Environment & Climate Change

Environmental Stewardship

We recognize that as part of the transportation and logistics industry, the biggest impact on our natural capital is our emissions, as well as our packaging and material use. These are key areas of focus as we face growing climate risks. To tackle these challenges, decarbonization is at the heart of our sustainability strategy. Our approach involves a holistic assessment of inputs and outputs to better understand and mitigate our environmental footprint. We are committed to minimizing fuel consumption and emissions by enhancing operational efficiency and increasing our use of renewable energy sources. Additionally, we continuously optimize our material and packaging practices to reduce waste, implementing a robust strategy of reduction, reuse, and recycling. Our employees and business partners are key to this strategy, and we actively work to raise awareness, provide targeted training, and rigorously evaluate our suppliers to ensure that sustainability and environmental impact are core to every aspect of our value chain.

Drawing inspiration from various standards and the Science Based Targets Initiative (SBTi), our efforts are focused on aligning with emissions reduction targets of 1.5°C for Scope 1 and 2 emissions, and 2.0°C for Scope 3 emissions. Given the complexities of our industry, asset-light model, and global presence, we have revisited our strategy in 2024 to ensure it is updated and fit for purpose in the coming years. This forms a key part of our decarbonization goals and action plans to achieve our long-term sustainability aspirations. In recognizing the complexities of climate-related risks, including regulatory shifts and physical impacts, we actively collaborate with stakeholders to identify both challenges and opportunities.

We utilize a comprehensive, data-driven approach to measure and manage greenhouse gas (GHG) emissions across our operations, ensuring continuous mitigation and reduction of our carbon footprint in alignment with sustainability goals. Following the GHG Protocol by WBCSD and WRI, we adopt an operational control approach, encompassing emissions from controlled locations while excluding franchisees and agents. Scope 2 emissions are calculated using IEA tools for accuracy, and external audits validate our data and methods to ensure transparency. We also use DEFRA emission factors for scope 1 and scope 3.

As a light-asset company, Aramex includes third-party transport emissions, such as airlines, sea lines, and vehicle leasing, in Scope 3 calculations for air, sea, and road freight. Local subcontractors handle express deliveries in markets like India, while fuel use is tracked for leased and owned vehicles. We work with transport partners to improve emissions data accuracy and gain deeper insights into our environmental impact.

In addition to robust measurement practices, we prioritize data transparency and support greener logistics by providing detailed emissions data tailored to customer-specific needs, such as shipment type, transportation mode, or route. These efforts are built on key pillars of environmental impact management, enabling us to implement targeted strategies that drive progress toward our sustainability objectives.

Some of our key strategic initiatives include:

• Renewable energy – solar installations
• Renewable energy investments are key to reducing carbon emissions resulting from our direct operations. Currently, investments in UAE, Jordan, Egypt and Ireland not only reduce our reliance on fossil fuels but also allow us to make progress toward our decarbonization goals.
• Sustainable fleet

Our strategy focuses on converting our vehicles to low-emission models, incorporating electric vehicles, and utilizing sustainable fuels where available and feasible. By electrifying our fleet and optimizing fuel use, we are not only reducing our environmental impact but also improving operational efficiency, positioning us as a leader in sustainable logistics.

• Energy efficiency

To achieve significant energy savings, we’ve implemented a multifaceted approach that optimizes the use of natural resources throughout our operations. Our commitment extends beyond reduction; we are determined to set industry benchmarks in sustainability by pursuing ISO 14001 and LEED certifications. These certifications will not only validate our efforts but also reinforce our dedication to responsible resource management and environmental stewardship.

• Operational efficiency and route optimization

By utilizing advanced technologies to streamline operations and optimize delivery routes, we reduce fuel consumption, minimize idle time, and lower overall emissions contributing to sustainable practices across the supply chain and toward greener logistics, while improving service reliability and operational performance.

Climate Risk

At Aramex, we understand our responsibility to stakeholders and the importance of fully assessing the potential threats that climate risks pose to our business, operations, and customers. In 2022, we took significant steps to assess our climate risks and resilience practices, aligning them with the evolving global standards such as IFRS. We appointed an independent third-party consultant to conduct a comprehensive climate risk assessment and benchmarking exercise. This assessment was designed to identify our exposure to various climate risks and evaluate our performance against global and industry-leading practices.

Our Climate Risk Framework is closely integrated with Aramex's Enterprise Risk Management (ERM) system and aligns with best international standards, such as the Climate Risk Frameworks of the Cambridge Institute for Sustainability Leadership. Our customized climate risk framework founded on the four core principles of TCFD, and follows the IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The framework provides a structured approach for identifying climate risks, evaluating various climate scenarios, assessing the impact of risks on the business, progressing action plans, and developing monitoring instruments.

Defining Climate Risks

The climate risks to be addressed are divided into two groups: transitional and physical risks.

Transition risks are those associated with the pace and extent at which an organization manages and adapts to the internal and external pace of change to reduce greenhouse gas emissions and transition to renewable energy. This group incorporate aspects related to legislative and regulatory changes, availability of technologies with an impact on the organization, economic

disruptions and new business models and topics with an impact on the reputation of the company.

Whereas Physical risks include acute and chronic risks caused by changes in the environment and ecosystems, namely extreme weather events, pollution, depletion of resources, among others.

As a result, and since these groups present different characteristics, the Climate Risk Framework defines slightly different approaches in order to ensure maximum effectiveness and reliability of the entire process.

Scenarios and Scenario Planning

Our climate risk assessment was conducted with three different climate scenarios in mind:

1. No Policies and Worst-Case Scenario

The most severe scenario in which no type of policies to reduce emissions or fight climate change will be applied, representing an increase in global average temperature to approximately 4 ºC in 2100

2. Business as Usual

The intermediate scenario assumes that governments will maintain the current pace of implementing policies and commitments to fight climate change, representing an increase in temperature between 2 and 3ºC until 2100.

3. 1.5-2 ºC or Paris Agreement (PA) Scenario

It is the most ambitious scenario with the average global temperature increase by only 1.5-2ºC until 2100, as a result of a substantial reinforcement of the policies and commitments assumed by countries in the coming years.

Each climate scenario provides a credible alternative view of how the future could evolve from a climate change perspective. These scenarios provide a holistic view of the potential future risk impact on the business sustainability. By considering each scenario we are able to future proof our strategy and risk management.

Risk Prioritization

Prioritization of risks for each category was performed based on the final risk score that is shown below. All of the risks on this slide are considered critical (the final score >= 10) except for the physical risks that are considered important (the final score >= 9). This prioritization was developed based on the Climate Risk Assessment methodology outlined above.

The following formula was used to calculate the final risk score:

Final risk score = max (Importance to peers; Importance to Aramex) + Severity + Likelihood

Priority Risks

The above risks correspond to our highest priority risks but are not exhaustive list of all risks assessed. In total, 30 different climate risks were assessed.

Time Horizon	10-15 years
Scenarios	1.5	1.5	2.0
Modeling Simulation	Scope 1 reduction of 42% by 2030	Scope 2 reduction of 42% by 2030	Scope 3 reduction of 25 % by 2030
Business Scope	Upstream, direct operation and downstream	Upstream, direct operation and downstream	Upstream and downstream
Risk Categories	Policy risks and legal risks Enforcement on supply chain control Enforcement of carbon-pricing mechanisms to reduce GHG emissions More stringent CO2 emission performance standards for vans and heavy-duty vehicles, new fuel standards Introduction of more stringent regulation on packaging and packaging waste Enforcement of renewable energy consumption
	Technology risks Lack of availability of low emission and electric vehicles
	Market risks Lagging behind the competitors by taking less ambitious climate actions Failure to fulfill publicly disclosed climate goals, SBTi targets Change of input prices for natural resources Change in customer behavior Change of insurance costs
	Physical risks (Acute and Chronic) Coastal flooding and erosion Extreme heat and extreme precipitation events Increase in the mean temperature

The above risks correspond to our highest priority risks but are not exhaustive list of all risks assessed. In total, 30 different climate risks were assessed.

Mitigating Environmental Impact

At Aramex, we actively manage our environmental impacts, beyond our emissions, to foster sustainability and reduce our environmental footprint. We focus on water use management by minimizing consumption and implementing water-efficient technologies, such as grey and black water recycling in Dubai. Additionally, we take a proactive approach to waste management by optimizing our packaging and using degradable pouches, reducing our material use, for example by going paperless, and expanding recycling programs throughout our operations. By reusing materials, reducing waste streams, and promoting circular practices, we not only contribute to environmental conservation but also enhance operational efficiency, delivering long-term value to our business and stakeholders.