• Incentives/Rebates based on sustainability related spending/investments are offered to EMEA markets. These incentives are claims secured due to qualifying projects and activities seeking advancement/innovation in the technology space, which local governments are trying to incentivize though these tax incentives (along with other grant mechanisms).
• This isn't an automatic settlement and requires significant amount of work by Procurement & Supply Chain to claim benefits. EY was engaged for an initial period of 12 months until end of Sept '25*. If work wasn't done, claim and upside wouldn't materialize. 
• (*)Overarching Global agreement now in place valid until May 2030.

Comparison to routine rebates is not correct as most rebates have a volume/spend limitation attached to it. Rebates sometimes are comprised of a lump sum component therefore baseline determination is challenging. 

• Does this count as P&L Productivity if the benefits are realized within the P&L or is it Cost Avoidance?
• What YoY benchmark can we use to calculate the impact of savings/productivity?
• Does the $ value or the % incentive become the basis for calculating YoY savings/productivity?
• What happens if the same amount of Productivity isn't realized in next year?

Rebates can be counted as Productivity if there is a reduction of effective Cost Per Unit vs PY. 

Governance:

The following criteria needs to be met to be recognized as P&L Productivity

• The incentive benefit should result in P&L upside. The %age of incentive will form the basis of Productivity calculation in current and subsequent years. If the incentive received is incremental to PY, it is Productivity.
• If the % Incentive stays the same in the following year, there is zero productivity in following year. 
• If the Incentive is an absolute $ amount linked to size of investment and we receive the same $ amount in the following year there is no Productivity in following year. 
• Volume/spending impact (up or down) in the following year cannot be recorded as Productivity.