To Beijer Almas stakeholders:

I am pleased to confirm that Beijer Alma 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 and sustainability strategy and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication - our corporate website and the combined annual report and sustainability report .

Sincerely yours,

Henrik Perbeck, president and CEO, Beijer Alma

Our Code of Conduct serves as a guide for our employees and partners. By applying the Code:
■ we comply with legislation, the UN Global Compact, the UN Convention on the Rights of the Child and other international agreements and guidelines.
■ we contribute to sustainable development, including health and social welfare.
■ the Code places demands on our employees and partners when it comes to acting honestly. Bribes are prohibited.
■ We treat all employees fairly and with dignity and respect.
■ We do not distinguish between our employees on the basis of religion, gender, age, disability, sexual orientation, nationality, political opinion, social background or ethnic origin.
■ We support and promote diversity.
■ We do not tolerate harassment, threats or discrimination.
■ We respect all employees’ right to freedom of association.
■ We do not permit child labor, illegal labor or forced labor.

- A lack of business ethics and human rights violations – in the Group companies or among our suppliers – could harm Beijer Alma’s reputation and business operations.

- We prevent corruption, anti-competitive practices and human rights violations through information, training, internal regulations (the Code of Conduct).

By follow-ups, including audits and employee surveys. The whistleblower system is also part of this work.

Outcome 2019:

No irregularities, near misses or whistleblower incidents pertaining to human rights were identified in the preparation of this report for 2019.

Our sustainability work is based on the Ten Principles of the UN Global Compact, an initiative to promote corporate social responsibility (CSR). The standard
for social responsibility (ISO 26000) also provided guidance in the formulation of our Code of Conduct. Regarding labour, we devote particular focus to the following area:

■ Our operations are to be conducted so that environmental and work environment legislation is followed with an ample margin.
■ We have a vision of zero tolerance when it comes to workplace accidents and do not compromise on workplace
health and safety.
■ We take a preventive and systematic approach in order to create a healthy, safe work environment.
■ We offer our employees opportunities to develop their professional knowledge and skills.

- Workplace accidents and injuries can have a significant impact on employees’ lives and health. In addition to safety, workplaces are to be associated with opportunities for personal development. Otherwise recruiting becomes difficult and, over the long term, the Group’s competitive ability could be weakened.

- Responsibility for equality issues is decentralized and lies with the individual units. Salary rates adhere to legislative requirements, exceed minimum wages and are entirely in line with market rates. As a result of cultural and legislative differences, the degree to which employees are covered by collective agreements varies between countries.

Preventive measures include systematic risk analysis, work environment assessments, training, safety inspections and investments in technical measures.

Work environment committees, internal audits and incident reporting are important preventative measures when it comes to creating safe workplaces. Accident and absence statistics are monitored and linked to tangible measures. Work environment issues and employee requests for personal development are identified in employee surveys and development talks.

We regularly follow up our companies’ work on sustainable development and CSR. Follow-ups take the form of annual questionnaires,
feedback and formal audits.

Outcome 2019:

During the year, the rate of short and long-term sickness absence remained low. No violations of the Code of Conduct
related to equality, respect or diversity were reported.

Regular employee surveys, which were carried out at 24 (12) units, serve as an important tool. The majority of employees were satisfied with their jobs. Some 1,300 employees (1,120) participated in development talks. Approximately 32,900 (21,500) hours of training for managers and sales and production employees were completed during the year. This corresponded to about 12 hours (8.5) for these categories of employees.

The environmental objectives focus on the folowing two areas and are based on the materiality analysis previously carried out by
the Group:

- More efficient use of resources: Beijer Alma’s use of energy, materials and other natural resources is to be efficient and
economical. Wherever possible, recycled resources are used in order to contribute to sustainable development.

Beijer Alma has a Group-wide energy objective. It is based on reducing energy consumption by 10 percent by 2023 compared with 2018. Efficiency enhancements
The performance measure used is energy consumption/net revenues (MWh/MSEK). By 2023, at least 95 percent of all waste is to be recycled as materials or energy. Compared with the level in 2018, the relative amount of waste (tons of waste/MSEK in net revenues) should also decrease by 2023.

- Reduced climate impact: Beijer Alma supports the UN SDGs for 2030 and actively contributes to reducing climate change and its consequences. We do so by reducing our emissions of climate-affecting gases and by evaluating how climate change affects the Group’s activities.

The objective is for CO2 equivalents from energy consumption to be reduced by 25 percent by 2023 compared with 2018. This is a relative objective and the performance measure used for emission intensity is tons of CO2/MSEK in net revenues.

Insufficient control of energy consumption and higher energy costs could have a negative impact on the operations, for example in terms of the purchase of electricity, for which prices are expected to increase in the long term. Taxes and charges for fossil-based fuels are also expected to rise.

The Group monitors developments and evaluates alternative energy sources, such as solar panels. A Group-wide energy-efficiency objective has been established. Measures – including energy audits – are being carried out at our plants to ensure that our energy consumption is efficient and can be reduced in line with the sustainability objectives.

Certified environmental management systems are a component of the sustainable development strategy. ISO 14001 provides a systematic approach to environmental
work and contributes to continuous improvements.

When it comes to energy, improvement initiatives include energy audits, installing new and more efficient production equipment and better operation of machinery and other technology – for example, ventilation and heating systems.

Regarding climate impact, the purchase of green electricity and energy-efficiency enhancement measures are helping to reduce the Group’s CO2 emissions from fossil fuels. Several of the Group’s units have local action plans for CO2 emissions. Energyefficiency enhancement, transitioning to fossil-free energy, streamlining or reducing transportation and installing treatment equipment in production lines are important tools for reducing the Group’s carbon footprint.

Environmental audits are part of the Group’s continuous efforts to monitor and improve the environmental management system. Beijer Alma employs 58 (70) internal environmental auditors, who conducted 42 (46) environmental audits in 2019.

Operational responsibility is delegated to the respective president of each Group company. They are supported by sustainability managers in the Group-wide team who organize and funnel the work related to the overall objectives on to the individual companies. The managers at the Group’s approximately 30´manufacturing units are responsible for implementing and reporting on local objectives and plans. This work is followed up in consultation with the companies’ management teams and through audits and sustainability reports. Each unit also receives a local report on its sustainability performance in the areas where the Group has set objectives. This report
serves as a tool in local efforts to improve and meet the unit’s objectives.

Outcome 2019:

Energy: The relative performance measure amounted to 14.5 (14.3) MWh/ MSEK. Over time, the Group has grown in terms of the number of units and production volume, which means that its absolute energy consumption has increased. In 2019, energy consumption once again increased compared with the preceding year, due to increases at existing units and to new units.

Waste: The total amount of waste amounted to approximately 4,000 tons (3,850). Around 90 percent (90) was recycled as materials or energy. Approximately
2,700 tons (2,600) of metal were recycled.

Climate impact: The performance measure for 2019 amounted to 3.3 tons (3.5) of CO2/MSEK. The purchase of green electricity, use of biofuels and energy-efficiency enhancementsare examples of measures taken to limit the growth of our carbon footprint

A lack of business ethics – in the Group companies or among our suppliers – could harm Beijer Alma’s reputation and business operations. Regardless of country or market, the risk of corruption is in general terms higher for employees working in sales, purchasing or procurement.

Our sustainability work is based on the Ten Principles of the UN Global Compact, an initiative to promote corporate social responsibility (CSR). Regarding anit-corruption, we devote particular focus to the following area:
■ applying sound business principles and high ethical standards. Preventing corruption is an important part of this work.

Our Code of Conduct serves as a guide for our employees and partners. By applying the Code:
■ we comply with legislation, the UN Global Compact, the UN Convention on the Rights of the Child and other international agreements and guidelines.

■ the Code places demands on our employees and partners when it comes to acting honestly. Bribes are prohibited. Gifts and other benefits may not exceed the amounts prescribed by local practices and legislation. We comply with competition legislation and apply sound marketing principles.

The Group’s anti-corruption initiatives are based on information provision and training related to the Code of Conduct, a zero-tolerance policy
towards bribery, sanction systems for violations, and clear guidelines on gift amounts and business entertainment.

A training program in the Code of Conduct was developed in 2019 to strengthen anti-corruption efforts and business ethics in the Group companies.
The material combines basic information about the Code of Conduct with everyday examples of ethical issues that participants then discuss together, including:
■ conflicts of interest
■ anti-competitive practices
■ undue influence
■ handling gifts
■ compensation to business partners
■ the whistleblower system

We prevent corruption and anti-competitive practices through follow-up, including audits and employee surveys. The whistleblower system is also part of this work.

Management in all of the major business units also perform an annual business ethics self-assessment that includes 20 questions based on guidelines from the Global
Compact.

Outcome 2019:

- No breaches of business ethics or human rights violations were reported.
- By December, more than 700 employees had participated in the new training program.
- This year’s management assessment indicated that no aspects of the Code were violated and that no sanctions had been imposed.