To our stakeholders:

I am pleased to confirm that Aibel reaffirms its support of the United Nations Global Compact. We do our utmost to conduct our business in line with the ten principles related to human rights, labour standards, 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. In order to take sustainability to the next level in our organisation, we have initiated systematic sustainability reporting in line with the internationally recognised Global Reporting Initiative (GRI) standard. Our first sustainability report is included in our annual report for 2017, which is available from our website: http://aibel.com/en/corporate-responsibility/reporting.

I am convinced that visualising and communicating efforts and results under the topic of sustainability will lead to many new opportunities to excel and improve in years to come.

Sincerely yours,
Mads Andersen
President and CEO

At Aibel, we promote a culture based on equal treatment of employees, mutual respect and trust. We offer our employees fair and reasonable working conditions and we do not discriminate. This is also described in Aibel’s HR Policy. We comply with the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work 1998. We also respect the freedom of employee association and the right to collective bargaining. Aibel has specific policies for Human Rights and for Child Labour.

Aibel requires all suppliers to sign a Supplier Code of Conduct prior to entering into any business relationship with us. The Supplier Code of Conduct covers Human Rights, Child Labour, Forced Labour, and Labour Standards, as well as other topics such as anti-corruption.

Aibel performs a Country Risk Assessment of all markets in which the company wishes to establish business operations. The assessment includes a review of risks related to Human Rights.

For 2018, the following key-goals have been established for Labour Standards and Human Rights :

- Aibel will pass all Customer Audits on Human Rights and labour standards
- We will conduct a Human Rights Assessment of our operations in Thailand
- We will train 90% of our employees in our policies and procedures on human rights
- We will include appropriate terms in our policies and contractual documentation, obliging suppliers and contractors to comply with the Modern Slavery Act

Aibel has a global Whistleblower reporting mechanism available to all employees world-wide. The channel is anonymous, available 24/7 online or via smartphones/QR codes. We also have standard grievance mechanisms through our employee manual, with points of contact in our Compliance Department and our Human Resources Department.

Aibel provides annual e-learning courses to all employees and hired-in staff covering our Code of Conduct. This course includes awareness of Human Rights and Labour Standards. It is a mandatory annual course. In addition, classroom training is provided to approx. 25% of all staff for more detailed course training.

In 2017, Aibel conducted a stakeholder survey to ensure stakeholder engagement as part of our first GRI report. The stakeholders were identified as owners, customers and key suppliers. Our GRI report was published on the Aibel website in 2018 along with our first Sustainability Report.

In 2017-2018, Aibel has been subject to external audits by customers related to Human Rights performance. These audits were conducted in our Norway and Thailand locations, and no major findings were noted. During the audit in Thailand, it was found that Aibel Thailand did not have a remediation process for handling under-age workers. Although no under-age workers were identified, and although Aibel Thailand's HR policies state that the minimum working age is 18, Aibel responded to the audit findings by development and implementing a remediation plan to be effective should instances of under-age workers present in the future.

Aibel has not been involved in any investigations or legal cases related to Human Rights. Any potential incidents would be handled by Aibel's Chief Compliance Officer through the Compliance Committee, which includes senior representatives from Compliance, Legal, Human Resources, Finance, and an Employee Representative.

At Aibel, we promote a culture based on equal treatment of employees, mutual respect and trust. We offer our employees fair and reasonable working conditions and we do not discriminate. This is also described in Aibel’s HR Policy. We comply with the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work 1998. We also respect the freedom of employee association and the right to collective bargaining.

These principles relate to the rights to freedom of association and collective bargaining, the elimination of forced labour,
child labour and discrimination in the work place, and are reflected in Aibel’s Code of Conduct, in our policy on Corporate Responsibility and in our dedicated policies on human rights and child labour. Aibel was also re-certified according to OHSAS 18001, Occupational Health and Safety System, in 2017.

The following HSSE Targets are established for Aibel in 2018:

■ 0 Philosophy
■ 0 serious Lost Time Injuries
■ 0 serious work related illness
■ Serious Incident Rate (SIR) < 0.3 per million hours
■ Total Recordable Injury rate (TRIR) < 2,7 per million hours
■ Falling Object Frequency (FOF) < 0.2 per million working hours
■ Sick Leave:
■ Office personnel < 3 %
■ Operators < 4.6 %
■ Tot. Norway < 3.5 %
■ Tot. Aibel < 3.4 %
■ HSE My Responsibility Training > 90%
■ Proactive KPI goals in BU/Projects 100 %

Environmental targets are detailed under the Environment section of this COP.

Please refer to the section on Human Rights for a description of our grievance mechanism (whistleblowing channel).

Equal opportunities and fair treatment:
Aibel promotes employee involvement and we seek to build cooperation models with employee representatives in all business units to involve employees in the development of the company. In Norway, workers are legally allowed to choose to form, belong to or not belong to a union or any other type of workers’ organisation. In Singapore, workers and employers are free to form their own organisations to represent their interests and there are legal provisions that protect their rights. The Industrial Relations Act regulates collective bargaining activities of unions and employers. Although we see no reason to worry, we still would like to monitor and ensure that these rights give them the possibility to influence and contribute in developing the company. Therefore, we intend to survey the employees to see whether we need to take any further actions to ensure this. Freedom of association and collective bargaining is not prohibited in Thailand, where the Industrial Relations Act regulates collective bargaining activities of unions and employers. However, there are no Trade Unions registered in Aibel Thailand. To promote employee involvement, a Welfare Committee consisting of elected employee representatives have quarterly meetings with management representatives. They monitor the welfare and wellbeing of employees and propose welfare initiatives. In addition we have local HSE committees, consisting of both management and employee representatives hold monthly meetings in order to improve safe working conditions and a good working environment. There is also a Working Environment committee.

In 2017 Aibel carried out a benchmarking, comparing wage levels with competing companies to ensure that we have fair and competitive terms in Thailand and Singapore.

For health and safety, the following activities were carried out in 2017:
- HSE training "My responsibility" was rolled out for all employees. A total of 5186 workers have completed the training between October and December 2017. These training courses also include workers from sub-contractors.
- Increased focus on falling objects by requiring a course "Preventing falling objects" at all our yard operations. 1218 workers in Norway and 2307 workers in Thailand have completed the course.
- Scaffolding user training provided to 7729 users in 2017.
- New HSE reporting system implemented, which is web-based and can be used also from tablets and smartphones.
- Emergency drills were performed in connection with Statoil, the Joint Rescue Coordination Centres (JRCC) and the Norwegian Business and Industry Security Council (NSR).
- Aibel joined a security network organized by the Petroleum Safety Authority (PTIL), and several actions have been taken to improve IT, travel, ISPS/Yard and physical security.

Health and Safety performance is continuously monitored and followed up by actions for improvements.
Examples of this in 2017 was external DNV follow-up audit on the OHSAS 18001 certification, performed of management, many projects and locations.
All serious actual and potential incidents are investigated to make sure the organization implements learnings and improvements. One of the investigated incidents in 2017 was a incident during assembly and installation of a 1m2 steel plate. The steel plate (219kg) toppled against one person and hit him in the hip region. Fortunately, a toolbox that stood beside the person decreased the injury. The direct cause of the incident was that the stoppers failed due to welding without debris. The incident did not result in serious injury.

In 2017, there have not been any Investigations, legal cases, rulings, fines and other relevant events related to the Global Compact Labour principles.

As part of managing our environmental impact, Aibel has been certified for some time in accordance with the global environmental standard ISO 14001. In 2017, we revised and updated our systems to comply with the 2015 versions of ISO 14001. The ISO certificate confirms that our management of environmental risks and opportunities are aligned with the global expectations and, equally important, the process helps us identify and improve our environmental initiatives.

As part of our action plan for 2018, Aibel will perform compliance measurements and establish processes for energy management in accordance with the ISO 50001
standard. We plan to carry out a minimum of two energy reduction projects. Initiatives will be taken towards our suppliers of transport and logistic services, waste services and travel agency with the aim of improving the overview and data for GHG (Greenhouse gases) emissions related to direct and indirect activities and processes.

For 2018, the following key-goals have been established:

- Aibel will have zero discharges to ground and sea and > 80 % sorting of waste
- We will perform mapping of indirect and direct GreenhouseGas emissions (CO2) to identify actions and reporting indicators
- We will establish processes for energy management in accordance with ISO 50001
- We will establish Aibel as a preferred supplier of HVDCplatforms in the European offshore wind market.
- Two major energy reduction projects
- CO2 reduction for transportation

With the help of grants from Enova, Aibel invested in a new shore power facility with two 1,000 kVA converters in Haugesund to provide electrical power to ships and platforms at the yard and thereby avoid the use of diesel generators. On a 3-month-long yard stay at the turn of the year 2016/17, we saved 4500 litres of diesel each day and reduced CO2 emissions by a total of 900 tonnes. During the commissioning period of the Johan Sverdrup Drilling Platform from September 2017 until spring 2018, the figures will be 9,000 litres of diesel saved daily and a reduction of a total of 4,500 tonnes of CO2 for the whole period. In total, the facility may reduce CO2 emissions from the yard by up to 34 tonnes every day.

Aibel has a target of minimum 80% sorting/separation of waste. The result for the whole company in 2017 is 84%,
which is an improvement from 80% in 2016. All wastes are handled by waste subcontractors who provide the yards and offices with waste containers and collectors. All waste subcontractors have undergone an internal supplier approval process. All suppliers have required approvals and authorisations from authorities. There is continuous focus of improving logistics and waste solutions.

Aibel has focus on using video-meetings/collaboration rooms to reduce travel costs and travel-related emissions. During 2017, investment and improvement have been made in IT and technical solutions to facilitate and improve communication between the locations. The 86 collaboration rooms were in use 25,325 hours, which represents an increase of 6% compared with 2016. The amount and distance of travel by aeroplane has been measured. The total distance travelled in 2017 was 13,978,000 kilometres. This is a reduction of approximately 25% from 2016 to 2017. Consequently, the CO2 emission has been reduced, from 2,839 tonnes to 2,124 tonnes.

Aibel has not been involved in any Investigations, legal cases, rulings, fines and other relevant events related to the Global Compact environmental principles in 2017.
In 2017, there have been no significant incidents related to external environment.

Compliance with our Code of Conduct is a prerequisite for working at Aibel. It guides us in our daily challenges; it helps us to do what is right and to safeguard Aibel’s reputation. These guidelines apply to all of us no matter where we are in the world, offshore as well as onshore, managers as well as employees. We have to make daily efforts to fulfill the expectations we set for ourselves.

In addition to the Code of Conduct, Aibel has dedicated policies for Anti-Corruption & Bribery and for Integrity Due Diligence of Third Parties. These policies contain a zero tolerance statement for all corruption, including facilitation payments.

Aibel also requires all existing and potential suppliers to sign a Supplier Code of Conduct which reflects our own policies as well as the established principles of international frameworks such as the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act.

In 2018, we aim to cooperate closely with our suppliers and customers with a view to better understanding the expectations and the consequences of stricter supply chain requirements. Therefore, we plan to arrange a workshop to align our views and open a dialogue on this issue. We also plan to further develop our work on training and awareness within the organisation, especially on human rights-related topics.
For 2018, the following key-goals have been established:

- Zero incidents of corruption
- 90% of our employees shall have completed e-learning or class-room training on Aibel’s Code of Conduct
- All new business associates in 2018 shall be subject to an IDD screening, according to our internal procedures
- A minimum of 10 compliance audits of critical subcontractors and/or business partners.

Aibel has implemented a Whistleblower reporting mechanism that is available globally and offers anonymous reporting via computer, tablet, smart phone or telephone calls. All reports are directed to the Compliance department for confidential investigation and reporting.

Aibel requires all employees to complete an annual electronic certification of our Code of Conduct. In 2017, the response rate was 97%. In addition, Aibel conducts classroom training for select managers and staff based on a risk assessment related to job function.

The overall responsibility for anti-corruption is with the Chief Compliance Officer (CCO) and the Compliance Department. The CCO has established a Compliance Committe which discusses specific cases and provides recommendations for actions. The CCO has direct access to the Board of Directors.

In 2017, no reported cases or internal investigations resulted in any legal cases, rulings or fines related to corruption and bribery.

In 2017, our Internal Audit team conducted a Compliance Survey to assess the effectiveness of our compliance programme. Overall, the survey showed that the effectiveness of our programme has improved since the previous survey from 2015. One of the respondents made the following comment: “I like the focus on culture here and I fully agree. I do think that compliance has become part of Aibel culture.”

Aibel is regularly audited by our customers on the matter of compliance and anti-corruption. In 2017, we were audited by a major client for our Singapore operations and no negative findings were noted related to our compliance program or anti-corruption efforts.