Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced total CO2 emissions by 26%
• Reduced total waste generation by 53%

Social Achievements

• Reduced lost time injuries to zero in 2019
• Maintained a health and wellness program

Governance Achievements

• Implemented corporate governance principles endorsing and complying with the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance
• Established an Audit Committee and a Compensation Committee

Climate Goals & Targets

Environmental Challenges

• Impacts of the solar trade war between China and the United States
• Uncertain market conditions
• Reduced demand for the Company’s solar grade polysilicon
• Lack of access to the Chinese market
• Negative cash flow through 2019

Mitigation Strategies

• Shutdown of the FBR facility in Moses Lake, Washington
• Workforce reduction
• Cost cutting
• Private placement of equity
• Initiatives to reduce spending and improve efficiency

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Ethics and sustainability are part of REC Silicon’s supply chain management process.
• The Company seeks to contract services, purchase materials, hire, and lease equipment in a manner that ensures that REC Silicon’s own sustainability policies are met.
• The Company’s standard terms and conditions require adherence to standards on human rights, freedom of association, child and forced labor, corruption, and occupational health and safety.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS

Certifications: Null

Third-party Assurance: KPMG AS

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Energy
• Water
• Environment
• Equal Treatment and Human Rights
• Governance

Environmental Achievements

• Energy use per produced unit fell by 6 percent year-on-year
• Water use and waste production per produced unit fell by 12-21 percent year-on-year
• CO2 emissions per produced unit were down by 6 percent

Social Achievements

• Health and wellness program facilitates healthy lifestyle choices and activities
• Mitigated production interruptions or losses due to COVID-19 with internal policies ensuring safe work practices
• No human right violations reported in 2021

Governance Achievements

• No incidents of corruption were reported in 2021
• No whistleblower complaints recorded during the year
• Adherence to the Norwegian Code of Practice for Corporate Governance

Climate Goals & Targets

Environmental Challenges

• Increase in lost time injuries (four in 2021, double that of 2020)
• Increase in total recordable injuries (eight in 2021)
• Number of environmental permit breaches remained at 3 (above company target)
• Energy used in production process is nearly 100% diesel
• Decrease in Safe Job Analyses and Hazard Recognition Audits due to COVID-19 restrictions

Mitigation Strategies

• Program to pinpoint reasons for test variability between labs to reduce permit breaches
• Continued focus on HSE procedures, safety departments, and employee-driven processes to improve safety performance
• Internal policies to ensure compliance with COVID-19 mandates and safe work practices
• Plans to improve energy mix and reduce reliance on diesel
• Addressing the decrease in safety audits through improved communication and training

Supply Chain Management

Responsible Procurement

• Supply chain standards and management; All strategic suppliers had contractual clauses or are subject to regulations regarding respect for human rights

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

UN Sustainable Development Goals

• Target 8.8
• Target 7.2
• Target 7.3
• Target 6.3
• Target 6.4
• Target 6.5
• Target 5.1
• Target 5.2
• Target 5.5
• Target 12.4
• Target 12.5
• Target 12.6
• Target 13.1
• Target 15.1

REC Silicon supports the UN SDGs and has identified seven particularly relevant to its operations.

Environmental Metrics

ESG Focus Areas

• Safety
• Energy
• Water
• Environment
• Equal treatment and human rights
• Governance

Environmental Achievements

• Restarting Moses Lake facility, which uses 80%-90% less energy than the conventional Siemens method

Social Achievements

• Improved health and safety performance with a 75% drop in lost time injuries from 2021; below national industry average.
• Increased workforce by 25% in 2022, primarily due to preparations for Moses Lake restart.
• 100% of workforce completed human rights and anti-corruption training.

Governance Achievements

• Board of Directors with 60% female representation and 60% independent members.
• Zero incidents of human rights violations or corruption in the past three years.

Climate Goals & Targets

Environmental Challenges

• Market weakness in the semiconductor industry and cost challenges from inflationary pressures, particularly the cost of power in Butte.
• Environmental permit breaches increased to 6 in 2022 (double that of 2021).
• Low recycling rate of waste (less than 0.03% is hazardous waste).

Mitigation Strategies

• Taking steps to mitigate external factors and expects market and cost improvements for the coming year.
• Addressing root causes of permit breaches and improving collaboration with employees.
• Exploring ways to recycle or reuse solid waste.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct (to be developed in 2023)

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather
• Water scarcity

Transition Risks

• Higher carbon pricing
• Restrictions on emission levels
• Increased transportation costs
• Polysilicon replacement by other materials
• Buyer requirements for lower embodied carbon emissions

Opportunities

• Energy efficiency improvements (FBR technology)
• Higher purity polysilicon production
• Reuse of raw materials
• Renewable energy sources
• Low-carbon MGS sourcing
• Silane gas as battery anode material
• Solar PV industry growth
• Semiconductor industry growth
• Energy transition

Reporting Standards

Frameworks Used: SASB

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)

REC Silicon's products are key inputs to renewable energy and electronics industries, contributing to the energy transition.

Sustainable Products & Innovation

• Low-carbon polysilicon (FBR technology)
• Silane gas for battery anodes

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Health and Safety
• Resource Use and Circular Economy
• Supply Chain Management

Environmental Achievements

• Restart of Moses Lake facility, utilizing FBR technology with 80%-90% lower energy consumption than traditional methods and significantly lower water usage.
• Shutdown of energy-intensive polysilicon production at Butte, reducing overall energy and carbon intensity.

Social Achievements

• Human rights due diligence conducted on the Company’s supply chain.
• Establishment of a Business Partner Code of Conduct in 2023.
• Increased average training hours per employee due to Moses Lake restart.

Governance Achievements

• Board of Directors with 60% independent directors and 60% female directors.
• Implementation of a whistleblower reporting system.
• Annual training on anti-corruption and anti-bribery for employees.

Climate Goals & Targets

Environmental Challenges

• Semiconductor industry downturn impacting silicon gas sales prices and volumes.
• Increased production costs, especially energy costs at Butte facility.
• Sharp decline in solar-grade polysilicon prices in China.
• Supply chain disruptions due to geopolitical issues.

Mitigation Strategies

• Secured long-term corporate financing and a 10-year offtake agreement with Hanwha Q Cells for Moses Lake production.
• Restart of Moses Lake facility to capitalize on the Inflation Reduction Act incentives.
• Increased capacity for specialty gases at Butte.
• Shutdown of polysilicon production at Butte to improve profitability and reduce energy costs.
• Price adjustments and power hedges to mitigate energy price increases.

Supply Chain Management

Supplier Audits: 75% of vendor business volume mapped in 2023.

Responsible Procurement

• Business Partner Code of Conduct.
• Requirement for suppliers to share REC Silicon’s approach to human rights and health and safety.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity

Transition Risks

• Rising energy prices
• Carbon pricing
• Emission restrictions
• Increased transportation costs
• Client demand for low-carbon products

Opportunities

• Energy efficiency improvements (FBR technology)
• Reuse of raw materials
• Renewable energy sources
• Growth in solar PV and energy storage markets

Reporting Standards

Frameworks Used: CSRD, ESRS

Certifications: ISO 14001, ISO 9001

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 13 (Climate Action)

REC Silicon's initiatives contribute to these goals through the production of low-carbon silicon materials for renewable energy and energy storage applications, and through investments in sustainable technologies.

Sustainable Products & Innovation

• Low-carbon polysilicon from Moses Lake (FBR technology)
• Silane gas for battery anodes