Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Environment
• Health and Safety

Environmental Achievements

• Implemented energy conservation measures and source separation, yielding positive results in reducing environmental impact.

Social Achievements

• Reduced absence due to illness from 3.2% in 2004 to 3.1% in 2005 (half the nationwide average in Norway).
• Conducted a share programme for all employees, offering shares at a discount and with options.

Governance Achievements

• Reviewed and revised corporate governance documents, including the Group's policy for corporate governance and rules of procedure for the Board of Directors.
• Established an Audit Committee and a Compensation Committee.

Climate Goals & Targets

Environmental Challenges

• Fluctuations in the currency market, especially for the USD.
• Weakening trend in the USD requiring significant cost-cutting measures.
• Reduced share of customer-funded product development due to the reorganization of the Armed Forces.
• Growing competition in most markets.
• Short-term uncertainty about investment decisions due to the reorganization of the Norwegian Armed Forces.

Mitigation Strategies

• Systematic hedging strategy over several years.
• Operative measures to reduce the effects of currency fluctuations.
• Increasing activities abroad.
• Cost-cutting measures.
• Focus on continual improvement measures to boost profitability.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Awards & Recognition

• Distinctions for Good Information and Good English by the Oslo Stock Exchange in 2004

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Health, Safety, and the Working Environment
• Diversity
• Ethics
• Environment

Environmental Achievements

• Energy conservation associated with the Group's premises, as well as source separation

Social Achievements

• Emphasis on Kongsberg being a good place to work with a positive atmosphere based on sound values
• Teaming up with local communities, supporting activities for children and young people as well as local colleges and universities
• Joined the UN Global Compact and Transparency International

Governance Achievements

• Annual review and update of corporate governance documents to comply with the "Norwegian Code of Practice for Corporate Governance"
• Establishment of an Audit Committee and a Compensation Committee

Climate Goals & Targets

Environmental Challenges

• Shipyard delays due to capacity problems and subcontractor issues
• Keen competition from local competitors, especially in Asia
• Persistently low USD exchange rate

Mitigation Strategies

• Moving value-added activities closer to customers
• Expanding operations and setting up new ventures in Asia and the USA
• Implementing initiatives to reduce currency exposure (hedging)

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Environmental Metrics

ESG Focus Areas

• Policy for Sustainability and Corporate Social Responsibility
• Anti-corruption
• Human rights and workers’ rights
• Climate challenge
• Sustainability and corporate social responsibility in the supply chain

Environmental Achievements

• Improved the reporting platform for the climate and environmental accounts, including more locations and expanded sources.
• Developed several products with positive environmental impacts (Green Shipping, Maritime Simulators, Integrated Environmental Monitoring, Wind Power).

Social Achievements

• Conducted a CSR audit at Corporate Services, finding no non-compliance related to human and workers’ rights.
• Developed routines for more systematic analysis, control, reporting and follow up of potential violations of human rights (to be implemented in 2014).
• Contributed to good causes in Zambia, Philippines, Brazil, and India.

Governance Achievements

• Further developed the Group’s compliance system, emphasizing compliance as a line responsibility and part of daily operations.
• Developed guidelines for business conduct, including rules for gifts and entertainment, sponsorship, and agreements with market representatives.
• Regularly performed in-house inspections to ensure compliance with the Code of Ethics.

Climate Goals & Targets

Environmental Challenges

• Air travel accounted for 56% of CO2 emissions in 2013.
• Challenges in reducing emissions due to growth; actual emissions may increase even with relative reductions.
• Need to improve routines to document systematic efforts linked to compliance with human and workers’ rights.
• Work needed to have a completely adequate overview of the risk inherent in the supply chain.
• Corruption case in Romania.

Mitigation Strategies

• Developing metering and support systems to visualize optimal vessel operation.
• Developing governance documents and risk-based action plans within various CSR themes.
• Developing routines to track "Conflict Minerals" in products.
• Developing principles and governance systems for supplier CSR, including training programs for CSR audits.
• Further developing the anti-corruption program and revising the corporate code of ethics.

Supply Chain Management

Responsible Procurement

• Developed principles and governance systems for how suppliers should deal with sustainability and CSR issues.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3.1, UN Global Compact

Third-party Assurance: Deloitte

Sustainable Products & Innovation

• Green Shipping
• Maritime Simulators
• Integrated Environmental Monitoring
• Wind Power

Environmental Metrics

ESG Focus Areas

• Anti-corruption
• Human rights and labour rights
• Climate challenges
• Sustainability and corporate social responsibility in the supplier chain
• Employee health and safety

Environmental Achievements

• Reduced energy consumption by 2.6% compared to the previous year.

Social Achievements

• Continued work on systematic development and follow-up of important areas for compliance with regulations, rules and internal guidelines.
• Implemented a comprehensive anti-corruption program.
• Drew up routines for better, more systematic analysis, control, reporting and follow up of possible violations of human rights.

Governance Achievements

• Annual evaluations and discussions by the corporate Board of Directors on corporate governance.
• Annual review and revision of the Group’s governance documents.
• Evaluated anti-corruption program using external advisors.

Climate Goals & Targets

Environmental Challenges

• Charges filed against Kongsberg Gruppen ASA and Kongsberg Defence & Aerospace AS and an employee, alleging serious corruption.
• Cancellation or postponement of several planned and already awarded projects in the oil and gas segment.
• Reduced demand and the fact that the largest customer no longer had major immediate requirements in the Protech Systems segment.

Mitigation Strategies

• Cooperating with the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway to determine what actually happened.
• Multiple restructuring processes, including a 10 per cent reduction in staffing and co-location of several units in the Oil & Gas Technologies segment.
• Continued to dominate the existing RWS markets in NATO countries and built its order backlog in the Protech Systems segment.

Supply Chain Management

Responsible Procurement

• Target to get an overview of the risk associated with sustainability and corporate responsibility in the supply chain, and to ensure that the risk is manageable through controls and measures.

Climate-Related Risks & Opportunities

Opportunities

• Utilise our unique technological expertise to develop products that will reduce greenhouse gas (GHG) emissions.

Reporting Standards

Frameworks Used: GRI G3.1, UN Global Compact

Third-party Assurance: Deloitte

Sustainable Products & Innovation

• Environmental monitoring systems
• Green shipping solutions
• Subsea Storage Units
• Maritime simulators
• Wind power technologies

Environmental Metrics

ESG Focus Areas

• Strategy for sustainability
• Anti-corruption
• Human Rights and Workers’ Rights
• Climate challenge
• Sustainability and corporate social responsibility in the supplier chain
• Our employees

Environmental Achievements

• Increasing number of products and solutions contributing to reduced emissions (qualitative)

Social Achievements

• Annual evaluation of businesses’ possible breaches of human rights and workers’ rights, revealing no serious breaches (qualitative)
• Continued work on systematic development and follow-up of important areas for compliance with regulations, rules and internal guidelines (qualitative)

Governance Achievements

• Annual review of the Group’s key governance documents to ensure that these are updated and cover the relevant topics (qualitative)
• External evaluation of KONGSBERG’s anti-corruption programme confirming satisfactory program (qualitative)

Climate Goals & Targets

Environmental Challenges

• Challenging oil and gas market
• Increased margin pressure and uncertainty in some market segments
• Corruption case in Romania

Mitigation Strategies

• Capacity adjustments and restructuring in oil and gas sector
• Diversified maritime business
• Comprehensive anti-corruption program
• Cooperation with Økokrim to clarify circumstances of corruption case

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Systematic efforts with corporate responsibility in the supplier chain (qualitative)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of climate technology (qualitative)

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: Null

Third-party Assurance: Deloitte

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Remote tower solutions
• Ocean Farming
• Fishery sensor systems
• Wind power solutions
• Environmental monitoring systems
• Green shipping solutions

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Corporate Social Responsibility
• Climate Change
• Human Rights
• Employee Rights
• Anti-corruption
• Health, Safety, and Environment (HSE)

Environmental Achievements

• Reduced CO2 emissions by 15% from 2015 to 2016 (due to lower travel and transport emissions).
• Improved Carbon Disclosure Project (CDP) score from E in 2015 to B in 2016.

Social Achievements

• No serious environmental pollution incidents reported in 2016.
• Reduced total number of work-related injuries (TRI) to 3.5% in 2016 from 4.1% in 2015.
• Total sickness absence in the Group was 2.5% (2.6% in 2015).
• Rumania corruption charges dropped.

Governance Achievements

• Annual review and update of corporate governance documents.
• Extensive external evaluation of KONGSBERG’s anti-corruption program in 2014 (confirmed compliance with national and international regulations).
• Development of a whistleblower system with a web-based notification channel (2017).

Climate Goals & Targets

Environmental Challenges

• Challenges in the oil and gas market leading to reduced operating revenues in Kongsberg Maritime.
• Market challenges affecting Kongsberg Maritime's EBITDA margin (restructuring costs and impairments).

Mitigation Strategies

• Extensive restructuring and reorganisation of Kongsberg Maritime.
• Investment in new concepts and solutions in Kongsberg Maritime.
• Cost-cutting measures in Kongsberg Maritime to adapt to the weak oil and gas market.
• DeltaOne efficiency program completed.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• Solutions for green shipping
• Solutions for wind power

Environmental Metrics

ESG Focus Areas

• Climate and environment
• Human Rights
• Responsible business conduct
• Integrity and anti-corruption
• Supply chain responsibility
• Attractive employer
• HSE (Health, Safety, and Environment)
• Diversity and inclusion
• Cyber and Information Security

Environmental Achievements

• 11% reduction in total CO2 emissions (mainly due to reduced business travel and lower emissions from freight)
• Delivered zero-emission technologies for shipping (Yara Birkeland, Hyseas)
• Improved data quality in climate accounts and set emission reduction targets

Social Achievements

• Increased proportion of women in the workforce to 20.4% (total) and 25% (leadership)
• Established a high-priority project to develop and implement a comprehensive human rights due diligence program
• Achieved 79% completion rate for ethics and compliance training (including human rights module)

Governance Achievements

• Updated climate strategy and established collaboration with Science Based Targets initiative
• Completed 19 audits of market representatives (approx. 25% of total)
• Implemented automated processes for conflict of interest management

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Data limitations in climate accounts
• Achieving 100% completion rate for ethics and compliance training
• Managing human rights risks across the value chain
• Ensuring compliance with the Norwegian Transparency Act and EU Taxonomy

Mitigation Strategies

• Active management of supply chain and logistics
• Improved data quality in climate accounts
• Implemented a new learning platform for training
• Developed a comprehensive human rights due diligence program
• Ongoing risk assessments and audits

Supply Chain Management

Supplier Audits: 111 audits in 2021 (including ESG module)

Responsible Procurement

• Supplier Code of Conduct (including human rights requirements)
• Integration of Supplier Conduct Principles (SCP) into supplier agreements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes in the maritime sector (IMO, EU ETS, Fit for 55)
• Market shifts related to the energy transition

Opportunities

• Development of energy-efficient products and services
• Increased demand for zero-emission solutions

Reporting Standards

Frameworks Used: GRI Standards (2016), Core level, TCFD (Task Force on Climate-related Financial Disclosures), UN Global Compact

Certifications: ISO 14001 (all business areas), ISO 9001 (all business areas), AS9100 (KDA), AQAP2110 (KDA), AQAP2210 (KDA), ISO 27001 (all business areas), ISO 45001 (KM and KDI)

Third-party Assurance: Deloitte AS (limited assurance)

UN Sustainable Development Goals

• Goal 13: Climate action
• Goal 14: Life below water
• Goal 16: Peace, justice and strong institutions

Contributions through core business activities in defense, maritime, energy, fishery, and aerospace sectors

Sustainable Products & Innovation

• Zero-emission technologies for shipping
• Hydrogen-based propulsion system
• Dynamic digital twin solution (Kognitwin Energy)
• Ship-to-cloud solution (Vessel Insight)

Awards & Recognition

• Industry top-rated badge by Sustainalytics (2022)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Biodiversity
• Human Rights
• Anti-corruption
• Responsible Supply Chain

Environmental Achievements

• Reduced GHG emissions by 3.0% in absolute numbers and 16.3% relative to sales (Scope 1 and 2)
• Developed science-based climate targets aligned with the Paris Agreement
• Established Kongsberg Renewables Technologies
• Delivered several hybrid solutions, propulsion systems, and hull upgrades to reduce shipping emissions (23% reduction in CO2 emissions for Hurtigruten ships)

Social Achievements

• Achieved target of increasing the share of women across the company
• Improved safety performance
• Implemented a comprehensive human rights due diligence program
• Organized the first annual Diversity, Inclusion, and Belonging Summit

Governance Achievements

• Disclosed sustainability and climate KPIs linked to executive compensation
• Expanded the mandate of the Board Audit and Sustainability Committee to include sustainability
• Updated governance, policy, and risk assessments
• Implemented a comprehensive compliance management system

Climate Goals & Targets

Environmental Challenges

• Global geopolitical uncertainty impacting supply chains and energy markets
• Increased inflation and potential economic recession
• Supply chain disruptions due to extreme weather events
• Transition risks related to decarbonization regulations and market shifts in the maritime and energy sectors
• Balancing governance and license to operate with responsible resource consumption and environmental footprint reduction

Mitigation Strategies

• Developed science-based emission reduction targets and a Net-Zero transition plan
• Established a robust climate risk management process including stress testing
• Implemented a comprehensive human rights due diligence program
• Developed guidelines for circularity, Life Cycle Assessment, and materials in product management
• Strengthened M&A due diligence processes to include climate and environmental assessments
• Increased investments in product development and decarbonization solutions
• Improved data gathering processes for emissions reporting
• Implemented a new HSE reporting system
• Enhanced supply chain audit program with focus on ESG

Supply Chain Management

Supplier Audits: 104 audits in 2022

Responsible Procurement

• Supplier Conduct Principles
• Prohibition of conflict minerals
• Due diligence processes
• ESG assessments

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting supply chains and operations

Transition Risks

• Market shifts related to decarbonization
• Regulatory changes impacting maritime and energy sectors
• Reduced access to capital due to sustainability requirements

Opportunities

• Increased demand for low-emission technologies and services
• Development of new revenue streams in renewables and other sustainable sectors

Reporting Standards

Frameworks Used: GRI, TCFD, UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 9001, ISO 27001, AS9100, AS9110, AQAP2110, AQAP2210

Third-party Assurance: Deloitte

UN Sustainable Development Goals

• Goal 4: Quality Education
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action
• Goal 14: Life Below Water
• Goal 16: Peace, Justice and Strong Institutions
• Goal 17: Partnerships for the Goals

Kongsberg's initiatives contribute to these goals through technology development, sustainable solutions, and responsible business practices.

Sustainable Products & Innovation

• Hybrid propulsion systems
• Zero-emission vessels
• HullSkater technology for biofouling
• Digital twin technology for optimizing operations

Awards & Recognition

• Industry Top Rated company by Sustainalytics