 defined criteria.**

#### 4.3 Findings of the Association Review and actions taken

Out of the 23 reviewed cement trade associations, 15 are fully aligned with the goals of the Paris Agreement according to our methodology. Six associations are partially misaligned, and one association is misaligned with the goals of the Paris Agreement. The advocacy of almost all ready-mix and aggregates trade associations covered in this review are consistent with the Heidelberg Materials' position on climate.

The CSO and the board member for associations is regularly informed about the associations' alignment with the goals of the Paris Agreement and the categories assessed. Country managers are informed through various levels.

Heidelberg Materials, through its associations, strongly supports the establishment of national CO2 roadmaps, which set out pathways to achieve net-zero emissions, in line with the Paris Agreement, and which outline the necessary measures and instruments to achieve this. For instance, we encouraged the GCCA to roll out their Net Zero Accelerator Programme in Thailand, Egypt, Morocco, India, Indonesia, Tanzania, and Ghana. The Accelerator Programme supports regional trade associations to translate the GCCA's Global CO2 Roadmap into national roadmaps. The GCCA CO2 Roadmap, published in 2021, sets out the pathway for the global cement and concrete sector to reach net-zero emissions by 2050.

Through the European cement association Cembureau, Heidelberg Materials' representatives support the implementation of the Green Deal and a successful decarbonisation of the European cement sector.

The Heidelberg Materials CEO and all members of the Managing Board continuously reinforce our ambition and commitment to achieve the goals of the Paris Agreement at high-level occasions, such as the GCCA's Annual Meeting in June 2023 or at COP28. This serves as a guidance to all our employees and those who represent Heidelberg Materials in trade associations.

#### 4.4 Ensuring alignment

Heidelberg Materials will continue to act on the findings raised in this Association Review. Based on the latest standards and best practice, we refine our survey annually. We follow up in case of misalignment, e.g. through bilateral calls with Country Managers.

If an association's position on a strategically important issue differs from ours, we will increase our engagement in the association's committees and signal our dissent to improve the alignment or to demand the association not take a position.

If the association repeatedly pursues policies and actions that are contrary to Heidelberg Materials' positions or if reasonable measures to advance the goals of the Paris Agreement are repeatedly opposed, we will publicly state our disagreement, assess the association's performance and its membership value, and finally review if exiting the association is appropriate. We believe exiting an association is only appropriate as a last resort since aligning positions as a sector or industry across companies and associations is a precondition for achieving a net-zero economy.

Given the climate ambition of Heidelberg Materials we have a vested interest to continuously engage with our associations to align their lobbying activities with the goals of the Paris Agreement.

The sustainability transition can only be achieved through collaboration with the relevant stakeholders. Therefore engagement with the different groups is of utmost importance to us. We cooperate with various partners from the industry, associations, governmental and non-governmental organisations, as well as universities and research institutions. We carefully decide which initiatives, associations and the like we support. Our engagement in associations and initiatives aims to drive and accelerate a successful implementation of the industrial transformation towards net zero. We thus raise the awareness of environmental issues concerning our industry by engaging with national governments, local communities, associations, and non-governmental organisations.

Direct exchange with political decision makers In order to further strengthen our dialogue with policymakers, we supplement HeidelbergCement's indirect representation via associations with three Group representative offices in Berlin, Brussels, and Washington. Our aim is to facilitate a direct exchange between political decision makers and contact partners within the company. At numerous events, presentations, and panel discussions in 2021, we were also able to demonstrate in person how HeidelbergCement, as a leading building materials company in Europe, can help to solve social problems. In 2021, our activities focused on new proposals for higher carbon pricing and a carbon border adjustment, the promotion of key low-carbon technologies and the associated infrastructure, as well as the creation of the green lead markets and standards and other political conditions needed to successfully implement our climate neutrality strategy. In addition, we formulated structures and policies to ensure that our positions remain consistent with those of the industry associations in which we are involved. In particular, we want to ensure that the positions and actions of industry associations are in line with international and European climate protection agreements and the targets set out in our Sustainability Commitments 2030. We have published a new Climate Advocacy and Association Review for 2021. Our lobbying activities represent the positions that HeidelbergCement takes in public. [Climate Advocacy and Association Review 2021](https://www.heidelbergcement.com/sites/default/files/assets/document/dd/54/heidelbergcement_climate_advocacy_and_association_review_2021.pdf)

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]HeidelbergCement recognizes that global climate change is a key challenge for our society, and we support the aim of the UNFCCC Paris Agreement to limit global warming to well below 2°C and pursuing efforts to limit it to no more than 1.5ºC.
We have adopted a global CO2 reduction roadmap with the most ambitious 2030 CO2 reduction target in our sector globally and the ambition to become a net-zero company by 2050. In June 2021, HeidelbergCement also signed the "Business Ambition for 1.5°C Commitment", a global initiative that confirms our ambition. In the same step, the company joined the UN "Race to Zero" campaign further underlining our leadership role on the road to carbon neutrality in the cement industry. Our commitments have been validated by the Science-based Target Initiative (SBTi) and we are on track to have our commitments approved in line with the 1.5°C pathway as soon as the SBTi methodology for the cement sector is finalized and ready to be used.
We acknowledge that our climate commitment also needs to be mirrored in our political engagements at global, regional and local level in order to support the transformation of our industry. HeidelbergCement advocates for comprehensive global and regional carbon pricing systems coupled with a level playing field to enhance effective responses to climate change (see Group Climate Policy document for more information).
We assure global governance and alignment of our advocacy work and our activities in associations through our interdisciplinary task forces that include experts from Group staff functions and operations. As mentioned previously, six interdisciplinary working groups comprising experts from different departments are responsible for the topics of CO2 management, sustainable land management, sustainable construction, social responsibility, sustainability strategy and risk management, as well as sustainability ratings and reputation. Several of these topics are further coordinated by steering committees, as in the case of CO2 management, which report to the Managing Board. Besides the coordination task, these groups are responsible to define main positions, guidelines, goals, and measures, as well as ensuring their implementation.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes

Heidelberg Materials

Climate Advocacy and Association Review 2022

December 2022

1. Introduction

Global climate change is one of the biggest challenges for society. As an energy-intensive company, Heidelberg Materials recognizes its responsibility to continuously reduce the carbon footprint of our production processes and we are committed to be carbon-neutral by 2050. We support the aim of the Paris Agreement to limit global warming to 1.5ºC. In addition, Heidelberg Material has set itself the sector's most ambitious CO2 target for 2030 reducing its carbon footprint by 47% compared to 1990 to 400 kg CO2 per tonne of cementitious material.

To achieve our goal of net-zero emissions by 2050, Heidelberg Materials cooperates proactively with associations, policy makers, communities, sectoral business partners, and other stakeholders to create the appropriate framework conditions to support the implementation of sustainable solutions for climate change mitigation and adaptation.

On a global level, the cement and concrete sector agreed to net-zero carbon emissions by 2050 as laid out by the Roadmap of the Global Cement and Concrete Association (GCCA) published in June 2021. GCCA members account for 80% of the global cement industry volume outside of China and also include several large Chinese manufacturers. Thus, the GCCA Roadmap serves as a reference for climate advocacy in national trade associations where no such roadmap is yet in place. Being a founding member of this association, Heidelberg Materials supports this roadmap in its climate advocacy.

In June 2021, Heidelberg Materials signed the "Business Ambition for 1.5°C Commitment", a global initiative that confirms our ambition. At the same time, the company also joined the UN "Race to Zero" campaign in the run-up to the 26th UN Climate Change Conference (COP 26) in Glasgow in November 2021, further underlining our leadership role on the road to net-zero in the cement industry. Acknowledging that the demand for low-carbon products is a key enabler for net-zero production processes, Heidelberg Materials also supports buyers-driven initiatives such as the First Movers Coalition. Heidelberg Materials was the first cement company with a 2030 CO2 reduction target for the 2°C scenario that was verified by the Science-based Target Initiative (SBTi). In 2022, we have also submitted our roadmap and targets for verification under the new SBTi 1.5°C pathway scenario for cement. Heidelberg Materials further engages and shapes discussions on industry decarbonisation with international institutions and initiatives such as UN Industrial Development Organisation (UNIDO) and the International Energy Agency.

This report covers our climate advocacy positions, our memberships in associations, their alignment with the Paris Agreement, and how we engage with those associations that are not yet fully aligned. While there is already a strong support for the Paris Agreement in many of the associations we are a member of, some associations need to take further steps. As Heidelberg Materials, we are committed to leverage our impact to set the cement sector's associations on track to net-zero emissions.

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2. Heidelberg Materials statement on climate policy

Heidelberg Materials aims to continuously reduce CO2 emissions within our company in line with the Paris agreement to limit global warming to 1.5°C. As one of the world's largest construction material companies, we aim to lead the transformation of our sector globally. Our company's commitment to the Paris Agreement is implemented through an internal CO2 roadmap with country and even plant-specific CO2 roadmaps. Our renumeration system for local and group management also depends on achieving their assigned CO2 reduction targets.

We therefore seek and – directly as well as indirectly – advocate for policy frameworks that are aligned with our own climate ambition and targets and that meet the goals of the Paris agreement. Such frameworks must promote innovative low-emission building materials, processes, and business models that foster the transition towards a net-zero society while also strengthening industrial competitiveness. Innovation should also be inclusive towards all promising technologies.

Our commitment to the Paris agreement and our Group climate policy are applicable company-wide and guide all our advocacy activities in the markets we operate in. This includes our direct political engagements as well as broader stakeholder outreach with associations, international and societal organisations, communities, and sectoral business partners.

2.1 Our goals and commitments:

In May 2022, Heidelberg Materials communicated the following climate-related commitments: • Our goal is to achieve a specific CO2 emission value of 400 kg per tonne of cementitious material by 2030, the most ambitious scope 1 target in our industry. Compared with the base year 1990, this corresponds to a reduction of almost 50%. By 2050, at the latest, we aim to achieve net-zero carbon emissions. • The above reduction target is based on calculations according to the GCCA standard. They are also currently being reviewed by the Science-Based Targets initiative (SBTi). We actively supported the development of a 1.5°C roadmap and meaningful criteria for the cement industry by SBTi. • We also aim to close the carbon and materials loop. Therefore, by 2030, we will double our revenue from low-carbon and circular products and solutions to reach 50% of Group revenue. By the same year, we will also offer circular alternatives for half of our concrete products – aiming for full coverage. • Concerning our energy use, one of our sub-targets is to increase the proportion of alternative fuels in the fuel mix to 45% by 2030. Finally, Heidelberg Materials has committed to reducing its Scope 2 CO2 emissions - indirect emissions from purchased energy - by 65% between 2016 and 2030.

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2.2 Transparency in our climate-related lobbying activities

Heidelberg Materials recognizes the importance of carrying out political engagements in a fair and transparent manner and pursues a constructive dialogue with political stakeholders.

To foster transparency, we report on our activities and publish the names of our representatives in applicable transparency registers and support the implementation of such registers in jurisdictions which have not yet done so. The registers also provide further information, a. o. about meetings conducted and input to public consultations. • EU Transparency Register (europa.eu) / Identification number in the register: 81970148701-15 • Registereintrag "HeidelbergCement AG" - Lobbyregister beim Deutschen Bundestag We conduct any political engagement in compliance with our own code of business conduct and other company policies, such as our climate policy, data protection policy, compliance policy as well as our competition law and anticorruption guidelines. All documents, including our policy positions, can be found under: ESG Documents and Policies | Heidelberg Materials.

Representatives of Heidelberg Materials will always identify themselves by name and affiliation when acting on behalf of the company. Our representatives will always provide facts-based and accurate information during political engagements.

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3. Our engagement in trade associations

Heidelberg Materials engages in most countries where we have operations with national trade associations and is member of these with only few exceptions. We pursue strong and broad engagement within these associations and thus are represented at the level of presidents/chairmen, board members, working group chairs and working group members. We also actively participate in ad-hoc working groups. Our contribution ranges from clearly advocating for working priorities of these associations to supporting position papers and proactively engaging in discussions.

Based on our climate commitments and Group climate policy, we seek alignment of associations with two of our main advocacy principles: ▪ Full support for the Paris Agreement and its targets ▪ Polices that support meeting our CO2 reduction target for 2030 and that enable a transition to net-zero by 2050 at the latest Heidelberg Materials supports and advocates these principles in our trade associations based on two pillars: 1. Review the association's policy statements and positions and ensure those are aligned with the Paris agreement as included in our Group climate policy. 2. Review policy priorities and work of associations to ensure that positive and pro-active positions are taken which support a net-zero transition. As the current political framework needs to be adapted to enable the industry's transition toward net-zero, it is in the interest of our company that trade associations advocate in line with the goals of the Paris Agreement. 3. Continuously highlight and reinforce the need for an ambitious climate policy and commitment to achieve the goals of the Paris Agreement at all levels of engagement with the association and at main gatherings and public events. Heidelberg Materials CEO and members of the Managing Board continuously reinforce our ambition and commitment to achieve the goals of the Paris Agreement at highlevel occasions, such as the Annual Meeting of the Global Cement & Concrete Association in June 2022 or at the COP27 in November 2022. This serves as a guidance to all our employees and thus also to those who represent Heidelberg Materials in trade associations. 4. Heidelberg Materials' representatives within the associations are asked to clearly communicate expectations, take the appropriate measures if these are not being met, and report any major misconduct. All representatives are encouraged to take an active position within the association in support of our policy asks.

3.1 Association Management

As a company, we have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to a member of the Managing Board. We set up a clear roadmap for all our operations how to reduce CO2 emissions. The progress is tracked and overseen by the Senior Management and Board Members. Operational responsibility for implementing the sustainability and climate protection goals of Heidelberg Materials lies with the respective country management teams.

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Heidelberg Materials strengthened its association management with a global function to provide continuous oversight over industry association advocacy, confirm alignment with our positions and help ensure our commitment to responsible and constructive advocacy is shared by the associations of which we are a member. A regular exchange with company representatives in trade associations has been established to ensure the associations' lobbying is in line with the goals of the Paris Agreement. The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the Chief Sustainability Officer (CSO) and the board member responsible for associations.

In 2022, Heidelberg Materials financially contributed to the selected cement trade associations with an estimated amount of €10.5 million globally. Thereof these associations used around €2.3 million for lobbying activities. The largest financial contributions in 2022 were made to the German, French & U.S. Cement Trade Association (i.e. VDZ, SFIC & PCA). Heidelberg Materials does not financially contribute to political parties, campaigns, or referendums.

3.2 Methodology of Association Review

We reviewed our membership in national trade associations in those countries which meet the following criteria: a. which cumulatively generate more than 80% of our global revenue, b. where we are producing clinker, i.e., the most CO2 intensive product in our value chain and, c. where there is an association established.

Additionally, the review includes a global and a European association, each related to cement production.

For this review, a set of criteria were defined that reflect whether a trade association's lobbying is aligned with the goals of the Paris Agreement or not. Based on internal desk top research, a pre-assessment of the fulfilment of the criteria was conducted. Representatives of Heidelberg Materials in the national trade associations were consulted to confirm, substantiate or further elaborate and revise the initial assessment. This information was again cross-checked through the Group Association Management. In case of uncertainties, the country representatives were consulted in a second and third review round. Government Affairs, Group Communications, and Investor Relations managed the process. The Chief Sustainability Officer and responsible Board Member for Associations supervised the progress and approved the outcome.

The associations were assessed based on six main questions:

1. Do the associations publicly support the Paris Agreement?

To fulfil this criterion there needs to be a public reference that the association acknowledges the Paris Agreement. This reference could be prominently placed on the association's website or in another key document such as an annual report or the CO2 roadmap.

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2. Do the associations publish a CO2 roadmap that is aligned with the Paris Agreement or are they planning to publish such a roadmap within the next six months?

This criterion is met, when there is a published CO2 roadmap that is aligned with the Paris Agreement or trustful information that the roadmap will be published within the next six months.

3. Do the association advocate for (the introduction of) carbon pricing?

This criterion is fulfilled when the associations are calling for carbon pricing through position papers, statements, or other publications or through their lobbying.

4. Do the association advocate for the introduction/support of advanced technologies, e.g., carbon capture, utilisation & storage (CCUS)?

This criterion is fulfilled when the associations are advocating for the support or introduction of advanced CO2 mitigation technologies through position papers, statements, or other publications or through their lobbying.

5. Does the association advocate for the introduction/support of low-carbon products (and/or de-

mand side/green procurement measures)? This criterion is fulfilled when the associations are advocating for the support or introduction of low-carbon products through position papers, statements, or other publications or through their lobbying.

6. Do the associations advocate for the support of renewable energies?

This criterion is fulfilled when the associations are advocating for the support or renewable energies through position papers, statements, or other publication or through their lobbying.

Associations' alignment was then categorised based on the outcome of the assessment of the six main criteria: • Fully aligned: The Association meets all 6 defined criteria. • Partially misaligned: The Association meets between 1 to 5 of the defined criteria. • Misaligned: The Association does not meet any of the 6 defined criteria.

3.3 Findings of the Association Review

It is encouraging to see that out of the 22 reviewed associations, 13 are fully aligned with the goals of the Paris Agreement according to our methodology. Seven associations are partially misaligned, and 2 associations are misaligned with the goals of the Paris Agreement.

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Table 1 Review of trade associations and their lobbying activities in alignment with the goals of the Paris Agreement.

Dothelistedtradeassociations/groups(andtheiradvocacyactivities): PublishaCO2Roadmap

Advocateforthe Advocateforthe thatisalignedwiththe Advocateforthe Publiclysupport Advocatefor(theintroduction/supportofintroduction/supportoflowParisAgreementorare supportof Country/RegionName theParis introductionof)advancedtechnologies,e.g.carbonproducts(and/or theyplanningtopublish renewable Agreement? carbonpricing?CarbonCapture,Utilization demandside/green suchaRoadmapwithinthe energies? &Storage(CCUS)? procurementmeasures)? nextsixmonths?

VereinDeutscherZementwerke

Germany (VDZ) ✓ ✓ ✓ ✓ ✓ ✓

Syndicatfrançaisdel'industrie France cimentière(SFIC) ✓ ✓ ✓ ✓ ✓ ✓ Belgium Febelcem ✓ ✓ ✓ ✓ ✓ ✓

Italiancementproducers Italy association(AITEC) ✓ ✓ ✓ ✓ ✓ ✓

StowarzyszenieProducentów Poland Cementu(SPC) ✓ × × ✓ ✓ ✓ Spain Oficemen ✓ ✓ ✓ ✓ ✓ ✓

CzechRepublicCzechCementAssociation ✓ ✓ ✓ ✓ ✓ × Romania &RoOmtahneiranMAinsesr.aolfPCroedmucetnst(ICnIdRuOsMtry) ✓ ✓ ✓ ✓ ✓

BulgarianAssociationofthe Bulgaria CementIndustry(BACI) ✓ ✓ ✓ ✓ ✓ ✓

MagyarCement,Beton&Mészipari Hungary Szövetség(CeMBeton) ✓ ✓ ✓ ✓ ✓ ✓ UK MineralProductsAssociation(MPA) ✓ ✓ ✓ ✓ ✓ ✓

USA U.S.PortlandCementAssociation ✓ ✓ ✓ ✓ ✓ ✓

Canada CementAssociationofCanada ✓ ✓ ✓ ✓ ✓ ✓

Indonesia AsosiasiSemenIndonesia × × × × × × India C(CeMmAen)tManufacturersAssociation ✓ × × × ✓ ✓

ThaiCementManufacturers Thailand Association(TCMA) ✓ ✓ ✓ ✓ ✓ ✓

CementConcrete&Aggregates

Australia Australia ✓ ✓ × ✓ ✓ ✓

AssociationProfessionelles Morocco Cimentier × ✓ × × ✓ (✓) Egypt TofhethCeeCmheanmtbDeirviosfioBnu,ilwdihnigchispart × ✓ × × ✓ ✓

ChamberofCementManufacturers Ghana Ghana(COCMAG) × × × × × ×

GlobalCementandConcrete Global Association(GCCA) ✓ ✓ ✓ ✓ ✓ ✓ Europe E(CureompbeuarneaCue)mentAssociation ✓ ✓ ✓ ✓ ✓ ✓

3.4 Actions taken to align national associations with the Paris Agreement

Several actions have been taken in 2022 due to previous misalignment of those associations with the goals of the Paris Agreement.

Heidelberg Materials strongly supports the establishment of national CO2 roadmaps aligned with the Paris Agreement which set out pathways to achieve net-zero emissions and which outline the necessary framework conditions to achieve this. We encouraged the Global Cement and Concrete Association (GCCA), of which we are a founding member, to roll out their Net Zero Accelerator Programme in Thailand, Egypt, Morocco, and India. The GCCA Net Zero Accelerator supports national trade associations to translate the GCCA Global CO2 Roadmap for the cement and concrete sector into national CO2 roadmaps. The GCCA CO2 Roadmap, published in 2021, sets out the pathway for the global cement and concrete sector to reach net-zero emissions by 2050.

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As a result, the Thai Cement Roadmap was launched at the COP27 in November 2022. Heidelberg Materials initiated discussions on whether Indonesia and Ghana should become part of this programme. This is foreseen for the coming one to two years.

Heidelberg Materials also joined the Africa Net Zero Cement Leadership Group led by the UN High Level Climate Champions with its Ghanaian subsidiary in 2022 to support that climate action steps up the agenda.

To show the cement sector's and our company's commitment, Heidelberg Materials was present at the COP27 in Egypt in November. By our presence, we showcased our global climate activities and our ambition to further progress on the implementation of the Paris Agreement and Glasgow Climate Agreement.

3.5 Ensuring alignment

Heidelberg Materials will continue to act on findings raised in this association review.

If an association's position on a strategically important issue differs ours, we will increase our engagement in the association committees and signal our dissent to improve the alignment or to demand the association not take a position.

If the association repeatedly pursues policies and actions that are contrary to Heidelberg Materials' positions or if reasonable measures to advance the goals of the Paris Agreement are repeatedly opposed, we will publicly state our disagreement, assess the association's performance and its membership value, and finally review if exiting the association is appropriate. We believe exiting an association is only appropriate as a last resort since aligning positions as a sector or industry across companies and associations is a precondition for achieving a net-zero economy.

Given the climate ambition of Heidelberg Materials to reach net-zero by 2050 and as laid out by its sector leading 2030 CO2 reduction target, Heidelberg Materials further engages with associations to align their lobbying activities with the goals of the Paris Agreement.

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ANNEX – Climate Policy positions

Carbon pricing

The transformation towards net-zero will require significant investments along the entire value chain sustainable construction value chain. When designed in the right way, carbon pricing can be an effective instrument to incentivize emission reductions, as it internalizes external carbon cost and incentivizes investment in emission reduction. • Price signals need to be reliable and allow carbon-neutral production to become a business case.

Speculation in the market and high price volatility needs to be avoided. • Cost-effective carbon pricing systems should consider sectoral starting points and abatement costs to ensure emissions will fall below predetermined emissions targets. • A global framework is the best option to ensure a global level playing field. In absence of a global carbon price, national or regional carbon pricing schemes can also be effective but need to be combined with carbon leakage protection to negative competitive effects. The EU proposal for a carbon-border adjustment mechanism is an example. • In addition, these instruments must be accompanied by demand side measures to ensure the update of low-emission and carbon-neutral products.

Carbon capture, utilisation, and storage (CCUS)

Two thirds of direct emissions in cement production are unavoidable process emissions from calcinating limestone during the clinker production process. Carbon capture utilisation and storage technologies are one of the main solutions to deal with unavoidable process emissions and must therefore be industrialised and deployed at large scale. • The fast development of national and international CO2 transport infrastructures (ships, railway, pipelines) connecting emission sources with storage sites is a necessary precondition for CCUS. Infrastructure planning should therefore be a priority for political decision makers. • Public financial support for scaling necessary CCUS technologies to market readiness needs to be ensured. This must include support for capital investments as well as increased operational costs, through instruments such as Carbon Contracts for Difference. • Recognition of CCUS technologies in carbon accounting. Acknowledging emissions avoidance resulting from CCU and BECCS/BECCU in carbon pricing schemes should be implemented to incentivise their application. In addition, the capture and storage of biogenic carbon emissions enables negative emission capabilities to offset residual emissions that should also be recognised, e.g. through issuing tradeable negative emissions certificates in carbon pricing schemes. To optimize the impact of negative emissions and leverage synergies resulting in reduced cost, alternative fuels with high biomass-content should be routed towards industrial high temperature processes.

Lead markets for low carbon & circular products

Already today, Heidelberg Materials can offer low-carbon construction products with a reduced CO2 emission footprint of up to 70% or a high content of recycled materials. To become more than a niche and rather a specialty product, stimulating demand measures will need to be put in place to ensure the uptake of more sustainable construction materials.

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• Collaboration is necessary to overcome sector-specific limitations to create and make use of synergies, e.g., to get access to concrete demolition waste. • Furthermore, users need to be made aware of circular products and their possible applications. • Revised product and construction norms as well as building codes are needed. • Implementing fiscal incentives for users or adapt green public procurement schemes considering the full life cycle, recyclability, and performance of products besides the price.

Renewable energy

The transformation process will require the rapid phase out of fossil fuels while, at the same time, climate mitigation technologies, require additional use of renewable energy capacity. • Policies must be developed that ensure access to sufficient renewable and low-carbon energy at com-

petitive cost. This must include generation capacity as well as appropriate networks. • Co-processing must be recognised as a sustainable alternative to produce cement allowing the effective substitution of fossil fuels and primary raw materials with non-recyclable residual and biomass waste. • Policies should also adopt a coherent biomass and alternative fuel strategy to ensure sustainability criteria are respected while increasing access to waste-based resources. Landfilling should be banned or heavily taxed.

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Heidelberg Materials

Climate Advocacy and Association Review 2023

December 2023

1. Introduction

Global climate change is one of the biggest challenges for society. As an energy-intensive company, Heidelberg Materials recognises its responsibility to continuously reduce the carbon footprint of our production processes and we are committed to achieve net-zero carbon emissions by 2050, according to the definition of the Science Based Targets initiative (SBTi). We support the aim of the UNFCCC Paris Agreement to limit global warming to 1.5°C. In addition, Heidelberg Materials has set itself the target to reduce the CO2 emissions of its products by almost half per tonne of cementitious material by 2030, compared to 1990, which is the sector's most ambitious target globally. We also committed to capture and store 10 million tonnes of CO2 cumulatively until 2030. In November 2023, Heidelberg Materials launched evoZero®, the world's first net-zero carbon captured cement. evoBuild® our globally unified product line for sustainable construction, was introduced in January 2024.

To achieve our goal of net-zero emissions by 2050, Heidelberg Materials cooperates proactively with associations, policymakers, communities, business partners, and other stakeholders to create the appropriate framework conditions to support the implementation of sustainable solutions for climate change mitigation and adaptation.

On a global level, the cement and concrete sector agreed to net-zero carbon emissions by 2050 as laid out by the Roadmap of the Global Cement and Concrete Association (GCCA) published in June 2021. GCCA members account for 80% of the global cement industry volume outside of China and include several large Chinese manufacturers. Thus, the GCCA Roadmap serves as a reference for the climate advocacy of national trade associations, in the case where no such roadmap is yet in place. Being a founding member of GCCA, Heidelberg Materials supports the roadmap in its global advocacy and calls on countries to adopt consistent national strategies.

Heidelberg Materials is a signatory of the global "Business Ambition for 1.5°C Commitment" and a member of the UN "Race to Zero" campaign, underlining our leadership on the road to net zero in the cement industry. Heidelberg Materials was also the first cement company with a 2030 CO2 reduction target for the 2°C scenario verified by the SBTi. In 2023, our roadmap and targets were validated under the new SBTi 1.5°C pathway scenario for cement, confirming our ambition. We have also submitted our net-zero target for 2050 to SBTi for validation in February 2024.

We attended the 28th UN Climate Change Conference (COP28) in Dubai in December 2023, at which a global review of countries' progress on their emission reduction commitments was carried out for the first time. Importantly, more and more countries and regions are setting themselves the goal of becoming climate neutral and low-emission solutions are becoming increasingly available. However, the global stocktake also found that further action is required to keep the 1.5°C target within reach.

This report covers our climate advocacy and related policy positions, our memberships in associations, their alignment with the Paris Agreement, and how we engage with those associations that are not yet fully aligned. While there is already a strong support for the Paris Agreement in many of the associations, we are a member of, some associations need to take further steps. As Heidelberg Materials, we are committed to leverage our impact to set the sector's associations roadmaps on track to net-zero emissions.

Heidelberg Materials Climate Advocacy and Association Review 2023 2/14

2. Heidelberg Materials statement on climate policy

Heidelberg Materials aims to continuously reduce CO2 emissions in line with the Paris agreement that aims to limit global warming to 1.5°C. As one of the world's largest construction material companies, we aim to lead the transformation of our sector globally. Our company's commitment to the Paris Agreement is implemented through an internal CO2 roadmap with country and even plant-specific CO2 roadmaps. Our renumeration system for local and group management also depends on achieving the assigned CO2 reduction targets.

We therefore seek and – directly as well as indirectly – advocate for policy frameworks that are aligned with our own climate ambition and targets and meet the goals of the Paris agreement. Such frameworks must promote innovative low-emission building materials, processes, and business models that foster the transition towards a net-zero society while also strengthening industrial competitiveness. Innovation should also be inclusive towards all promising technologies.

Our commitment to the Paris agreement and our recently updated Group Climate Policy are binding and applicable company-wide and guide all our advocacy activities in the markets we operate in. This includes our direct political engagements as well as broader stakeholder outreach with associations, international and societal organisations, communities, and sectoral business partners.

2.1 Our goals and commitments:

Heidelberg Materials communicated the following climate-related commitments: • Our goal is to achieve a specific CO2 emission value of 400 kg per tonne of cementitious material by 2030, the most ambitious Scope 1 target in our industry. Compared with the base year 1990, this corresponds to a reduction of almost 50%. By 2050, at the latest, we aim to achieve net-zero carbon emissions (based on SBTI definition).

• We report on our CO2 emissions in accordance with the reporting guidelines of the GCCA and the Global Reporting Initiative (GRI). We also actively supported the development of a 1.5°C roadmap and meaningful criteria for the cement industry by SBTi.

• We have also committed to reducing its Scope 2 CO2 emissions - indirect emissions from purchased energy - by 65% per tonne of cementitious material between 2020 and 2030. Concerning our energy use, one of our sub-targets is to increase the proportion of alternative fuels in the fuel mix to 45% by 2030. • As part of the SBTi validation, we have set ourselves the target to reduce our absolute Scope 3 CO2 emissions from purchased goods and services by 25% by 2030 compared with 2020.

• We further aim to close the carbon and materials loop. By 2030, we will increase our revenue from low-carbon and circular products with the aim to reach 50% of Group revenue. By the same year, we will also offer circular alternatives for 50% of our concrete products.

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3. Transparency in our climate-related advocacy activities

Heidelberg Materials recognizes the importance of carrying out political engagements in a fair and transparent manner and pursues a constructive dialogue with political stakeholders.

To foster transparency, we report on our activities and publish the names of our representatives in applicable transparency registers and support the implementation of such registers in jurisdictions which have not yet done so. The registers also provide further information, a. o. about meetings conducted and input to public consultations. • EU Transparency Register (europa.eu) / Identification number in the register: 81970148701-15 • Registereintrag "HeidelbergCement AG" - Lobbyregister beim Deutschen Bundestag We conduct any political engagement in compliance with our own Code of Business Conduct and other company policies, such as our Climate Policy, Data Protection Policy, Compliance Policy as well as our AntiCorruption Guidelines. All documents, including our policy positions, can be found under: ESG Documents and Policies | Heidelberg Materials.

Representatives of Heidelberg Materials will always identify themselves by name and affiliation when acting on behalf of the company. Our representatives will always provide facts-based and accurate information during political engagements.

Direct exchange with political decision makers and non-governmental stakeholders

In 2023, we have continued our direct lobbying activities at global, regional, and national level in alignment with our ambition to lead the sector's industrial transition towards net zero. To facilitate direct dialogue between political decision makers and contact partners within the company, we supplement Heidelberg Materials' indirect representation by associations with company representative offices in Berlin, Brussels, and Washington.

Through numerous talks, events, presentations, and panel discussions in 2023, we were thus able to demonstrate once again how Heidelberg Materials, as one of the world's leading building materials companies, can make an active contribution to solving current challenges. In particular, we advocate for a coherent and supportive framework for the decarbonisation of the industrial sector. We believe that, in addition to ambitious carbon pricing, this also encompasses the expansion of renewable energies under economically viable conditions and improved access to alternative fuels, including waste-based biomass. We support the implementation of reliable frameworks for CCUS and the associated development of infrastructure for the transport and storage of CO2. We also call for solutions to support a closed-loop circular economy, such as the targeted processing and reuse of construction and demolition waste. In order to create a market for low-emission products, we are in favour of creating green lead markets and developing the necessary internationally compatible standards. We also stress the importance of state funding, which large-scale CCUS projects in particular require during a transition period, as many projects are not yet economically viable at this stage of the transformation.

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At global level, we attended – amongst others – COP28, with our Group Chief Sustainability Officer participating in various panels and forums. At the conference, GCCA welcomed the first international agreement to transition away from fossil fuels signed by 200 countries. We supported their 'Concrete Future Pavilion', including an own event on driving demand for low-carbon cement and concrete. Heidelberg Materials further engaged and shaped discussions on industry decarbonisation with international institutions and initiatives, such as the UN Industrial Development Organisation (UNIDO), Clean Energy Ministerial (CEM), the World Green Building Council (WGBC), the International Energy Agency (IEA) as well as the Leadership Group for Industrial Decarbonisation (LeadIT). Acknowledging that the demand for low-carbon products is a key enabler for net-zero production processes, Heidelberg Materials supports green lead market and buyersdriven initiatives at global and regional levels, such as the First Movers Coalition.

In Europe, we supported final agreements on the revision of the Emission Trading Scheme and first-ever introduction of a Cross-border Adjustment Mechanism (CBAM) as well as the development of the Net-Zero Industry Act (NZIA) and Industrial Carbon Management Strategies. We also actively advocated for financial support for the deployment of large-scale decarbonisation projects, roll-out of infrastructure, and an increased use of circular industrial solutions.

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4. Our engagement in trade associations

Heidelberg Materials engages in most countries where we have operations with national trade associations and is member of these with only few exceptions. We pursue strong and broad engagement within these associations and thus are represented at the level of presidents/chairpersons, board members, working group chairs, and working group members. We also actively participate in ad-hoc working groups or taskforces. Our contribution ranges from clearly advocating for working priorities of these associations to supporting position papers and proactively engaging in discussions. Our Managing Board member for Europe Jon Morrish became vice president of the European Cement Association Cembureau in 2023 and our CEO Dr Dominik von Achten is board member of the Global Cement and Concrete Association (GCCA). Most country managers are engaged in national associations and take roles such as e.g., member of the board of directors, president, or chairperson.

4.1 Association Governance

As a company, we have established governance structures that assign responsibility for sustainability and climate protection, including target achievement, to the Chief Sustainability Officer (CSO) and member of the Managing Board. We set up a clear roadmap for all our operations how to reduce CO2 emissions. The progress is tracked and overseen by the Senior Management and responsible Board Members. Operational responsibility for implementing the sustainability and climate protection goals of Heidelberg Materials lies with the respective country management teams. Hence, engagement in national associations is key to help set the framework conditions for a successful transition of our sector.

Heidelberg Materials has a strong association management with a global function to provide continuous oversight over industry association advocacy. It confirms alignment with our positions and helps to ensure that our commitment to responsible and constructive advocacy is shared by the associations of which we are a member. A regular exchange with company representatives in trade associations has been established to ensure the associations' lobbying is in line with the goals of the Paris Agreement. The alignment of trade associations with goals of the Paris Agreement is quarterly reviewed with the Chief Sustainability Officer (CSO) and the board member responsible for associations.

Based on our climate commitments and Group Climate Policy, we seek alignment of associations with two of our main advocacy principles: ▪ Full support for the Paris Agreement and its targets, ▪ Polices that support meeting our CO2 reduction target for 2030 and that enable a transition to net-zero by 2050 at the latest.

Heidelberg Materials supports and advocates these principles in our trade associations based on four pillars: 1. Review the association's policy statements and positions and ensure those are aligned with the Paris agreement as included in our Group climate policy. 2. Review policy priorities and the work of associations to ensure that positive and pro-active positions are taken which support a net-zero transition. As the current political framework needs to be adapted to enable the industry's transition toward net zero, it is in the interest of our company that trade associations advocate in line with the goals of the Paris Agreement. 3. Continuously highlight and reinforce the need for an ambitious climate policy and commitment to achieve the goals of the Paris Agreement at all levels of engagement with the association and at main gatherings and public events. 4. Heidelberg Materials' representatives within the associations are asked to clearly communicate expectations, take the appropriate measures if these are not being met, and report any major misconduct. All representatives are encouraged to take an active position within the association.

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In 2023, Heidelberg Materials financially contributed to trade associations with an estimated amount of €15.5 million globally. Thereof these associations used around €3.3 million for lobbying activities. Contributions include Heidelberg Materials' memberships in cement, aggregates, and ready-mixed concrete associations. The largest financial contributions in 2023 were made to the German, French & U.S. cement trade associations (i.e. VDZ, France Ciment, PCA). On direct political engagements, the company spent a total of approx. €2 million for the same period. The company does not financially contribute to political parties, campaigns, or referendums.

4.2 Methodology of reviewing our engagement in Association

We are reviewing our engagement in national trade associations annually and pay special attention to key countries. A focus is placed on associations in which we have direct membership and thus greater impact on their positioning. Additionally, the review includes a global and a European association, each related to cement production.

In contrast to our 2022 Climate Advocacy & Association Review, in 2023, we extended our review from cement trade associations to aggregates and ready-mix concrete associations.

It was checked whether a trade association's lobbying is aligned with the goals of the Paris Agreement or not. Based on internal desk top research, a pre-assessment of the fulfilment of the criteria was conducted. Representatives of Heidelberg Materials in the national trade associations were consulted to confirm, substantiate, or further elaborate and revise the initial assessment. This information was again cross-checked through the Group Association Management. In case of uncertainties, the country representatives were consulted in a second or even third review round. The CSO and responsible Managing Board Member for Associations supervised the progress and approved the outcome.

Given their relevance for global greenhouse gas emissions, cement trade associations were additionally assessed more in detail. It was examined whether they (1) are aligned with the Paris Agreement (2) have a corresponding CO2 roadmap, (3) advocate for (the introduction of) carbon pricing, (4) advocate for the support of advanced technologies, e.g. CCUS; (5) advocate for the support of low-carbon products, (6) and advocate for the support of renewable energies.

The cement trade associations' alignment was then categorised based on the outcome of the assessment of the six main criteria: • Fully aligned: The Association meets all 6 defined criteria. • Partially misaligned: The Association meets between 1 to 5 of the defined criteria. • Misaligned: The Association does not meet any of the 6 defined criteria.

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4.3 Findings of the Association Review and actions taken

Out of the 23 reviewed cement trade associations, 15 are fully aligned with the goals of the Paris Agreement according to our methodology. Six associations are partially misaligned, and one association is misaligned with the goals of the Paris Agreement. The advocacy of almost all ready-mix and aggregates trade associations covered in this review are consistent with the Heidelberg Materials' position on climate.

The CSO and the board member for associations is regularly informed about the associations' alignment with the goals of the Paris Agreement and the categories assessed. Country managers are informed through various levels.

Heidelberg Materials, through its associations, strongly supports the establishment of national CO2 roadmaps, which set out pathways to achieve net-zero emissions, in line with the Paris Agreement, and which outline the necessary measures and instruments to achieve this. For instance, we encouraged the GCCA to roll out their Net Zero Accelerator Programme in Thailand, Egypt, Morocco, India, Indonesia, Tanzania, and Ghana. The Accelerator Programme supports regional trade associations to translate the GCCA's Global CO2 Roadmap into national roadmaps. The GCCA CO2 Roadmap, published in 2021, sets out the pathway for the global cement and concrete sector to reach net-zero emissions by 2050.

Through the European cement association Cembureau, Heidelberg Materials' representatives support the implementation of the Green Deal and a successful decarbonisation of the European cement sector.

The Heidelberg Materials CEO and all members of the Managing Board continuously reinforce our ambition and commitment to achieve the goals of the Paris Agreement at high-level occasions, such as the GCCA's Annual Meeting in June 2023 or at COP28. This serves as a guidance to all our employees and those who represent Heidelberg Materials in trade associations.

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Country/ Region Name

Isthetrade Doesthecementtradeassociation… association's …haveaCO2 …advocatefor …advocateforthe…advocateforthe…advocateforthe engagement Roadmapaligned(theintroductionsupportof supportoflow- supportof alignedwiththewiththeParis of)carbonpricing?advanced carbonproducts?renewable goalsoftheParisAgreement? Agreement? technologies,e.g. energies?

CCUS?

Germany VereinDeutscherZementwerke(VDZ) ✓ ✓ ✓ ✓ ✓ ✓

France FranceCiment ✓ ✓ ✓ ✓ ✓ ✓

Belgium Febelcem ✓ ✓ ✓ ✓ ✓ ✓

NetherlandsCementandBetonCentrum ✓ ✓ ✓ ✓ ✓ ✓

Italy Italiancementproducers

association(AITEC) Poland StowarzyszenieProducentów Cementu(SPC)

Spain Oficemen

✓ ✓ ✓ ✓ ✓ ✓ ✓ × ✓ ✓ ✓ ✓ ✓ ✓ × ✓ ✓ ✓

Czech

SvazvýrobcůcementuČR ✓ ✓ ✓ ✓ ✓ ×

Republic

CIROM(NationalAssociationof

Romania ✓ × × ✓ × ✓

CementProducersinRomania)

BulgarianAssociationforCement

Bulgaria ✓ ✓ ✓ ✓ ✓ ✓

Industry

HungarianCementConcreteandLime

Hungary ✓ ✓ ✓ ✓ ✓ ✓

Association,CeMBeton

UK MineralProductsAssociation(MPA) ✓ ✓ ✓ ✓ ✓ ✓

USA PortlandCementAssociation(PCA) ✓ ✓ ✓ ✓ ✓ ✓

Canada CementAssociationofCanada(CAC) ✓ ✓ ✓ ✓ ✓ ✓

CementConcrete&Aggregates

Australia

Australia(CCAA)

Indonesia AsosiasiSemenIndonesia

✓ ✓ × ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

CementManufacturersAssociation India ✓ ✓ ✓ ✓ ✓ ✓ (CMA) Thailand ThaiCementManufacturers ✓ ✓ ✓ ✓ ✓ ✓ Association(TCMA)

Morocco AssociationProfessionnelledes ✓ ✓ ✓ × ✓ ✓

Cimentiers(APC) Egypt ChamberofBuildingMaterials × × × × ✓ ✓

Industries-CementDivision Ghana ChamberofCementManufacturers × × × × × × Ghana(COCMAG)

Global GlobalCementandConcrete Asscociation(GCCA)

Europe CEMBUREAU

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Table 1 Review of cement trade associations and their lobbying activities in alignment with the goals of the Paris Agreement.

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4.4 Ensuring alignment

Heidelberg Materials will continue to act on the findings raised in this Association Review. Based on the latest standards and best practice, we refine our survey annually. We follow up in case of misalignment, e.g. through bilateral calls with Country Managers.

If an association's position on a strategically important issue differs from ours, we will increase our engagement in the association's committees and signal our dissent to improve the alignment or to demand the association not take a position.

If the association repeatedly pursues policies and actions that are contrary to Heidelberg Materials' positions or if reasonable measures to advance the goals of the Paris Agreement are repeatedly opposed, we will publicly state our disagreement, assess the association's performance and its membership value, and finally review if exiting the association is appropriate. We believe exiting an association is only appropriate as a last resort since aligning positions as a sector or industry across companies and associations is a precondition for achieving a net-zero economy.

Given the climate ambition of Heidelberg Materials we have a vested interest to continuously engage with our associations to align their lobbying activities with the goals of the Paris Agreement.

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ANNEX I – Climate Policy positions

Carbon pricing

The transformation towards net-zero will require significant investments along the entire value chain sustainable construction value chain. When designed in the right way, carbon pricing can be an effective instrument to incentivize emission reductions, as it internalizes external carbon cost and incentivizes investment in emission reduction.

• Price signals need to be reliable and allow carbon-neutral production to become a business case. Speculation in the market and high price volatility needs to be avoided.

• Cost-effective carbon pricing systems should consider sectoral starting points and abatement costs to ensure emissions will fall below predetermined emissions targets.

• A global framework is the best option to ensure a global level playing field. In absence of a global carbon price, national or regional carbon pricing schemes can also be effective but need to be combined with carbon leakage protection to negative competitive effects. The EU proposal for a carbon-border adjustment mechanism is an example.

• In addition, these instruments must be accompanied by demand side measures to ensure the update of low-emission and net zero products.

Carbon capture, utilisation, and storage (CCUS)

Two thirds of direct emissions in cement production are unavoidable process emissions from calcinating limestone during the clinker production process. Carbon capture, utilisation and storage technologies are one of the main current solutions to deal with unavoidable process emissions and must therefore be industrialised and deployed at large scale. • The fast development of national and international CO2 transport infrastructures (ships, railway, pipelines) connecting emission sources with storage sites, also those in inland locations, is a necessary precondition for CCUS. Infrastructure planning and coordination should therefore be a priority for political decision makers.

• Public financial support for the deployment of large-scale CCUS technologies needs to be ensured. This must include support for capital investments as well as increased operational costs, through instruments such as Carbon Contracts for Difference.

• Further recognition of CCUS technologies in carbon accounting. Acknowledging emissions avoidance resulting from CCU and Bio-CCS in carbon pricing schemes should be implemented to incentivise their application. In addition, the capture and storage of biogenic carbon emissions enables negative emission capabilities to offset residual emissions that should also be recognised, e.g. through issuing tradeable negative emissions certificates in carbon pricing schemes. To optimise the impact of negative emissions and leverage synergies resulting in reduced cost, alternative fuels with high biomass-content should be routed towards industrial high temperature processes.

Lead markets for low carbon & circular products

Already today, Heidelberg Materials can offer low-carbon construction products with a reduced CO2 emission footprint of up to 70% or a high content of recycled materials. evoZero and evoBuild complement the picture with a full-range sustainable product portfolio. To become more than a niche, stimulating demand measures will need to be put in place to ensure the uptake of more sustainable construction materials.

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• Collaboration is necessary to overcome sector-specific limitations to create and make use of synergies, e.g., to get access to concrete demolition waste. • Furthermore, users need to be made aware of circular products and their possible applications. • Revised product and construction norms as well as building codes are needed.

• Implementing fiscal incentives for users or adapt green public procurement schemes considering the full life cycle, recyclability, and performance of products besides the price.

Renewable energy

The transformation process will require the rapid phase out of fossil fuels while, at the same time, climate mitigation technologies, require additional use of renewable energy capacity.

• Policies must be developed that ensure access to sufficient renewable and low-carbon energy at competitive cost. This must include generation capacity as well as relevant networks.

• Co-processing must be recognised as a sustainable method allowing the effective substitution of fossil fuels and primary raw materials with non-recyclable residual and biomass waste.

• Policies should also adopt a coherent biomass and alternative fuel strategy to ensure sustainability criteria are respected while increasing access to waste-based resources. Landfilling should be banned or heavily taxed.

Circularity

Heidelberg Materials goal is to close the carbon and materials cycle. The use of by-products from other industrial sectors for the production of clinker and cement and the recycling of demolition concrete enables us to produce in a more resource-efficient way and with lower CO₂ emissions.

• Rerouting material flows towards circular products should be incentivised by revising demolition waste management regulations, including separation of waste streams on site.

• The market access for circular products needs to be improved by revising product, building and construction norms.

• Demand creation needs to take place for recycled products by adding financial incentives for private customers and by deploying green public procurement schemes, based on a full life-cycle-analysis, considering carbon footprint and other sustainability-related aspects such as recyclability.

Sustainable Finance

An enabling financial framework is needed that rewards investment into industry transformation with better access to finance and lower capital cost.

• Public funding schemes are needed to bridge the breakthrough period for large-scale decarbonisation technologies, such as CCUS.

• State aid guidelines for public funding of low-carbon technologies should enable support for capital and operations costs compensating competitive disadvantages compared to conventional production.

• Taxonomies defining what sustainable business practices are should be aligned globally. To avoid unintended barriers, taxonomy schemes should focus on the end of a product value chain and provide criteria for intermediate solutions based on technology openness.

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ANNEX II – List of political engagements

Below is a non-exhaustive list of meetings between Heidelberg Material's representatives and policy-makers over the past year.

Institutions

European Commission European Commission European Commission European Commission European Parliament European Commission European Commission European Parliament European Parliament European Commission European Parliament

Representative Date / Location Subject

Virginie Battu-Henriksson, Aleksandra Baranska, Juraj Nociar, Adam Romanowski, (Cabinet members of Maroš Šefčovič) Maroš Šefčovič, Executive Vice-President 30.11.2023, Brussels Alexandre Paquot, Director (DG CLIMA) 16.11.2023, Brussels Clean Transition Dialogue on Energy Intensive Industries Green transition of energy intensive industries Adam Romanowski, Cabinet 24.10.2023, member of Maroš Šefčovič Brussels Green transition of energy intensive industries Peter Handley (Head of Unit) and Madalina 20.09.2023, Brussels Philippe Lambert (MEP) 19.09.2023, Brussels European competitive sustainability and implementing a proactive green industrial policy.

EU climate policy and carbon capture Ruud Kempener, Cabinet member of Kadri Simson 27.06.2023, Net Zero Industry Act Brussels Kerstin Jorna, Director General (DG GROW) 27.06.2023, Brussels Discuss their views on how to accelerate the transformation of the EU construction material industry Michael Bloss (MEP) 25.05.2023, Industry transformation Heidelberg Jan Christian Ehler (MEP) 17.05.2023, Online Net Zero Industry Act Antoine Colombani, Cabinet member of Frans Timmermans Stefanie Hiesinger, Cabinet member of Frans Timmermans 25.04.2023, Brussels Peter Liese (MEP) 09.03.2023, Online Roundtable Decarbonisation of the cement sector EU Trading Emissions Scheme (ETS)

Below is a non-exhaustive list of Heidelberg Material's participation in major conferences and summits over the past year.

Event Company representative Date / Location

CHOOSE Summit Jon Morrish 15 May 2023, Versailles, France

Heidelberg Materials Climate Advocacy and Association Review 2023

Subject

Financing the green transformation UNFCCC 28. Conference of the Parties (COP28) New York Climate Week - PCA and GCCA Panel Event Stiftung KlimaWirtschaft Annual conference Dr. Nicola Kimm 30 November – 12 December 2023, Dubai, United Arab Emirates Chris Ward 19 September 2023, New York Dr Nicola Kimm 7-8 November 2023, Berlin, DE Decarbonization of the built environment Decarbonization of the built environment German climate agenda

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