Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health Contribution
• Insights for All
• Sustainable Innovation for Growth
• Best Place to Work
• Business Ethics
• Environmental Sustainability
• Social Responsibility
• Governance

Environmental Achievements

• Changed waste supplier in Stockholm, enabling better waste tracking and separation.
• Purchased e-commerce bags made from recycled plastics (192 kg) and ~3700 kg of recycled corrugated cardboard for the Swedish warehouse.
• 60% of warehouse electricity from solar panels.

Social Achievements

• Welcomed 53 new employees in 2020.
• Developed and implemented updated Supplier Code of Conduct.
• Developed a Code of Conduct (to be fully implemented in 2021).

Governance Achievements

• Developed and implemented anti-corruption policies and procedures.
• Established a whistleblower function.
• Developed a risk management policy (to be adopted in 2021).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the initial stages of the COVID-19 pandemic.
• Waste generation upstream and downstream in the value chain.
• Potential for negative environmental impact from plastic packaging.
• Potential risks related to corruption as the business grows.
• Ensuring suppliers adhere to Haypp Group's sustainability standards.
• Maintaining employee satisfaction and reducing turnover.
• Addressing concerns about nicotine addiction.

Mitigation Strategies

• Purchased larger volumes of products for warehouses to mitigate supply chain disruptions.
• Changed waste collection partner to improve waste tracking and management.
• Working with business partners to reduce waste and use recycled/biodegradable packaging.
• Implementing a Code of Conduct and whistleblower system to address corruption risks.
• Communicating and enforcing the Supplier Code of Conduct.
• Active dialogue with employees and individual development plans.
• Providing information and working towards marketing that is not related to the unhealthy tobacco market.

Supply Chain Management

Supplier Audits: 100% of suppliers screened (environmental criteria); All suppliers must adhere to the Supplier Code of Conduct.

Responsible Procurement

• Supplier Code of Conduct (covering safe products, taxes, working environment, anti-bribery, environmental and climate innovation).

Climate-Related Risks & Opportunities

Transition Risks

• Increased costs of emissions in the future.

Opportunities

• Opportunities to be at the forefront of sustainable practices.

Reporting Standards

Frameworks Used: GRI Core (full compliance starting 2021)

Third-party Assurance: Limited assurance provided by Öhrlings PricewaterhouseCoopers AB

UN Sustainable Development Goals

• SDG 3 (Good health and well-being)
• SDG 12 (Responsible consumption and production)
• SDG 14 (Life below water)
• SDG 17 (Partnerships for the goals)

Haypp Group focuses on SDGs where it believes it can have the greatest impact, aligning with its core business of providing healthier nicotine alternatives.

Environmental Metrics

ESG Focus Areas

• Health contribution
• Best place to work
• Insights for all
• Sustainable innovation
• Business ethics

Environmental Achievements

• Reduction of almost 40% in material cost in Norway due to packaging changes.
• 154 tons of cardboard packaging used in Swedish operations.
• 87% of nicotine pouches portfolio tested against market standard.
• 100% of suppliers screened on sustainable value chain.
• Waste collection emission saving of 42,600 kg CO2 in Sweden.

Social Achievements

• Employee satisfaction score increased from 65% to 87%.
• 73% of employees received useful feedback.
• 100% of suppliers acknowledged the Supplier Code of Conduct.
• 85% of employees finished training on Code of Conduct.
• Customer satisfaction score of 4.4 out of 5.

Governance Achievements

• Implementation of Code of Conduct for all employees and full-time consultants.
• No incidents of bribery or corruption reported.

Climate Goals & Targets

Environmental Challenges

• Challenges related to the corona pandemic.
• Challenges in expanding the organization and managing new employees.
• Fragmented data on carbon monoxide equivalents in the value chain.
• Lack of regulations and procedures for nicotine pouches.

Mitigation Strategies

• Investment in data analysis to provide insights.
• Development of a sustainability scorecard.
• Implementation of a policy for risk management and internal dialogues.
• Appointment of a sustainability manager.
• Investment in product testing and marketing standards of nicotine pouches.
• Initiation of dialogue with business partners regarding emissions calculations.

Supply Chain Management

Supplier Audits: 100% of nicotine product suppliers signed Supplier Code of Conduct or developed similar codes.

Responsible Procurement

• Supplier Code of Conduct focusing on safe products, taxes, working environment, anti-bribery, and environmental innovation.

Climate-Related Risks & Opportunities

Transition Risks

• Increased costs of emissions in the future.

Opportunities

• Reducing emissions in the value chain.

Reporting Standards

Frameworks Used: GRI Core

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 8
• SDG 10
• SDG 12
• SDG 13
• SDG 16
• SDG 17

Haypp Group focuses on the SDGs where they can have the most meaningful impact, with SDG 3 (Health and Wellbeing) as the main focus.

Environmental Metrics

ESG Focus Areas

• Health Contribution
• Best place to work
• Insights for all
• Sustainable innovation
• Business ethics

Environmental Achievements

• Decreased the number of deliveries for subscribers in Sweden by changing subscription intervals, resulting in a lower amount of transport and emissions.
• Warehouse in Stockholm and Oslo have a large part of its energy supply powered by solar panels.

Social Achievements

• Decreased gender salary gap in Sweden. The latest salary comparison showed a difference of 3-9 per cent in favour of males among mid- and senior-level specialists, while among heads of departments and business managers, the difference is 8-10 per cent in favour of women.
• 100% of nicotine product suppliers have signed our Supplier Code of Conduct or have developed similar codes of conduct and processes.
• Initiated several external reports on risk reduction and alternative nicotine products.

Governance Achievements

• Established a structure for sustainability within Haypp Group, making it part of the core of our Sustainable Business Model with five strategic areas.
• Implemented a Code of Conduct for all employees and a Supplier Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• High turnover rate and integrating new employees.
• Difficulty obtaining complete data on carrier carbon footprint.
• Lack of regulations and procedures for nicotine pouches in some markets.
• US subsidiary notified of potential non-compliance with the Americans with Disabilities Act (ADA).

Mitigation Strategies

• Strengthened the People & Culture organization.
• Planning to compile more complete data on carrier carbon footprint in 2023.
• Initiated product testing and established industry standards through NicoLeaks.
• Settled the ADA case and adjusted sites accordingly.

Supply Chain Management

Supplier Audits: 100% of nicotine product suppliers screened; no onsite inspections in 2022.

Responsible Procurement

• Supplier Code of Conduct focusing on safe products, taxes, working environment, anti-bribery, and environmental innovation.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Increased costs of emissions in the future

Opportunities

• Reducing emissions in the value chain

Reporting Standards

Frameworks Used: GRI Standards (GRI 1, GRI 2 and GRI 3)

Certifications: FSC certified labelling material

Third-party Assurance: PwC

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 8
• SDG 10
• SDG 12
• SDG 13
• SDG 16
• SDG 17

Haypp Group supports the global goals of the 2030 Agenda for Sustainable Development. The main SDG is SDG 3 (Health and Wellbeing), aligned with the higher purpose of inspiring healthier enjoyment. Other primary SDGs include gender equality, decent work, reducing inequalities, responsible consumption, climate action, peace, justice, and partnerships.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health contribution
• Insights for all
• Sustainable innovation
• Best place to work
• Business ethics

Environmental Achievements

• Reduced packaging material by approximately 21% annually through warehouse automation in Sweden.

Social Achievements

• Further reduced the gender pay gap in multiple employment categories.
• Maintained a high pace of hiring to strengthen the business.
• Invested in culture to promote collaboration, innovation, inclusivity, and execution.
• Actively monitored employee health on a regular basis.

Governance Achievements

• Initiated the transition process to comply with the Corporate Sustainability Reporting Directive (CSRD).
• Reinforced internal compliance function to strengthen business ethics and compliance.
• Implemented measures to strengthen cybersecurity.

Climate Goals & Targets

Environmental Challenges

• Challenges in obtaining comprehensive data on carbon emissions from transportation providers outside of the Nordics.
• Difficulty in obtaining a detailed overview of the contents of all packages.

Mitigation Strategies

• Continued dialogue with transportation providers to access data on carbon emissions.
• Planning to implement a system to obtain a detailed overview of package contents in 2024.

Supply Chain Management

Supplier Audits: 100% (initial screening); 77% signed Supplier Code of Conduct

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CSRD, ESRS

Third-party Assurance: Öhrlings PricewaterhouseCoopers AB (limited assurance)