January, 2018

To our stakeholders:

I am pleased to confirm that Nilorngruppen AB reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication. More information about sustainability can be found in our Sustainability report http://www.nilorn.com/sustainability/sustainability-report

Yours sincerely,

Claes af Wetterstedt
CEO

Nilorngruppen commits to being a reliable and responsible partner to customers and suppliers. Business relationships are built on common goals, honesty and mutual respect. Information in respect of the relationships will be treated as confidential and agreements respected.
Nilorngruppen Supplier Code of Conduct and Nilorngruppen Code of Ethics and Business Conduct are implemented to protect human rights and set the standard of operations.

Nilorn Human Resources Policy outlines the expectations of employees and Nilorn, provides guidelines for company travel, IT systems, salaries, benefits, and the managements responsibility to employees and employee development.
During 2017 CSR manager and Sustainability manager were appointed.

We are audited against SEDEX/SMETA in our own factories in Hong Kong, Portugal, Turkey and Bangladesh, no report on violation of human rights.
During 2017 new Nilorn factory opened in Dhaka, several trainings were done.
Nilorn keeps close contact with suppliers through regular meetings and visits to facilities. Formal inspections at facilities are carried out and documented. Feedback is provided and where necessary a corrective action plan with agreed time scales for completion.
Third party audits done at preferred suppliers
Sustainability discussed at board meetings.
reporting annually in sustainability report

Nilorngruppen Code of Conduct lays out the overall ethical approach, including labour related areas, for us and our suppliers. It is part of the contract that we have with suppliers. The Code of Conduct requirements are based on the ETI Base Code.

Nilorngruppen Code of Ethics and Business conduct is applicable to everyone working for Nilorngruppen, worldwide, at all levels of the company. All Nilorn employees are required to read, understand and adhere to the Code and the policies it refers to.

Supplier Code of Conduct, together with other CSR topics, were part of our annual sales conference August 2017.
We do our own inspections in combination with relying on third party audits, such as through BSCI, SEDEX and other initiatives. ISO 9001, ISO 14001 and OHSAS 18001 are also certification scheme used among suppliers,
Nilorn Human Resources Policy outlines the expectations of employees and Nilorn, provides guidelines for company travel, IT systems, salaries, benefits, and the managements responsibility to employees and employee development.Repsonsible for HR policy is CFO.

We are audited against SEDEX/SMETA in our own factories in Hong Kong, Portugal, Turkey and Bangladesh.
Third party audits done at preferred suppliers.
Reporting is done annually in company sustainability report.
Employees are encouraged to report all violations of the Code or other employment policies to their managers, an officer of the company or to the Human Resources department. The registration can be done personally, by phone, by e-mail or by an anonymous letter

We are committed to reducing the environmental impact of everything we do - designing a product, choosing production processes, choosing a supplier, planning the logistics etc.

Our environmental requirements are included in the updated Nilorn Supplier Handbook.
Since 2013, Nilorn Portugal is a bluesign system partner.

We are participating in the Swedish Chemical Group at Swerea IVF, Gothenburg, Sweden. The chemical guidance developed by the initiative is a
support to our organization to avoid producing and importing products containing unwanted substances.
All Nilorngruppen partners are required to sign an agreement stating that the REACH regulation is complied with. This is a non-negotiable requirement.
Environmental requirements part of Supplier Handbook.
Water meter installed at new factory in Dhaka in 2017.

Environmental requirements are part of the agreement with suppliers.
We conduct internal audits which include checking the handling and storage of chemicals used in production.
New Nilorn factory opened in Dhaka, own ETP .

During 2017 also Nilorn East Asia, Hong Kong, became an approved bluesign system partner, previous also Nilorn in Portugal is blusign approved.
Data was collected for energy consumption, staff travels and CO2 emissions was calculated in 2017..

Nilorngruppen is a global producer and trader and our staff are in contact with public
organisations, ordinary citizens, commercial companies and other counterparts
all over the world.
We are determined to maintain high standard of integrity and work
ethics across all areas of activity.

Our anti-corruption policy contains the organization’s rules and restrictions regarding gifts and other kind of appreciations.
It also describes the procedures for employees to raise any ethical questions or to report any breaches or suspected breaches of the company’s code of conduct to.

Anti-corruption policy is distributed internally and part of agenda at annual sales meeting August 2018.
CFO is responsible for policy. MD in each country responsible for the implementation.
Topic is incorporated in the introduction of new employee.

All suspicions about deceptive behaviour, corruption or similar circumstances, must be reported without delay to Nilorngruppen CFO. The registration can be done personally, by phone, by e-mail or by an anonymous letter.
No incidents reported the last year