Report of the Supervisory Board

Dr.⁠ ⁠Rainer Seele, Chair of the Supervisory Board of Covestro⁠ ⁠AG

Dear Shareholders,

Covestro continued to face an extremely challenging environment in the tenth year of its existence.
The year⁠ ⁠2025 was once again marked by weak economic activity in key customer industries of our company as well as sometimes persistent unfavorable structural conditions and unprecedented geopolitical upheavals.⁠ ⁠

Covestro countered this very difficult overall situation by continuing its actions to increase efficiency and make cost savings. We believe that we are on a successful path to meeting the targets we have set ourselves for the year⁠ ⁠2028. In addition to optimizing processes and structures, we have driven a narrower focus of our project portfolio as well as improvements in production. Central to this were an increase in the reliability and safety of our facilities as well as transitioning them to non-fossil raw materials and energies according to circular economic principles as the key vision of our company.⁠ ⁠⁠ ⁠

On the other hand, Covestro continued to align its product range with circular, climate-neutral materials and solutions in the firm belief that sustainability will continue to be a megatrend with considerable business opportunities in the long term. At K⁠ ⁠2025, the world’s largest plastics trade show, our company underscored this by presenting impressive innovations for areas such as mobility, electronics, and healthcare.⁠ ⁠⁠ ⁠

The Supervisory Board has supported this approach and remains convinced that Covestro has considerable potential for a successful future – all the more so since the partnership with XRG^* was finally sealed toward the end of the year. As a result, the composition of the Supervisory Board underwent a few changes. The body has identified considerable opportunities for Covestro in the constellation with XRG, especially in view of the objective to establish a global platform for performance materials and specialty chemicals with the new partner.⁠ ⁠

During the reporting period, the Supervisory Board of Covestro⁠ ⁠AG performed its duties with due care in accordance with the law, the Articles of Incorporation, and the rules of procedure. During fiscal⁠ ⁠2025, it monitored the conduct of the company’s business by the Board of Management with regular frequency based on detailed written and oral reports received from the Board of Management, and also acted in an advisory capacity. The discussions between the Supervisory Board and Board of Management were always constructive and were conducted in the spirit of openness and trust.⁠ ⁠

The Supervisory Board Chair (Dr.⁠ ⁠Richard Pott until December⁠ ⁠19, 2025, Dr.⁠ ⁠Rainer Seele since December⁠ ⁠20, 2025) was in regular contact with the Board of Management outside of Supervisory Board meetings and remained informed about current developments in the company’s business performance and material transactions. In addition, the Chair of the Supervisory Board was in close contact with the Chair of the Board of Management to discuss important questions and decisions one on one. The full Supervisory Board was informed in detail about the content of these discussions no later than during the next meeting.⁠ ⁠

In this way, the Supervisory Board was also kept regularly and fully informed in the respective meetings about the company’s intended business strategy, corporate planning (including financial, investment, and human resources planning), profitability, the state of the business, and the situation of the company and the Group (including the risk situation, risk management, and the compliance situation). Where Board of Management decisions or actions required the approval of the Supervisory Board during the reporting period, whether by law, or under the Articles of Incorporation or the rules of procedure, the draft resolutions were inspected and discussed in detail by the members of the Supervisory Board at its meetings, sometimes after preparatory work by the responsible committees, or approved in writing on the basis of documents circulated to the members. The Supervisory Board was always directly involved in decisions of material importance to the company. It discussed in detail the business trends described in the reports from the Board of Management and the prospects for the development of the Covestro Group as a whole, the individual segments, and the regions. The Supervisory Board continually ensured that the actions of the Board of Management were lawful, due and proper, and appropriate.⁠ ⁠

Meetings of the Full Supervisory Board and Member Attendance

In fiscal year⁠ ⁠2025, the Supervisory Board held a total of seven meetings, all of which were also attended by at least one member of the Board of Management, except where issues were discussed that required them to be absent. In addition, the various committees of the Supervisory Board convened a total of 13⁠ ⁠meetings.⁠ ⁠⁠ ⁠

The regular Supervisory Board meetings were held physically, while the extraordinary meeting (November⁠ ⁠25, 2025) convened at short notice was held by video conference. Most of the committee meetings were held as video conferences, unless they took place on the same day as one of the Supervisory Board meetings held physically.⁠ ⁠⁠ ⁠

The members of the Supervisory Board attended the meetings of the Supervisory Board of Covestro⁠ ⁠AG and its committees, as follows:⁠ ⁠⁠ ⁠

¹ One Supervisory Board and eight⁠ ⁠committee meetings were held as video conferences, six Supervisory Board and five committee meetings were held physically.

² The three Supervisory Board members appointed to the Supervisory Board as of December⁠ ⁠30, 2025, M. Alonso Benito, G. Janssens, and K. Salmeen, are not listed here, since no further meetings of Supervisory Board committees were held from this point onward in the year⁠ ⁠2025.

³ Absence for personal reasons.

⁴ Absence for extraordinary meetings convened at short notice due to not being available at that time.

In total, Supervisory Board members attended meetings of the Supervisory Board and its committees with a 92.1% attendance rate. In addition, some Supervisory Board members attended meetings of the Sustainability Committee intended for guest attendance (Irena Küstner attended three meetings, Marc Stothfang two, and Regine Stachelhaus one meeting). The Chair of the Supervisory Board at the time, Dr.⁠ ⁠Richard Pott, also attended three Audit Committee meetings as a guest before being elected as a member at the end of July⁠ ⁠2025 to succeed Dr.⁠ ⁠Sven Schneider who stepped down from the Audit Committee on July⁠ ⁠28. The current Chair of the Supervisory Board, Dr.⁠ ⁠Rainer⁠ ⁠Seele, attended one meeting of the Personnel Committee as a guest.

Based on its composition and experience, the Supervisory Board as a whole has in-depth industry expertise in the polymer sector in which Covestro operates.

The members of the Supervisory Board once again participated in continuing personal education in the reporting year⁠ ⁠2025 in order to enhance the expertise of the Supervisory Board as a whole. During a visit to the ADNOC (Abu Dhabi National Oil⁠ ⁠Company) Group in Abu Dhabi (United Arab Emirates) in May⁠ ⁠2025, the members of the Supervisory Board had the opportunity to familiarize themselves with the company, its philosophy and corporate culture, its production facilities, and a large number of topics relating to the aspects of production, health, safety, environment (HSE), artificial intelligence, and training, and to share information and views with representatives of the company. A workshop organized by the Board of Management in connection with the strategy meeting was held in November⁠ ⁠2025, at which Covestro-specific and other topics of relevance for Covestro were highlighted and discussed: securing success by embedding the customer perspective, innovation strategy and innovation infrastructure, as well as the implementation of artificial intelligence in the company. The members of the Supervisory Board also attended a presentation event with an external presenter on the eve of Supervisory Board meeting in June, at which the operation plan for Germany was discussed as a collective national and social task.

Change in the Composition of the Supervisory Board

On February⁠ ⁠21, 2025, Kerstin Spendel was appointed to the Supervisory Board by the court, replacing Petra Kronen, who stepped down from the Supervisory Board as of December⁠ ⁠31, 2024.

Dr.⁠ ⁠Sven Schneider stepped down from the Supervisory Board as of the end of September⁠ ⁠29, 2025 because he was taking up a position elsewhere.

On December⁠ ⁠19, 2025, the Supervisory Board members representing shareholders, Dr.⁠ ⁠Richard Pott, Lise Kingo, and Regine Stachelhaus stepped down from the Supervisory Board. They had resigned their mandates in connection with the takeover of the company by XRG in order to enable four XRG representatives to join the Supervisory Board in accordance with the investment agreement between Covestro and XRG.

Subsequently, Dr.⁠ ⁠Rainer Seele, Mercedes Alonso Benito, Guy Janssens, and Khaled Salmeen were appointed as members of the Supervisory Board by court order, Dr.⁠ ⁠Seele’s appointment was made on December⁠ ⁠9, 2025 and those of Mercedes Alonso Benito, Guy Janssens, and Khaled Salmeen on December⁠ ⁠30, 2025.

The Supervisory Board would like to thank the members who stepped down, Lise Kingo, Dr.⁠ ⁠Richard Pott, Dr.⁠ ⁠Sven Schneider, and Regine Stachelhaus for the good working relationship on a basis of trust over many years. The Supervisory Board would like to thank Lise Kingo specifically for her significant support in the establishment of the Sustainability Committee and for chairing this body. The Supervisory Board would like to thank Dr.⁠ ⁠Sven Schneider specifically for his significant contributions as Chair of the Audit Committee. The Supervisory Board thanked Regine Stachelhaus for her commitment and her valuable contributions in the Presidial Committee and the Personnel Committee. Dr.⁠ ⁠Richard Pott deserves special thanks for his role as Chair of the Supervisory Board and, associated with that, as Chair of the Presidial Committee, the Human Resources Committee, and the Nomination Committee: As Chair of the Supervisory Board, Dr.⁠ ⁠Richard Pott had supported and significantly shaped Covestro since the company was established in the year⁠ ⁠2015. During his more than ten years in office, he guided the company through critical phases of its development – from the carve-out from Bayer through the successful listing on the stock exchange down to the latest strategic realignment with its partner XRG.

Principal Topics Discussed by the Supervisory Board

The deliberations of the Supervisory Board initially focused on the Board of Management’s regular reports on business activities, which contained detailed information on the development of the sales and earnings for the Group and the segments as well as on the strategy, opportunities and risks situation, and personnel matters at Covestro.

Another material topic of discussion in the course of the year was above all the takeover of Covestro by XRG. In the year⁠ ⁠2025, the Supervisory Board focused in particular on the regulatory approval procedures and the completion of the takeover, including the associated capital increase. The Supervisory Board received regular updates and ultimately approved the implementation of the capital increase. The body’s composition was changed in this context and XRG is now represented by four members, of whom Dr.⁠ ⁠Rainer Seele was elected as the new Chair. In the year⁠ ⁠2025, the Supervisory Board also dealt in detail with Covestro’s innovation strategy as well as the latest status of the innovation infrastructure and the future ambitions in this regard.

Items on the agenda of every Supervisory Board meeting were the company’s current situation, the economic challenges, and the measures taken by the Board of Management, including the progress of the STRONG transformation program as well as the Board of Management’s reporting on the planned takeover of Covestro by XRG. In addition, the Supervisory Board concentrated on the following topics in individual meetings and also through circular resolutions:

On January⁠ ⁠15, 2025, the Supervisory Board discussed the issue of bonuses (Covestro Profit Sharing Plan) for the Board of Management for the year⁠ ⁠2024 and, on the recommendation of the Human Resources Committee, used a circular resolution to set them to 40 percent in accordance with the performance metrics to be applied to calculating the bonuses. The Board of Management adopted a corresponding resolution for the employees.

The Supervisory Board meeting on February⁠ ⁠25, 2025 focused on the annual financial statements and the associated reports. The Supervisory Board discussed in detail the Financial Statements and Consolidated Financial Statements for fiscal⁠ ⁠2024, and the Combined Management Report including the nonfinancial Group statement. It also reviewed in detail the audit report and the auditor’s oral report concerning the material results of the audit. In addition, the Supervisory Board examined internal risk reporting, which sets out the material risks for the Group and current developments in this regard, as well as the relevant countermeasures. Furthermore, the organization, statistics, training efforts, processes, and effectiveness of the Group’s compliance management system were reviewed in depth. The Supervisory Board also discussed the 2025 Annual General Meeting (AGM) and approved the agenda and its resolution proposals for this AGM. Another item on this meeting’s agenda was to discuss the Covestro site in LinYuan (Taiwan), which was closed already in the year⁠ ⁠2023 and whose sale was approved by the Supervisory Board at this meeting.

Various compensation issues were also discussed, and the Compensation Report of the Board of Management and the Supervisory Board for fiscal⁠ ⁠2024 was approved. Moreover, the Supervisory Board approved the amendments to the compensation system for the Board of Management, which had been recommended by the Human Resources Committee. They related, among other things, to the variable compensation components and the share ownership guidelines in case of the takeover by XRG. The long-term variable component required amendment because the price of Covestro shares, which ceased to be traded freely as a result of the takeover offer by XRG, no longer seemed suitable as a metric for the company’s long-term success.

Also at this meeting, the Supervisory Board dealt with its self-assessment regarding the effectiveness and efficiency of its work in fiscal⁠ ⁠2024. On the whole, members found the activity of the Supervisory Board and of all its committees effective and efficient. They continued to value in particular the detailed discussions and exchanges with the Board of Management on issues relating to strategy, for which sufficient time was allowed at Supervisory Board meetings and the annual strategy workshop. Overall, the results were comparable to those of previous years.

At this meeting, the Supervisory Board also elected its Vice Chair, which had become necessary as a result of Petra Kronen’s stepping down from the Supervisory Board; it also filled vacant positions on the committees. In this process, Frank Löllgen was elected as Vice Chair of the Supervisory Board.

In a circular resolution on March⁠ ⁠12, 2025, the Supervisory Board approved the renewal of an important supply agreement for the facilities on the Lower Rhine. In another circular resolution on the same day, it approved the closure of site PO11 (joint venture with LyondellBasell) in Maasvlakte (Netherlands).

At the Supervisory Board meeting on April⁠ ⁠17, 2025, the main focus was on the Annual General Meeting taking place on the same day, which was conducted in virtual format. After the Annual General Meeting, at which five of the six shareholder representatives were reelected, the Supervisory Board convened for its constituent meeting to elect the Chair of the Supervisory Board as well as the shareholder representatives on the Supervisory Board committees. Dr.⁠ ⁠Richard Pott was reelected as Chair of the Supervisory Board.

At its meeting held on June⁠ ⁠11, 2025, the Supervisory Board mainly dealt with Covestro’s innovation strategy as well as the latest status of the innovation infrastructure and the future ambitions in this regard. At this meeting, the Supervisory Board approved the acquisition of Pontacol AG, a company with operations in the specialty films business. At the same meeting, the Supervisory Board extensively debated an update on the planned takeover of Covestro by XRG, the latest status of the various regulatory approvals in this context, and the potential timeline for the subsequent steps for the case that all approvals of the takeover are granted.

In a circular resolution on July⁠ ⁠14, 2025, the Supervisory Board reappointed Dr.⁠ ⁠Thorsten Dreier as a member of the Board of Management (Chief Technology Officer, CTO) and Labor Director of Covestro⁠ ⁠AG for the period from July⁠ ⁠1, 2026 to June⁠ ⁠30, 2031. The Human Resources Committee had had drafted a proposed resolution for the Supervisory Board to this end.

After the Chair of the Audit Committee, Dr.⁠ ⁠Sven Schneider, had stepped down from the Audit Committee as of the end of July⁠ ⁠28, 2025, the Supervisory Board elected the member of the Audit Committee, Dr.⁠ ⁠Christine Bortenlänger, as Chair and Dr.⁠ ⁠Richard Pott as another member of the Audit Committee in a circular resolution on July⁠ ⁠31, 2025. The members of the Supervisory Board had knowledge of Dr.⁠ ⁠Schneider’s plans for some time and had discussed his successor at an early stage.

At the Supervisory Board meeting on November⁠ ⁠12, 2025, the focus was on the regularly scheduled topic of the corporate strategy, after the Supervisory Board had, as in previous years, addressed strategy issues in depth on the day before in a strategy workshop organized by the Board of Management. This meeting was about updating the corporate strategy following consolidation of the aspects of customer centricity, innovation strategy, and the use of artificial intelligence in the company. In the context of updating the corporate strategy, the associated adjusted system of performance metrics to measure the implementation of the strategy was also presented and discussed.

Another item on the agenda of this Supervisory Board meeting was the extension and renewal of an important supply agreement for chemical components for the manufacture of polyurethanes. At this meeting, the Supervisory Board also approved the refinancing of the revolving credit facility and debated the plans for the Sustainability Statement for the current fiscal year.

The main focus of the extraordinary Supervisory Board meeting on November⁠ ⁠25, 2025 was on adopting the resolution of the capital increase for Covestro⁠ ⁠AG using the Authorized Capital 2021. This followed decisions in principle taken by the Board of Management and Supervisory Board on the capital increase in accordance with the investment agreement entered into with XRG on October⁠ ⁠1, 2024 and resulted in the issuance of new shares to ADNOC International Germany Holding AG.

In its meeting on December⁠ ⁠18, 2025, the Supervisory Board considered various compensation issues. As regularly scheduled, it reviewed the fixed compensation of the members of the Board of Management and considered the short-term and long-term variable compensation for the Board of Management. In another important agenda item, the Supervisory Board looked in detail at the corporate planning for fiscal⁠ ⁠2026 proposed by the Board of Management and the medium-term outlook also presented. It approved both the corporate plan and the financing framework proposed for fiscal⁠ ⁠2026. The Supervisory Board also issued its declaration of compliance with the German Corporate Governance Code (GCGC).

At this meeting, the Supervisory Board also elected Dr.⁠ ⁠Rainer Seele as Chair of the Supervisory Board as from December⁠ ⁠20, 2025, thus succeeding Dr.⁠ ⁠Richard Pott, who stepped down from the Supervisory Board on December⁠ ⁠19, 2025.

Committees of the Supervisory Board

In the past fiscal year, the Supervisory Board had five permanent committees set up so that it can continue to exercise its duties effectively and efficiently. The committees prepared resolutions by the full Supervisory Board and provided information on other topics to be discussed by this body. Moreover, certain decision-making powers of the Supervisory Board were delegated to the committees to the extent legally permissible. The Supervisory Board currently has the following permanent committees: Presidial Committee, Audit Committee, Human Resources Committee, Nominations Committee, and Sustainability Committee. In addition, in accordance with the investment agreement entered into with XRG on October⁠ ⁠1, 2024, an Investment Committee was established in February⁠ ⁠2026; its purpose is to discuss and pass resolutions on significant investments and M&A projects.

The tasks and responsibilities of the standing committees and their current composition are described in greater detail in “Declaration on Corporate Governance” under “Committees of the Supervisory Board” in the Combined Management Report.

The meetings and decisions of all committees, and especially those of the Audit and Sustainability Committees, were prepared on the basis of reports and explanations provided by the Board of Management. The committee chairs regularly provided comprehensive reports on the work of the committees to the full Supervisory Board.

The Presidial Committee, on which shareholders and employees are equally represented, convened for one ordinary meeting in the year⁠ ⁠2025. At this meeting on December⁠ ⁠3, 2025, the Presidial Committee discussed the annual review of the Qualification Matrix of the Supervisory Board implemented in fiscal⁠ ⁠2022. The new Supervisory Board member Kerstin Spendel, who joined in 2025, was added to the qualification matrix. A review of the skills and experience of the Supervisory Board members did not identify any need to make any further changes.

The Audit Committee met a total of four times in the year under review: on February⁠ ⁠24, May⁠ ⁠5, July⁠ ⁠28, and October⁠ ⁠29, 2025, each time in the presence of the CFO and the auditor. At a working meeting on June⁠ ⁠11, only members of the Audit Committee were present. The Audit Committee conducted a preparatory review of the Financial Statements of Covestro⁠ ⁠AG, the Consolidated Financial Statements of the Covestro Group, and the Combined Management Report for the Supervisory Board. In particular, it also discussed in detail the respective audit report and the oral report by the auditor on the material results of the audit. The Combined Management Report also included the Group’s nonfinancial statement. In conducting its review, the Audit Committee found no grounds for objections. It recommended to the Supervisory Board to approve the Financial Statements and Consolidated Financial Statements for fiscal⁠ ⁠2024 as well as to consent to the Combined Management Report. In addition, the Audit Committee discussed with the Board of Management the half-year financial report in light of the results of the review by the auditor, and the Q1 and Q3⁠ ⁠2025 quarterly statements prior to their publication.

The Audit Committee monitored the accounting and financial reporting process and the appropriateness and effectiveness of the internal control system, the risk management system, and the internal audit system, including sustainability-related aspects, and deliberated on the audit of the financial statements and compliance. In doing so, the Committee received reports, including from the heads of Corporate Audit and the Corporate Law, Intellectual Property & Compliance functions and from the auditor. No material weaknesses were identified in the internal control system for financial reporting purposes or the risk early warning system.

The Audit Committee additionally undertook preparations for the Supervisory Board’s proposal for the appointment of the financial statement auditor by the AGM, the engagement of the auditor and agreement on the auditor’s fee. It monitored the quality of the audit and the independence of the auditor as well as the supplementary non-audit services provided in addition to the financial statement audit. In this context, the committee had the auditor confirm their independence.

The Audit Committee discussed the audit risk assessment, audit strategy, audit planning, key audit matters, and audit results with the auditor. The Audit Committee and its Chair (Dr.⁠ ⁠Sven Schneider until July⁠ ⁠28, 2025, Dr.⁠ ⁠Christine Bortenlänger thereafter) had regular meetings with the auditor about the progress of the audit and reported to the Audit Committee accordingly.

Particular issues discussed by the Audit Committee in this fiscal year were aspects of opportunities and risks such as cyber risk (specifically with regard to the security of production and technology IT systems; including analysis and processing of an attack by the CLOP Group in the fourth quarter of 2024, as well as measures to increase cyber resilience), the results of an appropriateness and effectiveness audit of the compliance management system in accordance with IDW AsS 980 (unqualified opinion), an update on tax positions, tax risks, and on the tax compliance management system, as well as discussion of an update on pension assets and pension obligations. In addition, the Audit Committee dealt with the activities in accounting required in connection with the planned takeover by XRG.

Furthermore, the Audit Committee obtained information on an ongoing basis on enhancements to the compliance management system (particularly regarding anti-corruption measures), the handling of suspected compliance violations, progress in significant litigation, new legal and regulatory risks, and the risk situation, risk tracking, and risk monitoring in the Group. The Corporate Audit function provided regular reports about risk assessments. The heads of the relevant corporate functions also participated in meetings of the Audit Committee on selected agenda items, reported on these, and answered questions. In addition, the Chair of the Audit Committee discussed important matters between meetings, particularly with the Supervisory Board Chair, the CFO and the auditor. The key results of these discussions were reported regularly to the Audit Committee and the Supervisory Board. The Audit Committee continued its practice of closed sessions in the year under review. They allow the auditor and the committee during the meeting to have a discussion without the Board of Management being present.

In the reporting period, the Human Resources Committee convened for a total of four meetings and passed two circular resolutions.

In one circular resolution on January⁠ ⁠14, 2025, the Human Resources Committee discussed the issue of bonuses (Covestro Profit Sharing Plan) for the Board of Management for the year⁠ ⁠2024 and recommended that the Supervisory Board set this to forty percent.

At its meeting on February⁠ ⁠25, 2025, the Human Resources Committee discussed compensation issues for the Board of Management (review of and adjustments to annual base salaries, approval of payouts of short-term and long-term variable compensation for the year 2024) and the handling of the current tranches for long-term variable compensation. It also debated a new system of metrics for long-term variable compensation for the Board of Management for the case that the takeover by XRG was completed, since this would mean that the share price of Covestro⁠ ⁠AG could no longer be considered a suitable metric for assessing the company’s performance going forward. Furthermore, the Human Resources Committee discussed the short-term variable compensation and the targets for the one-year component. It gave its recommendations for long-term and short-term variable compensation and recommended that the Supervisory Board should approve the compensation system for the Board of Management, which had been adjusted accordingly. At this meeting, the Human Resources Committee also approved the performance of secondary employment by CFO Christian Baier (membership of the Board of Trustees of Frankfurt School of Finance & Management gGmbH).

At its meeting on June⁠ ⁠11, 2025, the Human Resources Committee discussed aspects of human resources planning and succession planning for the Board of Management.

On July⁠ ⁠9, 2025, the Human Resources Committee passed a circular resolution recommending that the Supervisory Board should reappoint the member of the Board of Management, Dr.⁠ ⁠Thorsten Dreier, as a member of the Board of Management and Labor Director – with a contract term starting on July⁠ ⁠1, 2026 and ending on June⁠ ⁠30, 2031.

At its meeting on November⁠ ⁠12, 2025, the Human Resources Committee continued its considerations on succession planning for the Board of Management.

Key topics on the agenda of the meeting held on December⁠ ⁠18, 2025, included the annual review of the appropriateness of Board of Management compensation and short-term and long-term variable compensation of the Board of Management (one-year component for 2026 and LTI⁠ ⁠2026⁠–⁠2029 tranche).

The Sustainability Committee convened for a total of four meetings. The main issues of its deliberations were the circular economy, sustainability-related projects and initiatives, and the tracking of sustainability-related targets using metrics systems.

At its first meeting on February⁠ ⁠17, 2025, the Sustainability Committee dealt with the review of the sustainability-related parts of the Group Management Report and recommended the approval of the nonfinancial Group statement for the year⁠ ⁠2024. It also reviewed the progress reports on the Scope⁠ ⁠1, Scope⁠ ⁠2, and Scope⁠ ⁠3 emission reduction targets. It also received information on the Covestro KPI dashboard and paid particular attention in this context to climate and circular economy metrics to assess the implementation of the sustainability-related targets.

In the second meeting on May⁠ ⁠23, 2025, the committee debated an update on issue management of regulatory topics. In a further update, the issue of human rights and the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) were the subject of discussions. The members of the committee also obtained an overview of the current status of nature-related initiatives at Covestro – with a focus on biodiversity and water management.

The main priority of the meeting on September⁠ ⁠26, 2025 was the issue of circular economy at Covestro. It involved firstly an update on the company's circular economy projects and secondly a new enhanced approach to selecting suitable projects for processing and tracking internally. The committee furthermore reviewed the sustainability reporting for the year 2025.

At its meeting on November⁠ ⁠21, 2025, the members of the committee dealt primarily with the aspect of digitalization of sustainability at Covestro. This was predominantly about ways and measures to improve the efficiency of sustainability initiatives – especially through various forms of data automation to track and manage sustainability initiatives. This meeting also focused on discussing the intermediate progress made with corporate culture at Covestro as well as a review of key milestones that the Sustainability Committee had debated and monitored in previous years and that were important to Covestro. At the last meeting of the year⁠ ⁠2025, the members of the Committee agreed on priorities and core topics for the year⁠ ⁠2026.

At all the meetings during the year, current developments and requirements regarding EU chemicals policy, regulations, ratings, and rankings were discussed in addition to the specific topics mentioned. Where relevant, the discussion of all the topics addressed in the Sustainability Committee also included the discussion of entity-specific material impacts, risks, and opportunities associated with them.

The members of the Nomination Committee did not convene for any meetings in the 2025 reporting year.

Financial Statements/Audit

The Financial Statements of Covestro⁠ ⁠AG were prepared in accordance with the requirements of the German Commercial Code (HGB), the German Stock Corporation Act (AktG), and the German Energy Industry Act (EnWG). The Consolidated Financial Statements of the Covestro⁠ ⁠Group were prepared in accordance with the German Commercial Code and the International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU). The Combined Management Report including the Group’s nonfinancial statement was prepared in accordance with the German Commercial Code. The auditor, KPMG⁠ ⁠AG Wirtschaftsprüfungsgesellschaft, Essen, has audited the financial statements of Covestro⁠ ⁠AG, the consolidated financial statements of the Covestro Group, and the combined management report. The Nonfinancial Group Statement included in the combined Management Report was subjected to a separate audit by KPMG⁠ ⁠AG Wirtschaftsprüfungsgesellschaft, Düsseldorf (Germany). KPMG⁠ ⁠AG Wirtschaftsprüfungsgesellschaft has audited Covestro’s financial statements since fiscal⁠ ⁠2018. Marc Ufer and Dr.⁠ ⁠Kathryn Ackermann signed the Independent Auditor’s Report for fiscal year⁠ ⁠2025. Both of them signed the Independent Auditor’s Report for first time on December⁠ ⁠31,⁠ ⁠2022. The auditor’s report on the separate audit of the Nonfinancial Group Statement for fiscal year 2025 was signed by Oliver Geier and Claudia Fielenbach, both of whom signed it for the first time as of December⁠ ⁠31, 2024. The conduct of the audit, key audit matters, and results of the audit are explained in the auditor’s reports. The auditor finds that Covestro has complied, as appropriate, with the German Commercial Code, the German Stock Corporation Act, the German Energy Industry Act, and/or the IFRS regulations as adopted by the EU. The financial statements of Covestro⁠ ⁠AG, the consolidated financial statements of the Covestro Group, and the combined management report including the Group’s nonfinancial statement received unqualified audit opinions. The compensation report was subjected to a substantive audit and issued with an unqualified audit opinion, which, together with the related disclosures, complies in all material respects with the financial reporting requirements of Section⁠ ⁠162 AktG. The financial statements of Covestro⁠ ⁠AG, the consolidated financial statements of the Covestro⁠ ⁠Group, the Combined Management Report including the Group’s nonfinancial statement, and the audit reports were submitted to all members of the Supervisory Board. The auditor submitted a report on both occasions and was present during the discussions.

The Supervisory Board examined the Financial Statements of Covestro⁠ ⁠AG, the Consolidated Financial Statements of the Covestro Group, and the Combined Management Report including the Group’s nonfinancial statement. It had no objections and thus concurred with the result of the audit. It thus concurred with the result of the audit.

The Supervisory Board approved the financial statements of Covestro⁠ ⁠AG and the consolidated financial statements of the Covestro Group prepared by the Board of Management. The financial statements of Covestro⁠ ⁠AG are thus confirmed. Since no net income was generated, there is no proposal for the use of distributable profit. The Board of Management and Supervisory Board jointly prepared the annual compensation report.

Audit of the Related Parties Report by the Board of Management

As of the end of fiscal⁠ ⁠2025, the ADNOC Group held around 95% of the shares of Covestro⁠ ⁠AG: ADNOC International Germany Holding AG held around 83% and XRG⁠ ⁠P.J.S.C. around 12% of the shares of Covestro⁠ ⁠AG. Since the transaction was completed on December⁠ ⁠10, 2025, Covestro⁠ ⁠AG has been in a relationship of dependence with Abu Dhabi National Oil Company (ADNOC) P.J.S.C. This means that Covestro⁠ ⁠AG is a dependent company within the meaning of the German Stock Corporation Act (AktG). The sole shareholder of Abu Dhabi National Oil Company (ADNOC) P.J.S.C. is the Government of the Emirate of Abu Dhabi. Because of this ownership structure, the Government of the Emirate of Abu Dhabi can be considered a controlling company. The dependent company has not entered into a control and/or profit and loss transfer agreement with any company along the entire chain of control – up to the controlling company. For this reason, the Board of Management prepared a report on the company’s relationships with related companies for the period from December⁠ ⁠10, 2025, to December⁠ ⁠31, 2025, in accordance with Section 312 of the German Stock Corporation Act (AktG) (related parties report) and submitted this to the Supervisory Board in a timely manner. The related parties report was audited by the company’s auditor, a written report was presented on the result of the audit, and the following report was issued in accordance with Section 313, Paragraph 3 AktG:

“After due consideration and assessment, we confirm that

• the actual information in the report is correct, and
• the company’s consideration in the legal transactions described in the report was not inappropriately high.”

The related parties report and the auditor’s report were submitted to the Audit Committee and the Supervisory Board and reviewed by both bodies. No objections were raised as a result. There were also no objections to the declaration by the Board of Management at the end of the related parties report. It concurred with the result of the audit of the related parties report conducted by the auditor.

Corporate Governance and Declaration of Conformity

During the reporting year, the Supervisory Board again extensively addressed Covestro’s corporate governance, taking into account the German Corporate Governance Code and, together with the Board of Management, submitted a declaration of compliance in accordance with Section⁠ ⁠161 of the German Stock Corporation Act in December⁠ ⁠2025 based on the Code in the April⁠ ⁠28, 2022, version. This declaration, which specifies a deviation from G.10 sentence⁠ ⁠2 of the GCGC, has been posted on Covestro’s website.

Expression of Appreciation from the Supervisory Board

The Supervisory Board would like to thank the Board of Management and all of Covestro’s employees for their unwavering dedication in the 2025 fiscal year. The Supervisory Board wishes all of them success in dealing with the current economic and geopolitical challenges in a time of multidimensional crises. The Supervisory Board would also like to thank Covestro’s shareholders for the trust they have placed in the company.

Leverkusen, February⁠ ⁠25, 2026

For the Supervisory Board

Dr.⁠ ⁠Rainer Seele
Chair