Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health, Safety and Environment (HSE)
• Corporate Responsibility
• Corporate Governance

Environmental Achievements

• Reduced Energy Intensity by 3%
• Reduced absolute waste by 7% at 7% revenue growth
• 32% increase in recycled waste materials
• 9 manufacturing locations were landfill-free

Social Achievements

• Continued focus on eliminating unsafe conditions in manufacturing plants
• Implemented certified Environmental Management Systems in accordance with the ISO 14001 standard
• Aligning safety management systems to the new ISO 45001 standard
• Promoting a culture of diversity and inclusion
• Women make up 46% of the total workforce, 25% of executive management and 22% of top 50 management

Governance Achievements

• Implemented a principal model
• Strengthened senior leadership team
• Aligned remuneration principles to overall company and shareholder objectives
• Revised compensation system for executives
• Implemented a Compliance Reporting procedure

Climate Goals & Targets

Environmental Challenges

• Increased raw material commodity pricing
• Unfavorable exchange rate movements
• Growth pains and operational issues in the Interior segment
• Increased inventories due to restructuring activities and sharply increased raw material prices
• Weak cash flow due to increased inventories and longer credit terms in China
• Increase to 2.6 lost time injuries per one million person-hours worked

Mitigation Strategies

• Footprint rationalization (plant closures and production transfers)
• Improving operational execution and management of economics
• Further developing and growing businesses profitably
• Focusing resources on employee training and awareness, improved work processes and ergonomics
• Conversion to LED lighting in several facilities
• Revitalizing the Light Duty Cable (LDC) business

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Declaration and Supplier Sustainability Manual outline commitment to ethical and socially responsible sourcing
• Supplier assessment process vets new suppliers and assures that existing suppliers meet requirements

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Norwegian Code of Practice for Corporate Governance

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Deloitte AS

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Products that improve vehicle safety and reduce environmental impact

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health, Safety and Environment
• Corporate Responsibility
• Climate Change

Environmental Achievements

• Energy Intensity improved by 2.8% to 102 kilowatt hours used in production for every 1000 Euro of total product sales in 2019 compared to 105 kilowatt hours used in 2018.
• Eleven manufacturing locations were landfill-free in 2019.
• 20% reduction in injuries from 2018

Social Achievements

• All manufacturing facilities aligned their safety management systems to the new ISO 45001 standard in 2019.
• Successful external certification of all KA manufacturing locations to the ISO 14001 Environmental Management Systems standard.
• Launched a global cloud-based People Management Solution (SAP-SuccessFactors) to improve talent management and align learning outcomes with performance goals.
• Relatively low voluntary staff turnover due to positive work environment, satisfactory salary, job safety, and opportunities for professional development.

Governance Achievements

• Kongsberg Automotive complies with the latest version of the Norwegian Code of Practice for Corporate Governance.
• Established a set of general principles and guidelines for corporate governance covering risk profile determination, business organization, responsibility and authority allocation, reporting lines, risk management, and internal control.
• Adopted a Code of Conduct applying to all Group employees and elected officers.
• Implemented a Compliance Reporting Procedure to encourage reporting of suspected misconduct.

Climate Goals & Targets

Environmental Challenges

• General decline in most end markets, including a slowdown in Chinese growth rates.
• Trade conflict between the US and China leading to increased tariffs.
• Significant increases in labor costs in Mexican facilities.
• Strong increases in selected commodities and raw material prices.
• Difficult product launches impacting profitability.
• Weak cash flow with negative cash flow of EUR 44 million in 2019.
• Deterioration in operational performance in the Interior segment, particularly in Polish manufacturing facilities.

Mitigation Strategies

• Focusing on improving cash flow performance, managing operations in a challenging market, and driving strategic decisions, including portfolio trimming.
• Implementing operational improvements across all business units.
• Optimizing the product portfolio to improve capital productivity.
• Working to fix operational performance issues in Polish manufacturing facilities.
• Implementing operational excellence, lean manufacturing principles, and continuous improvement programs.
• Optimizing and localizing the supply chain.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Declaration and Supplier Sustainability Manual
• Supplier assessment process to vet new suppliers and ensure existing suppliers meet requirements.

Climate-Related Risks & Opportunities

Physical Risks

• Disruption to supply chains by extreme weather

Transition Risks

• Changing market requirements for lower emissions
• Increased costs of energy and supplies
• Cost of carbon

Opportunities

• Development of new products or services
• Resource efficiency
• Recycling
• Use of lower-emission sources of energy

Reporting Standards

Frameworks Used: ISO 45001, ISO 14001, CDP

Certifications: ISO 45001, ISO 14001

Third-party Assurance: Deloitte AS

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation
• Integrity & Ethics
• Pandemic Management
• Product Safety
• Environmental Compliance & Performance
• Workplace Health, Safety & Security
• Product Innovation
• Human Rights & Labor Practices
• Responsible & Sustainable Sourcing
• Supply Chain Management
• Community Engagement

Environmental Achievements

• Reduced absolute CO2 emissions by 10% (46,200 tonnes in 2019 to 42,100 tonnes in 2020)
• Reduced absolute energy use by 13% (125 million kWh in 2019 to 109 million kWh in 2020)
• Improved Waste Index by 16% (1.58 kg/1000€ in 2019 to 1.33 kg/1000€ in 2020)
• Reduced overall water usage by 14% (125,610 m3 in 2019 to 108,993 m3 in 2020)
• Eleven manufacturing locations were landfill free in 2020
• Commitment to 100% renewable energy by 2030 and carbon-neutral products by 2039

Social Achievements

• Improved safety record with 16 injuries in 2020 (33% improvement from 2019), less than one accident per million person hours worked, and 17 manufacturing locations with zero accidents.
• Supported employees and families during the pandemic with food, hygiene products, and face masks.
• Interior segment used upholstery skills to produce facemasks for employees and communities.
• Provided job opportunities for people with disabilities in Nuevo Laredo plant, Mexico.
• Initiatives to promote diversity and respect, including addressing violence against women.
• Various health and wellbeing initiatives for employees, including access to psychologists, stress management training, and financial wellbeing services.

Governance Achievements

• Established guidance for socially distanced working, use of facemasks, regular handwashing, and cleaning of work areas in response to the pandemic.
• Maintained a dedicated whistleblowing service.
• All identified smelters and refiners were conflict-free and successfully completed an assessment against the Responsible Minerals Assurance Process (RMAP) standard.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting production levels and workforce.
• Climate change risks including extreme weather events disrupting supply chains, increased energy costs, and potential carbon taxes.
• Market changes and customer requirements for lower-emission products.
• Competition for skilled engineers.

Mitigation Strategies

• Adapting factories to new ways of working, supporting employees with basic necessities, and implementing safety protocols.
• Assessing supply routes for extreme weather risks and working with suppliers on mitigation plans.
• Developing new products and services to meet customer demands for more sustainable products.
• Partnering with local education institutions to support STEM subjects and engineering.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainability Self-Assessment Questionnaires (SAQs) on the NQC platform
• Due diligence process to identify and mitigate risks related to conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting supply chains

Transition Risks

• Market changes, customer requirements for lower-emission products, potential carbon taxes

Opportunities

• Developing energy-efficient products, using renewable energy sources, improving resource efficiency

Reporting Standards

Frameworks Used: CDP

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

Sustainable Products & Innovation

• Rear axle stabilizer (30% weight savings)
• Electric clutch actuator (improved fuel efficiency)

Awards & Recognition

• GM Supplier Quality Excellence Award 2019 (Reynosa plant)
• Product Development Excellence Award 2020 (Wuxi Couplings team)
• Ford Q1 Award (Matamoros plant)

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation
• Responsible & Sustainable Sourcing
• Workplace Health, Safety & Security
• Human Rights & Labor Practices
• Product Safety
• Diversity & Inclusion
• Community Engagement

Environmental Achievements

• Reduced energy intensity by 3.3% (98.7 kWh/EUR 1,000 of total product sales)
• Improved waste index by 13.6% (1.15 kg/EUR 1000 sales)
• 13 landfill-free manufacturing locations

Social Achievements

• 12 accidents, a 25% improvement from 2020; 18 manufacturing facilities achieved zero accidents; 30% improvement on accidents per million person hours worked
• Over 280 suppliers (covering almost 60% of annual direct purchasing spend) completed sustainability questionnaires.
• Various community engagement initiatives (e.g., toy drives, blood drives, supporting local schools)

Governance Achievements

• Wuxi and KAMS facilities recognized as High-Tech Enterprises by the Ministry of Science and Technology of China
• FTS facilities in Epila, Spain and Ramos Arizpe, Mexico won PACCAR Supplier Performance Management awards
• No breaches of Human Rights and Decent Working Conditions identified in workplaces

Climate Goals & Targets

Environmental Challenges

• Semiconductor shortages
• Rising costs (freight, labor, electricity, oil)
• Slow recovery in automotive sales
• Unexpected and severe weather events impacting some facilities
• Increased energy costs

Mitigation Strategies

• Shift Gear program focused on operational excellence and cost reduction
• Dialogs with customers to understand production schedules and renegotiate supplier contracts
• Initiatives to improve energy efficiency (LED lighting, new equipment, waste heat reuse)
• Actions to reduce water usage
• Centralizing management of energy supply contracts and exploring renewable energy options

Supply Chain Management

Supplier Audits: More than 280 suppliers completed sustainability questionnaires (covering 60% of yearly direct purchasing spend)

Responsible Procurement

• Supplier Declaration
• Supplier Sustainability Manual
• Conflict Minerals Position Statement
• Supplier Sustainability Risk Assessment using Drive Sustainability’s Self-Assessment Questionnaire

Climate-Related Risks & Opportunities

Physical Risks

• Unexpected and severe weather events (snowfall in Texas, disruptions in Mexican electricity networks, unusual temperatures in South East Asia and Northern Hemisphere)

Transition Risks

• Increased energy costs

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards 2018 (Core)

Certifications: ISO 14001, ISO 45001

UN Sustainable Development Goals

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action

Sustainable Products & Innovation

• High-performance full-electric clutch actuation systems
• Pneumatic gear actuation systems
• Electric vehicle power train actuators
• Couplings products
• Off-Highway composite pedals
• Light-weight coolant lines

Awards & Recognition

• PACCAR Supplier Performance Management awards
• PACCAR Quality Supplier awards
• Randon Supplier Award for competitiveness

Environmental Metrics

ESG Focus Areas

• Governance
• Planet (Environmental)
• People (Social)

Environmental Achievements

• Reduced total energy use by 2.8% compared to 2021 (adjusted for divestments)
• Reduced Scope 1 and 2 CO2e emissions by 2.1% compared to 2021 (adjusted for divestments)
• 40% of energy consumed from renewable sources
• 14% waste index reduction (adjusted for divestments)
• 11 landfill-free manufacturing locations

Social Achievements

• Zero fatalities or high-consequence work-related injuries
• 85% of facilities certified according to the ISO 45001 standard
• Implemented a new strategic foundation to promote talent development

Governance Achievements

• 81% of direct material spend from suppliers who signed the supplier declaration
• 71% of direct material spend from suppliers with a valid sustainability risk assessment
• 110 purchasing colleagues participated in training on sustainable and responsible sourcing

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to extreme weather events
• Volatility in energy and commodity prices
• Increased costs of energy and supplies
• Significant change in employee turnover due to divestment of the Interior segment

Mitigation Strategies

• Monitoring supply chain for disruption risks and working with suppliers on mitigation actions
• Implementing energy efficiency measures (LED lighting, air leak reduction, etc.)
• Working on plans to centralize energy supply contracts and identify ways to achieve 100% renewable energy
• Further developing flexible working conditions, including remote work and workcation options

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Declaration
• Supplier Sustainability Manual
• Conflict Minerals Position Statement
• REACH requirements assessment
• Sustainability Assessment Questionnaire (SAQ)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting supply chains

Transition Risks

• Changing market demands for lower-emission products
• Increased costs of energy and supplies
• Government-imposed carbon costs

Opportunities

• Development of new products or services in response to customer requirements
• Resource efficiency improvements
• Recycling opportunities
• Use of lower-emission energy sources

Reporting Standards

Frameworks Used: GRI Standards, Greenhouse Gas Protocol (GHG Protocol), CDP, EcoVadis, UN SDGs

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 13: Climate Action
• SDG 5: Gender Equality

Not disclosed

Sustainable Products & Innovation

• Products designed for higher fuel efficiency, reduced weight, and less energy use

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Management
• Waste Management
• Water Management
• Employee Development & Wellbeing
• Employee Occupational Health & Safety
• Human Rights
• Ethical Business Conduct
• Sustainability in the Supply Chain

Environmental Achievements

• Reduced Scope 1 and 2 CO2e emissions by 21% compared to 2022.
• Ljungsarp, Sweden plant achieved zero Scope 1 and 2 CO2e emissions.
• 45% renewable energy used across manufacturing facilities.
• 10 manufacturing locations were landfill-free.

Social Achievements

• Lowest accident rate in 10 years (nine reported injuries).
• Launched KA’s Learning Lab for employees.
• 73% of new employees received Code of Conduct training.
• 86% of KA’s facilities were externally certified to ISO 45001 safety standard.

Governance Achievements

• 84% of direct material spend was with suppliers who signed the supplier declaration.
• 78% of direct material purchasing spend was with suppliers with a valid sustainability risk assessment.
• 94 purchasing colleagues participated in training on sustainable and responsible sourcing.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to extreme weather events.
• Volatility in energy and commodity prices.
• Increased Scope 3 upstream emissions (although ratio of kg CO2e per Euro spent improved).
• Need to further reduce Scope 3 emissions.

Mitigation Strategies

• Monitoring supply chain for disruption risks and working with suppliers on mitigation actions.
• Thorough budget preparation based on customer demand.
• Initiated projects to calculate, understand, and decrease the carbon footprint of products and materials.
• Developing a roadmap to reduce Scope 3 upstream emissions.

Supply Chain Management

Supplier Audits: Two pilot audits conducted in 2023; planning for at least 10 on-site audits in 2024.

Responsible Procurement

• Supplier Declaration
• Supplier Sustainability Manual
• Sustainability Assessment Questionnaire (SAQ)
• Country risk assessment
• Third-party on-site audits
• Training on sustainable development, responsible purchasing, and human rights.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting supply chains.

Transition Risks

• Changing market demands for lower-emission products.
• Increased costs of energy and supplies.
• Potential cost of carbon through legislation.

Opportunities

• Development of new products or services in response to changes in customer requirements.
• Resource efficiency leading to reduced OPEX spend.
• Recycling opportunities.
• Use of lower-emission sources of energy.

Reporting Standards

Frameworks Used: GRI Standards, GHG Protocol, CDP

Certifications: ISO 14001 (all manufacturing locations), ISO 45001 (86% of facilities)

UN Sustainable Development Goals

• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 13: Climate Action

KA's initiatives contribute to these goals through various programs and targets related to gender equality, employee wellbeing, sustainable production, and climate action.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Emissions Reduction

Environmental Achievements

• Ljungsarp, Sweden plant achieved zero Scope 1 and 2 CO2e emissions.
• Improved CDP Climate Change Rating to a B- score.

Social Achievements

• Achieved best safety performance in the past 10 years with only nine reported injuries.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Challenging automotive market, especially in commercial vehicles in Europe.
• Decline in commercial vehicle production outside China (around 4% in the first half of 2024).
• Further volume reductions in customer production programs in Europe and Asia due to weak economic climate.
• Weakening commercial vehicle market in North America in the second half of 2024 due to economic uncertainty and upcoming presidential elections.

Mitigation Strategies

• Cost optimization program launched in 2023, yielding positive results in reduced cost base in manufacturing and administration.
• Successful issuance of new Nordic four-year bond notes (MEUR 110) to refinance old Euro bonds, maintaining similar interest costs.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather

Transition Risks

• regulatory changes, market shifts

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed