121 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Sustainability Statement The BMW Group's long-term corporate planning is based on the Company’s target system. In this way, the targets set out in the planning are regularly compared with the BMW Group’s strategic targets. Decisions related to the implementation of sustainability targets – particularly in connection with sales planning and the product portfolio – are confirmed in specific draft proposals or by the decision making bodies of the BMW Group. The BMW Group is drawing up a CapEx plan for capital expendi- ture and operating expenditure that expands Taxonomy-aligned economic activities or allows Taxonomy-eligible economic activ- ities to become taxonomy-aligned. This plan is being drawn up on the basis of the long-term planning of the BMW Group. ↗ EU Taxonomy. The level of investment required to achieve the CO2e targets is derived from this CapEx plan. Specific measures are also financed, such as the development of technologies that contribute directly to the implementation of the transition plan.1 The progress of the implementation plan, based on the measures for each scope, is reflected in the emissions reductions achieved and forms the basis for its further development. Path to achieving the CO2e reduction targets in 2030 The BMW Group is fully committed to the Paris Agreement and contributes to decarbonisation efforts by pursuing its own ambi- tious targets. To achieve this, the BMW Group promotes the re- duction of CO2e emissions throughout the whole life cycle of its products as well as the principles of the circular economy with a verifiable track record of continuous improvement – from the supply chain to production, the use phase and the recycling of its products. The relative targets introduced in 2021 (expressed as reduction per vehicle) for Scope 1 and 2 (BMW Group locations) and Scope 3 (Purchased goods and services, Logistics, Use phase in each case for the Automotive segment) will be replaced with absolute values measured in tonnes CO2e from reporting year 2024 on- wards. The BMW Group’s overall target claim remains un- changed with this adaptation and take account of growth fore- casts and interaction between the scopes. No future develop- ments, (for example changes in sales volumes or new technologies) were assumed as premises as part of the target setting process. The BMW Group aims to reduce its CO2e emissions by at least 40 million tonnes CO2e compared to the 2019 base year by 2030 - from 150.1 million tonnes CO2e to 108.6 million tonnes CO2e. The targets are based on scientific, cross-sector methods aligned with the approach of the SBTi. The BMW Group is com- mitted to proceeding exclusively according to scientifically recog- nised methods. For this reason, the BMW Group joined the SBTi and validated its relative decarbonisation targets in 2020. Ongo- ing revisions to the SBTi guidelines, which are expected to con- tinue until at least the end of 2025, and interim requirements valid until then (including the mandated commitment to phase out combustion engine technology by 2035) mean that it is cur- rently preventing the validation of the absolute targets. The BMW Group actively incorporated stakeholder expectations into the methodology used for its reduction pathways when de- fining targets for a 1.5°C-aligned CO₂e reduction pathway for Scope 1 and 2 emissions, as well as the Well-Below-Two-De- grees approach for Scope 3 emissions in the Automotive seg- ment (covering Purchased goods and services, Logistics, and the Use phase). Additionally, the fleet CO2 regulations in the respec- tive markets are applicable during the use phase. Scope 3 categories are considered for both current reporting and target-setting purposes based on the requirements of the Green- house Gas Protocol. In addition to the absolute volume of emis- sions and the proportion of total emissions, the most important criterion being the extent to which the BMW Group is able to in- fluence the emissions directly. Based on this approach, the categories Purchased goods and services, Upstream transportation and distribution (Logistics), and Use of sold products (Use Phase) are both reported and fac- tored into the target-setting process for the Automotive segment. These target-relevant categories account for more than 95% of all reported Scope 3 emissions. Additional reported categories (Business travelling and Employee commuting) are excluded from the target Scope because the volumes in question are relatively small (Business travelling and employee commuting) or because of the lack of direct influence by the BMW Group (End-of-Life treatment of sold products [Disposal]). An absolute target of 0.635 million tonnes of CO2e by 2030 has been set for direct (Scope 1) and indirect (Scope 2) emissions.2 This is equivalent to a 46.3% reduction in emissions compared to the base year 2019 (1.182 million tonnes of CO2e). The Scope 2 target derivation is based on the market-based method. This factors in the actual emissions of the electricity used instead of the values of regional electricity mixes. Approximately three quarters of the emissions are allocated to Scope 1 and approxi- mately one quarter to Scope 2. An absolute target of 108 million tonnes of CO2e for 2030 was defined for Scope 3 emissions in the Automotive segment, based on Purchased goods and services, Logistics and the Use phase. This is equivalent to a 27.5% reduction in emissions compared to the base year 2019 (148.9 million tonnes of CO2e). Energy efficiency measures and the use of renewable energy in particular should contribute to achieving the targets in the own production of the BMW Group. Fossil fuels are increasingly being replaced by alternative technologies, particularly site-specific ge- othermal energy, renewable district heating and power-to-heat systems. At the new plant in Debrecen, Hungary, all paint line processes are powered by electricity instead of natural gas. 1 In accordance with ESRS 1-106, significant monetary amounts related to CapEx and OpEx nec- essary for the implementation of current or planned measures outside the CapEx plan are not quantified for confidentiality reasons. 2 The combined Scope 1 and 2 target includes all of the categories reported. At present, sites with- out operational control are not included in the target. The base year 2019 also includes emis- sions from contract manufacturing (”insourcing”). In the base year 2019 and the target year 2030, the biogenic share of emissions is included in the figure for the category Company Vehicles (Scope 1), while the biogenic share of the average electricity mix supplied to the BMW Group is included in the Electricity/Heating/Cooling Procurement for BMW Group Locations category. Emissions under Scope 2 are included in the target using the market-based calculation.