Profile of the Fraunhofer-Gesellschaft Contents Profile of the Fraunhofer-Gesellschaft Contents Fraunhofer in brief Based in Germany, the Fraunhofer-Gesellschaft is a world leader in applied research. Thanks to its focus on developing key technologies for the future and commercializing its findings in business and industry, it plays a major role in the innovation process. A trailblazer and trendsetter in innovative develop- ments and scientific excellence, the Fraunhofer-Gesellschaft is supporting research and industry with its inspiring ideas and sustainable scientific and technological solutions, and helping shape our society and our future. At the Fraunhofer-Gesellschaft, interdisciplinary research teams work with contractual partners from industry and government to turn pioneering ideas into innovations, coordinate and implement key, system-relevant research policy projects, and strengthen the German and European economy through ethical value creation. International collaborations with outstanding research partners and companies from around the world brings the Fraunhofer-Gesellschaft into direct contact with the most prominent scientific communities and economic regions. Founded in 1949, the Fraunhofer-Gesellschaft currently oper- ates 76 institutes and research units throughout Germany. Over 30,000 employees, predominantly scientists and engineers, work with an annual research budget of around 3 billion euros, roughly two thirds of which stems from industry contracts and publicly funded research projects. The German federal and state governments contribute around another third in base funding, enabling the Fraunhofer institutes to develop solu- tions now to problems that will drastically impact industry and society in the near future. The impact of applied research extends far beyond the direct benefits to specific customers. Fraunhofer institutes strength- en companies’ performance and efficiency and promote the acceptance of new technologies within society, while also training the future generation of scientists and engineers that the economy so urgently requires. As a scientific organiza- tion, our most important success factor is our highly motivat- ed employees and their trailblazing, cutting-edge research. This is why Fraunhofer offers its researchers opportunities to undertake independent, creative and yet also goal-oriented work, thus helping our employees to develop professional and personal skills that will enable them to take up positions of responsibility within Fraunhofer itself or in universities, industry and civil society. Students involved in projects at Fraunhofer institutes have excellent career prospects, as they are given practical training and opportunities to interact with contract partners at an early stage in their career. Fraunhofer at a glance Name Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e. V. Legal form (Non-profit) association registered under German law Institutes 76 Executive Prof. Reimund Neugebauer President, board Corporate Strategy, Research and Communications Prof. Alexander Kurz Innovation, Transfer and IP Management Prof. Axel Müller-Groeling Research Infrastructures and Digital Transformation Elisabeth Ewen Human Resources, Corporate Culture and Legal Affairs Dr. Sandra Krey Finances and Controlling Headquarters Munich, Germany More information: s.fhg.de/jahresberichte About this report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Organizational governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Social commitment – supporting the UN Global Compact . . . . . . . . . . . . . . . . . . . 11 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Holistic strategy planning – integration into the organizational structure and culture . . . . . . . . . 13 Participative and collaborative organizational development . . . . . . . . . . . . . . . . . . . 14 Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Scientific integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Socially responsible research processes. . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Research solutions for challenges facing society . . . . . . . . . . . . . . . . . . . . . . . 21 Outstanding research projects facilitate sustainable development . . . . . . . . . . . . . . . . 24 Contributing to the UN Sustainable Development Goals through targeted research . . . . . . . . . 26 Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Employees at Fraunhofer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 The Fraunhofer-Gesellschaft as an employer . . . . . . . . . . . . . . . . . . . . . . . . 43 HR management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Occupational health and safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Resources and procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Ecological responsibility in our scientific operations . . . . . . . . . . . . . . . . . . . . . . 49 Mobility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Sustainable construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Sustainable procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Social commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Young scientists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Supporting Ukrainian refugees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Fraunhofer Summer Camp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Social engagement (by employees) at the institutes . . . . . . . . . . . . . . . . . . . . . 59 GRI content index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Objectives and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Business development 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Publishing notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 4 5

About this report About this report also covers the opportunities and risks associated with these topics. In issuing this report, we are fulfilling the United Nations Global Compact (UNGC) requirement for Communication on Engagement (COE). We have dispensed with external auditing for this report, as the essential, material details on corporate responsibility already formed part of the final audit of the 2021 management report (cf. the 2021 Annual Report, p. 137). s.fhg.de/jahresberichte Key topics in this report assess the materiality of a wide range of topics. Representatives from industry and science, government and civil society organi- zations, and our own employees were included in this process. While the survey concentrated specifically on the materiality analysis, it also provided a space for general feedback on the Fraunhofer-Gesellschaft’s sustainability and CSR reporting. The content of the survey was based on the following quality criteria for sustainability reporting identified by the Global Reporting Initiative, the Institute for Ecological Economy Research (IÖW) and future e. V., an initiative by German SMEs: communicative quality, transparency and credibility, relevance and completeness. The topics for this report were selected as part of our most recent materiality analysis, which our most important stake- holders participated in. Once again, these topics have under- gone fundamental changes in comparison to previous reports, in light of ongoing socio-political and economic developments. Stakeholder involvement in the materiality analysis In a continuation of our efforts to include our stakeholders in our sustainability activities, we conducted a stakeholder survey on the materiality analysis in mid-2021. In the survey, we asked representatives of our most important stakeholder groups to Key CSR fields of action As in previous reports, we have defined our key fields of action based on the framework for research-specific sustainability management that Fraunhofer and the Leibniz and Helmholtz Associations formulated in late 2016, as part of the joint research project Sustainability Management for Non-university Research Organizations (LeNa), funded by the German Federal Ministry of Education and Research (BMBF). The goal of this framework is for the organizations to contribute to sustainabil- ity both through their core business activities of research and development and through their actual operations. The CSR fields of action that Fraunhofer has established are divided into five areas of responsibility: governance, research and devel- opment, employees, resources and procurement, and social commitment. Our key topics were derived from these five areas (see the table on p. 8). Although the issue of (knowledge) transfer is particularly relevant for Fraunhofer, it is not actually a CSR topic, but rather an inherent component of our responsibilities in the area of research and development. It is also integrated into the other areas of responsibility as an overarching topic. This issue plays an important role in determining the impact of our organiza- tion through a variety of channels, from communication with government and society and collaboration with industry at a national and international level, to patents, spin-offs, transfer via individuals and hardware. Fraunhofer’s focus on technol- ogy transfer has made it a trailblazer and driver of innovative developments, allowing it to participate in shaping our society and our future. As such, the topic of transfer will be explicitly addressed in the Research and development section. The Fraunhofer materiality matrix Fraunhofer’s materiality matrix once again had an important role to play when it came to weighting the topics in this report. This matrix was developed further in the course of the stake- holder survey. The updated matrix incorporates the stakehold- ers’ responses regarding what topics needed to be expanded or receive greater focus. In comparison to the previous report, this report puts much more emphasis on topics from the area of resources and procurement, especially energy consumption, greenhouse emissions and sustainable procurement. In light of this increased weighting, the Resources and procurement section (see p. 49) has been made much more extensive. When asked for their opinion on the most important aspects of sus- tainability management and reporting in a research organiza- tion, the stakeholders once again rated sustainability-related research activities (solutions for challenges facing society) very highly; in a new development, they also singled out responsible HR management as a top priority. Fraunhofer-Gesellschaft stakeholder groups Materiality matrix Employees Contracting authorities Internal committees and officers Civil society organizations Grant authority Fraunhofer Students Political delegates Interested members of the public Companies and business associations Science and scientific collaboration partners Key CSR topics for this report Governance/ organization Research and development Employees Resources and procurement Social commitment Holistic strategy planning Participative organiza- tional development Responsible research Solutions for challenges facing society Transfer Diversity Climate/emissions HR management Energy General social commitment Sustainable construction Sustainable Corpo- rate procurement Mobility i h g h y r e v l s r e d o h e k a t s o t e c n a v e e R l h g h i Governance / organization Research and development Employees Resources and procurement Social commitment Solutions for challenges facing society Energy HR management Transfer Diversity Climate/emissions Responsible research Sustainable Holistic strategy planning construction Sustainable procurement Participative organizational development Mobility Social commitment high Relevance to Fraunhofer very high 8 9

Governance Governance Compliance it has been continuously further developed in order to meet the increasing regulatory requirements in the research sector For the Fraunhofer-Gesellschaft, Corporate Governance consists not only of automatic compliance with regulatory requirements, but also of being guided by values such as trust, respect and fairness in both internal and external relationships. Restructuring of the compliance management system In 2010 Fraunhofer established a Compliance Management System (CMS). Over 2015 and 2016, the system’s suitability was audited, with a favorable result. Since then, it has been continuously further developed in order to meet the increasing regulatory requirements in the research sector. As regulatory requirements have become increasingly complex, the legal affairs department has had an ever greater role to play in many processes; consequently, the compliance office and its responsibilities were reorganized in 2022. The chief compliance officer delegated compliance management to the legal affairs department, where it is conducted with the support of the CMS. Topics such as the centralized manage- ment of compliance risks in matrix management structures, more efficient management of guidelines and the further development of Fraunhofer’s Internal Control System (ICS) were further expanded, thus helping make the CMS more effective. Professional consultants support this process in terms of the further development laid down in the IDW PS 980 (new series) auditing standard, so that Fraunhofer can prevent violations of internal and external regulations even more effectively with its tried-and-tested CMS. At Fraunhofer, we understand compliance as a business enabler, whereby the staff of the compliance department at headquarters are seen as trusted points of contact that are familiar with busi- ness processes and can create added value. For us, compliance in action means working out consistent measures that enable us to collaborate fairly within a framework of collectively defined guiding principles for responsible, successful research. The compliance framework serves a number of purposes, such as ensuring that monitoring processes are adapted for compliance by enabling different process participants with their own inde- pendent areas of responsibility and functions to interact in the CMS. Continuous inspections (e.g., inspections of all business locations for corruption risks1) are conducted by all employees as part of the established processes. Period inspections of regulato- ry and procedural requirements (e.g., regarding compliance with the monitoring process) are conducted by the topic owners in the department or the institute director/head of administration as part of the ICS. The CMS includes an anonymous, web-based whistleblowing system that both employees and external stake- holders can use to share information on possible violations at any time. All tips and reports submitted through the system are handled by the Internal Auditing department as an independent entity, so that each case is processed and the effectiveness of the CMS is maintained. The compliance department at headquarters is responsible for reviewing the effectiveness of the CMS as a system, by means of risk prioritization and appropriate further development in line with those risks. It is mandatory for Fraunhofer to establish four key functions (independent risk management function, compliance function, internal audit function and actuarial func- tion). These functions are material elements of the governance system, intended to ensure adequate and independent control within the organization. Furthermore, the legal department is an important stakeholder, which fulfills a supporting role to ensure the effectiveness. Inspections by the Internal Auditing department facilitate the provision of an independent, objec- tive and comprehensive assessment of Fraunhofer’s ICS (an internal audit); as such, the department serves as a backstop for the organization’s committees and executive board, thus providing an effective additional line of defense. In addition, the innovative and flexible business model of a modern, socially responsible applied research organization requires that compliance be integrated into its culture, as the corresponding rules, roles and values must be communicated to all employees and demonstrated to them through the exam- ple of their managers. Mandatory training courses (e.g., on cor- ruption prevention) for all employees support this integration process. Providing these courses requires a well-planned com- bination of cross-functional expertise, from teams such as HR, Communication and Legal Affairs and Compliance. Having the necessary mixture of personal responsibility and familiarity with guiding principles/regulations enables employees and managers to behave responsibly and comply with those regulations. Implementing the German Supply Chain Act One recent example of Fraunhofer’s continuous efforts to fine-tune its CMS is the implementation of the German Supply Chain Act (Lieferkettensorgfaltspflichtengesetz, LkSG). The LkSG entered into force at the start of 2023, meaning that the Fraunhofer-Gesellschaft is now subject to the provisions it contains on managing risks so as to ensure respect for human rights and the environment within an organization’s own business activities and supply chains. In compliance programs within the CMS, the duties of care that this gives rise to are adjusted to suit the risk situation in line with statutory require- ments. Since December 21, 2022, Fraunhofer’s declaration of its human rights strategy as adopted by the executive board has been available online on the Fraunhofer website. s.fhg.de/sustainability-standards-for-suppliers 1 There were no known instances of corruption during the reporting period. 12 Holistic strategy planning – integration into the organizational structure and culture New CSR structure CSR is a highly complex topic that affects virtually every busi- ness and organizational unit in Fraunhofer. Although sustain- able development has played a key role at the Fraunhofer-Ge- sellschaft for more than ten years, the organization did not have a comprehensive, integrated CSR structure until this point. Previously, a number of CSR subcategories were addressed by the executive board team for Research and Development, while others were the responsibility of the HR executive unit. In 2018, a committee was established to oversee the area of CSR. However, although it succeeded in driving progress in some key topics, it proved not to be adequately operational. In particular, it could not do enough to address issues such as the practical implementation of and specialist work on new topics and areas of responsibility. In light of mounting social, political and indus- trial requirements and Fraunhofer’s own aspirations in terms of achieving quality and contributing to sustainable development, it was necessary to establish a holistic coordination structure spanning all three core elements of sustainability. The goal of this initiative is to make CSR an inherent component of a comprehensive overall management system for our organiza- tion. To achieve this, we must integrate sustainability criteria and targets into Fraunhofer’s general strategy. Our key fields of action for CSR fall within the five areas of responsibility: organi- zational governance, research and development, resources and procurement, employees, and social commitment. The neces- sary structure was defined and implemented in 2022, with the result that specific responsibilities and CSR topics were assigned to each of the executive units. With this new approach, all executive vice presidents of the Fraunhofer-Gesellschaft are taking on responsibility for this area, making a commitment to sustainable development and taking action on the topics assigned to their executive units. The Think Tank in the presi- dent’s executive unit is responsible for overall management of the CSR strategy process. Decisions are made in the course of the executive board meetings as events require. Peer learning through dialogue In recent years, this process has been supported by regular dia- logues on sustainability issues and organizational structures with other research institutions, particularly the partners from the LeNa process (see p. 18). As part of the LeNa initiative, the represen- tatives of the non-university research organizations collaborated with the German Research Foundation (DFG) to organize three specific workshops in 2022. These workshops gave the institutions the opportunity to share information on topics such as sustainable procurement, carbon footprints and carbon offsetting. New Climate Management department Climate protection has been one of Fraunhofer’s key CSR focus areas since 2020, as a result of an analysis conducted by the CR Board in 2019. A dedicated Fraunhofer climate strategy (see p. 49) was developed for this purpose, and the executive board established the Climate Neutrality Task Force to implement it. The strategy consists of three elements: a climate fund and the climate protection projects that it finances; a network of climate neutrality officers; and the Climate Management department. The department coordinates the implementation of the climate protection projects and the climate neutrality officers network; it is also developing a topic-specific knowledge management system. It is attached to the Research Infrastructures and Digital Governance/organization Corporate Strategy, Research and Communications executive unit Research and development Corporate Strategy, Research and Communications executive unit Use of resources and procurement Research Infrastructures and Digital Transformation executive unit Integration of sustainability criteria and goals into the overall strategy of the Fraunhofer- Gesellschaft – restructuring and oper- ational integration of corporate social responsibility (CSR) at Fraunhofer to act responsibly Financial Management Finances and Controlling executive unit Application, transfer and use of intellectual property Innovation, Transfer and IP Management executive unit HR management/corporate culture Human Resources, Corporate Cul- ture and Legal Affairs executive unit 13 Overarching, leading strategy processes

Research and development Research and development As Europe’s largest applied research organization, we have a special mission to carry out. With our research solutions, we aim to do our part for the benefit of industry, the environment and society. Through our scientific developments and diverse research find- ings, we are creating the conditions needed for a competitive industry and helping solve large-scale challenges facing society as a whole. We counteract possible negative consequences of our research activities through a variety of measures, such as adhering to the criteria of good scientific practice and responsi- ble research processes. Scientific integrity The rules and methods of good scientific practice form the basis for honesty and quality in research work; this scientific integrity is the ethical foundation for all Fraunhofer researchers. This scientific code for personal conduct is an essential prereq- uisite for collaboratively acquiring and exchanging knowledge on a global basis on the one hand, and advancing industry and society on the other. In light of the new Guidelines for Safeguarding Good Research Practice released by the German Research Foundation (DFG) in 2019, we have extensively revised our internal regulation on this subject. All German universities and non-university research institutions were obliged by law to implement the DFG guide- lines by 2022. In 2020, Fraunhofer became the first non-uni- versity research institution to comply with this requirement. In the process, factors such as performance reviews for research- ers and quality assurance for project management were given equal consideration to legal and ethical issues. To fulfill these new and sometimes more extensive requirements, the Fraun- hofer executive board initiated a support project, whereby the primary officers for good scientific practice received assistance from experts in implementing the new guidelines. As part of this project, specific training courses have been offered for ombudspersons at the institutes and during onboarding of new employees. Quality assurance tools for projects are also being introduced, ranging from the mandatory conclusion of training agreements for the supervision of doctoral studies to the procurement of plagiarism checker software. In 2022, the procedure for dealing with whistleblowing reports set out in the corresponding internal regulation was used for the first time to resolve two instances of scientific misconduct that were submitted via the Fraunhofer whistleblowing system (see p. 12). Prevention is an indispensable tool when it comes to avoiding misconduct. Prevention measures include communicating good scientific practice rules to junior scientists, regularly updating these rules and raising awareness around the topic among scientific employees. Responsibility for prevention is allocat- ed to the individual institutes rather than a central body. To facilitate this process, around 150 ombudspersons (two per institute) meet twice a year to exchange examples of best prac- tice and discuss topical issues. In addition, the ombudspersons have access to a secure digital platform where they can hold discussions at any time. Any individuals with specific questions can apply to the two central points of contact for advice. When considered in light of the 12,000 researchers working at Fraun- hofer, the small number of incidents that occurred in recent years (two to three cases per year, primarily relating to author- ship of publications) shows that the rules of good scientific practice are predominantly being followed. 17

Research and development Research and development The ongoing EU project FRANCIS (Frugal Innovation by Citizens for Citizens) is also providing an opportunity for members of civil society to take on active roles in research and innovation processes. As part of this project, the Fraunhofer Institute for Industrial Engineering IAO and the Fraunhofer Information Center for Planning and Building IRB have teamed up with a number of other partners to organize open innovation chal- lenges, where interested users from marginalized demographic groups such as socially deprived or elderly citizens are asked to develop ideas for high-quality, simple and cost-effective (i.e., frugal) innovations and bring these ideas into application together with industry partners. Responsible research and innovation aligned with the needs of society represents a central research field for Fraunhofer IAO’s Center for Responsible Research and Innovation CeRRI. The center is developing new approaches and methods for ensuring that research projects and innovation processes are focused on user needs right from the outset. This means systematically asking stakeholders from civil society for their needs, require- ments and possible consequences, taking diverse viewpoints into account and collectively shaping the future. or villages — and what role technology and, in particular, bioeconomic innovations could play in these scenarios. To do this, they developed scientifically substantiated visions of the future under three broad headings: housing and construction, supply and community, and commuting and work. In order to allow citizens to participate in the project, these scenarios were posted on the initiative’s website for public discussion: stadtlandchancen.de (German only) This initiative was accompanied by a survey conducted in summer 2021. Almost 9,000 citizens from urban and rural areas participated and shared their wishes and concerns regarding the future scenarios. The project results show that many people are very interested in harnessing bioeconomic innovations to increase sustainability, staying abreast of future social and technological issues and participating in urban and regional development processes. Research solutions for challenges facing society STADT.LAND.CHANCEN (city.country.opportunities) — a col- laborative project by acatech — National Academy of Science and Engineering, CeRRI and Bayerischer Rundfunk, a Bavarian public broadcasting company — is an impressive demonstra- tion of this approach. The project partners set out to explore how people would live in the future — whether in cities, towns At present, our society is facing numerous diverse, large-scale challenges: The transformation toward a sustainable society requires solutions for protecting the climate and biodiversi- ty, conserving resources, combating diseases and securing energy supplies, to name but a few examples. The scientific world can and must make an essential contribution to this transformation. Key visual from the STADT.LAND.CHANCEN project Illustration: Fraunhofer IAO The organizational tool developed in the SeniorDesignLab is intended to support the establishment of neighborhood networks. The idea and design behind the “Wir sind Nachbarn” (we are neighbors) tool were developed by Friederike Brings in collaboration with Fraunhofer UMSICHT and Folkwang University of the Arts as part of the +SeniorDesignLab project. Photo: Friederike Brings and development process can give rise to vital inspiration for technological and social innovations, as well as enabling the consideration of differing viewpoints. This creates opportuni- ties for users to articulate their needs in respect of products and technologies and facilitates discussions regarding the consequences of adaptations or going without. The diversity of the stakeholders included in the process also ensures that a comprehensive range of sustainability issues (i.e., planetary needs) are taken into account and enables increased democ- ratization and openness in the scientific system. At the same time, it is necessary to make scientific working methods and the fundamental challenges of the scientific process, such as intersubjectivity, dialectics and the provisional nature of knowledge, transparent and to communicate them to civil society, while also reinforcing civil self-efficacy and partici- pation (empowerment). In this way, participative research and innovation process- es could help make Fraunhofer research even more tightly focused on industry needs, while simultaneously helping to strengthen the dialogue between the world of science and civil society. The methods and areas of expertise required for this have already been developed by many Fraunhofer institutes and are being put into practice in projects within a wide range of research fields. In 2021, a dedicated Public Formats and Initiatives department was established at Fraunhofer headquar- ters in Munich, with the aim of coordinating and reinforcing these approaches. One practical example is the +SeniorDesignLab established by the Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT in Oberhausen. The goal of this project, which was coordinated by the working group for User-cen- tered Technology, was to work with senior citizens to develop products that would allow them to lead self-determined lives in their old age. seniordesignlab.de (German only) When they were evaluated by a jury at a later stage, the ideas developed by these mixed teams were universally deemed to be more creative and more user-centric — an effect that can also be proved scientifically. The researchers at Fraunhofer UMSICHT firmly believe that involving everyday experts in design processes is worthwhile, and have every intention of using this participative approach to a greater extent in other areas as well, so as to develop sustainable technologies and products with future viability. 20 21

Research and development Research and development organizations that are working to address this complex, forward-looking field. Outstanding research projects facili- tate sustainable development The Fraunhofer Future Foundation also sees collaborating with stakeholders from civil soci- ety at early project stages to be a key factor in responsible, needs-oriented research. This is why its funding programs are mainly aimed at researchers that include non-profit organi- zations in their project design processes. To encourage citizen participation, the founda- tion is also making explicit efforts to facilitate dialogue with the public, e.g., through infor- mal video chat sessions like the Wissenschafts- sofa (scientists on the couch) events. However, a long-term participation process also entails giving citizens and stakeholders from civil society a say in funding alloca- tion decisions. Although this approach had previously seen very little use in the world of science, the Fraunhofer Future Foundation tried it out for the first time in 2022 with its crowdfunding competition, ScienceForGood. The Fraunhofer Future Foundation gave private individuals, non-profit organizations and companies the opportunity get involved in promoting a sustainable future and other social issues by helping to decide on the fund- ing of applied research projects. Chair of the Fraunhofer Future Foundation board, Prof. Hans- Jörg Bullinger (right) holds a discussion with researcher Dr. Volker Thomé (left), moderated by Sylvia Kloberdanz (middle) during a live broadcast of the Wissenschaftssofa (scientists on the couch) event at Fraunhofer IBP. Photo: Rafael Gramm / Fraunhofer IBP 24 The Joseph von Fraunhofer Prize is awarded to Fraunhofer employees for outstanding sci- entific achievements that help solve practical problems. In 2021, the prize went to research- ers at the Fraunhofer Institute for Environmen- tal, Safety and Energy Technology UMSICHT for their work on redox flow batteries. These promising energy storage devices are still too expensive for market use, but the UMSICHT team have brought them significantly closer to market readiness. The researchers redesigned the manufacturing process entirely, making the stack – the key component of a redox flow battery – 80 percent lighter, 50 percent smaller and, above all, far cheaper to produce than conventional models. The spin-off VOLTERION GmbH was founded to bring this new product onto the market. s.fhg.de/joseph-von-fraunhofer-preis-2021 In 2022, the jury awarded the prize to a group of employees at the Fraunhofer Institute for Integrated Circuits IIS in recognition of their technology’s importance for society. The IIS researchers’ RFicient® chip is a particularly efficient chip for wirelessly connected devices; it saves up to 99 percent of the energy that was previously required, which extends battery service life enormously. It is estimated that the RFicient® technology will be installed in more than 50 million IoT devices in the coming years. Given that future energy consumption would otherwise increase massively as the number of wirelessly connected devices grows, there can be no doubt of this development’s importance for society. s.fhg.de/joseph-von-fraunhofer-preis-2022 The Fraunhofer Prize for Human- and Envi- ronment-Centered Technology is awarded every two years for research and development achievements that make a significant con- tribution to improving human quality of life. In 2021, the prize went to three Fraunhofer institutes for their joint research project on improved vaccine development. Researchers from the Fraunhofer Institute for Cell Therapy and Immunology IZI collaborated with their colleagues at the Fraunhofer Institute for One of the projects featured in the ScienceForGood crowd- funding competition in 2022: The Fraunhofer Institute for Interfacial Engineering and Biotechnology IGB’s Phosphate Catcher project centers on using natural proteins to keep water resources clean and provide valuable nutrients for agriculture. Photo: Fraunhofer IGB 25 for photovoltaic modules. This innovative technology can be used to produce wafers of any thickness while consuming a fraction of the energy, materials and capital required for pre-existing processes. The following year, E-VITA GmbH, a joint venture by the Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP and Ceravis AG, received the Founder Award for 2021. The company developed a process for eliminating fungi and germs from seeds using accelerated elec- trons, thus creating a proven, non-chemical and yet financially viable alternative method of obtaining germ-free seeds. At the end of the process, all that remains are clean seeds that contain no pollutants and will not release toxins that could harm humans or the environment. Organic Electronics, Electron Beam and Plasma Technology FEP and the Fraunhofer Institute for Manufacturing Engineering and Automa- tion IPA to develop a procedure for inacti- vating pathogens within milliseconds using low-energy electrons – instead of the toxic chemicals that have been used up until this point. This would make vaccine production faster, more environmentally friendly and more cost-effective. s.fhg.de/fraunhofer-prize-for-human- and-environment-centered-technology-2021 Every year since 2016, Fraunhofer and the High-Tech Gründerfonds (HTGF) have pre- sented the Fraunhofer Founder Award to outstanding Fraunhofer entrepreneurs with innovative business ideas. To win the award and its 5,000 euros in prize money, the found- er must have created a successful spin-off with an active market presence that provides products or services that directly benefit soci- ety. Particular weight is given to criteria such as technological originality, high innovation potential and an established market position. In 2020, the Fraunhofer Founder Award went to the spin-off NexWafe. This start-up impressed all members of the jury, from both inside and outside of Fraunhofer, thanks to its novel, low-cost, resource-efficient pro- cedure for manufacturing silicon wafers

Contributing to the UN Sustainable Development Goals through targeted research Contributing to the UN Sustainable Development Goals through targeted research SDG 3 – Good health and well-being SDG 6 – Clean water and sanitation Maintaining healthy lifestyles and promoting well-being in every age cohort are vital factors in sustain- Adequate water supplies and sanitation are fundamental aspect of sustainable global development. able development. This includes providing high-quality healthcare services, combating communicable diseases, and safeguarding access to medicines and vaccines. As such, enabling universal access to clean drinking water and sanitation facilities, as well as ensuring reliable sewage treatment and efficient water usage are core sustainability tasks. Fraunhofer’s health research is structured based on the research fields of the 4D model: drugs, diagnostics, devices and data. In these fields, 45 Fraunhofer insti- tutes are combining their expertise across disciplines to develop cost-effective solutions to a wide range of problems in healthcare provision. In the future, transdisciplinary approach- es will play a key role in driving innova- tion, as doctors will need to collaborate ever more closely with experts from other disciplines, such as engineers, scientists, computer scientists and mathematicians. Mini-robots for less invasive treatment Researchers from the Fraunhofer Research Institution for Individualized and Cell-Based Medical Engineering IMTE and the Universität zu Lübeck are developing tiny swimming robots that can be magnetically steered to their site of action in the body. Once there, the »mini-submarines« dispense targeted medication, e.g., for chemotherapy, or carry out minimally invasive interventions in areas that are difficult to access. In 2021, with the input of radiology experts from the University Hospital of Schleswig-Holstein, magnetic fields were used to successfully steer one of these micro-robots through a model of the middle human cerebral artery to the site of an aneurysm. Rotating magnetic fields cause the robot to twist, which gener- ates a forward motion. The researchers track the movement of the microrobot via tomographic and real-time magnetic particle imaging, which uses magnetic fields that do no harm to the body. s.fhg.de/magnetische-u-boote-imte The DeKonBot disinfection robot Cleaning and disinfection tasks in build- ings, especially healthcare facilities, play an important role in preventing trans- mission of viruses and hospital-acquired infections. This means that a variety of surfaces like door handles, light switch- es and handrails must undergo regular disinfection. To support cleaning staff in this task, 12 Fraunhofer research units have come together as part of the MobDi – Mobile Disinfection project to develop new technologies for robot- based cleaning and disinfection. One of the outcomes of this project is the Fraun- hofer Institute for Manufacturing Engi- neering and Automation IPA’s DeKonBot 2 disinfection robot – which represents a further advance on the first-generation model of 2020. Designing a cleaning tool that was flexible and compact, yet still capable of effectively disinfecting the widest possible range of objects, present- ed a particular challenge here. s.fhg.de/dekonbot2-ipa Primary medical care in remote regions Fraunhofer researchers have been work- ing with local partners in developing a mobile healthcare platform to ensure comprehensive primary care provision even in rural areas of South Africa. In March 2023, the platform was handed over to the Rhiza Babuyile NGO for a year-long testing period. The medicines, vaccines and examination equipment The DeKonBot independently disinfects objects such as door handles. Photo: Rainer Bez / Fraunhofer IPA carried on board allow rapid on-site pro- vision of primary care to sick people and pregnant women. The care unit, which can be mounted on a commercially avail- able pickup truck, also contains elements that function self-sufficiently, e.g., a water treatment system, a refrigerator and a telecommunications unit. This means the platform can be used even in areas that are particularly difficult to access. s.fhg.de/precare-ist For their innovations in the area of vac- cine manufacturing, Fraunhofer IZI, IPA and FEP were awarded the 2021 Fraun- hofer Prize for Human- and Environ- ment-Centered Technology (see p. 25). Nine Fraunhofer institutes have come together as the Fraunhofer Water Systems Alliance SysWasser with the aim of developing innovative solutions for sourcing and distributing drinking water, as well as the efficient handling and treatment of sewage. The alliance is a highly capable group that covers the entire water cycle value chain, and is also playing an active role in international projects. Fraunhofer innovation platform for water, energy and food security In August 2020, the Fraunhofer- Gesellschaft and Stellenbosch University came together in a strategic partnership to establish the Fraunhofer Innovation Platform for the Water-Energy-Food Nexus FIP-WEF@SU. The aim of this long-term collaboration is to jointly develop need-driven, technological and cross-sector solutions for water, energy and food security in the South African region – for the benefit of its people and local environment. One of its goals is to bring together know-how and technolo- gies in the field of water treatment and usage, so as to develop solutions for South Africa and the sub-Saharan states through joint research and development activities. With the Fraunhofer Institute for Interfacial Engineering and Biotech- nology IGB as its primary coordinator, this initiative is addressing the entire water cycle and approaching the residual wastewater as a source of nutrients and energy. The FIP-WEF@SU aims to combine new process technologies and innovative sensors to develop solutions to issues ranging from the provision of clean drinking water right up to full-system approaches to water reuse and recycling and hydrological modeling. fip.sun.ac.za Thuringian Water Innovation Cluster (ThWIC) The Fraunhofer Institute for Ceramic Technologies and Systems IKTS launched the Thuringian Water Innovation Clus- ter (ThWIC) in collaboration with the Friedrich Schiller University Jena and the Ernst-Abbe-Hochschule Jena. The cluster was selected from numerous competi- tors to receive BMBF funding from 2023 under the Clusters4Future program. Led by the University of Jena, the scientists in this program will conduct research into new future-oriented approaches for a secure and sustainable water supply. Over the next nine years, up to 45 mil- lion euros in funding will flow into the development of new water technologies and research on how society handles this increasingly scarce resource. s.fhg.de/thwic-ikts Water and climate protection at sewage treatment plants RoKKa – Sewage Sludge as a Source of Raw Materials and Climate Protection at Wastewater Treatment Plants – is a proj- ect that aims to recover raw materials from sewage; the project is being con- ducted in Baden-Württemberg under the European Regional Development Fund (ERDF) Bioeconomy Bio-Ab-Cycling fund- ing program. At the municipal sewage treatment plant in Erbach, experts from Fraunhofer IGB are working with local stakeholders to research the recovery Clarifier at the Ulm-Steinhäule wastewater treatment plant Photo: Marius Mohr / Fraunhofer IGB of valuable materials in innovative pilot plants located at sewage treatment facilities. The focus here is on recovering nitrogen and phosphorus – nutrients that can be used as fertilizer in agriculture or algae production – as well as separating CO2 from the biogas generated during digestion. This can then be processed into basic chemicals. Using bioeconomic processes in the demonstration project represents an effective combination of water conservation and climate protection. s.fhg.de/rokka-igb 28 29

Contributing to the UN Sustainable Development Goals through targeted research Contributing to the UN Sustainable Development Goals through targeted research SDG 11 – Sustainable cities and communities SDG 12 – Responsible consumption and production Sustainable urban and regional development means making urban environments inclusive, safe, resilient and environmentally friendly. This includes features like sustainable transportation systems, affordable housing and civil protection measures. Sustainable exploitation and efficient use of ever-scarcer resources form the basis for sustainable pat- terns of consumption and production. The UN goals encompass sustainable supply chains as well as waste prevention and a significant reduction in food waste. Solutions for sustainable transportation systems are being developed by the Fraunhofer-Transport Alliance. Sixteen institutes are jointly researching resource- and energy-efficient transportation technologies and pioneering mobility solutions that focus on climate protection and the needs of the end user. verkehr.fraunhofer.de The Fraunhofer Center for the Security of Socio-Technical Systems SIRIOS, which was founded in 2022, is dedicated to civil protection (see p. 23). In the Mor- genstadt (City of the Future) initiative, Fraunhofer IAO has teamed up with cities, companies and scientific partners – among them many Fraunhofer insti- tutes – to address the issue of sustainable urban development. Sustainable urban planning thanks to digital twins Today, over half the world’s popu- lation lives in an urban setting. The health-related, ecological and social challenges associated with increasing urbanization call for intelligent and sustainable solutions. The precise form such solutions might take, and how they would affect their urban settings can be investigated with the help of a digital twin. This can digitally recreate a city’s real-life objects or processes to help simulate the effects of various possible measures. This is the context in which Fraunhofer IAO and some 20 interna- tional partners from industry, politics and research are participating in the Digital City Program – the first of three Urban Development Initiative (UDI) programs, this project was initiated by Fraunhofer in 2021 in conjunction with the cities of Eindhoven and Helmond, the Eind- hoven University of Technology and the Brainport Development. The aim is to use digital solutions to promote holistic, sustainable city planning. The digital twin uses existing data on mobility, climate, energy and noise, for example, to make complex topics visually accessible and to give decision-makers from politics, civil society and industry an extensive insight into complex urban issues. This method also allows researchers to systematically feed innovative ideas into concrete city development plans and test them out. The implementation phase began in the summer of 2021, giving Fraunhofer IAO the opportunity to put results from the Morgenstadt (City of the Future) initia- tive to use directly in regional and local contexts. s.fhg.de/digitalcity (German only) Heat pumps in existing buildings Supplying climate-friendly energy to existing multi-family housing is a major challenge for cities. LowEx Concepts for the Heat Supply of Existing Multi-Fam- ily Houses (LowEx-Bestand) is a group project that ran from 2016 to 2022, with funding from the German Federal Min- istry for Economic Affairs and Climate Action (BMWK) and scientific support by Fraunhofer ISE. The researchers in the project collaborated closely with industry companies to analyze and (further) develop solutions for incorporating heat pumps and heat transfer and ventilation systems into multi-family housing. The key objective was to make methods of 32 A multi-family building in the Durlach smart district in Karlsruhe. A PV system with a photovoltaic output of 60 kWp was installed on the roof. Photo: Fraunhofer ISE supplying heat to existing buildings more economically viable – particularly through heat pump technology – and to ensure operational quality, so as to achieve a more rapid market launch. Over the past two years, the components and models developed together with technology partners have been implemented in multiple demonstration projects: for example, using combined photovolta- ic-thermal collectors, or combining air and ground as sources of energy for heat pumps. Other developments like efficient ventilation units for renovated buildings, as well as smart operational manage- ment strategies, were also successfully realized in the course of this project. The project has therefore made a significant contribution to achieving climate policy goals concerning heat supply in the building sector, especially in cities. s.fhg.de/lowex-ise In order to sever the link between pro- duction activities and resource consump- tion as much as possible, the produc- tion-oriented Fraunhofer institutes have taken the lead in intensively researching technologies to make manufacturing processes more climate-friendly and resource-efficient. Under the Circon- omy® brand for circular solutions by Fraunhofer, institutes are conducting research and development activities with the aim of bringing products, processes and services to market in line with the defined principles of circularity. One branch of these activities involved estab- lishing the Fraunhofer Cluster of Excel- lence Circular Plastics Economy CCPE. Since the cluster was set up in 2018, its six Fraunhofer institutes have been examining how an entire value chain can be transformed based on the principles of the circular economy, using plastics as an example. In the process, they also analyze and take into account any likely economic and social effects. ccpe.fraunhofer.de Waste4Future — from waste to raw material With the aim of recovering valuable basic materials from waste products, research- ers in the Fraunhofer Waste4Future lighthouse project, led by the Fraun- hofer Research Institution for Materials Recycling and Resource Strategies IWKS, are developing new recycling methods, along with solutions for conducting economic and ecological evaluations of them. This will make it easier to create a circular system for the carbon contained in plastic, by using material and chemical recycling to turn it into a resource for the chemical industry. As such, Waste- 4Future is paving the way for a carbon circular economy, in which valuable new basic molecules are recovered from plastic waste and emissions are largely avoided. Today’s waste becomes tomor- row’s resources, which also reduces the industry sector’s dependence on imported carbon resources such as crude oil and natural gas. Seven Fraunhofer institutes are combining their expertise in this project, most notably in the areas of sensors and sensor technology, sorting technology, and material and chemical recycling. waste4future.fraunhofer.de Industrial manufacturing with no negative impact As part of the Life Cycle Impact Zero project, which launched in 2022, researchers from Fraunhofer UMSICHT, the Wuppertal Institute and the Institute of Sustainable Nutrition (iSuN) at the FH Münster are developing and applying a comprehensive approach for environ- mental assessment at the new facility of electrolyzer manufacturer Enapter. This approach covers chemical manu- facturing and electrolyzer production; energy, water and waste handling; and all the interactions between compa- nies and individuals. That includes not only the employees of the companies, but also stakeholders in upstream and downstream value chains, users of the technology and residents living close to the production facilities. The aim is to use these analyses as a basis to formulate concrete measures for avoiding negative environmental consequences. For more information, see here: s.fhg.de/press-releases-2022-life- cycle-impact-zero Sustainable food production In addition, Fraunhofer researchers are also developing targeted solutions for sustainable food production. One exam- ple is the REIF — Resource-efficient, Eco- nomic and Intelligent Foodchain research project. Here, the Fraunhofer Institute for Casting, Composite and Processing Tech- nology IGCV is investigating the potential offered by artificial intelligence (AI) for optimizing predictability and controlla- bility in industrial food production. Their goal is to establish an AI ecosystem that integrates stakeholders from all stages of the value chain in such a way as to reduce food waste at every stage. s.fhg.de/reif-igcv The new Enapter campus in Saerbeck. Photo: Enapter 33

Transfer Transfer Transferring knowledge to the worlds of industry, society and politics and dialoguing with these stakeholder groups – these activities are not only crucial to our mission as an applied research organization, but are also important factors in ensur- ing that research results are harnessed effectively. Transfer to industry For over 70 years, the Fraunhofer-Gesellschaft has been help- ing to successfully transfer the technological knowledge and expertise generated by its institutes to industry and society by means of new products, services and processes. Many different transfer pathways are needed in order to commercialize tech- nology successfully, including the following: Industrial projects and public-private partnerships Use of intellectual property (IP) Continuing education and training for industry Spin-offs and shareholdings Transfer via individuals Standardization Collaborations with SMEs One of the Fraunhofer-Gesellschaft’s fundamental transfer paths is conducting contract research for companies, especial- ly in collaboration with small and medium-sized enterprises (SMEs). For example, in 2021, around two-thirds of all Fraun- hofer customers were SMEs, accounting for approximately one-third of contract research revenue. In helping German SMEs develop products and technologies, the Fraunhofer-Ge- sellschaft is making an essential contribution to the national innovation system. In addition, the Fraunhofer-Gesellschaft supports the acqui- sition of innovation expertise in medium-sized companies in order to further enhance Germany’s competitiveness as a business location. A successful example of a contract research project is KoMoGER, which is helping Heckert Solar, an SME in Chemnitz, to set up a PV module production facility that is fit for the future. With the help of the Fraunhofer Institute for Solar Energy Systems ISE, the project team are developing a technology that can produce PV modules with an output of more than 400 W per module. Expanding German PV produc- tion and increasing the yield per module constitute essential steps toward achieving the energy transition and reducing international dependencies. Patents and spin-offs Patents and licenses represent another important transfer path at Fraunhofer. In 2021, for instance, Fraunhofer was named a Top 100 Global Innovator for the eighth time – a prize awarded on the basis of the quantity and quality of patent activities. In total, 7,620 active patent families were filed in 2021. Further key figures and measures relating to the exploitation of intel- lectual property rights in Fraunhofer research are presented in detail on page 21 of the 2021 Annual Report. In addition to contract research and licensing, Fraunhofer’s research results are also brought into application by means of spin-offs. Since 2019, for example, the AHEAD transfer program has served as a central funding platform for the commercialization of Fraunhofer technologies. In 2022, 65 of 75 project teams made it into the program. With the new sub- program, SDG Track, providing funding for sustainable project teams in line with the UN Sustainable Development Goals has also become a core component of AHEAD. In 2021, 22 Fraun- hofer institutes established a total of 30 spin-offs. This dynamic start-up activity is encouraged through the Fraun- hofer-internal spin-off bonus, which gives Fraunhofer institutes rapid, adequate compensation for the loss of knowledge carriers and intellectual property (IP) that occurs as result of spin-offs. Moreover, since 2016, Fraunhofer and the High-Tech Gründerfonds (HTGF) have presented the Fraunhofer Founder Award to outstanding Fraunhofer entrepreneurs with innova- tive business ideas. The prize – which, in 2022, was awarded alongside the unprecedented sum of 50,000 euros – is present- ed in recognition of a successful spin-off with an active market presence that provides products or services of direct benefit to society. Particular weight is given to criteria such as technolog- ical originality, high innovation potential and an established market position. For a brief profile of the award winners for 2020 and 2021, see page 25. Continuing education The Fraunhofer Academy trains innovation stakeholders across Germany and Europe with the aim of transferring key technol- ogies for a livable future into application. The transformation toward a sustainable society involves numerous fields of action, Transfer which require companies to take extensive measures to trans- mit expertise to their employees or give them a new strategic focus. As such, the continuing education and qualification programs for specialists and managers in industry and public administration represent an important transfer channel for Fraunhofer. With initiatives such as the European Learning Lab Battery Cells ELLB and the European Battery Business Club EBBC, Fraunhofer aims to meet the acute need for training in the battery sector and close the current skill gap. The first courses will begin in 2023, mostly in the form of digital and online training. The Fraunhofer Academy has also successfully developed its first pilot training courses on the topic of hydrogen. Continu- ing education is also a key element of hyBit, a large-scale, BMBF-funded hydrogen research project that was launched in 2022 with the aim of setting the Bremen/Lower Saxony region on a course for an efficient hydrogen economy. Fraunhofer’s contributions to the project include defining the required expertise profiles for the future hydrogen economy and devel- oping adequate training resources. High-performance centers for practical approaches to future-oriented topics The Fraunhofer high-performance centers are an essential technology and knowledge transfer tool for our organization. These centers are guided by the principle of close collaboration between university and non-university research institutions and industry companies. Fraunhofer institutes, universities, col- leges and other non-university research institutions collaborate with companies and stakeholders from civil society at a single location and on a specific topic with the aim of quickly bringing innovations into application and thus promoting the economic and social benefits of research and development. From their first launch in 2015 (with the subsequent initial evaluation phase that lasted until mid-2019) up until 2021, a total of 21 performance centers have been established in Germany. To consolidate this achievement, Fraunhofer implemented an omnibus model in 2022, whereby all centers were transferred over to a synchronized three-year funding phase. During this period, the centers will be evaluated on an annual basis; at the end of the three-year period, the overall results of these eval- uations will be used to determine which centers will continue after 2025. The first evaluation took place in May 2022. The evaluation criteria included the quality and ambition of the transfer roadmaps formulated by the high-performance centers and an array of self-selected transfer highlights that illustrate their actual impact. The following two highlights have been included as examples: Transfer highlights As part of a strategic partnership, the Kaiserslautern-based High-Performance Center Simulation and Software-based Innovation and BioNTech AG developed a software platform to help plan and control production processes for mRNA-based drugs — like the COVID-19 vaccine — and cancer drugs for individual patients. Fraunhofer ITWM and BioNTech have cre- ated a software that allows the company to effectively control its own production network and individual process stages. This development made for a significant contribution to the fight against the COVID-19 pandemic; and their expertise will remain in demand in the future for the development of individ- ual mRNA-based drugs and customized treatments. At the Center of Excellence in Photonics in Jena, the Fraun- hofer spin-offs ConstellR GmbH (a spin-off of the Fraunhofer Institute for High-Speed Dynamics, Ernst-Mach-Institut, EMI) and SPACEOPTIX GmbH (a spin-off of the Fraunhofer Institute for Applied Optics and Precision Engineering IOF) have joined forces with their parent institutes to develop a new form of space telescope that has been recording the surface tempera- ture and water cycle of our planet from the International Space Station ISS since late February 2022. This measuring instrument is the prototype for a constellation of micro-satellites, which in the near future will provide extensive quantities of data to help protect the environment, thus creating added value for science, industry and society. The primary origin of this successful collaboration can be traced back to the Elevator Pitches 2020 initiative, held by the startup platform, Digital Innovation Hub Photonics DIHP, and funded by the state of Thuringia. Sustainability research in engineering Founded in 2015, the High-Performance Center Sustainability in Freiburg was one of the first established high-performance centers — from the outset, it has been engaged in engineering research with the aim of promoting sustainability. Following the principle of the high-performance centers, the five local Fraunhofer institutes are collaborating with the University of Freiburg, developing innovative and sustainable products and services in collaboration with and for the industry sector. The focus is on four key topics: sustainable materials, energy sys- tems, resilience engineering, and ecological and social trans- formation. The center’s goal is to transfer research results to industry and society with maximum profit. In March 2021, the High-Performance Center Sustainability entered its third financing phase, with funding from the Fraun- hofer-Gesellschaft and support from the BMBF. In addition to new research projects, some demonstrator projects from phase 2 were continued in the form of scale-up projects. The center also launched a joint research project in early 2021: the I4C — Intelligence for Cities project, which is focused on using AI to help cities adapt to climate change. The project will explore AI-driven methods of improving cities’ capacity to adapt to climate change and the resulting extreme weather events. leistungszentrum-nachhaltigkeit.de 36 37

Transfer Transfer at employees of the Bundestag and the German government ministries. The goal of the sessions is to further promote networking between employees from the world of politics and Fraunhofer experts. In 2022, the event was held three times at the Fraunhofer Forum Berlin, focusing on digital mobility, digital health research and bioeconomy and receiving a positive response from the executive and legislative branches. Involvement in political advisory committees Fraunhofer participates in various committees that serve as advisors to the political world, providing the knowledge policymakers need as a basis for their decisions. In addition to Fraunhofer’s continuous involvement in innovation policy com- mittees, other noteworthy activities from the reporting period include its participation in the High-Tech Forum, the Innovation Dialogue advisory body, the German federal government’s council on future issues (Zukunftsrat) and the German Advisory Council on Global Change (WBGU). During the 19th legislative period, the High-Tech Forum served as the German federal government’s central advisory body for implementing its Hightech Strategy 2025 (HTS 2025). It consisted of 21 specialists from the worlds of science, industry and society. The role of chair was shared by Christian Luft, State Secretary at the BMBF and Prof. Reimund Neugebauer, president of the Fraunhofer-Gesellschaft. The forum analyzed important issues relating to Germany’s future viability as a hub for research and innovation, and offered advice on the formu- lation of a strategic structure for and the further development of the HTS 2025. In 2021, the High-Tech Forum produced a report summarizing all its advisory papers to date. This report was published on April 21, 2021 as part of a results conference held in hybrid format. There, Prof. Reimund Neugebauer, repre- senting the advisory panel, handed over the final recommenda- tions for a future innovation strategy to the German govern- ment — the recommendations were printed on synthetic DNA. The forum explicitly called for greater participation, courage and practical action when it comes to achieving the sustain- ability goals. It also emphasized the importance of reinforcing a mission-oriented approach to innovation policy with the aim of bringing more cutting-edge research results into application. Other recommendations included simplifying the process of founding a scientific start-up and creating more experimental spaces and effective avenues for citizen participation. For more than ten years, Innovation Dialogue has served as a reliable, independent advisory board for the German federal government. In 2021, the Fraunhofer president participated in the preparation of dossiers on the resilience of supply chains and value creation networks and the journey from promoting technological cold frames to self-sustaining ecosystems. During the closing session of the 19th legislative period of the Bund- estag in 2021, the round table provided advice on creating, bolstering and developing excellent ideas from research and development into self-supporting, internationally competitive industry ecosystems. Since 2022, the Fraunhofer-Gesellschaft has been represented on the Zukunftsrat, the committee succeeding the Innovation Dialogue body, by its President, Prof. Reimund Neugebauer. The Zukunftsrat, which is headed up by German Chancellor Olaf Scholz, serves as an independent, confidential, expert advisory body to the German government on issues relating to future innovation and research policy. Its goal is to leverage the potential of research and companies to strengthen Germany’s position as an innovation hot spot and to complete the trans- formation to a social-ecological market economy in an optimal way. The WBGU is an independent scientific advisory board that analyzes problems concerning global development and the environment and develops recommendations for action and research in this field. In 2020, the second Fraunhofer scientist was appointed to the advisory council — the first being Prof. Ina Schieferdecker, who, as director of the Fraunhofer FOKUS institute, was also a member of the WBGU until 2019. Prof. Anke Weidenkaff is a professor in the field of materials engi- neering and resource management at the TU Darmstadt and head of the Fraunhofer Institute for Materials Recycling and Resource Strategies IWKS. Fraunhofer is also positioning itself within the relevant bodies and projects at an EU level to drive forward the green and digi- tal transformation. By participating in European initiatives such as Hydrogen Europe Research (HER), Bio-based Industries Con- sortium (BIC), the European Energy Research Alliance (EERA) and the Solar PV Industry Alliance, Fraunhofer contributes to shaping the European research and innovation agenda as part of the European Green Deal and REPowerEU. Fraunhofer has not made any input into current legislative processes. Furthermore, the Fraunhofer-Gesellschaft does not make donations, including to political parties. International transfer In order to rise to global challenges, we must combine forces within international networks. In order to gain insights from others and apply technological advances in an international context, it is important to transfer knowledge and technology across national borders. Since 2018, Fraunhofer has been operating the secretariat of the international organization WAITRO (World Association of Industrial and Technological Research Organizations), as part of the WIN4S project funded by the BMBF. One of their core aims was to expand WAITRO into a global network of researchers Researchers and industry representatives from across the world at the 2022 WAITRO Summit in South Africa Photos: Ignus Dreyer Additionally, efforts were made to drive the expansion of the programs and services offered by WAITRO: The digi- tal transformation has made it possible to remove many barriers to availing of WAITRO’s services. In 2021 and 2022, there were over 30 workshops held on the topics of sustain- ability and innovation; in addition to that, there were two innovation competitions and a virtual conference (with over 1,000 participants). The 2022 WAITRO Summit in South Africa was a particular highlight — this event was conceived as an international infor- mation and networking event with a major focus on support- ing UN SDGs. One particularly noteworthy result of the summit is the establishment of five new working groups, which each focus on one SDG (2, 3, 6, 7 and 17). that contribute to realizing the United Nations Sustainable Development Goals through demand-driven collaborations with industry. Another goal is to significantly advance the development of scientific structures in countries with emerging markets and developing countries. To this end, they are focus- ing on the following aspects: The digital open innovation platform SAIRA was developed with the support of the Fraunhofer Institute for Applied Information Technology FIT — through this platform, users worldwide that are active in research or work in the public or private sector can establish new partnerships based on their needs. This will break down existing barriers, especially when it comes to collaboration between the Global North and South, and establish sustainable development as a core element in the long term. One result of these efforts is the SMARTinFood project. The participating partners from Spain, Thailand, South Africa and Nigeria are working together to find solutions to combat nutrient deficiencies in particularly vulnerable regions. Expansion of the WAITRO network: The digitalization of the organizational infrastructure (e.g., member management, communications) allowed the network to expand to more than 150 organizations. Stakeholders in the private sector were also granted access to the network in order to pro- mote the exploitation of research results. 40 41

Employees at Fraunhofer Employees at Fraunhofer HR management Employees (number at year-end) At the end of 2021, Fraunhofer had 30,028 employees, 21,640 of whom were research, technical or administrative staff (RTA staff), 7,877 were students and 511 were trainees. Due to the prohibition on offering different payment levels to holders of positions in the same salary category, we are obliged to apply the terms of the German Federal Collective Bargaining Agreement for the Public Service (Tarifvertrag für den öffen- tlichen Dienst, TVöD) in individual employment contracts. For management staff in the scientific field, we are authorized to apply pay scale W in accordance with the German Federal Pay Act (Bundesbesoldungsgesetz, BBesG) and state salary laws. Fraunhofer comes to agreements with trainees regarding the application of the rules of the TVAöD. Students are paid according to the collective bargaining rules of the German fed- eral state and receive employment contracts. The employment and remuneration of interns at Fraunhofer is governed by the German Federal Government Guidelines on the Employment of Interns (Richtlinie des Bundes zur Beschäftigung von Praktikan- tinnen und Praktikanten, Praktikantenrichtlinie Bund). In addition, the Fraunhofer-Gesellschaft also employs third parties as consultants and service providers. The contracts for commissioning these services contain clauses on compliance with the Act Regulating a General Minimum Wage (Mindest- lohngesetz, MiLoG) – compliance with these clauses is explicitly confirmed by contractors. Through its strategic action areas, the HR Management division at Fraunhofer is bolstering the knowledge and enthusiasm of employees, as well as establishing and further developing the ideal working conditions to allow them to flourish. The New Work@Fraunhofer initiative aims to create a flexible, collaborative and customer-oriented working and research environment for self-determining employees, thereby contrib- uting strategically important added value. In particular, this relates to innovative strength, employer attractiveness and resilience of the organization. By the end of 2021, around 40 institutes (with an additional five in 2022) successfully integrat- ed New Work into their respective organizational structures through a series of ten modules (TAKE OFF, SYSTEMATIZE and DEVELOP). The institutes concerned set different priorities, from establishing the conditions for flexible working hours and locations and introducing agile working methods to design- ing new workspace models that are adapted to new working routines. As it stands, a total of around 15,000 employees are directly or indirectly involved in New Work activities. 27,988 29,069 535 7517 30,028 511 7877 541 7827 26,648 510 7225 25,327 474 6888 2017 2018 2019 2020 2021 Trainees Students RTA staff, total 115 team charter workshops have now been held at various institutes, in most cases coinciding with the institute’s revision of work council agreements on flexible working hours and locations. The Fraunhofer-Gesellschaft continues to realize its overar- ching mission to transfer knowledge via individuals through its Careers with Fraunhofer program, which is based on a comprehensive HR development strategy aimed at supporting employees’ individual career planning processes. The employee development meeting is and will remain the core element of individual career planning; at Fraunhofer, it is carried out in the form of a development meeting. Individual development planning processes are based on Fraunhofer’s development and career paths (both internally and with regard to conventional next-step careers in industry, academia or self-employment), which are consolidated through defined qualification fields, topics and measures. Team charter processes have proven to be a successful tool for implementing New Work. The team charter tool is used to ensure that managers and employees can reach an agreement on how they want to work together in the future. Around Thanks to the widespread introduction of a digitalized career planning tool, every Fraunhofer institute has had access to a standardized platform to support development planning since 2022. As such, development planning is a clear, traceable, criteria-based process; meanwhile, the electronic workflow ensures that the individual process steps are carried out. At the same time, a learning management system was introduced to serve as a standardized learning platform, bundling all of the training resources available to Fraunhofer employees and making them more easily accessible. Career programs for specific target groups promote the cre- ation of networks across institutes: For top and senior manage- ment, there are the Vintage Class and Advanced Management Class programs; female scientists and female scientific manag- ers have access to the TALENTA program, while young pro- fessionals can take part in the Step Forward program. A new development program designed as part of the implementation of the Doctorate with Fraunhofer code of conduct is available to the supervisors of employees pursuing their doctorate. To evaluate these measures in the context of the overall HR development strategy, exit surveys are systematically conducted with departing employees, in order to collect data on various issues, such as the extent to which they felt they were support- ed in their development planning process. Diversity The aim of diversity management is to create a working environment where every employee can participate on equal terms — irrespective of their ethnic origin, gender, religion, ideology, physical or other impairment, age or sexual identity. In 2021, for example, the Equal opportunities support pro- gram was developed to assist institutes in implementing equal opportunity structures. This core component of this program is the topic-specific workshops provided for the institutes and Fraunhofer headquarters; these give inspiration and create opportunities for dialogue around best practices and peer- group networking in order to drive equal opportunities at the institute concerned. According to the participating institutes, the key added value of these events had to do with the recruitment of more female scientists, the further development of on-site recruiting processes and the implementation of mea- sures by newly formed steering groups. Since 2013, TALENTA, a targeted and holistic support and development program, has been a keystone in Fraunhofer’s efforts to promote equal opportunities in research and leadership. As of the end of 2021, there were 781 female scientists eligible for this compre- hensive support, including career development and research time, and training and networking events; all these measures are aimed at helping them achieve career goals such as com- pleting their doctorates, further developing their leadership skills or enhancing their scientific visibility at Fraunhofer. The program is subject to regular evaluation, whereby the impact of the program is investigated, along with its focus on the needs of scientists and institutes and, as a consequence of this, its efforts to continuously adapt and develop its overall model. In 2021, 72 female scientists were accepted to the program. At the end of 2021, the proportion of employees with severe disabilities was 2.6 percent (compared to 2.8 percent in 2020). The Fraunhofer-Gesellschaft aims to bolster its commitment to promoting inclusion and putting additional effort into recruiting, developing and retaining employees with disabil- ities. Since 2022, the Corporate Culture — Diversity section has been driving the development of an overall strategy for integrating inclusion into Fraunhofer’s organizational culture and structures. That same year, Fraunhofer also joined forces with the Max Planck Society and other members of the Alliance of Science Organizations to develop a joint inclusion initiative. Their primary goal is to set an example for inclusion in research and increase the visibility of their commitment to inclusion on the occasion of the International Day of Persons with Disabili- ties 2023. In 2021, the Fraunhofer-wide framework agreement with pme Familienservice covering services in emergency childcare, home and elder care, and life coaching was extended for a further two years. Also included here is the pme Academie, which includes webinars, e-learning courses and tips for living mindfully every day. The framework agreement was expanded in summer 2021 to include an unplanned support package for those affected by the German flooding disaster. This package For years, the Fraunhofer Institute for Material Flow and Logis- tics IML, which works and conducts research across all fields of internal and external logistics, has been an active member of the Fraunhofer Sustainability Network for many years, playing a key role in shaping the New Work@Fraunhofer initiative. It is not surprising that the IML is also one of the first institutes to have implemented these concepts in its own day-to-day activi- ties. The current works council agreement has laid out the new framework conditions for working at the IML from February 24, 2022. As part of this, the institute has implemented initial concrete measures in selected pilot areas, focusing on the following topics: Desk sharing, hybrid models, remote working options (particularly in conjunction with research infrastruc- ture) and collaboration tools and formats to support agile working with customers. 44 45

Resources and procurement Resources and procurement The activities of a research organization in which more than 30,000 employ- ees at over 100 locations work to earn an annual volume of around 3 billion euros in revenue go hand in hand with a corresponding demand for materials, equipment and energy. In order to minimize the ecologi- cal impact of our research activities, the responsible use of resources is a matter of central importance to Fraunhofer. Ecological responsibility in our scientific operations In addition to developing sustainable research solutions and contributing to the overall transformation of society toward improved sustainability, resource efficiency and climate protection, Fraunhofer is also taking on the responsibility of restructuring its internal processes and infrastructure to make them more sustainable and, in particular, climate friendly. By combining technology development and its application in its own processes, Fraunhofer can continue to position itself as an authentic, relevant partner for industry, which, increasingly, is also both aiming and obliged to achieve its own environmen- tal and climate goals. As we see it, the fact that our actions explicitly support the cause of global climate justice and seek to protect future generations’ rights to an intact and livable environment means that they have a direct impact on human rights. What is more, we cannot identify any relevant impact on human rights, except in the area of sustainable construction and sustainable procurement. Climate strategy Climate protection is a central topic at all decision-making levels of the Fraunhofer-Gesellschaft. Based on a greenhouse gas footprint recorded for the first time in 2020, scientists developed a roadmap that can be concretely implemented and which outlines dedicated measures for reducing greenhouse gas emissions. On the basis of this roadmap, Fraunhofer has set itself an ambitious climate protection goal: to reduce its greenhouse gas emissions and achieve climate-neutral scien- tific operations by as early as 2030. Any remaining emissions that still require offsetting after the target year must be almost entirely eliminated by 2045 at the latest. Measures for reducing greenhouse gas emissions In order to reduce emissions, measures will be implemented across all of the scopes influencing our carbon footprint. With regards to scope 1 emissions, the focus is on reducing oil and gas consumption through energy renovation, efficiency mea- sures, the replacement of fossil fuels with renewable energy and electrification. To this end, detailed renovation roadmaps are being developed for pilot properties, with consultation provid- ed by engineering firms. In order to reduce scope 2 emissions, which arise primarily from the use of electrical energy, Fraun- hofer is urgently pursuing three different approaches: First, energy efficiency measures will ensure a reduction in energy demand; second, there will be efforts to expand self-generated electricity supplies via photovoltaics; and third, the remaining energy demand will be covered by green electricity. Planned measures for reducing relevant scope 3 emissions – for instance, those caused by commuting and business travel, which account for around a quarter of the footprint – include the accelerated expansion of charging infrastructures, improved public transport services, regulations for mobile working and new guidelines for climate-friendly business travel. Integrating change within the organization: Climate Neutrality task force Implementing an ambitious climate strategy requires integrat- ing the strategy within the structure of the organization – to this end, a permanent Fraunhofer Climate Neutrality task force has been established. Along with the officers for climate neutrality and sustainability, who have been appointed by the respective institute management of each Fraunhofer institute, the task force includes a new Climate Management depart- ment at the Fraunhofer-Gesellschaft headquarters, which is 49

Resources and procurement Resources and procurement as rail travel, for example. While some institutes already have specific guidelines for environmentally friendly and sustainable business travel, these guidelines have not yet been developed for the Fraunhofer-Gesellschaft as a whole. However, the Fraunhofer-Gesellschaft has already defined some general conditions and concrete recommendations for action to ensure that business travel is sustainable and environmentally friendly, particularly by reducing air travel. Offsetting air travel Since 2020, Fraunhofer has offset unavoidable airplane emissions for all of its institutes. In 2020 and 2021, emissions were offset via atmosfair compensation projects. Concretely, this involved providing support for a pioneering solar plant project in Senegal and a small biogas plant in Nepal. These projects facilitate secure, affordable, clean energy supplies in poor, decentralized regions, primarily for private households. There are plans to adopt a similar approach to offsetting flight emissions from 2022. Alternatives to business travel Whenever in-person contact is not required, telephone or video conferences represent a concrete alternative to business trips. Modern, user-friendly telecommunications equipment is avail- able at the Fraunhofer institutes. The use of video conferencing systems and software has become a regular part of the work- ing world, particularly due to the influence of the pandemic. Video conferences present an ideal alternative to business trips, which are usually time- and resource-intensive — this is espe- cially true of information events and regular project meetings where the team members already know each other. In the future, virtual meetings will continue to play an important role in reducing the volume of business travel — a solution that will also have a positive effect on improving the work-life balance of Fraunhofer employees. Business travel in Fraunhofer-owned cars accounts for only a small proportion of greenhouse gas emissions. Nevertheless, the use of passenger cars with alternative drive systems, in par- ticular fully electric cars, will be promoted further in the future. Environmentally friendly commuting Organizations with large personnel volumes, such as the Fraun- hofer-Gesellschaft, must consider employees’ daily commutes when measuring their impact on the environment, especially in terms of greenhouse gas emissions. In summer 2020, for the first time, the Fraunhofer-Gesellschaft recorded the emissions CO2 emissions from business trips by Fraunhofer employees, in metric tons3 23,007 10,817 3142 1427 0 0 0 0 0 2018 2019 2020 2021 2022 Flight emissions calculated according to the VDR standard + RFI 2.7 (recorded from 2019) Rail travel: Carbon-neutral due to inclusion in the framework agreement between the federal government and German Volume of waste produced by Fraunhofer institutes, in metric tons 5702 5632 5954 5694 5505 XX 3 Since the decision to offset air travel in 2019, flight-related emissions have been calculated using the VDR standard with a Radiative Forcing Index (RFI) of 2.7 in order to take into account the total climate impact of flights taken by Fraunhofer employees. In the interests of transparency, these are reported accordingly. In previous reports, the lower values of CO2 emissions were presented according to GRI/GHG. 614 818 801 710 711 2017 2018 2019 2020 2021 Non-hazardous waste Hazardous waste The charging infrastructure is available to different user groups depending on location; it can be used by Fraunhofer’s own company vehicles, employees’ private vehicles or third parties. As such, LamA is making an important overall contribution to climate-friendly mobility in Germany. From 2023, the model is set to be rolled out to locations that have not yet been included in the project, thereby further expanding the charging infrastructure at Fraunhofer. Waste generation The Fraunhofer institutes have appointed dedicated officers for managing operational waste and documenting this activity in waste registers and annual reports. Due to the nature of the organization, figures on the current volume of waste generated by the Fraunhofer-Gesellschaft as a whole can only be made available some time after the fact. According to the 2020 and 2021 figures, Fraunhofer institutes generated 5,694 and 5,505 tons of non-hazardous waste and 710 and 711 tons of hazardous waste respectively. The fluctuations in hazardous waste can largely be explained by the fact that some projects generate more waste than others, and the amount of waste Fraunhofer employees regularly take part in the Stadtradeln (city cycling) campaign – a nationwide initiative to promote cycling in support of climate protection and quality of life, this includes colleagues at the Fraunhofer Institute for Reliability and Microinte- gration IZM. In September 2021, 55 Fraunhofer employees at the three Fraunhofer locations Berlin, Dresden and Cottbus swapped their cars or public transport for their bicycles and, as a team, covered a total of 16,181 km in 21 days. In addition to a very good 28th place in the overall ranking, the cyclists sent a clear signal for climate protection in daily life while doing something for their general health at the same time. s.fhg.de/cycling-against-climate-change generated by commuting via an employee survey. In 2019, the figure stood at 0.65 t CO2e per employee and 18,382 t CO2e for the Fraunhofer-Gesellschaft as a whole. Due to the pan- demic, many employees made use of the option to work from home from 2020 to 2022 – as such, it can be assumed that the commuting volume decreased significantly between 2020 and 2021. Although a survey on this topic is not planned until the beginning of 2023, feedback from the institutes and headquar- ters indicates that many people have taken advantage of the opportunity to work from home. Participants in the commuting survey also frequently cited a desire to work from home. In order to reduce emissions in the long term, it is important to reduce the commuting volume or avoid commuting altogether. By agreeing on flexible working models, the Fraunhofer-Ge- sellschaft can allow people to work from home and reduce some of the commuting volume, even after the pandemic. In addition, the Fraunhofer-Gesellschaft promotes the use of environmentally friendly means of transportation as much as it can, e.g., by providing sheltered, secure bicycle parking areas to ensure that their infrastructure is bicycle friendly, installing charging facilities for electric bicycles and providing employees with changing and showering facilities. When asked about the use of environmentally friendly means of transportation, a large proportion of respondents (46 per- cent) said they would like to see improvements in local public transportation, including better connections, more regular service and fewer transfers, as well as financial support, for example in the form of special discounted travel passes for employees (JobTicket). This was not possible for Fraunhofer for a long time, as the organization receives public funding. How- ever, thanks to a 2022 edict by the BMBF, Fraunhofer is now permitted to grant the subsidy to its employees. To put this authorization into practice, a central works council agreement on the JobTickets was concluded between the Fraunhofer-Ge- sellschaft and the central works council in 2022, thus laying out a framework for the granting of the subsidies. The LamA – Charging at Work project This is where another Fraunhofer climate protection project comes in: The research and infrastructure project LamA – Charging at Work, which is funded by the German Feder- al Ministry for Economic Affairs and Energy (BMWi), was launched in 2018 with two key aims: establishing e-charging infrastructure and promoting research in this field. It formed part of the Immediate Action Program for Clean Air, which addresses districts with high levels of NOx pollution. By the end of 2022, the project had overseen the successful installation of nearly 500 charging points at a total of 38 Fraunhofer insti- tutes. As of mid-2021, standard operations had already begun at just under half of the charging stations. lama.zone (German only) Photo: Fraunhofer IZM 525252 52 53

Social commitment Social commitment For legal reasons, Franhofer cannot make non-profit donations at an insti- tutional level. As such, Fraunhofer relies on other methods of social com- mitment beyond its actual business purpose. These include approaches such as providing extensive support for young scientists, special events and collaborations, and supporting Fraunhofer employees in their social commitments. Young scientists For many years, Fraunhofer has been actively supporting the next generation of STEM scientists by getting children and young people interested in the fields of science, technology, engineering and mathematics (STEM). The Fraunhofer STEM programs start from as early as kindergarten and support children and young people throughout their entire eduction up to their university studies – with the goal always being to get young people excited about research and nurturing their talents. At each stage of the process, the participants are engaged with in a way that is precisely tailored to their age and level of knowledge. Fraunhofer has developed various methods to do this, which have been used extensively for years. They include a creative competition for daycare centers and interactive workshops for young people with an interest in STEM as part of the Fraunhofer Talent School program for students in grades 9 to 12. In this program, Fraunhofer researchers show the young people how technical and scientific solutions are researched in practice. Then there is also the Talent Take Off study guid- ance program, which supports participants from high school through to successful studies in STEM subjects. At the start of the pandemic, the programs were moved online, allowing almost all of them to continue in this way. One exception was the Fraunhofer Accident Prevention School at Fraunhofer IVI, which was able to take place through in-person events at schools even during the pandemic. Overall, over 2,000 children and young people took part in the online and in-person events in 2021. Since fall 2022, all programs are once again taking place in person. In addition, many Fraunhofer Institutes regularly participate in regional or national initiatives in Germany such as the annual Girls’ Day and the Jugend forscht (young researchers) competi- tion, e.g., through facilitating numerous regional competitions and providing funding on a nationwide basis for prizes in the areas of mathematics/computer science. jugend-forscht.de (German only) Some Fraunhofer Institutes, such as the Fraunhofer Institute for Integrated Systems and Device Technology IISB, have also created their own initiatives. In June 2022, Fraunhofer IISB helped with the Kristalle (crystals) project week at the Montes- sori School Herzogenaurach, which also laid the foundations for the planned collaboration between the institute and the school. As part of the project week, children in fourth and fifth grade at the Montessori School Herzogenaurach had the chance to learn more about the unique features of an import- ant material – semiconductor crystals. These are not only used in the microchips in smartphones and computers, but also in LED lighting and electric cars. The students were able to play the role of researchers and – fitted out with white coats, protective glasses and gloves – grow their own alum crystals. Experts from Fraunhofer IISB were there to help them every step of the way. s.fhg.de/mint-projektwoche-kristalle-iisb (German only) Looking to another successful program, employees at the Fraunhofer Institute for Intelligent Analysis and Information Systems IAIS celebrated the 20-year anniversary of their Rober- ta® – Learning with Robots initiative in 2022. Since 2002, this 57

GRI content index GRI content index GRI content index GRI standard Disclosures GRI 1: 2021 Overview GRI 2: General disclosures 2021 GRI 3: Material topics 2021 GRI 201: management of impacts 2 – 1 Organizational details 2 – 2 Entities included in the organization’s sustainability reporting 2 – 3 Reporting period, frequency and contact point 2 – 4 Restatements of information 2 – 5 External assurance 2 – 6 Activities, value chain and other business relationships 2 – 7 Employees 2 – 8 Workers who are not employees 2 – 9 Governance structure and composition 2 – 10 Nomination and selection of the highest governance body 2 – 11 Chair of the highest governance body 2 – 12 Role of the highest governance body in overseeing the 2 – 13 Delegation of responsibility for managing impacts 2 – 14 Role of the highest governance body in sustainability reporting 2 – 15 Conflicts of interest 2 – 16 Communication of critical concerns 2 – 17 Collective knowledge of the highest governance body 2 – 18 Evaluation of the performance of the highest governance body 2 – 19 Remuneration policies 2 – 20 Process to determine remuneration 2 – 21 Annual total compensation ratio 2 – 22 Statement on sustainable development strategy 2 – 23 Policy commitments 2 – 24 Embedding policy commitments 2 – 25 Processes to remediate negative impacts 2 – 26 Mechanisms for seeking advice and raising concerns 2 – 27 Compliance with laws and regulations 2 – 28 Membership associations 2 – 29 Approach to stakeholder engagement 2 – 30 Collective bargaining agreements 3 – 1 Process to determine material topics 3 – 2 List of material topics 201 – 1 Financial implications and other risks and opportunities due to climate change Economic performance 2016 201 – 4 Financial assistance received from government GRI 204: Procurement practices 2016 GRI 205: 205-1 Operations assessed for risks related to corruption Anti-corruption 2016 205-2 Communication and training about anti-corruption policies and procedures 205-3 Confirmed incidents of corruption and actions taken Page 4 7 7, Publishing notes 7 8 4 44 44 11 11 4 11 13 7, 11 13 12 11 11 44 44 44 3 3, 49, 55 7 9, 18, 19 8 12 Omitted1 8 44 8 12 60 60 55 12 12 12 1 As part of their roles, employees of the Fraunhofer institutes and research units are often members of a variety of specialist associations and interest groups. When a Fraunhofer entity joins or becomes a member of an association, the legal department reviews the underlying documentation (e.g., statutes). If this review does not give rise to any issues, this department will confer authority to act on behalf of the executive board on the individuals that will exercise the Fraunhofer-Ge- sellschaft’s membership rights. GRI Standard Disclosures GRI 1: 2021 Overview GRI 302: Energy 2016 GRI 305: Emissions 2016 GRI 306: Waste 2020 GRI 308: Supplier Environmental 302 – 1 Energy consumption within the organization 302 – 4 Reduction of energy consumption 306 – 2 Management of significant waste-related impacts Assessment 2016 308 – 1 New suppliers that were screened using environmental criteria GRI 401: Employment 2016 401 – 1 New employee hires and employee turnover GRI 403: Occupational Health and Safety 2018 GRI 404: 403 – 9 Work-related injuries Training and Education 2016 GRI 405: Diversity and Equal Opportu- nity 2016 Other material topics Holistic strategy planning Participative organizational development Solutions for challenges facing society Responsible research processes Transfer Sustainable construction Mobility Social commitment Page 50 51 49–53 53 55 44 47 47 45, 46 see pp. 8, 9 12 14 22–25 17–25 9, 36 – 41 54, 55 51– 53 57, 58 60 61

Business development in 2021 Publishing notes Business development in 2021 Publishing notes With tremendous effort from everybody involved and the support of grant authorities, the Fraunhofer-Gesellschaft once again succeeded in overcoming the effects of the pandemic in 2021. The results for 2021 show subdued growth of 3 per- cent, with a total business volume of around 2.9 billion euros. Contract research accounted for 86 percent of this sum (around 2.5 billion euros) and represents Fraunhofer’s core activity. Around one third of the business volume stemmed from base funding provided by the German federal and state governments. Long-term research activities that fall outside of the scope of this regular base funding is allocated to the item Additional research funding, which amounted to 163 mil- lion euros. Major infrastructure capital expenditure amounted to 234 million euros. Shareholdings At the reporting date, the Fraunhofer-Gesellschaft held equity investments in 84 companies across a broad range of sectors. Technology transfer to industry formed the focus of activities at 60 of the companies in the shareholding portfolio, while a further 18 equity investments were of a strategic nature. Equity investments also include six affiliated companies. In 2021, the Fraunhofer-Gesellschaft invested a total of 2.5 million euros in the acquisition of equity interests in shareholdings. The Fraun- hofer-Gesellschaft added three companies to its investment portfolio and divested its shares in five others. Spin-offs The Fraunhofer Venture department typically provides support to researchers looking to found spin-offs as they prepare to launch their new business. In certain cases, Fraunhofer takes on a minority share in the spin-off under company law as part of its technology transfer activities. In 2021, Fraunhofer Ven- ture provided support to 52 new spin-off projects; a total of 30 new spin-offs were established. You can find further details on Fraunhofer’s financial situation in our Annual Report for 2021. s.fhg.de/fraunhofer-jahresbericht-2021 Key data: key data for 2021 (in € million) Total funding Contract research Additional research funding Major infrastructure capital expenditure Business volume by budget Operating budget Capital expenditure1 Project revenue Contract research of which industrial revenue of which public-sector revenue2 Additional research funding Major infrastructure capital expenditure 2020 2832 2398 164 270 2832 2357 475 1716 1553 658 895 76 87 2021 2915 2518 163 234 2915 2445 470 1858 1738 723 1015 73 47 + 83 + 120 – 1 – 36 + 83 + 88 – 5 + 142 + 185 + 65 + 120 – 3 – 40 + 3% + 5% – 1% – 13% + 3% + 4% – 1% + 8% + 12% + 10% + 13% – 4% – 46% International project volume 3 276 287 + 11 + 4% 1 Current capital expenditure for contract research, additional research funding and major infrastructure projects. 2 Comprises German federal and state government, EU and other revenue. 3 Excludes license-fee revenue and revenue generated by independent international affiliates through business with third parties (2021: 27 million euros). Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e. V. Hansastrasse 27c 80686 München, Germany Concept, text and coordination Heike Münch Illustrations and layout Amelie Roth Contact Dr. Anja Haslinger csr@zv.fraunhofer.de © Fraunhofer-Gesellschaft e. V., Munich 2023 64 65