Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Products and services
• Suppliers
• Anti-corruption
• Employees, health and safety

Environmental Achievements

• Reduced the “cradle-to-gate” carbon footprint of finished hot rolled steel products by 34% per metric ton since 2015.
• 96% of all residual products are recycled or reused.
• Reduced carbon dioxide emissions by 20% and nitrogen oxides emissions by 29% per metric ton since 2015.

Social Achievements

• Reached a Lost Time Injury Frequency Rate (LTIFR) below three.
• Improved employee engagement index above the Nordic industrial benchmark.
• Launched organizational and social work environment initiative

Governance Achievements

• Launched company-wide Code of Conduct and IT-Security training.
• Zero confirmed incidents of corruption and bribery from external and internal sources.

Climate Goals & Targets

Environmental Challenges

• Skills shortages in the locations where Ovako operates.
• Maintaining a diverse workforce.
• Negative environmental impact from operations or suppliers.

Mitigation Strategies

• Engaging with schools and education providers to ensure future skills availability.
• Working continuously to increase the share of women in the workforce.
• Implementing robust monitoring systems and making continuous investments to reduce environmental impact.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct included in all new contracts, imposing standards on legal compliance, business ethics, anti-corruption, working conditions, human rights, health and safety, and the environment.

Climate-Related Risks & Opportunities

Awards & Recognition

• Sustainability Award from Schaeffler

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Safety
• Diversity
• Anti-corruption
• Suppliers
• Human Rights

Environmental Achievements

• Reduced CO2e emissions from operations by 54% since 2015
• Achieved a carbon footprint 80% lower than the global average
• World’s first successful full-scale production trial of using hydrogen to heat steel before rolling
• 94% of all residual products recycled or reused
• Reduced CO2e emissions from steelmaking by 15% since 2017 (Smedjebacken mill)

Social Achievements

• Decreased the rate of lost time accidents by 90% over the past five years (LTIFR 1.9 in 2020)
• Recognized as one of the top 20 most attractive employers in Sweden
• Implemented Covid-19 countermeasures to create a safe work environment
• Launched Ovako Safety Standard to support managers and employees in pursuing zero accidents

Governance Achievements

• Implemented an e-learning module on anti-corruption and bribery for relevant employees
• Zero confirmed incidents of corruption and bribes
• Ovako’s Code of Conduct included in 60% of all supplier agreements

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic impacting business and the global economy
• Skills shortages
• Homogeneous organization
• Potential for serious environmental damage
• Impacts from climate change (forest fires, flooding)
• Risk of corruption and bribery
• Risk of cartels
• Non-compliance with human rights in the value chain
• Trade policy measures
• Risk of future pandemics

Mitigation Strategies

• Implemented cost-saving initiatives
• Engaged with schools and education providers
• Initiatives to increase the share of women in the workforce
• Robust monitoring systems and continuous investments to reduce environmental impact
• Supplier Code of Conduct
• Risk assessments and action plans
• Anti-corruption training and policies
• E-learning module on competition law
• Commitment to respecting human rights and stringent demands on partners
• Active monitoring of world markets
• Measures to handle Covid-19 and prepare for future pandemics

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct included in all new contracts

Climate-Related Risks & Opportunities

Physical Risks

• Forest fires
• Flooding

Opportunities

• Hydrogen for CO2-free heating

Reporting Standards

Frameworks Used: EU Regulation 2019/2088, Swedish Annual Accounts Act

Certifications: ISO 14001:2015, ISO 45001, ISO 50001:2018

Sustainable Products & Innovation

• Hydrogen heating of steel

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Business Ethics

Environmental Achievements

• Achieved 100% carbon-neutral operations from January 2022 (through carbon offsets)
• Reduced relative CO2e emissions from operations by 57% since 2015 (based on CY2021)
• 97% recycled steel in Ovako's products
• 95% lower carbon emissions than the industry average

Social Achievements

• LTIFR (Lost Time Injury Frequency Rate) of 0.8 in the last twelve months (to March 31, 2022)
• 93% decrease in accidents with sick leave since 2015
• Launched an internal sustainability awareness campaign
• Implemented a new tool called PSI (Potential Serious Injury) to improve safety

Governance Achievements

• Updated Ovako’s Code of Conduct
• Updated Environmental and Energy Policy, Health and Safety Policy, Anti-Corruption Policy, Communication Policy, and People Policy
• No known incidents of corruption in FY2021

Climate Goals & Targets

Environmental Challenges

• Supply chain challenges due to the war in Ukraine and rising energy prices
• Securing future expertise in the locations where Ovako operates
• Increasing the share of women in the workforce and achieving greater diversity
• Climate change impacts such as forest fires and flooding

Mitigation Strategies

• Strong foundations in conducting business responsibly and sustainably
• Innovative initiatives and robust business model
• Collaboration with schools and education providers
• Initiatives to encourage diversity in recruitment
• Continuous assessment of risks and appropriate actions to handle the effects of climate change

Supply Chain Management

Supplier Audits: All suppliers are qualified, rated and assessed by an internal standardized process

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Forest fires
• Flooding

Transition Risks

• Energy price increases
• Supply chain disruptions

Opportunities

• Fossil-free hydrogen heating project

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 9001, IATF 16949

Third-party Assurance: KPMG

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• High-performance steel products enabling lighter designs and energy savings

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced relative CO2e emissions from operations by 58% since 2015
• Achieved 100% carbon-neutral operations since January 1, 2022 (through carbon offsets)
• Building Sweden’s largest electrolyzer for fossil-free hydrogen production (expected to reduce Hofors steelmaking emissions by 50%)
• Recycled or reused 84% of residual products in CY2022
• Ovako’s steel products have a “cradle-to-gate” carbon footprint 80% lower than the global average

Social Achievements

• LTIFR (Lost Time Injury Frequency Rate) of 0.8 in the last twelve months (among the lowest in Europe)
• Launched a sustainability awareness campaign to engage employees
• Established a Young Professionals Network
• Continued collaboration with educational institutions to secure future skills

Governance Achievements

• No reported incidents of corruption or anti-competitive behavior in FY2022
• Updated Ovako’s Code of Conduct and other key policies
• Implemented a whistle-blowing function

Climate Goals & Targets

Environmental Challenges

• Rising energy prices
• Inflation
• Supply chain challenges
• War in Ukraine
• Increasing levels of copper in scrap

Mitigation Strategies

• Investing in new rolling stands to reduce carbon emissions
• Collaborating with partners on fossil-free hydrogen production
• Actively pursuing projects to reduce copper in scrap
• Implementing a system to quantify and visualize the efficiency of transportation alternatives

Supply Chain Management

Responsible Procurement

• Ovako Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Forest fires
• Flooding

Transition Risks

• Changes in energy prices
• Regulatory changes

Opportunities

• Development of energy-efficient products
• Hydrogen production

Reporting Standards

Frameworks Used: UN Sustainable Development Goals, Greenhouse Gas Protocol, ISO 14064

Certifications: ISO 14001, ISO 45001, ISO 50001, IATF 16949, ISO 9001

Third-party Assurance: KPMG AB

Sustainable Products & Innovation

• M-Steel® (enables faster machining, reducing energy consumption and carbon emissions)

Awards & Recognition

• Nominated for the Career Company 2023 award and Sweden’s most attractive employer

Environmental Metrics

ESG Focus Areas

• Climate change
• Circularity
• Safety
• Diversity
• Anti-corruption

Environmental Achievements

• Inaugurated the world's first hydrogen plant to heat steel prior to rolling in Hofors.
• Reduced scope 1 & 2 emissions per tonne of sales goods by almost 60% since 2015.
• Reduced absolute emissions by 13% in FY23 compared to FY22.
• 88% of residual products recycled or reused over the past five years.
• Successfully replaced 5,000 tonnes of purchased dolomite annually with dolomite recovered from used refractory bricks, reducing CO2 emissions by over 3,000 tonnes per year.

Social Achievements

• LTIFR (Lost Time Injury Frequency Rate) of 1.5 (one of the lowest in Europe) in the last twelve months.
• 88% reduction in accidents resulting in sick leave since 2015.
• 84% response rate in the global employee engagement survey, showing positive development in all indexes above the industrial benchmark.
• Launched the Green Metalheads campaign to attract young talent.
• Initiated Ovako Women's Network to improve collaboration and support for women.

Climate Goals & Targets

Environmental Challenges

• Challenges in collecting product-specific and verified carbon footprint data along the value chain for Scope 3 emissions.
• Ensuring the availability of necessary expertise in the regions where Ovako operates.
• Underrepresentation of women in the workforce.
• Climate change related risks such as forest fires and flooding.

Mitigation Strategies

• Collaboration with suppliers to improve data quality for Scope 3 emissions and participation in initiatives like MASSIV+.
• Collaboration with educational institutions to support training of the next generation.
• Initiatives to increase the share of women in the workforce and management positions.
• Continuous investments to reduce environmental impact and risk management strategies to handle the effects of climate change.

Supply Chain Management

Supplier Audits: Regular assessments of suppliers on quality, delivery, cost, and sustainability.

Responsible Procurement

• Ovako Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Forest fires
• Flooding

Transition Risks

• Changes in trade policy
• Supply chain disruptions

Opportunities

• Development of energy-efficient products
• Hydrogen technology

Reporting Standards

Frameworks Used: UN Global Compact, CRSD (preparing for FY2025 reporting), ESRS (preparing for FY2025 reporting)

Certifications: ISO 14001, ISO 45001, ISO 50001, IATF 16949, ISO 9001

Third-party Assurance: KPMG AB

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Ovako's initiatives contribute to these goals through the use of recycled steel, fossil-free electricity, and the development of low-carbon steel products.

Sustainable Products & Innovation

• High-performance steel products enabling lighter and more energy-efficient end-products.

Awards & Recognition

• Swedish Wind Energy’s Electrification Award 2023
• Nominated for Career Company Award 2024 and Sweden’s Most Attractive Employer Award 2024.