AF Gruppen

AF Gruppen ASA's Board of Directors has 10 members, three of whom are employee-elected. Of the seven members elected by the general meeting, three are men and four are women; of the three employee-elected members, two are men and one is a woman, giving a board gender indicator of 1 (women/men). The Board meets the gender distribution requirements of the Public Limited Liability Companies Act. Four of the seven shareholder-elected members are independent of the company's principal shareholders, an independence indicator of 57.1 per cent, and none are involved in day-to-day management. Chair Morten Grongstad served as CEO until August 2020. The Board has ultimate responsibility for corporate social responsibility and oversees management of sustainability impacts, risks and opportunities. It operates through two committees: the Audit Committee (Kristian Holth chair, Hege Bomark, Hilde Kristin Herud) and the Competence and Remuneration Committee. The Corporate Management Team has six men and one woman (gender indicator 0.17), with CFO Anny Oen responsible for sustainability reporting. Board and management have relevant expertise on material sustainability matters.

AF Gruppen describes how sustainability matters are addressed by the Board and Corporate Management Team. The Board considers sustainability-related issues when reviewing risk areas and internal controls and when approving strategies, quarterly and annual accounts, and the budget, as well as when reviewing core values, ethics and social-responsibility policies, and organizational structure. Sustainability KPIs relating to climate, environment and social issues are reported to the Corporate Management Team and the Board quarterly. Sustainability matters raised in the strategic-initiative steering groups, led by Corporate Management Team representatives, are forwarded to the rest of the team as required. The Board reviews goals and policies annually to check alignment with strategy. All material sustainability impacts, risks and opportunities were addressed by the Corporate Management Team and Board during 2024, a year in which AF completed its previous strategy period and formulated a new strategy for the next four years. A table shows how each material topic (double materiality analysis, E1, E4, E5, S1, S2, G1) was formally addressed annually or quarterly by the Board and the Corporate Management Team.

AF Gruppen discloses that it does not have direct incentive schemes tied to sustainability-related targets, and this also applies to climate-related targets. AF states its view that the existing policies for salaries and other remuneration of senior executives contribute to realising the business strategy, safeguard long-term interests, and maintain and develop the company's financial sustainability in an appropriate manner. The reward system is described in greater detail in Note 7 (Payroll costs) and Note 33 (Remuneration of executive personnel) in the consolidated annual financial statements, as well as in the separate Report on remuneration to senior executives.

AF Gruppen provides a statement on due diligence, describing due diligence as a process to identify, prevent, limit and describe how to manage existing and potential negative consequences of business activities. AF sets requirements for its entire value chain to comply with basic human rights and decent working conditions. The company is subject to the Norwegian Transparency Act and reports on due diligence in a separate publication on its website. AF follows the OECD Guidelines for Multinational Enterprises as a recognised and recommended due diligence model. A table maps where the core due diligence elements are reflected in the sustainability statement, cross-referencing GOV-1, GOV-2 and SBM-1 (embedding due diligence in governance, strategy and business model), SBM-2 and S2-2/S2-3 (engaging affected stakeholders), SBM-3 and IRO-1 (identifying and assessing adverse impacts), S2-4 (taking action) and S2-5 (tracking effectiveness). AF notes it has progressed furthest with due diligence relating to human rights and decent working conditions and does not currently have similar processes for climate change and the environment.

AF Gruppen describes risk management and internal controls over sustainability reporting. The Board is responsible for ensuring sound internal control and appropriate risk management systems and monitors material sustainability matters. The systems are reviewed annually by both the external auditor and the Board's Audit Committee, and the external auditor certified the sustainability statement for the very first time. In preparation for CSRD reporting, a dedicated project group reporting to the CFO was established, led by the Director of Sustainability and including representatives from climate and environment, HSE, HR, procurement, legal, communication and finance; it operated as a sustainability network establishing clear responsibilities, processes and systems. Internal control is designed to provide reasonable assurance of targeted and cost-effective operations, reliable external accounting and sustainability reporting, and legal compliance. AF identifies key risks over sustainability reporting including manual data collection, the use of estimates where data is unavailable, variable quality and limited insight into value-chain data, and the need for discretionary assessments when interpreting the new, complex regulations.

AF Gruppen is a project-based contracting and industrial group with seven operational business areas: Civil Engineering, Construction, Betonmast, Property, Energy and Environment, Sweden and Offshore. As of 31 December 2024 it had 5,648 employees. Total revenue was NOK 30,638 million, with Civil Engineering (9,590), Construction (8,881), Sweden (5,399), Betonmast (4,367), Energy and Environment (1,510) and Offshore (1,081) the main contributors. Operations are in Norway and Sweden, where Swedish civil engineering, construction, property and demolition activities span Stockholm, Malardalen, Southern Sweden and Gothenburg. Services cover roads, railways, bridges, tunnels and other infrastructure; residential, public and commercial buildings; energy-efficient solutions; and environmental clean-up, demolition and recycling at environmental centres including Rimol, Jolsen and Nes, plus offshore installation removal and recycling at Vats. AF describes key value chains split into upstream (engineering and consulting, raw materials and input factors such as cement, steel, gravel, transport and subcontractors), own operations, and downstream (use of buildings and end-of-life treatment, recycling and reuse of materials). A new 2025 to 2028 strategy was developed in 2024, built on ambitions for safety, profitability and growth and adaptation for the green transition and productivity.

AF Gruppen describes continuous dialogue with internal and external stakeholders as critical to achieving targets and creating value. Its most important stakeholders are employees, customers and suppliers, owners, and society and the environment. For each, the report explains how dialogue is organised, its purpose and the issues of particular importance. Stakeholder views are followed up and addressed through organisational adjustments, strategy processes and actions at group and individual-project level. Ongoing dialogue forms the basis for the double materiality analysis and the process of identifying impacts, risks and opportunities, and GOV-4 references dialogue with affected stakeholders in the due diligence processes. Intra-group network organisations and the strategic-initiative steering groups, with Corporate Management Team and staff-function representatives, gather insights from employees' meetings with external stakeholders in each project. Feedback related to sustainability impacts is forwarded to the Corporate Management Team and the Board through periodic reporting and, where relevant, included in decision-making. Stakeholder feedback, together with professional reports and industry studies, informed AF's strategy towards 2028.

AF Gruppen's double materiality analysis identified six material topic standards, each with material sub-topics: E1 Climate change (climate change adaptation, climate change mitigation, energy); E4 Biodiversity and ecosystems (direct impact drivers of biodiversity loss, impacts on the extent and condition of ecosystems, impacts and dependencies on ecosystem services); E5 Resource use and circular economy (resources, products and services, waste); S1 Own workforce (working conditions, equal treatment and opportunities for all); S2 Workers in the value chain (working conditions, equal treatment and opportunities for all, other work-related rights); and G1 Business conduct (corporate culture, protection of whistleblowers, relationships with suppliers, corruption and bribery, economic crime, information security). Four topic standards were not material: E2 Pollution, E3 Water and marine resources, S3 Affected communities and S4 Consumers and end-users. AF identified two entity-specific (unit-specific) topics, financial crime and information security, presented under G1 Business conduct. Impacts, risks and opportunities are mapped across upstream, own operations and downstream. 2024 was the first year the Board approved material sustainability matters, so no changes to material topics are described.

AF Gruppen conducted a double materiality analysis to determine material sustainability matters across two dimensions, impact materiality and financial materiality, with a matter material if it meets either. The process followed the ESRS requirements and EFRAG's implementation guidance in four steps: Step A understanding the context (value chain mapping, stakeholder dialogue, analysis of comparable companies, other frameworks, reports and media); Step B identifying actual and potential impacts, risks and opportunities using a top-down approach based on ESRS 1 AR 16; Step C assessment and evaluation against self-set thresholds, since ESRS sets no specific thresholds; and Step D reporting. Impact severity was assessed by scale, scope and irremediability, with more weight on severity than likelihood for human-rights impacts, using scales based on the OECD due diligence methodology and AF's HSE risk methodology. Financial materiality combined likelihood and magnitude of financial effects, using the same threshold as the financial statements, with climate and nature risks analysed under scenarios. The Director of Sustainability led the process, reporting to the CFO, with a multidisciplinary group and validation meetings. The Corporate Management Team recommended and the Board adopted the analysis in December 2024; it is reviewed yearly.

AF Gruppen states that the materiality analysis forms the basis for its sustainability reporting, with relevant disclosure requirements included when considered material or when meeting user information needs. It notes that ESRS set disclosure requirements rather than requirements to act, so disclosures on measures, targets, strategies, scenario analyses and transition plans are conditional on AF having them in place. The report provides tables listing the disclosure requirements covered and references to where the information is found in the annual report, plus references to data points deriving from other EU legislation (SFDR, Pillar 3, Benchmark Regulation). All ESRS 2 general disclosures (BP-1, BP-2, GOV-1 to GOV-5, SBM-1, SBM-2, SBM-3, IRO-1 and IRO-2) are reported as material, alongside disclosures under the material topical standards E1, E4, E5, S1, S2 and G1, with individual data points marked material or non-material. AF also justifies why four topic standards (E2 Pollution, E3 Water and marine resources, S3 Affected communities, S4 Consumers and end-users) were not material, noting E2 Pollution was closest to the materiality threshold, including a specific assessment of PFAS emissions around AF Miljobase Vats.

AF Gruppen sets a new main objective to halve its climate and environmental footprint by 50 per cent. It will halve total greenhouse gas emissions relative to revenue towards 2030, while halving absolute Scope 1 and 2 emissions towards 2028, and work towards achieving climate neutrality in 2050. AF Gruppen acknowledges it has not yet developed a transition plan that meets the ESRS requirements, but will prioritise quantifying emission reduction measures. Key milestones for strengthening the plan going forward include approval by the Corporate Management Team and Board of Directors, assessing formal verification that its climate targets are science-based, and quantifying and describing locked-in GHG emissions. AF has conducted a comprehensive climate risk analysis with scenario analyses (SSP5 among them) to assess exposure to climate change and the low-emission transition. Preparing new business plans in spring 2025 will be the next step in creating a credible transition plan. AF's targets have not been verified as science-based.

AF Gruppen's climate and environment policies are set out in the document Purpose, Goals and Values, which covers the E1, E4 and E5 topics collectively. AF commits, through competence and clear processes, to contribute to projects that ensure the lowest possible greenhouse gas emissions, resource use and environmental impact, and to look for opportunities to create positive climate and environmental impacts in production and over the lifetime of products and services. Ownership of climate and environmental work sits with the line organisation, and the business model is expected to be reflected in key documents within each company's management system. Suppliers and subcontractors commit to comply by signing AF's Supplier Declaration, which requires them to minimise waste at construction sites and organise work to avoid emissions from unnecessary energy consumption. Beyond these, AF has not prepared policies addressing the individual topic standards separately, taking the view that existing key documents appropriately cover material climate and environmental topics.

AF Gruppen describes actions across its own operations and value chain, though it has not quantified decarbonisation measures or the expected emission reductions of each action, and no significant investments including in technology have been approved for their execution. For Scope 1, actions include influencing early-phase project planning to reduce mass extraction and transport, selecting machines using hydrogen, renewable diesel and biodiesel, adding auto-stop mechanisms to prevent idle running, and electrifying machinery supported by mobile charging stations. For Scope 2, actions include better planning and use of district heating, and AF Energi's energy-efficient solutions (energy savings of 20 to 50 per cent). Upstream Scope 3 actions include early involvement through collaborative contracts, drawing up carbon budgets, reusing building components, identifying suppliers offering low-emission products such as low carbon concrete and recycled steel, and selecting climate-friendly transport. Downstream actions cover energy-efficient projects, durable materials, and sustainable transport solutions. Several AF companies target sustainability certification (BREEAM-NOR, Miljobyggnad) for new construction projects.

AF Gruppen's overall target is to halve greenhouse gas emissions relative to revenue by at least 50 per cent, by 2030. For own emissions (Scope 1 and 2, location based), the absolute target is to cut total emissions to 22,510 tonnes CO2e by 2028, from a 2020 base year value of 45,019 tonnes (2024 actual 42,954, progress minus 4.6 per cent). A Scope 1 and 2 intensity target of 0.8 tonnes CO2e per NOK million is set for 2030 against a 2020 base of 1.6 (2024 actual 1.4). For Scope 3, an intensity target of 9.9 tonnes CO2e per NOK million by 2030 is set against a 2024 base year value of 19.8. The baseline year is 2020 for Scope 1 and 2 and 2024 for Scope 3. Targets have not been verified as science-based, but AF states its 2028 and 2030 objectives align with the cross-sector (ACA) reductions pathway consistent with limiting warming to 1.5 degrees C (42 per cent reduction by 2030, 90 per cent by 2050).

AF Gruppen's total energy consumption associated with its own operations was 239,733 MWh in 2024, up from 205,836 MWh in 2023. Energy from fossil sources was 170,385 MWh, giving a fossil share of 71.1 per cent (up from 67.4 per cent in 2023). This included 134,595 MWh of crude oil and petroleum products, 50 MWh of natural gas, 17,753 MWh of other fossil sources, and 17,987 MWh of purchased fossil-based electricity, heating, steam or cooling. Renewable energy consumption was 68,216 MWh, a renewable share of 28.5 per cent (down from 32.4 per cent in 2023), comprising 16,714 MWh of renewable fuel, 51,351 MWh of purchased renewable electricity, heating, steam and cooling, and 151 MWh of self-generated renewable energy. Nuclear sources contributed 1,132 MWh (0.5 per cent). Energy intensity was 7.8 MWh per NOK million of operating revenue (revenue NOK 30,638 million), compared with 6.7 in 2023.

AF Gruppen's 2024 carbon accounts, prepared under the GHG Protocol Corporate Standard on an operational control basis, report gross Scope 1 emissions of 41,042 tonnes CO2e (33,660 in 2023; 2020 base year 42,699). Gross location-based Scope 2 emissions were 1,912 tonnes CO2e (1,506 in 2023; 2020 base 2,320), and gross market-based Scope 2 was 23,472 tonnes (15,827 in 2023). Total indirect gross Scope 3 emissions were 606,867 tonnes CO2e (14,196 in 2023, when only categories 5, 6 and 7 were reported), with 2024 the first year of complete Scope 3 reporting. The largest category was Category 1 Purchased goods and services at 470,959 tonnes, over 70 per cent of total emissions; other large categories include Category 11 Use of sold products (54,632) and Category 9 Downstream transportation (19,429). Total location-based GHG emissions were 649,822 tonnes CO2e (49,362 in 2023), and total market-based emissions were 671,382 tonnes CO2e (63,683 in 2023). Scope 3 represents over 90 per cent of total emissions.

AF Gruppen describes how biodiversity and ecosystems are considered in its strategy and business model. The Planning and Building Act regulates around 80 per cent of Norway's land area and is an important basis for AF's project activities. Existing legislation, new regulatory requirements and customer needs drive AF's efforts to counteract the negative impact of its project activities on nature, and early involvement gives AF the greatest potential to reduce that impact. AF references the Norwegian Action Plan for Biodiversity presented in 2024. A high-level resilience analysis, based on the nature risk and scenario work in IRO-1 E4 and the year's strategy process, concluded AF has a robust strategy and business model aligned with identified physical, transition and system risks. However, AF states that a transition plan for nature has not so far been prioritized in the Group strategy towards 2028, recognising that nature is a relatively immature topic for AF and its partners, and it will monitor developments going forward.

AF Gruppen reports that policies relevant to biodiversity and ecosystems are covered under its climate and environment policies described in E1 Climate change, set out in the document Purpose, Goals and Values. Through competence and clear processes, AF aims to contribute to projects that ensure the lowest possible greenhouse gas emissions, resource use and environmental impact, and to create positive climate and environmental impacts across the lifetime of its products and services. Ownership of climate and environmental work rests with the line organisation. Suppliers and subcontractors commit to comply with these policies by signing AF's Supplier Declaration, which includes a dedicated environment section requiring suppliers to actively minimise waste at construction sites and avoid emissions from unnecessary energy use. AF states it has not prepared separate policies or key documents addressing the individual topical standards, but considers that existing documents appropriately cover material climate and environment topics. AF continually assesses the need to update these documents.

AF Gruppen presents actions to address material biodiversity impacts using the mitigation hierarchy of avoid, limit, restore and compensate. Avoid: influencing project design and road-section choices through early involvement, protecting peatlands and carbon-rich forests, and timing works outside fish spawning and bird nesting seasons; one road and tunnel project places large parts of the infrastructure underground. Limit: establishing buffer zones and vegetation corridors, strict control of emissions to soil, air and water, building on hard surfaces and outside protected areas and nature reserves. Restore: in one road project, 4.5 kilometres of former two-lane road will be removed and returned to nature as agriculture and forestry, plus a trial peatland relocation. Compensate: returning old road sections to nature and green roofs that create habitats. Positive-impact examples include the Sveagruva (Svea mine) restoration in Svalbard, described as Norway's largest nature restoration project at roughly the area of Oslo, the Renere Havn Bergen seabed clean-up, and AF's environmental centres that treat contaminated mass. AF notes no quantified metrics or investment figures per action have been established.

AF Gruppen states it has not set quantifiable, result-oriented targets related to biodiversity and ecosystems. During the 2024 strategy process, objectives relating to nature were proposed and assessed in several phases, but AF concluded it was more appropriate to describe the positive impact it can have by providing expertise and solutions within biodiversity and ecosystems than to set specific targets. Going forward, AF says it will continue to take an active role in highlighting the consequences of negative impacts on nature and the environment associated with its activities, and contribute with actions to reduce or avoid these. AF's stated goal is to provide expertise and solutions that have a positive impact on biodiversity and ecosystems, to institute mitigation measures where appropriate in line with the mitigation hierarchy, and in future to take a stronger position in nature restoration services. AF also notes that no quantified metrics have been established for material nature matters and that it will prioritise developing reporting in this area.

AF Gruppen's quantitative nature reporting for 2024 is based on data from its nature risk analysis. From a risk-based sample of 19 locations, seven prioritized locations near vulnerable biodiversity areas were identified using tools such as the Norwegian Environment Agency's nature base maps, the Norwegian Biodiversity Information Centre, Artfakta and ENCORE. AF defined proximity to a biodiversity-sensitive area as a distance of one kilometre or less. The priority locations and distance to sensitive area are listed: New airport, Fagerlia, Mo i Rana (<1 km); FREVAR treatment plant, Ora, Fredrikstad (<1 km); New E6 Storhove-Oyer, Lillehammer (<1 km); E4 Forbifart Stockholm, Lovo (<1 km); AF Miljobase Vats, Rogaland (<5 km, selected on sensitivity criteria other than distance); Jolsen Miljopark, Lillestrom (<1 km); and Bruzaholm Wind Farm, Sweden (<1 km). Land types impacted are primarily peatland and forest plus some pastures and cultivated land: peatland 49 hectares, forest 626, other dwelling 17, cultivated land 6, grassland and inland pastures 2, total area 699 hectares. These projects accounted for 14 per cent of AF Gruppen's operating revenue in 2024. AF notes no standardized nature accounting system yet exists.

AF Gruppen reports that policies related to resource use and circular economy are covered by its climate and environment policies described in E1 Climate change. Through competence and clear processes, AF aims to contribute to projects that ensure the lowest possible greenhouse gas emissions, resource use and environmental impact, and to look for opportunities to create positive climate and environmental impacts in production and over the lifetime of its products and services. Suppliers and subcontractors commit to comply through AF's Supplier Declaration, whose environment section explicitly requires suppliers to actively work to minimise the quantity of waste at AF's construction sites and organise work and services to avoid emissions from unnecessary energy consumption. AF states it has not prepared separate policies addressing the resource use and circular economy standard individually, but considers existing key documents appropriately cover material topics, with ESRS 2 providing an overview of key documents and compliance with minimum disclosure requirements.

AF Gruppen's prioritized actions address material impacts, risks and opportunities related to waste, structured by the waste hierarchy. Prevention: careful planning to generate as little waste as possible, using standardized products, prefabricated elements and pre-cut materials, and return schemes with suppliers. Reuse and material recovery: a Group agreement with Ombygg, which operates Norway's largest reuse location at Okern in Oslo, where AF units deliver surplus materials; reuse of heavy material groups such as bricks; and an 80 per cent source separation requirement across all business units, supported by standardized waste-container signs aligned with the LOOP national labelling scheme and QR codes. Reducing incineration and landfill: each business unit has action plans for specific fractions. Wood is often sent for incineration by recipients because it generates greater returns than recovery. Concrete is AF's largest waste fraction and much ends as landfill, so AF works with operators on backfilling and crushing concrete into secondary raw material. Plaster often ends as landfill, so AF focuses on source separation and correct storage. AF also works with waste recipients to collect treatment data so it can select recipients that recover rather than incinerate or landfill.

AF Gruppen developed new circular economy objectives during the 2024 strategy process, using 2023 as the base year (selected in line with GHG Protocol principles as no equivalent waste-reporting protocol exists). AF has set a target to halve the quantity of waste sent for energy utilisation and landfill relative to revenue by 2030, an intensity target measured in tonnes per NOK million operating revenue: 3.5 in 2024 against a 2023 base year value of 3.8, with a 2030 target of 1.9 (development -6.3 per cent). AF has set a target that 70 per cent of non-hazardous waste be prepared for reuse or material recovery by 2028 (absolute), standing at 62 per cent in 2024 versus a 2023 base of 64 per cent (noted as not achieved). AF also targets a source separation rate above 80 per cent across all waste hierarchy levels, reported at 94 per cent in 2024 and marked achieved, well above the 70 per cent regulatory requirement. None of the targets are statutory except the source separation regulatory minimum, and the targets have not been verified as science-based.

AF Gruppen identifies resource use as a material topic and describes resource inflows qualitatively, noting that materials used in its construction projects include concrete, steel, brick, plaster, wood, glass, aluminium and insulation materials, while civil engineering projects use concrete, steel, asphalt, gravel and crushed stone. However, AF states it does not report quantitative material inflow data for 2024. It considered two options: collecting information from value chain parties, judged too resource-intensive for AF and the parties involved; and preparing an estimate, found unlikely to provide reliable information. Based on this assessment, AF decided not to include quantitative resource inflow data in this year's sustainability statement, and the E5-4 material consumption data point is marked not reported. AF notes the data quality challenge is common across the industry, that several industry initiatives are underway to streamline exchange of this information, and that AF will work to facilitate a system enabling this reporting in future.

AF Gruppen describes resource outflows and circularity across its construction, civil engineering and demolition activities, assessed qualitatively. In construction, typical products are residential and commercial buildings (residential lifespan often set at 50 years); large material groups such as concrete and steel have significant potential to enter a circular material stream where design allows careful disassembly and downstream recovery solutions exist, with steel having very strong material recovery potential. The HasleTre project, managed by AF Eiendom, is a prefabricated solid-wood building designed to be dismantled and reused. In civil engineering, asphalt can be recovered for new roads, concrete reused or recovered, and stone, soil and loose mass reused to achieve a mass balance and avoid unnecessary transport. AF's environmental centres at Rimol, Jolsen and Nes receive contaminated mass and treat it for reuse as gritting sand or aggregate in concrete or asphalt: 302,769 tonnes (288,511 in prior year) was recycled in 2024, with the centres reaching a total material recovery rate of just under 80 per cent, against the European Commission's 2030 goal of 80 per cent. Recovered metal from demolition also reduces virgin resource extraction.

AF Gruppen reports total waste generated from own activities of 268,654 tonnes in 2024 (307,636 in the 2023 base year), split into 260,230 tonnes non-hazardous (299,514) and 8,424 tonnes hazardous (8,123). Non-hazardous streams include concrete, brick and similar at 184,011 tonnes (the largest fraction), iron and other metals 32,332, wood and other biowaste 12,938, other masses and inorganic materials 6,830, plaster 4,430 and other waste 19,689. Hazardous waste comprises radioactive waste 3,113 tonnes and other hazardous waste 5,311 tonnes. By treatment: preparation for reuse 935 tonnes, material recovery of non-hazardous 159,125 and hazardous 485, so waste sent for reuse or material recovery totalled 160,544 tonnes (192,649). Energy utilisation was 28,280 (non-hazardous) plus 2,548 (hazardous) tonnes, and landfill 71,889 plus 5,392 tonnes; waste sent for incineration or landfill (non-recycled waste) totalled 108,109 tonnes, or 40 per cent (up from 37 per cent in 2023). Source separation rates in 2024 were 95 per cent for demolition, 86 per cent for rehabilitation and 88 per cent for construction. Waste is classified mainly under Norwegian standard NS9431.

AF states its policies for own employees sit in Purpose, Goals and Values and the Code of Conduct, which applies to employees, working partnerships and joint ventures and anyone representing AF. It covers working environment, personal conduct, the right to unionise, whistleblowing and censurable conditions. Procedures and policies comply with national and international law and are based on the UN principles for business conduct and human rights, aiming to prevent and follow up actual and potential negative impacts identified in the double materiality analysis. The Personnel Handbook covers employment terms, discrimination, working hours, employee development, leave and working environment. HSE policies are integrated into management responsibility at all levels through AF's HSE model. The Code of Conduct complies with the Equality and Discrimination Act, ensuring recruitment, employment, training, remuneration and promotion occur without regard to ethnicity, religion, gender, sexual orientation, age or disability. Violations may lead to sanctions from verbal warning to dismissal. Violence and harassment are not tolerated.

AF reports that the Board and Corporate Management Team emphasise employee involvement so employees can influence their working conditions and actual and potential impacts. AF has an employee representative and safety representative arrangement and two full-time Group employee representatives, plus employee representation on the Board of Directors. A dedicated Works Council and Working Environment Committee, with representatives from the Corporate Management Team, employees and senior employee representatives, works for a safe working environment and monitors safety, health and welfare, meeting four times a year. In line with the UN Global Compact, AF facilitates conditions for technical staff and production workers to join a union. AF conducts an employee satisfaction survey (ESS) every two years, most recently in 2023, distributed in nine languages by an independent third party, covering well-being, development, discrimination, diversity and whistleblowing. A minimum of one annual employee development interview must be conducted. HR and HSE networks channel input to the Corporate Management Team.

AF reports several reporting mechanisms so contentious conditions and negative impacts are followed up. All employees have a right to report misconduct and negative impact, and whistleblowing policies protect whistleblowers from retaliation, with details in G1 Business conduct. All undesired incidents and circumstances are registered and dealt with in the non-conformance system Synergi Life or similar systems to find underlying causes and improvement measures. Serious incidents are followed up through investigation processes involving all levels of the organisation, and experiences feed systematic risk management. In 2024, 51,069 undesirable incidents (RUI) were reported (55,089 in 2023), an RUI frequency of 4.5 (4.4). Emergency preparedness is a high priority, and each project compiles a list of defined risk and accident situations forming the basis for its emergency preparedness plan, with procedures covering accident site leader selection, contact with authorities, client communication and mobilisation of crisis staff.

AF describes priority actions structured around its strategic priorities. As a preferred employer it introduced the Take My Job student concept and uses Universum surveys to appear attractive to women and men. For a robust organisation it offers a five-level management training programme (Level 1 Management close to production up to Level 5 Lighthouse). For work satisfaction it ran the Have a chat campaign in 2024 to increase employee development interview completion, and facilitates parental leave. Diversity work, systematic since 2019, includes structured recruitment with aptitude tests, both genders on interview panels, manager training on unconscious discrimination and quarterly measurement of appointments by gender. On health and safety, AF gives extensive AF Academy training including a 40-hour basic course, and uses the Clara risk tool, Safetalk conversations, glove campaigns reducing cut injuries and industrial climbing helmets with chin straps (head injuries causing LTI halved since 2021). All companies are affiliated with a government-approved occupational health service, and AF defined 15 forms of workplace exposure communicated via health cards.

AF sets targets linked to its Group strategy towards 2028 and reports attainment. Safety targets: LTI-1 = 0 (actual 0.5 in 2024, 0.8 in 2023) and LTI-2 < 5 (actual 6.9, 7.9). AF also targets zero work-related absenteeism and defines a healthy sick leave situation as absence due to illness below 3 per cent (actual 4.1 per cent). Job satisfaction: ESS > 5 (5.2 in 2023, not carried out in 2024) and 100 per cent of employees having one annual development interview (67 per cent in 2023, not collected in 2024). Apprentices target above 7 per cent (6.0 per cent in 2024, 5.5 per cent in 2023). Specialist expertise, trade certificates above 60 per cent (48.0 per cent, 45.0 per cent). Gender equality: 20 per cent women of total (10.7 per cent, 9.8 per cent) and 40 per cent among administrative staff (21.0 per cent, 19.5 per cent). AF considers it not relevant to set a baseline year.

AF reports 5,648 total employees in 2024 (5,913 in 2023), split into 2,571 salaried employees and 3,077 skilled employees. By gender there were 5,042 men and 606 women, women being 10.7 per cent (9.8 per cent in 2023). By country: Norway 4,688, Sweden 894, Lithuania 27, Germany 25, Denmark 8 and United Kingdom 6. Turnover was 980 (1,251 in 2023), a proportion of 17.0 per cent (21.0 per cent), with voluntary departures at 13.1 per cent (16.8 per cent); turnover covers voluntary departures, termination and retirement. By contract, 5,394 permanent employees (4,832 men, 562 women) and 254 temporary employees (210 men, 44 women). By working time, 5,537 full-time employees (4,963 men, 574 women) and 111 part-time employees (72 men, 39 women), with only five cases of involuntary part-time work reported. Employee headcount data is direct reporting as of 31 December.

AF defines non-employees in its own workforce as self-employed persons and workers hired through staffing agencies, making up approximately 3 per cent of AF's total own workforce. In 2024 there were 183 non-employee FTEs in total, comprising 82 self-employed and 101 from staffing agencies. Non-employee figures are an estimate based on reporting as of 30 September. Non-employees in the own workforce are covered by the same policies as workers in the value chain described in S2. AF notes that subcontractors are considered workers in the value chain but are included in the LTI-1 and LTI-2 safety rates presented in this standard, with additional reporting in S2.

AF reports collective bargaining coverage by country in bands. Coverage is 0 to 19 per cent in other countries, 20 to 39 per cent for the IA business area, 40 to 59 per cent in Norway and 80 to 100 per cent in Sweden. A larger proportion of employees in Sweden are unionised than in Norway, attributed to Sweden having more administrative employees who are union members. AF facilitates the ability of technical staff and production employees to unionise. On social dialogue and corporate governance, the parent company AF Gruppen ASA is a holding company without employees. The number of employee-elected board members on the Group Board is three, one elected among employees with a collective bargaining agreement under the Joint Agreement for building trades and the Agreement for private construction, and one elected by other employees. Employees are represented on the boards of both AF Gruppen Norge AS and AF Gruppen ASA, and the Group has two full-time Group employee representatives. Collective bargaining coverage is estimated based on reporting as of 30 September.

AF reports diversity and equality metrics. Women made up 10.7 per cent of total employees in 2024 (9.8 per cent in 2023) and 21.0 per cent of salaried employees (19.5 per cent). In the Corporate Management Team, defined as senior management, there was 1 woman (14 per cent) and 6 men (86 per cent), unchanged from 2023. A wider management team of 47 people (directors of business units and key staff functions in addition to the Corporate Management Team) consists of 42 men and 5 women. By age, of 5,648 total employees, 1,145 (20 per cent) were under 30, 2,883 (51 per cent) between 30 and 50, and 1,620 (29 per cent) over 50. AF has a long-term strategic goal of raising women among salaried employees to 40 per cent and overall women to 20 per cent, and seeks a gender distribution of new hires that reflects the recruitment pool and equal promotion rates for men and women.

AF reports that performance and career development assessments are systematised through employee development interviews, measured via the ESS. Based on the 2023 ESS, 67 per cent of employees had at least one development interview in 2023, of whom 10.1 per cent were women and 89.9 per cent were men. AF states it does not have average course hours per employee per gender and presents available data for Group courses and skills development programmes, and will work on developing reporting in this area in 2025. In 2024, 1,833 employees completed courses through the AF Academy, of whom 707 attended HSE-related courses. More than 80,000 courses were completed in AF's e-learning system, applying to internal employees and external partners. Management course completions in 2024 were: Level 1 conducted by business units (not through the AF Academy), Level 2 134, Level 3 40, Level 4 32 and Level 5 21. Courses and management programmes are combined under the AF Academy, with the Motimate digital course portal.

Health and safety is central for AF, which reports metrics for own employees and subcontractors. In 2024 there were zero deaths from work-related injury for both own employees and subcontractors (also zero in 2023). Work-related accidents were 79 for own employees and 56 for subcontractors (107 and 63 in 2023), with accident rates of 8.2 and 5.7 (10.7 and 5.4). Days lost due to work-related injuries were 507 for own employees and 217 for subcontractors (907 and 627). The LTI-1 rate, including own employees and subcontractors, was 0.5 in 2024 (0.8 in 2023), the lowest ever measured, defined as lost time injuries and serious personal injuries per million man-hours. The LTI-2 rate was 6.9 (7.9), also the lowest ever. Absence due to illness for own employees was 4.1 per cent (4.1 per cent), below the industry average of 5.9 per cent in 2023. All employees are covered by AF's HSE system; AF has no quantitative data on work-related ill health from workplace exposure.

AF reports on work-life balance through parental and family-related leave. All AF Gruppen employees are entitled to parental leave, with different rules in the countries where AF operates. AF states that Norway and Sweden have the most beneficial leave schemes, both in terms of length of time and proportion of paid leave. A total of 7.1 per cent of all employees at AF took family-related leave in 2024. Broken down by gender, 58 women, equal to 9.6 per cent of the total number of women, and 345 men, equal to 6.8 per cent of the total number of men, took family-related leave in 2024. Parental leave data is an estimate based on reporting as of 30 September. AF also facilitates flexibility for employees in different life phases, including arrangements for those with young children, and ensures taking leave does not affect further career development, supported by digital guides and courses before, during and after leave.

AF reports pay gap and total remuneration metrics. Wage disparities in 2024, measured as the difference in average pay between women and men, were: administrative staff 21.8 per cent for basic pay and 25.1 per cent for total compensation; skilled workers 26.0 per cent basic and 21.0 per cent total; total 23.4 per cent basic and 20.6 per cent total. The total remuneration ratio, the ratio between total remuneration of the highest paid employees and the median for all employees excluding the highest paid person, was 11.8 in 2024. AF states no systematic wage disparities between genders have been revealed and that salaries reflect expertise, responsibility and experience. In AF Gruppen Norge AS, women have a higher average basic wage than men, because skilled workers (98.3 per cent men in 2023) earn less than administrative employees; among administrative employees men earn more, attributed to longer experience and overrepresentation in management. Salary mapping data is estimated based on reporting as of 30 September.

AF reports on incidents, complaints and severe human rights impacts for its own workforce. In 2024 AF Gruppen received and assessed five whistleblowing cases classified under the discrimination category; the assessments concluded there had been no discrimination in any of these cases. No fines, penalties or compensation claims relating to discrimination cases were imposed on or brought against AF Gruppen in 2024. AF Gruppen's whistleblowing committees received four notices of concern from its own workforce in 2024, none of which were found to violate the Code of Conduct, the Working Environment Act or other laws. During the 2024 reporting year, AF Gruppen was not involved in serious human rights issues or incidents concerning its own workforce, nor in relation to the UN Guiding Principles on Business and Human Rights or the OECD Policies for Multinational Enterprises. AF was not subject to fines, penalties or compensation for serious human rights problems, and there were no cases involving aggravated damages paid to anyone impacted by serious human rights abuses. Incidents are reported via the whistleblowing channel.

AF Gruppen states it shall only partner with suppliers and subcontractors committed to complying with the conduct values and requirements in its Purpose, Goals and Values and its Code of Conduct. By entering into an agreement, the supplier accepts the Supplier Declaration in full and undertakes to forward it down the supply chain. Suppliers must comply with all relevant laws and regulations and fully comply with the UN Global Compact, the UN Universal Declaration of Human Rights and relevant ILO conventions. The Supplier Declaration specifically addresses working hours and pay, forced labour, social dumping and child labour, health and safety, working environment and discrimination, climate and environment, combating corruption, undeclared work and money laundering, price cooperation, impartiality, confidentiality, whistleblowing and auditing. It stipulates that work cannot be set aside without written clarification and for no more than one underlying contractual level. AF can sanction violations by refusing entry to people, reducing payments or cancelling contracts. AF is subject to the Transparency Act and follows the OECD Guidelines for multinational enterprises as its due diligence model. A mandatory HSE appendix is attached to supplier contracts. The Supplier Declaration was updated in 2024.

AF Gruppen assesses its greatest inherent risk of human rights and decent working condition violations as incidents on its construction sites. Corporate staff hold overall responsibility for follow-up at sites, while day-to-day follow-up and dialogue are organised in the line and in projects. Dialogue with value chain workers is conducted through individual supplier meetings, procurement processes, internal audits, and supplier evaluations and surveys. Input is forwarded through established forums and communicated to relevant decision-makers when circumstances require measures. AF is governed by the Transparency Act and follows the OECD Guidelines for multinational enterprises as a recognised due diligence model, which has influenced its efforts to identify and report procurement risks and follow up suppliers and subcontractors across the Group. During the year the procurement director held talks with selected suppliers across various fields, including wholesalers, steel suppliers, concrete producers and glass, facade and parquet subcontractors, to understand how they monitor basic human rights and decent working conditions in their own supply chains. AF found significant variation in supplier maturity, but concluded that selected suppliers showed appropriate understanding of the risks in its Supplier Declaration. Complete due diligence reporting under the Transparency Act is published in a separate publication covering all subsidiaries.

AF Gruppen encourages workers in the value chain to raise concerns about any contentious conditions. Information on AF's whistleblowing channels is made available on its website and in its projects, with further detail provided under G1 Business conduct. The whistleblowing channel is established in accordance with the Working Environment Act and is subject to statutory requirements on the protection of whistleblowers. AF also encourages suppliers, partners and others to report misconduct such as corruption, embezzlement or other financial crime, harassment, discrimination or substance abuse, danger to life and health, and risk of harm to the climate or environment. Reports can be submitted openly or anonymously, and both the report and the whistleblower's identity are treated as confidential. Reports can go to a line manager, a more senior manager, by email to the whistleblowing committee (varsling@afgruppen.no), or anonymously via a reporting form at afgruppen.com/notification, with the option of external third-party handling. Requests for information about AF's Transparency Act and due diligence work can be sent to apenhetsloven@afgruppen.no. Corrective actions for significant findings involve stopping, preventing or mitigating adverse impacts, depending on the case and AF's ability to influence it.

AF Gruppen has implemented actions to protect the health, safety and fundamental rights of its own employees and its subcontractors and suppliers in all projects. Its approach is risk-based and targeted, with corporate staff holding overall responsibility and purchasing and compliance managers in the line performing day-to-day follow-up. Prequalification and evaluation of suppliers before contracts is a key proactive measure, using tools such as StartBANK, and approved subcontractors are followed up through spot checks and inspections. Key verifications include checks of salary payments and working conditions among suppliers, subcontractors and employment agencies (aided by AF's work-related crime adviser under the paseplikten obligation to inspect), access control, internal audits, on-site inspections and weekly safety rounds. AF increasingly requires use of HMSREG, an information system to counteract work-related crime and social dumping, and in 2023 adopted the Enin platform to gather company data such as accounting information, bankruptcy scores and sanctions lists. Inspection procedures detect undeclared work, money laundering and corruption. Complete Transparency Act due diligence reporting is published separately for all subsidiaries, and a mandatory Transparency Act online course was introduced in 2023. No significant findings arose from periodic due diligence. At the end of 2024, AF had opted not to use 60 Norwegian actors based on risk assessments, and a 2025 action plan will extend equivalent standards to Sweden.

AF Gruppen has set targets for workers in the value chain that relate to its safety work in the Group strategy towards 2028. The most important measurement parameter for AF's safety work is the LTI-1 rate, with a metric of zero serious injuries and zero lost time injuries, meaning an LTI-1 rate of zero. In addition, the LTI-2 rate shall be less than five. The LTI-1 and LTI-2 rates also include subcontractors who are injured on AF's projects, so the targets extend to value chain workers as well as own workforce. Reporting of the LTI-1 and LTI-2 rates is provided under S1-14, and target attainment under S1-5. The 2024 strategy process closely involved key stakeholders, with specialist resources in AF's companies providing input that was discussed with company directors through several management group meetings, and proposed goals tested in selected management groups. Beyond these objectives, AF states that quantified metrics have not been established with respect to the follow-up of identified impacts, risks or opportunities.

AF Gruppen is a value-based company whose core values date back to its 1985 establishment. Its business conduct is anchored in two key documents, the Code of Conduct and Purpose, Goals and Values, which establish AF's norms for action and the foundation of its culture. Compliance is embedded in the Board of Directors and put into practice by the Corporate Management Team, units, companies, projects and employees. Core values are reliability, thoroughness and hard work, persistence in achieving profitable growth, management through presence and involvement, and freedom to exercise entrepreneurship with discipline. The Code of Conduct covers anti-corruption, competitors, personal finances, IT security and privacy, conflicts of interest and insider trading. AF has zero tolerance for corruption and other financial crime, and employees may not give or receive gifts creating doubt about integrity. All documents are approved by the Board. Suppliers and subcontractors pledge to comply via the Supplier Declaration, with zero tolerance for breaches. AF identified two entity-specific material topics reported under G1: financial crime (a collective term with eight defined categories including bankruptcy crime, fraud, money laundering, securities crime, corruption, accounting crime, tax crime and financial impropriety) and information security. Emergency preparedness in 2024 focused on cyberattacks and financial crime, and a whistleblowing committee handles reports under the Working Environment Act.

AF Gruppen selects the supplier or subcontractor with the best offer based on price plus compliance with statutory requirements, collective pay agreement requirements and AF's internal requirements. Corporate staff hold overall responsibility for the procurement process, while procurements are organised in the line. Suppliers and subcontractors must comply with AF's values and requirements plus applicable legislation and UN Global Compact policies by consenting to AF's Supplier Declaration, which must be included in all agreements, is available on AF's website, and specifies social and environmental criteria. The Declaration was updated in 2024 and assessed to appropriately address identified material risks. AF allows only two levels of subcontractors to ensure acceptable transparency. As a prequalification tool, AF uses StartBANK and its risk filter, a common open supplier register and industry network ensuring all parties meet minimum criteria for cooperation. AF also has a dedicated corporate resource working preventively on work-related crime. All suppliers providing goods or services of material importance must be evaluated, and those with a Group agreement are always evaluated after delivery. AF measures customer and supplier satisfaction on a scale of 1 to 6 with a goal above 5; a 2023 survey showed both at 5.0. On payment controls, invoices are processed electronically and authorised per the authority matrix, payments require two-person approval, and contracts require double signatures.

AF Gruppen addresses corruption, bribery and other financial crime in the introduction course for new employees as a preventive measure, covering price fixing, embezzlement, manipulation of financial reporting and insider trading. AF states no additional specific training was conducted for the Corporate Management Team, the Board of Directors or particularly risk-exposed functions, as training reflects the identified level of risk. The risk of corruption and bribery is assessed as low, primarily because AF has two principal markets, Norway and Sweden; the site manager, project manager and managing director or business unit director carry the greatest risk due to their involvement in entering and following up contracts. AF has implemented processes to prevent financial crime, including strict invoice-processing requirements as a barrier to embezzlement, electronic invoice authorisation per the authority matrix, two-person payment approval and double signatures on contracts. Through its responsibility work AF prevents contracts with actors having a history of financial crime, carries out regular assessments of partners, and receives information from Fair Play Bygg. Control routines such as regular financial reviews detect financial crime, and internal and periodic reporting is ongoing. Suspicions must be immediately reported to the Director of Procurement and Legal; in financial crime, corruption and bribery incidents the Corporate Management Team is involved with crisis staff support.

AF Gruppen reports that there were no convictions or fines related to corruption, bribery or other financial crime during the reporting year. In other words, zero confirmed incidents of corruption or bribery were recorded for 2024. Corruption, bribery and other financial crime are treated as contentious conditions and are covered by AF's whistleblowing procedures. The AF whistleblowing committee, chaired by the Director of Procurement and Legal and including HR and employee representatives from Norway and Sweden, conducts a preliminary investigation of all written and documented reports received and investigates the facts where necessary. Where the case permits, the whistleblower is informed of how AF is handling the matter and its outcome. An ongoing overview of whistleblowing cases is maintained, with information provided to the Corporate Management Team on an annual basis. Reports may be submitted openly or anonymously via line managers, the committee email (varsling@afgruppen.no) or the reporting form at afgruppen.com/notification, with the option of handling by an external third party. AF's whistleblowing e-learning training helps employees and partners understand why and how to report. Under its related entity-specific information security topic, AF also reports that there were no significant incidents related to information security during the reporting year.