Principles Operating context Operating context refers to actual and potential changes to an organization’s operating environment that could impact its strategy and performance. It can include ESG risks and opportunities arising from megatrends, industry-specific trends and shifts in regulation. Key recommendations Identify key megatrends, industry-specific trends and regulatory trends affecting the organization. Discuss forward-looking information on how the external environment could impact strategy, risk and performance and how it factors into the materiality assessment process. Review the financial impacts of company climate-related transition plans, describing metrics linked to physical and transition risks. Methodology notes Clear and varied disclosure on these trends and how they impact on the company’s strategy, performance and resulting risks and opportunities. Robust description of climate-related scenario analysis and the extent to which they align with Task Force on Climate-related Financial Disclosures (TCFD) recommendations or other reputable frameworks, such as CDP. Across all reports reviewed, the most commonly cited mega-trends impacting sustainability strategies were: Aptar Group Aptar Group’s Annual Corporate Sustainability Report 2024 highlights six macrotrends affecting the company’s strategy: 1) increased need for transparent disclosure and due diligence; 2) sustainability reporting as a business imperative; 3) mitigating climate risks; 4) addressing water and biodiversity risks; 5) advancing resource efficiency and circularity; and 6) fostering a culture of belonging. Aptar Group briefly discusses what each trend entails, how it is impacting its business and strategy and how the company is responding, often pointing to relevant reports, research and supporting materials. Together, these discussions highlight how Aptar is considering the many effects of the wider operating context on its business. For example, on climate it describes the importance of the United Nations 2024 synthesis report on the state of climate change in informing its strategy. It then points out how climate risks are directly affecting Aptar and what it is doing to mitigate them, including establishing an International Organization for Standardization (ISO)-compliant energy management system and building a climate transition plan. On belonging, Aptar Group acknowledges that, while the topic of inclusion is debated in the United States, research has found that companies that prioritize inclusion programs are more resilient and agile. It shares employee survey data showing how employees have rated Aptar’s activities on this topic favorably. In its discussion of reporting trends, Aptar touches on the strategic implications of the changing regulatory environment and the frameworks it is using to support reporting and disclosure, including the TCFD and TNFD. Finally, on providing sustainability-related financial information, Aptar’s 2024 Transition Plan and 2024 CDP Questionnaire offer a clear description of governance, strategy and risk management, and metrics and targets associated with sustainability-related risks and opportunities. % Climate change 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 3 % Energy transition 0 1 2 3 4 5 6 4 0 1 2 3 4 5 6 6 % Consumer behavior shifts 0 1 2 3 4 5 6 4 0 1 2 3 4 5 6 1 % Political instabiloty 0 1 2 3 4 5 6 3 0 1 2 3 4 5 6 9