Akzo Nobel

AkzoNobel operates under Dutch law in a two-tier system with a Board of Management (CEO and CFO, the administrative and management body) and a Supervisory Board (non-executive directors, the supervisory body). The company states that the composition of these bodies ensures sufficient access to sustainability expertise and skills. Board of Management composition and skills are set out in the Board of Management and Executive Committee chapter and under Sustainability, while Supervisory Board composition, expertise, skills and independence are covered in dedicated sections. Oversight of impacts, risks and opportunities by the Supervisory Board and Board of Management is described in the Sustainability paragraphs and the Corporate governance statement. The Board of Management, operating within the Executive Committee, is responsible for incorporating the sustainability agenda into strategy and monitoring performance through the Operational Control Cycle. Within the Executive Committee, the Chief Human Resources Officer is responsible for sustainability. Board diversity and independence datapoints are reported in the Corporate governance statement.

AkzoNobel discloses that sustainability is on the Supervisory Board's agenda on a quarterly basis. Separately, the Audit Committee is kept up to date with sustainability reporting developments, including developments relating to risk management and internal control processes. The company states that more information, including on the specific topics discussed, can be found in the Report of the Supervisory Board and the Corporate governance statement. The Board of Management, operating within the Executive Committee, is responsible for incorporating the sustainability agenda into the company strategy and monitoring performance through the Operational Control Cycle, as described in the Corporate governance statement. This section is brief and directs readers to the governance chapters for fuller detail on the sustainability matters addressed by the bodies.

AkzoNobel discloses that goals related to ESG aspects are included in both the long-term incentive (LTI) and short-term incentive (STI) performance targets for the Board of Management. The company incorporates this disclosure by reference to its Remuneration report, indicating that the LTI ESG targets appear in the second table under Performance metrics 2022 to 2024 LTI Share Plan, and that the STI ESG targets appear in the table on STI personal objectives. It also notes that goals related to ESG aspects in remuneration from 2025 onwards can be found later in the Remuneration report. The ESRS 2 chapter itself provides only a short summary and points to the Remuneration report for the specific incentive metrics and other compensation indicators.

AkzoNobel states that the outcomes of its various due diligence processes for sustainability matters inform its material impacts, risks and opportunities, and that the identification, prevention, mitigation and reporting of actual and potential impacts is embedded in how it conducts business. The statement describes specific human rights and environmental due diligence processes. Human rights work is guided by the company's core values and its human rights framework, aligned with the UN Guiding Principles on Business and Human Rights, the International Bill of Human Rights, ILO fundamental principles and OECD Guidelines, and includes a grievance mechanism. From 2023 the global salient human rights issues assessment was integrated into the annual double materiality assessment. Environmental due diligence is embedded in the company's Health, Safety, Environment and Security processes, including processes for acquisitions and divestments. The company reports no severe human rights impacts or incidents in its own operations during 2024, and that site-level assessments across 13 sites identified no adverse human rights impacts.

AkzoNobel describes how controls and procedures related to managing impacts, risks and opportunities are being integrated into its overall risk management process, referring readers to the Risk management chapter for the general framework. Internal controls over sustainability reporting depend on the reporting area, with multiple internal functions contributing; the majority of reported metrics are prepared by the HSE&S and HR functions. In 2023 the company began an implementation plan setting a roadmap toward reasonable assurance readiness, including risk and control matrices for functions that contribute to sustainability reporting, with risks prioritized by function and potential impact. The main risks identified relate to the accuracy and completeness of information, given that CSRD requires data on many metrics not reported in prior years. These risks are mitigated by functional and group-level controls consisting of reconciliation of reported data to source files, analytical procedures and IT general controls. As 2024 was the first year of CSRD implementation, further development of the control environment is expected in coming years.

AkzoNobel produces paints and coatings, classified under NACE Code C20.3, a subset of C20 Manufacture of chemicals and chemical products. The chemicals sector is considered a high climate impact sector under Commission Delegated Regulation (EU) 2022/1288. Operations are grouped into two main businesses, Paints and Coatings, with the description of business model and strategy incorporated by reference to the Strategy chapter and the descriptions of key markets served. The value chain overview shows raw materials bought from suppliers worldwide (with resins, pigments and colorants the largest spend categories), around 130 manufacturing sites, about 35,000 employees and activity in more than 100 countries. Roughly 40 percent of revenue comes from Paints and 60 percent from Coatings. Value chain emissions are split into 46 percent upstream, 1 percent own operations and 53 percent downstream. The company confirms involvement in chemical production but not in fossil fuel, controversial weapons or tobacco activities. A key strategic element linked to sustainability is halving carbon emissions across the value chain by 2030 against a 2018 baseline.

In line with the Dutch Corporate Governance Code 2022, AkzoNobel has published a Stakeholder Engagement Policy available on its website. Its key stakeholders are customers, employees, governments and policy makers, industry associations and other partners, investors, suppliers and wider society. Engagement methods, chosen according to the nature, purpose and frequency of the interaction, include one-on-one meetings, calls, conferences, roundtables, consultations, roadshows, assessments and audits, surveys and multi-stakeholder initiatives and coalitions. Key engagement topics include company performance and strategy (financial and ESG), business climate, investments, innovation, sustainability, regulation and employee insights. The company states that the main purpose of engagement is to foster meaningful relationships and address pertinent issues, and that stakeholder views shape its strategic decision-making. As part of the double materiality assessment, AkzoNobel consulted representatives from these key stakeholder groups on sustainability-related impacts, risks and opportunities.

AkzoNobel assessed its environmental, social and governance impacts, risks and opportunities and how they interact with its strategy and business model, drawing on internal and external stakeholder engagement for both impact and financial materiality. The material topics identified are climate change mitigation and energy, climate change adaptation, priority substances, circularity and waste, working time, and health and safety, mapped across upstream, own operations and downstream boundaries and assessed over short, medium and long term. Each topic is linked in a table to its associated ESRS disclosure requirements and page references. The resilience of the strategy and business model is analyzed where relevant, primarily for climate change mitigation and adaptation, across short, medium and long term through carbon reduction levers and natural hazard impact management. The current and anticipated financial effects of the material risks and opportunities have been assessed and are not expected to significantly impact financial position, performance or cash flows over the short, medium and long term. No material biodiversity topics were identified, though indirect impacts such as emissions and waste are covered elsewhere.

AkzoNobel's process to identify and assess material impacts, risks and opportunities is structured in line with the ESRS and carried out through its double materiality assessment, performed separately from the enterprise risk management process, so no prioritization relative to other risk types took place. A baseline was performed in 2023, drawing on ESG raters, peer and value chain partner sustainability reports, salient human rights due diligence outcomes and prior impact assessments. In 2023 workshops with internal experts rated IROs on severity (scale, scope and irremediability) and likelihood on a 1 to 5 scale; topics scoring 50 or above were deemed material, assessed per value chain area and per activity, for impacts on people and environment, with financial materiality using the same thresholds as the financial statements. In 2024 the company updated the assessment, found no organizational changes warranting revised IROs, reviewed the 2023 material and non-material IROs, and validated outcomes with external stakeholders including suppliers, customers, investors and employees. The assessment is reviewed annually, with a thorough reassessment planned every three years.

AkzoNobel includes a mapping from its material impacts, risks and opportunities to the associated ESRS disclosure requirements, with page references, in the impact, risk and opportunity management section. Because certain topics are not material under its double materiality assessment, the company has not included all related ESRS disclosures for them, though other relevant matters for own operations are reported, including gender equality and equal pay, discrimination and harassment, diversity, equity and inclusion, freedom of association and collective bargaining, whistleblowers, bribery and corruption, and political engagement and lobbying, plus modern slavery for upstream operations. The statement applies several ESRS 1 phase-in and transitional provisions, including on real estate energy efficiency classes (E1-9), substances of very high concern in net revenue (E2-6), absolute weight of post-consumer recycled content in plastic packaging (E5-4), non-employee workers (S1-7 and S1-14), and the option not to disclose comparative data in this first year of CSRD application. Some disclosures are incorporated by reference to other parts of the management report, and a dedicated ESRS 2 EU legislation datapoint index shows which required datapoints are reported and material.

AkzoNobel discloses a transition plan for climate change mitigation. It targets a 50% reduction in carbon emissions across its full value chain by 2030 (baseline 2018), covering both own operations (Scope 1 and 2) and Scope 3, in addition to a carbon neutral ambition for 2050. The target is approved by the Science Based Targets initiative and aligned with a 1.5 degree Celsius scenario and the Paris Agreement. The company states its carbon emission reduction plan, target and transition plan were approved by the Board of Management and reviewed by the Supervisory Board, and that AkzoNobel is not excluded from the EU Paris-aligned Benchmarks. The plan sets out three key decarbonization levers for Scope 1 and 2 (energy efficiency, renewable electricity, and fossil to renewable fuel transition) and four levers for Scope 3 (energy transition, process efficiency, reduced solvent emissions, and circular solutions).

AkzoNobel identifies climate change mitigation and adaptation as material topics, mitigation for its entire value chain and adaptation for its own operations only. Its climate change mitigation policy includes the carbon emission reduction plan and the 2030 value chain reduction target announced in 2021 and validated by the SBTi. For adaptation, the primary risk identified is insufficient adaptation to natural hazards, which could cause asset loss and operational disruptions. The company disclosed two material environmental and social factors linked to physical risk: water scarcity at water intensive sites and heat stress for employees. A related heat stress policy makes line management responsible for heat stress training and for adjusting work practices, for example providing drinking water and rescheduling hot work. The global heat stress policy is owned by the HSE and S team. Water consumption reduction efforts focus on top water intensive sites in areas of high water stress.

AkzoNobel describes actions and resources supporting its climate policies. For Scope 1 and 2 it pursues energy efficiency (operational excellence, asset upgrades under a multi-year Capex plan, and production footprint optimization), renewable electricity through on-site solar, Power Purchase Agreements and renewable electricity certificates, and a shift from fossil to renewable fuels. In 2024, 3% of consumed electricity was produced on-site via solar, 83 locations used 100% renewable electricity, and 33 used solar panels. For Scope 3 it groups projects under four levers with planned 2030 contributions: energy transition (39%), process efficiency (33%), reduced solvent emissions (13%) and circular solutions (15%). Supplier engagement includes the SiGREEN PCF data platform (158 suppliers onboarded) and the Supplier Sustainability Balanced Scorecard. The company states that costs toward the 2030 target are mostly captured in the CapEx of suppliers and customers, with limited direct investment for its own operations, and that financial effects, if any, would be captured in cost of sales. Executive remuneration was coupled to Scope 3 reduction for the first time in 2024.

AkzoNobel reports GHG emission reduction targets. It has a target of 50% carbon emission reduction for Scope 1 and Scope 2 (market-based) by 2030 (baseline 2018, absolute) and a 50% reduction target for Scope 3 by 2030 (baseline 2018, absolute), validated by the Science Based Targets initiative and in line with a 1.5 degree Celsius scenario. The SBTi validated a 42% reduction ambition versus a 2020 baseline, which the company states refers to the same target as its 50% reduction versus the 2018 baseline. The Scope 3 target covers around 96% of total Scope 3 emissions. There is also a carbon neutral ambition for 2050 and an interim 2025 target of 25% reduction for own operations. This year AkzoNobel updated its energy efficiency target from a 30% to a 20% reduction by 2030 (baseline 2018), stating that its carbon reduction ambition remains unchanged.

AkzoNobel reports energy consumption and mix for its own operations. Total energy consumption in 2024 was 847,081 MWh, against a 2018 baseline of 889,357 MWh. Consumption from fossil sources was 475,835 MWh (56% of the total), from renewable sources 360,154 MWh (43%), and from nuclear sources 11,092 MWh (1%). Fuel consumption included 239,643 MWh natural gas and 36,516 MWh crude oil and petroleum products. Versus the 2018 baseline, absolute energy consumption fell 4.8% and relative consumption per ton of production fell 8.7%. Renewable electricity reached 65% of electricity use at the end of 2024 (2023: 62%), with bundled certificates at 28% and unbundled at 35%. In 2024, 3% of consumed electricity was self-generated on-site through solar panels. Because AkzoNobel operates in a high climate impact sector, it also reports energy intensity per net revenue and fossil source disaggregation.

AkzoNobel reports gross Scope 1, 2, 3 and total GHG emissions in tCO2eq. Scope 1 was 57,645 (down 8.3% since 2018). Scope 2 was 111,738 market-based and 202,927 location-based; market-based Scope 2 fell 50.6% since 2018. Combined market-based Scope 1 and 2 emissions were 169,382, a 41.4% reduction versus the 2018 baseline of 288,919, meaning the company has already met its 2025 interim target of 25% reduction for own operations. Scope 3 emissions were 12,761,437 (a rounded 12.8 million tons), down 3% from 2023 and down 12% versus the 2018 baseline, with significant categories being purchased goods and services, processing and use of sold products, and end-of-life treatment. Total market-based GHG emissions were 13,409,389 and total location-based emissions were 13,500,578. The company also reports GHG intensity per net revenue (market-based 0.00125 tCO2eq per euro) and the share of Scope 3 calculated using primary data (14%).

AkzoNobel discloses that it does not make use of financed carbon credits outside its value chain and currently does not perform or purchase any offsetting activities for its GHG emissions. It also states that it does not make use of carbon removals or storage in its own operations. The datapoint index confirms E1-7 GHG removals and carbon credits is included in the report but is not assessed as a material topic.

AkzoNobel discloses that it uses an internal carbon price in investment decisions. It has sustainability assessments in place for all material investment projects and states it has implemented an internal carbon price for these decisions for the last eight years, anticipating the impact of any future carbon pricing. Annually it quantifies the potential transition risk of global carbon taxation by multiplying its Scope 1 and 2 carbon footprint by the internal carbon price. To analyze scenarios it uses a carbon price ranging from 50 to 150 euros per ton, the upper figure being the suggested UN price on carbon, which results in an impact well below 1% of 2024 revenues.

AkzoNobel addresses anticipated financial effects from physical and transition risks. For physical risks to own operations it assessed potential property damage and business interruption across its approximately 130 manufacturing sites, judging business interruption risk low and operations resilient. It reviewed 20 years of insurance claims, noting total indemnity paid for natural catastrophes was below 10 million euros, and concludes it does not currently anticipate a material financial effect. For transition risks it lists its top five risks and states these are not considered material following the double materiality assessment and that it does not anticipate any direct material financial effects. Physical climate risk assessment used SSP2-4.5 and SSP5-8.5 scenarios with 2030 and 2050 horizons. Certain quantitative datapoints are not provided: the breakdown of the carrying value of real estate assets by energy-efficiency class is flagged as subject to phase in, while disaggregation of amounts by acute and chronic physical risk, location of significant assets at material physical risk, and degree of exposure to climate-related opportunities are reported as not applicable or not material.

AkzoNobel's pollution policy centers on Substances of Very High Concern (SVHCs) purchased and used in its own operations. SVHCs are only used in products when both permitted by applicable legislation and required for the unique properties and performance of the product. The policy is reviewed and updated annually where necessary. Monitoring of substances used in products is a continuous process run by the Product Safety and Regulatory Affairs (PSRA) department, and the Executive Committee is accountable for implementation. The company currently does not maintain a generic policy for phasing out all SVHCs, because these substances contribute to the properties of some products. All operations run under environmental permits or environmental legislation and must comply with applicable discharge criteria for air and water.

To gain further insight into SVHC emissions to water and air, AkzoNobel engaged an external consultant to design and carry out a monitoring campaign investigating these emissions, which may affect future materiality assessments. Levels of pollution are being assessed through environmental sampling with a third party, and the company will re-assess materiality if the results require it in the next reporting year. For soil, existing manufacturing locations have primary containment and sealed floors that prevent contact with the soil, alongside secondary containment and mature process safety management systems. Legacy soil remediation efforts, including the related financial provision for remediation, are disclosed in Note 19 of the Financial statements.

SVHCs are defined under REACH and disclosed through the safety data sheet when present above 0.1%. The total amount of SVHCs procured in 2024 was 23,234 tons, representing less than 1% of total purchased volumes, based on the REACH list as of January 1 of the reporting year. The quantity of SVHCs leaving facilities as products is estimated at 20 to 40% of the procured quantity, mainly relating to mutagenic and carcinogenic hazard classes. By hazard class (in tons): endocrine disrupting environment 8,808; toxic for reproduction 8,721; endocrine disrupting human health 8,168; equivalent level of concern environment 7,356; equivalent level of concern human health 7,356; mutagenic 3,273; respiratory sensitising 1,979; carcinogenic 1,299; vPvB 110; PBT 86. The class figures do not reconcile to the total because some substances carry multiple end-point hazard classes. More than 95% of SVHC purchases relate to the Performance Coatings business.

Note: AkzoNobel assessed water and marine resources as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel is committed to the responsible use and conservation of water and strives to reduce water use and encourage reuse and recycling at all manufacturing sites. The Water and Marine Resources Policy forms part of the annual communication of HSE&S objectives and targets, is reviewed annually, and is signed off by the leadership team within the HSE&S function. The current focus is on the top ten water withdrawing sites in high water stress areas (HWSAs), identified through the overall risk assessment of the company's climate change adaptation work.

Note: AkzoNobel assessed water and marine resources as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel will implement a water focus program in 2025 to analyze the water-saving opportunities of its ten focus sites, from which site-specific reduction targets will be identified. The program is carried out by a dedicated resource within the Corporate HSE&S team. The company has two key focus areas: further improving the efficiency of equipment used for cleaning activities and increasing the reuse of process water within manufacturing. It is also rolling out plans to collect reliable measurement of total water recycled and reused to track effectiveness, using a phased approach starting with the focused sites. Focus studies at the top ten water consuming sites in HWSAs will determine local impacts, including impacted communities. Dedicated resources have been allocated within the HSE&S team.

Note: AkzoNobel assessed water and marine resources as not material under its double materiality assessment and discloses this information on a voluntary basis. Overall company water withdrawal was 7.7 million m3 in 2024, with a relative water withdrawal of 2.3 m3 per ton of product. Withdrawal at sites located in high water stress areas (HWSAs) was 13% of total withdrawal, and the relative withdrawal in HWSAs was significantly lower at 0.65 m3 per ton. Overall water consumption in HWSAs was 0.4 million m3, representing 52% of total water consumption, with consumption mainly represented by water included in products. The water intensity ratio was 73 m3 per million euros, and total water consumption in areas at water risk was 402,782 m3. Water use split by purpose was cooling 72%, product 10% and other 18%. Using the WRI Aqueduct water risk atlas, 59 sites are located in HWSAs under the 2030 business-as-usual scenario.

AkzoNobel discloses three policies covering its material circular economy topics. The Waste Management Policy aims to minimize waste by preventing, reusing, recycling and recovering it, with a focus on reducing waste to landfill and hazardous waste to landfill through elimination, recycling or incineration. It forms part of the annual HSE&S objectives, is reviewed annually and signed off by the HSE&S leadership team. A resource inflows policy, owned by the Decorative Paints EMEA sustainability team, covers increasing recycled content in the plastic packaging used by the Decorative Paints Europe business. It was adopted in 2020 and formalized in 2024, and is reviewed annually. A resource outflows policy on extending the durability of assets protected by its products is owned by the sustainability team, with the Director of Sustainability accountable for implementation. It was adopted in 2024, is reviewed annually and covers the full product portfolio.

In 2024, AkzoNobel continued its waste management program with its overall approach to circularity unchanged. Programs focus on reducing waste directed to disposal, emphasizing recycling and reusing waste while keeping the waste reduction hierarchy in mind and avoiding landfill where possible. Specific initiatives in 2024 included improving the efficiency of solvent recovery units to increase recovered and reused solvents that would otherwise be disposed of, and transferring more unintended outflow from manufacturing into by-products reused by third parties. A material optimization process diverted slow-moving and obsolete materials (SLOBs) from scrapping to internal reuse and third-party recyclers and outlets. The company continued its focused approach on the former Grupo Orbis sites, acquired in 2022, to reduce landfill use in the LATAM region. Waste reduction is driven through multi-disciplinary collaboration between commercial teams, supply chain, manufacturing, HSE&S, innovation teams and third parties.

AkzoNobel holds an ambition of 100% circular use of materials by 2030, supported by a long-term incentive linked to that target. Circular use of materials reached 74% in 2024, up from 55% in 2023. In light of new ESRS definitions, this target will be replaced from 2025 once the vesting period ends. From 2025, waste reduction will be measured by relative total waste (kg waste per ton of production volume), aiming for a 3% reduction versus 2024. The circular use rate will be replaced by a waste disposal intensity rate, with 2025 as the baseline year and a target introduced from 2026. For resource inflows, the company targets at least 50% post-consumer recycled content in plastic packaging used by its Paints Europe business by 2025, applied to buckets and excluding lids, with 2024 treated as the official CSRD baseline. For resource outflows, no specific durability targets have been set yet because the company is still forming a baseline during CSRD implementation.

AkzoNobel discloses resource inflows for its material topic of recycled content in plastic packaging. The majority of plastic packaging used is by the Paints business in Europe, representing 48% of spend and 54% of units bought in 2024 (excluding Romania for data quality reasons). The company reports post-consumer recycled (PCR) content in plastic packaging for Paints Europe of 43% in 2024. In 2024, the range of PCR across packs was 25% to 90%, and the average PCR across Paints Europe buckets was 43%. For Paints businesses outside Europe, no targets are set and the estimated PCR range is 15% to 25%. The company continues collaborating with suppliers to stay on track, seeking alternative suppliers where a supplier cannot meet the target. Broader resource inflow figures, such as the total weight of materials used and the split of biological and technical materials, are not disclosed.

AkzoNobel frames its resource outflows around extending the durability of the substrates and assets its products protect, which builds circularity into the benefits its paints and coatings offer. The company aims to provide products with strong durability characteristics across end-user segments including transport, consumer goods, built environment and industrial applications, supported by durability norms such as Qualicoat and AAMA and specific warranties. In 2024, 15.5% of Paints revenue and 11.8% of Coatings revenue was considered to provide more durability than the mainstream product in that category. The overall expected durability of products placed on the market, relative to the industry average for each product group, was 13.3% of revenue. The assessment covered 84.3% of the Paints portfolio and 76.6% of the Coatings portfolio, with extrapolation based on analyzed business units for those not yet fully assessed. The company has not yet set specific durability targets, as it is still forming a baseline under CSRD.

In 2024, AkzoNobel generated 96.9 kilotons (96,910 metric tons) of waste, of which 52.9% (51,295 metric tons) was classified as hazardous. Non-recycled waste totaled 46,744 metric tons, or 48% of total waste. Waste directed to disposal was 30.6% of the total, comprising 16,065 metric tons of hazardous and 13,546 metric tons of non-hazardous waste. Waste diverted from disposal comprised 35,231 metric tons of hazardous and 32,068 metric tons of non-hazardous waste, mainly through recycling (24,546 hazardous and 25,619 non-hazardous metric tons) and other recovery operations. Waste to landfill (hazardous and non-hazardous) decreased by 8.1%, from 2,766 tons in 2023 to 2,543 tons in 2024, an absolute reduction of 78% versus the 2018 baseline, with 75% of manufacturing sites now landfill free. Following CSRD alignment of waste categories, reconditioned packaging (previously unreported) was added to waste diverted from disposal, representing 32.1% of total waste and reducing comparability with 2023.

AkzoNobel discloses several policies covering its own workforce. The Health, Safety, Environment and Security (HSE&S) Policy sets out the company's responsibility for protecting the health and safety of employees, contractors, customers and neighbors. It is owned by the HSE&S department and reviewed and updated at least annually, supported by an ISO 14001 and ISO 45001 certified management system. In 2024 the company finalized its Global Working Hours Standard Policy, applicable to all employees working under a time registering system, setting maximum working hours of no longer than 12 hours a day and 60 hours a week for a full-time employee. This policy became effective January 1, 2025, is owned by the Global HR Director and reviewed annually. The Code of Conduct governs fair and lawful remuneration and working hours, freedom of association and collective bargaining, and non-discrimination. A DE&I Policy and a Human Rights position paper are also referenced.

AkzoNobel engages its workforce on material impacts through workers' representative groups. At all locations, the workforce helps establish and implement annual HSE&S plans through works councils and labor organizations. On working time, the company measured its efforts using its Voices engagement survey, reviewing questions on the Workload topic that reflect the perception of employees both under and outside a time registering system. The annual Voices survey covers the entire own workforce and featured 50 questions in 2024, achieving an 89% participation rate with close to 32,000 employees taking part. The most senior role with operational responsibility for ensuring the company properly engages with employees is the Process Owner Human Resources. The company's approach to materiality, including engagement on impacts, risks and opportunities, is described in its Impact, risk and opportunity management disclosures.

AkzoNobel provides channels for its own workers to raise concerns and processes to remediate negative impacts. The SpeakUp! grievance mechanism allows employees to raise allegations about compliance with the Code of Conduct and violations of applicable laws. A dedicated team follows an investigation protocol adhering to confidentiality, respect for anonymity, non-retaliation, objectivity and the right to be heard. For concerns outside the scope of the Code of Conduct, employees can use other formal channels such as formal complaints to works councils, trade unions, occupational health services or committees, trusted persons and harassment committees, with availability varying by region or country. Informal channels include raising concerns to the line manager, HR or site manager, suggestion boxes at locations, or town halls. In the Voices survey, employees who score questions on bullying, harassment or discrimination low (1 or 2 of 5) trigger automatic notification of the manager and relevant HR manager, without disclosing the employee's identity, so action can be taken.

AkzoNobel took action on its material health and safety and working time impacts. On safety, it progressed its life-critical procedures and HSE&S roadmap, identifying locations needing improvement and placing them on targeted plans. It stepped up its lift truck and pedestrian segregation program using a risk-based approach, advanced its Behavior Based Safety approach, and continued company-wide monthly Safety Moments. It launched the Guard Your Hands campaign to reduce hand injuries and the Count On Me For Safety campaign to promote an open safety culture. Industrial hygiene and ergonomic programs are actively managed to reduce occupational illness-related absenteeism. On working time, it finalized the Global Working Hours Standard Policy and launched a global well-being portal, rolled out first in seven countries (Canada, Mexico, US, Brazil, UK, Ireland and the Netherlands) covering almost 31% of employees. During 2025 it will implement the working hours policy, gather results and measure compliance, with action plans to follow any findings.

AkzoNobel sets targets for its material workforce topics. Its health and safety targets are zero fatalities for its own workforce, zero fatalities for other workers on its locations, and a serious injuries and fatality frequency (SIF-F) for its own workforce of less than 3.0; the 2024 SIF-F was 1.4. For diversity, it has set a target of reaching 30% female representation at executive level by the end of 2025, with the ratio at 26% in 2024, and this target was included in senior executive long-term incentive plans, impacting 8.5% of their total value. It has also set targets for female representation at middle management levels. On working time, the company states it currently does not have targets for its own workforce and is determining how to effectively track compliance with its global working hours rules, including considering the root causes.

AkzoNobel reports a total of 35,327 employees (headcount) at year-end 2024, with an average of 35,427 employees during the year. By gender, 9,780 employees (28%) are female, 25,534 (72%) are male and 13 (0%) are other. By contract type, there are 32,796 permanent employees, 2,527 temporary employees and 4 non-guaranteed hours employees; and 33,751 full-time and 1,576 part-time employees. By region, permanent headcount is 15,922 in EMEA, 4,761 in Latin America, 2,991 in North America, 3,916 in North Asia and 5,206 in South APAC. China accounts for 4,278 employees (12%). Total employee turnover in 2024 was 12% (2023: 13%), representing 4,410 employees, and voluntary turnover was 7% (reported as 6.5% in the summary table). Definitions are provided in the Methodology and definitions chapter.

AkzoNobel reports that 40% of its total employees are covered by a collective bargaining agreement. Within the European Economic Area (EEA) the coverage rate is 62%, and 60% of employees in EEA countries are covered. Outside the EEA, 26% of employees in non-EEA countries are covered, with regional coverage of 59% in EMEA, 56% in LATAM, 28% in South APAC, 11% in North America and 4% in North Asia. The Code of Conduct states that the company respects individual rights to freedom of opinion and association and respects the right to collective bargaining and co-determination. Social dialogue takes place through workers' representative groups such as works councils and labor organizations, which help establish and implement annual HSE&S plans at all locations.

AkzoNobel reports diversity metrics for its workforce. By gender across the total headcount of 35,327, 28% are female, 72% are male and 0% (13 employees) are other. At executive level the female executive ratio is 26% (78 female and 227 male executives out of 305), up one percentage point from 2023. By age, 11% of employees (4,044) are under 30 years old, 62% (21,786) are between 30 and 50 years old, and 27% (9,497) are over 50 years old. The company also tracks female representation at middle management levels, increasing senior middle management female representation by 1.3 percentage points, and reports gender composition of its Supervisory Board, Board of Management and Executive Committee in its corporate governance disclosures.

AkzoNobel reports training and skills development indicators, noting the topic was not determined material but is included as good practice. In 2024 it provided a total of 112,167 training hours to employees, with an average of 2.54 training hours per employee (rounded to 3 in the summary table); this covers registered learning efforts under the 10% formal education portion of its 70:20:10 learning formula and excludes compliance-based mandatory training. The overall percentage of employees who participated in a regular performance review was 96% (women: 98%; men: 96%). The company extended its talent management framework to around 14,000 employees, of whom 31% are considered key talent and 6% high potential talent, and introduced a new learning and career platform in September 2024 to deliver more personalized, data-centric learning experiences.

AkzoNobel reports that 100% of its own workforce is covered by a health and safety management system based on legal requirements and recognized standards, globally certified against ISO 14001 and ISO 45001. In 2024 there was one fatality in the own workforce as a result of work-related injury (a sales representative in Medellin, Colombia, in a traffic incident) and zero fatalities among other workers on its sites. There were 107 recordable work-related accidents for the own workforce (2023: 110), with a rate of 1.46 per 1,000,000 hours worked (2023: 1.53). There were two cases of recordable work-related ill health (2023: zero) and 1,550 days lost to work-related injuries and ill health (capped at 180 days). The serious injuries and fatality frequency (SIF-F) was 1.4 against a target of less than 3.0.

AkzoNobel reports remuneration metrics. The gender pay gap was not determined material in the double materiality assessment but is disclosed at stakeholder request; the 2024 calculation found a 3.8% gap in favor of women (shown as (3.8)% in the summary table). Details on the calculation are in the Methodology and definitions chapter. During 2024 the company began preparing for the EU Pay Transparency Directive, which will apply once transposed into national legislation. Further compensation indicators, including pay ratios and the CEO pay ratio, are provided on page 120 of the Remuneration report rather than in the own workforce chapter.

AkzoNobel reports on incidents, complaints and severe human rights impacts. It analyzed SpeakUp! cases related to alleged discrimination or harassment, of which 84 cases were reported in 2024: 15 were found partly or fully substantiated, 9 were unsubstantiated, 14 were referred to HR as separate HR matters, 2 had insufficient information, and 44 remained under investigation. Actions taken on the substantiated cases involved three dismissals, eight mandatory trainings, two warning letters and two cases where no action was needed. There were zero complaints filed to National Contact Points for OECD Multinational Enterprises, zero severe human rights issues and incidents connected to the own workforce, and zero in material fines, penalties and compensation for such issues. Voices survey scores were 4.3 out of 5.0 on freedom from bullying or harassment and 4.2 on non-discrimination.

AkzoNobel identifies workers in its value chain as employees of upstream suppliers and downstream logistics service providers, with two material topics: working time and health and safety. Its Business Partner Code of Conduct (BP CoC) sets out expected ethical behavior for suppliers, distributors and agents, covering human rights, safety, fair working hours and remuneration, and grievance mechanisms. New business partners are expected to apply the BP CoC principles or equivalents, and non-compliance may lead to termination of the relationship. In 2024, the company established a Responsible Sourcing Policy built on the BP CoC, setting minimum expectations across all direct suppliers with procurable spend. It commits to the ILO Declaration on Fundamental Principles and Rights at Work, the OECD Guidelines for Multinational Enterprises, the Universal Declaration on Human Rights, the UN Guiding Principles on Business and Human Rights, and the Science Based Targets initiative. The Chief Procurement Officer owns the policy, which is reviewed annually. Separate position statements cover conflict minerals and mica minerals, and AkzoNobel is a founding member of the Responsible Mica Initiative.

AkzoNobel describes how it manages supplier relationships in the Governance chapter, including EcoVadis assessments performed through its Together for Sustainability (TfS) membership on high-risk and high-spend suppliers. The company performs third-party on-site TfS sustainability audits on selected direct raw material and packaging suppliers in high-risk areas. These audits address material topics including occupational health and safety, emergency preparedness and working time. TfS-approved third-party auditors verify document reviews and conduct individual and group interviews, with candidates randomly selected by the auditor without interference from management. As a founding member of the Responsible Mica Initiative, whose mission is a fair, responsible and sustainable mica supply chain in India free of child labor by 2030, AkzoNobel engages with workers in the supply chain through the Supply Chain Mapping and Workplace Standards program and the Community Empowerment program.

AkzoNobel's SpeakUp! grievance mechanism, described in its Integrity and compliance management chapter, offers employees and third parties a means to raise allegations relating to compliance with the Business Partner Code of Conduct and violations of applicable laws and regulations. A dedicated investigation team follows an investigation protocol adhering to principles of confidentiality, respect for anonymity, non-retaliation, objectivity and the right to be heard. Business partners are expected to provide their own employees and other interested parties with a mechanism to raise concerns about actual or potential violations, to address these concerns fairly and transparently, to protect confidentiality and to prohibit retaliation against those raising concerns. A review of adherence to this requirement forms part of the on-site audits. As part of its EcoVadis assessments, AkzoNobel also asks whether suppliers have implemented a formal grievance mechanism encouraging employees and external stakeholders to report potential violations of the partner's external stakeholder human rights policies.

AkzoNobel takes action on impacts on value chain workers primarily through its Together for Sustainability (TfS) membership. For TfS on-site audits, it achieved 87% completion on major and critical findings, of which the material topics of working time and health and safety make up the largest share. The company is considering using the corrective action planning (CAP) tool in EcoVadis for suppliers with improvement areas on its material topics of health and safety and working time, aiming to enhance measurement and follow-up of supplier performance, subject to an enhancement of the tool becoming available. During 2024, no suppliers had their contractual relationship terminated due to AkzoNobel's impacts on value chain workers. The company conducts due diligence with suppliers into the conflict minerals and mica minerals supply chains and takes appropriate action when necessary. In 2024 it sent 310 surveys on minerals with a 92% response rate, and 65 individuals from suppliers attended webinars on risk materials.

As part of its Together for Sustainability membership, AkzoNobel performs EcoVadis assessments on high-risk and high-spend direct suppliers. Beyond a minimum total assessment score of 45, its target includes a minimum score of 50 in the labor and human rights sub-section, which covers the material topics of health and safety and working time. Suppliers are asked to achieve these scores through an annual assessment, and those meeting the target scores are granted a validity of three years. The score benchmark of 50 was chosen because a score of 50 is rated as good under EcoVadis scoring principles. For 2024, both the total score and the labor and human rights score were met by 67% of suppliers (2023: 63%), and the target is to reach 75% of suppliers meeting both scores by 2030. The labor and human rights score alone was met by 71% of suppliers. There is no separate target for the percentage of suppliers meeting the minimum labor and human rights score of 50, since 2024 was the first year of reporting on this.

Note: AkzoNobel assessed business conduct as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel discloses its business conduct policies and corporate culture, noting it has not identified any material outcomes related to business conduct but provides transparency in line with good practice. The company has three core values of safety, integrity and sustainability. Its Code of Conduct, available in 32 languages, defines how these values are lived and covers topics including anti-bribery and anti-corruption, competition law, conflicts of interest, health and safety and human rights. The Code provides protection against retaliation, with no repercussions for reporting breaches in good faith even if unfounded. Code of Conduct training is carried out for all employees every other year, both online and face to face, with specific training on key risks for targeted audiences, and progress is reported quarterly to the Executive Committee and Audit Committee. Regional Integrity and Compliance Managers strengthen the culture of integrity. The SpeakUp! grievance mechanism lets employees and third parties raise concerns, with an investigation team following principles of confidentiality, anonymity, non-retaliation, objectivity and the right to be heard.

Note: AkzoNobel assessed business conduct as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel describes managing supplier relationships through dedicated sustainability programs. All direct suppliers with annual spend above 1,000 euros are requested to sign the Business Partner Code of Conduct, a core part of commercial agreements, with an IT solution automating collection since 2023. For direct suppliers with annual spend between 250,000 euros and 1 million euros, an annual country and industry risk analysis is performed using the IQ Plus tool from EcoVadis, with higher-risk suppliers selected for a Together for Sustainability (TfS) assessment. Suppliers with spend above 1 million euros are in scope regardless of risk. The company tightened its risk criteria in 2024 and increased suppliers joining its sustainability program from 1,347 to 1,557, covering 84% of global spend and 97% of upstream carbon emissions. Program suppliers must reach a total score of 45 and a labor and human rights score of 50 through annual assessment. In 2024, 25 TfS site audits were performed, and 350 suppliers completed 2,225 trainings across the TfS or EcoVadis academies. In total, 74% of procurement staff completed one or more sustainability trainings.

Note: AkzoNobel assessed business conduct as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel discloses its approach to preventing and detecting bribery and corruption, stating it does not make, offer or authorize bribes or engage in any other unethical business practice and competes on the merits of its products. Rules and procedures on anti-corruption and anti-bribery are held on a Policy Portal accessible to employees. Regional Integrity and Compliance Managers support identifying and addressing local risks, cooperating with business and functional teams to tailor the program to local risks and following up on internal audit findings and SpeakUp! cases. In 2024, the company further strengthened its Anti-Bribery and Anti-Corruption program by launching a Donations, sponsorships and hospitality registration and approval tool, and deployed new online training on critical anti-bribery and anti-corruption topics to increase employee awareness. Any alleged violation of the anti-corruption or anti-bribery rules can be reported through the SpeakUp! process and is then investigated by an independent team.

Note: AkzoNobel assessed business conduct as not material under its double materiality assessment and discloses this information on a voluntary basis. AkzoNobel discloses its political influence and lobbying activities, explaining that as a leading paints and coatings company it participates in public debate within its industry. Lobbying and stakeholder engagement are guided by company strategy and governance and based on material impacts, including its approach to sustainability. Oversight lies with the Communications function, reporting to the Executive Committee. Representatives engage directly and indirectly through trade and industry associations and sustainability coalitions with stakeholders globally. Main topics include relationships with local governments and communities, contributing to the green transition, chemicals and environmental regulation, innovation and R&D, and international corporate social responsibility. A global policy on donations and sponsorships states the company should not promise, offer, give or authorize anything of value to improperly influence or reward a business decision, and it does not provide donations or sponsorships to organizations owned, controlled by, associated with or at the behest of government officials. Akzo Nobel N.V. is registered in the EU Transparency register under ID number 365563511941-15.