FSN Capital

Environmental, Social and Governance report 2020 We are decent people making a decent return in a decent way Impact that lasts

Our objective is to create alpha return to investors, our ultimate clients, and we will do so in a responsible and sustainable manner.

FSN Capital delivers trend shifts through transformation, creating sustainable and resilient companies that withstand the test of time – for the benefit of both our investors and society at large.

Transparency will keep us accountable. This is our eighth annual ESG report, and all historical reports are available on our website.

Our historic strong focus on ESG, initiated by a clear tone from the top on the value of responsible investing, has ensured that ESG is now deeply integrated in our culture, investment processes, and how we govern our Portfolio Companies.

As responsible owners we recognize that we have an obligation to use our ownership position to drive change and impact. We want to ensure that our Portfolio Companies also remain sustainable after our ownership period, so our ESG approach is focused on integrating material ESG topics in the strategy, operations, and the culture of each Portfolio Company.

FSN Capital seeks to ensure that it will have impact that lasts beyond our ownership period.

The Partner Group at FSN Capital Partners Our ultimate clients

Our purpose is to contribute to the welfare of everyday people.

Norwegian municipal workers Swedish pensioners US high-tech workers US students Our ultimate clients are 11 million workers UK pensioners and pensioners, and 100,000 researchers Asian students US public European and students globally. employees steel workers Middle Eastern South-East citizens Asian citizens US medical researchers

«We are decent people making Australian a decent return in a decent way» nurses

Australian pensioners Letter from our Founder Strong performance in a difficult year

The year of the pandemic has required us to bring out the best in ourselves 2020 was an extraordinary year overshadowed and our management teams. by the global pandemic of Covid-19. Countless people have been furloughed or lost their jobs When the pandemic hit, we came together with permanently. As I write this, the death count our management groups and worked closely as stands at 2.7 million deaths globally. Our hearts one team to address the challenge that faced go out to all those who have lost close ones, us. The first lockdown materialized in early including the families of the two employees March and we held a virtual all-hands meeting we are saddened to have lost in our Portfolio with our management teams to align around Companies. two key priorities. Firstly, we all committed to protect the health and safety of our people The economic environment we have been and do whatever we could to protect the local operating in can best be described as opaque, communities in which our Portfolio Companies uncertain, and frustrating, with cycles of hope operate. Secondly, we focused on preserving and disappointment. Navigating successfully the competitiveness and financial stability of through this environment as owners and leaders our Portfolio Companies. Our management

6 FSN Capital ESG report Building Resilient Companies 7 teams rose to the occasion, we escaped any groups. Today we are inspired to see that much larger scale outbreaks thanks to the stringent of the energy propelling the ESG flywheel is The Obton Group´s 5-year business plan implies countermeasures that were put in place in our generated throughout our Portfolio Companies' installing solar capacity equivalent to the power needs of ~1.5 million households* facilities, recording a low number of infections organizations, who are increasingly taking The Obton Group today throughout the portfolio. ownership of their ESG agendas. We share a common understanding that ESG is simply We believe we were well prepared going into good business. the crisis, having taken a cautious investment approach and prepared our Portfolio Companies The continuous improvement of our ESG work over the last 3-4 years anticipating some kind of culminated in our firstESG-linked Credit ~1 million MWp installed Equivalent to power consum- ...or to the # of Equivalent to replacing economic and financial correction. Moreover, Facility in 2020. Under this facility the interest tion of ~300,00 households households in Helsinki ~600,000 combustion we are blessed with strong management teams margin we pay depends on us delivering on engine cars who were supported by local FSN Capital teams stated ESG ambitions, the main goal being to The Obton Group's plan for 2025 and our robust active ownership model; The accelerate the ESG transformation needed FSN Capital Execution Framework (FEF). The to remain relevant in the future low-carbon combination allowed us to switch focus early and economy. implement effective countermeasures. Impact Having incorporated ESG factors in our In 2020 we recorded several ESG wins both ~5 million MWp installed Equivalent to power consumtion ...or to the # of Equivalent to replacing ~4 governance model proved invaluable as the within our Firm and in our Portfolio Companies. of ~1.5 million households households in million combustion pandemic hit. Solid health and safety procedures Our «Team First» initiative aimed at fostering Los Angeles engine cars were already in place, which facilitated trust and collaboration across our offices and resolute implementation of effective pandemic cohorts continued to pay dividends evidenced by * Based on the assumption of 1.5 million households reached by 2025,

countermeasures. Moreover, the Portfolio the highest 360 review (employee satisfaction) and average combustion engine emissions of 0.1000 kg CO2e/km Companies delivered unyielding performance score we have ever recorded. Driving diversity in the face of the lockdowns, again an attribute and inclusion is a central part of the Team First of the success of ESG integration in our active initiative. I am happy to report that gender which is signed, but not yet closed, the Obton fatigue may slip in. However, we proved our ownership approach. diversity is improving, but much remains to be Group, a leading European developer of solar resilience in the first and second waves of the done also in improving diversity in the broader power parks. With our focus on thematic pandemic, and we proved how to work together The ever-evolving ESG agenda sense. sourcing of companies in sectors that contribute and navigate our companies through these Ever since our inception 20 years ago, ESG sustainable development, we should see more stormy waters. We are confident we will ride this has been a core part of FSN Capital’s value At FSN Capital Partners, we also purchased our investments of this character in the years to out and emerge even stronger as the pandemic creation. As responsible owners we are dedicated first carbon offsets (see page 91) for our 2019 come**. eventually fades and becomes a thing of the past. to continuing pushing the frontier of what and 2020 emissions. Going forward we will constitutes good ESG governance. Over the years continue purchasing offsets for all FSN Capital In closing we would like to thank our we have expanded our focus and approach from Partners’ emissions. We will also formalize our management groups and all our 53 team ESG compliance to long term value creation. commitment to the Paris Agreement and look to members for their stoic efforts of stewarding Frode Strand-Nielsen the Science Based target initiative as a potential us through a very difficult year. We are still not Managing Partner While the ESG journey was initially driven by mean to guide our ambitions. out of the woods and it is only natural that some FSN Capital Partners a crisp tone from the top represented by us as owners, the commitment has quickly spread to We made four attractive investments in 2020, of the Chairpersons, boards, and our management which I would like to highlight one investment ** A full list of Portfolio Companies is available on request.

8 FSN Capital ESG report Building Resilient Companies 9 we have gained valuable learnings and insights Letter from our Chairperson into what will be the «new normal» out of this Times they are a-changin’ crisis. 2020 was also a year with significant pressure on democratic institutions around the world that remind us about the fragility of the societal structures that businesses operate within. The free marketplace where rule of law prevails cannot be taken as given. Businesses 50 years have passed since Milton Friedman sighted and focusing on the bottom line may lead must contribute to the pillars of the marketplace wrote the influential article, «The Social to failure. Key elements of EU Green Deal are itself by always acting with high integrity and Responsibility of Business is to Increase Its directives on treating waste and adapting to the trustworthiness. The prospects of business and Profits». Over the years most investors as well as circular economy. They will impact hugely on the foundation of rule of law goes hand in hand. business leaders have nuanced their positions. the development of products and markets in the The purpose of business goes beyond increasing future and enhance awareness among customers. «S» in ESG stands for Social. Businesses are its bottom line. This ESG report is an example of EU is also raising the bar for transparency and dependent on the societies where they operate, times that are a-changin’. reporting. like access to highly trained and motivated employees – as it also thrives better in societies Friedman builds his theses on quite rigid and As you will read from this year’s report, both with high level of trust. The pandemic, like theoretical assumptions. Time has proved that our Portfolio Companies and we at FSN Capital global warming, shows that companies must be such models are not necessarily a reflection of are on the alert. We need to future-proof our conscious of how they affect societies as they are reality. The main reason is what economists business models against the new low-carbon deeply dependent upon the actions and feedback Photo by Håvard Solerød, for the newspaper Øyene. call «externalities». Global warming is such world and ensure that we meet new reporting from their surroundings. an example - the biggest market failure of all requirements. This is in the best interest of the and clear was natural for us as a Firm since we time. This potential threat to humanity is not longevity and long-term profitability of our Firm 15 years ago I took part in drafting the base all our activities on a strong sense of ethical built in with realistic pricing of greenhouse gas and Portfolio Companies. UN Principles of Responsible Investment values. It has helped us to stretch. This ESG emissions. Governments have so far failed to (UN PRI). At the time it was pioneering to report is miles ahead of the first one with regards address this by sufficiently high carbon taxes. The pandemic has reminded us that no business underline the mutual dependencies between to reporting and tangible actions. Being specific is an island sheltered from society. It emphasized business, societies and the environment. But on targets and KPIs makes us more accountable. Over the last year, however, we have seen mutual dependency between the corporate and time has changed and today more than 3,000 significant step-ups by some governments. civil societies, as it also revealed strengths and investors representing above USD 100 trillion The fundamental driver of our work is our values In particular, the EU European Green Deal weaknesses in social and political structures. in assets, have signed on to the principles. of integrity and decency and a sincere ambition with the target of carbon neutrality by 2050 Societies with high level of trust in government FSN Capital was among the early signatories. to ensure that all businesses we own in the sends strong signals on policy changes. EU and mutual trust between the citizens have Going forward, this massive support makes future will be well aligned with preferences and emphasizes that the transition towards a low tended to tackle the Covid-19 outbreak better me optimistic that investors and business will requirements from their customers, employees carbon society needs to be just, and by this than other societies. contribute positively to solving the challenges and society at large. To survive and prosper in highlighting the importance of social equality. posed on us by global warming and social the time ahead of us, businesses must apply a The Green Deal will reduce the physical risks A year has passed since the first lockdowns. All distrust. mindset and take responsibility that stretches of climate change but increases the transition our Portfolio Companies have shown strong beyond increasing its profit. risk as it requires businesses and consumers resilience during this exceptional time. Faster FSN Capital is a learning firm. We were early to change behavior. For example, carbon taxes than ever before they have had to adapt to adopters when we published our first ESG report Knut N. Kjær are expected to increase, posing existential changing technology and market structures, eight years ago. Back then we knew we still had a Chairperson challenges to most business. Just being short- much of which is irreversible. At FSN Capital, long way to go. But making the ambitions visible FSN Capital Partners

10 FSN Capital ESG report Building Resilient Companies 11 About FSN Capital Table of Contents

Established in 1999, FSN Capital Partners (FSN us to implement transformational initiatives Capital) is a Northern European private equity and create sustainable lasting change within the investment advisor. We advise the FSN Capital Portfolio Companies. Impact that lasts 3 Funds (FSN Funds), four active funds with a total Letter from our Founder 7 committed capital of more than EUR 2 billion. FSN Capital focuses on making control Letter from our Chairperson 10 investments in companies operating in Northern About FSN Capital 12 FSN Capital has been entrusted with the Europe with enterprise value between EUR 50 management of financial resources of our clients. million and EUR 500 million. The investors provide long-term capital allowing 1. FSN Capital's ESG engagement 14 Validating our commitment to ESG 16 FSN Capital in numbers

2. ESG integration through the investment process 20 4 53 42 142 Pre-investment 21 — The ownership period 29 – The exit process 37 – offices across Norway, employees in investments advised by add-ons advised by Sweden, Denmark, and FSN Capital Partners FSN Capital since 1999 FSN Capital The annual FSN Capital ESG Award 38 Germany (excluding interns)

3. ESG developments in the Portfolio Companies 40 2,206 18 11,291 132 Skamol 42 — Active Brands 44 — EET Europarts 46 — Fibo 48 — Kjell & Company 50 – million EUR active Portfolio Companies employees in our institutional investors Holmbergs 52 — Gram Equipment 54 — Mørenot 56 — SNS 58 — Nordlo 60 — Saferoad 62 – total committed capital (one additional company Portfolio Companies signed, but not closed) Rameder 64 — Fellowmind 66 — iMPREG 68 — ViaCon 70 — Håndverksgruppen 72 – MHP 74 — TASKING 75 – ESG KPIs for FSN Capital Portfolio Companies 76

4. ESG in FSN Capital Partners 78 FSN Capital Portfolio Companies The Portfolio Companies Improving Diversity & Inclusion 80 — UN Principles for Responsible Investment 82 – increased total revenues increased total EBITDA by 11% in 2020* by 35 % in 2020* UN Sustainable Development Goals 84 — FSN Capital´s climate change approach 86 – Actively promoting ESG 94 — Giving back 95 — Delivering on our commitments 98

Number of people employed by FSN Capital employee Net FSN Capital Portfolio Companies Promoter Score of 66 in 2020 increased by 25 % in 2020

Appendix I – FSN Capital Partners’ Code of Conduct - short version 102 Appendix II – Code of Conduct for FSN Capital 103 * Past performance is not necessarily indicative or a guarantee of future results. Appendix III – Responsible Investment Policy for FSN Capital Partners 107

12 FSN Capital ESG report Became signatory of the Principles for 2012 Responsible Investment 1. FSN Capital's ESG engagement

Conducted the first stakeholder assessment and published the first ESG 2014 report (for FY 2013)

FSN Capital FSN Capital FSN Capital

Environmental, Social and Governance report 2017 Environmental, Social and Governance report 2018 Environmental, Social and Governance report 2013 Building Resilient Companies Building Resilient Companies BUILDING RESILIENT COMPANIES BUILDING RESILIENT COMPANIES Why ESG opportunities for value creation. Firstly, FSN Building Resilient Companies BUILDING LASTING VALUE Private equity investing is about managing Capital has a long-term horizon that not only risk and creating value and returns by active spans our 5-7 year investment period, but ownership. also into the investment period of the next owner and beyond. This puts us in a unique Awarded the prize for ESG is simply good business. Done right, we position to capitalize on ESG initiatives that 2017 Corporate Citizenship at the European believe our ESG focus will mitigate risks, drive have an impact on long-term value creation. Private Equity Awards in London returns and create resilient companies. As an Secondly, FSN Capital´s active ownership model example, our Portfolio Companies thrive long enables us to support and drive long-term after our ownership period. Our IPO track change and to facilitate real implementation of record shows that the companies we have listed ESG improvement programs in our Portfolio significantly outperforms the comparable indexes Companies. (see page 37). Introduced the FSN Capital ESG Strategy Framework, based on the EU Non-financial The UN Sustainable Development Goals (SDG) 2018 Raw material supply Production Management Customer / and marketing end user ESG has been part of FSN Capital's DNA and are described by the UN as «a universal call Reporting Directive (NFRD), supporting Portfolio value creation approach since the inception of to action to end poverty, protect the planet Companies in developing tailormade ESG strategies the Firm. In the beginning ESG was part of the and ensure that all people enjoy peace and broader prudent risk management, while now prosperity». Since 2017 the SDGs have been part it is a cornerstone of every Portfolio Company’s of how we engage with Portfolio Companies on strategic considerations. ESG. Introduced the FSN Capital Climate Module, based on In 2014 we conducted our first stakeholder As a Firm we see ourselves as a learning 2019 recommendations from the Task force on Climate-related assessment on ESG, and also published our first organization with continuous improvement Financial Disclosures (TCFD) annual ESG report. Already then it was evident processes in everything we do, including our that our investors cared deeply about their ESG approach. As responsible owners, we are returns being generated in a responsible manner, dedicated to continuing to push the frontier of a focus that has increased ever since. what constitutes good ESG governance. The illustration on the next page shows our historic The private equity governance model can be strong focus on ESG and key milestones in our Rolled out climate change due diligence approach very effective in transforming ESG issues into developments to date. 2020 ESG-linked Credit Facility launched

14 FSN Capital ESG report Validating our commitment to ESG The KPIs of the ESG-linked Credit Facility are linked to FSN Capital's current ESG approach As PRI signatories we are serious about The three main KPIs and targets agreed under promoting sustainable business practices in our the ESG-linked Credit Facility are built on FSN industry. In 2020, FSN Capital reached yet Capital’s ESG Frameworks for driving long-term another milestone when launching our first change in our Portfolio Companies. Under the 1. ESG Strategy and Governance KPIs Roles and Preventive ESG-linked Credit Facility. This means that the Facility, the aggregate success rate across the responsibility measures Annual review interest rate paid and ESG performance are portfolio determines the interest rate - both A ESG Strategy and Climate Assessment Follow-up Controls and linked. with an upside and downside included in the Each Portfolio Company develops an ESG strategy reactions targets agreed. We therefore see the ESG-linked w/ annual targets B ESG Ownership Identify ESG risks Analyze climate risks Develop An ESG-linked facility sends a strong signal to Credit Facility as an additional tool to further and opportunities and opportunities ESG strategy Designate political (Board) and operational (mgmt) the market, our team, and Portfolio Companies incentivise full implementation of our ESG ownership per Portfolio Companies FSN Capital Governance Framework about the positive correlation between returns Frameworks. and FSN Capital ESG Strategy Framework C ESG Board Meeting Status Report and sustainability performance. We are happy to Semi-annual confirmation that ESG has been be early movers – utilizing debt financing as an discussed by the board of directors of the Portfolio Companies instrument to transform our Portfolio Companies.

2. Greenhouse gas (GHG) emission KPIs

A GHG Reporting System Set up CEMAsys (or equivalent) system

B GHG Emission Scope 1 & 2 Report Scope 1 and 2 emissions

«Being a part of a collaboration where our clients share C GHG Emission Scope 3 how they address sustainability is both enriching and insightful. Report Scope 3 to the extent deemed relevant The structure FSN Capital has built to address both ESG D GHG Emission Target FSN Capital Climate Module Set ambitious GHG reduction target opportunities and challenges is impressive. FSN Capital has shown how effective change can be successfully implemented in accordance with meeting the Paris Agreement. We are grateful for FSN Capital selecting SEB as its 3. Diversity Ratio KPIs Sustainability Coordinator to ensure a well-structured incentive A Diversity Ratio framework aligned with international goals and standards.» Incentive for having % of female Portfolio Company board members above 25%, margin increase if below 20% CHRISTOPHER FLENSBORG FSN Capital Diversity initiative (in aggregate) Head of Sustainable Finance at SEB “We are decent people making a decent return in a decent way”

The FSN Capital Ethos

Our ethos is at the core of how we approach By decent returns we mean an internal rate decision-making every day. of return which substantially outperforms that which our investors could achieve by By decent people we mean people of investing in the public market. character and integrity, the FSN Capital team operates according to our ethos and Generating returns in a decent way is values. achieved by implementing the FSN Capital Code of Conduct, which is based on the UN Global Compact, in all Portfolio Companies.

We believe that culture is the most important ingredient in driving the ESG agenda. FSN Capital is the sum of our people, and we invest significant time and resources to find and recruit talented individuals who share our values and who fit well with our culture.

JESPER ISAKSEN Head of Talent and Partner at FSN Capital

18 FSN Capital ESG report Sourcing Sourcing Investment decision Ownership period Megatrends and ESG included in risk framework Identify, prioritize, monitor exclusion criteria and investment decision material and measure

Pre-investment Due diligence Onboarding Exit Identify ESG and Setting Remain sustainable and climate risks and the tone resilient bussinesses Sourcing – Applying a long-term perspective Consideration of emerging ESG megatrends, such opportunities FSN Capital targets high-quality companies as inter alia climate change and resource scarcity, operating in Northern Europe with limited is thereby naturally integrated when evaluating exposure to uncontrollable beta risks, as the attractiveness of a potential investment. Our 2. explained in our Risk Framework on page 26, goal is to identify companies which we believe and with the potential to double EBITDA. are best positioned to capitalize on emerging ESG integration through trends at sector level, and to avoid companies the investment process We apply a long-term perspective when exposed to either transitional and physical evaluating potential investment opportunities. climate risks. We will prioritize investment Megatrends are always used to challenge our opportunities that have tailwinds from major current perception of reality and identify macro- and megatrends. both systemic risks and areas for growth.

In line with UN PRI and our Responsible board of directors of such Portfolio Company. Investment Policy, we integrate ESG into every They contribute in setting the tone from the top, phase of the investment cycle. Integrating ESG ensuring compliance with our ESG Governance considerations is part of FSN Capitals’s broad and and ESG Strategy frameworks. At the Portfolio long-term view when evaluating and managing Company level, the respective Chairperson and Exclusion criteria › Have contributed to systematic denial of investment risks and opportunities. board members remain fully accountable for the Exclusion criteria filter out investments that human rights implementation plan for ESG policies, the ESG are clearly not in line with our ethos and › Demonstrate a pattern of non-compliance We have developed mandatory standard ESG strategy, and monitoring status of integration. The values. with environmental regulations procedures and requirements for all stages CEO is fully responsible for the daily management › Show a pattern of engaging in child labor of the investment cycle. FSN Capital’s ESG of his / her Portfolio Company. It is important to Our Responsible Investment Policy defines or forced labor approach seeks to identify, prioritize, monitor, acknowledge that ESG efforts require time and our formal exclusion criteria, stating that we › Have an unacceptable high greenhouse and measure material commercial, reputational, resources, hence, going forward we will ensure shall not invest in companies that: gas footprint and have failed to take and operational ESG risks and opportunities. that named individuals have ESG included in reasonable steps to reduce these emissions Our strength lies in our ability to combine a their formal job description. › Produce weapons that through their standardized ESG approach while establishing normal use may violate fundamental personal relationships with Portfolio Companies’ FSN Capital’s ESG team is responsible for humanitarian principles (e.g. anti- management to drive lasting change. defining FSN Capital’s ESG expectations, personnel land mines, production of developing tools and frameworks, supporting cluster munitions, production of nuclear Clear roles and responsibilities Portfolio Companies in their ESG work, and arms) The basis of our ESG work is accountability and monitoring ESG status and progress. The ESG › Are directly related to adult a clear definition of roles and responsibilities. team also supports deal teams in climate change entertainment, tobacco, gambling or Each FSN Capital pointperson* is responsible and ESG due diligences and onboarding of new Our Responsible Investment Policy alcohol for the development of his / her Portfolio Portfolio Companies. Company and is always represented on the

* The partner or principal responsible for a particular Portfolio Company. Building Resilient Companies 21 Sourcing

Obton Group

In the final weeks of 2020, FSN Capital signed an In Obton Group's five year business plan the agreement to acquire a 45 % stake in the Obton goal is to expand operations and increase solar Group, entering a partnership with the founders capacity by a factor of five, as illustrated on and management team. The Obton Group is page 9. In 2025, one year’s production could a specialized alternative investment provider cover the power needs of 1.5 million household, developing, structuring, and managing solar the equivalent of removing 4 million combustion photovoltaic (PV) and real estate projects. With engine cars from the roads*. operations in eight markets, the company is one of the largest solar PV managers in Europe. The solar energy sector is highly interesting from an ESG perspective. While the sector has The investment supports FSN Capital’s view a significant positive impact as it accelerates of the low-carbon economy as an investment the share of renewable energy, transparency «At FSN Capital, we have a strong belief that the opportunity. The investment will contribute to on also biodiversity and responsible supply green transition of the energy system to renewable energy FSN Capital’s commitment to UN Sustainable chain management will be important topics is one of the most interesting investment themes for the coming Development Goal 13 «Climate action». to highlight going forward. We really look decades. As one of the largest and most experienced developers, forward to partnering with the Obton Group management team. administrators, and investors in solar energy in Europe, the Obton * Based on the assumption of 1.5 million households Group is very well positioned in this fast-growing industry» reached by 2025, and average combustion engine emissions of 0.1000 kg CO e/km. LARS DENKOV 2 Partner at FSN Capital

Building Resilient Companies 23 Due diligence Due diligence

Climate change due diligence – Identifying will be included in their Investment Proposal. ESG due diligence – Identifying ESG risks and pricing considerations and transaction documen- climate risks and opportunities Depending on findings, their recommendation opportunities tation; and (iii) to identify the status quo and use In 2020, we developed a high-level climate may be that external experts should be engaged An ESG due diligence conducted by external this as a baseline in planning the onboarding and change due diligence approach which is now a to conduct a more detailed climate due diligence. experts is a standard requirement for all new continuous improvement during the ownership standard requirement in all our transactions. The potential investments. The due diligence scope phase. objective is to test the robustness of the strategy We have internally developed the climate depends on the risk profile of the specific and value chain of a potential investment in change due diligence tool and templates, and a investment opportunity, but will always include To ensure that we understand the underlying risk different climate scenarios. mandatory training video. The video underlines anti-corruption, sanctions, and integrity drivers we always ask the external ESG experts the importance of understanding the impact background checks. to comment on specific risks related to jurisdic- With the objective of building relevant ESG com- of climate change and goes through the four- tions in target’s value chain (where they typically petence internally, we decided that the climate step process (illustrated below). We have also The objective of this is threefold: (i) to identify use Transparency International ratings as basis) change due diligence will be completed by the developed a longer version video which includes potential “show-stoppers”; (ii) to ensure that and any industry specific ESG risks. deal teams themselves. This will be done early in a practical example on how to use the climate ESG risks and opportunities are included in the the pre-investment phase, and deal teams’ con- change due diligence tool. clusions from the climate change due diligence The ESG due diligence

The climate change due diligence The scope of the due diligence depends on relevant jurisdictions, industry and company specifics. However, it always includes anti- Our climate change due diligence evaluates transition and physical risks and corruption and sanction due diligence, as well as integrity due opportunities along all stages of the company's value chain. Transition risks and diligence of management. opportunities are assessed based on sector-specific properties, while physical risks and opportunities are assessed based on the geographical reach of the company's value chain. What we do How we do it

Transition risks and opportunities Physical risks and opportunities

Sector-based assessment of transi- Location-based assessment of physical tion risks as companies in the same risks as companies in the same Integrity background checks of Discreet sources sector share similar: jurisdictions are exposed to similar: target, management and seller(s) › Industry standards › Climate and temperature change › Technology › Acute weather events Questionnaire › Markets and customers Risk based ESG due diligence – focus on key areas (depending on the specifics of the case) On-site due diligence Transition risk Physical risk and Value chain Conclusion and and opportunity opportunity mapping IP summary assessment assessment

Anti-corruption due diligence and sanction screening Management session

24 FSN Capital ESG report Investment decision Investment decision

FSN Capital´s risk categories Investment decision – Including ESG in extent identified ESG risks could result in a investment materials potential or actual adverse effect on the value FSN Capital seeks to limit exposure to of any investment and these findings are The FSN Capital Risk Framework is used for detailed analysis of alpha and beta uncontrollable beta risk factors and instead focus subsequentially discussed by, amongst others, the risks in a due diligence process. Alpha risks can be managed actively by our on understanding and dealing with the alpha Investment team, Executive Advisors, and the guidance, while beta risks are beyond our control. risks that can be controlled or mitigated. Investment Committee.

The FSN Capital Risk Framework forms the basis To the extent relevant, investment materials for any investment decision, and a summary of include countermeasures and plans to address key findings from the ESG and climate change identified ESG risks, and/or for how to capture due diligences are also always included in ESG opportunities. This will then also form the Macro Operational Environmental the formal investment documentation. Our basis for a tailormade ESG onboarding plan. › Cyclicality * › Management risk › Toxic emissions Risk Framework thereby considers to what › FX * › Integration risk › Harmful industrial waste › Commodity * › Internal / External › Deforestation

Industry Financial Social › Political * › Liquidity › Labor conditions › Competitiveness › Leverage › Forced / Child labor › Substitution › Covenants › Harm to health and safety

Commercial Exit Governance › Operating leverage › Multiple › Bribery / Fraud › Concentration sustainability * › Political interference * › Visibility › Marketability * › Criminal convictions › Dependency on trend shift › Regulatory relations

Weather * Active ownership › Majority shareholder › Ultimate control

* Beta risk

26 FSN Capital ESG report Building Resilient Companies 27 Onboarding Onboarding

The ownership period

Onboarding ViaCon* Onboarding – Partnering to create long always have a kick-off meeting, preferably in- term value person, between the Portfolio Company CEO, ViaCon was divested from FSN Capital Portfolio and implementing the ESG strategy? ViaCon’s The standard ESG onboarding program marks management team, FSN Capital deal team and Company Saferoad in 2019. To ensure that ViaCon products have a clear environmental profile with the first step toward continuous improvement ESG team. Here we present FSN Capital’s ESG built an ESG approach on a stand-alone basis, we high durability, where we also offer installations throughout the ownership period. The purpose expectations, share material from the ESG and decided to give ViaCon a new ESG onboarding that are more efficient than customer offerings in of the onboarding program is to set clear climate change due diligence and discuss how in 2020. We spoke with Mattias Hakeröd, relation to work site interruptions. It is important expectations as majority owners and to align the Portfolio Company is currently working with ViaCon’s Chief Human Resource Officer, about for us to highlight and advance these aspects, with management on ESG ambitions. ESG. his experiences regarding FSN Capital’s ESG particularly as we see an increasing focus on onboarding process. sustainability in EU public tenders. By uncovering As responsible owners we recognize that we have The Portfolio Company is presented with the the link between ViaCon’s offering and material an obligation to use our impact to drive change. two pillars of our ESG work: the FSN Capital How did you perceive the overall onboarding ESG topics, we made it easier to identify how We want to ensure that our Portfolio Companies Governance Framework (see page 30) and the process? The FSN Capital board members clearly ESG supports the commercial objectives of each also remain sustainable after our ownership FSN Capital ESG Strategy Framework (see transmitted their ethos: «We are decent people business unit. period, so our ESG approach is focused on page 32). making a decent return in a decent way». These integrating key ESG topics in both the strategy people are down to earth and will treat you with 2021 is the first year ViaCon has an ESG strategy. and operations of each Portfolio Company. A member of FSN Capital’s ESG team will fairness and integrity, which really appealed to me We have set long-term targets and broken these participate in the first Portfolio Company as I believe these are important characteristics of down in short-term goals with KPIs to be reported We focus onboarding on the CEO and board meeting to discuss ESG topics, share best any leader. regularly. Progress is monitored in iNEXUS, the IT management team as they are responsible practice and set the tone from the top. system for monitoring progress of our commercial for the daily ESG work in their company. We Which parts of the ESG onboarding did strategy is part of our FEF* approach. We have you find more useful? Finding the resources spent significant time defining ESG KPIs with a needed to drive the ESG agenda was initially clear business purpose. I believe this is essential difficult – my responsibility is divided between to motivate the internal ESG work, as it makes it human resources, internal communications, and easier to see how ESG initiatives have direct effect ESG. Thus, having access to the ESG team was on the bottom line. Examples include lost-time important when defining ViaCon’s ESG strategy. incidents and waste from the production process. In the beginning I found the ESG Strategy Framework a bit cumbersome, as it is a new way What is your advice to others who wish to of thinking about ESG, but with the support and get started with their ESG strategy? Focus on guidance from the ESG team I found a way to the topics most material to value creation and make the FSN Capital ESG Framework really define short- and long-term targets per business work for ViaCon. area. Involvement of a broader group is also important, valuable insight can be gathered from ViaCon’s ESG strategy is an example of how external sources but most importantly your fellow to integrate ESG with overall commercial employees! objectives. How did you go on about formulating * A full list of Portfolio Companies is available on request. ** FSN Execution Framework Building Resilient Companies 29 The ownership period The ownership period

The FSN Capital Governance Framework approving ESG policies, implementation plan, The objective of FSN Capital Governance monitoring ESG progress and status in every Framework is to ensure that our Portfolio board meeting, and for conducting an annual Companies operate in line with ethical standards review and update of ESG policies and plan for with a focus on continuous improvement. We implementation. Roadmap to ESG implementation set minimum requirements with regards to ESG policies, implementation, and governance. As illustrated by the road map to ESG Training of Our Governance Framework defines roles and implementation below, our objective is Adopted by board Adopted by all relevant responsibilities with clear expectations to the integration of ethical standards throughout each Standard policies of directors subsidiaries employees Chairperson, board of directors, and the CEO. Portfolio Company’s organization and relevant › Code of Conduct operational processes – with a focus on building › Code of Conduct short Continuous As part of the ESG onboarding program, ESG knowledge through training of employees. version improvement management will in close dialogue with the FSN This will ensure that we have impact beyond our › Supply Chain Code of Conduct Capital deal team and ESG team, tailor-fit FSN ownership period. › Whistleblower policy › Internal control Implementation Communicated to Capital’s standard ESG policies and minimum plan employees requirements and prepare a proposed plan for Our focus in 2021 will be on increasing the implementation, as illustrated on the next page. number of Portfolio Companies setting up The Portfolio Company board of directors is electronic whistleblower channels and rolling out responsible for setting the tone from the top, an ESG e-Learning platform to their employees.

«Ethical business practices must be very high on the agenda of any The Governance Framework is designed to drive change in the Portfolio Company company. As Chairperson of two FSN Capital Portfolio Companies it is my duty to ensure that these Portfolio Companies measure success not only financially, but also ethically. Having template ESG policies as well Adopt Implement as passionate and dedicated colleagues on the FSN Capital team has › Tone from the top › Governance policies › Roles and responsibility Roles and Preventive › Authorization matrix been tremendously helpful and efficient in onboarding these Portfolio › Align knowledge responsibility measures › Communication and training Companies regarding ESG. FSN Capital´s strong and long-standing commitment to ESG is one of the main reason why I am thankful to be part of the FSN Executive Advisor team.» Monitor Control Follow-up Controls CHRISTIAN MANGSTL › Get information › Internal control and › Follow up incidents › External control FSN Capital Executive Advisor › Evaluate reactions › Whistleblower

30 FSN Capital ESG report Building Resilient Companies 31 The ownership period The ownership period

The FSN Capital ESG Strategy Framework the bigger picture and can be proactive rather The FSN Capital ESG Strategy Framework The FSN Capital ESG Strategy Framework is than reactive to emerging sustainability trends. our method for establishing an individualized We see that when management combine their ESG strategy for each Portfolio Company. The deep industry expertise with the output from objective is to ensure that Portfolio Companies the ESG Strategy Framework, their strategic focus their resources on ESG topics most responses surpass our expectations. material to both their stakeholders and their own commercial strategy. With this approach ESG Each Portfolio Company’s ESG strategy focus on Identify ESG risks Analyze climate risks Develop Annual and opportunities and opportunities ESG strategy reveiw becomes an integral part of the value creation 3-5 key strategic ESG topics where they develop approach, and our Portfolio Companies are long term ambitions, identify relevant KPIs and more likely to also remain sustainable after our set annual targets. The ESG strategy of each ownership period. Portfolio Company is included in chapter 3.

External ESG experts conduct an outside-in The ESG Strategy Framework ensures an analysis › Identify Environmental, › Climate change analysis › Materiality assessment › Annual review and analysis under the ESG Strategy Framework. and reporting according to the EU Non-financial Social and Governance inspired by Task Force on to prioritize the most reporting of ESG strategy, The process is designed to drive change by Disclosure Directive (NFRD) and is also inspired risks and opportunities Climate-Related Financial important ESG topics for disclosure aligned continuously increasing ESG knowledge in our by the Task Force on Climate-related Financial throughout the value chain. Disclosures (TCFD). the stakeholders and the with EU Non-financial Portfolio Companies. The initial discussions Disclosures (TCFD). In 2021 we will introduce › Market (sector and peers) › Evaluate the company’s company. Reporting Directive with external ESG experts and the annual self- a sightly updated ESG Strategy Framework and stakeholder analysis value chain in three different › Develop an ESG strategy for (NFRD). review of the ESG strategy ensures that Portfolio integrating the EU Taxonomy and the latest non- to identify trends and climate scenarios to ensure sustainable value creation. › Annual review and Companies stay updated on key ESG topics in financial reporting trend – double materiality. expectations. the value chain is robust, and › Define 3-5 strategic ESG reporting of climate their sector, as well as coming ESG trends and the business relevant, in both priorities, set long term goals, management, disclosure regulatory requirements. Having a holistic ESG The ESG Strategy Framework consists of three the short- and long-term. identify KPIs, and annual aligned with TCFD. strategy allows them to be agile because they see main steps as illustrated to the left. Raw material supply goals to monitor progress.

Production

Global warming «Before we had a strategy, which had ESG elements by chance. Management Today we have an ESG strategy that assist and complements our and marketing Time Importance to Stakeholders

Importance to Company commercial strategy.»

SØREN KNUDSEN Customer / CEO iMPREG end user

Building Resilient Companies 33 The ownership period The ownership period

Ownership period – monitor progress of improvement. In 2020 we asked our Portfolio With the Governance Framework and the ESG Companies to report their ESG KPIs monthly Strategy Framework each Portfolio Company has through our financial reporting system. During developed an annual plan both for implemen- 2021 we will continue to make ESG reporting tation of ESG policies and for progress towards more efficiently and seamlessly. long-term strategic ESG ambitions. FSN Capital's During our ownership period, we support the ESG Expectations ESG is a topic on the agenda in every board Portfolio Companies on ad hoc projects and in meeting at FSN Capital’s Portfolio Companies. the annual review of their ESG Strategy. ESG Management is required to report, and the board is however no longer a top-down initiative, we of directors will discuss (i) status on ESG policy see an increasing request for ESG support and implementation; (ii) progress towards annual sharing of best practices among our Portfolio goals set out in the ESG strategy; and (iii) any Companies. A great example was the virtual ESG incidents. Regular discussions and review FSN Capital Leadership Seminar in January In every transaction ESG focus in Portfolio Companies of progress towards annual targets will ensure 2021 where iMPREG shared how ESG can be a › Climate change due diligence › ESG is the first point on the agenda at continuous improvements. competitive advantage; and Mørenot shared both › Anti-corruption and sanction due every board meeting: how sustainability is considered a key enabler diligence • Implementation of ESG policies All our Portfolio Companies are also required to for their commercial strategy and how they › ESG due diligence on a risk-based • Status towards annual ESG goals report their GHG emissions with the objective of use a digital tool to closely monitor employee approach • Any ESG-related incidents setting reduction targets once the reporting cap- satisfaction. › Integrity due diligence / background › Implement standard internal control tures material emissions (see page 76). Portfolio check of key management and seller heat map Companies are also expected to have a proactive In 2021 we plan to establish an ESG forum where › Integrity due diligence of all new Board approach to climate change. The annual TCFD Portfolio Companies can share experiences and Onboarding of Portfolio Companies members and key management reporting encourages companies to take climate best practices in an informal manner. › FSN Capital Governance Framework: › Include information on ESG status in risks and opportunities into consideration in the Adopt standard ESG policies and monthly and quarterly reports company’s governance, strategy, and risk man- prepare implementation plan together › Annual activities: agement. with ESG team • Review ESG strategy and next years’ › FSN Capital ESG Framework: Develop annual goals and ambitions ESG reporting to FSN Capital is important for tailormade ESG strategy with key ESG • Review plan for implementation of us to monitoring progress and identifying points goals and annual ambitions, including a ESG policies climate review • Review governance documents and procedures • Report on internal control from the auditor to the board of directors • Board of directors’ self-assessment • Employee satisfaction rate (eNPS) • Customer satisfaction rate (cNPS)

Building Resilient Companies 35 The ownership period Exit

Holmbergs' sustainability website The exit process Holmbergs Communicating progress Exit – Remain sustainable and resilient key ESG topics from the time of our acquisition, At the time of exit, sound ESG management which simplifies documentation of a Portfolio has reduced risks throughout our ownership Company’s ESG progress in an exit process. For stakeholders to make informed decisions, As ESG-lingo may be unfamiliar to most, period, put Portfolio Companies in a position to More importantly, it clearly shows how ESG is an companies are increasingly required to provide Holmbergs has taken a visual approach to the capture emerging ESG opportunities and thereby integrated part of both strategy and operations transparency and insight into their ESG focus communication strategy. Key messages are increased the value of the company. and that the ESG ambitions are driven by the areas. Governments and regulators place clearly illustrated and ESG topics are informed management team, not us as majority owners. requirements on sustainability reporting and in an educational manner. We see to an increasing degree that sophisticated customers want insight in the sustainability buyers of our Portfolio Companies appreciate In close collaboration with our management impacts, positive or negative, products Carina Landström, CFO in the Holmbergs Group and value the development of ESG metrics over teams, we seek to create robust and sustainable and services have on society. Good ESG notes that through communicating ESG, new time and use this as part of their assessment businesses – we have impact that lasts beyond communication is therefore key to staying opportunities and challenges have surfaced. of the attractiveness of a company. Our ESG our ownership period. relevant in the market going forward. New topics have been put on management’s Frameworks ensures focus on and monitoring of agenda, shaping the strategic business plans Holmbergs Group has taken this challenge going forward. to heart and used the opportunity to create a customer-oriented webpage addressing Strong track record in developing sustainability. Here Holmbergs informs and preparing companies for successful IPOs stakeholders on its sustainability targets and relevant UN Sustainable Development Goals, as Share price development well as the company’s ESG impacts throughout 2y post IPO – FSN Funds IPOs vs market the value chain. The company Code of Conduct 190 179 FSN Funds IPOs Share price (Index 100 at IPO) is also available to all external stakeholders. 180 Average of indexed share price Average return 2 years post IPO: 79.4 %* performance of the six companies listed 170 by FSN Funds (Troax, Netcompany, Bygghemma, Instalco, Green Landscaping, 160 Kongsberg Automotive) 150

140 « The ESG work has inspired Market 124 130 Holmbergs to look beyond the Index based on the average of the traditional financial goals and performance of the relevant index 120 112 (OMX30, OMXC20CAP or OBX) at the 103 110 see the business in a larger relevant post-IPO time period for each company. context.» 100 90 CARINA LANDSTRÖM + 1 year + 2 years CFO, Holmbergs Group

*) Average aggregated return for all companies. Source: FSN Capital, Capital IQ. All data as of August 2020. The annual FSN Capital ESG Award up local business units. This sends a strong Results have already started to materialize. signal from the top and enables identification of Mørenot has changed their fishnet drying process. irregularities at an early stage. The industry standard diesel generators were substituted with a solution using 25% less energy Employee satisfaction is also high on Mørenot’s while at the same time drying the nets twice as agenda. In 2020 they implemented Winningtemp, fast as conventional methods. The company is an AI and cloud-based software for measuring also continuing to explore net repair, re-use and and monitoring employee engagement. With this recycling of nets, as well as fishing solutions that tool, employees answer a few questions every reduces the risk of bycatch. Winner of FSN Capital’s second week on their mobile phone or laptop. 2020 ESG Award Mørenot’s middle management are responsible Going forward, the strategic ESG priorities will for following up comments and insights from the be further operationalised. In 2021 the company tool and including these in the monthly manage- is launching two cross-organisational groups, Our annual ESG award is part of setting the tone Over time, Mørenot has managed to internalize ment meeting. Mørenot wants to extend the use one focusing on sustainability and the other on from the top. Netcompany, Green Landscaping, ESG by identifying how ESG factors can support of Winningtemp to all their sites in more than 10 digitalisation. By bringing together minds across Kjell & Company, and Saferoad are all proud win- the overall commercial strategy. In this way ESG countries on three continents. the organisation, there is a potential to identify ners in previous years. has become a value-adding activity owned by sev- synergies and take ESG integration to the next eral people in the company, and not a reporting «Implementing a strong ESG platform is a two- level. Arne Birkeland also sees these groups as an The criteria for selecting the winner remain exercise to FSN Capital. phase-process.» explains CEO Arne Birkeland, important initiative to give all employees owner- unchanged: «First you need to make sure your operations ship of the ESG agenda; «In the future Mørenot As Mørenot has operations in high risk meet ethical standards, and then you can use ESG will consist of 800 sustainability directors!» › Awareness and ESG efforts in daily operations jurisdictions from a compliance perspective, as a value-adding measure.» Birkland believes › Value creation in society at large it is vital to mitigate the risk of unethical the company has just started their journey in the › Clarity in ESG policies behavior. When it comes to strengthening second phase. › Focus on continuous improvement and pro- business ethics and governance, Mørenot gress has continued their implementation of ESG The fishing and aquaculture industry is depend- › Tone from the top (i.e. management and board policies by rolling out e-Learning and making ent on responsible consumption of the ocean’s re- engagement) anonymous whistleblowing available to all sources, and Mørenot’s customers are increasing- › Portfolio Company’s holistic approach to sus- employees through an electronic whistleblower ly seeking sustainable solutions. Environmental tainability channel. The e-Learning included a short video and climate impacts of the company’s operations › Adherence to FSN Capital’s values of Mørenot’s CEO setting the tone from the top have therefore been in focus over the past year. In › Be a FSN Portfolio Company* and emphasizing the importance of safeguarding line with Mørenot’s vision, the company has iden- the company’s reputation by complying with tified how sustainability aspects can support each Mørenot was acquired by FSN Capital Fund V in the company’s ethical standards. However, business unit and the overarching commercial 2018. The company has a clear vision to ensure training and policies are not enough when strategic objectives. Each target has been broken that the oceans can feed generations to come, operating in high risk jurisdictions. Mørenot’s key down in actions assigned to specific people to which sets ESG at the core of their operations. management has therefore also closely followed ensure they are followed up.

* A full list of Portfolio Companies is available on request.

38 FSN Capital ESG report Building Resilient Companies 39 EBITDA 2019 EBITDA 2020 EBITDA Change EURm EURm A leading producer of energy-saving, high temperature insulation 12 11 -3 % 3. products to customers globally.

ESG developments EBITDA 2019 EBITDA 2020 EBITDA Change SEKm SEKm

in the Portfolio Companies A Nordic supplier of premium sporting goods brands. 142 119 -16 %

A value-added distributor of technology and digital products in 272 354 30 % Europe.

The Nordic market leader within the wet room wall panel segment. 58 70 19 %

Sweden’s largest retailer of accessories for home electronics. 160 175 10 % This chapter sets out the ESG strategy for each Håndverksgruppen has prepared its first ESG Portfolio Company in line with FSN Capital’s strategy (see pages 72-73), while company ESG Strategy Framework. descriptions of MHP and TASKING are provided on pages 74-75 as they will develop their Four new investments were signed in 2020: tailormade ESG strategies in 2021. The Obton EBITDA 2019 EBITDA 2020 EBITDA Change SEKm SEKm Håndverksgruppen (HG), MHP Solution Group Group transaction is waiting for clearance from A global supplier of mission critical safety systems to the child safety 104 119 15 % (MHP), TASKING, and Obton Group. the Danish Financial Supervisory Authority seat industry. (DFSA), a description is included on page 23. A global market leader within advanced ice cream processing -7 63 n/m equipment. A leading supplier of equipment and services to the world’s fishery 117 108 -7 % and aquaculture industries. A global online and physical retailer of limited edition sneakers and 70 44 -38 % apparel. One of the leading digitalization and managed IT services partners 191 228 19 % for the SME and smaller enterprise segment in the Nordics. The largest supplier of road safety and road infrastructure solutions 416 539 30 % in Europe. Europe’s largest omni-channel aftermarket distributor of tow bars and wiring kits and Germany’s largest aftermarket-installer of tow bar 173 228 31 % systems. A leading Microsoft Business Applications and Modern Workplace 140 260 86 % partner in Europe. A leading supplier of glass fiber liners for sustainable and 72 120 68 % environmentally friendly sewage rehabilitation. The European market leader of engineered corrugated steel 123 199 62 % structures and pipes used to build e.g. culverts, bridges and tunnels. Norway´s largest provider of surface treatment services, offering a 111 117 6 % broad range of services within painting, flooring and masonry. The leading provider of end-to-end logistics software solutions in the 80 95 19 % DACH region.

* Includes Portfolio Companies as of 31.12.2020.

40 FSN Capital ESG report Building Resilient Companies 41 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Loyal › In line with 2020 ambitions, Skamol › Trained all sales staff. › Conduct > 50 webinars for customers customers conducted training of all sales staff and include sustainability as one of the in market, branding, processes, topics addressed. systems, products and performance. › Increase number of customer inter- skamol.com Due to Covid-19 it was conducted as actions, both physical and interactive an interactive go-to-market training meetings, by 100% through increased session. use of virtual meetings, progress to be tracked in the CRM system.

2. Loyal and › In line with 2020 ambitions, all › Started training in Skamol Business › Improve employee satisfaction and Skamol produces and markets specialty insulation motivated departments implemented training System. loyalty. employees in Skamol Business System. › eNPS % 100 % › Initiatives to adjust Skamol culture, systems based on the four key raw materials calcium › The combination of Covid-19 and 2020: 22 e.g. through more simple, relevant and silicate, vermiculite, moler, and diatomite. The system internal company changes caused an 2019: NA frequent employee surveys, improved increased turnover (both voluntarily 2018: 27 communication through (virtual) town- portfolio spans bricks and blocks, insulation boards and involuntarily) and a lower eNPS. 2017: 30 hall meetings., introduce flexible work and fire protection boards which drives health-, safety- Skamol’s mission is to enable smarter, healthier and 2016: 30 arrangements. › Employee turnover < 10%. and energy preserving benefits for customers and end- more sustainable living and uses of energy resources in › eNPS > 27 % users around the world. homes and industries across the globe. 3. Caring about › Safety training continued in all › Conducted safety training and walks. › Ambition to achieve zero lost-time-in- people Skamol’s locations, and lost-time-in- › Lost time incidents (per million cidents. The Building sector provides easy-to-install systems The company is headquartered in Denmark where cidents reduced compared to 2019. worked hours) 10 › Continue safety trainings and increase › Safety walk registration procedure 2020: 2.9 the number of registered safety walks for both renovation and new build projects, while it also operates three production plants. Two other implemented during second half of 2019: 4.2 to two safety walks per month per the Industry sector provides systems to industrial production plants are found in Poland and Russia. 2020 with a total of 10 registered 2018: 5.0 production site. safety walks. 2017: 4.3 customers handling heat intensive materials or to 2016: 6.1 niche applications requiring superior insulation Skamol serves a global market (more than 70 4. Integrity › In line with 2020 ambitions: › Code of Conduct signed by › Identify Code of Conduct training tools properties at low weights. countries) with own sales force or agents in all regions. › Code of Conduct signed by all em- 100% of employees for continuously improving employees’ ployees and raw material suppliers. 100% of raw material understanding and knowledge. › Sanction's screening conducted for › Sanction screening › Code of Conduct signed by all new all customers and suppliers. 100 % of suppliers employees and raw material suppliers. Key climate risks and opportunities › Whistleblower reports handled ac- 100 % of customers › Sanction's screening for all customers cording to procedures, at appropri- and suppliers to be digitalized as part of › Opportunity: Increased demand for insulation products that reduces energy consumption, reducing ate organizational level. Skamol’s IT landscape. end-customer’s expenses and environmental footprint. 5. Reduce › In line with 2020 ambitions, Skamol › Implemented system for GHG › Ambition to reduce environmental › Acute physical risk: Local flooding and earth slides could interrupt raw material extraction as well as implemented an energy accounting accounting. footprint e.g. through energy production sites and transportation routes. environmental footprint system for all sites, and specific › GHG emissions (tCO2e): efficiencies, alternative energy sources › Regulatory risk: Increased production costs as carbon tax might be placed on direct emissions from reduction targets were defined. Scope 1: 28,622.4 and reduced waste. Long term ambition Skamol’s production sites. › Conducted energy efficiency projects Scope 2: 3,757.4 to have climate neutral operations. to reduce energy consumption and › Prepare a roadmap on how to move GHG emissions. towards these ambitions. › Reduce GHG emissions year-over-year through improvement and optimization ESG impacts identified along Skamol's value chain of equipment and processes.

Raw material supply Production Management and marketing Customer / end user › Climate impact raw material › GHG emissions › Sustainable product innovation › Climate impact of shipping and Skamol has selected the following UN SDGs to which they have the opportunity to contribute: sourcing › Chemicals and local pollution › Attracting and retaining employees delivery Water use and pollution Diversity › › Resource efficiency, recycling and › › Product contribution to energy Opportunity to make production process more efficient and › Responsible use and repa- waste management › Anti-Corruption and integrity efficiency increase resource-efficiency by adopting cleaner and more Sustainable and safe packaging Data security Product longevity triation of land areas in raw › › › environmentally friendly industrial processes (9.11). material mining › Water use › Sanctioned countries › Product take-back and circular › Supplier labor conditions and › Labor conditions and human rights › Sustainable brand positioning design human rights › Health and safety › Product quality and safety › Supplier health and safety › Local community impact › Product contribution to end user safety › Supply chain transparency Building Resilient Companies 43 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Happy › Introduced new policies addressing «Cultural › NOK 25, 000 awarded to Varden IL › Present (by Q1) the 10- and healthy Appropriation” and “Inclusive Colorway». from Meråker as one of the winners year horizon ESG strategy, customers Important for North American markets. of the «Unity, Community and emphasizing focus on › Kari Traa: Launched “Exercise outdoors” during Belonging»-campaign. customer welfare: Health by activebrands.com Covid-19 lockdown, and actively participated in promoting physical and mental the Black Lives Matter movement. health through core categories.​ › Dæhlie: Partnered with Norwegian cross- Standing up for human rights country skier Emil Iversen promoting «Unity, with a focus on diversity and Community and Belonging» among children. gender equality.

2. Extended use › Following the 2020 ambition we initiated › Styles containing Blue Sign fabrics › Conduct customer survey to of low impact a processes to prepare for the EU Circular 2020: 191/800 discover how to help them Active Brands is a leading Nordic supplier of sporting Brands also serves customers through each brand’s materials Economy strategy and directives through 2019: 170/800 participate in the circular goods brands and promotes seven own brands. The own webshops and outlets. with circular focusing on Reuse, Recycle and Product Life › Styles containing certified organic economy. attributes Cycle Analysis. Ex. Wastelayer (Kari Traa) and cotton › Apply for Sustainable Apparel Active Brands’ product portfolio consists of a varie- Wonderful Waste (Johaug). 2020: 6/800 Coalition (SAC) membership, ty of clothing, apparel, and equipment related to an Main raw materials include animal products like wool › 100% recycled and Blue Sign certified lining 2019: 0/800 looking into the Higg Index to replaced old lining fabrics in 89 technical styles › Styles containing recycled polymer better manage environmental active Nordic lifestyle. Norway is currently the biggest and goose down, as well as cotton and synthetic fab- for Kari Traa, Dæhlie and Johaug’s AW21 2020: 20/800 footprint. market, while Sweden and North America represents rics. The raw material is sourced globally by the manu- collections. 2019: 10/800 › 20% of styles containing › All polybags replaced with bags made of recycled › FSC certified packaging recycled polymer. the second and third largest end-markets. The main facturers on behalf of Active Brands, and products are low-density polyethylene, reducing virgin plastic solutions % 100 % › Increase number of wool styles customer group is B2B, where the company serves manufactured by third-party producers, most of which use. 2020: 63 containing Waste Wool from 2019: 23 1% to 5%. leading sporting goods retailer and e-tailers. Active are found in Asia, including China and Myanmar. 3. Supporting › Exceeded target of 70 % first tier suppliers to be › BSCI* members, first tier › Improving supplier social ethical trade and involved in a 3rd party auditing scheme. suppliers % 100 % standards by helping tier 1 a responsible › Supplier audits uncovered social management 2020: 85 suppliers set up policies and supply chain and decent working hours as improvement areas, 2019: 70 implement standard operating Key climate risks and opportunities particularly for suppliers beyond tier 1. 2018: 73 procedures. › Chronic physical risk: Permanent changes in seasons and temperatures affect customer purchasing patterns › One supplier received a D-rating on BSCI and › BSCI* members with rating C or › Following up on Corrective and needs. have submitted a corrective action plan and will higher Action Plans communicated to be re-audited in 2021. 2020: 31/32 suppliers. › Acute physical risk: Extreme weather events disrupts raw material supply (e.g. cotton) and global logistics, › Traceable non-mulesing Merino wool has 2019: 35/37 › Reduce number of temporary which may cause unexpected price increases and delays. become a company standard. › End-products supplier audits rated employees and offer suitable › Regulatory risk: Regulations to mitigate the negative impact of fast fashion, aiming to increase circular › Shifted all down sourcing to Responsible Down acceptable insurance to temporary design (following EU Taxonomy on circularity), recycling and transparency. Standard (RDS) certified suppliers. 2020: 19/19 employees. 2019: 26/28 › 2nd and 3rd Tier Suppliers: 25 fabric and trims suppliers included in CSR and Quality System. › Styles containing RDS certified ESG impacts identified along Active Brands' value chain down 2020: 40/100 2019: 0/800

Raw material supply Production Management and marketing Customer / end user 4. Active › Annual employee survey not conducted due to › Women employees % 100 % › Look at solutions to increase Brands should Covid-19, and hence an NPS was not conducted. 2020: 70 employee engagement. › Animal welfare in wool and › Chemical use and pollution › Sustainable and circular design › Product quality and longevity be amongst the › Between March and October 2020, many › Introduce Winningtemp to down production › Climate impact of retail and logis- › Sustainable service offering › Product take-back and recycling most attractive employees were furloughed due to lockdown help employees and leaders Attracting and retaining employees Product health impacts in use › Water depletion and pollution tics › › and reduced activity at Active Brands. At the interact through constructive Sustainable packaging Diversity Contributing to sport safety places to work in cotton supply chain › › › beginning of November 2020, all employees were feedback. Chemicals in sourced textiles Responsible marketing Data security and customer in the sporting › › Sustainable stock management › › fully back. › Labor and human rights › Labor conditions and human rights in › Anti-Corruption and integrity privacy goods industry › Sustainable textiles and mate- production › Sustainable product offering and › Sanctioned countries 5. Set high › One full day training in the company’s Code of › 100 % of tier 1 and 2 suppliers › Follow up on anti-bribery rials › Health and safety positioning standards Conduct and anti-corruption policies planned signed anti-bribery agreement. agreement signed by suppliers › Sanctioned countries › Local community impact › Anti-competitive behavior for all Shanghai employees and performed in › 100 % of Shanghai management as they are required to set up › Supply chain transparency for business 2021. team completed initial training in internal procedures, identify › Climate impact integrity and anti-corruption › Anti-corruption policies made available to Oslo Code of Conduct and anti-corrup- high-risk areas and train their employees via the intranet. tion. personnel. › Updated standard operating procedures for high- risk areas of bribery.

* Business Social Compliance Initiative Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Responsible › The 2020 ambitions were met as EET has: › Spend stemming from vendors with › 100 % of vendors to sign new contracts and active › Worked with private label suppliers to an ESG policy and/or completes self- and perform self-assessment. supply chain provide climate friendly alternatives. assessment % 100 % › Perform 20 audits, gradually increase management › Performed 20 supplier audits with no 2020: 95 audit capacity next 3 years. eetgroup.com major findings. 2019: 80 › Increased number of Supplier Code of › Private label vendors responded to Conduct signatories. self-assessment questionnaire % 100 % 2020: 20 2019: 16

2. A trusted › Updated the following internal policies: › 1 whistleblower incident reported › Ensure internal policies are up-to- and ethical Code of Conduct, anticorruption, whis- and handled according to internal date, reflecting societal trends (e.g. EET Group (EET) is a value-added distributor of IT EET sources all products form third-party producers. business tleblower. procedures. diversity and fair treatment). products and spare parts for electronic equipment. Most products are sources from Asia, and China partner › New policies introduced for quality, ESG › Evaluate potential business ethics and conflict minerals, all available on e-learning for all employees. The company operates across eight business lines: in particular. EET’s private label products are EET’s website. › Introduce an anonymous Server, Computer & Printer Parts, ProAV Solutions, also produces in Asia and the production is fully whistleblower channel.

Surveillance & Security, Network, Storage, POS & outsourced. 3. A great › Continued focus on lowest scoring work › eNPS % 100 % › EET will continue to: Auto-ID, and Consumer Electronics. The company place to work satisfaction drivers from 2019 (growth and 2020: 28 › Address areas of employee frustra- reward). 2019: 20 tion to maintain or increase eNPS. is headquartered in Denmark, where you also find Third-party transportation companies are engaged › Frequent communication with employees 2018: 20 › Increase share of female employees. the central warehouse. Other warehouses are in UK, to ship goods to the customers. EET’s main customer following Covid-19 to ensure their contin- › Absenteeism % 10 % › Maintain or increase trust in fair ued wellbeing. 2020: 1.9 treatment score. France, Spain, Poland, Norway, and Finland. EET has base is solely B2B and constitutes a mix of integrators › Increased share of women leaders to 2019: 2.5 operations in more than 20 countries in Europe. and re-seller. actively impact gender diversity (20 % 2018: 2.5 compared to 15 % in 2019). › Female employees 100 % › Managed to maintain share of female em- 2020: 28 ployees and trust in fair treatment scores. 2019: 28 2018: 26 › Trust in fair treatment score Key climate risks and opportunities 2020: 8.8 / 10 2019: 8.8 / 10 › Opportunity: Customers looking to reduce their environmental footprint by requesting spare parts, 2018: 8.7 / 10 repairs, and products that increase energy efficiency. › Acute physical risk: Extreme weather causing delays as they disrupt global logistics and may damage private 4. Minimise › Strengthened capacity to deliver on › 2020 GHG emissions: › Continued focus on «right to repair» label production sites in Asia. the increasing demand stemming from EU’s Scope 1: 96 tCO2e by reducing customer e-waste and › Regulatory risk: Increased responsibility for e-waste management under the EU Waste Electrical and environmental «right to repair» strategy. Scope 2: 92 tCO2e increase product lifetime. Electronic Equipment Directive, as well as the EU Taxonomy on circularity. Carbon tax impact › Improved scope of GHG emissions Scope 3: 9,309 tCO2e › Provide CO2 neutral deliveries for ma- could affect prices on plastic packaging and transportation. through the reporting as we obtained data from the jority of shipments through investing value chain majority of the outbound transportation in carbon offsetting projects. partners. › Improve waste management measure- › Reviewed solutions to provide partners ment and efforts. ESG impacts based on EET’s sector and operations with opportunity to CO2-offset their orders.

5. Ensure safe › «Right to repair», packaging optimization › cNPS % 100 % › Look into possibilities to gain a deeper Raw material supply Production Management and marketing Customer / end user and satisfied and waste reduction identified as opportu- 2020: 29 understanding of our customers’ ESG customers and nities to reduce customers’ environmental 2019: 27 related priorities. › Labor conditions and human › Labor conditions and human › Anti-corruption and integrity › Product quality and safety consumers footprint. 2018: 22 › cNPS: 30 rights rights › Employee health and safety › Customer privacy › Launched online shop giving customers › Data breaches identified 100 % Conflict minerals Sustainable packaging in the Employee satisfaction and Dual use goods › › › › access to enhanced product information. 2020: 0 Sanctioned countries supply chain development Sanctioned countries › › 2019: 0 › Transportation and logistics › Diversity and anti-discrimination › Climate impact of transport and in the supply chain › Product offering to enhance shipping electronics’ longevity › Product offering to enhance end- EET has chosen to focus on the following UN SDGs, and connected each to the Key ESG Goals: › Internal waste management use energy efficiency › Operational climate impact › Electronic waste (WEEE) Achieve gender Promote sustain- Ensure sustainable Take urgent Promote just, › Sustainable packaging to customers equality and able economic consumption action to combat peaceful, and › Tax policies and payments empower growth and and production climate change inclusive societies. women and decent work patterns. and its impacts. girls. for all.

46 FSN Capital ESG report Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Practical, › Conducted customer and market surveys to › cNPS %: 100 % › Continuously improve the ability to durable and better understand customer needs. 2020: 60 serve customer needs. decorative › Started an inbound marketing project to de- 2019: 72 › cNPS score of 65.0 %. fibosystem.com quality panels fine and optimize the customer journeys and 2018: 50 develop content for different target groups. 2017: 49 › Implemented technical platform to better 2016: 47 monitor the customer journey. 2015: 37 › Unfortunately, cNPS decreased despite the stated 2020 ambition; the 2021 ambition was Fibo is the leading global manufacturer of high- adjusted accordingly. quality wet room wall systems, which is a more 2. Satisfied › Fibo managed to significantly surpass 2020 › eNPS % 100 % › Continue efforts to raise employee environmentally friendly, design versatile, functional employees that ambitions of eNPS of 23 %. 2020: 52 satisfaction through focus on Lead- and cost-efficient substitute to traditional ceramic are passionate › Continued efforts to create a one firm culture 2019: 21 ership, HSE, corporate culture and a about Fibo that capsules all employees across geogra- 2018: 13 clear vision. tiles. The product range includes complete wet room phies. 2017: 11 › eNPS score of 53 %. wall systems, comprising fully waterproof wall panels › Took measures to reduce noise in the factory 2016: 13 › Maximum 4.6 % sick leave. as part of HSE focus. › Sick leave % 10 % and related installation accessories, as well as kitchen The final products are sold to customers across the › Continuous inputs from employees were 2020: 4.7 boards and countertops. new construction, repair, and manufactured housing systematically collected through employee 2019: 6.9 surveys. markets in Scandinavia, Europe, New Zealand, Canada, Plywood constitutes the main raw material and and North America. Fibo is active across different 3. Resource › Started process of better and automated data › Energy usage (kwh/m2) 3 % › Continue to further reduce energy efficiency collection from the factory to: 2020: 2.05 consumption, achieving energy usage is sourced from suppliers in Asia, Latin America, distribution channels, with key customers being › Improve production process and product 2019: 2.06 of 2.04 kwh/m2. and Europe, while the end-product is produced at builders’ merchants, DIY chains and direct B2B sales, quality. 2018: 2.07 › Achieve ISO 14001 certification. › Reduce waste from product defects. 2017: 2,36 Fibo’s factory in Lyngdal, Norway. The company is that in turn mainly sell to installers within residential › Optimized use of heating boilers and heat 2016: 2.17 headquartered in Oslo. and non-residential construction. recovery thus reducing greenhouse gas 2015: 2.28 emissions. › Initiated process for ISO 14001 certification, expected completed in 2021. Key climate risks and opportunities 4. Waste › Intensified efforts to reduce waste in the › Waste (% of produced m2) 7 % › Continue reducing waste through › Opportunity: Increased demand for building products with circular attributes made of raw material management production process: project teams assessed 2020: 4.70 optimizing production. with lower environmental footprint compared to alternatives like ceramic tiles measures including material selection, tem- 2019: 5.00 › Waste (% of produced m2): 4.5. (following EU Taxonomy for climate change mitigation). perature control, and humidity adjustments. 2018: 5.00 › Ran a Circular Economy project to identify 2017: 5.20 › Acute physical risk: Extreme weather events may impact forestry production and disrupt the supply chain possible customers and markets for waste 2016: 4.05 and increase plywood raw material prices. from the production process. 2015: 2.80 › Regulatory risk: Requirements on ensuring sustainable forestry, as well as increased emphasis on supply chain transparency and product traceability.

ESG impacts based on Fibo’s sector and operations

Fibo has selected the following UN SDGs to which they have the opportunity to contribute:

Raw material supply Production Management and marketing Customer / end user › Wood sourcing (material › Labour conditions and human › Anti-Corruption and integrity › Sustainable market positioning certificates) rights › Attracting and retaining › Product quality and safety › Labour conditions and human › Health and safety at the employees › Product longevity rights production site › Local community engagement and › Product take-back, recycling and › Health and safety › Resource efficiency and waste job creation reuse Protect worker’s health and Increase resource efficiency in own Contribute to sustainable forest Reduce resource consumption › Industrial chemical handling and management › Diversity › Product labeling and certification safety in Fibo’s production sites production processes by adopting management (15.2) through by developing circular product treatment › Energy efficiency › ESG supplier management (in- › Climate impact of shipping and (8.8), and promote an inclusive clean and environmentally sound cooperation with raw material attributes and minimizing waste › Climate impact › Chemical use and pollution cluding audits) delivery work environment (8.5 and 8.6) technologies (9.4). suppliers. in production process (12.5). › Sanctions › Sustainable packaging › Business Ethics › Sustainable and circular design

48 FSN Capital ESG report Building Resilient Companies 49 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. › Achieved ambition of 100 % climate compensated › Climate compensated outgoing e-commerce › Evaluate opportuni- Environment: e-commerce shipments. shipments % 100 % ties for recycling in Reduce CO2e › Made agreements with last-mile-forwarders to 2020: 100 all locations. emissions with climate compensate their emissions; Kjell & Company 2019: 15 › Reduce energy con-

kjell.com 50 % by 2030 purchased climate compensation for the one forward- › GHG emissions (tCO2e): sumption by 5% by er that was unable to compensate own emissions. Scope 1: NA upgrading lightning › Started measuring material usage in private label Scope 2: 169.5 to LED in 95% of packaging to reduce plastic usage. Scope 3: 1,237.2 shops. › No plastic was allowed in new item packaging pro- › Plastic in private label packaging % 100 % › Reduce non- duction. 2020: 13 renewable plastic › Assessed the potential to minimize plastic in repeat 2019: 22 used in private label order packages – where financially viable. packaging to 5%. Kjell & Company is a leading consumer electronics All products are produced by third-party accessories omnichannel retailer, operating 130 stores manufacturers and sourced from suppliers in 2. Social: › Efforts made to achieve eNPS of 60 %, the share of › eNPS % 100 % › 60 % eNPS. Fair and safe female employees to 21%, and to keep absenteeism 2020: 47 › 10 % of employees across Sweden and Norway. Both markets are also Europe and Asia. Most goods, including the private employer at 3%, however, the pandemic forced a shift in focus 2019: 44 originate from served through an online shop, where the logistics to label products, are produced in China, and Kjell & offering from launching new initiatives to ensure staff and 2018: 57 another country consumer safety in our stores. › Women employees % 50 % than the one they deliver the products to the end-customer has been Company runs a procurement office in Shanghai. The opportunities for career › Stricter rules for absenteeism applied in 2020. 2020: 20 are currently outsourced to third-party logistics operators. The goods from Asia are primarily shipped by boat to the as well as 2019: 19 working in. personal 2018: 17 › 25 % female leaders. product line covers everything from computer screens, central warehouse in Malmö, where you also find the Women leaders % 50 % growth › drones, and gaming accessories, to memory chips and headquarter. Substantial work has been done in recent 2020: 20 2019: 15 printer ink. years to cut out air freight and reduce packaging size 2018: 14 to reduce both emissions and cost. › Absenteeism % 10 % 2020: 5 2019: 3

3. Governance: Business integrity and transparency Business integrity and transparency Business integrity Key climate risks and opportunities Set an example › Planned to implement a new way to measure custom- › Efforts to be resumed in 2021. and transparency for business er satisfaction to better understand how to improve Product quality and safety › Conduct anticorrup- › Opportunity: Increased demand for indoor climate products as average temperatures increase and ethics customer relationships, however it was put on hold › Private label returns % tion training with all seasonal heatwaves becomes more common. and social due to Covid-19. 2020: 0.8 staff in assortment, › Acute physical risk: Extreme weather events interrupting supply chain activities and damaging production responsibility Product quality and safety 2019: 1.7 sourcing, and pro- sites in Asia that produce private label products. › Implemented stricter quality controls to identify high › % of unique new items introduced where curement. › Regulatory risk: Tightened environmental and climate regulations in China, as well as EU regulations on return ranges and managed to decrease private label relevant compliance documents are ob- Product quality and 100 % packaging and product circularity (following the EU Taxonomy on circularity). returns below ambition of 1.5 %. tained safety › 0.5 FTE position dedicated to collect and verify com- 2020: 89 › Hold 100% of pliance documents of new products. 2019: 58 relevant compliance Supply chain management Supply chain management documentation for › Efforts made to audit all new private label suppliers › Supplier Code of Conduct signed by private new items intro- for compliance against the Code of Conduct, follow up label suppliers % 100 % duced to our range. ESG impacts identified along Kjell & Company's value chain on all existing suppliers’ corrective action plans and 2020 100 Supply chain have 90% of active European suppliers sign a Code of 2019: 100 management Conduct – according to 2020 ambitions. › 2018: 81 › Ensure all suppliers

80 days of work allocated to auditing. Supplier Code of Conduct signed by have signed the Raw material supply Production Management and marketing Customer / end user › › › 1/3 FTE devoted to have the Code of Conduct signed European suppliers % 100 % Supplier Code of › Climate impact of raw material › Electronic waste (WEEE) › Anti-Corruption and integrity › Product quality and safety by our suppliers. › 2020: 93 Conduct. sourcing › Climate impact of logistics and own › Diversity › Product take-back, recycling › 2019: 61 › Conflict minerals in electron- operations › Sustainable stock management and reuse 2018: 0 ics › Chemical use and pollution › Product offering to enhance › Sustainable brand positioning › All 38 new suppliers were audited › Sanctioned countries › Sustainable packaging energy efficiency and electronics’ › Product labelling and transpar- › 134 audit findings required follow up, but › Supply chain transparency and › Supplier labor conditions and longevity ency only able to verify 111 due to the pandemic. ethics human rights › Attracting and retaining em- › Dual use › Supplier health and safety ployees › Data security and privacy › Labor conditions and culture of own › Tax policies According to Kjell & Company’s employees the following SDGs are relevant for the company’s operations: operations › Employee health and safety › Internal waste Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Saving lives › Launched Roll Fix, a safety belt helping › Number of field failures › Maintain zero faults by continuing to and minimising parents fasten their children in the car 2020: 0 improve production, product quality, damages during seat in the right way, reducing the risk of 2019: 0 and product development cycles. transport and injuries. 2018: 0 holmbergsgroup.com traffic through › The group is certified according to innovation and International Automotive Task Force zero defect (IATF). products

2. Moving › All relevant products fulfills REACH regu- › Passed the COP test and chemical › Discuss ambition of climate neutral towards lations. testing. operations by 2030. circularity and › 70 % of covers produced in a non-chemical › Passed annual testing conducted › Management group to develop circu- low-impact environment in Lithuania . by third party institute. lar economy strategy. products › Suppliers required to minimize number of › 2020 GHG emissions › Investigate possibility of installing materials used in products to facilitate for Scope 2: 1,238.1 tCO e* solar panels in Chinese factories. Holmbergs develop and produce critical safety The company only serves B2B customers, primarily 2 re-design and recycling. components and systems for child safety car seats. The child seat OEMs (original equipment manufacturers). › Scrap steel at QingXi factory, China, sold for *788.1 tCO2e related to new factory recycling, equivalent to 1,978 tCO e. in QingXi. products include harness systems, ISOFIX connectors, They also provide some customers in other 2 retractors, and covers. The company operates two transportation niches with safety belt solutions, 3. Commit to our › In 2020 Holmbergs significantly increased › eNPS % (compared to 2019) › We strive to achieve zero incidents production sites in China, one in Lithuania, and one including buses, agriculture machinery, and rescue employees eNPS by high focus on creating a common Production sites and reduce absenteeism. company culture in a fast-growing Lithuania: +62 % › Holmbergs will focus on how to im- in Romania. The main raw material inputs are plastic, vehicles. organization. China, Hengli: +36 % prove the eNPS scores. metal and webbing, and textiles. › Covid-19 initiatives in factories: China, QingXi: NA temperature checks and intensified cleaning Corporate offices routines. Sweden: +0 % › Fire drills and training at the factories. › Sickness absenteeism % › Refurbished kitchen, dining room, and Production sites sanitary area at Chinese production site. Lithuania: 9,4 % China, Hengli: 1,0 % Key climate risks and opportunities China, QingXi: 1,2 %

› Regulatory risk: Increased regulations on end-of-life product management (e.g. waste and plastic) in Corporate offices relation to the EU Circular Economy strategy could impact current production methods Sweden: 1 % and sourcing strategies. 4. Act ethically › All new employees receives and signs the › One Code of Conduct incident › Always act on Code of Conduct › Market risk: Changes in mobility patterns, moving towards the sharing economy may affect the towards society Code of Conduct reported and handled according breaches . demand for car-related products. › Code of Conduct posted on bulletin boards to internal procedures. › Maintain zero incident ambition. › Acute physical risk: Extreme weather events disrupting supply chain activities and damaging production across the organization. › 100 % employees signed Code of › Implement eLearning available for sites – heath waves may interrupt productivity as factory workers’ health and safety is › Established anonymous whistleblower Conduct. all staff. put at risk. channels.

5. Responsible › Dialogue with suppliers to improve › Supplier audits performed by site › Perform 20 supplier audits. supply chain traceability. visits %: 100 % management › Supplier Code of Conduct distributed in 2020: 0 ESG impacts based on Holmbergs’ sector and operations local languages to all critical suppliers. 2019: 28 (25/89) › Supplier site visit audits cancelled due 2018: 28 (22/79) to Covid-19, however, 8 self-assessment › Suppliers signed Supplier Code questionnaires were distributed with no of Conduct 100 %

main findings. 2020: 41 Raw material supply Production Management and marketing Customer / end user › Climate impact of metals and plastics › Climate impact › Sustainable design and posi- › Responsible product disposal › Use of renewable and recycled plas- › Chemicals and pollution tioning and circular design tics and metals › Resource efficiency › Working conditions and culture › Product durability › Hazardous chemical use and pollution › Recycling and waste management › Safety innovation › Product weight saving benefits Holmbergs has selected the following UN SDGs to which they have the opportunity to contribute: in the supply chain › Sustainable packaging › Diversity › Environmental benefits of pro- › Environmental impacts of metal › Labor conditions and human › Anti-Corruption and integrity tecting cargo sourcing rights › Data security › Protect end-user safety Holmgren´s products directly contribute to › Supplier labor conditions and human › Health and safety › Access and affordability UN SDG 3.6 on road safety and traffic accidents. rights › Anti-corruption and integrity › Human health and plastics › Supplier health and safety › Product certification and trans- › Sanctioned countries parency

Building Resilient Companies 53 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Supporting › Continued customer dialogue and actions › Initiated the establishment of a test › Roll out a global customer survey customers to to further the innovation of resource-effi- center for innovation and develop- which includes questions on which reach their cient products. ment of sustainable solutions. ESG topics they find more important. environmental › Active partnership with the Easy-E › cNPS above 10. gram-equipment.com ambitions project which aims at reducing energy › Open the test center to support inno- consumption for production machines; vation projects and the development the project is supported by the Danish of sustainable solutions. Energy Agency and done in cooperation › Continue the Easy-E project with with the Danish Tech. University and the the aim of reducing machine energy Danish Technological Institute. consumption by 27 %.

2. Motivated › Covid-19 measures and contingency plans › Short term absenteeism › Continue to monitor short-term ab- Gram Equipment (Gram) assembles and produces food employees implemented at all sites, no infection out- › Production sites % (goal 3 %) 5 % senteeism closely and limit the conse- processing equipment and spare parts for the global and a diverse breaks and the few individual cases were 2020: 4.1 quences of the pandemic, aiming for: workplace handled according to the government’s 2019: 3.8 › Production sites: 3.9% ice cream production industry. The machinery is for recommendations. › Administration % (goal 1.4 %) 1.4 % › Administration: 1.1% (Due to expect- high-throughput production only and can produce › Positive development in the eNPS score at 2020: 0.8 ed COVID-19 effects on absentee- all sites, employee engagement and loyalty 2019: 1.0 ism) more than 40,000 ice creams per hour. scored particularly high. › eNPS % 0 % 100 % › eNPS: above 20 % › Leadership training for all manages was 2020: 13 › Completing the new leadership pro- prepared but execution postponed to 2019: -8 gram with a 360-degree evaluation of The machine parts are mainly made of stainless-steel 2021. › Women employees % 100 % all managers. components, sourced from sub-suppliers, and are › Group Management formulated 4 leader- 2020: 17 › Continue to include diversity factors, ship virtues. 2019: 17 such as gender composition and na- assembled at Gram’s facilities in Denmark and Turkey. › Continued work to improve diversity, › Women recruitments % 100 % tionality, in recruitment processes. Transport to the customer site is outsourced, while Gram’s customers operate across the globe, ranging focusing on recruiting female graduates 2020: 18 › 20 % of new recruitments are women. for a career at Gram. 2019*: 26 Gram handles the installation and machinery service. from North America to New Zealand. * (few recruitments in total)

3. Reducing › All entities, except the Chinese, office › 2020 GHG emissions › Improve data quality of quarterly

our have completed their first year of GHG Scope 1: 4802 e tCO scope 2 reporting and increase num- environmental emissions reporting. Scope 2: 318 e tCO ber of emission sources included in Key climate risks and opportunities 2 footprint › Business operations in Denmark changed Scope 3: 1,128 tCO2e scope 3. › Opportunity: Increased demand for production equipment that reduce energy consumption and food power supply to Green Energy. › Reduce GHG emissions by 50 % by waste as customers seek to minimize their environmental footprint (following the EU 2030 per FTE, compared to 2021. taxonomy on circularity). › Describe how surplus material is handled and/or waste management at › Acute physical risk: Extreme weather events may disrupt own production lines in Denmark, as well as cause warehouse.​ supply chain delays. › Group Management to assess climate › Regulatory risk: Policies related to energy efficiency and waste management may affect both Gram’s risks and opportunities. production methods and end-products. 4. Ethical › Code of Conduct is a mandatory part of › 99 % of employees signed the Code of › Continued focus on Code of Conduct value chain / the onboarding process for new-hires. Conduct. compliance, and the policy will be part › Current employees re-signed the Code of › 76 % of supplier value spend signed of the onboarding for all new hires. ESG impacts based on Gram’s sector and operations Conduct to emphasize the importance for the supplier Code of Conduct. › Roll out eLearning on business ethics. our business. › No whistleblower incidents in 2020. › Implement an anonymous and elec- › Engaged dialogue with suppliers to tronic whistleblower channel. recognize and sign the Supplier Code of › 85 % of supplier value spend to sign

Conduct. the Supplier Code of Conduct. Raw material supply Production Management and marketing Customer / end user › Contact details for whistleblower › Conduct supplier risk assessments › Water use in supply chain › GHG efficiency at production sites › Product innovation: longevity › Promote reduced food waste incidents were included in the Code of and audits following a risk-based › Labor conditions and human › Hazardous substances and waste at and ease of maintenance › Equipment GHG emissions (ener- Conduct. approach. rights in raw material pro- production sites › Green marketing gy use and refrigerants) duction › Material utilization and recycling › Employee education and devel- › Equipment water use › Workers' health and safety in › Water consumption at production opment › End-of-life: Machine reuse, repair, the supply chain sites › Diversity and anti-discrimination and recycling › Supply chain transparency › Transport climate impacts › Anti-corruption and bribery › Consumer health and safety (nutri- › Business ethics in procure- › Health and safety of own employees › Anti-competitive behavior tion and hygiene) ment practices › Labor and human rights › Tax payment transparency › Customer health and safety (operat- ing the machines) › Partner and customer integrity

54 FSN Capital ESG report Building Resilient Companies 55 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Attractive › Measures taken to improve › eNPS % 0 % 100 % › eNPS of 10, with focus on participation employer with participation in employee surveys, e.g. 2020: -12 and meaningfulness. a sustainable implemented human resources software 2019: -5 › Arrange more digital knowledge mindset (Winningtemp). › Lost Time Injury (LTI) 10 exchange seminars. morenot.com › Covid-19 had a negative effect on eNPS, 2020: 5 › Increase awareness of sustainability sick-leave, and turnover rate, and we did 2019: 1 throughout organization and develop not achieve the stated 2020 ambition of › Sick-leave % 10 % measurement indicators. increased eNPS. 2020: 6.2 › Initiate a sustainability steering › Increased focus on employee 2019: 5.2 group with broad presence in the development and internal knowledge › Employee turnover % 100 % organization. sharing through digital seminars. 2020: 12.0 › Started challenging the organization 2019: 8.7 Mørenot manufactures and services solutions Mørenot is headquartered in Ålesund, Norway, with regarding current ESG work and future › 100% of employees completed ethics within the global fishing, aquaculture and seismic service stations mainly on the Norwegian coastline. aspirations. training, in line with 2020 ambition.

industries. The company is divided in three divisions: However, the company has a global footprint with 2. Resource › Developed a new drying technology for › 2020 GHG emissions › Implement new drying technology at

Aquaculture, Fishery, and Offshore. Key products and equipment production in China, Lithuania, Canada, efficient aquaculture nets that reduces both time Scope 1: 1,2902 e tCO 3 more locations. Investigate potential production and energy consumption. The technology Scope 2: 758e tCO synergies with the fishery. services offered within the Aquaculture division Spain, and Denmark. 2 and circularity is implemented at 5 locations, exceeding Scope 3: 3,2902 e tCO › Increase the share of renewable include the production and service of nets, mooring 2020 ambition of 3. › 5/12 stations with new drying energy used in the drying process, › Set up 2 return points for net recycling. technology (+4 compared to 2019). reducing GHG emissions by 2,800 systems, and cages. The Fishery division The customer base consists of blue-chip fish farming tCO2e. produces trawls, longlines, purse seines, and pots. and vessel companies. The key target markets are Nor- › Develop tracking indicators for resource efficiency, circularity The Offshore division produces seismic towing way, the Unites States, Russia, South Korea, Scotland, and environmental impacts in the solutions such as deflectors, seismic buoys, and ropes. and Iceland. Each of which has a sizeable and Aquaculture division. › Set targets for GHG emissions industrialized aquaculture and fishing market. reduction.

3. Supply chain › All new suppliers signed the Supply Chain › Supplier by purchase value who have › 80 % of purchase value from suppliers ethics and Code of Conduct, or similar agreement. signed the supplier code of conduct, or that signed the Supply Chain Code of transparency › Due to Covid-19 fewer site-audits com- an equivalent agreement % 100 % Conduct or a similar agreement. Key climate risks and opportunities pleted than the 20 which were planned. 2020: 36 › Complete 20 enhanced supplier due › Opportunity: Extreme weather events increase the market for climate robust fishing equipment. › Initiated the development of a Risk 2019: 19 diligences and supplier audits. Management Framework, covering key › Number of supplier audits completed* › Continue Risk Management Frame- › Opportunity: Utilise new technologies to develop products that reduce fuel consumption and increase principles for risk management and 2020: 13 work development. Implement in one energy efficiency in the fishing and aquaculture industry. strengthening supply chain governance. 2019: 10 location. › Regulatory risk: Taxation on non-renewable raw materials, as well as requirements to ensure product * There were no major findings in each of circularity and recycling (e.g. extended producer responsibility for plastic products). the years.

4. Sustainable › Met 2020 ambition by releasing 3 › 4 products currently deemed «more › Initiate and develop a product product products deemed as more sustainable sustainable alternatives». portfolio of more sustainable products offering alternatives: and develop clear criteria for ESG impacts based on Mørenot’s sector and operations and R&D › Banana Pingers (Prevents by-catch) . sustainability classification. › Hvalpsund Extreme 500 (Reduces risk › Introduce 7 new sustainable products of fish escape). to the market. › NetCare (Reduces risk of releasing

harmful chemicals from coating to the Raw material supply Production Management and marketing Customer / end user ocean). › Waste management in supply › Local pollution stemming from › Green innovation and marketing › Water pollution and end-of-life › Established an R&D group in Aquaculture chain (e.g. microplastic, steel) own operations (e.g. copper › Product safety, reliability and product mgmt. (e.g. microplastic) division to develop new, more sustainable › Energy consumption in raw mate- emission from anti-fouling) traceability › Products' effect on marine life products. rial production › Waste management and recy- › Diversity and anti-discrimination (e.g. bycatch) Health and safety in supplier cling Employee education and devel- GHG emissions › › › Mørenot has selected the following UN SDGs to which they have the opportunity to contribute: operations › Transportation throughout the opment › Fish welfare Labor conditions and human value chain Anti-corruption and bribery Net robustness (e.g. prevent fish › › › Support a sustainable Ensure decent Resource efficiency Develop products rights in supply chain Health and safety at own pro- Anti-competitive behavior escapes) › › food production system labour con- and circularity that enable the Supply chain transparency and duction sites HSE at fishing vessels › › (2.4) and promote ditions in the throughout the customers to business ethics in procurement Labor conditions and human › seafood as a nutritious supply chain products’ lifecycles sustainably harvest practices rights at own production sites and affordable food (8.6, 8.7). (12.5) the sea. alternative (2.1).

56 FSN Capital ESG report Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Motivated › Due to the heavy impacts from Covid-19, the › eNPS % 100 % › Increase employee satisfaction and satisfied company focused on ensuring all employees 2020: 36 rate by 4% points by improving employees had a sustainable working environment while 2019: 36 leadership skills, enrolling basic sneakersnstuff.com working remotely. 2018: 32 HR processes and map salaries. › Several employees were engaged in the Black › Define goals related to Diversity Lives Matter-movement, and SNS responded by and Inclusion. increasing efforts to improve diversity, equity, Sneakersnstuff (SNS) is a global online and physical and inclusion in the company. › Initiated a diversity taskforce to evaluate Diver- retailer of sneakers and apparel, as well as a creative sity and Inclusivity at SNS and to set relevant contributor to street culture. The primary product goals for the future; as part of this, a survey was made by an external consultant. segments are limited edition/rare sneakers sold › Conducted employees survey, key findings through raffles, normal premium sneakers, apparel included: › Request for better structured HR processes, & accessories. Adding to this, SNS also have a bar in continuous feedback, development, and career New York and a café in Tokyo to connect to the local opportunities. › Higher focus on internal communication and culture. Products are mainly branded goods, primarily Nike culture building. and Adidas, but SNS also sell their own-branded 2. Sustainable › Increased focus on SNS brand and new suppliers › Suppliers signed the Supply › Continue tracking share of SNS is headquartered in Sweden and operates seven products. All products are sourced from a selected supply chain to sign the Supplier Code of Conduct. Chain Code of Conduct % 100 % purchases bought from suppliers physical stores in Europe, the United Stated and Japan, number of third-party suppliers. › The capsule collection «Kinenbi» made with 2020: 53 (23/43) that have signed code of conduct. organic cotton was released in Q4-2020 with 2019: 51 (20/39) › Have ESG as a primary focus as well as an online shop shipping to customers across Japanese designer Kazuki Kuraishi. 2018: 36 (14/39) when choosing suppliers. 64 countries. To reach the customers, SNS has three SNS’ customer base is primarily millennials with a › Continued ambition from 2020 for 30% of SNS Brand to be pro- warehouses in Stockholm, New York, and Tokyo. great interest in the sneaker and streetwear culture. duced in a sustainable matter. Raw material supply Production Management and marketing Customer / end user 3. Promote › Take business integrity very seriously; maintain- › Employees signed the Code of › 100% of employees to complete › Climate impact supply chain › Sustainable packaging and › Sustainable brand positioning › Product environmental impact high standard ing trust among customers is key. Conduct % 100 % anti-corruption training. › Chemical use and pollution in waste management and circular and product offering in use and disposal business ethics › SNS has a Code of Conduct and policies in place 2020: 100 › Continue to act on any breaches supply chain economy › Employee training and › Product quality and safety Key climate risks and opportunities to promote high business ethics; any deviations 2019: 100 of the Code of Conduct. › Sustainable raw materials › Climate impact retail operations development › Customer service › Opportunity: Increased demand for high-end sneakers with a low environmental footprint. can be reported through a whistleblower system. 2018: 100 (rubber, cotton, etc.) › Working conditions & health › Supply chain transparency › Data privacy and security › No reported breaches of the Code › Acute physical risk: Extreme weather events disrupting shipping goods to end-customers, as well as delaying › Labor conditions and human and safety in own operations › Level of diversity and › Product labeling and of Conduct. supply chain activities. rights in supply chain › Sanctioned countries inclusivity in the workplace transparency › 100% GDPR compliant. › Health and safety in supply › Anti-corruption and integrity › Regulatory risk: Increased regulation on end-of-life product management (following the EU taxonomy chain - in particular logistics training on circularity), while carbon tax increase cost of transport. 4. Sustainable › Identified transport as a significant contributor › Local fulfillment in USA as % of › Further decrease CO emissions › Anti-competitive behavior 2 operations and to the environmental footprint through a value total US sales 100 % by shortening transport routes. reporting transports chain ESG assessment. 2020: 66 › Whistleblowing mechanisms › Continued to monitor CO2-emissions for long 2019: 40 › Data security and fraud haul transports. › 59 % decreased intercontinental protection ESG impacts based on Sneakersnstuff’s sector and operations › Worked to decrease intercontinental shipments. shipping from EU (compared to 2019).

5. High customer › As Covid-19 took a tight grip on key markets, SNS › Customer service tickets an- › Continue ambition of achieving Raw material supply Production Management and marketing Customer / end user trust and loyalty connected with consumers digitally and hosted swered within 24 hours % 100 % 100 % of customer service tickets › Climate impact supply chain › Sustainable packaging and › Sustainable brand positioning and › Product environmental impact in several engaging online events, to substitute for 2020: 82 answered within 24 hours. › Chemical use and pollution in waste management and circular product offering use and disposal local activities and events in key cities. 2019: 80 › Set relevant goals for customer supply chain economy › Employee training and development › Product quality and safety › Local customer service launched in Japan. satisfaction, e.g. better communi- › Sustainable raw materials › Climate impact retail operations › Supply chain transparency › Customer service cation towards customers. (rubber, cotton, etc.) › Working conditions & health and › Level of diversity and inclusivity in › Data privacy and security › Labor conditions and human safety in own operations the workplace › Product labeling and transparency rights in supply chain › Sanctioned countries › Anti-corruption and integrity › Health and safety in supply training chain - in particular logistics › Anti-competitive behavior reporting › Whistleblowing mechanisms › Data security and fraud protection

58 FSN Capital ESG report Building Resilient Companies 59 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Customers: › Assessment to identify ESG areas to support › cNPS % 100 % › Strengthen business understanding Offer services customers. 2020: 30 and proactivity to help customer’ ESG and products › Reduced customers' travel through digitali- 2019: 40 challenges. nordlo.com that promote zation. 2018: 42 › Strategic customer workshops with sustainable › Helped customers to be efficient and safe sustainability integrated in the agenda. digitalization when working remotely and in digital meet- › Develop service offering related to the ings during Covid-19. green transition and circular economy. › Did not achieve 2020 ambition of cNPS › Include ESG topics in customer survey. increase. Nordlo is a Nordic IT and digitalization partner Nordlo is headquartered in Stockholm, Sweden, and helping customers improve their IT environment by operates 33 offices across Sweden and five in Norway. 2. Own › Increased share of renewable energy in strate- › Renewable energy in strategic › Follow-up and further develop circu- operations: gic data centers. data centers % 100 % larity initiatives. offering scalable IT solutions addressing the needs of About 600 people work at Nordlo with operations Close the loop › Retained ISO 14001 certifications, according 2020: 85 › Continue working towards 100 % re- both businesses and employees. The service offering coordinated under three main divisions: Regional and deliver to 2020 ambition. 2019: 78 newable electricity in data centers. responsible › Provided Infrastructure as a Service: custom- › 2020 GHG emissions › Improve energy efficiency and optimi- includes a broad range of services and can assume Sweden, National Sweden, and Regional Norway. and ers can reduce own IT management resources Scope 1: 69.1 tCO2e zation in data centers. a full commitment for clients’ IT environment and environment with a sustainable and reliable product. Scope 2: 185.7 tCO2e › Set short- and long-term carbon strate- considerate › Implemented reporting structure to gather Scope 3: 234.7 tCO2e gies, and improve reporting in line with digitalization. Key service offerings include managed The key customer focus is companies with limited GHG emission data from all business units the GHG Protocol. tech IT services, IT infrastructure, cloud services, hardware to no in-house IT department across a wide range of (including scope 2 & 3). › Offset the 2020 carbon footprint, all › Current scope 3 factors include e-waste, busi- scopes included. and software management, and digital transformation. different industries. The main customer segments are ness travel and employee commuting. These are organized in three main service segments: small to medium-sized enterprises, public institutions, 3. Data › Expanded IT security and information securi- › Strategic hosting capacity with › Further develop IT-security service 1) IT Operations; 2) Hardware; and 3) Consulting. NGOs, and the education sector. security: Be a ty services: Prevent threats, discover potential ISO 27001 certification % 100 % offering in line with business plan. Services are provided through Nordlo’s own data trustworthy security threats, limit and restore. 2020: 70 › GDPR-refresh e-learning for all partner › Increased capacity in DDOS protection and 2019: 70 existing employees and for new centers. providing quarterly security scans of all data centers. › 0 reports on data privacy employees within the first two months secure › Säpo audited some customers' IT operations breaches. of employment. IT solutions with good results. › One more business unit to obtain ISO › Nordlo's «IT security podcast». 27001 certification.

Key climate risks and opportunities 4. Employees: › Continued to develop our purpose-driven, › eNPS % 100 % › Leadership development - including Be an transparent and team-based approach. 2020: 37 sustainability. › Opportunity: Increased demand for green IT and services that support the transition to a low carbon Developed the Nordlo joint intranet, 2019: 40 Work on possibilities for recovery and economy. attractive, › › inclusive HR-guidelines and financial handbook as a › Total Women FTEs % 100 % reduced unwanted stress related to the › Acute physical risk: Extreme weather events causing physical damage to data centers, disrupting Nordlo’s employer common base in the growing group. 2020: 14.5 business. services. committed › Launched «Nordlo More», a group-wide initi- 2019: 15 › Continue “Nordlo More” and develop › Regulatory risk: Regulations on energy consumption for electricity intensive operations, following EU to greater ative to drive areas related to equality, gender › Women managers % 100 % an ambassadorial initiative, with extra Taxonomy (climate change mitigation), as well as on non-renewable energy sources, and diversity and equality, diversity and inclusion. 2020: 23 focus on gender equality. requirements on end-of-life management for electronic goods and e-waste. 2019: 22 Improve and increase frequency of equality › › Women technicians % 100 % employee surveys, including eNPS. 2020: 3 2019: 4 ESG impacts identified along the value chain 5. Supply › ESG dialogue with suppliers focused on envi- › Code of Conduct signed by › Annual follow-up with Nordlo-com- chain: Act ronmental impacts. new employees and new Nordlo mon supplier assessment template. with high › Retained ISO 9001, 14001 and 45001 certifica- business units. › Conduct supplier risk assessment, Facility & equipment supply Production Management and marketing Customer / end user ethical tions; one additional business unit certified. › > 50 % of employees work in with extra focus on social and working › Environmental footprint of › GHG efficiency in own operations › Internal waste management › Energy use of products and after standards and › Increased transparency through 2020 sustain- ISO-certified business units conditions. products and services pur- (data centers) › Internal energy use sales-services transparency, ability report. 9001, 14001, 45001. › ESG training for all leaders and people chased › Water use in data centers › Green service offerings › Enabling resource efficiency while in key functions. › Sustainable mineral extraction › E-waste and end-of-life man- › Employee health and safety and productivity through digital promoting › E-waste management in supply agement (data centers and IT › Employee benefits and working transformation human rights chain equipment) conditions › Data privacy › Labor conditions and human › Noise generation from data centers › Diversity and anti-discrimination › Quality of customer service rights in supply chain › Employee education and develop- › System reliability and security Nordlo is contributing to the following UN SDGs: › Conflict minerals ment › Supply chain transparency › Data security Opportunity to indirectly contribute to upgrading Opportunity to indirectly reduce environmental › Business ethics in procurement the technological capabilities of customers (9.5) by impact of cities (11.6) and increase their resource processes promoting digitalization. efficiency (11.B) by promoting digitalization. Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Improve road › To achieve the ambition to improve product › Implemented safety technology › R&D teams in place and revised safety and development we: in new products, including: product road maps defined for all climate resilient › Defined a common framework for the busi- › Planned development of an business areas. saferoad.com operations and ness area Road Safety Systems to standard- innovative crash cushion. › External communication on mission, infrastructure ize internal R&D processes. › Turbine drying of road mark- vision and ESG efforts. › Actively pursued new technologies to ing to enable work on wet › Identify KPIs for climate related increase efficiency, performance, reduce surfaces. operational disruptions, track cost, and safeguard employees – across all › Steering assistance to improve quarterly. business areas. accuracy of Thermoplastic › Identify areas for more climate › Identified ESG opportunities and risks for lay-out. resilient operations. each business area.

2. Ensure health, › Rapid response and organizational alignment › Lost time incident rate (LTI) › HSE re-training for all employees safety and to mitigate impact of Covid-19, however some 2020: 58 and establish an HSE Network for satisfaction of negative effects included: 2019: 62 common initiatives and best practices. Saferoad is a leading supplier of road safety solutions wholesalers, installers and construction companies to own employees › Slight decline in overall eNPS for business › Accidents resulting in at least › LTI <55 in Europe and serves customers from early road design road authorities, governments and municipalities. units that implemented forlough-programs. one day absence (H1) › H1 <13 › Sick leave peaked in March 2020, resulting 2020: 13 › Sick leave < 4.5% through manufacturing, installation, and ongoing Headquartered in Norway, Saferoad employs about in overall increase compared to previous 2019: 14 › 0 Business Units with negative eNPS. maintenance in four core business areas: (1) Road 2,100 people across 13 countries in the Nordics and years. › Sick leave % 10 % › eNPS executed for all employees. Improved 2020: 5.1 restraint systems; (2) Signs and work zone protection; Eastern Europe. Main production sites are located communication pre-survey, implemented a 2019: 4.5 (3) Light poles and masts; and (4) Road marking. in Norway, Sweden and Poland. Input materials are structured follow-up process, incl. Manager › eNPS % 100 % Handbook and Action Plan template in all 2020: 24.9 Saferoad's key customer segment vary by product sourced from both Europe and Asia. Business Units. 2019: 28.0 and geography but spans from light manufacturers, › Surpassed targets for LTI (<60) and H1 (<16). › Business Units with negative eNPS scores: 3

3. Ensure ethical › Rolled out business ethics e-learning for all › 2 external whistleblower cases › Review the handling of «conflict of business conduct employees; 310 employees in key functions handled in accordance with new interest» in policies, procedures, and completed the course. policy and procedure. authorization matrix. Key climate risks and opportunities › Adopted new whistleblower policy and › Review material ESG policies and › Opportunity: Increased demand for road rehabilitation and infrastructure resilient against procedure. procedures. extreme weather events, as well as increased demand for products with a › Established Group ESG Functional Team as a › Distribution and training regarding low environmental footprint. first step to implement ESG-reporting within revised policies and procedures. the group, as well as integrating ESG in the Decreased working efficiency at project sites during heatwaves and › Chronic physical risk: group’s operations. permanent temperature increases. › Regulatory risk: Policies and taxation on non-renewable energy increasing costs of produc- 4. A transparent › Implemented new Travel and Car Policy for › Screened 1420 suppliers (annual › Revitalized implementation of tion and transportation. and sustainable all Nordic Business Units. In cooperation spend exceeding NOK 100K). Saferoad Procurement Policy. supply chain with selected suppliers, strengthening suppli- er governance.

5. Increase › Improved quality and scope of Scope 1 and › 0 breaches of local environmen- › 0 breaches of local environmental ESG impacts based on Saferoad’s sector and operations circularity and Scope 2 GHG emissions. tal legislation. legislation. reduce climate › ISO 14001 certifications, including focus on › 9 production facilities ISO 14001 › Finalize ISO 14001 certification impact waste management and circularity. certified, 4 in process. process for 4 units. › 2020 GHG emission: › Report scope 3 emissions for steel Own operations Management and marketing Customer / end user Raw material supply Scope 1: 11,488 tCO2e consumption. Scope 2: 2,922 tCO e › Define KPIs for circularity and waste › Key raw material: Steel, plastic, › Energy consumption / GHG › Anti-corruption and bribery › Road accidents and safety 2 management on ISO14001 production aluminum emissions › Anti-competitive behavior › Public and client health and safety sites. › Energy consumption in raw mate- › Management of hazardous › Trade sanction / restricted persons › Trade sanctions / restricted rial production substances and waste at › Attracting and retaining persons › Workers’ health and safety and production sites employees › Customer satisfaction labor conditions in the supply › Health and safety of own › Product innovation: product › Recyclability and end-use of chain employees in production longevity, ease of maintenance products › Supply chain transparency › Material utilization and recycling and climate resilient Saferoad has selected the following UN SDGs to which they have the opportunity to contribute: › Trade sanctions / restricted › Chemical use and pollution persons Contributes to target 3.6, road Contributes to target 9.1, quality, re- Contributes to several targets by › Human rights traffic accidents, by providing liable, sustainable and resilient infra- focusing on resource efficiency products that increase road structure, by providing high-quality and waste reduction. safety road infrastructure components. Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Satisfied › Market growth during Covid-19 highlighted › Customer satisfaction › All KPIs above 2019-levels by customers how Rameder’s products enable active life- eKomi.de % 100 % improving shop systems and customer styles outdoors. 2020: 94 service. rameder.eu › Tracked customer satisfaction via independ- 2019: 96 › 80 % reachability of call center agents. ent customer reviews. Trustedshops.de % 100 % › Investigate which ESG topics are most › cNPS reduced partially due to strong demand 2020: 94 important to our customers. growth negatively impacting product availa- 2019: 96 › Understand how macrotrends affect bility and call center response time. Ebay % 100 % our end-customers. 2020: 99.1 2019: > 99 › Service cNPS % 100 % 2020: 77 Rameder is Europe’s largest omni-channel aftermarket online retailers. While the original key customer group 2019: 82 distributor of car-related transportation solutions was car garages and other installers of tow bars and › Retail cNPS % 100 % 2020: 54 and Germany’s largest aftermarket installer of tow transportation equipment, the company has recently 2019: 52 bar systems. Rameder is headquarter in Leutenberg experienced a shift towards the end-consumer market. › Call center reachability: 63%

(Thuringa), Germany and operates several warehouses 2. Be an › High focus on employee satisfaction during › Employee satisfaction › > 50 % employee survey participation. and offices across Germany. Rameder serves customers Towbars are sourced directly from third-party attractive Covid-19, implemented initiatives like 2020: 4.2/5 › Increase awareness of diversity and employer temporary leave and bonuses. 2019: 4.0/5 conduct appropriate trainings amid an in both the B2B and B2C markets. It operates more manufacturers. Due to the products’ heavy weight, the › Managed to keep sick-leave below 4.5 %, › eNPS % 100 % increasing share of female mechanics. than 70 tow bar installation centres Germany, Sweden, suppliers are exclusively located in Europe. according to our 2020 ambition. 2020: 29 › < 4 % sick leave. › Installed ergonomic workplace. 2019: 11 Finland and France. Moreover, products are also sold › Employee surveys conducted twice a year to › Female employees % 50 % online through Rameder’s own website and via other monitor initiatives effects, 2020: 24 › Male majority of new hires, resulted in lower 2019: 26 ratio of women employees. › Sick leave % 10 % › 13 trainees offered permanent employment. 2020: 3.6 2019: 3.9

Key climate risks and opportunities 3. Sustainable › All new suppliers required to sign the › Supplier Code of Conduct › 100% of suppliers to sign the Supplier supply chain Supplier Code of Conduct as a part of the signed by % of purchasing Code of Conduct. › Opportunity: Customers prefer products with less packaging delivered by logistics with a low admission process. volume: 100 % › Conduct risk-based supplier audits, carbon footprint. 2020: 82 annual self-assessment for low-risk › Chronic physical risk: Price increases on non-renewable materials may increase costs of tow bars and 2019: 67 suppliers. logistics services. › Regulatory risk: Extreme weather events interrupting supply chain activities, causing delays in 4. Sustainable › All subsidiaries included in the GHG › 2020 GHG emissions › Reduce GHG emission per EURm product deliveries from Europe. operations emissions reporting scheme. Scope 1: 147.2 tCO2e sales by 5%. › Increase in emissions mainly related to new Scope 2: 507.7 tCO2e › Investigate climate compensated

add-ons (scope effects). Scope 3: 6,282 tCO2e shipping. › Reduced packaging and increased use of › 20 % electric and hybrid vehicles in renewable material. the company car fleet. › Selected suppliers and logistics providers ESG impacts based on Rameder’s sector and operations based on location and emission profile.

5. Safe products › Installed approximately 32,000 tow bars. › Zero accidents known to › Keep number of known accidents at › Strong focus on customer education on the Rameder due to faulty zero. Production and supply chain Management and marketing Customer / end user correct and safe usage of tow bars. installations. › Continue the training of mechanics to ensure quality, efficiency, and safety. › Raw material sourcing › Waste management › Climate impact of logistics › Production energy efficiency › Energy management and emissions › End-of-life product management › Logistics climate impact › Sustainable packaging › Product quality and safety › Sustainable packaging › Employee health and safety › Data protection and information › Hazardous waste › Employee training and development security › Working conditions and human rights › Diversity › Customer management › Production health and safety › Employee satisfaction › Hazardous substances (ROHS II) › Corporate citizenship › Compliance management › Procurement and supplier management › Business ethics compliance

64 FSN Capital ESG report Building Resilient Companies 65 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. The best › Conducted a company-wide employee survey › Female ratio % 100 % › Increase diversity, with the aim workplace in the and used results to define specific focus areas 2020: 24,5 of at least 30 % of all new hires industry per business unit to further increase employee › eNPS % 100 % being women. fellowmindcompany.com engagement. 2020: 24 › eNPS of 35 % in 2021 and 50 % › The survey results showed employees value in 2024. their colleagues and the low levels of internal bureaucracy.

2. Enabling the › Serviced many customers by implementing › Teamed up with Microsoft › Identify the top climate related green transition technology to reduce waste and improve on their FarmBeats program; topics according to the EU Fellowmind is a Microsoft Business Applications resource efficiency in several industries, enabling farmers to improve taxonomy for the business’ main including the waste industry itself. production and reduce carbon verticals. and Modern Workplace partner, dedicated to deliver footprint by adding IoT, sensors › Start reporting GHG emissions digital transformations for its customers. Key offerings and develop smart dashboards. and define action plan for emis- sion reduction. include consulting and implementation services across all Microsoft products as well as managed services. 3. Personal › Conducted customer survey to better understand › cNPS % 100 % › Be a business partner to custom- connection with their needs. 2020: 27 ers by offering a holistic service Revenue is also generated from the sale of licenses our customers › The results show Fellowmind’s people have for the digital transformation from third-party developers, including Microsoft, as the most positive impact on the customer journey. satisfaction score. › cNPS of 35 % in 2021 and 50 % well as internally developed software. management based in the Netherlands but with a local in 2024. team in each country, enabling Fellowmind to be close 4. Enhancing › We want technology to be a tool for social › The German team developed › Allocate a budget to support Fellowmind's key asset is its 1,600 employees. The to its customers. meaningful inclusion and started an initiative to organize a digital learning platform for initiatives that help people gain company serves the European market through 35 connections activities for people who have lost connection teachers to help them engage digital literacy and reconnect with society because of rapid digitalization and students amid the Covid-19 with society. offices located in the Netherlands, Finland, Sweden, The company serves public and private customers changes. lockdown. Denmark, Germany, and Poland. Fellowmind is across a wide range of industries, including industrials, 5. Ethical and › Rolled out the company Code of Conduct and › ESG policies implemented in all › Draft and implement a GDPR organized in a decentralized model with the group infrastructure, and agriculture. reliable business whistleblower policy. business units. policy. partner › Established eLearning portal for business ethics › > 90% of employees signed › Implement and audit the IT training. the ESG policies through the security baseline. › Incidents on data security, privacy and ESG eLearning portal. Key climate risks and opportunities should be reported to the board of directors. › An IT security baseline was put in place, cover- › Opportunity: Increased demand for green IT and services that reduce customers’ environmental ing the most critical security areas. footprint and support the transition to a low carbon economy. › Opportunity: Increased demand for IT services and solutions that help businesses manage a new permanent changes in seasons and weather patterns. › Regulatory risk: Regulations on energy consumption for electricity intensive operations, following EU Taxonomy (climate change mitigation), as well as on non-renewable energy sources, Chatbots take strain off Denmark’s emergency helplines and requirements on end-of-life management for electronic goods and e-waste. In a health crisis medical helplines — as many Fellowmind and Microsoft offered a free chatbot people are now discovering first hand — quickly that could help handle the call volume. It worked get overwhelmed. well enough that the chatbot service was soon rolled ESG impacts based on Fellowmind’s sector and operations out to all of Denmark. “We were worried because the call volumes more than doubled for us,” says Freddy Lippert, chief The chatbot answers people’s questions about their Production Management and marketing Customer / end user Raw material supply executive of Copenhagen Emergency Medical symptoms and advises them when they need to get › Environmental footprint of › Employee education and devel- › Green service offerings › Enabling resource and produc- Services, who is responsible for both the emergency additional help. purchased goods and services opment › Employee health and safety tivity efficiency through digital (e.g. data center services) › Data security › Diversity and anti-discrimination transformation call line in Copenhagen and an advice line for less › Labor conditions and human › E-waste and end-of-life manage- › Energy use in offices › Data privacy urgent medical problems. Both became completely The chatbot can also be used as a diagnostic tool. rights in supply chain ment of IT equipment › General waste management in offices › Quality of customer service › Business ethics in procure- › System reliability jammed as people began to call about Covid-19, even Lippert’s team is already using it to identify hotspots ment practices before the pandemic had really begun to spread in of Covid-19 development around the country. the country. Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Ensure Safety Safety Safety health, safety › Implemented routine reporting on accident rates › Accident rate: 8 % › Improve HSE through training and employee globally. Employee satisfaction and by tracking causes and miti- impreg.com satisfaction › Defined training manuals in APAC for site › Employee turnover rate and eNPS gating actions. installations. to be reported from 2021. › < 5 % accident rate in global Employee satisfaction operations. › Implemented frequent management meetings in Employee satisfaction iMPREG supplies sewer rehabilitation products, all regions. › Introduce eNPS surveys with › Introduced communication tool for workers to ongoing follow-ups and mitiga- focused on fiberglass-based cured-in-place pipe liners propose initiatives to improve their work. tion plans. that enable trenchless repair of wastewater pipes. › Introduced an incentive scheme to improve › Implement global routines for performance and idea generation. turnover rate reporting. The company operates four production sites, two in › < 15 % turnover rate. Germany, one in China, and one in the Unites States, to 2. Be the › Performed customer interviews to understand › cNPS 100 % › Introduce a repeatable, standard be close to regional markets. Asia and North America with local management, preferred key buying criteria and satisfaction levels. 2020: 48 way of measuring cNPS and set production and sales teams. partner for all › Invested in new capacity that reduces lead times, appropriate targets. our customers in a key aspect for customer satisfaction. › No region with negative cNPS. Key raw material inputs include fiberglass and styrene- all our regions › Include question on main ESG based resin. Along with the local production strategy, The main customers are installers and contractors that concerns in the customer survey. iMPREG focuses on localizing its supply chain and has conduct rehabilitation work for pipe owners, including 3. Ensure › Revisited authority matrix, rules of procedures, › Code of Conduct communicated › Monthly ESG KPI reporting. established relationships with local partners in Europe municipalities. The customer base spans across compliance and delegated powers, and introduced revised to all business operations. › 100 % indirect labor to complete business ethics Monthly Operating Review reporting. › 100% of employees in Chinese business ethics training. and China. iMPREG is headquartered in Denmark, Europe, Middle East and Africa, Asia-Pacific, and the › Revised the Code of Conduct. operations completed business › 80 % of suppliers to sign the and operates dedicated organizations in Europe, Americas. › Implemented the Code of Conduct all regions. ethics training. Supplier Code of Conduct. › Introduced anonymous Whistleblower channels in most regions.

4. Maximize › Defined «energy efficiency» as a new activity › GHG emissions to be reported › Set up GHG reporting system. energy efficiency relevant for the overall business strategy. from 2021. › Track and report Scope 1 and 2 Key climate risks and opportunities in production GHG emissions. › Opportunity: Increase demand for wastewater infrastructure upgrades in areas experiencing a › Track and report material scope wetter climate due to chronic change in seasons and precipitation patters. 3 GHG emissions. › Opportunity: Increased demand for energy efficient wastewater treatment systems (following EU 5. Material › Introduced incentive scheme to promote im- › 85 ideas received in China and › Tracking waste generation. Taxonomy on climate change mitigation). utilization and provement initiatives and ideas, including better 31 ideas received in Germany for › Replace wood transportation › Acute physical risk: Extreme weather events damaging production sites, causing production delays; recycling in waste management at production sites. how to improve sustainability at boxes with cardboard boxes. transport routes may also be impacted. production › Implemented improvement ideas suggested production sites. › Set a target for share of shipped by employees, e.g. replacing wood boxed with › Waste to be reported from 2021. boxes made of cardboard. cardboard. › Further investigate the opportu- nities to promote circularity, e.g. create a market for scrap materi- al from production sites. ESG impacts based on iMPREG’s sector and operations

iMPREG has selected the following UN SDGs to which they have the opportunity to contribute:

Raw material supply Production Management and marketing Customer / end user › Energy consumption in raw › Energy efficiency (production, › Sustainable market positioning › Product takeback, recycling and material production (styrene, building) › Sustainable product offering reuse (plastics, wood) fiberglass, foil) Climate impact of transport Anti-corruption and bribery Product longevity and quality › › › Environment: iMPREG’s products Social: iMPREG’s operations have an impact on Resource use (petroleum, wood) Sustainable packaging (wood, plastic) Anti-competitive behavior Site working conditions and › › › › enable clean water preservation (SDG the health and safety of own employees, (SDG Workers’ health, safety and Styrene leakage (aquatic toxicity) Trade sanction/restricted persons safety (construction sites, old › › › 6), while resource efficiency is important 8), and its products could prevent water-related labor conditions (e.g. exposure Resource efficiency (water, waste, Attracting and retaining employees pipe systems) › › throughout the products’ lifecycle (SDGs illnesses in civil society (SDG 3). to ethyl benzene) materials) Diversity and anti- › 9 and 12). › Supply chain transparency › Labor conditions discrimination › Trade sanctions/restricted › Employee education and develop- › Whistleblowing mechanisms persons ment

68 FSN Capital ESG report Building Resilient Companies 69 Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Improve climate › Defined an ESG strategy with short- and › 1 new Environmental Product › Further build the stormwater busi- resilience of the long-term targets to develop and promote Declaration (EPD) for steel ness. society climate resilient solutions. structures (MultiPlate, Super- › Develop Life Cycle Assessment (LCA) viacongroup.com Cor and UltraCor). calculation tool for corrugated steel bridges and geotechnical solutions. › Expand EPDs to 2 additional produc- tion units.

2. Be this › Created a «one-stop-shop» on the intranet › Lost time frequency rate: › 100 % factories audited for HSE, plans industry’s best for ESG, including policies and trainings. 2020: 28.81 for improvement implemented where employer › Introduced ‘Winningtemp’ to monitor em- › Lost time severity rate: relevant. ployee engagement. 2020: 30.57 › Improve internal communication and › Established eNPS reporting. › eNPS to be reported from 2021 review core values. ViaCon provides engineered corrugated steel installation of water management systems. › eNPS > 10 › Piloting Winnintemp. structures and pipes to customers in Northern and The company employs about 750 people across 18 › Deploy new bonus program with clear Eastern Europe, France, as well as Middle East and countries. The two main production plants are in and aligned group targets. North Africa (MENA). The business is organized Poland and Turkey. Main raw materials used in the 3. Act with › Launched whistleblower channel. › Employees who has complet- › 95 % employees completed compli- in three segments: 1) Bridge & culverts solutions – production include steel coils and raw plastic, while business ethics › Defined a set of new compliance policies, all ed compliance training to be ance training. approved by the board. reported from 2021. › Develop Supplier Code of Conduct. consist of the design, engineering, manufacturing geotextiles are procured by third-party suppliers. › Compliance eLearning launched for all staff and installation of corrugated steel as well as the ViaCon often acts as a sub-supplier to construction in December. production of steel and plastic pipes; 2) Geotechnical companies that participate in larger public tenders for solutions – provides geotextiles required in road road and tunnel construction. Stormwater solutions 4. limit our own › Set up the structure of GHG emissions › GHG emissions to be reported › 2 % reduced scrap in steel production environmental reporting. from 2021. through production process improve- infrastructure projects; and 3) Stormwater solutions – are sold to the B2B market and the customer base is footprint › Defined the following emission sources as › Waste to be reported from 2021. ments. consists of the design, engineering, manufacturing and largely private sector companies. relevant for 2021 scope 3 reporting: transpor- › On average reduce plastics raw mate- tation, waste, steel consumption. rial per diameter sold by 2 %. › 5 % reduced electricity consumption per ton plastic pipes produced. › Instal LED-lights in all factories.

Key climate risks and opportunities › Opportunity: Increased demand for infrastructure that help societies adapt to a new climate reality of more frequent extreme weather and shifts in seasons. › Regulatory risk: Taxation on non-renewable materials and on energy intensive production processes (e.g. steel and plastic), increases raw material and production costs. › Acute physical risk: Construction work disrupted by unforeseen weather events like heavy downpour and heat waves that put workers’ health and safety at risk.

ViaCon has selected the following UN SDGs to which they have the opportunity to contribute: ESG impacts based on ViaCon’s sector and operations

Raw material supply Own operations Management and marketing Customer / end user › Energy consumption in raw › Management of hazardous sub- › Anti-corruption and bribery › Product life cycle and end of life material production stances and waste at production › Anti-competitive behavior management › Workers’ health and safety and sites › Trade sanction/restricted persons › Quality and safety of products/ Promote safe working environments Develope resilient and sustainable Reduce raw material labour conditions in the supply › Health and safety of own em- › Attracting, engaging and retaining services for all employees through HSE infrastructure (9.1), and increase consumption and scrap material, chain ployees employees › Public and client health and training and audits (8.8). resource efficiency in infrastructure particularly of steel and plastic, › Supply chain transparency and › Material utilization and recycling › Product innovation: climate safety development (9.4). thus reducing waste (12.5). traceability › Chemical use and pollution adaptation › Trade sanctions/restricted persons › Business ethics in procurement › GHG emissions from transport practices Company ESG performance 2020

Key ESG goals Efforts 2020 Performance 2020 Ambitions 2021

1. Attractive › Implemented Code of Conduct › Established a group-wide communication › Update all employment contracts and employer who and whistleblower policy. channel. provide opportunities for personal takes social › Prepared for eNPS data › 98% of companies are approved apprentice development through the «HG responsibility collection and reporting. training companies. school». handverksgruppen.com › Conduct employee surveys. › Define short- and long term eNPS targets. › The Code of Conduct will be included in all updated employee contracts. Håndverksgruppen (HG) is Norway's largest entity offering surface treatment services including painting, 2. Deliver the right › Collaborated with flooring › cNPS % 100 % › Maintain the industry’s highest quality from a life supplier to recycle the removed 2020: 92 customer satisfaction by delivering flooring, tiling and masonry. The group has strong are mainly transportation of workforce and building cycle perspective flooring in two medium-sized › 30 tonnes of flooring recycled across 30 high quality projects. local presence across Norway with more than 1,000 materials to different worksites. There is an ongoing and promote projects. companies. › Engage in partnerships with the main circular economy flooring suppliers to increase floor employees in their 44 operating companies. focus to increase the relative share of electrical for us and our recycling. vehicles used in the group. customers The main input factor to offer surface treatment ser- 3. Reduce our and › All companies have strict › Eco-lighthouse-certified companies › Establish ways of measuring leftover vices are labor and building materials, including paint, HG mainly serves the B2B segment, including building our customers’ procedures to return all residual (similar to ISO 14001) % 100 % paint returns and volume reduction. paint from completed projects. 2020: 33 › Measure GHG emissions and set a fillers, and flooring (wood, carpets and epoxy). The contractors, insurance companies, municipalities, footprints by minimizing › Electric vehicles as share of company’s reduction goal. materials are purchased mainly from large Norwegian and real estate owners. HG’s key value proposition to emissions and fleet % 100 % › Raise awareness of the environmental distributors which source the materials from leading public and professional B2B customers is the strong securing proper 2020: 5 impact of customers’ choices by waste management proposing waste-reducing solutions. national and international building materials suppliers. ESG focus by offering high quality services, with clear ethical standards and strong HSE compliance and The companies in HG operate in their local markets documentation. 4. Be a driving › Begun implementation of › Initiated cooperation with «Fair Play», › All employees trained and signed force in the Supplier Code of Conduct, promoting and verifying worker’s labor Code of Conduct by Q1 2021. and the logistics required to offer the different services industry by which will be included in all conditions; relevant KPI to be established › Electronic whistle-blower channel maintaining high new supplier contracts. in 2021. implemented by Q1 2021. business standards › Define requirements for suppliers’ adherence to ethical guidelines Key climate risks and opportunities and define a plan for audits and monitoring. › Opportunity: Increased demand for rehabilitation and repairs, as well as climate resilient solutions, as extreme weather events damage properties. › Acute physical risk: Painting and rehabilitation jobs disrupted by unforeseen extreme weather events as workers’ health and safety is put at risk. › Regulatory risk: Local regulations on zero-emission vehicles and construction sites, as well as regulations on construction site waste management, mainly driven by public procurement.

ESG impacts based on Håndverksgruppen’s sector and operations Håndverksgruppen has selected the following UN SDGs to which they have the opportunity to contribute:

Increase number Reduce the number HG’s core Promote sustainable

of youth and adults of unemployed competency consumption Production Management and marketing Customer / end user Raw material supply who have relevant youth through can make direct through waste › Chemical use in paint produc- › GHG emissions from transportation › Environmental impact from › Ease of maintenance and repair vocational skills for apprenticeship contribution to reduction (12.5) tion › Hazardous substances occurring administration offices (waste, › End-of-life product management future employment (8.6) as well as ensure access to and supporting › GHG emissions from produc- during rehabilitation activities energy use) › Product reliability and quality by employing preventing shadow adequate, safe and sustainable public tion of rehabilitation materials › Efficient resource use (e.g. recycled › Diversity and anti-discrimination › Long-term health impacts of toxic apprentices and work and promote affordable housing procurement (12.7). › Hazardous waste materials) › Employee education and devel- materials supporting them labour rights and for all (11.1). › Labour conditions and human › Waste management opment › Partner and customer integrity on the way to safe working envi- rights › Health and safety of own employees › Labour opportunities (e.g. ap- certification (4.4). ronments (8.8). › Worker’s health and safety › Labour rights prenticeship) › Business ethics in procure- › Shadow work and tax evasion › Anti-corruption and bribery ment practices › Anti-competitive behavior

Building Resilient Companies 73 mhp-solution-group.com tasking.com

Newly acquired Newly acquired

MPH Solution Group (MPH) provides end-to-end Software solutions are developed in-house, while TASKING offers embedded software development The company’s software development teams are logistics software solutions to the German-speaking third-party software suppliers are mainly relied on for tools for automotive original equipment manufacturers in Germany, the Netherlands and Russia, while the part of Europe (DACH-region). The company develops development tools, databases, and storage. Hardware (OEMs) and tier 1 suppliers in the automotive space. headquarter is based in Munich, Germany. In addition software for four distinct areas in the logistics supply is sourced from global OEMs. The tools are critical for software engineers to create to its R&D team, TASKING utilizes its own salesforce chain: Shipping, Customs, Warehouse Management, safety-certified and high-performance software, which in various regions with sales and customer service and Transportation Management Systems. The MHP’s customers are mainly medium to large is then implemented on microcontrollers. These offices in the US, India, Japan and China. company also operates a hardware business that enterprises, spanning across a variety of industries, components are critical for software used in advanced sells and configures hardware products for large including logistics forwarders, retail, e-commerce, driving assistance systems (ADAS) and autonomous original equipment manufacturers (OEM) along with wholesale, and manufacturing. driving. its software to customers. MHP has offices across Germany and a development centre in Spain.

74 FSN Capital ESG report Building Resilient Companies 75 ESG KPIs for FSN Capital Portfolio Companies

Status per 31 December 2020 Revenue (SEKm) Revenue Employees Gender distribution (% women total workforce) Gender distribution (% women BoD) Gender distribution (% women C-suite officers) Absenteeism (eNPS) Satisfaction Employee (cNPS) Satisfaction Customer Scope 1 GHG emissions (tCO2e) location based)Scope 2 GHG emissions (tCO2e, Scope 3 GHG emissions (tCO2e) Location-based) ** emissions (tCO2e, Total market-based) Scope 2 GHG emissions (tCO2e, ** market-based) emissions (tCO2e, Total Skamol 531 409 25 % 20 % 0 % NA 22 % 29 % 28,622 3,757 NA 32,380 7,128 35,750 «The Portfolio Companies bring our standard Fibo 639 139 23 % 40 % 11 % 4.7 % 52 % 60 % 75 41 59 175 1,816 1,949 ESG frameworks to life. The combination of internal EET Europarts 4,573 534 28 % 0 % 25 % 1.9 % 28 % 29 % 96 92 9,309 9,496 166 9,570 sustainability competence and deep industry expertise allows them

Kjell & Co 1,999 646 20 % 40 % 20 % 5.0 % 47 % 74 % NA 170 1,237 1,407 1,087 2,324 to respond to stakeholders' ever-evolving ESG expectations.

Active Brands 919 205 70 % 29 % 0 % 2.5 % NA 71 % 90 122 1,308 1,519 590 1,987 We are impressed to see ESG embedded in the strategies,

Holmbergs 584 634 67 % 33 % 17 % 4.8 % 33 % 33 % NA 1,238 NA 1,238 1,247 1,247 operations, and cultures of our Portfolio Companies.»

Gram 937 445 17 % 0 % 0 % 1.9 % 13 % NA 481 318 1,128 1,926 472 2,080 REBECCA SVENSØY General Counsel at FSN Capital Partners Mørenot 1,217 781 39 % 17 % 0 % 6.2 % −12 % NA 1,290 758 3,290 5,338 4,998 9,578

SNS 902 163 42 % 43 % 0 % NA 36 % 3 % NA 57 8 66 71 79

Nordlo 1,309 600 15 % 29 % 23 % NA 37 % 30 % 69 186 235 490 929 1,233

Saferoad 5,146 2,200 18 % 33 % 6 % 5.1 % 24 % 33 % 11,488 2,922 NA 14,410 9,799 21,287

Rameder 1,213 336 24 % 0 % 0 % 3.6 % 29 % 66 % 147 508 6,282 6,937 704 7,134

Fellowmind 2,265 1,500 25 % 0 % 25 % NA 24 % 27 % NA NA NA NA NA NA

iMPREG 709 295 NA 33 % NA NA NA 48 % NA NA NA NA NA NA

ViaCon 1,986 779 20 % 0 % 13 % 4.3 % NA NA NA NA NA NA NA NA

HG 1,250 1,300 NA 20 % 0 % NA NA 92 % NA NA NA NA NA NA

MHP 339 268 27 % 0 % 50 % 3.5 % NA NA NA NA NA NA NA NA

TASKING 167 57 17 % 0 % 0 % NA NA NA NA NA NA NA NA NA

SUM 26,683 11,291 42,358 10,169 22,855 75,381 29,006 94,218

* Location-based is calculated based on where the electricity is consumed. Market-based is calculated based on where the electricity is purchased. Including both methods for calculation in the GHG reporting is recommend by the GHG Protocol. Building Resilient Companies 77 4. ESG in FSN Capital Partners Team First and Covid-19

The success of FSN Capital is dependent on Our team members were divided into six the trust of our investors and the founders we groups across all levels of seniority, business partner with. areas and geographies, and the initiative was launched with a two-day physical workshop in The FSN Capital culture is built on our ethos At FSN Capital we have high expectations to our Trust comes from within, and is a key January 2020. The workshops were an arena for and values and is realized through our behavior team, but we always make sure to equip them with component of the culture at FSN Capital. We developing personal connections and trust in and priorities. We continue to strengthen our guidance, support and tools which allow them to believe that we are at our very best when every smaller groups and discussing topics important culture in a growing organization by nurturing the surpass our expectations. member of the team actively participates in the to the further development of the Firm. collaboration across offices and cohorts and with continued development of the Firm. our Portfolio Companies. The ESG knowledge of our deal team members is Although the world seemed a bit chaotic when therefore continuously updated through: In 2019, we launched our Team First initiative. Covid-19 broke out, we decided early on to keep In 2019 we launched our Firm-wide «Team First» This comprised of three workshops addressing driving the Team First initiative and to complete initiative that focused on reinforcing a common › Our Managing Partner and Chairperson setting 1) group discussions about building trust and scheduled workshops and meetings in a virtual culture across our four offices. The immediate the tone from the top when onboarding new commitment in high performance teams, setting. While the normal social touchpoints goal of Team First is to engage everyone to think employees. 2) workshops on themes that are central were absent following mandatory home office, deeply about our core values as an organization, to › An introduction session with the ESG team for all to who we are and how we operate at FSN Team First groups provided a valuable arena further foster trust and collaboration amongst all new employees. Capital, 3) effective teamwork through the «five to discuss matters outside business, including team members, and to ensure that we transparently › Our Firm-wide ESG Slack channel where dysfunctions of a team», as well as a project to personal issues, and to suggest improvements. communicate our guiding principles to all everyone shares best practice and external simplify our existing FSN Capital Values. employees. The initiative also seeks to underscore articles. With Team First, the broader team became an the importance of diversity and inclusion in › On the job training by being responsible «The five dysfunctions of a team»* explains how even more integrated part of managing FSN everything we do. Moreover, Team First had a for climate change and ESG due diligence to overcome common hurdles in team work (i.e. Capital. Comments from employees indicate positive impact on our culture and well-being of in transactions, and ESG implementation dysfunctions) and thereby build efficient teams. that Team First meetings had a positive impact our employees during the Covid-19 pandemic. in Portfolio Companies – always in close The five dysfunctions are i) absence of trust, on their well-being during Covid-19 and proved cooperation with the ESG team. ii) fear of conflict, iii) lack of commitment, iv) that FSN Capital has an open culture, with Best practice ESG knowledge and a good › Our ESG intranet with information about our avoidance of accountability, and v) inattention willingness to learn, listen and improve. In understanding of ongoing ESG regulatory initiatives ESG approach, ESG Frameworks, standard to details. 2021, we will continue to drive the Team First is part of the key skillset of FSN Capital employees. policies and external ESG sources. initiative by focusing on implementing the As board members in Portfolio Companies they › Annual seminars, the Global PE Alliance actions suggested by the six different groups. are in a unique position to set the tone from the top Academy, FSN Leadership Seminar and internal Each group will be responsible for following up and send a strong message about the importance of best practice sharing sessions. progress on their proposed actions monthly. sound ESG management. › Firm-wide training sessions when rolling out new * book by Patrick Lencioni ESG initiatives (eg. climate change due diligence). › Participation in external ESG seminars as presenters or panelists.

78 FSN Capital ESG report In 2020 we launched two new important universities in our home countries. To ensure initiatives on Diversity & Inclusion. First, the that female and diverse talent is retained, we ESG-linked Credit Facility (see page 17) has are increasing our support to employees who gender diversity on Portfolio Companies’ boards are parents of young children and measuring as one of three KPIs; second, we set up a separate the employee net promoter score on this topic internal Diversity & Inclusion group as part of our specifically. Team First initiative (see page 78). We seek to influence diversity also outside of our The internal Diversity & Inclusion group has firm and have therefore defined indicators related defined detailed diversity targets, specific to our executive advisor base, our portfolio Improving Diversity & Inclusion actions to reach the targets, nominated owners company boards and the professional services of each action item, and will be responsible for teams that we hire for due diligence work. Please monitoring progress, and reporting status on a see the table below for an overview of our current FSN Capital is committed to contribute towards › Partnered with headhunters specialized in monthly basis. Diversity & Inclusion targets. UN SDG 5, «Gender Equality». It is proven recruiting female candidates to help us achieve that diversity within a team is a key driver of the goal. Building diversity starts with recruiting. To Building on our current gender diversity targets, long term performance. Yet, the Private Equity › Unconscious bias training conducted for the recruit talents from a more diverse base, we have we will work towards a broader perspective that industry still has a long way to go, both we and Partner Group and all employees. decided to increase our focus on top international also includes nationality, ethnicity, education, and our peers need to take action. › Implemented mandatory parental leave for all universities, which often have a more diverse professional experience. team members – male and female. student base with interest in private equity than We strongly believe that having teams › Cooperation with Equality Check (former with complementary skillsets and diverse #ShesGotThis) since 2017. Diversity & inclusion targets backgrounds are vital for success. Since 2017 we › Mentoring program for all females in the 2020 status 2021 goal 2023 goal

have had commitment to improving the diversity Investment team, where they are paired with Build diverse investment and % of candidates coming of ideas, backgrounds, and perspectives in our external female senior executives. from top universities 1) business support teams 25 % 50 % team – with an explicit focus on gender diversity. › Part of the Nordic Executive Committee of 2) Level20. % of new hires are diverse 33 % 66 % Some of our accomplishments to date include: › Cooperation with MAK, a network for young professionals promoting intercultural and Build a diverse industrial / executive % of female Executive Advisors › Defined clear targets for improvement: 50% of ethnic diversity. advisor network and re-tackle 20 % 40 % 50 % board of directors diversity all new hires to the Investment team, Executive % of female Board Directors in Portfolio Companies Advisors and Portfolio Company board of 25 % 33 % 50 % directors should be female. % of Portfolio Company 3) Boards that are diverse 33 % 42 % 66 % % of due diligence teams used by FSN Capital having 25% FSN Capital´s Performance* 2014 2015 2016 2017 2018 2019 2020 50 % 100 % female members Employees (FTEs) 28 30 32 39 48 51 53 Percentage women versus men Build the required processes and 25 % 27 % 28 % 28 % 33 % 33 % 36 % eNPS around parenting, (all FSN Capital employees) tools at FSN Capital to become diversity and inclusion a firm of good parents and good 75 % 100 % Employee Satisfaction NPS 87 % 92 % 92 % 79 % 46 % 60 % 66 % employees at the same time

* Numbers as of 31.12 each calendar year, interns not included 1) Based on the Top 30 Times Higher Education ranking 2) In terms of gender, ethnicity or educational/professional background compared to the team you are hired into (i.e. a male is considered diverse if hired into a female-dominated team) – no double counting 3) At least one female and one international board member – no double counting. 80 FSN Capital ESG report UN Principles for Responsible Investment

Compliance with the six principles in the UN We highly welcome how PRI continues to drive Principles for Responsible Investment (PRI) is the sustainable investment agenda, the PRI a natural part of our investment approach and climate module being the latest development. the foundation for our Responsible Investment Policy (included in Appendix III). Below we have highlighted some of our key efforts to fulfil our commitments under each of PRI’s principle.

Examples of how FSN Capital The Principles upholds each principle

1 We will incorporate ESG issues into the ESG and climate considerations are always included in the pre- investment analysis and decision-making investment phase (see page 21). process

2 We will be active owners and incorporate We engage with our Portfolio Companies, providing them with ESG ESG issues into our ownership policies and frameworks to support them in identifying material ESG issues and practices addressing these through ESG strategies (see page 29).

The ESG-linked Credit Facility is designed to further incentivize implementation of our ESG frameworks in the ownership phase (see page 17).

3 We will seek appropriate disclosure on Portfolio Companies are required to disclose material ESG issues in ESG issues by the entities in which we their value chain, their ESG strategy (see chapter 3), as well as FSN invest Capital standard ESG KPIs (see page 76).

4 We will promote acceptance and Our Responsible Investment Policy forms part of our formal implementation of the Principles within commitment to our investors. ESG questions are included in the the investment industry annual service provider assessment conducted by FSN Capital.

5 We will work together to enhance our ef- We share our ESG approach in relevant fora and contribute to sector fectiveness in implementing the Principles ESG initiatives and events (see page 94).

6 We will each report on our activities FSN Capital’s PRI transparency reports are publicly available on UN and progress towards implementing the PRI’s websites. See table of historic PRI scores. Principles

Historical PRI scorecard (median score) 2014 2015 2016 2017 2018 2019 2020 Strategy & Governance C (B) B(B) B(B) B(A) A(A) A(A) A+(A) Private Equity B(B) A(B) A(B) A+(B) A+(B) A+(B) A(A)*

* In 2020 we scored A following a reporting error on a question regarding existence of our responsible investment policy. UN Sustainable Development Goals

The private sector plays an integral part in rights, access to food, healthcare and education, solving the most urgent global challenges and in which the general population have labor Our opportunity Goal Target to contribute KPI and 2020 performance that are best described by the UN Sustainable and human rights protection. This of course, is Development Goals (SDGs). only achievable in a healthy biosphere, without › 5.5. Ensure women's full › Opportunity to include › 26 % women on board of directors in and effective participation women on board of Portfolio Companies*. which there is no life. The codependency of the and equal opportunities directors and key C-suite › 2/10 Executive Advisors are women. Navigating towards the SDGs is in many ways SDGs are illustrated by the figure below. for leadership at all levels positions, both in our Port- › Launched ESG-linked financing self-serving. The private equity industry of decision-making in folio Companies and in FSN with KPIs on % of women on board of political, economic and Capital. directors in Portfolio Companies. depends on a predictable and healthy investment Our investment philosophy is also inspired by public life. › See «Improving Diversity & Inclusion» environment, and our Portfolio Companies the SDGs when we look to identify global growth for more information. depend on a strong and healthy economy to trends and deal opportunities. › 8.2. Achieve higher levels › Job creation through › 25 % increase in the number of people thrive. Such investment environments and of economic productivity organic growth in the employed by Portfolio Companies. through diversification, Portfolio Companies. › 4 % increase in FSN Capital economic climates grow out of transparent We have identified the SDGs and targets to which technological upgrading employees in 2020. societies, predicated on equal opportunities for FSN Capital can contribute in its investments and innovation, includ- all, be it through freedom of speech, democratic (see table to the right). ing through a focus on high-value added and labour-intensive sectors.

› 13.3 Improve education, › Opportunity to increase › 12/18 Portfolio Companies submitted awareness-raising and awareness among Portfolio GHG reporting. human and institutional Companies and FSN › 9/18 Portfolio Companies have begun capacity on climate change Capital’s employees reporting scope 3 emissions. mitigation, adaption, when supporting strategy › Climate change due diligence impact reduction and early development and training. completed ahead of every transaction. warning. › Opportunity to reduce our › Launched ESG-linked financing with environmental footprint KPIs on GHG reporting by Portfolio through investments and Companies. KPIs. › Carbon offsetting FSN Capital’s greenhouse gas emissions.

› 16.5 Substantially reduce › Opportunity to strengthen › Launched mandatory e-Learning corruption and bribery in ethical business conduct for FSN Capital employees - 100% all their forms. by always conducting an completed. ESG due diligence and › 100 % Portfolio Companies have implementing the FSN implemented the FSN Code of Capital ESG Governance Conduct. Framework in our Portfolio › 100 % Portfolio Companies have Companies. implemented the FSN Standard Supply Chain Code of Conduct. › 100 % Portfolio Companies adopted Whistleblower policy.

Source: Azote Images for * Excluding FSN Capital employees and company employee representatives. Stockholm Resilience Centre

84 FSN Capital ESG report Building Resilient Companies 85 FSN Capital’s climate change approach FSN Capital's Climate Module

FSN Capital is committed to contribute towards We have already initiated an EU taxonomy UN’s SDG 13 «Climate action». As illustrated on assessment of our portfolio (see page 93). Our Transaction stage the next page we have integrated climate change ESG Strategy Framework is based on EU’s Non- considerations in the full investment process. Financial Reporting Directive (NFRD). In 2021 we will introduce a sightly updated ESG Strategy Transition risks and opportunities Physical risks and opportunities We will continue to work with the Portfolio Framework integrating the EU taxonomy and Companies to help reduce their absolute GHG the latest non-financial reporting trend – double

Transition risk Physical risk and Value chain Conclusion and emissions. The greenhouse gas emission KPI materiality. and opportunity opportunity mapping IP summary assessment assessment under our ESG-linked Credit Facility (see page 17) will be an important incentive in this regard. FSN Capital fully supports initiatives that 1. Exclusion criteria 2. Climate change 3. Part of investment In 2021 we will look further into the Science promote transparency on ESG in the financial due diligence decision Based Target initiative as a potential mean to industry, the latest being the Sustainable Finance guide our GHG reduction ambitions. Disclosure Regulation (SDFR). To increase «Have an unacceptable high Conducted in Information of any material climate greenhouse gas footprint and have failed every transaction. change topics included in the investment transparency on our ESG approach, we have to take reasonable steps to reduce decision material . The EU has an ambition to be climate neutral in 2021 updated our Responsible Investment these emissions». by 2050. FSN Capital seeks to ensure that our Policy (see appendix III) and website with more Portfolio Companies can contribute to this detailed information. transition and stay relevant in a low-carbon society. We therefore integrate relevant ESG regulations into our existing ESG Frameworks and approach. Ownership period

Total

Global warming tCO2e

Time

4. Climate scenario analysis 5. TCFD Reporting 6. GHG Reporting

Portfolio Companies assess physical and Portfolio Companies report annually Portfolio Companies report GHG transition climate risks and opportunities on how climate change topics are emissions annually through an along the value chain, using three climate managed: Governance, Strategy, Risk online portal. scenarios. management, Metrics and targets. Our portfolio’s greenhouse gas emissions On an aggregate level across the FSN Capital Aggregated climate risks and opportunities risks is driven by EU’s push towards a low carbon As of 2019 all Portfolio Companies are required portfolio: We have conducted a climate change analysis society. All Portfolio Companies are exposed to to report their greenhouse gas emissions. This also on an aggregate basis. The tables below pro- acute physical risk, reflecting their dependency being the early days of reporting, we have › Scope 1 emissions constitute 56 % of total vide an overview of the aggregate risks and op- on complex global supply chains. focused our efforts on establishing a system, and emissions and are mainly driven by companies portunities for FSN Capital. Detailed findings are then improving data scope and quality. Despite with energy intensive production facilities and described per Portfolio Company in chapter 3. Risks and opportunities driven by physical cli- the Covid-19 outbreak, most Portfolio Companies processes, like Skamol and Saferoad. mate change will increase as temperature rises, managed to improve reporting compared to last › Scope 2 is based on electricity use and There is a clear opportunity for our Portfolio while those driven by the transition to a low car- year. In 2021, we will conduct a quality check represent 13 % of total location-based Companies to offer sustainable products and bon society will increase pending regulatory and of the reported 2020 numbers. We will also emissions and 30 % of total market-based services, and to assist customers reduce their market push to limit global warming. continue to inspire Portfolio Companies to define emissions*; and it should be possible for environmental footprint. Exposure to regulatory emission reduction targets. Portfolio Companies to reduce this going forward. › As most of our Portfolio Companies have global value chains, 26 % of total emissions stem from purchased transport services, representing 85 % of reported scope 3 emissions.

GHG emissions for FSN Funds III, IV & V

Scope 1 Scope 2 Scope 3

Key climate risks and opportunities Tonnes CO2 eqv. › Opportunity: Increased demand for products that help customers reduce their environmental 30.000 footprint, dependent on the companies’ structuring business strategy and product development accordingly.

20.000 › Opportunity: Several Portfolio Companies will experience increased demand for their products and services due to extreme weather events damaging infrastructure and properties. › Acute physical risk: All companies source raw materials or products from locations exposed to extreme 10.000 weather events. This could both drive raw material prices, as well as disrupting production and logistics. 0 › Regulatory risk: Regulations on circularity and waste management (driven by the EU taxonomy) is FSN Capital Fund III FSN Capital Fund IV FSN Capital Fund V relevant for all companies, applying to the products, packaging, and responsibility for end-of-life management. Tonnes CO2 eqv. › Regulatory risk: A wider set of potential regulations, driven by the EU Green Deal, on consumption of ViaCon, iMPREG, Fellowmind, Håndverksgruppen, and FSN Portfolio Companies 2020 non-renewable energy, is relevant for the companies with own production sites, as well as those relying on energy intensive data centers to deliver their services. MHP have not completed their GHG reporting for 2021 Scope 1 total 42,358 and are therefore not included in aggregate overview. Scope 2 total (location based) 10,169

Location-based is calculated based on where the elec- Scope 3 total 22,855 tricity is consumed. Market-based is calculated based on Total emissions (location based) 75,381 where the electricity is purchased. Including both meth- ods for calculation in the GHG reporting is recommend by Scope 2 (market based) 29,006 the GHG Protocol. Total (market based) 94,218

88 FSN Capital ESG report Building Resilient Companies 89 Reducing our internal greenhouse gas In 2020 FSN Capital Partners decided to Offsetting FSN Capital Partners´ carbon footprint emissions purchase carbon offsets for all our own reported FSN Capital Partners will also reduce GHG emissions, starting from 2019, as illustrated on

emissions from own operations. While our the next page. In 2020 we initiated a partnership with tons of CO2e. The mangrove tree is the only business operations have some environmental CEMAsys to reduce our climate footprint tree on the planet which can grow in saltwater, impact, FSN Capital’s largest contribution to In 2021 we were the first Nordic Firm to sign up through carbon offsets. By purchasing offsets thus protecting the coastal areas from extreme global warming (Portfolio Companies aside) to the PRI backed private equity collaboration for our reported greenhouse gas emissions, weather conditions such as cyclones, increasing has traditionally been business travel. Travel Initiative Climat International (iCI). iCI is a we neutralize our own carbon footprint seafood production and biodiversity, and restrictions during Covid-19 has required us to collective commitment to understand and reduce while supporting projects with a positive preserving coral reefs. go digital to a greater extent than what we have carbon emissions of private equity-backed environmental impact. previously done. The pandemic has been an eye- companies and secure sustainable investment The Thor Heyerdahl Climate Park is a climate opener, and we believe business travel will be less performance. We have purchased carbon offsets for our change mitigation project as the trees will

frequent in the future. 2019 and 2020 emissions through the Thor essentially remove CO2 from the atmosphere. Heyerdahl Climate Park - a project aiming to The mangrove trees capture up to five times

restore mangrove forests in the Ayeyarwady more CO2 compared to other trees in the Region of Myanmar. rainforest.

In Ayeyarwady, only 16 percent of the original The project also has local benefits. Breeding, mangrove forest is still intact. The project aims planting, and cultivating the forests creates local Annual GHG emissions for FSN Capital to plant 300 million trees by 2023, which will jobs, while the network of roots filter polluted biologically capture and store over 150 million water. Our scope 1 emissions are insignificant. Tonnes CO2 eqv. In 2020 we have increased our scope 2 reporting Annual GHG emmisions per scope* 2018 2019 2020 to include waste from some of our office facilities. The reported emissions remain incomplete due to Transportation - - 4.3 Scope - - 4.3 unavailable data from some landlords. Electricity (location based) 7.6 10.1 6.6 Scope 3 still constitutes our largest footprint, despite District heating - - 1.6 2020 being an odd year. Air and business travel Scope total (location based) 7.6 10.1 8.2 represent 83 % of total 2020 emissions. Waste 1.8 In 2021 we will request more data from our landlords Business travel 348.6 303.5 69.8 Scope total (location based) 348.6 303.5 71.6 to improve the completeness of scopes 2 and 3. Total emissions (location based) 356.2 313.5 84.2

* Location-based is calculated based on where the electricity Scope 2 (market based) 16 38.7 47.3 is consumed. Market-based is calculated based on where the electricity is purchased. Including both methods for calcula- Total (market based) 364.6 342.2 123.2 tion in the GHG reporting is recommend by the GHG Protocol.

90 FSN Capital ESG report Building Resilient Companies 91 Aligning our portfolio with the EU taxonomy 1. An outside-in high level assessment, with the The EU taxonomy for sustainable activities is preliminary results below. The grouping in- part of EU’s Action Plan addressing planetary dicates which of the six environmental objec- boundaries. tives each Portfolio Company have a potential to contribute to - pending such activities As the EU taxonomy is a sustainability bench- meeting the technical screening criteria. marking tool, alignment with the criteria may EU taxonomy screening have commercial and strategic value for several 2. In step two we will focus on the Portfolio of our Portfolio Companies. Companies with potential to meet currently The EU taxonomy defines clear criteria for an environmental objectives, and finally the published criteria: climate change mitiga- economic activity to be considered sustainable: economic activity must be conducted in In early 2021, we initiated a project, assisted by tion and climate change adaptation. We will it must substantially contribute to one of six line with minimum social safeguard (as also KPMG Pure Consulting, to determine whether evaluate whether these Portfolio Companies’ environmental objectives (see below), while defined by the EU taxonomy by reference to the economic activities of our Portfolio Com- activities actually meet the technical criteria to not significantly harming any of the remaining international social standards). panies can be considered sustainable based on be labeled sustainable. the EU taxonomy criteria. Since sustainability criteria do not exist for all economic activities, The final result of the EU taxonomy screening of The EU taxonomy's six environmental objectives we decided to conduct the EU taxonomy screen- our portfolio will be published in FSN Capital’s ing in two steps: 2021 ESG report. Climate change mitigation Substantially contribute to at least one of the six Environmental Objectives Climate change adaptation

Sustainable and protection of Do not significant harm water and marine resources any of the other five 1: Climate change mitigation 2: Climate change adaption Environmental Objectives Transition to circular economy Fellowmind, Fibo, Håndverksgruppen, iMPREG, MHP, Fellowmind, Fibo, iMPREG, MHP, Nordlo, Saferoad, Mørenot, Nordlo, Saferoad, Skamol, Tasking, ViaCon Skamol, ViaCon

Polution prevention and control Comply with Minimum safeguards Protection and restoration of biodiversity and ecosystems 3. Sustainable and 4: Transition to a 5: Pollution prevention 6: Protection and res- protection of water circular economy and control toration of biodiversity and marine resources and ecosystems

Mørenot, Saferoad, EET, Gram, Saferoad Saferoad Skamol Holmbergs, Kjell & Company, Mørenot, Rameder, Saferoad, Sneakersnstuff

* Currently criteria have only been published for two of the six environmental objectives – climate change mitigation and climate change adaptation. Further, criteria under these two objectives are still only available for seven sectors. More criteria are expected to be published by the EU in 2022.

Building Resilient Companies 93 Actively promoting ESG Giving back FSN Capital also sponsored and co-operated with other initiatives including: The PRI principle 5 states that we should Rebecca Svensøy, General Counsel, FSN Capital donates to selected philanthropic «work together to enhance our effectiveness represented FSN Capital as a panelist during initiatives that support our values. MAK (makorg.no), a network for young in implementing the Principles within the the SuperReturn International conference, professionals promoting intercultural and ethnic investment industry». Rather than safeguarding organized by Infroma Connect. Moreover, Since 2014 we have donated a Christmas gift to diversity. our ESG knowledge as a competitive advantage, she participated in a fire side chat on how the the Naandi Foundation. The charity supports the we actively share and promote our approach sustainability agenda will affect the M&A market education and empowerment of underprivileged RFKennedy Compass, promoting investment to improve ESG efforts of the private equity at the Nordic M&A and Private Equity Forum, girls in India. As of 2020, our donations have approaches that consider social justice. industry. hosted by Mergermarket. contributed to 30 students completing 10 years education. Currently we support the education of NRK Telethon (TV-aksjonen), the 2020 charity Participation in the public debate has made FSN During 2020 Mia Sørli was a temporary member 268 girls in school. campaign supported World Wildlife Fund. Capital known for its values and ESG focus. of the FSN Capital ESG team, and she shared Despite most conferences and seminars being insights on how FSN Capital work with ESG From 2021 onwards each local FSN Capital canceled or moved online in 2020 due to in our Portfolio Companies at the Norwegian Partners' office will also be allocated their own Covid-19, FSN Capital has promoted ESG in Compliance day, organized by Juristenes donation budgets. In this way we hope to further several external forums. Utdanningssenter, and at PwC’s Internal Ethics align our philanthropic activities with our values Day. and ethos on a local level. Managing Partner Frode Strand-Nielsen shared how the pandemic had affected the Private FSN Capital was present at the Womens Finance Equity industry, and his reflections on climate Day at NHH, promoting women in Private change at the Nordic Buy Out Forum, an event Equity with Level20 and NCVA, and facilitated hosted by Wiersholm in collaborations with case studies for the school’s female students. Setting the tone from the top NVCA (Norwegian Venture Capital Association). FSN Capital is affiliated with the network Our Chairperson, Knut Kjær, participated in Invest Europe Responsible Investment FSN Capital’s strong belief in doing the right Frode Strand-Nielsen also takes a stance outside panel discussions on how the financial markets Roundtable, a permanent forum dedicated to thing is firmly rooted in our foundation. Frode the professional arena. As a Simon Fraser should address sustainability and climate risk promoting responsible investment practices and Strand-Nielsen, our Managing Partner and University (SFU) alumnus, and former men’s at the Norwegian University of Life Sciences ESG considerations in Europe’s private equity Founder, sports a strong passion for social justice soccer captain, he learnt how to manage conflict, (NMBU) and at Arendalsuka – Norway’s largest industry. both at FSN Capital and in private. overcome negative thinking, and engage with gathering for open debate and involvement. diverse team members – all key leadership skills. Further, he was part of the panel at the IMD As our Managing Partner, Frode Strand-Nielsen CEO Roundtable, addressing how investor views was in 2020 named on Real Deals Future Frode Strand-Nielsen has established an are evolving. Kjær was also invited to share 40 Diversity and Inclusion Leaders list for endowment of CAD 2.2m that will provide 10-12 his thoughts on the importance of integrity in recognition of his important work to level the full scholarships for athletes in perpetuity. Since leadership at the ESG Summit, organized by playing field. male athletes tend to receive more donations, NASDAQ. he has ear-marked 50% of the endowment to support female athletes.

94 FSN Capital ESG report Building Resilient Companies 95 boardapprentice.com

Developing tomorrow's board member today

As an initiative to increase board diversity on strict conflict of interest and confidentiality boards globally, our Chairperson Charlotte obligations. Valeur founded a not-for-profit social franchise – Board Apprentice. The concept works because a number of boards are willing to reserve a seat at the table for Board Apprentice place appropriate individuals education of tomorrow’s board members. In as board apprentices on boards for 1 year to 2020 FSN Capital decided to join the initiative gain firsthand experience, through observation and appointed Sean Madden as our Board of the workings and dynamics on boards. This Apprentice. He is currently a consultant to the in turn will grow and widen the pool of board- financial services industry, with data analytics ready individuals. The Board Apprentices do and project management competence. not receive remuneration and are subject to

Building Resilient Companies 97 Delivering on our commitments In 2020 we also How we did it

2020 was an extraordinary year due to the The tables below show our 2020 ambitions, Mapped fund-level climate risks and Climate risk and opportunities mapped for all opportunities. funds, see page 89 for the results. global Covid-19 pandemic. We still managed to what we did to deliver on these, as well as our Updated the FSN Capital ESG Strategy keep ESG high on the agenda both internally plans for 2021. Framework according to the latest Updated in December 2020 and will be rolled out and with the Portfolio Companies. recommendations under EU Non-financial in 2021. Reporting Directive. The ESG intranet was launched and provides and Launched ESG intranet available to all FSN What we said we would do How we did it overview of the most important initiatives the Capital employees. Investment team should know about. Signed the first fund-level ESG-linked Credit FSN Capital signed the Facility in December 2020. Hire a full-time dedicated ESG resource to the FSN Recruiting process initiated but put on hold due to Facility. Capital ESG team. Covid-19. This ambition will be followed up in 2021. All FSN Capital employees completed the training Rolled out mandatory eLearning for all FSN Tool developed and mandatory video training by August 2020, the training is included in the Capital employees. Launch a standard climate change due diligence launched for all employees in August 2020. Climate mandatory training for all new hires. approach. change due diligence is included in the mandatory training for all new hires. Present at four ESG seminars in the DACH-region, with the overall aim to raise awareness of ESG in Initiated dialogue with local networks and plat- the DACH private equity market and educate our forms but put on hold due to Covid-19. advisors. Virtual participation at several international Actively participate in ESG seminars and networks. seminars and networks (see page 94). What we will do in 2021 The new policy was rolled out in FSN Capital in Update and roll out a revisited Whistleblower February 2020. The policy was updated in some Policy and procedures in FSN Capital and all Roll out the updated FSN Capital ESG Strategy Portfolio Companies, with the ambition of complet- Portfolio Companies. Framework to all Portfolio Companies. ing the process for the entire portfolio in 2021. EU Taxonomy screening of all Portfolio Implement an electronic whistleblower channel for Established in February 2020, available on our Companies. FSN Capital. website. Create a platform for all Portfolio Companies to Update formal Portfolio Company board instruc- Put on hold due to Covid-19, and will be a priority share and discuss ESG knowledge, best practice tions template with clear ESG responsibilities. in 2021. and questions. We purchased carbon offsets for FSN Capital's 2019 Formalize FSN Capital’s climate ambitions and set Pilot an ESG reporting tool with at least one and 2020 emissions. Formal ambitions will be set emission targets. Portfolio Company. post Covid-19. Hire a full-time dedicated ESG resource to the Established a Diversity & Inclusion working group, Formalize FSN Capital’s commitment to Diversity FSN Capital ESG Team. which will set ambitions and targets going forward & Inclusion. (see page 81). Implement Team-First recommendations. Create a platform for all Portfolio Companies to Present at two ESG seminars in the DACH- Put on hold due to Covid-19 and will be a priority share information and questions about their ESG region. in 2021. processes. Respond to the EU Sustainable Finance Individual meetings held with all Portfolio Compa- Disclosure Regulations, including updating Assist Portfolio companies in setting quantitative nies in Q1 to evaluate 2019 reporting and identify our communications material and responsible emission reduction targets. improvement areas. investment policy. Increase scope of mandatory KPIs that are reported Implemented 2020, but we will continue to explore Apply for UN Global Compact membership. by Portfolio Companies in FSN Capital’s financial how to gather ESG KPIs from Portfolio Companies Further formalize FSN Capital’s climate reporting system (iLevel). in the most efficient manner. ambitions and set a science-based target for emission reduction in line with the Paris Agreement. Update Portfolio Company board instructions Completed template with clear ESG responsibilities. Not completed In progress

98 FSN Capital ESG report Building Resilient Companies 99

Appendix I Appendix II

FSN Capital Partners’ Code of Conduct - short version Code of Conduct for FSN Capital, last updated in 2019

Purpose and main principle or other employees. In most cases, an employee’s The purpose of the Code of Conduct is to create sponsor or the head of relevant local FSN Capital Introduction standards for us as individuals and as a socie- a company culture that promotes integrity, our Partners’ office is in the best position to address Our ethos reads «We are decent people making a ty. Combining ethical judgment with personal values, ethical guidelines and the FSN Capital an area of concern. If this reporting channel is decent return in a decent way». strength to act out that judgment is our definition Partners’ policies. The underlying principle for deemed inappropriate, please see contact list: of integrity. the Code of Conduct is that we always do the right Integrity and honesty are at the heart of who Contact thing, and if we are unsure, ask people who might we are. We maintain high ethical standards in FSN Capital shall respect the principles set out Compliance Officer FSNC know first. The Code of Conduct applies to every- Rebecca Svensøy +47 924 97 857 [email protected] everything we do and take pride in living by these in the UN Global Compact as attached hereto as one in FSN Capital Partners, including all direct Managing Partner FSNC standards, both in our professional and personal Appendix IV, (principles derived from the UN and indirect subsidiaries, and we expect all Board Frode Strand-Nielsen +47 917 31 364 [email protected] lives. Convention against Corruption, the UN Decla- Chairperson FSNC members, Advisors and Employees to live by them. Knut Kjær +47 901 00 438 [email protected] ration of Human Rights, the ILO Declaration on External contact person We believe that FSN Capital has three assets – Fundamental Principles and Rights at Work and Whistleblower policy Gunnar Holm Ringen +47 952 60 175 gunnar.holm.ringen@ people, capital and reputation. If any of these the Rio Declaration on Environment and De- at PwC pwc.com If anyone in FSN Capital Partners becomes aware are ever compromised, reputation is the most velopment), the OECD guidelines for corporate of circumstances that violates laws, regulations We expect that all employees are familiar with difficult one to restore. Reputation takes years to governance for multilateral enterprises and the or the Code of Conduct, they are encouraged and our Code of Conduct and actively promote its build, but only one wrong decision to ruin. UN Convention on the Rights of the Child. sometimes obligated to report this. We encourage content. Please see the full version policies for employees to make good faith reports of actual further details Code of Conduct (go/coc), Whis- The purpose of this Code of Conduct is to 1. Personal Conduct or suspected breaches of our Code of Conduct, tleblower Policy (go/whistleblower) and Proce- breathe life into the definition of who we are and FSN Capital sets high ethical standards for and no one who in good faith reports a violation dure for handling reported issues of concerns what we stand for, and to inspire and steer our everyone who acts on behalf of the Firm. All shall suffer retaliation from FSN Capital Partners (go/whistleblowerprocedure). team members, Executive Advisors and portfolio board members and employees must conduct companies to do the right thing every day – even themselves with courtesy, respect and integrity when no one is looking. A breach of law or of in business relationships, towards customers, Always Never our Code of Conduct is a threat to our Firm’s colleagues and others who they encounter in pro- + Act professional and treat others with respect - Do not conduct any form of harassment, discrimination or culture, our competitiveness and our reputation. fessional life. No one should behave in a manner Be careful when writing or posting pictures in blogs and treatment that may be interpreted as threatening or degrad- + We strive, therefore, to ensure that we do not that may offend local customs or culture. social media regarding FSN Capital Partners, suppliers or ing by others customers - Do not discriminate or provide differential treatment to compromise our ethos, integrity or values and + Comply with applicable laws and regulations in the coun- others that every member of the FSN Capital team is All board members and employees must protect tries in which we operate - Do not share any confidential information + Act to promote a culture characterized by respect, inclusion, - Do not conduct any form of corruption – this includes offer, encouraged to raise the following question if in FSN Capital’s assets to ensure that they are used equality and diversity promise, request, demand, receive or accept unlawful or doubt: «Is this behaviour in line with our ethos efficiently and properly for legitimate business Act in the best interest of FSN Capital Partners at all times inappropriate gifts or other remunerations (all employees + and values?» purposes. Each employee is personally accounta- + Avoid conflict of interests and disclose all actual or potential will be provided training in this) conflict of interest to your line manager - Do not give or accept gifts, entertainment or preferential ble for the use of any Firm assets which he or she + Follow regulations regarding insider information and the treatment unless: Code of conduct for FSN Capital controls. Incidental personal use of telephones, insider list › it is a non-cash gift + Compete fairly within the framework of relevant anti-trust › it is consistent with customary business practice Ethics deals with ideas about what is right and copy machines, personal computers and similar and competition laws › it is of insignificant value wrong. We believe that ethics in professional life equipment is allowed provided that there is no Act in a socially responsible manner that is safe and protec- › it cannot be construed as a bribe or kickback + must be directly linked to the ethics that set the significant cost to the Firm, it does not interfere tive to people, the environment and society › it is in accordance with FSN Capital Partners values + Promote principles set out in international conventions › it does not violate any laws regarding human rights and worker’s rights - Do not exploit children as a labor force - Do not exploit any form of forced or compulsory labor with duties to the Firm, and it is not related to 3. Work environment and safety notify their sponsor or point person of their sit- Proprietary and confidential information gen- any illegal activity or is otherwise outside the FSN Capital shall provide a professional, inspired uation and may then be excused from having any erated and gathered in the Firm’s business is Firm’s business activity. and safe workplace in accordance with man- further involvement in the matter concerned. a valuable FSN Capital asset. Protecting this datory legislation and will show respect for all information is critical to FSN Capital’s reputa- FSN Capital team members must not use assets individuals and make active efforts to ensure a 5. Directorship, employment and other assign- tion for integrity and ensures compliance with of the Firm direct or indirect for contributions of good and inclusive working environment char- ments the complex regulations governing the financial any kind to any political party, political commit- acterised by equality and diversity. FSN Capital’s Board members, Executive Advisors and employ- services industry. «Proprietary information» tee or candidate for, or holder of, any public of- suppliers shall be required to apply the same ees are expected to show loyalty towards FSN includes all non-public information that might fice. Board members and employees may partici- principles. Capital and shall not participate in any compet- be useful to competitors or that could be harmful pate in political activities solely in their personal ing business. to FSN Capital, its investors, portfolio companies capacity and never in the capacity of being an No form of harassment, discrimination, differ- or other connections if disclosed. It includes, for employee or representative of FSN Capital, and ential treatment or other conduct which may be No one must engage in other directorships, example, intellectual property, business plans, always with due consideration to FSN Capital’s interpreted as threatening or degrading shall take employment or assignments of any material sig- personal employee information, unpublished Code of Conduct. place. nificance outside FSN Capital unless otherwise financial information and identification of target agreed with FSN Capital. Should a conflict of portfolio companies. «Confidential information» Even when a person makes a statement in a All board members and employees must refrain interest arise, or if the relevant person’s ability to is information that is not generally known to the personal capacity, they are still representing FSN from conduct that may have a negative effect on perform their duties or fulfill their obligations to public about FSN Capital or other parties with Capital. Each employee is personally responsi- colleagues or on the work environment of FSN FSN Capital is compromised, such approval will whom FSN Capital has a business relationship ble for blog entries or participation in internet Capital. be evaluated and could be withdrawn. and that have an expectation of, or legal right to, discussions. Everyone at FSN Capital shall be confidentiality. particularly careful in relation to entries and 4. Conflicts of interest 6. Investment in publicly traded shares and pictures in blogs and internet discussions relating Board members and employees must behave funds 8. Insider information to FSN Capital or any of the portfolio companies. impartially in all business dealings and not give FSN Capital’s Executive Advisors, board mem- All Executive Advisors, FSN Capital board Confidential information shall not be published other individuals, companies or organisations bers and employees are not permitted to invest members and employees shall comply with and neither colleagues, customers, partners nor improper advantages. Everyone shall avoid in single company shares in companies trading applicable laws and regulations regarding insider suppliers may be quoted or referenced without situations where conflicts of interest may arise on any of the Nordic or DACH stock exchang- information. Everyone is advised to take neces- their prior consent. Everyone at FSN Capital between their personal and/or financial interests es. Portfolio investments made by independent sary measures to ensure that insider information must respect intellectual property rights and cop- and those of FSN Capital. financial advisors on behalf of the employee or in regarding a potential target portfolio company is yright-protected material. investment funds are exempted from this policy. not received. FSN Capital should under no cir- No one must work on or deal with any matter cumstance advise or act (purchase or sell shares) 2. Laws and Regulations in which they themselves, their spouse, partner, FSN Capital employees are required to report as a result of insider information. All board members and employees are personally close relative or any other person with whom all share and fund holdings to the Compliance responsible for complying with applicable laws, they have a close relationship, has a direct or in- Officer every six months. 9. Anti-corruption regulations: regulations and guidelines issued by public au- direct financial interest. Further, the same applies Remuneration and gifts thorities. In some instances, FSN Capital’s Code when special circumstances exist which may 7. Confidentiality FSN Capital is strongly opposed to all forms of of Conduct may be more comprehensive than the weaken the perceived impartiality or the trust Everyone at FSN Capital shall maintain all pro- corruption. Corruption undermines legitimate applicable laws and regulations and, if not in con- and integrity of employees or of their work. prietary and confidential information in strict business activities, distorts competition, ruins flict with the laws and regulations, FSN Capital’s confidence, except when disclosure is authorised reputations and exposes companies and indi- Code of Conduct shall prevail. Employees who consider themselves not to be by FSN Capital Partners’ Managing Partner or viduals to risk. FSN Capital makes active efforts impartial in relation to any particular matter, or required by law. to ensure that corruption does not occur in its who are uncertain as to their impartiality, shall business activities.

104 FSN Capital ESG report Building Resilient Companies 105 The purpose of entertainment and gifts in a c. As a general rule, one should decline invita- business setting is to create and enhance good- tions to paid events or trips hosted by service Appendix III will and working relationships to better serve providers or other business contacts. Partici- FSN Capital and its investors, and not to gain an pation at paid events must always be author- Responsible Investment Policy for FSN Capital Partners unfair business advantage. No Executive Advisor ised by FSN Capital’s Compliance Officer. and no one at FSN Capital shall offer, promise, We are decent people seeking to request, demand, receive or accept unlawful or Agreements with consultants, suppliers, partners make a decent return in a decent way. inappropriate gifts or other remuneration. In or other middle-men must never be used to chan- some countries, «facilitating» (paying a «small nel payment or other remuneration to anyone token» to smooth a process or transaction) is not within or outside FSN Capital. FSN Capital seeks to act with the highest level 1. We always incorporate ESG risks and op- uncommon, but FSN Capital does not accept this of integrity, taking a responsible approach when portunities into the investment analysis and as a way of doing business. 10. Fair Competition interacting with our portfolio companies, our ad- decision-making process. FSN Capital will compete in a fair and ethically visors, our investors, local communities, and the No one shall gain personal business-related ben- justifiable manner within the framework of the environment. FSN Capital publishes an annual › This Responsible Investment Policy defines our efits other than gifts or services of insignificant antitrust and competition rules in the markets in ESG report to be transparent about our perfor- formal exclusion criteria. value. which the Firm operates. mance and keep ourselves accountable. › We conduct a climate change due diligence in every transaction. FSN Capital Partners’ policy for gifts is as follows: 11. Correct information With our investment approach, FSN Capital › We conduct an ESG due diligence in every a. No gift, entertainment or preferential FSN Capital requires that all employees are doesn’t see a need for a responsible investment transaction. treatment can ever be solicited, provided or truthful in their dealings with one another, our policy that is treated separately from our general › A summary of the key risks and opportunities accepted by any individual at FSN Capital clients and other business partners. In our inter- investment strategy. Our policy for responsible identified in the climate and ESG due diligence unless (i) it is a non-cash gift, (ii) it is consist- action with investors, each other, intermediaries investments and our investment philosophy are is always included in the investment decision ent with customary business practices, (iii) and potential sellers of portfolio companies, FSN intertwined and in fact two sides of the same material. it is of insignificant value, (iv) it cannot be Capital will always be honest and fair in terms of coin; tools we apply to ensure that we over time › We always consider the likely impact of key construed as a bribe, payoff or kickback, (v) is how we act in processes and «only promise what get the best possible combination of controlling sustainability risks on return by having ESG in accordance with FSN Capital’s ethos and we can deliver». risk and enhancing value. risks integrated in our Risk Framework. (vi) it does not violate any laws; We will never take short-cuts in terms of due Compliance with UN’s Principles for Respon- 2. We are active owners and incorporate ESG b. All directors and employees of FSN Capital diligence of potential portfolio companies. We sible Investment (UN PRI) into our ownership policies and practices. shall notify the Compliance Officer of any will view each deal in isolation and only base our FSN Capital became a signatory to the United gifts, entertainment or preferential treatment investment recommendations on the merits of Nations-backed Principles for Responsible In- ESG is a core part of FSN Capital Partners’ value prior to such being provided or accepted. that particular transaction. vestment on September 14, 2012. creation approach. The Compliance Officer shall maintain a gift-log and approve gifts, entertainment or FSN Capital’s business information will be com- UN PRI promotes integrating ESG perspectives We implement both the FSN Capital Governance preferential treatment only when such are in municated accurately and fully, both internally into the investment process and active ownership Framework and the FSN Capital ESG Strategy compliance with FSN Capital’s anti-corrup- and externally. All accounting information must policy. For FSN Capital, being a signatory falls Framework in every Portfolio Company. With the tion policy set out herein; be correctly registered and reproduced in accord- naturally within our investment approach and FSN Capital Governance Framework we set the ance with laws and regulations, including rele- being compliant with these six UN PRI princi- tone from the top and have minimum require- vant accounting standards. Any intentional act ples is a natural part of an investment strategy ments with regards to ESG policies, implemen- that results in material misstatements in financial to safeguard and enhance return of our portfolio tation of ESG policies, and governance. The FSN statements will be treated as fraud. investments: Capital ESG Strategy Framework is our method

106 FSN Capital ESG report for establishing an individualized ESG strategy 4. Have an unacceptable high greenhouse gas for each Portfolio Company. footprint and have failed to take reasonable steps to reduce these emissions. As responsible owners, we are dedicated to con- tinuing to push the frontier of what constitutes 5. Produce weapons that through their normal good ESG governance. Our ESG Frameworks will use may violate fundamental humanitarian therefor evolve over time in line with interna- principles (eg Anti-personnel land mines, tional conventions, standards, and guidelines. Production of cluster munitions, Produc- tion of nuclear arms) 3. We seek appropriate disclosure on ESG risks and opportunities by the entities in 6. Are directly related to the following indus- which we invest. tries:

4. We promote acceptance and implementa- a. Adult entertainment tion of the UN PRI within the investment b. Tobacco industry. c. Gambling d. Alcohol 5. We work together to enhance our effective- ness in implementing the Principles. FSN Capital Partners’ annual ESG report FSN Capital has published an annual ESG report 6. We will each year report on our activities since 2014. and progress towards implementing UN PRI by completing the annual PRI signatory We will continue to publish an annual ESG survey. report to transparently report on the progress of both FSN Capital Partners and the Portfolio FSN Capital’s exclusion criteria Companies. We shall not invest in companies that: In the annual ESG report we will describe in 1. Have contributed to systematic denial of more detail how ESG is integrated in our invest- human rights ment process and ownership approach, as this naturally evolves over time. 2. Demonstrate a pattern of non-compliance with environmental regulations. This policy will be reviewed and amended as appropriate from time to time. 3. Show a pattern of engaging in child labour or forced labour. Revised March 2021

108 FSN Capital ESG report Building Resilient Companies 109 We hope you appreciated reading this year’s ESG report. Please provide any feedback, comments or questions you may have to [email protected]