SUSTAINABILITY IN ACTION CONTINUED
The Climate Change risks and opportunities identified as material are described in detail in the Climate Analysis Report on pages 57 to 73. The opportunities identified under the Electrification and Security topics are explored in more detail in the Market Overview section on pages 18 to 23. The Group’s business model is aligned to the risks and opportunities identified during the materiality exercise. As a specialist supplier of bespoke products, we have close design relationships with our customers, and are well positioned to understand the impact of megatrends within our markets (such as electrification, digitalisation and urbanisation) on customers’ portfolios. The Group’s decentralised model allows our businesses to retain an entrepreneurial culture, which enables them to react quickly to emerging risks and opportunities. The divisional organisation of our businesses also helps to concentrate market expertise close to our customers. For example, our Magnetics subdivision serves our renewable energy customers, whilst Controls operates across the breadth and depth of Medical and Security markets. Our strategy is designed to deliver sustainable returns to our shareholders. Investment decisions, including those relating to sustainability, are assessed on a case-by-case basis using the Group’s standard capital allocation processes. These assessments consider expected financial returns and opportunity costs alongside relevant non-financial factors including carbon reduction and energy security. Acquisitions are evaluated in line with the Group’s strategy of sustainable growth. Where businesses we acquire have a significant pre-existing greenhouse gas emissions profile, we work to abate their emissions through similar actions to those which have already proved successful in reducing the emissions of our legacy businesses. Our products are high-quality and designed for long, safe and efficient operation. In parallel, our focus on our sustainable growth markets ensures we prioritise relationships with customers who share our vision of enabling technology for a sustainable world. In focusing on planet and people, in addition to product, we have constructed a sustainability framework that supports growth whilst reinforcing processes to minimise the negative impact to employees and the environment. Risk management The Group assesses, prioritises and monitors sustainability- related risks as an integral part of our Enterprise Risk Management (“ERM”) process. No separate sustainability risk process exists; sustainability risks are embedded within our ERM. As described in the Risk Management section on pages 74 to 78, two risk management processes are conducted in parallel. A central review of the Group Risk Register is conducted, whilst a bottom-up review is simultaneously undertaken by the management teams at each operating company. From a sustainability management perspective, this method works well in identifying systemic macro risks, such as climate change,
at the Group level, whilst specific operational factors, such as situational health and safety risks, are managed by knowledgeable teams at the local level. During the year, the GST worked with the Group Risk and Internal Audit team to gather non-financial and non-carbon sustainability information in conjunction with the bottom- up risk management review completed by the leadership of each business. This was to enhance consideration of sustainability-related risks and opportunities more closely at operational level, and to encourage businesses to capture such risks and opportunities in their value chains. The process improved visibility of sustainability-related risks at operating business level and did not identify any material gaps. A local review of businesses’ Risk Registers was combined with a sustainability risk screening questionnaire, which encouraged local teams to think more broadly about non-financial risks in their operations. Output from the questionnaire was consolidated and reviewed centrally to identify common themes across businesses which might develop into a Group-wide or financially material risk. The Group’s corporate structure provides resilience against sustainability risks. Under the decentralised structure, operating companies are responsible for managing and monitoring their business risks, supported by central functions that provide guidance. Whilst the Group’s structure limits the extent to which an unforeseen or unmanageable risk at the local business level affects the wider Group, risks are actively managed through targeted reporting, central oversight, the sharing of best practices, and risk management processes across the businesses. Where risks emerge, we make financial resources available to support appropriate management and mitigation. Material sustainability topics Our risk management process has assured us that only the risks and opportunities relating to climate adaptation, electrification and security have the potential to be of material financial impact to the Group. Of these, only climate adaptation is believed to pose a material risk. However, our materiality analysis also demonstrated that there are common sustainability themes across the Group with the potential to impact key stakeholders, including employees, suppliers and customers. The Board, therefore, continues to oversee these themes and track operational progress.
Our Planet The risks and opportunities presented by climate change represent financially material challenges to the Group. Our focus on clean technologies drives our growth strategies, whilst the evolving threat of climate change presents challenges to our supply chains and operations that demand our attention. These risks and opportunities are analysed further in our Climate Analysis Report on pages 57 to 73. Greenhouse gas emissions We also recognise the importance of all companies acting to mitigate their impact on the planet through careful stewardship of their own emissions. In November 2022, we announced our commitment to achieve net-zero emissions and set science-based targets for the medium and long term and, in May 2025, we received validation of our targets from the Science Based Targets initiative (“SBTi”). We report progress on our net-zero short-term targets for Scopes 1 and 2 against the 2021 baseline, restated to exclude divestments and include acquisitions, in accordance with the Greenhouse Gas (“GHG”) Protocol. We aim to achieve net-zero emissions for Scope 1 and 2 by 2030 and for Scope 3 by 2040 and have published an updated transition plan for net-zero Scope 1 and 2 emissions by 2030. Further details of our net-zero plan can be found at: www.discoverieplc.com/sustainability/our-net-zero- commitment/default.aspx Our net-zero plan for Scope 1 and 2 focuses primarily on addressing four of the Group’s largest emission sources: electricity, natural gas, company cars and refrigerants. We are pleased to report that our efforts have been successful, and we have achieved an absolute reduction of 68% of Scope 1 and 2 emissions in CY2025 against the CY2021 baseline, in excess of our 65% reduction target.
Since CY2021, Scope 1 and 2 emissions reduction
68% (CY2024: 59%)
Electricity from renewable or clean sources
85% (CY2024: 83%)
Sites with ISO 14001 accreditation 33 (2025: 32)
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discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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