Supply Chain Due Diligence Act Policy Statement

Together with our Supplier Code of Conduct, and the environmental and human rights-related commitments outlined therein for our external business partners, this Policy Statement further outlines the importance N26 places on environmental and human-rights related due diligence checks, in our supply chain. By ensuring that all our business activities and ways of working are conducted in such a way as to reduce any impacts we may have, directly or indirectly, N26 can play a bigger role in fostering a more sustainable world for our employees, customers, and partners.

As part of the requirements of the German Supply Chain Due Diligence Act (LkSG) (effective for N26 from 1st January 2024), we are required to have a Policy Statement detailing our commitment to the LkSG. This statement details what our company commitment is to human rights and environment-related due diligence in our supply chain, including the relevant roles and responsibilities of those managing the due diligence processes.

The scope of this Policy Statement relates to supply chain due diligence connected to new and changing laws, regulations, guidelines and standards issued by legislative bodies. The Policy does not represent a comprehensive overview of all applicable laws, regulations, guidelines and standards which are issued by legislative and regulatory bodies. Applicable rules go beyond laws, regulations, guidelines and standards and can include e.g. policies, procedures, other internal and external standards.

All rules within the Group which are not expressly mentioned in this Policy Statement therefore remain in full force and effect and are to be observed in addition to this Policy Statement.

This Policy Statement is applicable for all employees of the N26 AG and N26 Bank AG, wholly or partially owned Subsidiaries and Branches including the Management Board Members (N26 AG and N26 Bank AG) and the members of the Supervisory Boards, without any exception and irrespective of their location, function or grade (hereinafter all together referred to as “employees”).

Relevant employees include:

• all contracted employees whether permanent or fixed term, full-time or part-time,
• all N26 executives (including board members and senior management),
• agency workers (i.e. temporary staff placed by recruitment agencies),
• self-employed or contract workers operating under service agreements with N26 (rather than employment contracts), any individual on work experience (including interns, apprentices and working students), and,
• any individual training with N26 under a contract.

This policy will be reviewed and updated on an annual basis to ensure we are taking any possible measures and opportunities to further positively impact the environment and the people within it.

The German Supply Chain Due Diligence Act management is predominantly carried out by Sourcing employees with the role of ‘Sustainable Sourcing Manager' or similar, and by Compliance employees with the role of ‘Human Rights Officer’ or similar. The ‘Head of Sourcing & Outsourcing’ may also be involved in the management, for example where commentary or further explanation is needed to support the processes.

• Sustainable Sourcing Manager - Responsible
• Human Rights Officer (Compliance) - Responsible
• Head of Sourcing & Outsourcing - Consulted
• Head of Anti-Financial Crime Standards Intelligence & Controls - Consulted
• Chief Regulatory Officer - Informed
• Head of Outsourcing Management - Informed

Sections 5.1-5.6 outline N26’s commitment to adhering to the German Supply Chain Due Diligence Act.

N26 is committed to ensuring that we’re doing everything in our power to neutralise any environmental and human rights-related impact that our business has on the planet. In order for us to effectively achieve this goal, we’re also obligated to understand what impact our suppliers’ actions create.

We expect that our suppliers commit to reduce any potential environmental impact that the goods and services they provide to N26 may create. At the very minimum, N26 expects our suppliers to adhere to any nationally-applicable environmental legislation, regulations and directives to protect and improve the environment. In line with our own goals, we also encourage our suppliers to have action plans in place to achieve emission reduction targets.

N26 expects its suppliers to have an understanding of the environment and human rights-related risks of their business operations. Suppliers are also expected to take measures to ensure that any risks are mitigated, whilst also providing N26 transparency on the risks/impacts related to the goods and services provided to us. We will also ask our suppliers to provide evidence of their commitment to Net Zero targets, as well as documentation showing any alignment of their business conduct and strategy to the 17 United Nations Sustainable Development Goals.

It is expected that all our suppliers comply with the following guidelines, with regards to human rights-related principles;

• OECD Guidelines for Multinational Enterprises,
• UN Guiding Principles on Business and Human Rights,
• International Bill of Human Rights,
• European Convention for the Protection of Human Rights and Fundamental Freedoms,
• International Labour Organization (ILO) Tripartite Declaration of Principles on Multinational Enterprises and Social Policy,
• ILO Declaration on Fundamental Rights and Principles at Work,
• Ten principles of the UN Global Compact,
• International Framework Agreement on the Fundamental Rights of Workers (signed in 2012 jointly with trade unions and workers' representatives)

The Supplier Code of Conduct will be sent to all suppliers as an integrated part of the order form. This Code outlines the expectations N26 has towards its suppliers with regards to environmental and human rights-related responsibilities.

Should a supplier be found to be breaking the expectations outlined in the Code of Conduct, N26 will work with the supplier in order to find better ways of working. Remediation, mitigation and prevention are the goal with any instance of a violation to the expectations outlined in the Code of Conduct, in order to ensure successful long-term business partnerships. However, persistent non-adherence to the Code of Conduct could result in a contract being terminated.

Pursuant with the LkSG, N26 acknowledges that risk management, and the identification of potential risks and environment and human rights-related violations, is crucial for full adherence to the LkSG. Combined with a number of our existing internal procurement processes, the creation of an enhanced supplier due diligence process enables N26 to ensure that we partner only with those suppliers who share the same values and ethics that we do, whilst also being aligned to the requirements set out in the LkSG.

N26’s supplier due diligence process is a risk-based approach based on a risk assessment framework. This process will be carried out through our procurement tool, following the processes as outlined in our company Procurement Policy.

For those suppliers where the potential risk for human rights and environmental violations is identified in the risk framework as being low, a lighter version of the due diligence process is carried out. Justification for these criteria will be documented in our annual due diligence report.

The risk analysis process will be carried out annually, and on an ad-hoc basis when required (should there be a significant change in business, or if N26 has reason to believe that a violation to the LkSG has occurred in the supply chain). The results of the risk analysis will be communicated to the N26 Supervisory Board.

In the event that a risk is identified through the risk analysis stage, N26 will act accordingly, and with no undue delay. Our suppliers will not only be made aware of N26’s expectations with regards to human rights and environment-related conscientious business conduct, but they will be obliged to provide assurances and evidence to ensure their compliance with N26’s requirements for this regulatory Act.

Additionally, N26 has the following portfolio of measures to prevent any adverse human rights and environment-related risks that may arise;

• N26 Supplier Code of Conduct which will be signed by all new suppliers moving forward,
• N26 LkSG Policy Statement which is publicly available online,
• Complaints mechanism through our supply page on the N26 website for the awareness and remediation of any violations,
• A thorough Third Party Risk Assessment (TPRA) process,
• All measures will be reviewed annually to ensure effectiveness.

When it comes to understanding how our suppliers embody environmental, social and governance policies, N26 has an open door for communication. Any employee from one of our suppliers can connect directly with N26 through our supplier webpage (n26.com/en/suppliers) to submit evidence of a human rights or environment-related violation. N26 will react and respond to every notification, and when relevant, we will work directly with our suppliers to remediate any violations that break with our Supplier Code of Conduct and the LkSG requirements.

As stated in the UN Guiding Principles, N26 has a duty of care to understand and address any adverse human rights impacts, through taking adequate measures for their prevention, mitigation and remediation. Specifically ‘The responsibility to respect human rights requires that business enterprises… Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts’ (UN Guiding Principles on Business and Human Rights, II, A (13,b)). Through employees of our suppliers maintaining an open communication channel with N26, we will seek to remedy any human rights and environment-related violations that potentially occur in our supply chain.

This operational-level grievance mechanism supports N26’s identification of possible adverse human rights impacts as part of our due diligence commitment. This mechanism aims at identifying any legitimate concerns of those who may be adversely impacted, and through this early identification, N26 has the possibility to address the concerns and ensure that over time they do not escalate into more major issues and abuses.

For details of the procedure, please refer to the Complaints Procedure in the link here.

In line with Division 2, Section 10 of the LkSG, we are required to document our due diligence processes, and additionally keep appropriate documentation of any complaints received through the online grievance mechanism (as per Division 2 Section 8).

Where no risk to the environment or human-rights is identified from our suppliers, we are required to plausibly justify the analysis on these suppliers, and how the risk framework has determined that no further due diligence investigations are required.

N26 will provide an annual report on the fulfilment of our due diligence obligations in the previous financial year to the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle, BAFA). This report will detail the following:

• Whether N26 has identified any human rights or environment-related risks or violations,
• What N26 has done to fulfil its due diligence obligations with reference to the measures described in Sections 4 to 9 of the LkSG,
• How N26 assesses the impact and effectiveness of the measures taken to fulfil our due diligence obligations, and,
• The conclusions we have drawn from our assessment for future measures required to further enhance our due diligence processes.