2017 SUSTAINABILITY REPORT

1

2

2017 SUSTAINABILITY REPORT

Contents

04 The Olav Thon Group 2017 07 Sustainable value creation 09 The Olav Thon Foundation 10 Pantelotteriet (bottle deposit lottery) 12 About this report 15 Economic social responsibility 16 Environment and green operation 23 Social responsibility 26 HSE 30 Supply chain 32 Profilopplysninger 34 GRI index 37 UN’s Global Compact

3

The Olav Thon Group 2017

Book equity increased to NOK 16.2 80 billion and the equity ratio was 30%. Value-adjusted equity is estimated to be significantly higher. hotels Thon Eiendom is Norway's leading property company, At the turn of the year Thon with a total of 98 shopping LIQUIDITY Hotels had 11,338 rooms in centres and about 500 80 hotels. commercial properties in the RESERVE portfolio. AT YEAR END NOK 12.3 BILLION. 2.3 billion Pre-tax earnings before tax totalled NOK 2.3 billion. 1010 NET apartments INVESTMENTS In 2017, 171 apartments were completed for sale in Lillestrøm, and TOTALLED a further 839 are under construction 9 OF THE 10 in Oslo and Akershus. With around NOK 2.9 BILLION 1,450 apartments, the Thon LARGEST Eiendom rentals portfolio is one of The Group owns or manages 9 of the biggest in Oslo. the 10 largest shopping centres in Norway

4

+1.5%

Revenue in the Norwegian shopping centre portfolio owned by the group increased by 1.5% to NOK 67 billion.

AROUND 5,500

TENANTS AT OUR

SHOPPING CENTRES

IN NORWAY

The group's property portfolio increased rent income level by 3.3% to NOK 5.5 billion, while the vacancy level was 2.5%

5

6

Sustainable value creation

It is my great pleasure to present the Olav Thon Group’s fifth Sustainability Report, which has been produced to systematise and promote the work of the Olav Thon Group on sustainable development.

The Olav Thon Group has been a signatory to the UN’s Global Compact initiative since 2012. This is the world’s largest initiative for corporate sustainability, based around 10 principles in the areas of human rights, labour practices, the environment and anti-corruption. We signed up to the Global Compact out of a desire to run our business according to these principles as far as possible.

In December 2013, I set up the Olav Thon Foundation, which then took on ownership of the Olav Thon Group. The purpose of the Foundation is to exercise stable, long-term ownership of Olav Thon Gruppen AS and its subsidiary businesses, and to distribute funds to charitable causes. Securing the continued development of the Olav Thon Group, while also ensuring that some of the profits generated by the business are used for charitable work, will hopefully prove a sustainable approach – for the company, its employees and for society in general.

I hope you find this a good read!

Olav Thon Chairman of the Board/Group CEO

7

8

The Olav Thon Foundation

The Olav Thon Foundation was established in December 2013, and all shares of Olav Thon Gruppen AS were transferred to the foundation by Olav Thon at the time of establishment. The aim of the foundation is to own and operate the Olav Thon Group's business activities. It can also contribute to non-profit activities.

SOCIAL COMMITMENT SUPPORT FOR CHARITABLE AWARDS IN 2017 We have a goal of creating value CAUSES In 2017 four awards were and secure jobs in everything The Foundation can support presented in four different we do. To an increasing degree, causes in the categories – international Olav Thon in person and the mathematical/natural science research award, national awards Olav Thon Group have made and medical fields. This may be for outstanding teaching, active contributions toward a provided both as the support for Nordic research better society. presentation of awards to collaboration in medicine and Norwegian and foreign support for national student- LONG-TERM OWNERSHIP IN THE researchers, as well as direct related research projects. OLAV THON GROUP support to research projects. Altogether, awards amounting In its management of the Olav to almost NOK 42 million were Thon Group, the board of the Furthermore, support may also presented, shared among all Foundation aims to develop the be provided to both general award winners. business in line with the values, charitable causes and the attitudes and ideas adopted by construction of property for use For more information on the Olav Thon to run his business. by charitable causes in Norway. award winners, see the Olav Thon Foundation website. The Foundation owns all the Support may also be given to shares in Olav Thon Gruppen AS, promote outstanding which must be based in Norway. entrepreneurship in Norway. Buying and managing property are exclusively the group's largest business areas. An essential part of this business is to take place in Norway. We want the business to expand. We will always prioritise ensuring that the Group has a strong financial position.

9

The Deposit Lottery

Pantelotteriet is run by Norsk Pantelotteri AS, a company owned by the Norwegian Red Cross and the Olav Thon Group.

It was Olav Thon himself who received an incredible NOK 194 43% set up Pantelotteriet, out of million. At a stroke, the lottery Market share in best store concern for the environment has become one of the and a desire to promote charity organisation’s most important work. The idea is for the lottery revenue streams. NOK 37 million on bottles that carry a deposit to encourage more people to The deposit money goes to local Contribution to the Red Cross in recycle, while also establishing a Red Cross work around Norway. 2017 stable source of revenue for Example activities are home charitable organisations. visits, learning support, guidance for refugees, a prison NOK 194 Profits from the lottery go visitor service and first aid. directly to the Red Cross, which million by the end of 2018 had Contribution to the Red Cross since 2008

NOK 325,278 TurnoverCONTRIBUTIONS in best store TO THE RED CROSS

kr40 000 000

kr 37 170 170 37 kr 893

kr35 000 000

kr 32 091 091 32 kr 111 kr 29 891 891 29 kr 048

kr30 000 000

kr 26 241 241 26 kr 455

kr25 000 000 800 23 kr 370

kr20 000 000 523 18 kr 840

kr15 000 000

kr 12 423 423 12 kr 611

kr10 000 000

kr 7 784 657 784 7 kr

kr 4 914 206 914 4 kr

kr5 000 000 kr 928 543 928 kr kr0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

10

NOK 194 million to the Red Cross

Since its inception in 2008, Pantelotteriet has contributed NOK 194 million to the Red Cross. "These funds enable us to carry out even more voluntary work for all those who need it," said new president of the Red Cross, Robert Mood.

The Red Cross president thinks the lottery is a very smart idea, and it seems incredible that the total amount is now approaching NOK 200 million.

Delighted “This is a fantastic lottery in which everyone wins. The Red Cross is delighted for every winner, large or small, and for all the empty bottles that generate money for voluntary services,” said Mood, who personally donates all his deposit-carrying bottles to the Red Cross. “Pantelotteriet has become one of our main sources of income, especially for local and support organisations throughout Norway. It's both vital and highly motivating to get such great funding every single year," the president said. APPROACHING NOK 200 MILLION: Robert Mood, president of the Red Cross, is not in doubt as to which button he should choose. “Pantelotteriet is a game with winners only,” says Mood (Photo: Katrine Lunk/Apeland). Important contribution Telemark is one of the counties this money, it means more up in what we in Norway define where Pantelotteriet is most funding to save lives, run as poverty. That’s why we have popular. That also means that activities for vulnerable specifically increased the Red Cross in Telemark is children and adolescents and to commitment to this group in one of the local associations visit the elderly and lonely in recent years,” says Jensen. that receives the highest nursing homes across the “We do so through free contribution from the lottery. county," said Ducros. activities such as the Barnas No less than seven people have Porsgrunn Red Cross is at the Røde Kors (Children's Red become a Pantelotteriet top of the list of local Cross), Ferie for alle (holidays millionaire in the county since associations that receive the for all) and Røde Kors it started. most in Telemark. NOK 240,000 førstehjelp og friluftsliv (Red "The number of winners has was generated from Cross first aid and outdoor encouraged more people to Pantelotteriet in 2017. Local life). We want every child to press the Red Cross button and association leader Kim Jensen be able to participate in given more funding to our local says that this is an important recreational activities associations," says Eli Ducros, contribution to the budget. regardless of their parents' Managing Director of Telemark "Porsgrunn Red Cross aims to income, and funds from the Red Cross. be there for anyone who needs Pantelotteriet allow us to do “For each individual local us locally. There are over 700 so,” says the local association association that receives children in Porsgrunn growing manager.

11

About this report

The Olav Thon Group is publishing its fifth Sustainability Report as a member of the UN Global Compact. The purpose of the report is to describe how the Group strives to operate responsibly and sustainably.

To ensure transparency in our reporting and compliance with international reporting standards, we publish data in accordance with the Global Reporting Initiative (GRI G4), at Core level. References to aspects and indicators are available in the GRI index towards the end of the report.

LIMITATIONS AND REPORTING intervals, and for this reason a trends is communicated to the PERIOD new stakeholder dialogue and group directors, so that they This Sustainability Report is materiality analysis were may make well-informed aimed at our customers, guests, conducted in 2016/2017. New decisions on the work's employees, suppliers, the local implementation was first direction. communities in which we decided at a meeting with the operate, students, special group directors in September Stakeholder dialogue and interest groups and public 2016, where it was decided to materiality analysis were authorities. We see all of you as carry out a combined conducted by the technical stakeholders who are affected stakeholder dialogue and advisor for sustainability work by, and have a considerable materiality analysis with key analysed aspects and associated influence on, our business. personnel in the Group, in indicators, and also collected addition to the group directors. priority analyses from the group The data presented in this The Group’s economic, directors in relation to the report is for all the companies environmental and social impact various aspects (including within the Olav Thon Group, have previously been examined, simple explanations for each which means business units of to determine just which aspect). Thereafter interviews which the Olav Thon Foundation footprint we leave behind – were conducted with the group indirectly owns more than 50%. giving us an idea of the areas in directors, where the aspects Any exceptions are explained in which we can contribute were reviewed and further the notes on the individual data. towards sustainable explained. The technical advisor The report relates to the development. The previous and group directors discussed calendar year 2017, and has materiality analysis is still the aspects and related been drawn up in Norwegian, considered to be very important significant/relevant indicators Swedish and English. The Group in the context of the (based on the previous has an annual reporting cycle, Sustainability Report, but materiality analysis, in addition such that the next report will be certain adjustments have been to a new analysis conducted by published in May/June 2019. made after the new stakeholder the technical advisor on the dialogue. market demand, signals from MATERIALITY ANALYSIS AND corporate management and STAKEHOLDER DIALOGUE The stakeholder dialogue was from key personnel in the In order to define the content of conducted in two stages: organisation). All group the Sustainability Report, and to ongoing dialogue with key directors were then given the ensure that our report is as personnel in the group and opportunity to prioritise the relevant as possible with regard interviews with the group aspects anew. This was to our core business, we have directors. Ongoing dialogue with compiled in a priority table conducted a materiality analysis. key personnel is essential in (average of all group directors' This was initially conducted in order to obtain relevant priorities), which in turn formed 2013 in connection with information and focus effort in the basis for the technical preparation of the first the direction the organisation advisor's report with sustainability report. deems necessary at all times. At recommendations. This report the same time it is the group has taken the previous We need to conduct directors who make decisions in materiality analysis into stakeholder dialogue and the sustainability area, and it is account, as well as recent materiality analysis at regular important that information on stakeholder dialogue. 12

FOCUS AREAS In our fifth sustainability report, we decided to emphasise four focus areas for the group: Economy, environment and green operation; health and safety; and diversity and inclusion.

7,0

6,0 5,8

5,0

4,4 Economic 4,0 Environmental Human rights Labor practices and decent work 3,2 3,2 3,0 3,0 Society Product responsibility

2,0

1,4 1,0

0,0

13

14

Economic social responsibility

The Olav Thon Group is a commercial player, and revenue and profit are key focus areas in day-to-day operations. The economic aspect also implies a contribution to society in the form of taxes and duties, employee salaries and benefits, and investment in business expansion, which in turn leads to new jobs.

Amounts in NOK million Category 2016 2017 Revenues 10,172.00 10,935.00 Operating expenses 4,267.00 4,515.00 Employee wages and benefits 1,505.00 1,505.00 Payments to suppliers of capital 1,278.00 1,108.00 Payments to authorities 213.70 345.00 Investments in society - - Financial values retained in the company 2,908.30 3,461.00

GROUP INCOME AND PROFITS FINANCIAL CONTRIBUTIONS more direct contribution is The Olav Thon Group TO SOCIETY the payment of employee achieved operating revenues The Group's financial salaries and benefits. The in 2017 of NOK 10,935 contributions to society are Olav Thon Group million with financial assets divided into several factors. paid out NOK 1,505 million retained in the company of Operating expenses are in wages and benefits to NOK 3,461 million for indirect socio-economic employees in 2017. This investment in the expansion support in that they affects the economy by and improvements of the contribute to other helping to maintain the business in line with the Norwegian businesses' purchasing power of our articles of association of the revenues on sales of their workforce and their Olav Thon Foundation. products and services. A contribution through payment of taxes and duties. The Olav Thon Group is also Outgoings 2017 a direct contributor to society through the payment of taxes and duties. In addition, the financial assets Operating expenses generated by the company are retained and used for Employee wages and expanding the business. This benefits is in line with the articles of association of the Olav Thon Payments to suppliers Foundation and helps create of capital jobs and value for Payments to Norwegian society. authorities Investments in society

15

Environment and green operation

The Olav Thon Group should always strive to take account of environmental challenges within the business and in society in general. The Group maintains focus on environmental efficiency, with careful management of energy and waste as core concerns. Thon Hotels Thon Hotels has Eco-Lighthouse local follow-up in individual responsible for Eco-Lighthouse certification for all its hotels in subsidiary units. After Thon certification at head office. Norway. As one of Norway’s Hotels became a part of Eco- Certification with the new largest hotel chains, Thon Hotels Lighthouse's HQ model in 2015, model was carried out for the has a responsibility to help the model was revised in 2016. first time in 2017, with great protect the environment. With Eco-Lighthouse has improved its success. over 2.6 million guest nights per digital interface, and has now year, it is important to ensure prepared a comprehensive The headquarters model will eco-friendly consumption, digital solution for certification contribute to simpler and more reduced waste and energy and re-certification. As part of rational certification for the savings. Thon Hotels is also a the transition to the digital hotels, stronger local support control member of Grønt Punkt solution, Thon Hotels reviewed and a better flow of Norge, and requires its the criteria anew and shared information. A central Norwegian suppliers to be them between headquarters environmental group will members of and subsidiary units without any present Thon Hotels' overall the return significant changes. The new environmental results to the scheme for digital solution makes the management annually. Our packaging. certification process easier and environmental ambitions will more transparent for underlying thus be further strengthened REVISED HQ units, and allows better and visualised. MODEL integration with the person In 2015 Thon Hotels was designated certified according to the headquarters model. The model ensures that responsibility for the environmental management system is where this naturally belongs, and clarifies which processes and environmental requirements that are met by the headquarters and which environmental requirements that remain the responsibility of

16

Brussels Unger

the needy, or two weeks of food ENVIRONMENTAL LABELS for a rescued hedgehog or Fabrikker Four Thon squirrel before they release into hotels in the wild. SUSTAINABLE PALM OIL Brussels Unger Fabrikker manufactures and BLOOD DONOR DAY products that are not persistent Rotterdam Thon Hotel EU and Bristol and can be registered with eco- (Thon Hotel Stephanie organise annual labelling systems. It is also a EU, Thon Hotel Bristol blood donor days in partnership member of, and certified under, Stephanie, Stanhope Hotel, with the Belgian Red Cross. The the Roundtable on Sustainable Thon Hotel Rotterdam) are donation of blood, plasma and Palm Oil (RSPO). The certified according to the platelets helps save human life. certification concerns the international environmental sustainable production of palm label Green Key, currently found FAIRTRADE oil, and the objective of Unger in over 40 countries. To achieve Thon Hotels in Brussels have Fabrikker has been to use only Green Key certification, the chosen to only buy coffee that is 100% sustainably produced hotels actively address a FAIRTRADE certified. Fairtrade’s palm oil. A new fatty alcohol number of criteria such as values, such as roasting coffee tank has been installed and put environmental management, beans using solar energy, use of into operation. The new tank information to guests, coffee as organic waste, and provides better management minimising their consumption of recycled packaging are some of and control of the supply chain energy, water and chemicals the benefits achieved. Thanks to for certified goods. Unger and reducing waste. Thon Hotel the partnership, Thon Hotels in Fabrikker has no palm oil EU and Stanhope Hotel have Brussels in 2017 protected products, but does use also been awarded the "Eco- 11,208 m² of rain forest. ingredients based on palm Dynamic Enterprise" label, a kernel oil. The goal of 100% local initiative for businesses in product delivery in accordance Brussels. with RSPO certified products has

been postponed until 2020 at GUEST REWARDS & DONATIONS the earliest. The reason for this Thon Hotels in Brussels have is the lack of access to the RSPO three partners specialising in certified goods on the market. guest loyalty: GoodPlanet, Red Cross and Birds Bay. These are based on guests staying at the hotel for more than one night choosing to hang a green card on the door indicating that they don't require room service. By doing so, they earn a EUR 5 ‘green’ gift voucher they can use in the bar or restaurant, or donate to one of the three partner charities. The money contributes either to an eco- friendly and healthy school, a hot meal for

17

Waste

The Olav Thon Group has a target of reducing the quantity of waste that the Group generates and increasing the level of waste sorting for recycling purposes.

WASTE VOLUME (TON) VOLUME for the average sorting ratio The amount of non- for the group. 35 000 hazardous waste has 30 000 decreased 1.61 percentage NEW SUPPLIER points in 2017, compared to Norsk Gjenvinning was the 25 000 2016. The amount of non- main supplier of refuse 20 000 hazardous waste has collection services in Norway 15 000 increased 6.55 percentage in 2017, but the contract 10 000 points in 2017, compared to was renegotiated in 5 000 2016. 2017/2018, resulting in - Retura being the largest 2015 2016 2017 SORTING RATIO supplier to the Olav Thon Average sorting ratio for the Group. Norsk Gjenvinning Hazardous Non-hazardous group is below target will continue servicing the (48.6%). locations the Group has in (60%). There are southern and western considerable differences Norway. It will be interesting SORTING RATIO 48,6 % between the various to see if the change of the divisions/companies, and we main supplier will affect 47,7 % can see that the hotel statistics in 2018. division, commercial properties, Sweden, LEFTOVERS 46,0 % BeNeLux, Follo District A large proportion of Heating and Conrad leftovers produced by the Langaard have managed to Olav Thon Group does not increase their sorting ratio. go to waste, as much of it is Only Follo District Heating, sent for energy recycling, Sweden and the shopping where it is mainly used to 2015 2016 2017 centre division have an fuel district heating. There is average of 50% or above, particular focus on recycling which means that several leftovers in Sweden, with have not yet met their combustible waste being targets. The group as a sorted for energy production Division 2015 2016 2017 whole progressed, with a at our shopping centres Shopping centre 54.5% 56.0% 55.5% total increase of 2.6 already. percentage points for sorting Hotel 46.0% 47.5% 49.1% ratio. The group is thus Commercial property 36.0% 33.0% 38.1% approaching 50%. The next HQ 54.0% 48.9% 43.2% step is towards the 60% goal Sweden 50.2% 44.9% 59.0% BeNeLux 35.9% 12.7% 40.2% Waste type 2015 2016 2017 Resthon 22.0% 23.9% 5.6% Unger Fabrikker 12.0% 10.0% 7.2% Hazardous 97,608 83,461 88,930 Follo District Heating 43.0% 50.0% 84.1% Conrad Langaard 17.0% 30.1% 37.6% Non-hazardous 30,522,124 29,398,515 28,924,589

Overall 47.7% 46.0% 48.6%

18

SORTING RATIO PER DIVISION 90,0 % 80,0 % 70,0 % 60,0 % 50,0 % 40,0 % 2015 30,0 % 2016 20,0 % 2017 10,0 % 0,0 %

MEASURES IN 2017 downstream solutions are much The main purpose of this - Further increased focus on better in the case of this dry measure is to reduce food waste monitoring, customer service waste as opposed to normal after the food has been cooked. and information. food waste. The end-product is - Monthly reports on costs and significantly better for The most important thing food sorting ratio to be sent to each incineration than wet waste, in suppliers can do is reduce waste location addition to the biogas potential in production, but if surplus - Focus on optimisation and being around three times as food is unavoidable, Too Good review of status report at the high as for wet food waste. To Go is a means of preventing local level waste. This is great for the - Information programme for TOO GOOD TO GO environment and the economy, waste management will be Thon Hotels entered into an both for us and for those who introduced at more shopping agreement with Too Good to Go use Too Good To Go. centres and hotels. for certain hotels in 2016. More - Optimisation of handling of hotels were added to the Thon hotels sold 3,014 portions food waste at hotels portfolio in 2017, bringing the of surplus food in 2017, saving total by the end of the year to the environment 6.03 tonnes of WAISTER seven Thon hotels in Norway. CO2. This equates to driving a In 2016 a pilot test of Waister This figure is expected to car about 24,000 kilometres. was conducted, which is a increase during 2018. drying machine for food waste. The machine was taken back to Too Good to Go is a solution the factory in Italy for designed to reduce food waste. calibration and further testing in It helps restaurants and other 2017. It returned to the Thon food outlets to sell their surplus Hotel Arena in the autumn as a food. In brief, the participating full production model. It should hotels are registered in Too be capable of reducing the Good To Go's app, users of volume of food waste by 75- which can order surplus food. 80%, which benefits the The food can usually be picked environment through reduced up just after the restaurant logistics and handling of the closes, and entails minimal extra waste. In addition to this, the work for our own employees.

19

KUTTMATSVINN 2020 are participating in the project, Thon Hotels signed a contract in along with many individual 2017 to participate in the hotels and restaurants. Thon KuttMatSvinn 2020 (cut food Hotels will contribute by taking waste) project. One third of all various steps to reduce our food foods produced are thrown waste. All food we scrap will be away. Food waste on a global weighed, allowing us to see scale equates to the world's whether we need to change the third largest country measured way we procure and in greenhouse gas emissions. KuttMatSvinn was initiated as a produce food in our hotels. response to contribute to the Thon Hotel chefs are UN's sustainability goal of encouraged to be creative in cutting food waste by 50% by terms of food reuse and we 2030. encourage guests to help reduce the amount of food The aim of the project is to cut waste on their plates. Too Good food waste in the catering to Go is used to sell surplus industry by 20% by 2020. food. Several other large hotel chains

20

Energy

Energy is one of two main focus areas in the Olav Thon Group within environment and green operation. Focus is on energy management and the reduction of energy consumption through better systems and more frequent reporting.

ENERGY CONSUMPTION CONSUMPTION 2017 (kWh) This is the second time energy expenditure for the Olav Thon 350 000 000 Consumption non- group is reported. The reporting renewable fuel categories have been taken 300 000 000 Consumption from the GRI reporting 250 000 000 renewable fuel framework. It is complicated to 200 000 000 report these figures for a group Consumption electricity with numerous subsidiary units, 150 000 000 and with different types of Comsumprion 100 000 000 district heating operation. There are therefore certain reservations regarding 50 000 000 consumption district cooling the reported figures. An 0 attempt was made to report a measurement figure based on Total energy expenditure has as no surprise because a large square metres, but it proved increased 9.85 percentage number of our technical impossible to compile square points from 2016 to 2017. We facilities are wholly or partly metre figures in this year's believe this to be due to an powered by electricity and the report. An attempt will be made increase in property mass and Group has a considerable to repeat this in the next report. better figures from the various amount of property. A share of plants. As more meters are the electricity consumption is 2016 (total 2017 (total added to the group's energy- used to power heat pumps, and Category kWh) kWh) tracking solution, there will be this energy thus produces more Consumption non- 6,345,806 4,419,537 an apparent increase in kWh thermal energy than is renewable fuels Consumption consumption overall. consumed to power the heat 8,415,809 14,011,987 renewable fuels Consumption mainly increased pumps. Nor is it surprising that Consumption 299,991,210 320,424,001 electricity within electricity, district the second largest consumption Consumption heating and renewable fuels, category is district heating. 56,632,171 63,349,314 district heating while consumption of non- Many of the Olav Thon Group's Consumption 17,081,956 19,949,559 district cooling renewable fuel went down. properties are connected to Consumption steam 0 0 Consumption of non-renewable district heating, and use this to a fuels specifically decreased 0.6 varying degree for heating. Sales of electricity 0 0 percentage points to 1.1% of Sales of district 11,121,000 10,287,000 total consumption. The sale of heating SALES 2017 (kWh) Sales of cooling 10,501,000 8,896,000 district heating and cooling decreased slightly. These figures 10 500 000 Sales of steam 0 0 are largely temperature- Total energy 366,844,951 402,971,398 dependent. Heating and cooling 10 000 000 consumption sales are deducted from our Sweden, the Netherlands and Belgium are excluded. 9 500 000 Franchise hotels and shared ownership properties and total consumption and external procurements are not included. Lagunen, therefore contribute to some of Sørlandssenteret, Oasen, Conrad Langaard and Unger 9 000 000 Fabrikker are also excluded. The figures are calculated on 2017’s increase in total the basis of central purchasing agreements and accounting consumption compared to information, and there are therefore several potential 8 500 000 sources of error. However, we choose to report these 2016. figures as we believe they provide a snapshot and a summary of the Olav Thon Group's energy consumption. 8 000 000 The statistics indicate that by far the largest source of energy Sales of district heating consumed by the Olav Thon Sales of district cooling Group is electricity. This comes

21

TECHNICAL SERVICES ENERGY MONITORING SWITCHING TO RENEWABLE DEPARTMENT We use the energy ENERGY The Technical Services management solution Energinet When the ban on fossil-fuel Department under the Property to identify and monitor most of heating as from 2020 was Department is responsible for the Group's energy adopted, the Olav Thon Group energy consumption by the Olav consumption. The was already well on the way to Thon Group. The department implementation process reveals switching to alternative sources. heads the Group’s work on ongoing improvement potential, Oil heating will be replaced by energy management in the with the objective of measuring renewable solutions. A natural hotel, commercial and shopping all energy consumption. The alternative is district heating centre divisions with the aim of solution also gives us high- where available. Although oil saving energy and protecting precision reporting on consumption was a small the environment. The main consumption trends. The Group proportion of the Group's total contributor to a better has signed an agreement with energy consumption, such environment is reduced CO2 EvoTek for energy monitoring of measures still contribute to a emissions from reduced energy all our properties using pleasant reduction in our CO2 consumption and switching to Energinet. Technical Services emissions. renewable energy. Energy personnel will gain new, savings are achieved in several valuable skills via the OBJECTIVE ways: agreement, which will allow The Technical Services them to correct deviations in Department has set several - Operational streamlining, energy consumption revealed. goals, but the highest of them i.e. simpler ways of all is to ensure that energy operating at our locations ENOVA management will be included in The Group has a constant array relevant decisions on energy - Operating support, i.e. of energy-saving projects of all consumption for the Olav Thon professional support for sizes supported by Enova. group. The reason for this goal is technical operations staff Support for more of our as simple as it is complicated. - Energy saving measures, i.e. shopping centres was granted in Decisions have to be taken physical measures aimed at 2017. Many of these projects every single day, some of which saving energy include shopping centres where can indirectly cause a problem - Maintenance procedures much of the support is targeted from an energy perspective, at the installation of low energy even if the intention is good. which also generate energy lighting (LED). Switching to LED The Technical Services savings is also a major environmental Department often sees things - Project support, i.e. support measure thanks to much lower from a different standpoint, and for project managers linked electricity consumption and involving them can open up to energy and technical reduced cooling needs, but also opportunities not otherwise facilities because LED lights are more apparent. - Service agreements environmentally-friendly than traditional lighting, and last focusing on energy savings substantially longer. - Requirement specifications derived from operating experience and standardisation - Energy centres, i.e. planning and consultancy on the best energy solutions - Power output planning, i.e. planning and preparation in response to notification of changes in tariffs

22

Social responsibility

Diversity and inclusion

Gender and age distribution

Within the Olav Thon Group, we strive for genuine equality and good diversity among our employees. We demonstrate this with reference to an even gender distribution, as well as commitments in several inclusive projects.

GENDER DISTRIBUTION IN THE female managers has increased Gender 2015 2016 2017 OLAV THON GROUP by 12% from 2016, against the Women 51% 52% 53% The Group has balanced gender 11% increase for men. distribution with few changes in Men 49% 48% 47% recent years. Gender AGE DISTRIBUTION IN THE OLAV distribution among managers THON GROUP also remains at a consistent The Olav Thon Group has good GENDER DISTRIBUTION level compared to previous age distribution, and work is AMONG MANAGERS AND MIDDLE MANAGEMENT years. ongoing to maintain the good 300 distribution. Half of all The proportion of female employees are in the 30-49 age 250 employees increased marginally range. This group is large and 200 in 2017 by one percentage has a wide range in terms of 150 point, bringing it to 53%. An experience and expertise. In increase of two percentage addition, there are many 100 points has been recorded since employees in the group below 50 2015, showing a positive the age of 30. A large - attitude towards equality in the proportion of these work in Women Men Olav Thon Group. Thon Hotels, which as a division attracts many young employees. Managers Gender distribution for The hotel division also has the Middle management managers has remained highest number of employees, unchanged since 2016. There meaning that Thon Hotels exerts was a total of 45% women in considerable influence on the AGE DISTRIBUTION management positions in 2017. Group statistics for gender and There are variations in gender age distribution. 19 % distribution when differentiating 31 % between manager and senior manager. The percentage of women in senior management is 40%. Amongst middle- management, it is 48%. This remains unchanged from 2016, 50 % but the number of female managers has increased from Under 30 30-49 50 and above 204 to 229 from 2016 to 2017. There is a similar increased for men from 250 to 277. This means that the number of

23

AGE DISTRIBUTION BY DIVISION

60%

50%

40%

30%

20%

10%

0% Under 30 30-49 50 och över Inte anges

Thon Hotels Köpcenter Huvudkontoret Thon Bygg Resthon Andre företag

An inclusive workplace

The Olav Thon Group continuously works to be an inclusive employer and create diverse jobs. This is reflected in the Group's recruitment process, but also through cooperation with various stakeholders who work to create inclusive workplaces.

COOPERATION WITH NAV A total of seven candidates were and inclusion project organised BJERKE offered practical experience by NHO. The aim of the project The Olav Thon Group, with Thon positions at three of our hotels is to get jobseekers into work at Hotels at the forefront, has had in Oslo in 2017. NHO entities. Ringer i Vannet is close collaboration with NAV based on local cooperation Bjerke since 2013. Under this PØBELPROSJEKTET between our hotels and local partnership several of the hotels The Group has partnered with work and inclusion entities. The in Oslo offer work practice the Pøbelprosjektet (an partnership bore fruit within its places for people who are employment project) for some first year and more is expected struggling to find a job. 46 time. This has not been a formal in 2018. people have been offered work cooperation, but in 2017 it was practice places since 2013. formalised through a group STELLA – THE RED CROSS agreement. WOMEN'S CENTRE IN OSLO The aim of the partnership is to In 2016 a trainee was engaged help provide access to ordinary Two interns were given the from Stella, which is a part of working life for people with an chance to try working at our the Oslo Red Cross's services for immigrant background. The hotels, and one at our head women and which aims to be a partnership is a win-win office. In addition, two diverse house focusing on situation for both parties – the employees of Thon Hotels and women as a resource. Hayat candidates receive workplace Thon Eiendom contributed with Mahmoud, who was training, language training and a presentations at the project’s interviewed for last year's network, and the hotels gain Employer's Day. report, stayed in his practice contact with talented people place into 2017. Even better is who can quickly move into RINGER I VANNET that after finishing his practical employment. Thon Hotels signed a group experience, Hayat has now been agreement in September 2017 given a permanent job in Thon with Ringer i Vannet, a labour Hotels Revenue division.

24

Employee development

TRAINING AND SKILLS SCHOLARSHIPS EMPLOYEE SURVEY DEVELOPMENT In partnership with several of The Group conducted an Establishing good training and our suppliers, we are able to employee survey in 2017. This is skills development is important offer financial support/grants to an important means of for the progress of the Group, our staff in Thon Hotels and detecting problems and and is therefore one of the HR Resthon, through the Training improving potential. Following Department’s most important Fund. The grants are for people the desire for a simplified survey areas of responsibility. who want to gain more with fewer questions, the 2017 Information on courses and knowledge within a specific field survey contained only 12 enrolment is published via the they are working on and are questions. These centred on job Group’s activity calendar on the enthusiastic about. This could satisfaction, reputation, working intranet. 47 different types of mean a course in restaurant conditions, job content and courses were held under the management, training as a collaboration. auspices of the group in areas bartender or sommelier, or a such as safety, food and craft certificate. The response rate for the 2017 beverages, HSE, management employee survey was 80%. The and sales during 2017. A total of APPRENTICES results of the survey show a 1,622 employees attended one It is becoming increasingly level of job satisfaction of 74 on or more courses. A total of six important for the hotel industry a scale of 1-100. According to gatherings of various types were to attract apprentices, both to the surveys for the European also held. support professionalism in the Employee Index, staff in industry and because the the Olav Thon Group have THE F&B SCHOOL authorities are putting in place a high level of job satisfaction, In 2016, for the first time, more and more stringent similar to employees in general courses were organized by the requirements toward the use of in Norway. The results showed a F&B school. This is an internal apprentices in connection with consistently high score for all knowledge school focusing on tenders. At Thon Hotels it is the the questions in the survey. The food and beverages for the hotels themselves who take the score was above the national employees of Thon Hotels and initiative to bring on board average and showed an increase Resthon. The school has several apprentices, with more focus in for 10 of the 12 questions. levels, and in 2016 the central administration. In 2017, elementary school was 48 of our hotels were approved launched. The elementary training providers, engaging 89 school is a three-day course that apprentices: 44 trainee chefs, 8 deals with the basics of being a trainee pastry chefs, 29 trainee good service associate. Every reception staff and 8 trainee day has a focus area – wine, waiters and waitresses. beer and spirits. A total of 77 employees of Thon Hotels and Resthon attended three sessions of the elementary school in 2017.

25

HSE

The aim of Health and Safety within the Olav Thon Group is to create safe and secure businesses with good working conditions and job satisfaction among employees and managers.

WHAT WE DO The HSE vision for the Group  News on health and PREVENTING SEXUAL is to maintain a “high-profile safety issues is published HARASSMENT focus on health, safety and on the intranet, with FAFO published its report the environment.” The printed information “Seksuell trakassering i different divisions within the sheets for anyone with arbeidslivet” (sexual Group are working in various no access to a computer. harassment in the ways and at all levels of the workplace” in March, in organisation to achieve our To get more information out which 21% of those vision: into the organisation, it has interviewed among hotel been decided to produce and restaurant staff stated  Group Senior four HR & HSE newsletters that they have been Management holds four each year. These will be sent subjected to sexual HSE meetings each year, out to line managers and harassment. LDO and the where the key guidelines also made available on the Norwegian Labour for HSE are drawn up. intranet. The intention is for Inspection Authority started  It has been decided that the newsletters to be work on a guide in 2017 for HSE should be an agenda displayed internally and so the hotel and catering item at internal made available to staff industries on how to prevent meetings. without a PC of their own. harassment. They wanted to  The HSE department ensure that their attends internal recommendations would meetings and talks about work in practice, and the HSE work. therefore wanted to link to  The HSE department businesses to try out their attends internal HSE ideas in the early stages. training courses and talks Thon Hotels and Resthon about HSE within the took part as pilot companies. Group.

HSE ORGANISATION OTG

WEC ATU AKAN

OTG Thon Conrad Unger Follo District AMFI Resthon Thon Hotels Time Park headquarter Eiendom Langaard Fabrikker Heating s

26

Organisation (incl. WEC)

Group Senior Management is the ultimate body for HSE matters. The central guidelines are then implemented via the Working Environment Committees (WEC) in the various divisions and units.

HSE WORKING ENVIRONMENT There is one central WEC for Group Senior Management COMMITTEE (WEC) hotels and restaurants. holds at least four HSE WEC is a decision-making There are also 12 local meetings each year when and advisory body that WECs, nine of which are key guidelines for HSE are works to implement working linked to Thon Hotels. Over drawn up. The Group HSE environment legislation in 90% of our employees are Director leads the health, the enterprise. The represented via a formal safety and environment Committee takes part in the WEC. work, and has established a planning of health, safety network of working and environment work in the environment committees at enterprise, and closely company level. The local unit follows developments in the leaders have HSE working environment. There responsibility for their unit, are a total of 13 WEC in the and have a duty to monitor Olav Thon Group. requirements in HSE legislation.

WEC ORGANISATION Other businesses: Unger Fabrikker HSE group Conrad Langaard Group Follo District Heating

WEC WEC WEC WEC Units without Hotell&Rest Headquarters Time Park Drift Surnadal office own WEC

Hotels with own WECs

27

Sick leave

One of the goals of HSE is to have lower sick leave than the sectors in which we operate.

The figures in the table SICK LEAVE INDUSTRY include self-reported and UNIT/DIVISION SECTOR 2017 FIGURES 2017 certified sick leave for own activities, as well as industry Headquarters¹ Business services 3.91% 6.50% figures (from Statistics Accommodation and Norway). Thon Hotels² catering activities 9.14% 5.50% Shopping centre When we publish sick leave division³ Retail 3.26% 5.70% figures for a given period, we AMFI Group Retail 2.89% 5.70% also have attendance for the Accommodation and same period. The attendance Resthon AS catering activities 2.60% 5.50% figure tells us how many Building and construction employees have been at Thon Bygg AS activities 5.50% 5.90% work, highlighting factors Electricity, water, sewage such as a sense of belonging, Follo District Heating and refuse 1.32% 5.40% loyalty, team spirit, motivation, pride in work, Unger Fabrikker Industry 5.40% 5.90% responsibility, use of personal skills, leadership and caring Conrad Langaard Retail 9.00% 5.70% for each other. 1. Includes Thon Hotels AS, Thon Hotels Salg AS, Thon Holding AS, Time Park AS, Time Park Services AS, Norsk Pantelotteri AS, Panto AS 2. Includes all operating companies belonging to Thon Hotels AS (incl. Sweden, Belgium and the Netherlands) + Vettre To increase attendance in the Hotelldrift AS, Linne Hotell AS, Hotel Bristol AS, Åsgårstrand ANS and Nordby Motell AB Olav Thon Group, sick leave is 3. Includes Olav Thon Eiendomsselskap ASA, Gardermoen Park AS, Bergen Storsenter AS, Lagunen AS, AMFI Konsern, Vestkanten AS, Sartor Senterforening AS, Østerås Kjøpesenter AS, Thon Ski AS, Töcksfors Shoppingcenter AB, always on the agenda of each Charlottenberg Shoppingcenter AB, Orvelin Shoppingcenter AB, Thon Fastigheter AB Konsern WEC. The occupational health service for Thon Hotels, Resthon and Thon Bygg AS follows up units whose attendance figure is too low, and helps to establish measures to increase this Additionally, local social activities that promote a better working environment are also organized.

28

Safety

The Olav Thon Group concentrates on safety for people and equipment. Digital attacks became more common in 2017.

EMERGENCY RESPONSE RISK ASSESSMENT COOPERATION WITH THE EVENTS We have seen no particular AUTHORITIES The Group experienced a change in terms of risk Our cooperation with the very serious event at the profile in recent years. This is police remains good. As in Sørlands shopping centre especially true for previous years, the police when a life was lost. A mainstream events such as used the group's shopping person stabbed two people burglary and vandalism, centres and hotels for at random, and one died where the number of various exercises during the from injuries sustained. Our incidents has actually year. These vary from emergency response dropped. However, there is training in "shooting in procedures worked very well an increase in risk and progress" to training of and the efforts of Security likelihood of digital crime. police dogs. helped prevent further injury. Cooperation with the SECURITY police worked as intended. The Group has a blanket agreement with NOKAS for THE DIGITAL THREAT security at our locations, an The digital threat continues arrangement that works to increase and we have had well. NOKAS primarily almost weekly scam provides security guards for attempts in Norway, Sweden shopping centres, and Belgium. We also emergency response, guard experience phishing services and alarm station attempts and copy or abuse services. We have also of our Facebook profiles. We entered into a long-term notice that our name is agreement with NOKAS for being abused towards our provision of CCTV guests and customers. This surveillance in the future. can take the form of fake The Group is also working on invoices and false e-mails for collecting all images from TV example. surveillance monitoring on a shared server with an external vendor. The process was begun in 2017, but will continue into 2018 before introduction of a shared server.

29

Supply chain

The Olav Thon Group purchases goods and services worth NOK 3-5 billion each year, and has major responsibility as a purchaser.

Responsible purchasing is an collaborate on an annual audit collective agreements. In increasingly important focus and evaluation of the Olav Thon addition, local managers are area. The Group strives to Group’s suppliers, with an responsible for conducting purchase responsibly through emphasis on their work on monitoring duty where relevant thorough procedures for ethics and social local agreements exist. supplier selection that includes responsibility. Every other year, assessing numerous aspects of ten of the Group’s suppliers are SUPPLY CHAIN MANAGEMENT corporate social responsibility evaluated, with controls and The procurement department relevant within the individual spot-checks the following year implemented a project in 2017 categories. We also have our in line with our monitoring duty. for better management of the own set of ethical standard The selection of suppliers is supply chain with regard to terms that impose strict based on an annual risk ethical procurement. The Group requirements on all suppliers assessment. The monitoring has a set of ethical standard and subcontractors, including obligation is implemented both terms, and the project was their focus on and continuous locally and centrally. For designed to identify and assess work with human rights, centrally agreed contracts, it is the need for closer monitoring working conditions, the mainly individuals at the of risks. A form was designed to environment and anti- headquarters who are be used for vendors who come corruption. responsible for monitoring duty. under those procurement Local managers are responsible categories that were considered ANNUAL RISK ASSESSMENT AND for monitoring various breaking to be most risky. EVALUATION points in everyday work and The Purchasing and HSE notifying headquarters if there departments in the Group are suspicions of breaches of

30

Sustainable food

The Group is focusing increasingly on sustainable food. Key words are quality, safety and environmentally-friendly food.

QUALITY the hotels, and in 2017 our own took second place and Thon The Olav Thon Group’s central breakfast plans were launched Hotel Rosenkrantz Oslo came purchasing department, on with recipes for products to be third in the prestigious Twinings behalf of our hotels and other found at Thon Hotels. competition. We are placing catering outlets, is constantly on considerable focus on the lookout for good ingredients FOOD AWARDS 2017 homemade specialties, local and in collaboration with our Thon Hotels won second and organic foods. We want suppliers. The Group focuses third prizes in the Twinings breakfast to be the best start to heavily on quality at all stages, competition on Norway's best the day at Thon Hotels. from purchasing to the counter. breakfast. Thon Hotel Lofoten Our Food & Beverage managers run regular training for cooks and encourage the maximum use of fresh unprocessed products.

FOOD SAFETY We are proud of our partnership with good Norwegian suppliers. We only buy food that can be traced back through the suppliers, so we know where the food comes from. We are concerned with good internal control, and have regular visits from the supervisory body, which contribute to a clean and safe environment for food preparation.

ORGANIC AND LOCAL FOOD Thon Hotels has a policy whereby all hotels should seek to increase the number of organic products every year. We assumed it was possible to offer a minimum of 15 organic products at each hotel as of 1 January 2017, when agreements on large volumes of organic products came into effect. Our hotels also focused on locally- produced food in the form of home-cooked products, several of which are produced locally at

31

General standard disclosures

Below is a general standard disclosure for the Olav Thon Group, in accordance with the guidelines of the Global Reporting Initiative (GRI).

STRATEGY AND ANALYSIS G4-1 Statement from the most senior decision-maker of the organisation Page 7

ORGANISATION PROFILE G4-3 Name of the organisation Page 3

G4-4 Major brands, products and/or services www.olavthon.no

G4-5 Location of the organisation’s headquarters www.olavthon.no

G4-6 Number of countries where the organisation operates www.olavthon.no G4-7 Nature of ownership and legal form Page 3

G4-8 Markets served Annual Report Olav Thon Gruppen

G4-9 Scale of the reporting organisation Annual Report Olav Thon Gruppen G4-10 Key information on employees Page 23 G4-11 Employees and principal agreements About 70 % G4-12 Information about the supply chain Page 30 G4-13 Significant changes in the reporting period Page 12 G4-14 Whether and how the organisation follows a “safety first” approach. Page 26 Externally developed principles or other initiatives used or supported G4-15 by the organisation Page 12 Membership of associations and national or international interest G4-16 organisations No such memberships

IDENTIFIED KEY ASPECTS AND DEFINITIONS Units included in the organisation’s consolidated accounts or

G4-17 equivalent documents www.olavthon.no Explanation of the process used to define the contents of the report G4-18 and definition of the aspects Page 12 G4-19 All aspects of GRI Page 34

G4-20 Definition of the aspects in the organisation Link to PDF

G4-21 Definition of the aspects outside the organisation Link to PDF G4-22 Impact of any new declarations Page 12 Significant changes from earlier reporting periods in the scope and G4-23 definition of the aspects Page 12

STAKEHOLDERS G4-24 Stakeholders Page 12 G4-25 Identification of stakeholders Page 12 G4-26 Involvement of stakeholders Page 12 G4-27 Main areas covered by stakeholders Page 12

32

REPORTING PARAMETERS G4-28 Reporting period for information provided Page 12 G4-29 Date of most recent previous report Page 12 G4-30 Reporting cycle Page 12 G4-31 Contact point for questions regarding the report or its content Page 38 Compliance option selected by the organisation, and GRI content G4-32 index for the chosen alternative Page 12 The organisation’s policy and current practice for seeking external G4-33 quality assurance of the report Report is not externally audited

GOVERNANCE, COMMITMENTS AND ENGAGEMENT G4-34 Governance structure of the organisation Page 3

ETHICS AND INTEGRITY

G4-56 The organisation’s ethical guidelines www.olavthon.no

33

GRI index

The Olav Thon Group’s Sustainability Report for 2016 has been drawn up in accordance with the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI). The Group’s reporting qualifies for Core level.

ECONOMY G4-EC1 Direct economic impacts Page 15

ENVIRONMENT G4-EN3 Energy consumption Page 21 G4-EN23 Waste summary Page 18 G4-EN29 Failure to comply with environmental statutes and regulations No instances

SOCIAL EFFECTS

LABOUR PRACTICES AND DECENT WORK G4-LA5 Working Environment Committee (WEC) Page 27 G4-LA9 Education, training and counselling Page 25 G4-LA12 Gender and age breakdown Page 23

HUMAN RIGHTS G4-HR3 Incidents of discrimination (legal cases) No instances G4-HR4 Monitoring of suppliers (organizational freedom) Page 30 G4-HR5 Follow-up of suppliers (abolish child labour) Page 30 G4-HR12 Human rights violations No instances

SOCIETY G4-SO3 Risk assessment Page 29 G4-SO4 Anti-corruption Pages 26 and 30 G4-SO5 Instances of corruption No instances

PRODUCT LIABILITY G4-PR8 Instances of privacy violations No instances

34

The UN Global Compact

The Global Compact is a UN initiative for collaboration with businesses on sustainable development. The letter below was sent to the then Secretary-General of the UN, H.E. Ban Ki-moon, confirming that in supporting the Global Compact, the Olav Thon Group undertakes to integrate the ten basic principles into its strategy and day-to- day operations. The next letter confirms that the Olav Thon Group continues to support the UN Global Compact, and that the Group’s work will be summarised in an annual report (Communication on Progress).

35

36

Global Compact Index

PRINCIPLES OF THE UN GLOBAL RELEVANT GRI INDICATORS COMPACT IN THE REPORT

HUMAN RIGHTS Businesses should support and respect the protection of Principle 1 internationally proclaimed human rights HR3, HR4, HR5, HR12 Principle 2 Make sure that they are not complicit in human rights abuses HR3, HR4, HR5, HR12

STANDARDS FOR LABOUR Businesses should uphold the freedom of association and the Principle 3 effective recognition of the right to collective bargaining HR4 Principle 4 The elimination of all forms of forced and compulsory labour HR4 Principle 5 The effective abolition of child labour HR5 The elimination of discrimination in respect of employment Principle 6 and occupation HR3, LA5, LA9, LA12

ENVIRONMENT Businesses should support a precautionary approach to Principle 7 environmental challenges EN3, EN23, EN29 Undertake initiatives to promote greater environmental Principle 8 responsibility EN3, EN23 Encourage the development and diffusion of environmentally friendly Principle 9 technologies EN3, EN23

FIGHTING CORRUPTION Businesses should work against corruption in all its forms, including G4-HR1 extortion and bribery SO3, SO4, SO5

37

THE OLAV THON GROUP

Stenersgata 2A Post Box 489 Sentrum | 0105 Oslo Phone +47 23 08 00 00 [email protected] | olavthon.no

38