THE PROCESS OF IDENTIFYING ENVIRONMENTALLY SUSTAINABLE ACTIVITIES

Screening

Analysis Of Substantial Contribution Dnsh Evaluation

Respect For Safeguards

Comer Industries has initiated a five-step process to analyze the applicability of the EU Taxonomy to the Group's activities:

1. SCREENING: identification of eligible economic activities with respect to the first two environmental objectives of Art. 9 of Reg. EU 2020/852 (climate change mitigation and adaptation).

2. ANALYSIS OF SUBSTANTIAL CONTRIBUTION: assessment of compliance with the technical screening criteria set out in EU Delegated Regulation 2021/2139 of June 4, 2021 (Annex I and II), which set out the requirements that an economic activity must meet in order to make a substantial contribution to climate change mitigation and adaptation objectives.

3. ASSESSMENT OF COMPLIANCE WITH THE DNSH PRINCIPLE  3 : assessment of compliance with DNSH criteria, i.e., that the activity does not cause significant harm to any of the environmental objectives in Article 9 of Reg. EU 2020/852, in accordance with Article 17 of the same Regulation.

4. EVALUATION OF RESPECT FOR MINIMUM GUARANTEES OF SAFETY  4 : Assessment of whether procedures implemented by the enterprise are in place to ensure that they respect the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions identified in the International Labor Organization's Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights;

5. CALCULATION OF KPIs  5 : with exclusive reference to climate change mitigation and adaptation targets (the only ones technical screening criteria have been defined for to date), EU Delegated Regulation 2021/2178 of July 6, 2021 specified the content, methodology and manner of presentation of the information that must be reported, supplementing the provisions of Article 8 of the Taxonomy Regulation.

3 - “Do No Significant Harm” principle.

4 - Reference was made to the Final Report on Minimum Safeguards published by Platform on Sustainable Finance in October 2022 to assess compliance with the minimum safeguards.

5 - The KPIs represent the turnover, capital expenditures (CapEx), and operating expenditures (OpEx) of aligned and unaligned activities, as required by Article 8 of Regulation EU 2020/852.

The process implemented identified Taxonomy-eligible aligned, Taxonomy-eligible not aligned, and not eligible activities 6 and calculated the metrics required by the Taxonomy Regulation related to the turnover, capital expenditures (CapEx), and operating expenditures (OpEx) associated with them for 2022.

Environmentally Sustainable Activities

With regard to the goal of climate change mitigation, the application of the assessment process led to the identification of the manufacture of planetary gearboxes for wind turbines as one of the activities eligible for the Taxonomy, falling under the category "manufacture of renewable energy technologies." 7 This activity appears to be Taxonomy-aligned by contributing substantially to achieving the objective through compliance with the technical screening criteria, not causing significant harm to any of the other objectives, 8 and being carried out in compliance with the minimum safeguards. 9 Finally, it turns out to be enabling according to Article 16 of the Taxonomy Regulation. No Taxonomy-eligible not aligned economic activities were identified. Regarding the climate change adaptation objective, Comer Industries' activities are not among those classified to date as eligible for the Taxonomy with respect to climate objectives, described in EU Delegated Regulation 2021/2139 of June 4, 2021, Annex II.