Sustainability Report 2019 Annual Report 2019 Strax

STRAX AB STRAX ANNUAL REPORT 2017 REPORT ANNUAL

SUSTAINABILITY REPORT 2019 ANNUAL REPORT 2019 STRAX

2 SUSTAINABILITY REPORT

April 28, 2020

To our stakeholders: I am pleased to confirm that STRAX AB reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption. In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations.

We also commit to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Gudmundur Palmason CEO ANNUAL REPORT 2019 STRAX

SUSTAINABILITY REPORT

STRAX´s ambition is to conduct business in a sustainable manner in all areas possible. Sustainability is considered in profitability and risk analyses, business and product development, investment decisions and in our communication with stakeholders. Doing so will enable us to offer innovative products more competitively, while taking responsibility for the impact our business has on the world around us.

Not only do we work to ensure high standards have gained a more well-defined ownership of corporate responsibility internally, we also and have become more established in day- engage our external partners to collaboratively to-day operations, which has improved the manage social and environmental risks and conditions for successful sustainability work. opportunities. A clear vision and shared values form the basis for our behavior and actions at Our Sustainability Report STRAX. Read more about our sustainability STRAX´s Sustainability Report presents an management on page 60-61 in the annual overview of what we are trying to achieve report. with our sustainable business strategy, how the sustainability work is conducted and our The past year progress so far. The report´s content reflects In 2019, we identified and implemented several the sustainability aspects in which our busi- initiatives to reduce the Group’s environmental ness has the greatest impact on people and 4 impact. Among other things, we have worked the environment. The sustainability report on; reducing the use of plastics in packaging, covers STRAX AB (publ), co. no. 556539-7709 the coordination and optimization of transpor- and all subsidiary companies in the Group tation of goods and the launch of environ- and has been prepared in accordance with mentally friendly mobile phone cases that are the regulations in the Annual Accounts Act (6 either biodegradable or compostable. We have chap. 10 §). As signatories of the 10 UN Global also increased the employees’ knowledge on Compact Principles within human rights, labor, how we as an organization work with environ- environment and anti-corruption, the sustaina- mental issues and discussed how the employ- bility report also comprises STRAX´s Commu- ees can reduce their negative environmental nication on Progress. impact in everyday life.

During the year we formed STRAX Plus, a sustainability steering group with representatives from various functions within the organization. Through STRAX Plus, sustainability issues STRAX ANNUAL REPORT 2019

Our Values

Honesty Respect Frugality Teamwork We aim always to show We always show the We use resources wisely; We realize and 5 respect by adhering to utmost respect for our effective planning and understand that as a facts, by fulfilling co-workers, the communication together team we’re stronger promises and admitting company, our with optimized processes than as individuals, so failures. We nurture competitors, our minimize costs across all we work together to honest communication customers and our areas of the business. achieve our common throughout the partners. goals. company. ANNUAL REPORT 2019 STRAX

IMPACT IN OUR BUSINESS MODEL ees' health and safety, risks of corruption and STRAX is a market-leading global company to ensure a good work environment are other specializing in mobile accessories with sales areas that are important to STRAX. Sustaina- in more than 20 countries. Sales are made bility aspects are considered throughout the through all key channels ranging from telecom value chain, which covers everything from pro- operators, wholesale and consumer electronic duct development and procurement to pro- stores to lifestyle retailers or directly to consu- duction, logistics and professional marketing mers online. STRAX's brand portfolio includes support at the point of sales. More information both own brands and licensed brands that about STRAX´s business model is to be found make up 61 and 14 percent of sales, respective- on page 10-12 in the annual report. ly. STRAX also represents over 40 distributed brands, which account for 25 percent of sales. SUSTAINABLE SUPPLIER NETWORKS In addition to products, STRAX also offers As a global business with an extensive supp- value-added services and customer-specific lier base, it is challenging to develop a full solutions. understanding of our suppliers’ sustainability performance even with strict supply chain STRAX does not own any factories and all pro- processes in place. We place great emphasis duction is sourced from third party suppliers. on establishing good relationships with our 99 per cent of the production is based South suppliers and increased control and responsi- East Asia. The concentration of production in bility throughout the supply chain. one geographic area when sales are global results in environmental challenges due to Responsibility in the supply chain transportation. The development and produc- STRAX has adopted the Responsible Business tion of own products add further requirements Alliance (RBA)’s Code of Conduct as a gui- on the control of materials used in the pro- deline for standardizing the requirements and ducts and on third party factories’ adherence evaluation of suppliers. The code contains a set to sound business practices. of social, environmental and ethical standards for the electronics industry. We have also With over 150 suppliers worldwide, continual implemented STRAX´s Code of Conduct for improvements together with our partners Suppliers to ensure that all suppliers know what regarding sustainability issues are not only we expect of them. We expect all suppliers to crucial to ensure the rights and conditions of continually monitor their compliance with the the workers that make our products, but also standards set in the STRAX Supplier Code of to minimize the negative impact that the ma- Conduct. Should any breach of the regulations nufacturing have on the environment. Employ- be detected, the supplier must immediately 6

Material sustainability aspects "A value chain perspective makes it easier for STRAX to manage its sustainability impact and create in STRAX´s value chain the highest possible value."

Product Procurement Production Logistics Value-added development The procurement Throughout the The logistics solutions and In product deve- process entails production process, include challenges services lopment, close coo- challenges related the environmental related to carbon It is important that peration between to corruption and impact of the pro- emissions from STRAX’s value-ad- the departments is briberies. The focus duction techniques transportation of ded solutions and essential to ensure is on ensuring that such as use of products as well as services align with product safety, STRAX require- chemicals, carbon waste from the pac- the company’s core product quality and ments are met and emissions and was- kaging used in the values and contri- product durability. to develop the te, product quality logistics process bute to the overall The focus is also on suppliers' ability to assurance as well and energy usage quality assurance. the use of chemi- improve the sus- as human rights, in warehouses. cals and materials, tainability aspects. fair labor practices packaging solutions STRAX requires and health and and recyclability. that all suppliers safety issues are comply with important aspects STRAX's and RBA's to consider. Code of Conduct. STRAX ANNUAL REPORT 2019

notify STRAX, so that we can ensure that effec- Business ethics tive and timely corrective actions are taken. Corruption and unethical behavior can occur both within the organization and indirectly Monitoring and improving suppliers through suppliers. STRAX’s procurement CSR performance process mainly takes place in South East Asia, At STRAX, we apply a self-assessment system, a market that offers good business opportuni- that over time corrects behavior and creates ties, but that is also exposed to material risks a sound culture of improvement and progress relating to areas such as corruption, bribery for the factories. Initial audits are conducted and fraud. at all new major suppliers. The self-assessment system is then monitored by regular visits STRAX’s Code of Conduct and Anti-Bribery to the factories and checked by audits. We Policy describe our commitment to maintain a have also implemented third party validation high standard of ethics when we do business of strategic suppliers’ CSR-performance to and our expectations on each employee and cross reference our internal controls. In 2019 a partner. STRAX has a zero-tolerance policy total of 2 process audits (9) were conducted. on corruption and fully support the require- Major suppliers account for over 90 percent ments of the UK Bribery Act as well as similar of Group purchases. In 2020 focus will be on legislation in all regions where we conduct conducting qms audits (quality management business. We have implemented policies and system). procedures to ensure we are prepared, to the extent possible, to prevent and deter corrupt STRAX’s intention is to support safe and fair practices across our business relationships. All working conditions and responsible mana- personnel shall be aware of their responsibili- gement of environmental and social issues in ties in respect to anti-corruption and bribery every part of the supply chain. In order to do and shall be empowered to act as a line of so, we support the establishment of a Corpo- defense in the identification of any corrupt rate Social Responsibility (CSR) management practices. STRAX’s guidelines on gifts and structure and incorporate CSR-performance hospitality serves as a support structure for as a part of our supplier evaluation criteria to employees to handle such corrupt activities. further incentivize their participation in these STRAX has set as a target that all employees activities. should be educated on the topics of bribery and corruption by 2020. 100 percent (100) Engaging directly with suppliers is one of the of all employees in vendor-facing positions most effective ways to improve performance had completed their education on the topic of in the supply chain. Ways to do this include bribery and corruption at year-end 2019, which using our monitoring processes, follow-up corresponds to 30 percent (24) of the Group´s 7 discussions and briefings with the suppliers’ total employees. managers and executives. If any evidence of non-compliance is identified, STRAX work Alongside the Supplier Code of Conduct, together with the supplier to develop correc- STRAX has an Anti-Bribery Contract with tive actions and improve the process used to factories and other contractors in Asia with manage material risks. heavy penalties for any bribery or inappropri- STRAX has developed a program that en- ate influence on STRAX employees or repre- courages the suppliers to incremental impro- sentatives. STRAX has amended employee vements through the provision of best practice contracts for all Asian employees, giving CSR-improvement recommendations. We aim STRAX the right to terminate employment to have all suppliers in areas with high CSR-re- immediately, and without notice period, should lated risks, currently South East Asia, partici- any briberies have been accepted. pating in the supplier development program. STRAX aim for all suppliers to comply with the At year-end 2019, 100 percent (100) of all requirements regarding anti-corruption and suppliers in high-risk areas had participated in bribery with no serious deviations. In 2019, 100 the development program. percent (100) of suppliers complied with the requirements without serious deviations. ANNUAL REPORT 2019 STRAX

PRODUCT RESPONSIBILITY

STRAX is dedicated to providing customers protocols for product recalls in place should with products that exceed their expectations the need arise. regarding quality and safety as well as the environmental impact caused by producing and Materials and chemicals using them. Therefore continuous progress In order to ensure that none of STRAX’s is a crucial part of the product development products contain any harmful, restricted or process. STRAX continuously work on pro- unnecessary chemicals, we adhere to strict viding information that supports customers legal compliance across a range of legislative and consumers to make sustainable product environments around the world, including choices. but are not limited to, the EU RoHS (guidelines to restrict the use of harmful substances Quality management system in electric/electronic products) and the EU STRAX develops products in strict compli- REACH (European Regulation on Registration, ance with internationally recognized safety Evaluation, Authorization and Restriction of and legal requirements. Regulations setting Chemicals), and we have a multi-layered app- mandatory safety and reliability standards for roach to ensure that our suppliers do as well. products on certain geographical markets are defined during the product development sta- Conflict minerals and cobalt management ges. Among other things, STRAX´s products STRAX supports the efforts of human rights are labeled with CE marking, which means organizations to end violence and atrocities that they meet the EU's basic health, environ- in Central Africa. It has been widely reported mental and safety requirements. Another that the major driver of this violence is the na- example is FCC labeling, which means that the tural abundance of the minerals tin, tungsten, electromagnetic interference caused by the tantalum and gold, now referred to as conflict product is below the limits approved by the US minerals. In 2016, Amnesty International also independent organization Federal Communi- shed light on human rights abuses, including cations Commission. child labor, linked to cobalt mining in the De- STRAX has assembled a Product Safety and mocratic Republic of Congo. Compliance Team which continually monitors product safety issues within the supply chain The issues of conflict minerals are important and reports directly to the Management Team. to STRAX and we undertake due diligence to Together they have developed robust proce- ensure that no conflict minerals are used in our 8 dures to detect and prevent non-compliant products. STRAX requires that all new supp- products from shipping to customers. The liers confirm that materials we purchase do not foundation of these procedures is based upon contain conflict minerals and the suppliers are a quality management system and supplier notified periodically to update this assurance. partnership mechanisms that ensure adheren- In addition, we require of our existing suppliers ce to strict standards throughout the supply who use any of the four metals listed above to chain. ensure that they are using approved smelters, STRAX ensures the traceability along all as informed by the Conflict Free Sourcing instances leading up to the design approval Initiative. Suppliers shall exercise due diligence process, which enables us to track products regarding the source and chain of custody of and components to individual suppliers, conflict minerals and make their due diligence ensuring supplier accountability. This system measures available to STRAX upon request. also enables us to trace components that fail to achieve our requirements, and therefor may STRAX Cobalt and Conflict Minerals Decla- affect safety, back to their source. Following ration also ensure that all suppliers recognize this, root cause analyses takes place and solu- and align their supply chain policies with the tions are implemented. Responsible Cobalt Initiative (RCI). STRAX also includes cobalt in the requirements of For product safety certifications, STRAX the supplier evaluation. At year-end 2019, 100 engage external experts to identify continual per cent (100) of all suppliers had completed improvement areas and corrective actions. a self-assessment, ensuring all procurements, We also cross-check the final results with our purchases and use of cobalt adheres to the internal testing facilities and have established RCI´s recommendations. STRAX ANNUAL REPORT 2019

OUR PEOPLE

STRAX maintains a strong commitment to Diversity and equality high standards in order to deliver a fair, res- At STRAX we are committed to ensure the pectful and safe workplace where employees fair and equal treatment of everyone in our can fulfill their potential. The ability to attract, organization. Workplace diversity contributes develop and retain competent and committed to the variation and exchange of ideas, which employees at all levels is key to continued is critical to STRAX’s innovation process successful growth. and contributes to a healthy management environment. STRAX has a zero-tolerance Living our values policy for all forms of discrimination and At the heart of our behavior and actions are harassment. We are committed to provide an four core values: Honesty, Respect, Frugality inclusive and welcoming environment for all and Teamwork. We want our people to always members of our employees, clients, volunte- show respect by adhering to facts, fulfilling ers, subcontractors, vendors, and clients. promises and admitting to failures. We also want them to show the outmost respect STRAX regard gender equality as an essen- for co-workers, the company, competitors, tial part of human resource management. customers and partners. Resources shall be While recognizing that differences between used wisely across all areas of the business, people must be acknowledged and reasona- with effective planning, communication and bly accommodated, employment practices optimized processes that reduce costs. We must ensure that differences do not lead to are stronger as a team than as individuals, discrimination in the workplace. The gen- so we shall all work together to achieve our der division in the Group is 44 percent (45) common goals. women and 56 percent (55) men. 32 percent (34) of managers were women during the Health and safety management year. STRAX aim to continuously improve Ensuring safety awareness, positive attitu- the proportion of women in management des and continual improvement in safety positions. The target is that both men and performance requires the commitment and women will represent at least 40 percent of active involvement of all partners, managers, management positions by year 2020. employees and regular contractors at all levels.

In order to make analyzes and plans of action, 9 STRAX is measuring employee satisfaction by using a Employee Satisfaction Index (ESI). The target is set to achieve an ESI-score of at least 85 percent by 2020. The latest survey on employee satisfaction was conducted in 2017. The survey was addressed in Asia with an overall ESI score of 78 percent. Due to organizational changes no survey was conducted in 2018 or 2019. STRAX is planning to survey employee satisfaction for the entire Group in 2020.

STRAX works actively and preemptively to improve the company’s employee attendance through initiatives such as preventive health- care, which STRAX strives to offer to all the Group’s employees. ANNUAL REPORT 2019 STRAX

ENVIRONMENTAL RESPONSIBILITY

STRAX work systematically to prevent, mini- the year, we have reviewed and adjusted pac- mize and remedy the adverse environmental kaging design and the use of material impacts of our business activities. As a part of together with our suppliers, in order to op- STRAX’s continuous improvement process for timize transportation of goods. STRAX also environmental management, we are further operate a bonded warehouse in Asia, which analyzing our environmental impact to better has enabled improved coordination of trans- understand how we can play a larger and portations as well as provided cost-effective more constructive role in contributing to a solutions. healthier global environment. At year-end 2019, 85 percent (99) of transports Reducing our climate footprint were by air. The target is that transportation At STRAX, we recognize the impacts of by air should not exceed 70 percent by year global warming and work to be part of the 2020. We recognize that we are up for a chal- solution. lenge and that we still have a long way to go, but at the same time, we are confident that We are only in the beginning of our work. As our ongoing efforts to reduce our CO2-foot- a first step we have identified five focus areas: print will yield results in the future. • Reduce emissions caused by transportation of goods STRAX is also committed to reduce emissions • Avoid emissions caused by business from business travel by prioritizing alternative travels technology options such as video conference • Engage suppliers to reduce their manu- and virtual offices. STRAX travel policy -ex facturing energy usage and CO2- presses the company's guidelines and princip- emissions les that must be considered by all employees • Reduce the environmental impact of during business travels. our products at the research and design stage Working for a circular economy • The use of more environmentally friendly In the context of the rapidly decreasing and recyclable materials in packaging amount of global resources, STRAX strives to understand and optimize our role in contribu- Once we get a bit further in our work, we will ting to a circular economy. start measuring our baseline carbon footprint 10 and setting short and long-term reduction STRAX is continually investigating how we targets. can better use the principles of a circular economy to deliver value to our customers. Reduce transport emissions For STRAX, this means making high qua- With a global network of suppliers and distri- lity products that last longer, are made of butors, a significant part of STRAX’s value environmentally friendly materials, and can chain’s negative impact on the environment be easily recycled. In this way, we hope to stems from the transportation of goods in not only benefit the environment, but also the form of carbon emissions. Reducing our achieve cost benefits for us at STRAX and climate footprint caused by transportation to offer our customers an environmentally of goods is therefore a priority. In this work, friendly product design and better end-of-life optimization of transportation and reduced management. proportion of transport by air is central. Our current approach includes the use of To ensure efficient transports, STRAX has a biodegradable plastics in products, the use of screening process with requirements regarding recycled material in packaging and to ensure transportation optimization and efficiency recyclability of products in line with WEEE when choosing what carriers to use. During regulations. By replacing the plastics used STRAX ANNUAL REPORT 2019

in packaging with biodegradable plastics or paper and creating new design solutions containing less plastics, the packaging beco- mes more sustainable and has less negative impact on the environment.

In 2019, our work continued by identifying and implementing several initiatives to reduce plastics used in packaging and transporta- tions. We also launched new environmentally friendly mobile phone cases that are either biodegradable or compostable.

Engaging our suppliers In order to reduce the CO2-emissions throughout our value chain, it is crucial to engage our suppliers and to work collaboratively.

STRAX seeks to reduce the energy consumption in manufacturing by requiring that supplier use energy efficient devices which comply with extended internationally efficiency standards. In order for STRAX to measure and follow up on CO2 emissions, the suppliers are required to provide information about energy consumption, production technolo- gies and logistics. For information involving energy consumption, the suppliers´ must be based on the ETSI-TS standard, while for CO2-effects, they must be based on internationally recognized standards, in particular the standard of the GHG Protocol and recommendations of the ITU-T SG5. Regarding 11 assembly, suppliers shall provide STRAX with all necessary information about the materials from which the items delivered are assembled, as well as about the packaging. ANNUAL REPORT 2019 STRAX

URBANISTA AGAINST VIOLENCE AND MENTAL ILLNESS

STRAX’s wholly owned subsidary Urbanista DETROIT NON-VIOLENCE is a lifestyle brand focused on audio products. “Brains no bullets” is illustrated The products are inspired by cities and free- in glossy black along with icon dom, with urban lifestyles in mind and are of the famous knotted gun sculpture available online as well as in about 20,000 that serves as this generations stores spread over 80 countries. most iconic representation of peace. Urbanista x Non Violence Project In 2019, Urbanista initiated several significant collaborations, such as the launch of special edition headphones for the Non-Violence Project an organization that takes a stand for peace both locally and globally. The goal of the project is to show the next generation that conflicts can be resolved without violence and that we can all make a difference. For each sold pair of the special edition headphones, Urbanista donates a portion of the proceeds to the Non-Violence Project global education work for peace.

Tim Bergling Foundation Urbanista was also one of the main sponsors of the charity concert organized by the "Tim Bergling Foundation" in memory of the artist Avicii on December 5, 2019. The purpose of the sold-out concert was to highlight mental health issues and suicidal tendencies, with the 12 participation of artists such as David Guetta, Rita Ora and Kygo. In addition to sponsoring the charity concert, Urbanista contributed to the foundation by donating a portion of Urbanista´s sales.

The foundation was created by Klas and Anki Bergling and their family after the death of their son Tim Bergling, also known as Avi- cii. The foundation is devoted to recognize suicide as a global health emergency and re- moving the stigma attached to the discussion of mental health issues. STRAX ANNUAL REPORT 2019

SUSTAINABILITY TARGETS

STRAX is working toward a number of sustainability targets focused on monitoring the areas where our operations have the greatest impact on people and the environment.

Sustainability target Results of 2018

Supply chain 100 % of suppliers are to comply with 100 % (100) of suppliers complied the requirements of STRAX’s Supplier with the requirements without serious Code of Conduct regarding anti-cor- deviations in 2019. ruption and bribery with no serious deviations

All suppliers in high-risk areas (cur- At year-end 2019, 100 % (100) of rently South East Asia) are to partici- all suppliers in high-risk areas had pate in STRAX’s supplier development participated in STRAX´s supplier program. development program.

Business Ethics 100 % of all employees should be 30% (24) of all employees had been educated on the topics of bribery and educated on the topic of bribery and corruption by year 2020. corruption at year-end 2019, with 100% (100) of employees in vendor- facing positions.

Social Conditions The target is that both men and At year-end 2019, the gender division women will represent at least 40 % of in the Group was 44% (45) women management positions by year 2020. and 56% (55) men. 32% (34) of managers were women during 2019.

The Group’s employee satisfaction STRAX conducted a survey on score (ESI) should be at least 85 % by employee satisfaction in Asia during year 2020. 2017 with an overall ESI score of 78 per cent. Due to organizational changes no survey was conducted in 2018 or 2019. STRAX is planning to survey 13 employee satisfaction for the entire Group in 2020.

Carbon Management Transportation by air should not 85 % (99) of transports were by air exceed 70 % by year 2020. in 2019.

Product responsibility All suppliers shall recognize and align At year-end 2019, 100 % (100) of all their supply chain policies with the suppliers had completed a self-as- Responsible Cobalt Initiative (RCI). sessment ensuring any sourcing, purchasing or use of Cobalt adheres to the RCI. All products shall meet internationally recognized safety and legal require- In 2019 100 % (100) of STRAX ments for the markets they are sold in. products complied with all local and international regulatory safety standards. ANNUAL REPORT 2019 STRAX

SUSTAINABILITY GOVERNANCE

At STRAX we are committed to ensure that everything we do, and all decisions that we make, are governed by the principles of ethics, integrity and respect for people and care for the environment. We take our responsibility seriously whether in areas of corporate governance, employee responsibilities, consumer protection, partnership management, or environmental standards. In doing so we hope to earn the trust and respect of our customers and society in the process. Our vision, values, and Code of Conduct reflect our entre- preneurial, social and environmental responsibility.

Organization STRAX´s framework for sustainability is Sustainability and ethics are emphasized based on widely recognized international throughout STRAX’s corporate governan- standards including the Universal Declaration ce, starting with the Board of Directors and of Human Rights, ILO International Labor the Group Management Team. The Board of Standards, the Rio Declaration on Environ- Directors has the ultimate responsibility for ment and Development, the UN’s Convention the Group’s sustainability work. The Group Against Corruption and OECD Guidelines for Management Team has the responsibility of Multinational Enterprises. Since 2017, STRAX monitoring of STRAX’s efforts, while opera- is a signatory to the UN Global Compact and tional responsibility and implementation falls has aligned the sustainability work with its ten under the team STRAX Plus who coordinate principles concerning human rights, labor iss- the work. The Group Management Team is ues, environment and anti-corruption. STRAX also responsible for the establishing and is also in full compliance with the Responsible implementation of STRAX’s Code of Conduct, Business Alliance (RBA)’s Code of Conduct guidelines and policies. All team heads are which includes a set of social, environmen- obligated to ensure that their coworkers know tal and ethical standards for the electronics the Code of Conduct and perform their work industry. in line with it. STRAX´s quality management system and Policies and guidelines for STRAX’s sustaina- supplier partnership mechanism ensure adhe- 14 bility management, as well as internal stan- rence to our strict standards throughout the dards and processes, are regularly revised to supply chain. The entire business, including ensure their conformance with international the STRAX´s logistics center, is ISO-9001 standards and customer requirements. certified. The management systems ensure that the operations are conducted in accor- Principles and practices dance with established procedures and act as STRAX is committed to comply with the laws support for employees in their daily work. and regulations in each country in which we operate. The products are designed and The Code of Conduct leads the way tested to meet the appropriate standards for STRAX´s Code of Conduct is the Group´s product safety, electromagnetic and wireless overarching sustainability policy and declares connectivity, ergonomics and other regulato- what is expected from every person working ry compulsory requirements, when used for for and with the organization. It also underli- their intended purposes. In most cases, legal nes our responsibilities to customers, collea- compliances act as a starting point only, our gues, suppliers and other partners. own policies tend to be more strict than legal compliance requirements. STRAX ANNUAL REPORT 2019

The STRAX Code of Conduct is based on the company’s core values and the ten principals Group-wide sustainability provided by the UN Global Compact as well policy documents as the other international conventions STRAX complies with. • STRAX Code of Conduct The STRAX Code of Conduct obliges all • STRAX Supplier Code of employees to uphold high ethical standards Conduct in their conduct towards each other and when • STRAX Anti-Bribery Policy representing the company. It also aims to ensure a safe working environment, an equal • STRAX Cobalt and Conflict and fair treatment of all employees, a strict Minerals Declaration quality management and focus on the end- • STRAX Travel Policy user in product development, as well as to prevent, minimize and remedy the business´ adverse environmental impacts. The Code of Conduct is complemented by STRAX´s Anti-Bribery Policy, Code of Conduct for Suppliers, rules of corporate governance and other relevant policies. 15 Reporting concerns Employees and partners are encouraged and expected to report incidents of non-compliance with the STRAX Code of Conduct. Reported information will only be processed to the extent reasonably necessary for the investigation. There will be no retaliation or other negative consequences for individual reporting on such incidents. The STRAX Code of Conduct have instructions for employees on how to raise their concerns within the organization. In 2019, no reported deviations from the STRAX Code of Conduct were received. ANNUAL REPORT 2019 STRAX

SUSTAINABILITY RISKS

Stakeholders have ever increasing demands on companies’ accountability. The active work with issues concerning the environment, social conditions, human rights and corruption is an integrated part of STRAX’s operations. Should STRAX´s efforts in these areas prove insufficient, sales and market shares could be negatively affected.

Risk Risk management

Risks in the supply chain

Some of the more significant sustainability risks and oppor- STRAX expect all suppliers to operate ethically correct and tunities are found in STRAX’s supply chain. The risks include, in accordance with internationally recognized standards on but are not limited to, corruption and briberies, violence of human rights, labor rights, environment, anti-corruption and human rights and unfair labor practices, health and safety, bribery. Principles and values are communicated through and environmental damage. Should STRAX’s suppliers break STRAX’s Supplier Code of Conduct, which applies to all international rules and legislation, or if they should deviate STRAX’s suppliers and subcontractors. STRAX support from established standards, STRAX’s would risk facing eco- the establishment of a CSR management structure and nomic damages, negative publicity and legal ramifications. incorporate CSR performance as a part of the supplier evaluation criteria to further incentivize their participation in CSR activities.

Product-related risks

STRAX’s ability to offer products that meet stakeholders’ STRAX complies with the EU directives RoHS and WEE as expectations regarding quality, safety, use of materials and well as the REACH Regulation, which states requirements chemicals, as well as comply with all regional and coun- for companies to take responsibility for products and their try-level statutory standards is crucial to maintain customer impact on society. STRAX strives to reduce the products’ trust. If STRAX fail to meet customer expectations this could environmental footprint through the use of recyclable entail a risk of reduced sales and a negative impact on the packaging materials and by ensuring the recyclability of the STRAX brand. products when reasonably possible. To reduce the carbon emissions caused by transportation of goods, STRAX is working to optimize the transports and prioritize transports by sea or train over those by air. Product safety issues within the supply chain are continually monitored and STRAX has developed robust procedures to deter, detect, and prevent non-compliant products from shipping to customers. STRAX also undertake due diligence to ensure that conflict minerals and cobalt are not used in our products. 16 Risks related to business ethics

With employees in 12 countries and over 150 suppliers STRAX has a zero-tolerance policy on corruption. All around the world, STRAX is, to a varying degree, exposed to STRAX’s employees are educated on the company’s Code of the risk of corruption. Unethical behavior would entail legal Conduct and made aware of their responsibilities in respect ramifications and harm the company’s reputation. to anti-corruption and bribery. STRAX’s guidelines on gifts and hospitality serves as a support structure.

Risks related to social conditions

Skilled and engaged employees are instrumental to the STRAX maintains a strong commitment to high standards in company’s ability to develop according to the long-term order to deliver a fair, diverse, respectful and safe workplace strategic plan and to reach the established targets. If STRAX for all employees. STRAX’s Code of Conduct establishes the were to fail in providing an attractive working environment organization’s stance on these topics. All STRAX’s employ- it would have a direct negative impact on the company’s ees are educated on the company’s Code of Conduct and ability to attract and retain skilled employees. informed of their personal responsibility to ensure that they act according to it. ANNUAL REPORT 2019 STRAX

AUDITOR’S REPORT ON THE STATUTORY SUSTAINABILITY REPORT

To the general meeting of the shareholders in accordance with International Standards in Strax AB (publ), corporate identity on Auditing and generally accepted auditing number 556539-7709 standards in Sweden. We believe that the examination has provided us with sufficient Engagement and responsibility basis for our opinion. It is the board of directors who is responsible for the statutory sustainability report for the Opinions year 2019 on pages 50-62 and that it has A statutory sustainability report has been been prepared in accordance with prepared. Årsredovisningslagen. Stockholm, 28 April 2020 The scope of the audit PricewaterhouseCoopers AB Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the Niklas Renström statutory sustainability report. This means Authorized Public Accountant that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted

17 STRAX AB (PUBL) CORP.ID NO: 556539-7709 MÄSTER SAMUELSGATAN 10 TEL: +46 (0) 8-545 01 750 111 44 STOCKHOLM EMAIL: [email protected] SWEDEN WWW.STRAX.COM