Analysis of economic activities of HHLA

Taxonomy-eligible economic activities

The definitions of taxonomy-eligible economic activities ("eligibility") for the environmental objectives "climate change mitigation" and "climate change adaptation" can be found in Annexes 1 and 2 to the Climate Delegated Act. The definitions of economic activities for the environmental objectives "Sustainable use and protection of water and marine resources", "Transition to a circular economy", "Pollution prevention and control" and "Protection and restoration of biodiversity and ecosystems" can be found in Delegated Regulation (EU) 2023/2486, the Environmental Delegated Act.

After reviewing the definitions of economic activities in accordance with the Delegated Regulations, HHLA’s taxonomy-eligible economic activities are to be assigned solely to the environmental objective “climate change mitigation”:

The taxonomy-eligible activities of container transport by rail and road, including the inland terminals, are carried out by HHLA’s intermodal companies.

The Group’s economic activities in container handling and the operation of HHLA seaport terminals were classed as taxonomy-eligible, as these activities facilitate low-carbon maritime transport.

In the Real Estate segment, the ownership and acquisition of property was classed as taxonomy-eligible. Real estate owned and let by HHLA primarily covers the Speicherstadt historical warehouse district in Hamburg – a landmarked UNESCO World Heritage Site – and Hamburg’s fish market district.

Activities in the fields of consulting, automation, container repair and project logistics were mainly classed as taxonomy-non-eligible.

HHLA is not involved in economic activities as defined in 4.26-4.31 of the complementary delegated act EU 2022/1214 (gas and nuclear legal act). The corresponding templates from the aforementioned delegated act do not apply for these economic activities.

Review of taxonomy alignment of economic activities

Taxonomy alignment was reviewed in a three-stage process:

1. Review of a material contribution to the environmental objective “climate change mitigation”,
2. Review of the avoidance of significant adverse effects (DNSH - do no significant harm) of the other environmental objectives and
3. Review of compliance with the minimum safeguards.

Material contribution to the environmental objective “climate change mitigation”

The definitions of the corresponding technical screening criteria for the environmental objective "climate change mitigation" can be found in the annexes to the Climate Delegated Act. These served as the basis for the assessment.

Each of HHLA’s economic activities identified as taxonomy-eligible was reviewed to determine whether it complies with the technical screening criteria for a material contribution to climate change mitigation. Economic activity “6.2 Freight rail transport” makes a significant contribution, as the trains and freight wagons used by HHLA largely cause no direct CO₂ exhaust emissions. The economic activities “6.14 Infrastructure for rail transport” and “6.16 Infrastructure enabling low-carbon water transport” enable the transfer of goods between modes of transport and thus make a significant contribution to climate change mitigation. See Reporting forms for EU taxonomy for the results.

Avoidance of significant adverse effects on environmental objectives

The definitions of the corresponding DNSH criteria for the environmental objective "climate change mitigation" can also be found in the annexes and appendices to the Climate Delegated Act.

The DNSH criteria were reviewed at the level of economic activities. HHLA’s Intermodal segment, with its extensive terminal network in Central and Eastern Europe, led to comprehensive examinations of the technical screening criteria at site level, and the same applies to the seaport terminals. Compliance with the DNSH criteria is ensured through adherence to European and national laws, as well as voluntary environmental management certifications, for example. The robust climate risk and vulnerability assessment was conducted on the basis of the latest available climate data (using the RCP scenarios 2.6, 4.5 and 8.5) and on the smallest suitable scale. For the results, see Reporting forms for EU taxonomy. For the results of the robust climate risk and vulnerability assessment, see Management of risks and opportunities.

Compliance with minimum safeguards

The minimum safeguards are provided in Article 18 of the Taxonomy Regulation and relate to compliance with the OECD’s Guidelines for Multinational Companies and the United Nation’s Guiding Principles on Business and Human Rights, including the basic principles and rights under the eight fundamental conventions specified in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. The criteria also relate to the International Bill of Human Rights.

HHLA’s taxonomy-eligible activities are limited to Europe. More than 95 % of HHLA’s suppliers are based in the European Union, where human rights and workplace safety and the other areas listed in the minimum safeguards are enshrined in both local and European laws. Key aspects of the international standards in the aforementioned guidelines and norms are, for example, embedded within the Charter of Fundamental Rights of the European Union, in particular the prohibition of slavery and forced labour and the principle of non-discrimination. Furthermore, EU law often has stricter requirements in relation to health, safety and social sustainability.

As a responsible company, HHLA conducts its actions on the basis of lawfulness and integrity as a basic principle. HHLA not only complies with the applicable laws, but in particular also respects the principles and standards that go beyond the legal requirements. Democratic principles and international standards

To this end, internal Group documents and measures lay down binding guidelines for activities and thus support respect for and compliance with the key criteria areas arising from Article 18 of the Taxonomy Regulation:

• Human rights, including workers’ rights
  Respect for human rights
• Bribery/corruption
  Combating bribery and corruption
• Taxation
  Taxes
• Fair competition

Compliance with minimum safeguards has been assessed at Group level in order to ensure compliance with these requirements at the level of economic activities. This is because the corresponding management systems are embedded at Group level and therefore apply to all business activities. Information about corporate governance practices

Following a review of all the aforementioned minimum safeguards, no discrepancies were identified. The implemented management and prevention systems ensure compliance with Article 18. Compliance with the minimum safeguards within the meaning of the Taxonomy Regulation has therefore been confirmed.

Taxonomy-aligned economic activities

The economic activities of HHLA that were identified as taxonomy-aligned focus on:

The activity "6.2 Freight rail transport", which is carried out using electric locomotives and is not used to transport fossil fuels, was classified as taxonomy-aligned. In addition, the activity "4.1 Electricity generation using solar photovoltaic technology" at the HHLA TK Terminal in Muuga, Estonia, the activity "6.14 Infrastructure for rail transport" (inland terminals) and the handling of goods at seaport terminals as part of the activity "6.16 Infrastructure enabling low carbon water transport” were classified as taxonomy-aligned. These four activities meet the technical screening criteria.

Taxonomy-eligible but not taxonomy-aligned economic activities

Low shares of activity “6.2 Freight rail transport” were assessed as taxonomy-eligible but not taxonomy-aligned. This refers to freight transport such as shunting runs that are operated on non-electrified railway lines using diesel-powered locomotives.

Activity “6.6 Freight transport services by road” was also assessed as taxonomy-eligible but not taxonomy-aligned.

The technical screening criteria of the Climate Delegated Act do not allow HHLA to classify container transport conducted by trucks on roads as taxonomy-aligned. The main reason is the outstanding market ramp-up for low-emission or emission-free semi-trailer trucks.

Activity “7.7 Acquisition and ownership of buildings” was also assessed as taxonomy-eligible but not taxonomy-aligned.

The technical screening criteria of the Climate Delegated Act do not allow HHLA to classify the Real Estate segment as taxonomy-aligned. The real estate portfolio chiefly comprises the historic landmarked buildings of Hamburg’s Speicherstadt historical warehouse district, a UNESCO World Heritage Site, meaning that landmarked building regulations always have to be taken into account when carrying out measures to improve energy efficiency. HHLA is working on projects to increase energy efficiency using engineering innovations that comply with landmark protection requirements. For the results, see Reporting forms for EU taxonomy.