Session 2 –

Development of
Leading ESG
Strategies
September 2023
 Recap: A holistic take on sustainability

Environmental Social Governance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

With the challenge of climate Health and safety of employees, Corporate governance such as
change, a company's usage of natural product liability and the assumption leadership's orientation on ESG-
resources and its pollution and waste of responsibility within a company's aligned company policies and
management become a matter of environment shape its public image corporate social responsibility are
societal awareness the steering mechanisms of ESG
implementation

1
Recap: A value-focused approach to sustainability strategy

Sustainability/ESG1 has moved from ‘philanthropy’ to a ‘must have’ on the corporate

agenda—driven by external and internal stakeholder expectations

ESG is a source of company value—drivers include more engaged people, lower

exposure to regulatory risks, lower costs of capital and financing, and new business

Copyright © 2023 by Boston Consulting Group. All rights reserved.

opportunities

Becoming an ESG leader requires an integrated ESG strategy that defines material
ESG topics, underpins these with actionable initiatives, and incorporates ESG into
the organization using KPIs and a fit-to-purpose ESG governance

1. We will use Sustainability/ESG as interchangeable throughout the proposal as we will look at sustainability from a holistic ESG perspective
Source: BCG 2
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 3
Tangible deliverables behind each ESG strategy element
• Quickly review achievements as basis for vision and ambition
Validate current
Vision and sustainability • Assess key areas of strength and potential for evolution with Sustaina-
1 sustainability vision
ambition level and ambition bility Health Check Survey – define target ambition level per key area
• Define overall sustainability vision and goal
• Identify group-wide material issues as well as divisional focus areas
Materiality assessment Confirm highest impact
• Understand peers' approach via Sustainability Strategy Benchmarking
2 topics and how they
along asset value chain relate to SDGs1 • Define relevant ESG indicators for industry and along asset value chains
• Understand which SDGs1 are affected and affect asset via material issues
• Compare asset performance against industry peers
Benchmarking, measure Compare ESG
• Develop sustainability strategy to address highest-impact issues
3 performance, define
definition & prioritization and prioritize measures • Derive concrete/quantifiable targets and measures to achieve strategy
• Build high-level business case and define a prioritized measure roadmap
• Identify initiatives across the organization with strong flagship effect on
Flagship Identify or define
relevant/priority stakeholders

Copyright © 2023 by Boston Consulting Group. All rights reserved.

4 flagship initiatives to
initiatives support ESG narrative • Focus on initiatives with high influence on target achievement and proven
business case

Set focus KPIs and • Define focus KPIs for performance assessment and reporting
Focus KPIs, organization
5 define org setup to • Review sustainability skills, resources, systems, and metrics setup
and governance deliver upon strategy • Outline lean and efficient sustainability operating model and governance

• Outline cornerstones of regulatory engagement strategy

ESG reporting & Continue stakeholder • Determine priorities and needs and align plans w/ all relevant stakeholders
6 engagement, reporting
• Chose KPI reporting & rating to build transparency on ESG performance
eco-system management & eco-system strategy
• Define eco-system strategy including communication & policy shaping
• Prepare internal communication package to get buy-in from the business
1. Sustainable Development Goals
Source: BCG 4
Key questions for a company to understand its maturity and start the journey
Illustrative
Questions to be assessed Maturity
• Is an ESG vision and ambition defined?
Vision and sustainability
1 • Have key areas of strengths and development been assessed?
ambition level • Is there an overall vision and goal for ESG?

• Are material issues focus areas defined?

Materiality assessment
2 • How does the approach compare to peers?
along asset value chain • Are the relevant ESG indicators for the industry regarded?

• How do own targets compare to the company's peers?

Benchmarking, measure
3 • Are concrete measures defined to achieve the strategy?
definition & prioritization • Have those measures been prioritized?

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• Are initiatives with flagship effect on relevant/priority
Flagship
4 stakeholders in place?
initiatives • Are initiatives selected based on influence on target achievement?

• Are focus KPIs for perform. assessment and reporting selected?

Focus KPIs, organization
5 • Has a lean and efficient sustainability operating model and
and governance governance been put in place?

• Has and regulatory engagement strategy been defined?

ESG reporting &
6 • Has and eco-system strategy including communication &
eco-system management policy shaping been defined?

1. Task Force on Climate-related Financial Disclosures existing missing Low maturity High maturity
Source: BCG 5
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 6
 ESG vision & ambition 1

What role should ESG considerations play in shaping

future corporate strategy?

ESG vision and What is the company's vision of the world in 2050
that can shape strategy?
ambition | Key
questions to
consider

Copyright © 2023 by Boston Consulting Group. All rights reserved.

What are the company's unique strengths and
features that enable it to achieve a differentiated
ESG approach?

Do you want to commit to public targets for

environmental, social, and corporate governance?

7
 ESG vision & ambition 1

ESG vision can shape strategy—sometimes radically

Select examples

Taking decisive action now to stop Our strategy is to be a leader There must be a clear and far-
climate change and create a within sustainable generation reaching strategic vision as well
better tomorrow […], that is what and consumption to make fossil- as planning abilities in line with
leadership is about free living possible within the UN Sustainable Development
one generation Goals
—Mads Nipper, CEO —Annika Ramsköld,
Head of Sustainability
—Enel Sustainability Report 2020

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Our strategy aligns our unique We are heading to a net-zero Our purpose reflects what we do
competences and our purpose future as a thriving sustainable and why we do it: We create
(‘creating brighter lives for all’) energy business that is a force chemistry for a sustainable
with our ambitions to address for good in a low-carbon world future. We want to continue to
specific megatrends and targeted grow profitably and make a
—Bernard Looney, CEO
Sustainable Development Goals positive contribution to society
and the environment
—Geraldine Matchett & Dimitri de Vreeze,
Co-CEOs —BASF Report 2020

Source: Company information; BCG analysis 8

 ESG vision & ambition 1

Cornerstones of ESG vision—An example for a leading energy company

Key questions Hypotheses for vision and ambition

Sustainability is a driving factor for corporate strategy, incl.
Link to corporate strategy: What role
further evolution of business portfolio and pursuing
should ESG considerations play in shaping
of new business opportunities (e.g., decarbonization partner
future corporate strategy?
for industry, driver of new offsetting projects, etc.)

Long-term vision: What is company’s “Our ambition is to be climate neutral by 2040, with clean,

Copyright © 2023 by Boston Consulting Group. All rights reserved.

vision of the world in 2030, 2040 and 2050 secure and affordable energy”: This ambition is to be expanded
and how can that shape the strategy? into a more holistic ESG ambition

Ambition and commitment: What is

Beyond climate and new business, one should make clear
company’s ambition level with regards to
commitments for its legacy business and state concrete,
ESG commitment? How far does the
measurable, quantitative ESG targets which also put the
company want to make specific
company as an industry leader in selected dimensions
commitments?

Source: RfP, BCG 9

 ESG vision & ambition 1

Myth-busting: Many common beliefs about ESG do not hold up and shouldn't
prevent from an ambitious vision

Myths
We will only get a good There is one global We cannot get a good Addressing ESG will incur
rating once we have standard rating if we are in a high- high costs and offers little
implemented measures for ESG certification polluting industry financial returns

Realities

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Transparency about A multitude of standards Ratings reward transpa- Enhancing sustainability
commitments and plans exists and can be used rency and strategies, not can go hand-in-hand with
going forward is a strong complementarily only today’s footprint reducing costs and
value in itself (e.g., emissions) increasing valuation

Source: BCG analysis 10

 ESG vision & ambition 1

Example Materials Industry: Leaders have already started

Myths
We will only get a good There is one global We cannot get a good Addressing ESG will incur
rating once we have standard rating if we are in a high- high costs and offers little
implemented measures for ESG certification polluting industry financial returns

Examples

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Developed targets for CO2 Increased transparency Received top Integrated AI into their
emissions reduction in in ESG reporting sustainability risk rating production process
cement production
Reports adhere to TCFD Sustainalytics declared Saved energy & material
Targets were certified by and GRI standards as well "low risk" for Lafarge- and produced an 8-digit
the Science Based Targets as selected SASB mining Holcim's business model annual cash savings
Initiative (SBTi) metrics

TCFD = Taskforce for Climate-Related Financial Disclosure; GRI = Global Reporting Initiative; SASB = Sustainability Accounting Standards Board
Source: Company websites, BCG analysis 11
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 12
 Materiality assessment 2

WHAT? A structured process of determining ESG issues that could impact the
business or internal/external stakeholders, and an assessment of impact
on business, society and environment

In the process, perspectives from a breadth of internal/external

stakeholders should be considered

What is WHY? To comply with regulations and standards – deep dive in following slides
Materiality assessment is required for all large companies1 according to

Materiality
the European Sustainability Reporting Standards (ESRS), and for
companies reporting according to GRI2

assessment? To focus ESG efforts

Copyright © 2023 by Boston Consulting Group. All rights reserved.

A materiality assessment is a first step in an ESG transformation to focus
effort on material topics

HOW? 1. Scan the environment to identify ESG topics with potential impact
2. Engage with relevant stakeholders and experts to prioritize ESG
topics
3. Assess significance of the impact on business, society and
environment for each ESG topic
4. Present in a materiality matrix
1. Companies exceeding 2 of the 3 thresholds: Average number of employees >250; Net
turnover >40m€; Balance sheet total >20m€ 13
2. GRI = Global Reporting Initiative, a voluntary standard for sustainability reporting
 Materiality assessment 2

Materiality in sustainability needs to be discussed equally along all three

ESG dimensions

Environmental Social Governance

• Energy, emissions and • Human rights and inclusiveness • Corporate governance and ethics

Copyright © 2023 by Boston Consulting Group. All rights reserved.

climate change in supply chain and workforce
• Influencer of change: advocacy
• Circular economy: waste, resource • Safety and well-being strategy and policy shaping
mgmt and recycling
• Socio-economic development: • Anti-corruption
• Water local and national
• Reporting and KPIs
• Biodiversity and land • Access and inclusiveness in
• …
products and services
• …
• …
Source: BCG 14
 Materiality assessment 2

Material topics to be determined along a variety of lenses

Corporate strategy Key benchmarks

Considering company's current Considering key benchmarks
strategy particularly focusing on its illustrating company's ESG
decarbonization and sustainability performance vs that of its key
ambitions peers

Existing material topics Peers’ material topics

Paying attention to the key topics Considering the key topics

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RWE has been focusing on or is company's stakeholders and peers
intending to focus on in the future are focusing on in their ESG
agenda

Management input & decisions Stakeholder expectations

Taking into consideration the Paying attention to the demands of
management's vision as well as its company's current and future key
decisions and announcements stakeholders

Source: Company website, LinkedIn, BCG analysis 15

 Materiality assessment 2

Peers' material topics: Focus on climate and health & safety

Example Energy utilities

Selected peers1
considered in analysis:
Climate change and low-carbon
most important topics as expected
Low Importance for stakeholders High

Addressing climate change

Low-carbon product portfolio

Prevention of major accidents

Reducing environmental footprint Client experience and satisfaction

Responsible products and services Product quality and safety
Innovation and research Health and safety
Cybersecurity
Waste management and circular economy Access and affordability
Social impact already
Digital transformation
high on agenda Community engagement and impact

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Transparency, accountability and reporting Data governance and privacy Company financial performance
Protecting biodiversity Responsible investing and lending Corporate ethics
Diversity and inclusion
Water management
Corporate governance
All topics around digitalization
Regulatory compliance and reform Employee recruiting, development and retention and data still key
Pay/compensation yet Human rights
with low significance2
Supply chain sustainability and responsible procurement
Systematic risk management
Fair pay and executive compensation Supply chain not yet in focus, but is
Food security
currently becoming more important

Low Relevance for long-term business success High

Governance Social Environmental

1. Peers selected based on players who publish complete materiality matrices per GRI guidelines 2. But e.g. E.ON with recent change to link executive compensation to ESG targets
Source: Company annual sustainability reports & websites; BCG analysis 16
 Materiality assessment 2

Example: Most material ESG topics for a utility

Key questions Ingoing hypotheses for material topics

Environmental
• Decarbonize existing portfolio
• Accelerate Coal/lignite phase out in Europe
• Reduce trading activities in physical fossil fuels
• Engage in recultivation to protect biodiversity
• Support decarbonization of hard-to-abate sectors (via e.g. H2, e-fuels)
Social
Materiality: What are the key ESG topics
• Take responsibility for whole supply chain1
for the utility company?
• Strengthen health & safety measures

Copyright © 2023 by Boston Consulting Group. All rights reserved.

• Ensure high employee attractiveness
• Enhance diversity in top management and overall workforce
Governance
• Increase cybersecurity measures
• Ensure compliance when entering new markets/partnerships
• Update corporate branding

Ambition level: What is the ambition level • To be detailed in project, once material topics are aligned, and to be
that company wants to reach for each
discussed along business case scenarios (ESG and financial performance)
material topic (Comply, Compete, Lead)?
1. incl. compliance with "Lieferkettengesetz", human rights assessments, responsible procurement, etc.
Source: BCG 17
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 18
 Measures & 3
prioritization

LEAD
AND SHAPE THE
Measures and INDUSTRY
COMPETE
prioritization | WITH START OF • Ambitious goals &

For material COMPLY

SELECTED PROJECTS industry leader
• Willingness to invest

topics, a clear AND DECLARE

INTENSIONS
• Clear positioning
beyond compliance
• Sustainability as
business opportunity

ambition is
• Sustainability as

Copyright © 2023 by Boston Consulting Group. All rights reserved.

business opportunity
• Focus on legal
required compliance
• Little competitive
edge
• Sustainability mainly
as cost

Source: BCG 19
 Measures & 3
prioritization

Ambition setting should be guided by a comprehensive peer benchmarking to

map their targets
Selected categories—Initial outside-in assessment

Peer target range Comply Compete Lead

• RWE and EDF: -50% scope 1-2 until 2030 (vs. '19/'17 resp.), committed to SBTi at well-below 2°C
Environmental

GHG emissions from own

• Enel and Iberdrola with slightly higher ambitions in line with 1.5 path
operations • Ørsted and Fortum with similar ambitions, but no SBTi certification
• RWE, EDF and Enel: -30%, -28% (vs. '19) and -16% (vs. '17) resp. scope 3 until 2030
GHG emissions and env. • Ørsted with highest ambition of -50% (vs. '18) until 2032
standards in supply chain • Iberdrola, Fortum with goal of carbon neutrality by 2050
• Iberdrola: Specific quantitative target of water use/production intensity reduction by 50% until 2030
Water usage • RWE, Enel, Fortum and EDF with ambition statements and/or specific water reduction measures
• Ørsted with waste and water management policies in place
• Ørsted, Fortum and Iberdrola with specific quantitative targets (e.g. injury frequency <1 by '25)
Health & safety • Enel and RWE with well being initiatives in place

Copyright © 2023 by Boston Consulting Group. All rights reserved.

• EDF without specific targets or initiatives
Social

• RWE, Iberdrola and Ørsted: targets of 30%, 25% and 22% resp. of female senior management by 2022
Diversity • EDF target of 30% female executives by 2030, Enel with targets for middle management only
• Fortum with target of 25% female top executives by 2022 for Uniper subsidiary only
• Enel and Iberdrola: 80% (by '23) and 70% (by '22) of suppliers to have standard sustainability policies
Social standards in supply • RWE, Ørsted and Fortum with supplier qualification processes in place
chain • EDF less transparent on supplier standards
• EDF with executive compensation and up to 40% of manager salary linked to CO 2 emissions
Governance

Compensation • Ørsted with short-term cash-based schemes with 60% weight of ESG
• Enel, RWE, Iberdrola, Fortum with ESG criteria linked to executive and/or manager compensation
• All peers have reporting standards in accordance with GRI, SDG and TCFD in place as well as engage
Transparency & reporting with rating agencies
• Ørsted includes only 6 rating agencies in their report, which is below average of peer group

RWE Fortum Ørsted Enel EDF Iberdrola

Note: KPIs/Targets not directly comparable
Source: Company sustainability and annual reports; Company websites; BCG analysis 20
 Measures & 3
prioritization

Backup: Maturity level definitions per category

GHG emissions from own operations Maturity level definition Diversity Maturity level definition

Comply • No climate targets in place Comply • Scattered initiatives across diversity topics
• Scattered/local initiatives • No targets set
• No explicit alignment with international standards as TCFD
Compete • Diversity targets set at Executive level and above
Compete • Reduction targets in place, with transparency on baselines & interim targets • Diversity, equity & inclusion initiatives mainly focused on gender
• Aligns to TCFD or another intl. standard
Lead • Diversity reported at different mgmt. levels
Lead • Climate neutrality commitment • Gender targets high in the short terms (e.g. +30% female at leadership
• Aligns with Paris Agreements objectives and targets verified by SBTi scenarios positions before 2025)

GHG emissions and env. standards in SC1 Maturity level definition Social standards in SC1 Maturity level definition

Comply • No targets for value chain emissions Comply • Generic narrative on compliance in supply chain
• Scope 3 reporting at a nascent stage • Code of Conduct for Suppliers
• Initiative oriented approach (not systematical)
Compete • No quantitative targets set
Compete • Reports Scope 3 emissions, but no target setting • Collaboration with suppliers on developing compliance aspects
• Actions programmed in the short time (next 2 years) around reporting and
collaborations Lead • Targets set on suppliers assessed on compliance and/or supplier to achieve
certain sustainability targets
Lead • Aims for climate neutrality incl. Scope 3
• High level of reporting and strategic approach to Scope 3 reduction
Compensation Maturity level definition

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Water usage Maturity level definition Comply • Compensation not linked to ESG performance

Comply • No targets set with boilerplate narrative about water management

Compete • Compensation not linked to ESG or linked with no clarity on weighting
Compete • No targets set, however, actions depicted, and water considered material
topic
Lead • Compensation linked to ESG with clear weighting
Lead • Set water reduction/generation ambition

Transparency & reporting Maturity level definition

Health & safety Maturity level definition
Comply • Basic sustainability report
Comply • No safety targets clearly set • No reference to disclosure guidelines (UN GC, GRI…)
• Employees' wellbeing acknowledged but no specific initiatives
Compete • Reporting aligned to GRI and SDG and/or Climate risk based on TCFD
Compete • Qualitative targets set around safety within a defined time horizon recommendations
• Wellbeing initiatives in place for employees • Disclosure of max. 6 ESG raters

Lead • Set quantitative target to reduce injury rates (occasionally in addition to zero Lead • Reporting aligned to GRI and SDG and engaging rating agencies, and Climate
fatalities goal) risk based on TCFD recommendations
• Wellbeing incorporated into health & safety framework • Among top performers across ESG Raters

1. Supply chain
Source: Company sustainability and annual reports; Company websites; BCG analysis Environmental Social Governance 21
 Measures & 3
prioritization

Depending on decisions for

Comply, Compete, Lead,
various scenarios are defined
Estimates are made for the
ESG rating impact for key

Before making a final initiatives (e.g. CO2 reduction,

female mgmt share)

recommendation on In summary, each scenario will

show a total ESG improvement
ambition level: depending on the chosen
targets for initiatives
Business case to be
developed as reality
check to find right

Copyright © 2023 by Boston Consulting Group. All rights reserved.

trade-off between For scenarios as defined
above, financial impacts
financial and ESG are estimated (Capex need,
EBIT(DA) impact, payback
performance period, etc.)
Trade-off between financial
and ESG impact is analyzed
and discussed to find right
balance between likely
financial impact and
estimated ESG improvement

Source: BCG case experience 22

A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 23
 Flagship initiatives 4

Flagship initiatives | We see four types of initiatives, with flagships being a

few selected key initiatives

1 Flagships 2 Operative measures 3 Low-hanging fruits 4 Core enablers

Usually a maximum of 4–6 flagship Other key (non-flagship) initiatives Various quick wins identified Some enabler initiatives necessary:
initiatives distributed throughout the as operative measures: Implemen- in initiative discussion: Implemen- Often to be rolled-out across entire
organization1 tation driven centrally or decentrally tation driven centrally or decentrally organization to enable ESG initiatives

Used for most material topics with Used for other relevant topics with Used often for lower ambition level Used to enable other ESG
high ambition level and high impor- moderate ambition level to anchor topics and/or for “Walk the talk: initiatives, yet enabler often with no
tance for external communication ESG in operations Making ESG-related changes visible direct ESG ambition level or purpose

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Resulting in large-scale change, thus Resulting in considerable changes, Resulting in comparably short Differing levels of changes, depending
often longer implementation time and with varying implementation time implementation time, mostly with on enabler; however, implementation
potentially significant budget needs and budget needs smaller budget needs key to get ESG agenda going

Typical ambition level

Lead
Compete
Comply
1. E.g. each OpCo with one flagship initiative
Source: BCG 24
 Flagship initiatives 4

Implications per type of initiatives: Flagships with need for thorough planning

2 Oper. measures
Activities per type of initiative 1 Flagships 3 & low-hang. fruits 4 Core enablers

Develop a detailed roadmap going forward with a clear timeline

Define key milestones going forward

Capture all key KPIs in performance reporting1

Share (and develop) core programs and policies for rating process

Include in (potential future) external communications2

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Assess and capture status quo (incl. gathering of anecdotal evidence3)

4
Set quantitative target

Set qualitative ambition

Identify pilot OpCo and/or Function

Detail resource needs/business case

1. Incl. e.g. Sustainailytics 2. e.g., ESG reports 3. As relevant 4. For some initiatives
Source: BCG 25
 Flagship initiatives 4

Peers strive to realize their goals by implementing ambitious flagships

Selected flagship examples

Environmental Social Governance

10% CEO compensation tied

2050: Net zero emissions Access to energy for all
to gender diversity goals
First oil & gas player to assume Contribution to UN SDG 73 Long-term variable
this goal through various initiatives, compensation based on
(providing power to achieving gender diversity
underserved communities, LED within the Group’s "Managers

Copyright © 2023 by Boston Consulting Group. All rights reserved.

street lighting etc.) and Professionals" category

2028: 100% high-risk 2050: 100% sustainable

2026: First fossil-free steel
materials with action plan supply chain
HYBRIT – Joint initiative of Aiming to define and In the meantime, involving 4000
SSAB1, LKAB2 and Vattenfall implement measures for all Indonesian farmers in a “full
production materials with high rubber supply chain
risk of human rights violations transparency” project by 2024

1. Steel company 2. Mining company 3. Ensure access to affordable, reliable, sustainable and modern energy for all
Source: Company information, BCG research, BCG analysis 26
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 27
 Org., focus KPIs, 5
governance

KPIs are critical Selected examples

for ESG success Example: Typical 'Social' KPIs to drive ESG performance

Outside
Key communications Diversity People development
element % of women employees Average hours of training per
year per employee
Input to ratings and % of women managers
Employee satisfaction level
investor decisions

Inside

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Business steering
Impactful action through Workforce Safety
ambitious targets % of employee turnover Total injury rate
% of employees represented by Lost time injury rate
Executive incentives independent trade union
Employee fatalities
organizations Community
Employee engagement Contractor fatalities
Amount of donations divided by
net sales or revenue

Source: BCG case experience 28

 Org., focus KPIs, 5
governance

KPIs | While overarching targets will be set at Group level, translation into
individual contributions will lead to specific KPIs for each operating company
Illustrative example

Group Level

First, group-level
material topics and peer Materiality analysis Peer Benchmarking
benchmarks will be used Carbon Gender Diversity Board Compensation
2040: Net Zero Emissions 2025: 30% women among new 2023: 20% weight for ESG
to define overarching Division incl. Supply Chain (Scope 3) recruits for mgmt. positions targets in var. compensation
targets…
Until 2025, x% of Additional:
Reduce emissions by

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women employees with Variable compensation linked to success
Generation xx% until 2030
a senior female mentor as industry decarbonization partner

…which will then be

translated into targets 100% of women affected
Expand flue gas Additional:
by transformation offered
for each OpCo1 to Power cleaning plants to X%
of operations by 2025
re-/upskilling or transition
Variable compensation linked to
success in employee transition
define individual support
contributions
50% women among new Additional:
Carbon-neutral growth
recruits for mgmt. Variable compensation linked to
Renewables from 2022 on
position by 2025 responsibility in supply chain

By 2023, X% of traded Until 2025, x% of women Additional:

volume is based on organized in internal Variable compensation linked to reduction
1. OpCo = Operating company Supply & Trading "green" power female networks of Scope 3 emissions from physical trading
Source: BCG 29
 Org., focus KPIs, 5
governance

Example from power generation focused utility: tangible set of targets for all
focus topics based on derived strategy and peer comparison
Recent project example

Environmental Social Governance

1 Low-carbon product portfolio 5 Health and safety 7 Corporate governance

• > XX GW of renewables by 2030 • Zero fatalities & severe • Compliant with CMA by 2021
occupational accidents • Aligned with best practices
2 GHG emissions • LTIR < 0.XX in 2021 by 2023
• XX% intensity reduction for Scope • TRIR of < 0.XX in 2021

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1 and 2 by 2030
• Net zero Scope 1 and 2 by 2050 6 Diversity
• At least xx% women in top
3 Climate risks management by 2025
• Full TCFD reporting by 2024

4 Water & wastewater management

• Full disclosure on water metrics
• XX% water consumption reduction
target by 2030

Source: Recent ESG Strategy with a utility client, sanitized 30

 Org., focus KPIs, 5
governance

Organizational setup | Three models can be frequently observed for organizing

sustainability efforts
Centralized expertise,
1 Dedicated central 2 3 Decentralized
decentralized implementation
CEO CEO CEO

SVP SVP CSO SVP SVP/CSO SVP

Option 1 Option 2

BU SD Alternative: ESG often BU SD CoE BU

driven by strategy/special
projects team Sustainability Sustainability

1
Setup of RWE and selected peers

Responsibility within business

Central coordination

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• Central stewardship • Effective steering of sustainability • Sustainability priorities aligned well with
• Standardized programs strategy and BU-specific programs business priorities
• Strong link between corporate strategy • Standardized programs • Higher acceptance by the business
and sustainability • Most often applied; considers both central • Practical, focused on implementation
expertise & strategy and local needs • Typical in mono-BU or holding companies
• Sustainability detached from business • Requires strong commitment from top • Limited sustainability goals, risk of being
priorities level management detached from overall strategy
• Difficulty implementing centralized • Requires more headcount • Usually includes only basic functions
programs in BUs
• Sometimes perceived by business as
"theoretical" function, "adding no value"
CSO = Chief Sustainability Officer; 1. RWE with central team plus e.g. decentral sustainability position in RWE Renewables and informal network throughout whole organization
Source: BCG analysis 31
 Org., focus KPIs, 5
governance

Peer comparison of sustainability organization

Sustainability KPI Performance

Sr. Director, Head of Global Chief Sustainability Officer, Chief Innovability Chief Sustainability
No dedicated CSO, only a Public Affairs & Sustainability
council and committee C-2 Officer, C-1 Officer, C-1
Solutions, likely C-2
from busines

Level of highest-ranking
sustainability officer1 Lower level CI&SO not in ExCom or Direct CEO report
below, but reporting to
Chairman Head of Corporate
Responsibility, C-22

Dedicated sustainability
unit No sustainability Dedicated
unit Sustainability unit

Copyright © 2023 by Boston Consulting Group. All rights reserved.

External advisory board
or partnerships No external High external engagement/
engagement advisory board incl. reps
from NGO, academia

Centrally managed or
per business unit BU Central
No dedicated
sustainability efforts

1. In a "pure" sustainability-focused role 2. C-2: Reporting into executive that reports to CEO, C-1: Reporting to CEO
Source: Company websites, sustainability and industry reports, expert interviews, BCG analysis 32
 Org., focus KPIs, 5
governance

Required setup to execute— typical hypotheses

Key questions Hypotheses for setup

Organization: How should company set up its
Define hybrid sustainability organization with an effective balance between
orga-nization to enable a through execution of
central and decentral structure while guaranteeing OpCo ownership. Strong
its ESG strategy, strengthen the importance of
link to strategy key to enable value creation from ESG
ESG and include ESG in daily business practices?

KPIs: How can company leverage KPIs and which Introduce relevant overarching and business-specific KPIs (for both overall
KPIs should it use to support and track its ESG Group and each OpCo) that are aligned with material topics, ambition levels

Copyright © 2023 by Boston Consulting Group. All rights reserved.

ambitions? (Comply, Compete, Lead) and defined ESG initiatives

Incentive scheme and motivation: How can Requires further assessment in project: For incentive schemes, it needs to be
company stimulate ESG conform behavior ensured that ESG covers a material part: Key incentive aspects need to be
throughout the organization? linked to material topics and ambitions derived in the project

Skills, resources, and systems: How can company Specific resources will be needed for ESG management centrally and for each
ensure that it has the right capabilities in place OpCo; however, experience suggests that this will not lead to additional
to facilitate its ESG strategy? manpower, but rather reskilling/reallocation of existing resources

Source: BCG 33
A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 34
 ESG reporting & 6
ecosystem mgmt.

ESG reporting and eco-system management | Five pillars are key to an ESG
reporting strategy
Impact narrative
grounded in corporate purpose and strategy

ESG reporting framework

(Organization of metrics, metrics reported)

Adhere to external Align materiality & Build data capability/ Engage with the ESG Shape positive investor &

Copyright © 2023 by Boston Consulting Group. All rights reserved.

requirements capital allocation management eco-system other relations
(Cater to demands from (Address current & (Define and implement data (Establish voice with data (Own the ESG impact-
customers, investors, future material issues to collection org and processes raters, industry coalitions business narrative, engage
regulators, data rater and business throughout value throughout value chain, set & ESG consortiums) investors on ESG and Impact)
other stakeholder chain) up controls, consider ERP
demands) tools1)

ESG impact of business activities throughout the value chain,

informed by and prioritized based on strategy and reporting (key material issues/risks)

1. e.g., cooperation with SAP

Source: BCG 35
 Ceritifications costs money, so only
better for larger organisitions, Uusually larger publically rated comapnyies
ESG reporting & 6
are rated automatically, howeverecosystem mgmt.
the bad
ecovardis for example does for
supply chain point is that if the report has been
automaticallly generated then some internal
elemenbts which havent been mentioned in
our reports will be missed

Certification Rating
Mandated certification of ESG Not mandated rating of overall

Three components by external service

providers
sustainability performance by
external service provider
Deep Dive
dependent
dimensions
to cover ESG

Copyright © 2023 by Boston Consulting Group. All rights reserved.

So usually for larger comapnies it is better to pay, and then get our ECG Reporting. so as

reporting to give a true represnentation of the companies activities, usually it costs 150k Euros
approx for such reporting, it is generlly recommended to do the same.
Reporting on key metrics/standards of economic,
environmental and social impact by a company

Standards

Note: External service providers may offer certification and rating services
Source: BCG Source: BCG analysis 36
Goes from A to B++ , REMEMBER THE MOST IMPORTANT THING is to collect as much data for your ESG ESG reporting & 6
activties so that you are able to share the data with these Suntainabilkity reporting firms ecosystem mgmt.

Rating overview: Example company notably weaker than most peers across
major dimensions — significant upside potential especially in Governance topics
Benchmark approach Inside-out Outside-in
and description: Measures relative ESG performance across key issues based on several Aggregating public & company AI-based NLP algorithm to assess ESG
hundred quantitative and qualitative company reported data points reported data ESG scores from >700 sentiment across public data on material
sources issues (SASB)

Prominent
Scores (0-100, 100=best)
reporting Scores (0-10, 10=best) Scores (0-100, 100=best) Insight score (0-100, 100=best)
Momentum (12mths trailing)
Rating scale firms
E S G E S G E Empl. Comm. G Insight Momentum
Example company B+ 84 66 44 A 5.6 4.9 6.0 62 57 56 50 65

A 92 93 78 AAA 9.4 6.0 5.6 74 63 66 58 71

Peer 1

A 93 90 59 AAA 9.2 8.1 4.4 72 66 65 55 70

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Peer 2
A- 93 96 44 AAA 10.0 10.0 7.0 78 67 70 55 59
Peer 3
A- 76 76 74 AAA 8.3 6.2 4.3 59 62 57 53 70
Peer 4

B+ 80 78 63 AAA 8.1 5.7 5.8 63 57 56 53 69

Peer 5

Peer 6 B+
Inside-Out81 Sustainability
62 77
Reporting: 72 60 60 54 72
Inside-out reporting, also known as "top-down" or "organizational-centric"
Peer 7 B+ 55 86 75 69 Outside-In
65 62Sustainability
59 Reporting:
67
reporting, starts from within the organization and focuses on the data and
Outside-in reporting, also known as "stakeholder-
Peer 8
information thatB the
64 organization
58 generates internally.
70 70 56 59 53
56 reporting,
centric" or "contextual" begins by
Note: Peers sorted according to Refinitiv score; MSCI ESG data for five peers and client considering the perspectives and Positive
concernsNegative
of
Source: Refinitiv, MSCI ESG, CSRHub, TVL - all data extracted May 18, 2021 external stakeholders such as investors, customers,37
NGOs, and communities.
 ESG reporting & 6
ecosystem mgmt.

Deep Dive Refinitiv: Example company lags behind peers similarly like in
overall picture This company
You can always ask could improve
these fuckers why compared to its
ESG Scores they gave you the Performance vs. main peers peers
rating they did
89
B+ 83 82 75 75 74 70 68 63
Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Example Peer 8
Overall Score Example company sub-scores company

Environment A Resource Use

93 93 92 84 81 80 76 64
Pillar Score B+ Emissions 55
Weight: 42.5% A+ Innovation Peer 3 Peer 2 Peer 1 Example Peer 6 Peer 5 Peer 4 Peer 8 Peer 7
company

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B+ Workforce
Social C+ Human Rights 96 93 90 86 78 76 66
Pillar Score 62 58
A+ Community
Weight: 33.9%
Peer 3 Peer 1 Peer 2 Peer 7 Peer 5 Peer 4 Example Peer 6 Peer 8
B- Product Responsibility
company

Governance C Management
Pillar Score B- Shareholders 78 77 75 74 70 63 59 44 44
Weight: 23.6% A- CSR strategy Peer 1 Peer 6 Peer 7 Peer 4 Peer 8 Peer 5 Peer 2 Peer 3 Example
company
Note: Pillar score reflect weights for client Industry Group
Source: Refinitiv ESG Database, extracted May 12, 2021; BCG analysis 38
Category score grade A+ A A- B+ B B- C+ C C- D+ D D-
(scale: A+ to D-)
 ESG reporting & 6
ecosystem mgmt.

Best-practice example: SAP shows strong practices Interactive connectivity tool links
across pillars ESG factors to financial value
drivers:

• Reports on SASB, TCFD, GRI standards; reported on TCFD strategy,

governance and metrics before it was identified as a standard
Adhere to ext. • Connects business priorities and ESG initiatives to SDGs
requirements

• Includes current materiality map incorporating SASB, SDGs and GRI

• Shares methodology for materiality framework
Align materiality & • Reports on link of impact between ESG areas (e.g. CO2 emissions)
capital allocation and business value/ profits with interactive connectivity tool

• Interactive data dashboard ("chart generator") allows easy Interactive chart generator
selection/ exploration of financial and non-financial metrics allows different data cuts of
Build data • Unique data cuts and customization enable different (non-)financial measures:

Copyright © 2023 by Boston Consulting Group. All rights reserved.

capability/ mgmt. stakeholder groups to access measures in comparable terms

• Pushing for standardized measurement and disclosure

through membership in Value Balancing Alliance
Engage with ESG • Signatory to other relevant coalitions UN Global Compact,
ecosystem WEF IBC Compact for Responsive and Responsible Leadership

• Pioneer in ESG investor calls – held first ever ESG call as part
of Global Compact Pilot in 2012
Shape positive • Sustainability milestones shared in investor calls (e.g. 10th
investor relations year of roadmap, #1 on Dow Jones sustainability index)
Source: SAP website and integrated report 2018; TCFD 2019 Status report; SASB Software IT Brief 39
 PROFESSOR SAYS - IMPORTANT SLIDE, ESG reporting & 6
ecosystem mgmt.
REMEMEBR
Beyond ESG reporting, targeted stakeholder engagement is key —
communication strategy needs to address strong ESG demands
Example Energy
Demand high ESG transparency and reveal/penalize non ESG conform behavior
(e.g., klimareporter, ECOreporter)

Demand high ESG standards in Scrutinize ESG performance and demand a socially
business conduct/contracting Media & fair & environmentally friendly energy transition
(e.g., Vestas, E.ON, Axa) journalists (e.g., Greenpeace, Klima-Allianz Deutschland)
Business NGOs & civil
partners1 society

Demand integration of ESG criteria Set ESG regulations and targets as well as
Share- Regulators
into long-term business decisions transparency and reporting requirements
(e.g., Blackrock) holders & politics (e.g., EU, local government)
Key stakeholders

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Investors Employees
Demand ESG performance Demand strong ESG performance and a
according to Paris Agreement socially-fair energy transition
(e.g., Deutsche Bank AG) ESG Stock (e.g., students, workers council)
rating exchanges &
agencies funds
Demand better sustainability performance and ESG risk mgmt. Set requirements to enter specific ESG indices or ETFs
(e.g., MSCI, Sustainalytics, ISS) (e.g., Dax 50 ESG2, Global Clean Energy ETF)
1. i.e., off-takers, suppliers, insurances 2. if listed
Source: News reports, BCG research, BCG analysis 40
 ESG reporting & 6
ecosystem mgmt.

Communication strategy will cover both internal

and external stakeholders
External Internal
Both require a targeted
communication plan

Targeted
objectives
Stakeholders: Stakeholders:

Copyright © 2023 by Boston Consulting Group. All rights reserved.

• Shareholders (e.g. Blackrock) • Group and OpCo board members
• ESG rating agencies (e.g. MSCI) • Workers council
• NGOs (e.g. Greenpeace) • All employees Customized
… … channel mix

Channels: Channels:
• Capital Markets Day • Leader forums & meetings
• Annual and sustainability report • Employee training & engagement Synchronized
timeline
• Press releases and (social) media • E-Learning modules
• … • …
Source: BCG 41
 ESG reporting & 6
ecosystem mgmt.

What it takes to create stakeholder buy-in and quickly

improve position—typical hypotheses
REMEMEBER 80/20 RULE, 20 % of the stuff can lead to 80% of the improvement

Key questions Ingoing hypotheses on “what it takes”

Transparency: Publish required data to enable rating agencies to gather

ESG rating: How can company further improve correct data and intercept misinterpretations of ESG activities
its ESG rating? Prioritization: Rank rating agencies and related rankings and certifications
based on investor requirements to assure strong ESG rating

Copyright © 2023 by Boston Consulting Group. All rights reserved.

Consider key stakeholders in ESG strategy (i.e., shareholders, investors,
Stakeholder management: Beyond ESG ratings,
regulators) and proactively approach others throughout the ESG journey
how can company further advance stakeholder
(e.g., NGOs, media). Build strong holistic narrative in communication to
management?
ensure buy-in from all sides

Corporate brand: How can company best

Align with eco-system on ideas for re-branding of (a) legacy part of portfolio
update its corporate identity and use branding
and (b) future company business
strategically for ESG?

Source: BCG 42
Recap | A proven approach to ESG strategy: Six steps to ESG leadership

1 ESG vision and ambition

Validate/update sustainability vision and ambition, and take
stock of existing efforts

2 Materiality 3 Measures and prioritization 5 Org, focus KPIs,

assessment Develop sustainability strategy for highest-impact governance
issues—derive quantifiable targets and define initiatives
Identify/confirm highest incl. business cases to achieve developed strategy Outline lean & efficient organization
impact ESG topics—by relevance and define focus KPIs for performance

Copyright © 2023 by Boston Consulting Group. All rights reserved.

to business success and importance assessment, review sustainability skills,
to stakeholders—and discuss RWE resources, and systems
starting point vs. peers
4 Flagship initiatives
Define flagship initiatives with high influence on
target achievement and proven business case
to support ESG narrative

6 ESG reporting and eco-system management

Provide transparency, generate buy-in from all stakeholders inside and outside of the company and actively
shape the ecosystem—develop and execute ESG communication strategy

Source: BCG 43
 Summary | A typical project approach covers all six steps to ESG leadership
Always try to get leadership (ceo, board etc) to be actively engages in the ESG activites to set an
example for the employees, activately engage employees IN CONEXT TO ESG strateges

Strategy & initiatives

Baselining & ambition Platform building
Materiality assessment Prioritization & target setting Implement. planning
A
Core #1 Take stock ESG #2 Identify and #3 Agree on priority initiatives #5 Develop action Adjust processes,
activities activities, conduct assess material and strategy, define targets plans, handover governance, KPI,
“Health Check”, align issues, synthesize to OpCos, ensure and incentives
on ESG ambition and overarching resources
principles with key themes #4 Develop initiatives for
internal stakeholders Group and OpCos, incl. business
cases
B
#6 Drive and prepare stakeholder engagement (incl. interviews), Feedback loops

Copyright © 2023 by Boston Consulting Group. All rights reserved.

synthesize ESG story for communication purposes

C
Leadership journey to engage the leadership and ensure alignment

D
Design Thinking journey to shape ESG strategy
Optional
E
Hack-a-Sustainability to develop ESG bus models

Key
meetings
1. Incl. two weeks of summer break
SteerCos & leadership workshops OpCo alignments (CEO, key contact) Expert sessions & panels X Deep Dive in chapter
Source: BCG 44
Key fields of action to define and execute ESG strategies
As a rule of thumb, always ensure consistency in your reporting standards, if you decide upon a KPI, AND
TARGETS, THINK beforehand what your publish and ensure consistently in the reprots, DO WHAT YOUR
PREACH !!

• Align with Steering Committee (Group and OpCos) on ESG vision and ambitions
• Develop business case, manage CAPEX decisions, ROI targets, etc.
• Define organizational setup of ESG/sustainability units
Corporate
level • Specify strategic priorities and major flagship initiatives

• Assess strategic ESG issues and priorities for OpCos

• Integrate into businesses (COOs), ensure linkage into core strategic considerations
OpCo level

Copyright © 2023 by Boston Consulting Group. All rights reserved.

• Define OpCo-specific targets, KPIs and strategic projects
• Establish measurement and reporting systems and processes

• Identify strategic risks and opportunities at local level

(e.g. regulatory environment, market conditions, etc.)
Territorial level
• Define region/country-specific KPIs and targets
• Establish best practices across sites

Source: BCG 45
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