Climate Change Data

Environmental Metrics

ESG Focus Areas

• Long-term commitment
• Responsible business
• Sustainable products and services
• Competent employees in a safe and secure work environment

Environmental Achievements

• All European units within the Fibre business area joined Operation Clean Sweep to prevent plastic materials from reaching marine environments.
• A paint recycling project was carried out in the Technical Textiles business area, saving resources and money.
• IFG Drake developed a PFAS-free protective apron with a longer lifespan than other common disposable products used in American healthcare.

Social Achievements

• Implemented a Group-wide Code of Conduct.
• Griffine implemented an action plan for enhanced safety, resulting in 100 accident-free days.
• Duroc Rail worked to reduce sick leave, increase employee involvement, and introduce systems for skills development and job rotation.

Governance Achievements

• Adopted a Group-wide policy package including a code of conduct, CSR policy, and an anti-corruption and bribery policy.
• Implemented a whistleblower procedure, including an anonymous whistleblower function.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly affected the second half of the financial year, leading to reduced demand in some entities.
• Overcapacity and fierce competition in the European staple fibre market.
• High absence frequency caused by injuries in the Technical Textiles business area, particularly in Griffine.
• Skills supply challenge in the long term, with a relatively large part of the workforce over 50 years and too few employees under 30.

Mitigation Strategies

• Adjusted the business according to reduced demand during the COVID-19 pandemic and received governmental support.
• Initiated a change program within the European unit, including organisational changes and capacity adjustments.
• Developed and launched an ambitious action plan with a zero-vision for safety at Griffine, including investments in enhanced machine safety and a systematic approach to raise current security issues.
• Working with a number of universities in various business areas to attract and retain competent staff, focusing on sustainability and innovation.

Supply Chain Management

Responsible Procurement

• Group-wide Code of Conduct

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• PLA-fibre
• PFAS-free protective apron

Environmental Metrics

ESG Focus Areas

• Acquisitions
• Climate impact
• Anti-corruption and business ethics
• Health and safety
• Diversity and equality
• Responsible, long-term business

Environmental Achievements

• Asota transitioned to renewable electricity as of January 2022.
• New power plant using green gas to generate electricity and steam commissioned in Asota.
• Electricity consumption fell by almost 10 percent through efficiency improvements.
• Inefficient electrical heating replaced with gas-fired central heating.
• More fiber types are now recycled in the manufacturing process.
• All fossil-fueled vehicles are being replaced by hybrids.
• Production waste reduced by 30 percent through recycling.
• 30 percent of all lighting replaced by LEDs (aiming for 100% by 2025).

Social Achievements

• Launched cultural transformation journey to improve well-being and create a safer workplace at Drake Extrusion.
• Increased collaboration with local schools and universities to attract future talent.
• Increased employee healthcare benefits to cover mental health and social support.
• Implemented changed shift patterns to improve work-life balance.
• Special initiative for recruiting newly arrived refugees fully implemented.
• All sales managers underwent anti-bribery training.
• Pregnancy pay introduced at Duroc Rail.
• Employees have access to CBT programs and psychological counseling at Duroc Rail.

Governance Achievements

• Implemented Group-wide training in anti-bribery and corruption.
• Strengthened requirements in each company’s regulations regarding anti-bribery and corruption.
• Implemented Group-wide processes for Talent & Succession Management.
• Implemented a performance management process for all salaried employees (others to follow).

Climate Goals & Targets

Environmental Challenges

• Griffine SA (Cotting Group’s French arm) reported very large losses due to semiconductor shortage and inability to pass on increased costs to customers.
• Supply chain disruptions and raw material price increases affected several companies.
• Labor shortages, particularly in the US, impacted Drake Extrusion’s delivery performance.
• Weakening demand in certain markets due to economic factors.
• Price pressure from Turkish operators affected Cotting Group’s Belgian arm.
• Continued delivery delays from manufacturers due to component shortages affected Universal Power Nordic.

Mitigation Strategies

• Plans are being made for a Duroc without Griffine (considering a possible sale).
• Cost-cutting programs were implemented in several companies.
• Strategic efforts were begun to find and retain personnel at Drake Extrusion.
• Successful cost-cutting measures such as switching production methods and adapting production capacity at Plastibert.
• Previously implemented cost-saving measures improved profitability at Universal Power Nordic.

Supply Chain Management

Responsible Procurement

• New policy for responsible purchasing to be completed and published in 2022 at Cotting Group.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards Core

Certifications: ISO 9001 (eight of eleven production units), ISO 14001 (eight of eleven production units)

Third-party Assurance: PricewaterhouseCoopers AB

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 5: Gender Equality
• 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

Duroc's operations and initiatives contribute to these goals through various policies, targets, and action plans.

Sustainable Products & Innovation

• PFAS-free protective apron with longer life (IFG Drake and STI Fabrics)
• Climate screens that optimize cultivation process and reduce environmental impact (Cresco)
• Ground cover fabrics made from PLA biobased plastic (Cresco)
• Laser surface treatment for component repair and new production (Duroc Laser Coating)

Environmental Metrics

ESG Focus Areas

• Acquisitions
• Climate impact
• Anti-corruption and business ethics
• Health and safety
• Diversity and equality
• Responsible, long-term business

Environmental Achievements

• Cresco, Plastibert, and IFG Exelto installed solar panels.
• IFG Asota is investing in energy production with lower climate impact.
• Drake Extrusions reduced energy consumption by 6% with more efficient compressors.
• Reduced waste in Fiber & technical textiles (3.1% in 2022-2023 vs 3.9% in 2021-2022).

Social Achievements

• Successful strategic work with retaining and training personnel at Drake Extrusion, dramatically reducing personnel turnover.
• Positive outcomes in several companies in activities to increase attractiveness as an employer.
• Minor impact of Covid-19 pandemic resulting in less sick leave.

Governance Achievements

• Implemented a group-wide Code of Conduct.
• Implemented a uniform group-wide process of risk identification and action.
• Used a self-assessment tool to evaluate policies and guidelines, identifying common weaknesses.
• No signs of corruption or other discrepancies found.

Climate Goals & Targets

Environmental Challenges

• Higher energy prices, uncertainty in the global market, and inventory adjustments by customers negatively impacted IFG.
• Weakening sales volumes in filament yarns at Drake Extrusion due to higher interest rates and inflation.
• Market downturn at Cresco due to inflation and increased costs for customers, leading to decreased investment rates and negatively affecting sales volumes.
• Decreased volumes at Plastibert due to global market conditions, increased raw material prices, and compulsory pay rises in Belgium.
• Reduced EBIT margin at DMT Group due to growth phase investments in personnel and processes.

Mitigation Strategies

• IFG continued its change management program focusing on technical fiber segments.
• Drake Extrusion focused on retaining and training personnel.
• Cresco reduced costs through a review of day-to-day and personnel costs.
• Plastibert increased prices and implemented cost-cutting measures.
• DMT Group made strategic investments in workforce and ERP system.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards Core

Certifications: ISO 9001 (8 of 11 production units), ISO 14001 (8 of 11 production units)

Third-party Assurance: PricewaterhouseCoopers AB

UN Sustainable Development Goals

• Goal 3
• Goal 9
• Goal 5
• Goal 12
• Goal 7
• Goal 13
• Goal 8

The report details how initiatives contribute to these goals through policies and actions.

Sustainable Products & Innovation

• PFAS-free protective apron with longer service life (Drake Extrusion and STI Fabrics)
• Climate control offering combining up to four different materials to reduce energy consumption (Cresco)
• Ground cover fabrics made from PLA biobased plastic (Cresco)

Environmental Metrics

Environmental Achievements

• Plastibert implemented new technology in production with the aim of eliminating hazardous solvent emissions.

Environmental Challenges

• Continued volatile and subdued demand in the polymer companies.
• Lack of major projects in the cultivation industry.
• Delays in the deliveries of sold machine tools in the DMT Group.
• Setbacks in the fiber and cultivation industries.
• Slowdown in sales in most companies in the Group.
• Uncertainty continues to prevail in the fiber industry in Europe and the United States.
• A more challenging business environment will continue to affect business negatively.
• Ongoing strike in Finland affected Duroc Machine Tools sales.

Mitigation Strategies

• Cost-saving program in place for fiber units.
• Conservative approach to ride out the extraordinary storm that has befallen the fiber-related companies.
• Duroc constantly analyzes the global situation and acts accordingly to adapt the business.
• The Group is financially well-equipped to meet poorer economic conditions.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• DMF-free technical textiles
• Recycled and bio-based fibers
• Energy-saving climate screens for greenhouses
• Recyclable ground-cover fabric made from PLA