Task Force on Climate-Related Financial Disclosures (TCFD) Report 2025 - machine readable

The Board of Directors is responsible for overseeing Avolta’s Sustainability strategy and its effective implementation, including climate-related initiatives.

Within the Board, the Nomination and Sustainability Committee drives the Company’s sustainability agenda by approving strategy and key initiatives, monitoring progress against targets, and evaluating sustainability impact. Its core responsibilities include assessing the Company’s position across key sustainability dimensions (such as financial market performance, ratings, and sustainability indices), strengthening stakeholder engagement, and embedding sustainability principles into the company’s business model and culture. The Nomination and Sustainability Committee meets as often as business requires, typically two to four times per year, with meetings lasting approximately one to two hours.

The Lead Independent Director, as a member of the Nomination and Sustainability Committee, plays a central role in overseeing the development and execution of Avolta’s Sustainability strategy, ensuring alignment with business objectives. Working closely with the other members of the Nomination and Sustainability Committee, whose members are experts in corporate citizenship, sustainability, and governance, the Lead Independent Director contributes to a comprehensive, holistic approach to sustainability. Climate-related topics are a key focus of the committee’s regular discussions, reflecting their relevance to the broader sustainability agenda. At least twice annually, the Nomination and Sustainability Committee receives updates on the Climate risk and opportunities and the effectiveness of the mitigation measures implemented to bolster the company’s resilience against both physical and transition risks.

The Board of Directors receives periodic non-financial updates at least quarterly, covering progress on Sustainability strategy implementation and climate-related initiatives. Climate risks and opportunities are part of these updates.

The Chief Financial Officer (CFO), reporting to the Group Chief Executive Officer (CEO), represents sustainability at the Global Executive Committee level and is responsible for leading the execution of Avolta’s sustainability strategy. In 2025, this leadership role was further strengthened through the integration of the Global Sustainability department into the Global Finance team, underscoring the strategic importance of sustainability within the company’s overall governance and decision-making structures. The CFO exercises direct oversight over the Global Sustainability department, which manages the day-to-day implementation of Avolta’s sustainability and climate risk and opportunities strategies, and provides the Nomination and Sustainability Committee and the Board of Directors with regular updates against established sustainability targets and climate risks resilience.

The Global Sustainability department works closely with global functions and regional and local sustainability teams to ensure consistent execution across the organization and to keep stakeholders informed on climate-related risks, opportunities, and related mitigation measures. At least twice per year, dedicated presentations are held to update global and regional management on the identification and assessment of climate risks and opportunities, as well as on the effectiveness of initiatives in place to support organizational resilience.

In particular, the Global Sustainability department closely collaborates with the Global Enterprise Risk Management (ERM) team to develop and maintain processes for the identification, assessment, monitoring and reporting of climate-related risks and opportunities, in alignment with Avolta’s overall risk management framework. Climate-related physical and transition risks are integrated into the Company Risk Register and are assessed – at least twice per year – using the same methodologies, governance processes, and risk rating scales applied to other enterprise risks under the ERM framework. The climate risk assessment process incorporates both bottom-up and top-down approaches, drawing on-site and regional-level inputs while consolidating and validating results at the global level to ensure consistency, comparability, and comprehensive risk oversight (see page 300 of the Corporate Governance Report).

Since 2022, sustainability and climate-related performance target metrics have been integrated into the remuneration schemes of the Global Executive Committee and senior management to align long-term incentives (LTI) with the Company’s sustainability objectives. For more information, please also refer to pages 310 – 313 of the Remuneration Report 2025.

Avolta’s strategy incorporates climate considerations as a core element of long-term business planning and risk management. As climate change increasingly influences global operations, supply chains and consumer expectations, understanding these impacts has become essential for safeguarding business continuity and supporting long-term organizational resilience.

A central component of this approach is Avolta’s climate risk assessment, which enables the Company to identify where it is most exposed, whether through physical threats such as extreme weather events or through shifts associated with the transition to a low-carbon economy. By evaluating how these risks may affect operations, costs and market dynamics over different time horizons, the assessment supports informed decision-making and helps guide strategic priorities across the organization.

Climate change is expected to affect Avolta’s business over the short-, medium-, and long-term. Physical risks, including extreme weather events and chronic shifts in temperature and precipitation, may disrupt operations, reduce footfall in certain travel hubs, and impact the availability of key inputs across the supply chain.

While Avolta’s core business model is not structurally threatened by climate change, several components of its value chain are directly exposed. In particular, the Food & Beverage segment relies on agricultural commodities whose availability and pricing may be affected by changing climate patterns. Reduced crop yields, water scarcity, and increased volatility in commodity prices could result in supply shortages or higher procurement costs, ultimately influencing product availability and margins.

Avolta is also exposed to transition risks arising from the global shift toward a low-carbon economy. These include evolving environmental regulations, carbon pricing mechanisms, and rising energy costs, particularly for aviation fuel, gasoline, and electricity. Such developments may increase operational expenses, affect pricing strategies, and influence travel demand, which is closely linked to passenger traffic in airports, motorways, and major transport hubs. In the F&B segment, evolving consumer expectations for sustainable, low-impact products may also require adjustments in sourcing practices, menu design, and supplier selection.

At the same time, climate change presents significant strategic opportunities. Avolta can strengthen its market positioning and stakeholder trust by advancing its decarbonization strategy and expanding its range of sustainable products. Offering plant-based, ethically sourced, and environmentally responsible options can boost sales, enhance brand loyalty, and respond to rapidly shifting consumer preferences. Incorporating locally sourced, organic, or regenerative agriculture-based ingredients can further reduce exposure to climate-related supply chain risks and support operational resilience. In addition, investments in energy efficiency and low-carbon technologies in stores and logistics can improve cost competitiveness over the long term.

2.1.1 Avolta’s physical risks

Physical impacts refer to the direct consequences of climate change and are generally classified into acute hazards such as hurricanes, floods, heatwaves, and tornadoes, and chronic hazards including sea-level rise and long-term changes in climate patterns. These risks can have substantial implications for Avolta’s operations, particularly in locations where exposure to extreme weather events is high. Stores situated in storm-prone regions, such as the southeastern coast of North America, coastal airports vulnerable to severe flooding, or airports located in areas with elevated wildfire danger, face the greatest potential for damage and operational disruption in the most severe climate scenarios.

To better understand Avolta’s exposure and to support the development of effective mitigation strategies, a comprehensive Climate Change Risk Assessment (CCRA) was carried out. This assessment evaluated both acute and chronic physical risks for each site across multiple climate scenarios and time horizons. The analysis was undertaken in close collaboration with Avolta’s Enterprise Risk Management (ERM) department to ensure alignment with the Company’s broader risk management processes.

The assessment was conducted across all Avolta stores, warehouses and distribution centers worldwide, encompassing 3,368 sites potentially exposed, at varying levels, to physical climate risks.

Following the initial assessment, the most significant physical climate risks to Avolta were identified based on their potential impact on business operations. Storms (including cyclones, hurricanes, typhoons and tornadoes), flooding, and wildfires emerged as the primary risks, as they have the capacity to directly disrupt operations, impede access to Avolta sites and cause substantial damage to facilities and assets. These events can result in operational downtime, increased repair and maintenance costs, and potential safety hazards for employees and customers. The other chronic and acute physical risks are not particularly relevant for Avolta’s business and therefore, were not further explored throughout the CCRA.

A key indicator used in the assessment is Business Interruption Days (BID), which quantify the potential number of days a site may be unable to operate due to extreme weather events. The accompanying map illustrates the average BID scores for storm, flooding, and wildfire risks, highlighting the sites with the highest potential for operational disruption.

The findings from the CCRA, based on a near-term worst-case physical risk scenario (2030) represent an extreme assumption for the analysis, namely that all at-risk sites will simultaneously experience the full impact of the physical risks associated with climate change. It is important to emphasize that this does not reflect a likely or realistic outcome but rather represents the maximum potential exposure to risk in the event of severe climate-related disruptions. By modeling this worst-case scenario, we aim to understand the full scope of possible financial impacts and help to stress-test the resilience of the adequacy of our risk management strategies.

While this extreme scenario may not be probable, the analysis provided valuable insights into the potential severity of impacts and the financial consequences Avolta could face in the future. It also allowed to assess whether current mitigation actions, particularly insurance coverages, are sufficient to address the potential damage caused by these extreme physical risks.

The financial impacts associated with the three main risks identified for Avolta are assessed based on the potential business interruptions that could arise from each risk. The resulting loss of profit is quantified and categorized as high, medium, or low, taking into account the severity and duration of potential disruptions. These estimated financial impacts are subsequently evaluated in relation to the Company’s existing insurance coverage to assess the extent to which potential losses are mitigated. While storm-related risk is associated with a high potential financial impact, the analysis indicates that current insurance arrangements are sufficient to fully offset the projected financial exposure.

For a deeper dive into the CCRA and the specific assumptions underlying this analysis, refer to page 9/14 of the TCFD Report, where a more detailed breakdown of the methodology can be found.

2.1.2 Avolta’s transition risks

As the global economy accelerates its shift toward lower-carbon practices, Avolta faces a range of transition risks that could influence costs, operations, and long-term planning. These risks arise from evolving policies, new regulatory requirements, technological changes, and shifting market expectations. Among them, policy and legal risks are particularly significant for Avolta, as they have the potential to result in substantial fines, stricter compliance obligations, and notable increases in operating costs, especially in areas such as carbon pricing, emissions reporting, and environmental performance standards.

Beyond regulatory pressures, transition risks may also stem from changes in energy markets, including rising fuel and electricity prices, as well as consumer demand for more sustainable products and services. Such trends may require adjustments in procurement strategies, operational practices, and the types of offerings presented across Avolta’s global portfolio.

The table on page 8 provides an overview of the main transition risks identified for Avolta, forming the basis for understanding where the Company may need to adapt its operations and strengthen its resilience in a rapidly evolving business environment.

Avolta’s approach to managing physical and transition climate risks is anchored in continuous monitoring, forward-looking planning, and the application of a range of risk management measures designed to enhance resilience and limit potential financial impacts. The Company actively tracks developments in climate-related regulation, market expectations, and low-carbon technologies to ensure strategic alignment with regulatory trends and evolving industry practices. In parallel, Avolta monitors the increasing frequency and severity of climate-related natural hazards, supporting informed operational decisions and long-term resilience planning.

Physical climate risk assessments provide Avolta with a detailed understanding of exposure patterns across its portfolio, highlighting geographic concentrations of vulnerability and the relative severity of risks at site level. These insights inform a structured prioritization process, whereby climate-related risks are assessed alongside other operational and strategic risks based on their potential impact, likelihood, and time horizon. This enables the Company to focus resources on sites and risk drivers that present the most material exposure, while ensuring consistency with its broader enterprise risk profile.

Avolta applies a diversified set of risk response measures to manage climate-related risks. Where appropriate, risks are mitigated through preventive and adaptive actions, such as enhancing site resilience, adjusting operational procedures, or integrating climate considerations into investment and maintenance planning. Certain residual risks are transferred through insurance solutions, which play a key role in protecting against acute physical impacts. In cases where risks are assessed as lower in severity or unavoidable in the short term, they may be monitored and accepted within defined risk tolerance levels, subject to ongoing review.

Following its physical climate risk assessment, Avolta conducted a comprehensive evaluation of its insurance coverage to ensure alignment with identified exposures. The insurance portfolio is structured across multiple hazard categories, including wildfire, flooding, and storm-related risks, each governed by specific thresholds, coverage limits, and triggering conditions. This structure allows for targeted protection tailored to the risk profile of different locations and hazard types.

The analysis considered a conservative scenario in which multiple high-risk sites are affected simultaneously by severe physical impacts. Even under these assumptions, the results indicate that Avolta’s current insurance coverage, in combination with its existing mitigation measures, is sufficient to absorb potential losses. As a result, the Company considers its current level of investment in climate-related mitigation and risk management measures to be appropriate in relation to foreseeable financial exposures. Through this integrated and prioritized approach, Avolta aims to balance risk prevention, risk transfer, and risk acceptance in a manner that supports operational continuity, financial stability, and long-term resilience to both acute and chronic climate-related risks.

3.1 Organizational processes for identification and management of CRRO

In 2025, Avolta conducted a comprehensive Climate Change Scenario Analysis in alignment with the principles of the TCFD to evaluate how potential physical and transition risks associated with climate change could impact the company over the medium and long term. The analysis leveraged multiple climate pathways referenced by the Intergovernmental Panel on Climate Change (IPCC), including best-case, intermediate, and worst-case temperature scenarios, to provide a structured, forward-looking assessment of potential business, operational, and strategic implications through 2050. By examining a variety of plausible climate futures, Avolta was able to identify both vulnerabilities and opportunities arising from evolving environmental and regulatory conditions, providing a robust foundation for resilient decision-making.

The scenario analysis has allowed Avolta to strengthen their strategy, including the evaluation of potential strategic options in relation to the selected scenarios. It has also provided a framework to assess potential risks and impacts to which the company is exposed, serving as a foundation for the continuous monitoring of management approaches and the integration of related technological and environmental opportunities into the company strategy.

Avolta conducted its climate-related scenario analysis in line with TCFD and IFRS S2 guidance, applying a structured and forward-looking approach to assess both transition and physical risks over multiple time horizons. The analysis considered short-term (to 2030), mid-term (to 2040) and long-term (up to 2050) climate trajectories to evaluate potential impacts on the Company’s operations, financial performance, and strategic resilience. These time horizons provide Avolta with a comprehensive view of physical climate risks across its sites over the short, medium, and long term, enabling the company to assess potential impacts in a structured manner and to strengthen its resilience planning accordingly. By differentiating risk exposure over multiple time horizons, Avolta can more effectively prioritize sites that are subject to higher short-term risks and require immediate mitigation measures, while also identifying sites where risks are expected to materialize over the medium to long term and can therefore be addressed through planned, longer-term adaptation actions.

To ensure methodological robustness, Avolta selected internationally recognized climate scenarios from authoritative sources, including the IEA and the IPCC, that are widely used in regulatory, financial, and corporate risk assessments. These scenarios enable the Company to explore a range of plausible climate futures, test the resilience of its strategy under varying levels of global policy ambition, and identify potential vulnerabilities or opportunities associated with different decarbonization pathways. Scenario assumptions, limitations, and uncertainties were carefully considered, reflecting TCFD expectations for transparency and analytical rigor.

Selected Climate Scenarios

Scenario 1: Net Zero Scenario

This scenario represents the “best case” projection in which governments worldwide significantly accelerate climate action, implementing strong policies to achieve Net Zero emissions. It is consistent with limiting global warming to 1.5°C by 2050. Under this scenario, transition risks are highest, while long-term physical risks are considerably reduced.

Scenario 2: Announced Pledges Scenario

The Announced Pledges Scenario reflects the official commitments and targets publicly declared by governments and international institutions to reduce greenhouse gas emissions. It assumes these pledges are pursued but not necessarily achieved in full. This scenario represents a middle-ground trajectory, characterized by moderate policy implementation and intermediate levels of transition and physical risks.

Scenario 3: Stated Policies Scenario

The STEPS, or “Stated Policies Scenario,” considers only the policies currently in force and does not assume future regulatory enhancements or new climate measures. It reflects a lower level of global climate ambition and is associated with a higher-temperature outcome and more severe physical risks over time. If this scenario were to occur, characterized by limited 2030 policy commitments, it would imply greater global warming, with significant climatic and operational impacts for businesses.

Scenario Alignment with IPCC Physical Risk Pathways

To assess physical climate risks, Avolta referenced the Representative Concentration Pathways (RCPs) developed by the IPCC:

These pathways support consistent and science-based modelling of future climate hazards across both short- and long-term horizons.

As stated above, the scenario analysis of climate-related risks was conducted across multiple time horizons, namely the short term (up to 2030), the medium term (up to 2040), and the long term (up to 2050), in order to capture the evolution of physical climate risks over time. For practical and decision-making purposes, the results were analyzed in greater depth for the short term horizon.

By focusing on the potential physical risk exposure by 2030, Avolta is able to allocate resources more effectively, ensuring that urgent risks are addressed promptly while longer-term risks are incorporated into broader resilience and investment planning. This structured approach enables the company to anticipate future climate-related challenges, strengthen the resilience of its portfolio, and proactively manage physical risks in a manner that is both efficient and aligned with its long-term business strategy.

Avolta’s greenhouse gas (GHG) emissions for 2024 and 2025 have been calculated in accordance with the Greenhouse Gas Protocol (GHGP), ensuring consistency, transparency, and comparability in reporting.

In 2025, the Company expanded its Scope 3 inventory to include Business Travel, Employee Commuting, and Capital Goods across both Retail and F&B operations. Although the newly added categories represent only about 3 % of Avolta’s total GHG emissions, their inclusion enhances the completeness and accuracy of the Company’s overall carbon footprint. The remaining Scope 3 categories are not calculated because they are either not applicable to Avolta’s business model or contribute only a negligible share of total emissions. The following tables present Avolta’s 2025 GHG performance and carbon intensity compared to 2024. In 2025, combined Scope 1 and Scope 2 (market-based) emissions fell by 15 % to 173,262 tons of CO2-eq, from 204,803 tons of CO2-eq in 2024 consistent with Avolta’s decarbonization strategy. While Scope 1 and 2 carbon intensity improved by 17 %, year-on-year, total carbon intensity across Scope 1, 2 and 3 intensity rose by 10 %. This reflects a 14 % increase in Scope 3 emissions (4,546,265 tons of CO2-eq, primarily due to expanded data perimeters and improved reporting granularity within Category 1). The transition from spend-based to more accurate activity-based methodologies in 2025 has enabled a more comprehensive capture of value chain impacts.

Greenhouse gas emissions (GRI 305-1, GRI 305-2, GRI 305-3) 1,2,3

Carbon intensity (GRI 305-4)

In 2025, Avolta finalized its comprehensive emission reduction strategy, marking the first fully integrated plan to address the entire organizational scope following the 2023 business combination. This strategy was carefully crafted with a deep understanding of Avolta’s unique business model and operational context, which includes a wide, geographically diverse network of close to 5,100 shops and restaurants. On the other hand, the previous Science-based targets set by Dufry have been automatically revoked through the submission of Avolta’s new targets.

These facilities are primarily operated under concession agreements in airports and other transportation hubs, which present specific challenges for decarbonization. These locations often present infrastructure limitations and restrict the Company’s ability to directly implement on-site energy-efficiency measures, such as equipment upgrades or energy-saving technologies. In airport-managed locations, the implementation of energy-efficiency measures, such as HVAC upgrades or heat-pump installations, often depends on landlord decisions and infrastructure investment timelines, limiting Avolta’s ability to directly influence on-site improvements. At the same time, the procurement of electricity from renewable source is subject to landlords’ decision as well as to market dynamics, including GO and REC price volatility, regulatory developments, and varying levels of maturity across regional electricity markets.

Given these operational constraints, particularly the limited influence over both energy systems and energy sourcing in airport-managed facilities, Avolta has chosen to prioritize a decarbonization strategy focused on green energy procurement as the key lever for reducing Scope 2 emissions. This strategic focus allows the Company to achieve meaningful emissions reductions despite the challenges inherent to its operating environment. For Scope 3, the reduction strategy is based on active supplier and stakeholder engagement.

Avolta has committed to achieving a 59 % reduction in Scope 1 and 2 emissions by 2034 as part of its near-term decarbonization strategy.

Scope 1&2 Emission Reduction pathway

Avolta’s decarbonization strategy is anchored in a rigorous, data-driven approach that reflects the ambition and discipline expected under leading international frameworks such as SBTi. The definition of Avolta’s Scope 1 and 2 reduction plan began with a comprehensive delineation of the Company’s operational perimeter to ensure an accurate emissions baseline. Through a global mapping of all stores and facilities, Avolta established a detailed and granular energy dataset across its retail and F&B operations. This enabled the identification of high-impact locations, a deeper understanding of energy drivers, and the development of a targeted and actionable decarbonization roadmap.

This foundational work included a systematic assessment of electricity and fuel consumption patterns, contractual arrangements with landlords and airport authorities, and the technical feasibility of implementing decarbonization levers across highly heterogeneous operating environments.

Each location was classified according to Avolta’s degree of operational influence, determining where direct interventions, such as heat pumps, HVAC optimization, or LED retrofits, could be deployed. Avolta modelled its forward-looking operational trajectory by integrating expected business growth to estimate future energy demand and associated emissions. This allowed to assess how evolving operational volumes may influence consumption patterns and to identify the most effective decarbonization levers across the portfolio. Where operational control permitted, Avolta activated energy-efficiency investments.

Recognizing that on-site reductions alone cannot deliver the level of decarbonization required to meet its SBTi pathway, Avolta places strategic emphasis on renewable electricity procurement, leveraging high-quality market-based instruments including Guarantees of Origin (GOs) and Renewable Energy Certificates (RECs). This approach enables Avolta to drive substantial emissions reductions across a geographically diverse portfolio where direct infrastructure control and energy procurement are often limited.

A key innovation of Avolta’s strategy is its structured two-pillar approach:

Pillar 1 – Leveraging Airport Carbon Accreditation (ACA) Momentum

Avolta conducted a systematic assessment of airports certified under ACA Levels 3 to 5, facilities that have committed to sourcing 100 % renewable energy by 2034 By aligning operations with these airports, Avolta is projected to avoid approximately 70,000 tCO₂-eq by 2034, compared to 2024. This targeted footprint strategy reflects Avolta’s commitment to operating within ecosystems that have credible decarbonization pathways and enables the Company to amplify its own reduction efforts through coordinated action with airport stakeholders.

Pillar 2 – Global Renewable Energy Procurement Roadmap

Avolta’s renewable energy procurement strategy follows a phased, region-specific timeline that balances climate ambition with market readiness and cost efficiency, beginning in wave 1 with full renewable electricity coverage in priority regions where market conditions are already mature, then, in wave 2, expanding to additional regions as procurement mechanisms strengthen. This disciplined approach responds to price signals, evolving regulatory frameworks, and long-term contracting opportunities, ensuring Avolta can secure renewable energy at scale and at optimized cost. By 2034, the company will cover the electricity demand of its major operational regions with renewable energy, driving a substantial reduction in Scope 2 emissions.

Scope 3 emission reduction pathway

Avolta’s Scope 3 decarbonization strategy is designed to drive meaningful, system-level emissions reductions across its global value chain, with supplier engagement serving as the cornerstone of the Company’s climate transition approach. Supply-chain-related emissions typically represent the largest share of Scope 3 emissions for most companies and given that SBTi requires near-term Scope 3 targets to cover at least 67 % of total Scope 3 emissions, Avolta places strategic emphasis on the categories that contribute most significantly to corporate carbon footprints: Purchased Goods and Services (Category 1). Within Avolta’s footprint, emissions from purchased goods and services alone account for more than 90 % of total emissions, making Category 1 the Company’s most material decarbonization lever.

As a result, Avolta has adopted a structured supplier engagement model encouraging supplier transparency and emissions reporting to enhance supply chain resilience and long-term cost predictability. This includes assessing supplier leverage, procurement trends, supplier size and type, existing GHG management practices, and climate-related risk exposure.

A core operational metric guiding this strategy is the level of alignment of Avolta’s suppliers with the Science Based Targets initiative. As of 31 December 2024, suppliers representing approximately 70 % of Avolta’s emissions linked to purchased goods have committed to SBTi-aligned pathways. By embedding SBTi expectations directly into procurement processes, contractual discussions, and supplier performance evaluations, Avolta is systematically steering its value chain toward science-based climate action. Avolta’s engagement approach is fully consistent with the GHG Protocol and with SBTi guidance, which recognizes supplier engagement targets as a credible and effective lever for reducing value-chain emissions.