Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Environmental Performance
• Social Performance

Environmental Achievements

• Reduced CO2 emissions, water, and energy usage for comparable units
• 81% of manufacturing sites achieved ISO 14001 certification
• Launched a new range of grinders, recyclable to 95%

Social Achievements

• Significantly improved workplace health and safety (reduced accidents and sick leave)
• Increased average training hours per employee to 37.2

Governance Achievements

• Issued the Atlas Copco Group Business Code of Practice
• Selected as a member of the Dow Jones Sustainability World Index and European DJSI STOXX index for the fourth consecutive year

Climate Goals & Targets

Environmental Challenges

• Unfavorable currency effects negatively impacting added value
• Customers' use and end-of-life disposal of Atlas Copco products
• Recruiting, developing, and retaining professional people, and ensuring human and labor rights are respected

Mitigation Strategies

• Following the sequence of stability—profitability—growth, while continually improving productivity and developing new and better products
• Developing and manufacturing new products with lower environmental impact
• Implementing environmental management systems (EMS) in all divisions and ensuring ISO 14001 certification

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Sustainable Products & Innovation

• VSD compressors (up to 35% less energy)
• Tornado grinder (95% recyclable)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• ISO 14001 certification reached 92% of Atlas Copco’s product companies (measured in % of cost of sales).
• Reduced energy use by 11% and CO2 emissions from energy use and transport by 5% in 2006 (relative to cost of sales).

Social Achievements

• Number of accidents per million working hours decreased.
• Number of hours of training increased.
• Proportion of women increased.
• Up to 70,000 people provided with clean drinking water through the Water for All organization.

Governance Achievements

• Established routines to share the Group’s views with business partners and customers.
• Introduced training packages covering anti-corruption procedures and behavior.

Climate Goals & Targets

Environmental Challenges

• Increased use of natural resources (energy, water, transport fuel, cooling agents) despite efficiency improvements and greater focus on environmental issues.
• Weaker demand from the North American and European motor vehicle industries for advanced assembly tools and systems.
• Unreliable delivery times for rail transport between Belgium and Italy.

Mitigation Strategies

• Continuous improvements of manufacturing plants and product designs to reduce environmental impacts.
• Strategic changes to manufacturing and distribution operations to reduce airfreight and improve road transport efficiency.
• Investments in a closed-loop cooling-tower system to reduce water consumption.
• Strengthened presence and gained market share within the general manufacturing industry.

Supply Chain Management

Supplier Audits: 1200 suppliers evaluated in 2006

Responsible Procurement

• Common ten-point checklist based on the UN Global Compact.
• Lists of prohibited and restricted substances.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Increasing regulations and requirements related to carbon dioxide emissions.

Opportunities

• Development of energy-efficient products.

Reporting Standards

Frameworks Used: GRI 3.0

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient compressors, low-emissions engines, low-noise drill rigs, water well drills with reduced fuel consumption, electric tools.

Awards & Recognition

• One of “The 2007 Global 100 Most Sustainable Corporations in the world”,
• One of the top ten companies in the ‘Amnesty Business Rating 2007’ list

Environmental Metrics

ESG Focus Areas

• Products and service
• Ethics
• Safety and well-being
• People
• The environment
• Profitability

Environmental Achievements

• 6% reduced water consumption in relation to cost of sales in water risk areas
• 34% renewable energy of total MWh energy used in operations
• 8% decrease in energy use in relation to cost of sales
• 3% decrease in number of accidents per million working hours
• 94% of waste was recycled, reused or recovered
• CO2 emissions from transport decreased by 3% in relation to cost of sales

Social Achievements

• 23% of total new employees were women
• 37% of recent graduates recruited in 2018 were women
• 3% decrease in number of accidents per million working hours for employees
• 8% decrease in the number of work-related incidents
• 1.5 million training hours worldwide
• MSEK 16 in community investments

Governance Achievements

• 95% of managers have signed the Business Code of Practice
• 86% of significant suppliers confirmed compliance with the Business Code of Practice

Climate Goals & Targets

Environmental Challenges

• Weakened demand in the semiconductor and automotive industries
• Increased protectionism
• Insufficient supply of renewable electricity in some operational areas
• Climate change impacts (e.g., changes in environmental regulations, resource availability, consumer behavior)
• Risks related to the communication of financial information
• Increased energy prices and energy taxes
• Regulations related to carbon dioxide emissions
• Natural disasters
• Corruption and bribery in some markets
• Human rights abuse in some operational areas

Mitigation Strategies

• Strong local presence and a strong portfolio of brands
• Switching to renewable electricity where possible
• Implementing new goals for 2019 to address climate change
• Resource efficiency measures
• Stringent credit policies
• Hedging strategies for currency and translation risks
• Procedures to ensure compliance with Group instructions, standards, laws and regulations
• Internal and external audits
• Zero-tolerance policy on bribery and corruption
• Internal control routines to prevent and detect fraud
• Global and local hotlines to report violations
• Policies and procedures aligned with UN Guiding Principles for Business and Human Rights
• Due diligence process for acquisitions
• Supplier evaluations in accordance with the UN Global Compact
• Regular audits of significant suppliers

Supply Chain Management

Supplier Audits: 845 significant suppliers audited for safety, health, environmental and ethical standards

Responsible Procurement

• Business Code of Practice
• UN Global Compact
• International Labour Organization’s Declaration on Fundamental Principles and Rights at Work

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in environmental regulations
• Increased energy prices and energy taxes
• Regulations related to carbon dioxide emissions
• Market shifts toward a low-carbon economy

Opportunities

• Development of energy-efficient products
• Increased generation of renewable energy
• Surge in production of electric vehicles

Reporting Standards

Frameworks Used: GRI Standards, Global Reporting Initiative’s reporting guidelines, level Core

Third-party Assurance: Deloitte

UN Sustainable Development Goals

• Goal 5 (Gender equality)
• Goal 6 (Clean water and sanitation)
• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 16 (Peace, justice and strong institutions)

Atlas Copco’s focus areas for sustainable, profitable growth are implemented in the daily operations, supported by policies, training material and monitoring tools. Results are measured and followed up through key performance indicators. Progress in relation to the KPIs contributes to the achievement of the UN Sustainable Development Goals.

Sustainable Products & Innovation

• ZH 1000-3150 oil-free centrifugal air compressor
• GHS 3800-5400 VSD+ vacuum pumps
• STB battery nutrunners
• QAC 1450 TwinPower generators

Awards & Recognition

• Atlas Copco annual safety award

Environmental Metrics

ESG Focus Areas

• Climate change
• Product eco-efficiency
• Life-cycle perspective
• Product carbon impact
• Product quality and safety
• Employee satisfaction and engagement
• Diversity and non-discrimination
• Occupational health, safety and well-being
• Business ethics and integrity
• Human rights
• Transparency and accountability
• Responsible supply chain
• Energy use and efficiency
• Waste
• Water use

Environmental Achievements

• Reduced CO2 emissions from energy in operations and transport of goods by 13% relative to cost of sales
• Increased renewable energy share to 58% of total energy used in operations
• Installed base of abatement products removed around 19 million tonnes of CO2e emissions at customers’ facilities

Social Achievements

• Launched 'NeverStopLearning week' for employee upskilling
• Improved employee engagement scores above global benchmark
• Increased share of female employees to 20.9%

Governance Achievements

• Science-based targets for greenhouse gas emission reductions set in line with the Paris Agreement
• No deviations from the Swedish Corporate Governance Code reported

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Shortages of semiconductors
• Climate change impacts on operations and supply chain
• Reputational risks
• Human rights risks in operations and supply chain
• Corruption and fraud risks
• Environmental risks in the supply chain

Mitigation Strategies

• Agile manufacturing and logistics
• Global and local presence
• Science-based targets for emissions reduction
• Business Code of Practice and ethics training
• Supplier audits and responsible sourcing
• SpeakUp misconduct reporting system
• Risk management processes
• Customer sustainability assessment tool
• Collaboration with NGOs and industry peers

Supply Chain Management

Supplier Audits: Over 600 suppliers audited on safety, health, environment and ethics

Responsible Procurement

• Business Code of Practice
• Supplier sustainability requirements
• Screening for conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in regulations, taxes, and resource prices
• Market shifts toward a low-carbon economy

Opportunities

• Development of energy-efficient products
• Growth in renewable energy and electric vehicle sectors

Reporting Standards

Frameworks Used: GRI Standards, Global Reporting Initiative’s reporting guidelines, level Core, EU Taxonomy

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 16

Atlas Copco contributes to these goals through its operations, values, and processes.

Sustainable Products & Innovation

• VSD compressors
• Abatement systems
• Electric portable compressors
• Electric industrial power tools
• Tensor ITB-A battery tool

Awards & Recognition

• Giulio Mazzalupi Award for operational excellence

Environmental Metrics

ESG Focus Areas

• Products and service
• People
• Safety and wellbeing
• Ethics
• Climate and environment

Environmental Achievements

• 31% reduced CO2 emissions from energy in operations
• CO2 emissions from our own operations were 33% lower than in the baseline year, 2019
• 97 percent of projects for new or redesigned products had targets for reduced carbon impact
• Atlas Copco’s installed base of abatement products removed around 20 million tonnes of CO2e emissions at customers’ facilities
• Share of renewable energy used in the Group was 58%

Social Achievements

• 99% of employees have signed the Code of Conduct
• Employees agree there is opportunity to learn and grow in the company (73 on a scale 1–100, in 2021)
• Employees agree that Atlas Copco has a work culture of respect, fairness and openness (76 on a scale 1–100, in 2021)
• Compressor Technique Service division has 65 female service technicians and five female Business Line Managers
• Global wellbeing framework introduced

Governance Achievements

• Code of Conduct updated
• All employees are required to complete a leader-led ethics training every two years
• Every employee is also required to annually sign a Code of Conduct compliance statement

Climate Goals & Targets

Environmental Challenges

• Increased costs related to constraints in the supply chain and Covid-19, which affected the margin negatively
• For Scope 3, the use phase of our products, we have not reached this year’s target. The reason for this is in part due to increased sales but also to the fact that the availability of renewable energy is lower than we had expected.
• Increased geopolitical tensions and protectionism, we have experienced long lead times and problems with delivering to our customers on time
• The ongoing war in Ukraine has very limited direct financial effects on Atlas Copco. Given the uncertainties surrounding the ongoing conflict, it is very difficult to predict potential indirect effects on Atlas Copco.

Mitigation Strategies

• Dual sourcing and local suppliers are important ways to shorten lead times and we have worked very hard to increase our capabilities to deliver
• As of March 5th, 2022, and until further notice, we are taking no new orders for capital equipment for delivery to Russia. The only exemption is orders for humanitarian purposes, e.g. medical equipment.
• we have also increased our focus on trade com - pliance to ensure that we follow all applicable international trade and export controls, economic sanctions, and embargos.

Supply Chain Management

Supplier Audits: Over 900 suppliers audited on safety, health, environment and ethics

Responsible Procurement

• Code of Conduct
• Business Partner Criteria document

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Increased fuel/energy taxes
• Regulations and requirements related to carbon-dioxide emissions

Opportunities

• Develop products with improved energy efficiency, reduced emissions and lower environmental footprint
• Water-efficient or water-recycling products
• Increased renewable energy generation and the surge in production of electrical vehicles

Reporting Standards

Frameworks Used: GRI Standards

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 6: Clean water and sanitation
• Goal 7: Affordable and clean energy
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation and infrastructure
• Goal 16: Peace, justice and strong institutions

Atlas Copco endorses all 17 Sustainable Development Goals and contributes directly to the eight ones described above.

Sustainable Products & Innovation

• VSD technology
• Abatement systems
• Energy storage systems
• Tensor ITB-P battery tool
• GA VSDS compressor

Environmental Metrics

ESG Focus Areas

• Climate change
• Energy efficiency
• Emissions reduction
• Circular economy
• Occupational health and safety
• Diversity and inclusion
• Human rights
• Responsible value chain
• Business ethics

Environmental Achievements

• Reduced CO2 emissions from own operations by 38% compared to 2019 baseline
• 63.6% renewable energy share of total energy use
• 91% of waste reused, recycled or recovered
• 95% of new and redesigned product projects had targets for reduced carbon impact

Social Achievements

• Employee engagement survey results above global benchmark
• Launched a Diversity & Inclusion index
• Increased share of female employees to 22%
• Average training hours per employee increased to 43.2

Governance Achievements

• 99% of employees participated in ethics training and signed Code of Conduct compliance statement
• 90% of significant suppliers signed Code of Conduct compliance statement
• Established a new Group identity

Climate Goals & Targets

Environmental Challenges

• Reducing emissions from the use phase of products (Scope 3)
• Supply chain disruptions
• Geopolitical challenges
• Varying environmental and labor standards across countries
• Meeting Minimum Safeguards criteria for EU Taxonomy

Mitigation Strategies

• Investing in R&D for energy-efficient technologies
• Investing in local manufacturing capabilities
• Developing alternative sourcing strategies
• Strengthening due diligence processes for human rights
• Implementing climate awareness training and hackathons

Supply Chain Management

Supplier Audits: Over 900 suppliers audited on safety, health, environment and ethics

Responsible Procurement

• Code of Conduct
• Business partner criteria
• Supplier sustainability requirements
• On-site evaluations
• Action plans for improvement

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Droughts
• Rising sea levels

Transition Risks

• Market shifts
• Regulatory changes
• Increased energy prices and taxes

Opportunities

• Development of energy-efficient products
• Growth in renewable energy and electric vehicle sectors

Reporting Standards

Frameworks Used: GRI Standards, EU Taxonomy Regulation

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Ernst & Young AB (limited assurance)

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 6: Clean water and sanitation
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation and infrastructure
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 16: Peace, justice and strong institutions

Details on how initiatives contribute to these goals are provided in the report.

Sustainable Products & Innovation

• B-Air battery powered screw compressor
• E-Pump electric dewatering pumps
• CP86 battery-powered cordless nutrunner
• MVR compressors for steam energy recovery
• Mechanical vacuum systems (MVS) for steel degassing

Awards & Recognition

• Not disclosed