NL Industries Inc.
Annual Report 2022

Plain-text annual report

Sustainability Report 2022 We connect a greener world Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 2 Contents 03 16 Introduction Environment 36 Governance 45 Data sheets 04 Sustainability highlights 18 Climate and decarbonization 38 Business ethics and governance 46 Introduction 05 Letter of Commitment 22 Circular products and waste 42 Data privacy, data protection 47 Environment 07 Business model 25 Innovation and technology 08 Memberships commitments advancements 28 Biodiversity and cyber security 44 Responsible value chain Strategy and Governance Social 10 Sustainability governance 31 Talent attraction 11 Sustainability strategy 32 Diversity and Inclusion 12 Climate risk and opportunities 34 Health and safety 13 Materiality assessment 35 Community engagement 15 Target overview 51 Social 54 Governance 56 Taxonomy Appendix 61 GRI Index 63 Limited assurance report 66 ESG ratings This report describes the compliance of NKT Cables Group A/S with Section 99a (CSR), Section 99d (Data ethics), Section 99b (Gender diversity) and 107d (Diversity) of the Danish Financial Statements Act in 2022. It also includes the progress made on compliance with the principles of the UN Global Compact. NKT Cables Group is part of NKT A/S. NKT Group annual reports 2022 Annual Report Remuneration Report Corporate Governance Report Introduction NKT’s purpose is to connect you, us and society to a greener world by enabling sustainable energy transmission. As a key power cable provider, NKT is actively reducing its environmental impact and strengthen its social responsibility. Sustainability Report 2022 NKT 3 In 2022, NKT installed the onshore power cable system for the VikingLink interconnector enabling exchange of renewable generated power between UK and Denmark. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 4 Sustainability highlights Corporate emissions* decreased with 20% Compared to 2021 * scope 1 and 2 Total amount of waste sent for material recycling 80% Share of female newhires increased to 21% From 80% in 2021 From 19% in 2021 Employee Engagement Score 73 From 74 in 2021 Total Recordable Incident Rate 1.14 From 1.19 in 2021 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 5 Letter of Commitment Speed is key to connecting a greener world Accelerated action is needed to mitigate the effects of climate change. In the past year, we have seen extreme heat across Europe, wildfires in North America and massive rainfall across Asia. Immediate climate action is necessary At NKT, we encourage political leaders to contin- ue to set ambitious targets and to follow through with the necessary initiatives to stay on the 1.5°C trajectory. We have heard the ambitions and speeches – now it is time for immediate action and investments for the sake of future genera- tions. This calls for unified and immediate action to reduce global CO2e emissions to keep the hope alive that we can prevent temperatures from To meet the politically set climate targets, we need more swift and agile processes in the per- rising by more than 1.5°C above pre-industrial mitting and tendering phase of energy infrastruc- levels. This trajectory is under pressure due to the ture projects. Furthermore, an increased focus on lack of speed in the global transition to a low-car- sustainability in the value chain is central to drive bon and sustainable future. the decarbonization of the energy infrastructure. A key element is to strengthen the significance of Furthermore, Europe is experiencing an energy low-carbon footprint in tender criteria. This would crisis with high prices and fluctuating supply enable the environmental impact from manufac- impacting all areas of society. The combination of the war in Ukraine and a dry summer with low wind has left energy supply at the top of the political agenda in Europe. The way forward is to strengthen climate action, accelerate and increase the renewable energy generation and to continue to invest in an interconnected power grid. turing, transportation and installation of products and solutions to be more carefully considered. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 6 Internally, we have continued to reduce the carbon footprint from our operations and have cut corporate CO2emissions with 79% Connecting a greener world In 2022, we continued to conduct our busi- As a central player in the power sector, we are obliged to lead the way towards a more sustain- Responsible partner and employer Part of our sustainability journey is to continue ness with a strong focus on sustainability while able future by engaging in dialogues with key our aspiration and efforts to be a fair and respon- building the global power grid essential to the stakeholders in the industry. In 2022, we were a sible partner and employer. We have a strong green transition. In close collaboration with our founding member of the Powering Net Zero Pact, focus on health and safety while safeguarding partners, we have connected offshore wind farms where we join forces with other companies to human rights and work to empower people to shore, enabled hydro power to flow across decarbonize the energy sector, and we engaged across the organization, the industry and in local borders and ensured necessary upgrades of in discussions for a more sustainable sector communities. the low-, medium- and high-voltage power grids at COP27 in Egypt. It is a long, transformative across Europe – and soon in North America. journey, and collaboration across the value chain As a leading company in the power cable in- compared to 2019 Internally, we continue to operate all factories and is essential to succeed. dustry, a high-performing, diverse and inclusive organization is a key enabler for our growth most offices using renewable electricity and have A good example of innovative collaboration is ambitions. This makes attracting, developing and further reduced the carbon footprint from our the project where the world’s first HVDC power retaining talents and employees a high priority operations. Here, we have a nearterm target to reduce the corporate CO2e emissions by 90% in 2030 compared to 2019 despite of a substantial cables using low-carbon copper will be installed area for NKT. In 2022, we have continued to at Dogger Bank C, the third phase of one of the strengthen our focus on talent management, world’s largest offshore wind zones located in the diversity and inclusion. increase in our activity level. We are well on our UK. This initiative will reduce the carbon footprint way to meeting this target with a 79% reduction of the HVDC power cable system by more than We remain committed to conducting our busi- already achieved. The next steps are to stop all 35%, demonstrating the potential for low- carbon ness in accordance with the principles of the UN use of natural gas and complete the transition to fossil-free fuels. solutions in the offshore wind industry. At COP27, NKT participated to promote a stronger commitment to accelerate the green transition and strengthen the global power grids to ensure transmission security. This requires immediate action, and at both formal and informal discussions, we experienced an increased focus on how to drive and accelerate climate actions in the energy sector. Global Compact and look forward to continuing to support the necessary acceleration of the green transition. Our power cable systems are the backbone of the green transition – without a proper infrastruc- ture implemented fast the green transition will stall. Let us take immediate action, speed up pro- cesses and connect a greener world – together. Alexander Kara President and CEO NKT Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 7 Description of business model NKT is connecting a greener world with high-quality cable solutions for on- and offshore power transmission. Resources People NKT's core consists of a diverse, engaged and highly skilled workforce Innovation More than 130 years of pioneering the power cable industry with innovative technology for the future Partners NKT's business is built on long-standing relations and strong partnerships Business Value creation A greener world Sustainability is at the heart of NKT with a strong focus on connecting a greener world and delivering net-zero emissions by 2050 Societal value NKT has a strong focus on ensuring equal opportunities in the organization, actively engaging in local communities and operating according to high safety standards Customer value NKT supports its customers with extensive experience, high quality solutions and services and strong project execution Shareholder value NKT is creating shareholder value trough business performance Solutions Specialized in high-voltage power cable solutions Applications Markets building wires, low- and medium-voltage Service & Accessories On- and offshore power cables services and a full portfolio of for on- and offshore installation power cable solutions accessories for medium- and high-voltage power cable systems Business lines Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 8 International sustainability memberships and commitments Climate commitments Broader sustainability In December 2020, NKT As a member, NKT has NKT has signed the NKT is a member of the NKT has been a member NKT is an active member signed up to the Science committed to taking commitment under the UNFCCC Race to Zero of the UN Global Compact of Europacable, supporting Based Targets inititative corporate action to halve UN Global Compact to global campaign rallying to since 2009 and actively the focus on promoting to become a net-zero global emissions by actively work to run its take rigorous and immedi- emissions company by 2030 in line with a 1.5°C business within the 1.5°C ate action to halve global supports and acts on the principles to drive sustainable and fair conditions in the wire and 2050. pathway. trajectory by setting emissions by 2030. sustainable changes in power cable industry. science-based targets. the world. Diversity and inclusion Stakeholder interaction To continue to promote As a member of the Above NKT supports the diversity and inclusion and Beyond Diversity Tekniksprånget intern- NKT is a signatory to the Confederation of NKT is a founding member of the Powering Net Zero across the company, NKT Council, NKT is actively ship program to promote Danish Industry’s Gender Pact where companies has signed up to the UN Women’s Empowerment Principles and has a corporate target of no less than 30% women in senior leadership positions in 2025. taking part in addressing the barriers obstructing the advancement of more women into top manage- ment. careers in engineering for female students in Sweden. Diversity Pledge to actively promote gender diversity across the organization. from the energy sector have committed to a series of social, environmental and corporate commitments. Sustainability Report 2022 NKT 9 Strategy and Governance As a central player in the global transition towards renewable energy, NKT is continuously reducing the environmental impact of its activities. An offshore power cable is being stored at the Swedish high-voltage factory in Karlskrona before being installed to ensure reliable power transmission, thereby supporting the green transition. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 10 Sustainability governance Sustainability is embedded in all processes across the company and NKT recognizes the importance of having clear governance to ensure ongoing progress. Board of Directors ESG committee Other committees Approver ■ The Board of Directors approves the sustainability strategy and the sustainability report annually ■ Sustainability is part of the agenda quarterly ■ The ESG Committee is a Board of Directors’ committee charged solely with preparing resolutions to be taken by the Board of Directors in fulfilling its responsibility for oversight of relevant ESG policies, strategies and programs of the Company Formulator ■ The CEO is accountable for the sustainability strategy and sustainability report and oversees performance and progress CEO ■ Sustainability is an integral part of the CEO responsibilities and is also addressed at formalized meetings at least once a quarter Group Leadership Team (GLT) Proposer ■ The Global Leadership Team (GLT) and the Sustainability Steering Group implement the sustainability strategy Sustainability Steering Group ■ Sustainability is embedded in all areas of the business and addressed at formal meetings at least once a quarter Group Sustainability Owner ■ Overall owner of sustainability and advisor to the corporate ESG program Compliance Board HSE Council Sustainability Council Group HR Group HSE Environmental Council Business work streams - organised according to sustainability priorities Driver ■ Councils and functions ensure sustainability trends are captured, planned and prioritized. Provide guidance to Sustainability Council and ensure actions from the Sustainability Steering Group and the Sustainability Council are addressed ■ Councils have monthly meetings or as needed Implementer ■ Ensures that processes, controls and governance are implemented in the organization, captures ideas and collects performance data. Meetings as needed Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 11 Sustainability strategy ImpACT NKT executes the long-term strategy ImpACT for resolving global sustainability challenges in support of the Paris Agreement. ImpACT sets the direction and documents the progress on sustainbility in NKT. It is anchored in three main pillars founded on responsible business processes. Programs 1. Net-zero: Natural gas-free operations 2. Energy efficiency 3. Transition to alternative fuels 4. Supplier engagement program 5. Recycling of XLPE and PE 6. Waste elimination and increased circularity 7. Take-back program 8. Materials development 9. SF6 mitigations 10. Superconducting technology 11. Biodiversity 12. Talent attraction, development and management 13. Diversity 14. Inclusion 15. Safety Strategy 2028: Twice as good 16. Community engagement 17. Responsible business partners 18. Ethical business conduct 19. Speak-up culture 20. Responsible tax practices 21. Cyber security 3.0 22. Data privacy and data ethics 23. Supplier due diligence Climate action Actively solving climate challenges Be a leader in driving the green transformation by reducing corporate emissions and entering into partnerships addressing and resolving climate challenges. NKT has a target of 90% reduction of scope 1 and 2 by 2030 and has also committed to the Science Based Targets initiative to become a net-zero company by 2050. Programs 1 – 4 Social capital A fair, inclusive and safe place to work Be a fair, inclusive and safe workplace empowering trust and engagement within the organization, the industry and in local communities. Programs 12 – 16 Circularity Create circular value proposition Have a sustainable value proposition through the lifecycle of products and solutions, and actively pursue zero waste through circularity. Programs 5 – 11 NKT – connecting a greener world Responsible business – Be a trusted partner Programs 17 – 23 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 12 Climate risk and opportunities Risks Short term (0-2 years) Opportunities ■ Extreme weather events such as heatwaves, draughts, storm surges or flooding can have a negative impact on the NKT production, potentially damag- ing facilities and assets, disrupting the supply chain and logistics, and threatening employee health and safety. Productions sites near the sea (Karlskrona, Sweden) or major rivers (Cologne, Germany, and Velke, Czech Republic) are particularly vulnerable ■ Failing to meet climate commitments can harm relationships with investors, regulators, customers and employees, can negatively impact the company’s com- mercial relevance, reputation and license to operate ■ The short-term cost to achieve central elements of the corporate decar- bonization actions such as using 100% renewable electricity or phasing out natural gas may increase (e.g. increasing prices for renewable electricity, technolo- gy, CAPEX investments) ■ NKT's ommitments and actions to contribute to a low-carbon economy through minimizing the corporate impact and providing a central product to the energy transition attracts the necessary talent and investor support to meet the corporate growth trajectory ■ Minimizing NKT’s sustainability impact is central to the custom- ers’ success and their respective sustainability journey. Sustainability actions contribute to the company's competiveness and increase chances to become preferred supplier ■ Through the product portfolio, NKT is positioned as a central contributor to the electrification of society and the energy transition towards renewable energy supply. The demand for renewable energy might see a tipping point in the medium-term accelerating likewise the demand for NKT’s products and services Medium term (2-5 years) ■ The increase in the frequency and severity of extreme weather events can have ongoing impacts on production, assets, and supply chain. The cost of mitigating and adapting to a changing climate may also increase ■ NKT's ambition to offer low-impact alternatives to its clients may lead to increased competition for low-carbon materials from suppliers. Likewise, competition may also increase on subcontractors in the energy transition landscape ■ Materials being used are potentially affected by regulatory changes ahead of product development Long term (5-15 years) ■ Political and regulatory failure to deliver on climate change commitments (e.g. renewable energy targets) undermine the potential commercial opportunity for NKT as a central actor in the transition towards more renewable energy. Additionally, NKT’s scope 3 product use emissions are significantly influenced by the renewable electricity in the national grids ■ It is expected that extreme weather events will persist in severity and occur- rence in the long-term inclusive of the associated risks to NKT’s assets, operations, employee health and safety and the local communities NKT is part of ■ Investments into decarbonization action (e.g. 100% renewable energy, natural gas phase out) decrease the overall cost in comparison to previous configurations and accounting for increas- ing carbon prices ■ Planned and committed renewable energy capacity will increasingly materialize. NKT is well positioned to seize opportunities from the energy and low carbon economy transition Method and approach A central dimension of the materiality assessment is the identification and assessment of material topics on NKT (page 13). It includes a broad range of topics integrating an assessment of the climate risks and opportunities. Outcomes of the materiality assessment is used to identify and manage material topics (in- cluding climate risks) addressed in relevant sustainability programs. Both, the climate risk assessment as part of the materiality assessment, and the sustainability programs are integrative elements of NKT’s sustainability strategy (page 11) and the sustainability govern- ance structure (page 10). Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 13 Materiality assessment defining sustainability priorities The materiality assessment enables the identification and prioritization of social and environmental issues presenting risks and opportunities for NKT and stakeholders. In 2022, NKT has performed a double materiality assessment. The assessment furthermore supports the visu- alization of global changes and trends and their potential effect on the business. It also facilitates reporting on the issues of greatest importance to relevant stakeholders. Interaction with stakeholders associated with sustainability-related matters takes place through several channels, e.g. via interviews, surveys and informal dialogues. The feedback collected has been included in this year’s double materiality assessment and in the general sustainability processes of NKT. Sustainability aspects are evaluated on the basis of risks, opportunities and trends in relevant industries and in political agendas. Changes in legislation, technology and general developments in the sustainability agenda have also been assessed. Materiality assessment High s n o i t a r e p o s s e n s u b f o t c a p m i i n i - e d s t u O i ) e r o c s e v i t a l e r ( Medium Circular products and waste Climate change Business ethics and governance Energy management Talent attraction and management Responsible supply chain management Employee health, safety and well-being Innovation and technology advancements Community engagement Diversity and inclusion Product quality and safety Human rights and labour standards Data protection and cyber security Water management Biodiversity Inside-out impact of business operations (relative score) High Categories of material topics Relevance of the material issues to NKT’s stakeholders: customers, suppliers, investors and public organizations Core areas for accelerations Sustainability enablers Areas to monitor Medium Moderate Large Significant Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 14 Assessment method and design principles Method 1 2 3 4 Mapping NKT’s existing materiality topics with relevant segment, ESG trends Selecting topics for promotion to materialities Selecting topics as described in the Validation & prioritization of materialities by stakeholders External interviews and internal proxy and ESG requirements based on desk design principles. Internal workshop to workshop. Stakeholders include research. assess business impact and validate suppliers, customers, employees, Visualization and mapping of materialities Categorization of the materialities as 1. Core areas for acceleration 2. Sustainability enablers topics (inside-out and outside-in public organizations/regulatory and 3. Areas to monitor perspective). investors. Design principles for selecting materialities Based on the principles of GRI and SASB Covers internal and external factors The selection of material topics covers both inside-out topics (related to Has (potential) impact on the company’s bottom line Topics are material when they have the ability to affect the company’s Within sphere of control and influence The company should have the ability to control and influence the material topic. Excludes purely financial and operational issues, as well as hygiene factors The scope of the materiality matrix the corporate mission and strategy) operational results and financial This includes the company’s reach of is non-financial. Operational issues and outside-in topics (reflective of stakeholder concerns or broader societal expectations). conditions. Where possible, tools such responsibility along the value chain, i.e. will be excluded, since they are as impact assessment methodologies covering upstream and downstream expected to already be actively or life cycle assessments are applied to signify direct economic, environmental and social impacts. entities. managed. This extends to ‘hygiene factors’ which are relevant but are impacted by the management of a material topic, rather than being defined as a topic in itself (e.g. reputation). Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 15 Target overview 2022 Completed Partly completed Incomplete Environment Status Result SDG** 1 2 3 4 5 Social 6 7 8 9 Receive SBTi verification for corporate climate target* Acquire further data transparency via supplier engagement program Reduce corporate CO2 e emissions by 5% compared to 2021 (scope 1 and 2) Maintain full low-carbon electricity supply at all factories Develop long-term strategy roadmap for achieving zero waste and increased circularity Maintain Employee Engagement Score ≥74 Diversity and Inclusion Score in employee engagement survey ≥74 Total Recordable Incident Rate ≤1.20 Complete corporate safety week (30 May - 3 June) 10 Implement Management Safety Walks Governance 11 12 Maintain completion rate for Code of Conduct, incl. anti-corruption and anti-bribery e-training ≥90% Further strengthen existing risk assessment framework * Climate data has been submitted to the Science Based Target initiative for validation of the corporate decarbonization targets which is expected to be concluded during 2023. ** Sustainable Development Goals, https://sdgs.un.org/goals 20% 13.2 13.2 13.2 13.2 12.5 Status Result SDG 73 73 1.14 Status 202 performed Result 91% 8.5 5.5 8.8 8.8 8.8 SDG 16.5 16.5 Environment As a central player in the global transition towards renewable energy, NKT is continuously reducing the environmental impact of its activities towards net-zero emissions. Sustainability Report 2022 NKT 16 Offshore wind is a cornerstone in the global transition to renewable energy and NKT has extensive experience in connecting offshore wind farms to shore with high- voltage cable systems. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 17 Environment During 2022, NKT has continued the journey to achieve net-zero emissions through various initiatives, including by decarbonizing the value chain via partnerships and customer collaboration on low-carbon solutions and eco-design. Previous decarbonization steps include that all production sites and most offices switched to 100% renewable electricity. Decarbonization targets 90% reduction of CO2e emissions in 2030 compared to 2019 Net-zero emissions by 2050 Environmental programs 1 Natural gas-free 7 Take-back program 8 Materials development 9 SF6 mitigations 10 Superconducting technology 11 Biodiversity operations 2 Energy efficiency 3 Transition to alternative fuels 4 Supplier engagement program 5 Recycling of XLPE and PE 6 Waste elimination and increased circularity Carbon emissions reduction plan Overview of corporate emissions 2022 100% 80% 60% 40% 20% 79% Scope 1 and 2 emissions decreased 20% from 2021 2019 Renewable electricity 2022 Removing natural gas Transition to bio fuel 2030 Find method statements and comments for non-financial data at page 50, 53 and 55. Scope 1: 13,215 tonnes Scope 2: 162 tonnes Scope 3: 10,388,000 tonnes Scope 1: Emissions from NKT sites NKT Victoria Scope 2: Purchased heat and electricity Scope 3: Transportation - upstream and downstream Business travel Purchased goods and services Employee commuting Capital goods Fuel and energy-related activities 3rd party waste recycling Use of sold products End of life treatment of sold products Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 18 Environment Climate and decarbonization As a significant part of the global greenhouse gas emissions derive from the production and use of fossil fuel-based energy, decarbonizing energy generation and improving energy efficiency are core focus areas for mitigating climate change. NKT runs ongoing climate initiatives, has strong processes and governance in place and has set an internal science-based target to reduce its scope 1 and 2 emissions by 90% by 2030 compared to 2019. Furthermore, NKT runs a supplier engagement program to reduce its scope 3 emissions, with the aim of achieving net-zero emissions no later than 2050. The focus on climate and energy efficiency is directed by the corporate Environmental Council to ensure a systematic approach across NKT. 1 Net-zero: Natural gas-free operations Key risks and challenges: Natural gas is one of the largest sources of CO2e emissions in NKT and removal is essential. During 2022, the war in Ukraine further increased the risk of sudden shortages of natural gas posing risks to the NKT operations. Discontinued use of natural gas also depends on mature political frameworks and investments in both infrastructure and new technologies. Approach: NKT is phasing out natural gas from seven factories by replacing it with sustainable energy sources such as renewable electricity, solar power and biogas. Target: No use of natural gas by 2030. Progress: ■ Reduction of natural gas consumption by 37% compared to 2021 ■ Completed study to identify alternative solutions to natural gas, primarily in relation to facility and manufacturing (2022) ■ 35 individual local replacement projects identified (2022) ■ Relevant investment program initiated to remove natural gas (2022) ■ Accelerated implementation of the first solutions by replacing natural gas in Cologne with almost 5,000 MWh of biogas, thereby reducing CO2e emissions in this area by approximately 900 tonnes in 2022 ■ Entered into partnership with the municipality of Asnaes, Denmark, to divest land to enable the construction of a district heating system providing energy to the NKT factory as well as the local community (2022) Future actions: ■ Execute on first phase of the implementation of natural gas alternatives at all identified sites ■ Emergency plan ready in case of sudden short-term shortages of natural gas Carbon intensity from natural gas, tCO2e per mEUR 4.31 3.17 1.75 2019 2021 2022 0 2030 Target CO2e emissions from natural gas consumption (tCO2e) 5,465 5,802 3,644 2019 2021 2022 0 2030 Target Calculated based on the total CO2e emissions related to natural gas by the annual revenue in market prizes (see NKT annual reports). Emissions are calculated based on the emission factors applicable to the type of fuel. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 19 Environment Climate and decarbonization 2 Energy efficiency Key risks and challenges: Continuous improvement in energy efficiency is an important part of the corporate climate ambition. Here, a key risk is inefficient and unnecessary energy usage without mitigating actions. During 2022, the war in Ukraine increased the risk of sudden shortages of natural gas and various weather conditions impacted electricity prices. Furthermore, ongoing improvements in energy efficiency are dependent on the development of new technologies and methods, which poses a potential risk to future results. Approach: NKT has energy efficiency actions incorporated in the corporate strategy to ensure ongoing focus and progress. Energy perfor- mance and data are monitored on an ongoing basis, which enables rapid responses to anomalies and provides the necessary data for increased energy efficiency. NKT meets these challenges by having processes in place to ensure data-based progress in energy efficiency and swift response to irregularities in energy consumption. Energy intensity related to stationary equipment and facilities, MWh per mEUR 145 137 108 95 Target: Continuous improvement of energy efficiency. Progress: Executing key initiatives from long-term energy program ■ Replacement of light sources by LED ■ Optimization of capacity settings ■ Reduction of leakages of compressed air in production ■ Switch-off initiative reducing electricity consumption Short-term energy savings during winter ■ Temperature reduction and insulation check at several sites ■ Precision temperature check and set-up at several sites Future actions: ■ Continue to execute on long-term energy efficiency program at all sites ■ Leverage ongoing energy data collection to ensure energy efficiency and drive mitigative actions when needed ■ Prepare plan to generate short-term energy savings related to natural gas at several sites 2019 2020 2021 2022 Calculated based on the total amount of energy used for stationary equipment and facilities (MWh) by the annual revenue in market prizes (see NKT annual reports). Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 20 Environment Climate and decarbonization 3 Transition to alternative fuels Key risks and challenges: The electrification of transportation is a key driver in the global transition to renewable energy and alternative fuels. Here, an underdeveloped infrastructure is a potential limiting factor to this transition. The conversion to alternative fuel depends on mature political frameworks and investments in both infrastructure and new technologies. Approach: NKT is executing on program initiatives to phase out diesel for internal logistic vehi- cles and stationary equipment by 2027 and aims to transition the company fleet to electric/hybrid vehicles by 2025. Decreased and decarbonized fuel consumption is central to NKT's ambition to become a net-zero emissions company. NKT is ad- dressing these challenges by incorporating climate actions in the business strat- egy and by engaging in relevant partnerships supporting the required change. Target: Fossil-free fuel for land-based vehicles by 2027. Progress: ■ Internal car policy implemented, with a stepwise introduction of electric cars in the company fleet (2021) ■ Electric chargers have been installed at several sites (2020-) ■ Transition to internal logistic vehicles and stationary equipment powered by electricity or biofuel is in progress (2021-) ■ In 2022, the fossil fuel usage for vehicles increased across sites in the aftermath of COVID-19 restrictions Future actions: ■ Execute program initiatives enabling the transition to electricity and/or biofuel for internal vehicles and stationary equipment. ■ Continue ongoing dialogues with customers to ensure availability of infrastructure for alternative fuels at installation sites CO2e emissions from fossil fuel consumption related to internal vehicles and stationary equipment, tCO2e 2,353 1,952 1,601 1,272 2019 2020 2021 2022 0 2027 Target Include CO2e emissions from diesel, petrol and LPG. Emissions are calculated based on the emission factors applicable to the type of fuel. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 21 Environment Climate and decarbonization For NKT, an important element on the journey towards net-zero emissions is to decarbonize the value chain, which accounts for a significant part of the corporate emissions. NKT runs a supplier engagement program aimed at driving emission data transparency and developing strong collaboration and decarbonization processes in the value chain. 4 Supplier engagement program Key risks and challenges: NKT is exposed to value chain risks, primarily related to key raw materials sourced for cable production. Especially copper, aluminum, steel and plastic have a high climate, environmental and social impact. Risk exposure exists especially in high-risk countries, where most of the metal reserves are located. Share of suppliers in engagement program having scope 1 and 2 emission reduction targets Approach: NKT runs a supplier engagement program addressing emission reductions in more than two-thirds of the corporate scope 3 emissions related to 'purchased goods & services'. The program focuses on metals and plastic suppliers identified as having high climate and environmental risk 2022: 89% 2025: 100% (target) exposure as per the materiality assessment conducted. The main objective of the program is to create transparency as regards suppliers' climate maturity and develop strong collaboration and decarbonization processes along the value chain. Main activities include the alignment between NKT, customers and suppliers, with a decarbonization roadmap as a key enabler to offer low-carbon cable solutions and to fulfill carbon reduction targets. Target: ■ 100% of suppliers in engagement program have scope 1 and 2 emission reduction target by 2025 ■ 75% of suppliers in engagement program have scope 3 emission reduction target by 2025 ■ 75% of suppliers in engagement program offering low-carbon alternative material incl. EPD/LCA by 2025 Progress: ■ Supplier engagement program launched, first priority decarbonization (2021) ■ Supplier climate requirements implemented. Evaluation of the maturity of the suppliers in the program completed (2022) ■ Ongoing proactive approach and dialogue, enabling key suppliers to mature on their decarbonization journey (2022) ■ Implementation of low-carbon alternative materials in cable solutions ■ Producing world’s first HVDC power cables using low-carbon copper (for Dogger Bank C windfarm), reducing the carbon footprint of the power cable system by more than 23,000 tonnes of CO2e Share of suppliers in engagement program having scope 3 emission reduction targets 2022: 50% 2025: 75% (target) Share of suppliers in engagement program offering low-carbon alternative material incl. compliant carbon footprint evidence (EPD/LCA) 2022: 28% 2025: 75% (target) Future actions: ■ Extend supplier engagement program to include installation services ■ Continue proactive approach and dialogue, driving suppliers to mature on their decarbonization journey ■ Integrate sustainability criteria in corporate sourcing process and the Procurement & Category Strategy ■ Enable use of low-carbon alternatives and materials in power cable solutions ■ Remain an active customer focusing on how to decarbonize products and projects Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 22 Environment Circular products and waste The need for circularity is becoming increasingly important to the transition to a more sustainable world as the demand for raw materials and other materials is driven up by the development and implementation of climate technologies. Product circularity plays a central role in NKT's ambitions to reduce the environmental impact of its products and solutions. The focus on decarbonization and circularity in the product design, research and development is directed by the Technical Board, on which Group Sustainability participates. 5 Recycling of XLPE and PE Key risks and challenges: Technology development and the expansion of the global power grids, which are central to the transition to renewable energy, are creating increased demand for raw materials. Irresponsible and irrational use of resources poses a risk in relation to limiting the environmental impact of products and solutions in the energy infrastructure. A key challenge with cross-bound material like XLPE (cross-linked polyethylene) is that there are limited possibilities to restore it to its original form and ensure a high level of circularity. Waste sent for reuse, recycling and composting 80% 80% 90% Approach: NKT is committed to eliminating waste, and progress is based on a long-term focus on the reuse and recycling of cable scrap and other 70% materials. Target: ≥90% of production waste diverted to recycling or reuse by 2028. Progress: Through innovation and external partnerships, NKT has made significant progress regarding recycling of scrap from power cable production over the past years Key highlights: ■ Successfully developed mechanical recycling of cross-linked polyethylene (XLPE) as the first company in the power cable industry (2020) ■ Developed new methods for recycling the remaining mixed fraction of materials from production to give them a second life in new applications and products such as flowerpots, cable drums and construction material (2021) ■ Initiated pilot project to decrease the carbon footprint from cable production by investigating methods to replace a substantial part of the materials used with recycled polyethylene (2021). ■ Continued pilot project (2022) Future actions: ■ Continue investigation and implementation of new methods to increase reusability and recycling of XLPE and PE from production ■ Evaluate pilot project on an ongoing basis with a view to company-wide implementation 2020 2021 2022 2028 Target Find method statements and comments for non-financial data at page 50. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 23 Environment Circular products and waste 6 Waste elimination and increased circularity Key risks and challenges: ■ Waste directed to landfill contributes to the negative impacts such as potent greenhouse gas emissions, space consumption and environmental pollution. Incinerating waste is an inefficient use of valuable resources despite energy recovery. Both options are increasingly unacceptable in an evolving regulatory landscape of circular economy, customers' circularity journey and corporate decarbonization, Waste directed to landfill and incineration (no energy recovery), % of total amount of waste biodiversity and zero waste ambitions ■ Copper, aluminum, steel and plastics are among materials used in NKT products. There are often risks associated with the use of these materials. For example, they are resource-intensive and mining ore can potentially have negative impacts on environment, communities and human health. Additionally, inefficient resource usage has a direct cost implication as the costs of core materials rise and become increasingly volatile 6% 4% Approach: NKT works to eliminate waste directed to landfill, reduce the waste directed to incineration and increase waste and materials diverted to recycling and reuse. The waste strategy defines three central guiding principles: 1. Advance circularity as regards materials and material use 2. No compromise on landfill and incineration 3. Integrate the 5Rs (refuse, reduce, reuse, repurpose, recycle) of waste management across NKT Target: ■ ≤1% waste directed to landfill and incineration by 2026 ■ ≥90% of production waste diverted to recycling or reuse by 2028 Progress: In 2022: ■ Maintained level of waste diverted to reuse, recycling and composting at 80%, same as in 2021 ■ Diverted 4% more waste to incineration with energy recovery than in 2021 ■ Reduced diversion to landfill to 1.56% of total waste generated ■ Developed cross-functional waste and circularity strategy and initiated measures to improve waste-related business intelligence Future actions: ■ Continue to improve waste- and circularity-related business intelligence, including circularity metrics ■ Implement first waste strategy action items and detail long-term programming 2% 2019 2021 2022 ≤1% 2026 Target Find method statements and comments for non-financial data at page 50. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 24 Environment Circular products and waste 7 Take-back program Key risks and challenges: During cable installation, cable drums and trolleys are usually left as waste after delivery. This involves a risk of increased waste and non- circular use of resources, with a negative environmental impact. Number of drums and trolleys sent back through the program each year Approach: NKT started the first drum take-back program in Denmark more than Wooden drums Trolleys 30 years ago. Today it has grown to a deposit refund program covering both wooden drums for medium-voltage cables, 1 kV cables and low-voltage cable drum trolleys, Qaddy®. Each drum has a unique bar code and one drum is usually reused 7-8 times. During its lifetime, it is repaired and the Qaddy® is also washed before being put into use again. 36,903 9,471 41,255 9,772 38,259 11,014 34,933 10,048 27,432 31,483 27,245 24,885 2019 2020 2021 2022 Target: Continue develop the take-back program with the aim to increase circularity and logistics efficiency. Progress: ■ A total of about 100,000 wooden drums and about 42,000 Qaddy® are in circulation in Denmark, Sweden, Norway, Finland and UK (2022) ■ About 10% of the wooden drums and 65% of the Qaddy® -trolleys come through the refund/reuse system every year ■ At the end of their lifetime - when the drums cannot be repaired any more - they are either recycled, incinerated with energy recovery or donated to the Red Cross for disabled people, who make new items from them Future actions: ■ Explore further possibilities to optimize the drums and the logistics in relation to customers ■ Explore whether the Qaddy® concept can be used for other types of cables Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 25 Environment Innovation and technology advancements NKT is continuously developing new technologies to enable more efficient, reliable and sustainable power transmission based on environmentally friendly materials. As a technology leader in the power cable industry, NKT has a long-term strategy to be a key player in developing the next generation of power cables and accessories needed to drive the transition to renewable energy. 8 Materials development Key risks and challenges: The transition to renewable energy is creating increased demand for raw materials often extracted and produced in energy-intensive processes. This creates potential risks related to the environmental impact of materials that are used for products and solutions as well as utilization of finite resources. Approach: In NKT, environmental impact and carbon footprint are core considerations in the development of new products and solutions. A key focus in this development is to design for sustainable manufacturing processes, efficient material usage, low power losses, long product lifespan and potential for decommissioning and recycling. The ongoing development of new and existing materials is managed by Group R&D in close collaboration with the relevant business lines and through external partnerships. Climate impact is a core element in the R&D strategy and integrated in the business strategy. Details on materials development are withheld due to competitive considerations. Target: Continuously create a sustainable value proposition by ensuring environmental stewardship through the lifecycle of products and solutions. Progress: NKT investigates, develops and tests new materials on an ongoing basis, with constant focus on minimizing the environmental impact of its products and solutions. Examples : ■ Development of low-loss conductor that will reduce the CO2e emissions from the cable systems during operation ■ Ongoing development of HVDC technology at the highest voltage levels enabling efficient transmission of renewable power Future actions: ■ Continue development of HVDC technology ■ Investigate design for lead-free offshore power cables ■ Continue research and development of new materials for increased performance and decreased environmental impact Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 26 Environment Innovation and technology advancements 9 SF6 mitigations Key risks and challenges: SF6 is one of the most potent greenhouse gases commonly used in products for power transmission and distribution. Medium- and high-voltage electrical equipment could contain SF6 SF6 leakage intensity, tonnes CO2e per MEuro used for insulation, and leakages pose a risk to the environment and the corporate climate targets. Further research and technological developments are needed as there are limited alternatives to SF6 available on the market. 2021 2022 SF6 leakage intensity 0.013 0.116 Approach: NKT is mitigating leakages and release of SF6 by having risk reduction measures and processes In 2022, SF6 emissions increased due to minor leakages as the amount of testing activities increased at some sites. in place and by having product development related to SF6 integrated as part of the business Calculated based on the total amount of SF6 leakage by the annual strategy. revenue in market prizes (see NKT annual reports). Target: SF6-free cable accessories implemented by 2027. Progress: Ongoing development program for SF6 alternatives Implementation of preventive measures: ■ Internal education of relevant employees ■ Only certified staff handles SF6 ■ Clear and implemented routines, risk assessments, equipment testing ■ Control cards for gas measurements implemented In case of a leakage: ■ Alarm systems and emergency evacuation equipment in place to handle remaining gas ■ Process in place for lessons learnt, root cause analysis and implementation of identified preventive actions Future actions: ■ Maintain strong processes and security measures to mitigate SF6 leakages ■ Continue ongoing program to develop solutions with more sustainable alternatives to SF6 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 27 Environment Innovation and technology advancements 10 Superconducting technology Key risks and challenges: The expansion of the energy infrastructure in large cities is critical to the decarbonization of highly populated areas. It often requires Superconducting power cable technology comprehensive and expensive construction work, slowing down enables power-dense transmission carrying the development of necessary projects. As superconducting a large amount of electric power in a very technology is under development for large-scale solutions, there is compact cable design a potential risk in relation to successful implementation. Approach: NKT has been at the forefront of developing superconducting technology for more than 30 years and believes it will be a central part of the future energy infrastructure in highly populated areas. ■ SuperLink is expected to become a 12 km link with a power rating of 500 MW and a voltage level of 110 kV ■ SuperLink is planned to be installed in existing ducts to minimize the construc- Superconducting power cable technology is very compact and has tion work ■ SuperLink will deliver a large amount of power through a narrow corridor in the heart of Munich, Germany ■ The superconducting cable is cooled to minus 200ºC in a closed circuit with the environmentally harmless refrigerant nitrogen ■ A cooling system with redundant back- up coolers will be an integral part of the system massive potential to meet the growing demand for clean energy in large cities as it can be installed with less construction work. In 2020, NKT started the development of a prototype technology for the German SuperLink project to become the world’s longest superconducting power cable system. This system is considered a milestone project that will take superconducting technology to a new level. Target: Complete development of superconducting prototype technology by 2025. Progress: ■ Initiated development of prototype for the SuperLink project in Germany ■ Ongoing testing at Technical University of Denmark and Fachhochschule Südwestfalen-Soest Future actions: ■ Continue technology development for the SuperLink project Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 28 Environment Biodiversity Rich biodiversity and well-functioning ecosystems have a proven effect on mitigating climate change. NKT is committed to reducing the environmental impact of its operations, including by actively protecting the environment. Consequently, biodiversity is part of the corporate sustainability governance structure and the Integrated Management System Policy. Integrated Management System Policy 11 Biodiversity Key risks and challenges: As biodiversity is an emerging area important to climate change, the regulatory frameworks and requirements are not clear and aligned across customers, governmental stakeholders and geographical areas. The lack of consistency in requirements makes it challenging to apply standardized approaches across industries, markets and projects. Furthermore, there is a lack of standardized data collection processes and aligned measurements covering biodiversity. Approach: Safeguarding biodiversity is currently addressed from a risk-based perspective, and a project-specific assessment with a more strategic approach being developed. Installation processes are in place to protect biodiversity. In connection with offshore operations, the seabed is safeguarded during trenching and cable burial, and a safe distance to wildlife is kept. Onshore power cables are installed underground, and after completion the areas can be used for several purposes like farming, fields and meadows. Target: Aiming for biodiversity net gain in all operations. Progress: ■ Risk assessment completed showing that no NKT factories are in protected areas or areas of high biodiversity value (2022) ■ The Swedish factories in Falun and Karlskrona have protected nature areas nearby (within 1 km radius), but operations have no negative impact on these areas. ■ In Karlskrona, NKT has planted 20 pine trees, left wood for insects and created cairns to strengthen biodiversity in the sensitive areas near the factory (2021). ■ Experience from onshore projects in several Natura 2000 and other protected areas, ensuring restoration to the same state as before ■ Successfully installing the near-shore high-voltage power cable for BorWin 5 in the nature sensitive Wadden Sea area in Germany, minimizing the impact on the seabed by leveraging HDD pipes and innovative simultaneous cable-laying and burying technology (2022) Future actions: ■ Widen corporate risk assessment, including main suppliers ■ Increase measuring capabilities and data collection within biodiversity ■ Develop a Biodiversity Net Gain Policy and roadmap Social NKT believes a safe, diverse and inclusive working environment is fundamental to the continued growth of both the company and its employees. Sustainability Report 2022 NKT 29 NKT trainees taking part in the corpo- rate trainee program at the Swedish high-voltage engineering centre and manufacturing site in Karlskrona. After the 12-month program the participants are expected to continue in relevant positions throughout the organization. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 30 Social People, safety and community engagement NKT continuously works to be seen as a responsible employer with a strong focus on ensuring equal opportunities in the organization, and believes in strengthening workplace safety and engaging in the local communities to drive sustainable and positive development in the areas where where the company operates. Targets Diversity and inclusion ≥30% ≥40% ≥30% ≥74 female representation in the female representation on the minimum share of female new- in Diversity and inclusion score Group Leadership Team and Board of Directors by 2025 hires by 2025 in employee engagement sur- the Extended Leadership Team by 2025 Talent development ≥74 vey by 2025 Health and safety ≤10% ≤5% ≤0.60 Employee Engagement Score by 2025 attrition of employees by 2025 attrition of identified talents by 2025 Total Recordable Incident Rate by 2028 Social programs 12 Talent attraction, development and management 13 Diversity 14 Inclusion 15 Safety Strategy 2028: Twice as good 16 Community engagement Human and labour rights As a signatory to the UN Global Compact, NKT is committed to conforming to all aspects of the Uni- versal Declaration of Human Rights. NKT respects and abides by local labour law, supports freedom of association and all employees have contracts com- plying with local laws and regulations. Respect for human and labour rights is also a key parameter in the company's screening and qualification of suppliers. As NKT mainly operates in low-risk countries, use of forced and child labour is not considered to constitute a material risk, but the situation is continuously moni- tored to ensure adherence to best practices. Modern Slavery Statement Modern Slavery Statement, UK and Australia Conflict minerals NKT uses the Conflict Minerals Reporting Tem- plate (CMRT) provided by the Responsible Minerals Initiative to increase transparency in respect of the smelters and refiners used in the supply chain and ensure they are conformant. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 31 Social Talent As a leading company in the power cable industry, NKT requires strong technical skills to continue building the necessary infrastructure for the transition to renewable energy. As NKT is growing in order to meet the increasing demand for power cable technology for this transition, attracting, developing and retaining talents is of high strategic importance to the corporate growth journey. The focus on social topics such as talent, diversity and inclusion is directed by Group HR. 12 Talent attraction, development and management Key risks and challenges: Attracting, developing and retaining talent with the right competencies is critical to the performance of NKT. Increased competition for top-talent can challenge the potential for attracting, developing and retaining the people necessary to have the organization in place to deliver on the corporate growth ambitions. Approach: NKT has a strategic focus on expanding opportunities for employee and talent development across its organization via corporate programs and processes. This includes proactively developing and deploying identified talents in the company as well as attracting talents by continuously strengthening the company's employer brand in professional areas relevant to its future performance. For NKT it is a long-term focus to ensure a culture driven by high engagement. To track workforce engagement, an annual survey is conducted based on an employee engagement index. In 2023, leaders at all levels will continue to foster employee commitment by initiating actions based on survey feedback. Targets: ■ ≥ 74 Employee Engagement Score by 2025 ■ ≤ 10% attrition of employees by 2025 ■ ≤ 5% attrition of identified talents by 2025 Progress: ■ Implemented global onboarding program (2021) ■ Implemented talent program for leaders (2021) ■ Launched trainee program in Karlskrona, Sweden, (2 trainees in 2020) and expanded to also include Cologne, Germany, (total of 7 trainee positions in 2022) ■ Increased strategic focus on attracting, developing and retaining technical talent (2022-) ■ Launched employer branding strategy including employee value proposition (2022) ■ Strategic focus on strengthening in-house recruitment processes for talent (2021-) Future actions: ■ Develop and deploy career path framework and continue talent programs ■ Launch of corporate mentoring program ■ Strengthen internal mobility and jobrotation ■ Activate employer brand ■ Develop and deploy new corporate leadership model ■ Increase focus on diversity and inclusion in talent attraction, development and management ■ Strengthen succession and workforce planning ■ Continue strategic focus on attracting, developing and retaining technical talent, including building external partnerships in strategic areas, e.g. with universities Employee Engagement Score* 74 73 ≥ 74 65 2020 2021 2022 2025 Target * To track workforce engagement, an annual survey is conducted based on an employee engagement index measured annually on a scale from 0-100. The result is on par with the external benchmark of 73 for 2022. Voluntary attrition of employees 10% ≤ 10% 8% 6% 2020 2021 2022 2025 Target Find method statements and comments for non-financial data at page 53. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 32 Social Diversity and inclusion Equal opportunity is a basic human right and fundamental to NKT's ethical mindset. Discrimination creates inequality and destabilizes companies, communities and societies. A diverse company with an inclusive culture increases the ability to perform, innovate and deliver the best products and services, and a sense of belonging will boost retention and performance. Learn more in Learn more in the the Diversity and corporate Code of inclusion standpoint Conduct 13 Diversity Key risks and challenges: Lack of diversity in the organization can challenge the potential for attracting, developing and retaining the necessary competencies to drive company performance. The number of female candidates with relevant technical backgrounds is limited in the power cable industry which poses a challenge to have the organization in place to deliver on the corporate ambitions. Approach: NKT has diversity as a strategy enabler and includes diversity perspectives in the talent attraction and recruitment processes. Here, NKT is actively participating in outreach programs inspiring and supporting women’s technical education and their way into a relevant technical position in the industry after graduation. The corporate approach to diversity covers various areas such as gender, age, experience, nationality etc. NKT measures its progress on gender diversity and has it as a leading indicator of the development on other angles to diversity being more difficult to measure. Target: ■ ≥ 30% female representation in the Group Leadership Team and the Extended Leadership Team by 2025 ■ ≥ 40% female representation on the Board of Directors by 2025 ■ ≥ 30% minimum share of female newhires by 2025 Progress: ■ Upskilling recruitment competencies from a diversity perspective (2021-2022) ■ Implemented employer branding with a diversity perspective (2022) ■ Strengthened recruitment processes to remove biases, e.g. through data-driven recruitments (2022) ■ Initiated collaboration with external partners, for instance female technical networks (2021-2022) ■ Implemented headhunter guidelines and gender diversity requirements in pipelines (2021) ■ Launched senior female leadership forum (2022) ■ Implemented flexible work guidelines (2022) ■ Implemented targeted development program for emerging female leaders (2022) Future actions: ■ Continued focus on diversity and inclusion perspectives in employer branding ■ Continuous focus on ensuring a diversity perspective in internal recruitment and mobility processes ■ Drive development activities for targeted minority groups ■ Increased focus on collaboration across the organization ■ Further investments in female leadership development ■ Pilot diversity and inclusion training ■ Mentoring program for targeted minority groups ■ Diversity metrics in all talent tools Female representation on Board of Directors Female representation in Senior Leadership* ≥40% 33% 33% 33% ≥30% 18% 19% 13% 2020 2021 2022 2025 Target 2020 2021 2022 2025 Target Share of female newhires * Senior leadership includes the Group Leadership Team (GLT) and the Extended Leadership Team (ELT). ≥30% 18% 19% 21% 2020 2021 2022 2025 Target Find method statements and comments for non-financial data at page 53. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 33 Social Diversity and inclusion 14 Inclusion Key risks and challenges: Not fostering an inclusive culture poses a risk in relation to attract- ing, developing and retaining the employees necessary for the company to perform. Approach: NKT is committed to strengthening inclusion company-wide as a key enabler for psychological safety, employee well-being and en- gagement. NKT runs various inclusion initiatives such as engaging front runners and passionate employees, raising awareness, and ensuring inclusion is a priority for all leaders. Target: ≥74 in Diversity and inclusion score in employee engagement survey by 2025. Progress: ■ Diversity and inclusion strategy, standpoint, targets and roadmap announced (2021) ■ Awareness training for full organization (2021-2022) ■ Leader tools available, incl team talks and conversation aids (2021-2022) ■ Diversity and inclusion included in leadership training program (2021-) Future actions: ■ Create employee resource groups focusing on diversity and inclusion ■ Launch initiatives fostering awareness, allyship and role models ■ Drive culture of inclusion through improved meeting culture ■ Strengthen diversity and inclusion standards in onboarding processes Diversity and inclusion score* 72 73 ≥74 65 2020 2021 2022 2026 Target * To track workforce engagement, an annual survey is conducted based on an employee engagement index measured annually on a scale from 0-100. The external benchmark in 2022 was 76. The diversity and inclusion score is part of this annual employee engagement survey. Diversity and inclusion score is a key metric of the yearly employee engagement survey conducted in October 2022 and sent out to all permanent and temporary employees at NKT. The survey had a 84% response rate. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 34 Social Health and safety Being safe at work is a basic human right and is directly correlated to the well-being of employees and their families. It is therefore imperative for NKT to ensure the safety of employees, suppliers, customers and partners by continuously strengthening the safety culture through initiatives and data-driven risk mitigation. The focus on health and safety is directed by the corporate HSE Council to ensure a systematic approach. 15 Safety Strategy 2028: Twice as good Key risks and challenges: At NKT, hazards derived from the use of heavy and complex equipment in production facilities, as well as harsh environments and complexity in installation opera- tions, may pose a significant risk for the health and safety of employees. Approach: NKT is committed to having a safe working environment with an aim of zero injuries and operates with a common set of requirements representing the expectations from all sites in the different health and safety systems from legal compliance, through risk assessment, top risk mitigation, employee involvement, leadership, up to monitoring and corrective actions. NKT is continuously mitigating health and safety risks and aims to set minimum requirements and develop best practices to mitigate those risks in each location. NKT has defined a strategy oriented to taking the necessary actions to improve its safety performance and strengthen the corporate safety culture by mitigating safety risks. This strategy is executed on three pillars: Target: ■ <1.05 Total Recordable Incident Rate (TRIR) by 2023 ■ ≤0.6 Total Recordable Incident Rate (TRIR) by 2028 1) Local development plans: Maturity assessment to evaluate local gaps, and development of site-specific roadmaps to implement the missing requirements 2) Global standards: Development and implementation of a set of global standards for the mitigation of the top risks as well as for the Health and Safety relevant procedures 3) Behavioural safety: Development and implementation of a behavioural safety program across NKT to drive the appropriate safety behaviours Progress: ■ Developed roadmap of practices to achieve the expected and best in class Future steps: ■ Local self-assessment against the requirements, development and health and safety performance (2022) execution of local roadmaps ■ Standards on machine safety, electrical safety and cable end fastening were ■ Implement the safety standards developed during 2022, develop developed (2022) ■ Pilot project on behavioural safety observations and feedback for managers introduced at selected sites (2022) ■ Leadership in safety reinforced through implementation of Management Safety Walks and participation of top leadership in the activities of the Safety Week (2022) ■ Reinforcement of the safety culture with the introduction of a global Safety Week leveraging the NKT Life Saving Principles (2022) remaining standards and implement them, including strengthening health and safety in the leadership development programs with an enhanced focus on psychosocial risks ■ Define requirements of a behaviour-based safety program and choose the most appropriate (i.e. country-specific) and then execute locally Total Recordable Incident Rate* 1.20 1.19 1.14 ≤0.6 2020 2021 2022 2028 Target * The TRIR is defined as the combined num- ber of Fatal Incidents, Lost Time Incidents, Medical Treatment Incidents and Restricted Work Cases, multiplied by 200,000 and divided by the sum of hours worked. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 35 Social Community engagement NKT continuously works to be seen as a responsible employer actively engaging in the local communities where the company operates to support a sustainable and positive change. 16 Community engagement Key risks and challenges: As a leading employer at multiple locations, NKT commits to taking responsibility in supporting the local community through active participation in initiatives that drive sustainable and positive development. It can be challenging to efficiently assess and prioritize how to engage most efficiently to drive change in the local communities and ensure the inclusion of minorities. Approach: NKT drives community engagement through supporting employee participation in local initiatives, aimed at fostering positive sus- tainable development, improving corporate reputation, and boosting employee engagement, retention, and satisfaction. Target: Develop global community engagement strategy by 2023. Progress (examples): Diversity and inclusion in technical education ■ Introduce a girl to engineering (IGEday) with Women Engineer (Sweden) ■ Tekniksprånget, promoting technical careers to female students (Sweden) ■ Cooperation with high-schools and universities to drive interest for technical education (Czech Republic) ■ Hosting school break activities to inspire youth to pursue a technical education (Sweden) Safe and healthy lifestyle Care for the local society ■ Red Cross, joint fundraising with NKT ■ Support underprivileged employees to support Ukraine (€35,000 children and families from employees + €35,000 from the (Sweden, Germany, Lithuania) company) (Globally) ■ Support local sports clubs and organzsations (Sweden, Czech Republic) ■ Support the sports facility NKT Arena in ■ Supporting people with special needs (Denmark) ■ NKT Family Days (Sweden, Czech Republic) Karlskrona (Sweden) ■ Support Tree Planting Day ■ Unsold, fresh food distributed to people with more than 2,500 trees in need (Germany) (Czech Republic, Germany) Future actions: ■ Develop and implement global community engagement strategy by 2023 ■ Continue ongoing local engagements Employees form the NKT office in Berlin, Germany, are prepar- ing distribution of unsold, fresh food for people in need. NKT employees engaging in school break activities to inspire technical interest of local youth in Karlskrona, Sweden. The activity is hosted by Blekinge Institute of Technology (BTH). Sustainability Report 2022 NKT 36 Governance Responsible business operations are fundamental for global sustainable development and are a key priority for NKT NKT is loading spare parts for the BritNed interconnector to a new, innovative storage solution using a customized basket for long-term storage. The new solution eases the logistics and can save time in case an unplanned cable repair is needed. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 37 Governance Responsible business NKT is committed to promoting ethical behaviour throughout the company. Ethical compliance across all segments, markets and entities is crucial for commercial success and is therefore continuously strengthened and improved via a broad-reaching compliance program based on the principles and standards outlined in the NKT Code of Conduct. Compliance Board In NKT, corporate governance is managed by the Compliance Board, which oversees the initiatives contained in the compliance program. Ultimate supervision is performed by the Audit Committee on behalf of the Board of Directors. Board of Directors (Audit Committee) CEO (Chair) Head of Risk and Compliance CFO CHRO CIO General Counsel Head of Corporate Commercial, Compliance and M&A Business Line Representative Governance programs 17 Responsible business partners 18 Ethical business conduct 19 Speak-up culture 20 Responsible tax practices 21 Cyber security 3.0 22 Data privacy and data ethics 23 Supplier due diligence Number of whistleblower reports 2020-2022 E-learning completion rate 2020 1 6 4 2021 2022 1 3 1 6 2 2 6 11 5 14 2021 2022 Ambition Code of Conduct, incl. anti- corruption and anti-bribery Data privacy Competition law Trade sanctions 92% 87% 89% 95% 91% 87% 88% 92% 90% 90% 90% 90% Substantiated Unsubstantiated Out of scope Investigation ongoing * Find method statements and comments for non-financial data at page 55. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 38 Governance Business ethics and governance NKT is committed to promoting ethical behaviour throughout the company. Ethical compliance principles are deeply embedded in operations and entities. NKT operates a comprehensive compliance program to ensure compliance with all applicable laws, regulations and international standards. In the performance of its business, NKT focuses on managing and mitigating risk exposure in respect of sanctions, corruption and bribery and strives to meet the expectations of shareholders. 17 Responsible business partners Key risks and challenges: Risk exposure in relation to sanctions, bribery, corruption and other governance indicators principally arises through finan- cial interactions with external partners, including both customers and suppliers, in connection with tenders and business agreements. Trade sanctions compliance training, completion rate % Approach: NKT will not tolerate any form of bribery, corruption or violation of sanctions, and mitigative actions and processes are in place to minimize risk exposure to third parties. Based on an internal risk assessment, customers and suppliers operating in high-risk countries undergo a due diligence screening and are monitored on an ongoing basis. Trade sanctions compliance training 2021 95% 2022 Ambition 92% 90% Find method statements and comments for non-financial data at page 55. Targets: ■ Compliance and sanction screening of all relevant business partners, including those located in countries that may be subject to sanctions ■ 90% completion rate on trade sanctions compliance training and annual recertification of relevant employees Progress: ■ Continued screening in light of current sanctions regime ■ Dedicated training for leaders developed and implemented (2022) ■ Training to support employees’ understanding of sanctions, trade control and anti-corruption completed (2022) Future actions: ■ Expand and strengthen risk assessment process ■ Ongoing monitoring of medium and high-risk third parties ■ Continue to monitor compliance requirements related to export controls and sanctions in countries where NKT operates, especially focusing on new markets Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 39 Governance Business ethics and governance 18 Ethical business conduct Key risks and challenges: Corruption, bribery and unethical business practices pose potential risks to the business operations of NKT and can lead to increased scrutiny from legal authorities, fines and reputational damage. Training completion rate Learn more in the corporate Code of Conduct Code of Conduct, incl. anti-corruption and anti-bribery Competition law Find method statements and comments for non-financial data at page 55. 2021 92% 89% 2022 Ambition 91% 88% 90% 90% Approach: NKT operates a comprehensive compliance program to support a culture of integrity and ensure compliance with applicable anti-bribery and anti-corruption laws and regulations. This is an integral part of the NKT culture, which includes a zero-tolerance approach towards corruption. The commitment to anti-bribery and anti-corruption is clearly outlined in the Code of Conduct. The compliance program includes written policies and guidelines for fair competition, gifts, entertainment and hospitality, trade sanctions compliance, confidentiality and data privacy. Furthermore, compliance training is in place for all relevant employees. Target: ■ ≥90% completion rate on annual anti-bribery and anti-corruption training ■ ≥90% completion rate on annual competition law training Progress: ■ Code of Conduct training included in updated onboarding process (2022) ■ Dedicated training of all managers (2022) ■ Dedicated training of employees working in high-risk areas (2022) ■ No significant instances of non-compliance with laws and regulations and no fines were paid during the reporting period Future actions: ■ Ensure continued integrity and adherence to compliance, particularly in new markets ■ Continued focus on training with emphasis on high-risk areas and employees with increased exposure ■ Further strengthening of existing risk assessment framework Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 40 Governance Business ethics and governance 19 Speak-up culture Key risks and challenges: NKT is committed to a culture of openness and honesty and takes full responsibility for its actions. Employees and business partners are urged to report any concerns arising from their daily Number of whistleblower reports work or their collaboration with NKT. Unresolved concerns of 2020 1 6 4 2021 2022 1 3 1 6 2 2 6 11 5 14 Substantiated Unsubstantiated Out of scope Investigation ongoing The reports received in 2022 related to potential concerns about misuse of company funds, workplace harassment and illegal sharing of confidential information. All cases have been investigated thoroughly and appropriate action taken where necessary. Due to the decreased number of reports in 2022 compared to previous years, concerted efforts have been made to raise internal awareness about the whistleblower hotline. Find method statements and comments for non-financial data at page 55. misconduct or unethical behaviour pose a risk to NKT’s reputation as a responsible employer and business partner. Approach: NKT operates a secure and confidential whistleblower hotline which both employees and external stakeholders can use to report suspected unethical or unlawful behaviour such as bribery, fraud, serious misconduct, harassment, discrimination, violence, criminal behaviour or other violations of regulations or the NKT Code of Conduct. NKT has a zero-tolerance policy on retaliation and no employee will suffer retaliation for raising a concern or reporting misconduct in good faith. Target: Continuous efforts to raise awareness about the whistleblower hotline, including online and face to face training and other internal communication channels. Progress: ■ Updated internal guidelines and procedures in accordance with EU Whistleblower Directive (2022) ■ Completed awareness campaign targeting all NKT employees (2022) ■ All cases investigated thoroughly with appropriate actions taken Future actions: ■ Continue to drive awareness of whistleblower hotline among both internal and external stakeholders Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 41 Governance Business ethics and governance 20 Responsible tax practices Learn more in the corporate tax policy Key risks and challenges: Complying with tax rules across many tax jurisdictions can be complex as the legislation may allow for different interpretations or choices, and legislation and interpretations tend to change over time. Further, the tax legislation has developed rapidly in recent years and a result hereof the compliance burden has increased significantly. Find relevant data for corporate tax in Note 2.5 in the Annual Report 2022. Approach: NKT has implemented a global corporate tax policy that is both responsible and sustainable, ensuring tax compliance and value creation for all stakeholders. NKT strives to mitigate potential risks by having strong compliance processes and transparent communication with tax authorities. Complying with legislation can be complex where legislation allows for different interpretations or choices, and legislation and interpretations tend to change over time. If a common practice or interpretation has not yet formed, NKT will adopt progress following the more-likely-than-not principle, and where appropriate seek advice from tax advisors and tax authorities to establish a reasonable interpretation. Where legislation and practice allow for different interpretations or choices, NKT will adopt a tax position which must be justifiable, defendable and in accordance with the NKT Code of Conduct. The more-likely-than-not principle means that NKT will only adopt a position expected to be upheld in court if challenged by tax authorities. NKT does not operate in tax havens and tax is paid in the countries where value is created. Furthermore, the company aims to benefit from tax in- centives in the countries where it has substance. NKT is committed to responsible tax through adherence to international double taxation treaties, EU regulations and relevant domestic and OECD guidelines. Targets: ■ Ensure transparency in tax reporting ■ Continue compliance with relevant laws and regulations Progress: ■ Prepared for future extensive reporting requirements by further advancing the digital foundation used for tax compliance and reporting (2022) ■ Tax policy updated (2021) Future actions: ■ Prepare for country-by-country reporting ■ Continue adherence to international double taxation treaties, EU regulations and relevant domestic and OECD guidelines ■ Prepare for OECD Pillar 2 (minimum taxation) Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 42 Governance IT and cyber security IT security, data privacy and data protection are of paramount concern for NKT in order to safeguard the data of its customers and employees as well as data that is critical to the continued operations of the business. To support this, NKT has established a strategic initiative which focuses on raising the governance, awareness and ownership of information security within the organization to support the protection of the data held. 21 Cyber Security 3.0 Key risks and challenges: Large international organizations are increasingly threatened by malicious actors that specifically look to disrupt the ability to operate by launching cyber attacks. Approach: In view of the rising cyber risks and digitalization of internal processes, NKT is taking decisive action in relation to several aspects of information security. NKT is committed to updating and modernizing the corporate network to mitigate risks of cyber attacks. Likewise, security governance and awareness will be strengthened across the organization to mitigate risks and cyber threats potentially facing NKT. Targets: ■ Continue recurring training on risk awareness and function-specific training for high-risk functions ■ Complete network renewal project by 2024 Progress: ■ Annual Cyber Security Month implemented (2022) ■ Completion of wave 1 of network renewal project (2022) ■ Update of Incident Response Plan, Major Incident Response Plan and associated procedures (2022) ■ Expanded external Security Operations Center (2022) Future actions: ■ Updated Information Security Onboarding training package for new employees (2023) ■ Implement wave 2 of network renewal project ■ Complete Cyber Security Month ■ Continue recurring training on risk awareness ■ Strengthen focus on ensuring a resilient and secure infrastructure that continuously matches developments in external threats by focusing on people, processes and technology Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 43 Governance Data privacy, data protection and data ethics Data privacy training 2021 2022 Ambition Completion rate, % 87 87 90 Find method statements and comments for non-financial data at page 55. 22 Data privacy and data ethics Key risks and challenges: Violation of ethical and responsible data usage requirements and non-compli- ance with applicable data protection legislation, including the EU General Data Protection Regulation (GDPR) and data ethics, may cause serious damage to data security and NKT business operations. Approach: NKT respects all data, including non-personal data, received or collected from employees, customers and other stakeholders. Fair and responsible data handling drives more efficient NKT business processes and supports core values and the trust of stakeholders. Such data is handled in compliance with applicable laws and regulations and in accordance with internal ethical stand- ards. Employees are trained in data privacy on an ongoing basis, and NKT has processes in place to ensure that data is transferred in a secure manner, supported by IT systems, and complies with legal requirements. Target: ≥90% completion rate on data privacy training in 2023. Progress: ■ Roadmap developed to strengthen data privacy compliance program ■ Developed data ethics policy ■ Employee training completed Future actions: ■ Continue implementation of data ethics principles ■ Enhance data privacy compliance program ■ Maintain strict privacy in respect of all personal information relating to employees and third parties Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 44 Governance Responsible value chain NKT is continuously strengthening the ESG requirements across its value chain and expects and requires business partners to fully comply with all applicable laws, statutes and international regulations, as well as with the corporate Code of Conduct. 23 Supplier due diligence Key risks and challenges: NKT is exposed to risks in relation to supplier compliance with legal and market requirements linked to health, safety, quality, financial stability, human rights, climate and environment. Potential future changes in legislation and an increased focus from customers requires a high degree of adaptability in the organization. Qualified strategic suppliers 2021: 81% Supplier due diligence process In NKT, the supplier due diligence approach includes Not being able to meet legal and market requirements poses a threat to business performance. 2022: 97% Approach: NKT works with approximately 5,500 suppliers annually and a segmentation model determines the engage- ment level to manage supplier due diligence and strategies. This is the first step in the process of Supplier Lifecycle Management (SLP). The segmentation exercise yields in a list of strategic suppliers (A+, A and B). Group Procurement drives an aligned strategic supplier due diligence approach to mitigate and minimize exposure to health, safety, quality, financial stability, human rights, climate and environmental risks. Target: ■ 100% of strategic suppliers (A+, A and B) are qualified ■ 100% of strategic suppliers agree to corporate Code of Conduct ■ 30 supplier audits conducted in 2023 Progress: ■ In 2022, strategic suppliers comprised 105 suppliers representing 71% of NKT’s annual spend ■ Supplier qualification process implemented (2019) ■ Implementation of Supplier Relationship Management program covering strategic suppliers (A+ and A) (2020) ■ Supplier due diligence approach updated with additional social and climate aspects (2022) Future actions: ■ Review and update procurement processes, emphasizing supplier due diligence ■ Increase emphasis on human rights and climate legislation in supplier audits ■ Supply chain risk mapping of raw materials Strategic suppliers agreeing to the NKT Code of Conduct 2021: 100% 2022: 100% Supplier audits conducted 2020: 3* 2021: 14 2022: 28 * Reduced number of audits due to impacts of COVID-19 related travel restrictions. Find method statements and comments for non-financial data at page 55. supplier qualification, compliance and financial risk review and supplier audits. As part of the qualification process, suppliers com- plete a self-assessment questionnaire which incor- porates parameters related to health, safety, quality, human rights, climate and environment. Suppliers are also required to confirm compliance with NKT’s Code of Conduct. For the compliance risk review, a screening and mon- itoring tool is used to check suppliers against: sanc- tion lists, watchlists and blacklists, politically exposed persons (PEP) and adverse media, etc. If the report shows that a supplier is non-compliant, the scope of the cooperation must be reviewed and documented to the NKT compliance function. Furthermore, the financial stability of the supplier is evaluated. The supplier due diligence is valid for two years and then needs to be re-performed. In addition, NKT Group Procurement conducts an annual supplier risk assessment, including if the sup- plier operates out of a high-risk country. The outcome of the supplier risk assessment feeds into supplier segmentation. The supplier information is assured through an on-site supplier audit. Data sheets NKT uses operational scope for the ESG data collection as part of its data-driven approach to sustainability. Sustainability Report 2022 NKT 45 NKT operates some of the most advanced high-voltage test centres in the industry. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 46 Introduction to the data sheets Discontinued indicators: Environment Green electricity, share at production facilities (full year), verified by Guarantees of Origin. HSE management training for top 200 leaders, com- pletion rate Implement Safety Culture Ladder level certification, HV Solutions Restatement of information: Scope 3 - recalculation of scope 3 emissions from 2019-2022 for the categories C4, C5, C6, C7 and C11 due to improvided accounting methodology and data availability. Trend evaluation: Is provided when yearly increase or decrease is more than 5% compared to previous year. Changes in business structure affecting ESG performance: On 10 January 2022, NKT aquired Ventcroft Ltd, a UK based company. Reporting structure and principles Scope: NKT uses operational scope for data collec- tion for NKT Cables Group A/S and all subsidiaries. NKT Cables Group A/S is headquartered in Brøndby, Denmark. All its subsidiaries and sites in Germany, Spain, UAE, Netherlands, Czech Republic, India, Den- mark, Norway, Poland, Australia, Sweden, Lithuania, United Kingdom, and United States are included in the sustainability reporting. ESG data collection and quality: NKT continuously strives to improve data quality and increase data transparency and granularity. Reporting period: Q4 2021 - Q3 2022 for all environmental data and calendar year for social, governance and taxonomy data. The data is reported annually in the annual sustainability report. Contact: Carina Lindberg Director, Head of Group Sustainability and HV Solutions Marketing info@nkt.com New indicators: Environment Scope 2: Total energy indirect GHG emissions (location- and market-based) Scope 3: Category 11: Use of sold products Energy consumption: Biogas Share of renewable energy in electricity consumption District heating and cooling Energy intensity Social Employees by type, gender, region and age Employee turnover New Recruitments by employment type Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 47 Sustainability data Environment Greenhouse gas emissions Scope 1 Total direct GHG emissions (Tonnes CO2e) Scope 2 Electricity - market-based (Tonnes CO2e) Heating -market-based (Tonnes CO2e) Electricity - location-based (Tonnes CO2e) Heating - location-based (Tonnes CO2e) Total energy indirect GHG emissions - market-based Total energy indirect GHG emissions - location-based Scope 3 (Kilotonnes CO2e) Category 1: Purchased goods and services Category 2: Capital goods Category 3: Fuel- and Energy-Related Category 4: Upstream transport Category 5: Waste Category 6: Business travel Category 7: Employee commuting Category 9: Downstream transport Category 11: Use of sold products Category 12: End-of-life treatment of products sold Total other indirect GHG emissions Emissions from bioenergy (Tonnes CO2e) Carbon Intensity (kgCO2e/EUR) * Scope prior to 2020 included only production facilities. ** excluding methane emissions 2022 2021 2020 2019 13,215 15,748** 12,053 16,247 26 136 37,494 766 162 38,260 1,842.8 42.3 3.3 29.6 0.6 0.7 6.3 17.1 8,298.4 146.7 10,387.9 41.7 0.006 705 294 39,456 852 999 40,308 1,182.3 33.9 4.1 14.5 0.9 0.2 6.3 8.4 5,557.5 158.9 6,966.9 10.2 0.009 13,147 296* 44,385 296* 13,443 44,681 1,468.2 35.2 5.5 24.9 0.8 0.6 6.3 14.4 5,203.7 158.9 6,918.4 5.9 0.018 47,138 199 42,774 199 47,337 42,973 1,308.9 35.2 13.5 24.2 0.8 1.5 6.3 14.0 8,197.8 160.7 9,762.9 - 0.050 Trend evaluation Total scope 1 emissions Decreased due to an increase of electric vehicles (e.g. forklifts), an increased use of renewable fuels (incl. biogas), and a reduction of fuel oil consumption by NKT Victoria. Market-based scope 2 emissions Increased purchase of renewable energy including production and non-production across regions. Up- dated utility specific emission factors in Sweden result in a decrease of emissions from heating. Location-based scope 2 emissions Updated location-based emission factors 2022 drove decrease in location-based emissions. Scope 3 emissions C1 and C2 increased as result of increased produc- tion volume; Quantis calculates C3 based on scope1 & 2 emissions, which decreased in 2022; the increase of C4, C6 and C9 results from improving the account- ing methodology; C5 decreased because we diverted less waste to landfill; C11 increased due to more deilvered km of HV cable. The total mass of produced goods decreased resulting in a decrease of C12. Emissions from bioenergy Increased use of biodiesel at Karlskrona site and Service & Installation business line and replacement of natural gas with biogas at the Cologne production site Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 48 Sustainability data Environment Energy consumption Fuel for transportation of personnel and goods Non-stationary sources: Diesel and fuel oil (MWh) Non-stationary sources: Petrol (gasoline) (MWh) Non-stationary sources: LPG (MWh) Non-stationary sources: Renewable fuels (MWh) Fuel for own stationary equipment Natural gas (MWh) Biogas (MWh) Stationary equipment: Diesel (MWh) Electricity and district heating Electricity (MWh) Share of renewable energy in electricity consumption (%) District Heating & Cooling (MWh) Energy Intensity (kWh/EUR) 2022 2021 2020 2019 32,693 1,148 173 3,042 19,959 4,957 10 156,470 99.97 16,620 0.11 36,185 860 149 602 31,671 - 154 22,997 794 255 130 25,695 - 613 36,306 489 - - 28,878 - 930 151,528 99.82 14,580 0.13 154,333 - 11,978 0.15 142,294 18 11,915 0.17 Trend evaluation Non-stationary source: diesel and fuel oil Decreased due to increased usage of renewable fuels; electrification of internal vehicles; decrease of diesel-fuel fleet and reduction of fuel oil consumption of NKT Victoria Non-stationary source: petrol Vehicle usage increased across sites in the aftermath of COVID-19 restrictions. LPG Increased usage of LPG at Velke Mezirici and Runcorn sites Renewable Fuels Continued activity to increase renewable fuels usage for vehicles and non-stationary equipment Natural Gas Acute natural gas reduction initiatives and replacing natural gas for biogas at Cologne/Leverkusen site Biogas New indicator; Investment from natural gas to biogas at Cologne site Stationary equipment: diesel Updated inventory re-categorized previously recorded stationary diesel sources as non-stationary diesel source in the current reporting period. Share of renewable energy in electricity consumption New indicator; calculated based on electricity con- sumption covered by renewable energy guerantees of origin (wind, solar, hydro). District Heating The average temperature during winter months in the reporting period 2022 was lower than in the previous year 2021. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 49 Sustainability data Environment Waste and material utilization Hazardous waste Reuse, recycling and composting (Tonnes) Recovery, including incineration with energy recovery (Tonnes) Landfill and incineration (no energy recovery) (Tonnes) Non-hazardous waste Reuse, recycling and composting (Tonnes) Recovery, including incineration with energy recovery (Tonnes) Landfill and incineration (no energy recovery) (Tonnes) Waste by treatment type Reuse, recycling and composting (% of total waste volume) Recovery, including incineration with energy recovery (% of total waste volume) Landfill and incineration (no energy recovery) (% of total waste volume) Material utilization Material utilization rate (%) Water Water withdrawal Municipal Water (m3) Incidents 2022 2021 2020 2019 1,655 188 67 15,099 3,546 258 80 18 2 747 152 105 14,655 2,515 967 80 14 6 477 532 387 13,362 4,600 412 70 26 4**** - - - - - - - - - 96.8 95.6 95.5*** 95.8 174,779* 128,709 130,105 102,508 Environmental and climate impact incidents 0/0/14** 0/0/9** 4.00 1.00 Excl. site in Drammen, Norway * ** Environmental Impact Incident/Climate Major Incident//Climate Minor Incident *** One site excluded from calculation. **** Two sites excluded from the reporting scope. Trend evaluation Hazardous Waste lncrease attributed to increased waste oil in produc- tion and increase of process water. Non-Hazardous Waste The total non-hazardous waste remained on a similar level as previous year with a decrease in landfill, and increase in the other treatment categories. Reuse, recycling and composting The increased hazardous waste volumes were primar- ily diverted away from disposal to reuse, recycling or composting. Recovery, including incineration with energy recovery Increase of waste diverted to incineration across waste category due to diversion away from landfill. Landfill and incineration (no energy recovery) Decrease of waste diversion to landfill or incineration without energy recovery across waste category due to improved waste and circularity management. Municipal Water Falun site consumed unusual higher volumes of water due to temporary open loop circulation in cooling system instead of closed loop. Environmental and climate impact incidents Increase attributed to minor leakages of fugitive gases. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 50 measured as CO2e An emission less than 5% of NKT Carbon Footprint Scope 1 (equals less than 500 ton CO2e for NKT A/S) is classified as a Minor climate incident. Sustainability data Methods and comments - Environment Greenhouse gas emissions: Scope 1: Reporting is conducted based on the Greenhouse Gas Protocol (GHG Protocol) and covers direct NKT emissions included in the scope of report- ing. Emissions are calculated based on the emission factors applicable to the type of fuel. Emissions from the biofuels are excluded from the Scope 1 emissions and are reported separately as per GHG Protocol. Scope 2: Reporting is based on the GHG Protocol and covers indirect greenhouse gas emissions from the generation of power, cooling, heat and steam purchased and consumed by NKT. The calculation is conducted based on the volumes purchased and uses average emission factors based on the site loca- tion. Market based emissions account for purchased renewable energy and the respective Guarantees of Origin. Scope 3: Reporting is based on the GHG protocol employing a hybrid accounting approach: Category C2, C3, C4, C7, C12 and 29% of total C1 emissions result from a screening based on spent data with the Quantis scope 3 evaluator tool. An inventory was performed for 71% total C1 emis- sions, C5, C6, C11. The inventory for C1 applied an average-data method for the material provided by the suppliers in the supplier decarbonization program. C5 emissions are based on actual waste data and emission factors for the respective treatment type. C6 emissions are calculated based on GHG emissions of flights, rail travel, and hotel nights provided by the corporate travel agent. C11 emissions have been calculated based on associated power losses of the cables, per application and region, over their lifetime. C9 emissions have been modelled together with C4 emissions based on logistics and trans-portation agreements with suppliers and customers. C8, C10, C13-15 are not relevant for NKT operations. Carbon intensity: Calculated based on the total scope 1 and 2 (market based) emissions by the annu- al revenue in market prizes (see NKT annual reports). Energy consumption: Includes all energy consump- tions leading to generation of greenhouse gasses according to scope 1 emissions from all production facilities including the NKT owned cable-laying vessel. Electricity and district heat: Include all heat, cool- ing and power purchased for own consumption both for production and non-production sites. Production sites use accounting methods based on financial doc- umentation. Where directly attributed consumption data for non-production sites is not available, estima- tions are based on the use per m2 and consumption data of the entire asset. Renewable electricity share: Share of renewable eletricity (tracked through guerantess of origin) of the total electricity consumed by all NKT sites including production and non-production sites. Energy intensity: Calculated based on the total energy consumption by the annual revenue in market prizes (see NKT annual reports). All types of energy consumed within NKT during the reporting period have been taken into account in the calculation of the energy intensity. Waste by type and disposal method: Data on waste is collected based on invoices and reports received from waste contractors, supplemented by site specific measuring methods. Waste is reported for sites producing more than 1% of the total reve- nue-generating production in the year. Waste diverted from disposal are allocated in the category: "Reuse, recycling and composting". Waste direcetd to disposal are categorized as "Re- covery, including incineration with energy recovery", and "Landfill and incineration (no energy recovery) ". Material utilization: Calculated based on production volumes as a factor for the scrap generated in relation to the product produced. Material utilization is reported for sites producing more than 1% of the total revenue-generating production in the year Water withdrawal: Data collected based on invoices received from utility companies, supplemented by site specific measuring methods where applicable. NKT receives third-party water as potable water or process water, both reported as municipal water. Other sources of water are not applicable to NKT and are not listed as categories in the corporate disclosure. The third-party water received is not withdrawn from water-stressd-areas and no respective category has been added to the disclosure. Water withdrawal is reported for sites producing more than 1% of the total revenue-generating production in the year Environmental incidents: Reported based on the HSE reporting principles. Environmental Impact Incident (EII) means a discharge or release of hazardous substances into the environ- ment, or other negative impact on the environment or stakeholders, have occurred. Discharges or releases that have been decontaminated before causing harm to the environment is not classified as an Environmen- tal Impact Incident but reported as an environmental incident. Incidents only impacting the climate is classified as Minor or Major Climate Incidents, not as EII. Incidents impacting climate are categorized as Minor or Major based on the amount of emitted GHG Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 51 Sustainability data Social Total employees Total female employees (FTE) Total male employees (FTE) Other (FTE) Total permanent employees Permanent female employees (FTE) Permanent male employees (FTE) Other (FTE) Total temporary employees Temporary female employees (FTE) Temporary male employees (FTE) Non-guaranteed hours employees, total Non-guaranteed hours female employees (HC) Non-guaranteed hours male employees (HC) Other (HC) Employees by country (FTE) Czech Republic Denmark Germany India Lithuania Poland Sweden United Kingdom Other Age distribution of employees <30 (FTE) 30-50 (FTE) >50 (FTE) 2022 2021 2020 2019 4,471 766 3,704 1 3,963 678 3,284 1 508 88 420 48 6 34 8 525 302 1,157 112 106 404 1,697 82 86 691 2,391 1,389 4,232 725 3,507 - 3,771 632 3,138 - 461 92 368 48 9 39 - 494 348 1,231 47 91 356 1,558 38 69 610 2,274 1,347 3,903 661 3,242 - 3,451 585 2,866 - 452 76 376 18 6 12 - 461 351 1,251 2 92 263 1,393 33 57 546 2,110 1,247 3,471 595 2,875 - 3,206 537 2,669 - 265 58 206 4 - 4 - 458 352 1,112 - 85 262 1,134 15 52 448 1,887 1,135 Trend evaluation Permanent female employees Efforts are to build more diverse organization and NKt is actively working to ensure more women the company. Temporary male employees More temporary employees in CZ, SWE, DE project related. Non-gueranteed hours employees Reduction due to decrease use of external consultants. Employees by country Czech Republic - Increase in production Denmark - Decrease in production Germany - Decrease in production India - Expansion at the Chennai site Lithuania - Expansion of the Shared Service Team Poland - Increase in production United Kingdom - acquisiton of Runcorn site Age distribution <30 - increase especially due to new recruitments in India and Lithuania Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 52 Sustainability data Social Senior leadership* Total senior leaders (FTE) Total female senior leaders (FTE) Total male senior leaders (FTE) Gender diversity in senior leadership (%) Average age (No.) Nationalities in senior leadership (No.) Employee attrition Employee attrition rate (%) Voluntary attrition rate (%) Total employee attrition (FTE) Total voluntary attrition (FTE) New recruitments Total new recruitments (FTE) Total new recruitments - Permanent (FTE) Total new recruitments - Temporary (FTE) Total new female recruitments (FTE) Total new male recruitments (FTE) Total new other recruitments (FTE) Employee engagement Employee Engagement Score (%) Employees with performance and career development review (HC) Health and safety Lost Time Incident Rate (Per 200,000 hours worked) Total Recordable Incident Rate (Per 200,000 hours worked) Lost Work Day Rate (Per 200,000 hours worked) Fatal incident (No.) Reported near misses (No.)** Reported unsafe acts and conditions (No.)** * Senior leadership Includes the Group Leadership Team (GLT) and the Extended Leadership Team (ELT). ** excl. Indian sites and Runcorn, UK site. Plan to onboard them during 2023. 2022 2021 2020 2019 78 15 63 19 49 15 13.7 9.5 543 375 1,033 625 409 216 816 1 73 1,530 0.59 1.14 8.54 0 436 4100 80 10 70 13 48 14 11.5 7.9 433 297 1,028 773 255 194 834 - 74 1,204 0.57 1.19 12.0 0 328 2269 80 14 66 18 49 12 8.8 6.3 304 218 833 571 263 149 684 - 65 1,030 0.41 1.20 11.6 0 532 2723 53 8 45 15 - 10 13.6 8.0 434 257 571 434 136 134 436 - 58 858 0.73 - 21.3 0 259 1922 Trend evaluation Senior Leadership Increase of female senior leaders is a strategy initiative to build a more diverse organization Employee Attrition Increase of attrition is especially attributed to produc- tion and operation employees, and mirrors a macro trend in employee mobility post COVID-19. New Recruitments Increase of female recruitments is a strategy initiative to build a more diverse organization Lost Work Day Rate Decrease indicates an overall reduction of risk driven by concentrated actions on awareness and safety behavior and refreshment of the corporate life-saving principles. Reported Near Misses Increase due to succeeding focus on reinforcing the safety culture encouraging the reporting of near miss. Reported unsafe acts and conditions Increase due to succeeding focus on reinforcing the safety culture encouraging the reporting of unsafe acts and conditons. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 53 Sustainability data Methods and comments - Social Employees by type, gender, and country The metrics describing the NKT workforce are based on cut-off data on 31.12.2022 describing characteris- tics of the workforce as is on 31.12.2022. The cut-off was extract on 02.01.2023.The values are reported in full-time equivalent (FTE) or head count (HC). Total employees describe active employees at NKT including permanent and temporary employees. Permanent employees are employees with an unlimit- ed employment contract with NKT, employees without permanent contract but who hold an established po- sition in NKT's organizational chart, and impatriates. Temporary employees are employees with a contract for a limited period of time. Total employees, permanent and temporary employ- ees are reported in full-time equivalent. Non-guarenteed hour employees are contigent workers such as external freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a per-pro- ject basis. Non-gueranteeed hour employees are reported in head count. The employee gender breakdown describes the num- ber in full-time equivalent (FTE) of female, male and other employees. Other refers to all other gender an employee identifies with, or the employee did not wish to disclose gender, or the gender is unknown. Employees by country are reported for countries with more than 50 permanent and temporary employees. Permanent and temporary employees in countries below 50 total employees are reported in Other. The breakdwon is reported in FTE. The age distribution breaks down total employees in three age brackets. The breakdown is reported in FTE. Senior leadership Includes the Group Leadership Team (GLT) and the Extended Leadership Team (ELT). Senior leadership is reported in full time equivalent (FTE), totals and gender distribution. Group Leadership Team (GLT) consists of Executive Vice Presidents, CEO and CFO. Extended Leadership Team (ELT) consists of Senior Vice Presidents, Vice Presidents and Directors as well as selected subject matter experts. Gender diversity in senior leadership is the number of female members of senior leadership divided by total number of senior leadership positions multiplied with 100 (reported as percentage). Average age of senior leadership is the statistical mean of age of all senior leadership members. Nationalitiies in senior leadership is count of unique nationalities in the senior leadership group. Employee Attrition Attrition is the same as employee turnover and describes the departure of employees from the organization for any reason (voluntary or involuntary), including for example resignation, termination, death or retirement. The attrition rate, both total and voluntary are calculated as share of total attrition or voluntary attrition of permanent employees (see employees by type, gender, and country for definition), reported in percentage. New recruitments: New recruits are employees who started working at NKT during 2022 and the values are calculated as sum of FTE employees reported in total, and by type and gender with hire date from 1.1.2022 to 31.12.2022.(see employees by type and gender for definition). Employee Engagement Score is a key metric of the yearly employee engagement survey conducted in October 2022 and sent out to all permanent and temporary employees at NKT. The survey had a 84% response rate. Employees with performance and career review include permanent office-based employees who received a performance review in 2022 as part of the internal performance and career review programs. Medical Treatment Incident (MTI): A work-related injury that is treated by a paramedic or doctor (either on site or at a medical facility) not resulting in lost time beyond the day of occurrence. Restricted Work Case (RWC): A work-related injury with the consequences of temporary assignment to more suitable tasks and/or reduction in working hours beyond the day of occurrence. Lost Time Injury (LTI): A work-related incident with consequences of lost time beyond the day of occurrence. Lost Time Incident Rate (LTIR): The number of Lost Time Injuries (LTI) of NKT employees, multiplied with 200.000 and divided by the sum of worked hours. Total Recordable Incident Rate (TRIR): The combined number of Fatal Injuries, Lost Time Injuries, Medical Treatment Injuries and Restricted Work Cases, multiplied by 200.000 and divided by the sum of worked hours. Lost Work Day Rate (LWDR): The sum of lost workdays due to Lost Time Injuries (LTI) multiplied by 200.000 and divided by the sum of worked hours. Fatal Injuries (FI): A fatality as a consequence of a workrelated injury. Near miss (NM): An incident which did not lead to a safety incident or illness but which potentially could have done given a slight shift in time or position. Unsafe acts and conditions: Observed unsafe situations and behaviours that if not corrected can cause harm and could result in incidents, illness, and/ or damage to material, property and/or environment. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 54 Sustainability data Governance Ethics and integrity Whistleblower Total whistleblower cases Concluded whistleblower cases Whistleblower cases concluded as substantiated Business conduct Completion rate for e-training in Code of Conduct, incl. anti-bribery and anti-corruption (%) Completion rate for data privacy e-training (%) Completion rate for competition law compliance e-training (%) Completion rate for trade sanctions e-training (%) Supplier due diligence Supplier audits (No.) Share of strategic suppliers*who have signed the Code of Conduct (%) Share of strategic suppliers who have completed the qualification process (%) Management systems ISO 45001 certification, main production sites** (%) ISO 14001 certification, main production sites** (%) ISO 9001 certification, main production sites** (%) Customer experience CX Pro Performance (No.) Satisfaction (No.) NPS (No.) Environmentally responsible (No.) 2022 2021 2020 2019 6 4 1 91 87 88 92 28 100 97 88 94 94 78 78 44 83 14 11 2 92 87 89 95 14 100 81 100 100 100 77 79 41 80 11 11 1 91 75 96 97 3 - - 100 100 100 80 83 57 81 12 12 3 - - - - 23 - - -*** 100 100 - - - - * Strategic suppliers (segmented as A+/ A/ B) represent 71% of the overall third party supplier spend. NKT has a total of 105 strategic suppliers ** Sites producing more than 1% of the total revenue-generating production in the year *** OHSAS 18001 Trend evaluation Supplier audits Increase due to the possibility to travel for audits after lifted COVID-19 restrictions and hybrid approach combining virtual and on-site audit. Share of strategic suppliers who have completed the qualification process Increase due to improved and strengthened supplier qualification governance. ISO 45001 Decrease due to acquisition of site without 45001 certification and one site without ISO 45001 certica- tion passed the 1% of the total revenue-generating production threshold. ISO 14001 Decrease due to acquisition of site without 14001 certification. ISO 9001 Decrease as one site without ISO 9001 certication passed the 1% of the total revenue-generating pro- duction threshold. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 55 Sustainability data Supplier qualification process: Share of strategic suppliers that have gone through the qualification pro- cess. 81% of the annual spend is tagged to suppliers who have gone through the qualification process with NKT. Customer experience: Numbers are based on the results of the yearly relationship survey conducted in October 2022. Customers were asked to evaluate different statements on a scale from 1 to 10. All other scores are measured from 0 to 100. CX Pro Performance: Main customer experience identification, contains 3 dimensions: Satisfaction, value for money, and willingness to recommend. Satisfaction: Shows the overall customer satisfaction Net Promoter Score (NPS): Shows the level of customer loyalty. Environmentally responsible: Customers view on the extent to which extent NKT is environmentally responsible. Methods and comments - Governance Whistleblower cases: The whistleblower hotline is in place for both internal and external use. All cases are assessed by the NKT Compliance function which also determines whether a case is violating the Code of Conduct or relevant legislation. The Compliance Board, Audit Committee and the Board of Directors of NKT, receive anonymized reports of the cases on a regular basis. 4 out of the total number of cases reported in 2022 were concluded as either substan- tiated or unsubstantiated after an investigation and evaluation had been conducted. 2 cases remain open as of 31.12.2022. Compliance training: The Code of Conduct and Data Privacy training is provided company-wide, while the Competition Law and Trade Sanctions training is assigned to a selected group of relevant employees with increased exposure to business partners and high risk jurisdictions. Suppliers signed the Code of Conduct: All strategic suppliers have gone through the registration process to confirm adherence to the Code of Con- duct. This means that 100% of the spend allocated to strategic suppliers is compliant to the code accept- ance by the suppliers. Supplier audits: The supplier audit inspects a suppli- er's usage of industry regulation practices, including the health and safety and correct manufacturing processes. NKT cover supplier audits in all areas such as quality, health and safety, and sustainability, meaning that supplier audits are done when relevant depending on material risks, supply chain risks, or other issues based on the risks and opportunities identified. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 56 Taxonomy Turnover Substantial contribution criteria DNSH criteria (Do No Significantly Harm) t u r n o v e r A b s o u t e l C o d e s o f t u r n o v e r P r o p o r t i o n mEuro % m i t i g a t i o n C l i m a t e c h a n g e % C l i m a t e c h a n g e % a d a p t i o n W a t e r a n d m a r i n e % r e s o u r c e s C i r c u a r l e c o n o m y % e c o s y s t e m s P o l l u t i o n % i i B o d v e r s i t y a n d C l i m a t e c h a n g e m i t i g a t i o n C l i m a t e c h a n g e a d a p t i o n W a t e r a n d m a r i n e r e s o u r c e s C i r c u a r l e c o n o m y e c o s y s t e m s P o l l u t i o n i i B o d v e r s i t y a n d T a x o n o m y - a l i g n e d t u r n o v e r , y e a r n p r o p o r t i o n o f s a f e g u a r d s i i M n m u m % Y/N Y/N Y/N Y/N Y/N Y/N % Y/N ( e n a b l i n g a c t i v i t y ) C a t e g o r y E ( t r a n s i t i o n a l a c t i v i t y ) C a t e g o r y T 359.9 17.3 17.3 249.4 12.0 12.0 0.0 0.0 0.0 609.4 29.3 29.3 1.0 203.9 0.0 0.1 9.8 0.0 0.1 9.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 205.0 9.9 9.9 0 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Y Y Y Y N/A Y Y Y N/A Y Y N/A N/A N/A N/A Y Y Y E E E E E E 17.3 12.0 0 29.3 0.1 9.8 0 9.9 Economic activities A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) (A.2) B. Taxonomy-non-eligible activties Turnover of Taxonomy-non-eligible activties (B) Total (A+B) 1,264.6 2,079.0 60.8 100.0 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 57 CAPEX Substantial contribution criteria DNSH criteria (Do No Significantly Harm) A b s o u t e l C A P E X C o d e s o f C A P E X P r o p o r t i o n mEuro % m i t i g a t i o n C l i m a t e c h a n g e % C l i m a t e c h a n g e % a d a p t i o n W a t e r a n d m a r i n e % r e s o u r c e s C i r c u a r l e c o n o m y % e c o s y s t e m s P o l l u t i o n % i i B o d v e r s i t y a n d C l i m a t e c h a n g e m i t i g a t i o n C l i m a t e c h a n g e a d a p t i o n W a t e r a n d m a r i n e r e s o u r c e s C i r c u a r l e c o n o m y e c o s y s t e m s P o l l u t i o n i i B o d v e r s i t y a n d s a f e g u a r d s i i M n m u m T a x o n o m y - a l i g n e d t u r n o v e r , y e a r n p r o p o r t i o n o f % Y/N Y/N Y/N Y/N Y/N Y/N % Y/N ( e n a b l i n g a c t i v i t y ) C a t e g o r y E ( t r a n s i t i o n a l a c t i v i t y ) C a t e g o r y T N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Y Y Y Y N/A Y Y Y N/A Y Y N/A N/A N/A N/A Y Y Y E E E E E E 32.2 23.3 0 55.5 0 19.1 0 19.1 0 0 0 0 0 0 62.0 32.2 32.2 45.0 23.3 23.3 0 0 0 107.0 55.5 55.5 0 0 0 36.8 19.1 19.1 0 0 0 36.8 19.1 19.1 48.9 192.8 25.4 100 Economic activities A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies CAPEX of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) (A.2) B. Taxonomy-non-eligible activties CAPEX of Taxonomy-non-eligible activties (B) Total (A+B) Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 58 OPEX Substantial contribution criteria DNSH criteria (Do No Significantly Harm) C o d e s A b s o u t e l O P E X mEuro o f O P E X P r o p o r t i o n % m i t i g a t i o n C l i m a t e c h a n g e % C l i m a t e c h a n g e % a d a p t i o n W a t e r a n d m a r i n e % r e s o u r c e s C i r c u a r l e c o n o m y % e c o s y s t e m s P o l l u t i o n % i i B o d v e r s i t y a n d C l i m a t e c h a n g e m i t i g a t i o n C l i m a t e c h a n g e a d a p t i o n W a t e r a n d m a r i n e r e s o u r c e s C i r c u a r l e c o n o m y e c o s y s t e m s P o l l u t i o n i i B o d v e r s i t y a n d s a f e g u a r d s i i M n m u m T a x o n o m y - a l i g n e d t u r n o v e r , y e a r n p r o p o r t i o n o f % Y/N Y/N Y/N Y/N Y/N Y/N % Y/N N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Y Y Y Y N/A Y Y Y N/A Y Y N/A N/A N/A N/A Y Y Y 19.5 14.1 0 0 11.5 0 0 0 0 0 0 0 94.0 19.5 19.5 67.8 14.1 14.1 0 0 0 161.8 33.6 0.2 0 0 55.5 11.5 11.5 0 0 0 55.6 11.6 263.7 481.2 54.8 100 ( e n a b l i n g a c t i v i t y ) C a t e g o r y E ( t r a n s i t i o n a l a c t i v i t y ) C a t e g o r y T E E E E E E Economic activities A. Taxonomy-eligible activities A.1 Environmentally sustainable activities (taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies OPEX of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) 3.1 Manufacture of renewable energy technologies 4.9 Transmission and distribution of electricity 7.6 Installation, maintainance and repair of renewable energy technologies Taxonomy-eligible but not environmentally sustainable activities (not taxonomy aligned) (A.2) B. Taxonomy-non-eligible activties OPEX of Taxonomy-non-eligible activties (B) Total (A+B) Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 59 EU Taxonomy method statement NKT is a European based turnkey provider of power ca- ble solutions and accessories. NKT has assessed and deemed financial activities of 2022 both EU Taxonomy eligible (activities contributing to the climate objectives) and taxonomy aligned (fully compliant). In 2022, there has been no significant changes in the nature of finan- cial activities compared to 2021. NKT has evaluated the business activities against the EU Taxonomy eligibility criteria for climate mitigation and climate adaptation under the Regulation (EU) 2020/852 of the European Parliament. NKT has subdivided eligible activities into three activity types: Manufacture of renewable energy technologies’ ‘3.1. ‘4.9. Transmission and distribution of electricity’ ‘7.6. Installation, maintenance and repair of renewable energy technologies’ 1. For all the projects and products that relate to manufactured cable systems for the renewable energy sector as per NACE code C27.3 ‘Manufacture of wiring and wiring devices’ - those financial activities have been deemed eligible for activity 3.1 when they comply with at least one of the below criteria: ■ Cables dedicated for a given renewable energy application ■ Customers who are dedicated to renewable energy ■ Projects and/or installations dedicated to renew- able energy The financial activity has been deemed aligned with the “Substantial contribution to climate change mit- igation” when complying with the technical criteria manufactures renewable energy technologies. 2. In 2022, the assessment has been further aligned with industry recommendations from EuropaCable. Projects including both products and installation related to construction and installation of interconnectors or enforcement of the grid under the ‘4.9. Transmission and distribution of electricity’ have been deemed eligible.: The financial activity has been deemed aligned with the “Substantial contribution to climate change mitigation” when complying with at least one of the following technical criteria’s: a. the system is the interconnected European system, i.e. the interconnected control areas of Member States, Norway, Switzerland and the United Kingdom, and its subordinated systems. b. the main purpose of the interconnector/power cable system was to enable transmission of renewable power between or within countries (based on the specific project data)and ff one of the countries' carbon intensity of the grid was less than 100g CO2 e per kWh, the project was considered aligned. c. If projects within the same country or between two countries where the grid carbon intensity was above 100g CO2 e per kWh, the projects were deemed not aligned, unless project specific information is available to ensure that installed cable system carbon intensity is below 100g CO2 e per kWh. 3. Repair activities conducted for the renewable energy sector were also deemed eligible as per activity ‘7.6. Installation, maintenance and repair of renewable energy technologies’. Installation, maintenance and repair should occur on site, not remotely. The financial activity has been deemed aligned with the “Substantial contribution to climate change miti- gation” when complying with the technical criteria: a. installation, maintenance and repair of cable systems used for the transmission of renewable energy from wind turbines. In 2022, no repair activities were categorized eligible within 7.6 since they were not related to renewa- ble energy sector (for example repair of cables for offshore wind energy). The financial activities have been deemed aligned when complying with the relevant “Do no significant harm” (DNSH) criteria’s for the categories 3.1, 4.9 and 7.6 as described in the tables. Climate change adaptation (Appendix A), Sustainable use and protection of water and marine resources (Appendix B), Pollution prevention and control (Appendix C), Protection and restoration of biodiversity and ecosystems (appendix D) and transition to circular economy have been assessed on product, project and manufacturing site level. The assessments are documented in either product, project specific doc- umentation and/or the integrated management plans, processes and procedures for the manufacturing sites. Read more about our transition to circular economy on page 22-25 and biodiversity on page 28. The financial activities have been deemed not aligned with the “Do no significant harm” (DNSH) criteria’s when a project do not have the supportive documentation to comply with the set criteria’s. This can be the case when a project is new and thereby the necessary documenta- tion has not been developed yet. The Minimum Safeguards has been assessed on a glob- al company level with reference to the corporate Code of conduct, related policies, processes and governance. Read more on page 30-34 and 37-44. Reporting Principles The Turnover (revenue), CAPEX and OPEX related to taxonomy-aligned activities have been determined based assessment of project/product eligibility and alignment. Turnover, CAPEX and OPEX that can be linked to identified taxonomy-aligned activities are classified as taxonomy-aligned and thereby included in the numerator of the respective KPI. The proportion of turnover, CAPEX and OPEX that is associated with taxonomy-eligible but not-aligned activities, i.e. those eligible activities where we do not fulfil the technical screening criteria for taxonomy-alignment, has been de- termined. The proportion of turnover, CAPEX and OPEX that is associated with taxonomy-non-eligible activities, i.e. our activities that are not included in the delegated acts, has been determined. Double counting across activities has been avoided by allocating a fixed base of Turnover, CAPEX and OPEX to the three material taxonomy-aligned activities or the non-taxonomy aligned category. Applied ratios cannot sum to more than 100%, which eliminates the risk of double counting. Internal transactions have been eliminated. The share of taxonomy-aligned Turnover is calculated as the Turnover from taxonomy-aligned projects and products as a proportion of total Turnover. Turnover is defined as Revenue according to NKT’s revenue defini- tion in the annual report The share of taxonomy-aligned CAPEX is calculated as the investments related to assets, processes and tech- nologies associated with taxonomy-aligned economic activities as a proportion of total CAPEX. The share of taxonomy-aligned CAPEX has been assessed on site and Business Line level applying share of taxono- my-aligned turnover in the specific site or Business Line as allocation key. Most investments can and will be used to produce both aligned and non-aligned projects/ products, and NKT believes that split between aligned and non-aligned turnover represents a good proxy for the split between aligned and non-aligned activities. The majority of NKT’s investments in 2022 have been within the Solutions business line primarily related to existing production facilities and technology, where a relatively larger part of activities and turnover are taxonomy-aligned. CAPEX is defined as investments in property, plant, equipment and technologies, and does not include non-turnover related items. The nature of CAPEX is largely unchanged compared to 2021. The share of taxonomy-aligned OPEX is calculated as the OPEX associated with processes and activities re- lated to taxonomy-aligned economic activities as a pro- portion of total OPEX. The share of taxonomy-aligned OPEX has been assessed on site and Business Line level applying share of taxonomy-aligned turnover in the specific site or Business Line as allocation key. Most costs can be associated with both aligned and non- aligned projects/products, and NKT believes that split between aligned and non-aligned turnover represents a good proxy for the split between aligned and non- aligned activities. OPEX has been defined as non-cap- italized Staff Costs, Other Costs, and Other operating income directly or indirectly associated with turnover related activities. Costs of raw materials, consumables and goods for resale are not defined as OPEX in this respect. The nature of OPEX is largely unchanged compared to 2021. Appendix Sustainability Report 2022 NKT 60 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 61 GRI content index Statement of use NKT has reported the information cited in this GRI content index for the period Q4 2021-Q3 2022 (environmental data) and full-year 2022 (social and governance data), with reference to the GRI standards. NKT refers to the Annual Report 2022 (AR) and the Sustainability Report 2022 (SR) GRI 1 used GRI 1: Foundation 2021 GRI standard Disclosure Location GRI 2: General Disclosures 2021 2-1 2-2 2-3 2-4 2-5 2-9 2-10 2-11 2-12 2-13 2-14 2-16 2-17 2-19 2-20 Organizational details Entities included in the organization’s sustainability reporting Reporting period, frequency and contact point Restatements of information External assurance SR p.46 SR p.46 SR p.63 Governance structure and composition SR p.10 Nomination and selection of the highest governance body AR p.42-45 Chair of the highest governance body AR p.46 Role of the highest governance body in overseeing the management of impacts SR p.10, AR p.45-48 Delegation of responsibility for managing impacts SR p.10, AR p.45 Role of the highest governance body in sustainability reporting AR p.45, SR p.10 Communication of critical concerns AR p.21, SR p.37, p. 54-55 Collective knowledge of the highest governance body Remuneration policies Process to determine remuneration NKT investor website AR p.44 AR p.44 GRI standard Disclosure Location 2-22 2-23 2-26 2-27 2-28 2-29 3-1 3-2 3-3 Statement on sustainable development strategy SR p.5,11 Policy commitments SR, p.2, 8, 28, 30, 32, 41, 43 Mechanisms for seeking advice and raising concerns Whistleblower hotline, SR p. 54-55 Compliance with laws and regulations SR p.39, AR p.44 Membership associations SR p.8 Approach to stakeholder engagement SR p.13-14 Process to determine material topics SR p.13-14 List of material topics SR p.13 Management of material topics SR p.16-44 GRI 207: Tax 2019 207-1 Approach to tax Tax governance, control, and risk management 207-2 207-3 Stakeholder engagement and management of concerns related to tax NKT Tax Policy NKT Tax Policy NKT Tax Policy GRI 302: Energy 2016 302-1 Energy consumption within the organization SR p.48 302-3 Energy intensity SR p.48, p.50 GRI 303: Water and Effluents 2018 GRI 305: Emissions 2016 303-3 Water withdrawal SR p.49-50 305-1 Direct (Scope 1) GHG emissions SR p.47 305-2 Energy indirect (Scope 2) GHG emissions SR p.47 305-3 Other indirect (Scope 3) GHG emissions SR p.47 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions SR p.47 SR p.18-21 SR p.46, NKT website SR p.46, NKT website GRI 3: Material Topics 2021 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 62 GRI content index continued GRI standard Disclosure Location GRI 306: Waste 2020 306-2 Management of significant waste-related impacts SR p.22-25, 306-3 Waste generated 306-4 Waste diverted from disposal 306-5 Waste directed to disposal SR p.49-50 SR p.49-50 SR p.49-50 GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system SR p.34, 52-53 GRI 404: Training and Education 2016 404-2 Programs for upgrading employee skills and transition assistance programs SR p.31 GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees SR p.51-52 Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 63 Independent assurance statement on selected ESG data SGS Poland’s assurance opinion on KPIs in NKT Cables Group A/S’s ESG scorecard of NKT Sustainability Report for 2022 based upon internationally recognised assurance We are providing a limited level of assurance, guidance and standards including the principles using our protocols for: of reporting process contained within the Global Reporting Criteria Options 1. Reporting Criteria Options 2. GHG Protocol Reporting Initiative Sustainability Reporting ■ evaluation of KPIs within the ESG scorecard 3. ISO14064-1 Standards (GRI Standards) GRI 1: Foundation (against the ISAE 3000 (Revised). 4. ISAE3000 (Revised) 2021 for report quality, GRI 2 General Disclo- Nature and the assurance/verification SGS Poland (SGS Polska Sp. z o.o. - hereinafter sure 2021 for organisation’s reporting practices We are providing a reasonable level of assurance, and other organizational detail, GRI 3 2021 for using our protocols for: referred to as SGS) was commissioned by NKT organisation’s process of determining material Specified performance information and disclosures included in scope Sccope of the verification included independent Cables Group A/S (hereinafter referred to as topics, its list of material topics and how to man- ■ evaluation of the GHG-related KPIs against the assurance of the NKT Sustainability Report 2022 NKT) to conduct an independent assurance of ages each topic, and the guidance on levels of ISO14064-3 Standard requirements. - ESG scorecard (pages 45-59) dated 31 Jan, the NKT Sustainability Report 2022 - ESG score- assurance contained within the AA1000 series of 2023. NKT has defined the reporting period as card (pages 45-59) dated Feb 6, 2023 (hereinaf- standards and/or ISAE3000. Within the scope of assurance, the procedures Q4 2021 - Q3 2022 for all environmental data and ter referred to as the Report). we performed included, but were not limited to: full year (2022) for social and governance data. Intended users of this assurance statement This Assurance Statement is provided with the The assurance of this report has been conducted according to the following Assurance Standards: ■ Pre-assurance research Assurance methodology The assurance performed comprised the review, intention of informing all NKT’s Stakeholders. ■ SGS ESG & SRA Assurance Protocols (based ■ Interviews with the relevant managers and evaluation of and providing comments on the Responsibilities The information in the Report and its presentation on GRI Principles and guidance in AA1000); directors with responsibility for each element of the assured part of the report, including those reporting processes as well as evaluating the accuracy of the report content and indicators. ■ ISAE3000 (Revised), Assurance Engagements responsible for producing and validating KPI This included the following activities: are the responsibility of the Senior Leadership Other than Audits or Reviews of Historical data Team and the management of NKT. SGS has Financial Information; ■ Desk study to identify material issues in relation not been involved in the preparation of any of the ■ Remote site tours in Karlskrona and Cologne to the organisation, its sector, location and material included in the Report. ■ ISO 14064-3:2019 Greenhouse gases — Part production units operations, and stakeholders, Our responsibility is to express an opinion on ification and validation of greenhouse gas ■ Review of documentation of record to check ■ Evaluation of the NKT Sustainability Report 3: Specification with guidance for the ver- the text, data, graphs and statements within statements; statements back to source. the scope of verification (ESG scorecard, pages 45-59) with the intention to inform all NKT’s stakeholders. Assurance standards, type and level of assurance The SGS ESG & Sustainability Report Assur- ance protocols used to conduct assurance are ■ ISO 14064-1 :2018 and the WRI/WBCSD GHG Protocol – A Corporate Accounting and Reporting Standard ■ GRI Standards 2021. Scope of assurance and reporting criteria The scope of the assurance included evaluation of quality, accuracy and reliability of specified performance information as detailed below and evaluation of adherence to the following reporting criteria: 2022 against SGS ESG & SRA Assurance Pro- tocols (based on GRI Principles and guidance in AA1000), Verification of GHG Inventory to ISO 14064 and GRI standards 2021 and ISAE 3000 in the level of limited assurance, ■ Planning of site visit (remote) and preparation of bespoke checklists for evaluation of data collec- tion processes and accuracy of reported data, Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 64 ■ Interviews carried out with main persons The engagement included verification of emis- Category 1: Indirect GHG emissions from responsible on client’s side for data collection sions from anthropogenic sources of greenhouse purchased good and services and analysis (based in different locations; all gases included within the organisation’s bound- Category 2: Indirect GHG emissions from Statement of independence and competence The SGS Group of companies is the world leader interviews conducted remotely via MS Teams) ary and meeting the requirements of EN ISO capital goods in inspection, testing and verification, operating in to complete the evaluation of data collection 14064-1 :2018 and the WRI/WBCSD GHG Proto- Category 3: Indirect GHG emissions from fuel more than 140 countries and providing services processes and accuracy of reported informa- col. The organisational boundary was established and energy related including management systems and service cer- tion and data, including: following the operational control approach. Category 4: Indirect GHG emissions from tification; quality, environmental, social and ethical — Interviews with relevant personnel, — Document and record inspection, — Confirmation of information sources. ■ Description of activities: Manufacturing of High Category 5: Indirect GHG emissions from sustainability report assurance. SGS affirm our Voltage Cables, Medium Voltage Cables, Low waste independence from NKT Cables Group A/S, be- Voltage Cables, Category 6: Indirect GHG emissions from ing free from bias and conflicts of interest with the upstream transport auditing and training; environmental, social and The procedures performed in a limited assurance Accessories and also Cable Services and Tech- Category 7: Indirect GHG emissions from engagement vary in nature and timing from, and nology Consulting employee commuting The assurance team was assembled based on are less in extent than for, a reasonable assur- Category 9: Indirect GHG emissions from their knowledge, experience and qualifications ance engagement. Consequently, the level of as- ■ Location/boundary of the activities: Production downstream transport for this assignment, and comprised auditors with surance obtained in a limited assurance engage- sites in Europe (Czech Republic, Denmark, Category 11: Indirect GHG emissions from use expertise in ESG fundamentals, Social Auditing, ment is substantially lower than the assurance Germany, Sweden, Poland, Norway, United of sold products OHS Systems, that would have been obtained had a reasonable Kingdom) and also NKT Victoria (vessel), ware- Category 12: Indirect GHG emissions from end assurance engagement been performed. houses, offices and others. of life treatment of products sold Environmental Protection and Carbon Footprint As- business travel organisation, its subsidiaries and stakeholders. sessments, Information Security and Data Quality. Assurance methodology - GHG related data CO2 emissions from own operations were verified at a reasonable level of assurance according to ■ Physical infrastructure, activities, technologies ■ Types of GHGs included: CO2, N2O, CH4, and processes of the organisation: HFCs, PFCs, SF6 Findings and conclusions standard EN ISO 14064-3 :2019 Specification ■ manufacturing facilities, offices, warehouses, ■ Directed actions: none With Guidance For The Validation And Verifica- vessel, transport and others tion Of Greenhouse Gas Assertions, to establish conformance with the requirements of EN ISO ■ GHG sources, sinks and/or reservoirs included: 14064-1 :2018 and the WRI/WBCSD GHG Pro- tocol – A Corporate Accounting and Reporting Standard (‘The WRI/WBCSD GHG Protocol’), within the scope of the verification. The material- ity required of the verification was considered by SGS to be below 5%, based on the needs of the intended user. — Direct GHG emissions from stationary combustion, mobile combustion, cooling equipment, process sources; — Indirect GHG emissions from imported ener- gy – purchased electricity, purchased district heating, purchased district cooling — Indirect Emissions List categories: Limitations and mitigation Financial data drawn directly from independently audited financial accounts has not been checked back to source as part of this assurance process (refers to EU Taxonomy KPIs). Assurance process was performed remote- ly – MS Teams tool, phone calls and e-mails exchange was used. Assurance/verification opinion On the basis of the methodology described and the verification work performed, nothing has come to our attention that causes us to believe that the specified performance information included in the scope of assurance is not fairly stated and has not been prepared, in all material respects, in accordance with the reporting criteria. We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting. Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 65 Assurance / verification opinion - GHG related data On the basis of methodology described for GHG data verification SGS concludes with reasonable assurance that the presented CO2 equivalent asser- tion is materially correct and is a fair representation of the CO2 equivalent data and information, and is prepared following the requirements of ISO 14064-1 :2018 and the WRI/WBCSD GHG Protocol – A Cor- parts of the business and the opportunities for pacts on the economy, environment, and peo- ■ Statement of use was provided (withing the improvement identified may be considered for ple, including impacts on their human rights. GRI content index) and included required infor- implementation during future reporting cycles: mation: NKT has reported the information cited Good practice: ■ KPIs more adjusted to NKT’s operations and organizational structure comparing to the pre- vious reporting cylcle. ■ For employment statistics related KPIs it is rec- in this GRI content index for the period Q4 ommended to awaverage the data in reporting 2021-Q3 2022 (environmental data) and full- period to make data more representative. year 2022 (social and governance data), with Adherence to GRI standards requirements The report, NKT Sustainability Report 2022 - reference to the GRI standards. NKT refers to the Annual Report 2022 (AR) and the Sustaina- bility Report 2022 (SR); porate Accounting and Reporting Standard. ■ GHG related data expanded to include scope ESG scorecard, complies with the requirements 3 emissions. for reporting with reference to the GRI Standards ■ GRI notification: to be conducted after publish- NKT Cables A/S provided the GHG assertion set out in Section 3 of GRI 1. The significant im- ing the report. based on the requirements of ISO 14064-1 ■ Source data for majority of KPIs collected / pacts are assessed and disclosed with reference :2018 and the WRI/WBCSD GHG Protocol – A recorded for the last day of reporting period to the guidance defined in GRI 3: Material Topic Corporate Accounting and Reporting Standard. (ending of Q3 2022 for all environmental data 2021. The report has properly disclosed infor- The GHG information for the period 01/10/2021 – and ending of Dec for social and governance mation related to the company’s contributions to ADHERENCE TO GHG Protocol and ISO14064-1: Criteria against which a carbon footprint verifica- 30/09/2022 disclosing gross emissions of 10 439 475tCO2e (location based methodology), 10 401 377 tCO2e (market based methodology), 42 tCO2e (from biofuels combustion) are verified by SGS to a reasonable level of assurance, consistent with the data). sustainability development. For future reporting, tion assessment is undertaken are the require- it is encouraged to prepare for the transition to ments of ISO 14064 and GHG Protocol. ■ Customer satisfaction data generated from well reporting in accordance with the GRI Standards, managed external systems. with more comprehensive details of its manage- ment processes on the identified impacts on the Signed: For and on behalf of SGS Poland agreed verification scope, objectives and criteria. ■ On-line platform used for data collection of economy, environment, and people, including environmental data (Resource Advisor). impacts on their human rights. We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting. Quality and reliability of specified performance information During the verification process some examples of good practice as well as some opportunities for improvement in underlying processes were identi- fied and reported to NKT with the aim of enabling a process of continual improvement in collection and reporting KPI data. It may be possible to roll out examples of good practice to other KPIs, or Opportunities for improvements: ■ Overall assurance process could be strnght- ened if for the next reporting cycles the pro- As a result of GRI pre-assurance activity it was Zbigniew Suchodolski confirmed that: ■ GRI Content index was published, including: - Knowledge - Business Manager cess would be started earlier or backed-up by i. the title: GRI content index; pre-assurance activity (based on data sheets) – to make sure all necessary changes are made in advance of deadline dates. ■ It is encouraged to prepare for the transition to reporting in accordance with the GRI Stand- ards, with more comprehensive details of its ii. the statement of use; iii. the title of GRI 1 used; iv. a list of the reported disclosures from the GRI Standards, including the disclosure titles; v. the titles of the GRI Standards that the reported disclosures come from; vi. the location where the information reported management processes on the identified im- for each disclosure can be found; Gdynia, Poland Feb 9, 2023 www.sgs.com Introduction / Strategy and governance / Environment / Social / Governance / Data sheets / Appendix Sustainability Report 2022 NKT 66 ESG ratings 2022 NKT is constantly increasing sustainability in all activities which was recognized in ESG ratings provided by four independent agencies in 2022. ■ NKT is rated in the Management (B) band ■ Rated Platinum with a score of 83 out of 100 in 2022 within the industry category ■ NKT is among the 34 % of companies reaching Management level in the group "Electrical and electronic equipment" ■ This places NKT among the top 1% of companies in total “manufacture of wiring and wiring devices” D- D C- C B- B A- A 0 - 44 Bronze 45 - 53 Silver 54 - 65 Gold 66-72 Platinum 73 - 100 ■ NKT is rated AA in the MSCI ESG Ratings assessment in 2022 ■ As of December 2022, NKT A/S received an ESG Risk Rating of 15.3 from Morningstar Sustainalytics and was assessed to be at low risk of experiencing material financial impacts from ESG factors CCC B BB BBB A AA AAA Negl. risk 0 - 10 Low risk 10 - 20 Medium risk 20 - 30 High risk 30 - 40 Severe risk 40+ The use by NKT of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trade- marks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of NKT by MSCI.  MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty.  MSCI names and logos are trademarks or service marks of MSCI. Copyright ©2022 Morningtsra Sustainalytics. All rights reserved. This page contains information developed by Morningstar Sustainalytics (www.sustainalytics.com). Such information and data are pro- prietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers. NKT A/S Vibeholms Allé 20 DK-2605 Brøndby Denmark Company Reg: 6272 5214 T: +45 43 48 20 00 info@nkt.com nkt.com NKT is signatory to: Science Based Targets initiative. A commitment to become a net zero emissions company. United Nations Global Compact. A pledge to implement universal sustainability principles. Europacable Industry Charter. A commitment towards superior quality. d e v r e s e r s t h g i r l l A 7 1 0 2 © . p u o r G T K N f o k r a m e d a r t a s i M T T K N 

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