ALK-Abelló

ALK's governance model places overall responsibility for the sustainability strategy, including impacts, risks, opportunities and targets, with the Board of Directors. The Audit Committee oversees sustainability disclosures, processes, controls and assurance, while the Remuneration Committee oversees sustainability related remuneration. The Executive Leadership Team approves all sustainability related policies and strategy and reports to the Board. A Sustainability Committee, led by the Executive Vice President for People and Organisation, oversees legal reporting requirements and makes recommendations to the Executive Leadership Team on matters with strategic impact, operating under a sustainability committee charter and meeting quarterly. The Corporate Finance Department handles accounting policies and internal controls, the Sustainability Department leads strategy implementation, and corporate functions manage daily execution and data collection. Information on the composition, diversity, expertise and business conduct related role of the bodies, and on the experience of Board members relevant to ALK's sectors, products and geographic locations, is incorporated by reference to the Corporate governance and Board of Directors sections of Corporate matters.

The statement explains that sustainability is systematically managed and integrated into decision making and business strategy through the governance model, which defines clear roles and provides a framework for setting and monitoring targets. The Board of Directors holds overall responsibility for the sustainability strategy, and the Executive Leadership Team, which reports to the Board, approves all sustainability related policies and strategy. The Sustainability Committee oversees legal reporting requirements and makes recommendations to the Executive Leadership Team on matters with strategic impact on the global organisation. During 2024 the Sustainability Committee focused on ensuring ALK meets ESRS and EU Taxonomy reporting requirements, and it is intended to also focus in future on implementing further due diligence programmes in the value chain and evaluating the effectiveness of policies, actions, metrics and targets addressing impacts, risks and opportunities. The Sustainability Committee, the Executive Leadership Team and the Audit Committee receive quarterly updates on progress on the sustainability statement. The 2024 Double Materiality Assessment result was presented and approved by these bodies and the Board.

ALK reports that information about the integration of sustainability related performance in incentive schemes is incorporated by reference to the Corporate governance section of Corporate matters. The disclosure covering both ESRS 2-GOV3 and the climate related datapoint E1-GOV3-13 is therefore located outside the main sustainability statement. Within the general disclosures, ALK does not restate the details of its short term and long term incentive arrangements or specific sustainability targets tied to remuneration, pointing readers instead to the referenced corporate governance content. The statement separately notes that the Remuneration Committee oversees sustainability related remuneration as part of the governance model.

ALK addresses the statement on due diligence by incorporation by reference. The information required under ESRS 2-GOV4-32 is incorporated by reference to the appendix titled Core elements of due diligence. Within the general disclosures ALK indicates that its materiality assessment process was guided by sustainability related due diligence, including internal policy reviews, the whistleblower channel and Enterprise Risk Management. It also notes that a human rights risk assessment, covering labour rights, was conducted as part of the Double Materiality Assessment, and that the Sustainability Committee intends to focus in future on implementing further due diligence programmes in the value chain. The detailed mapping of due diligence core elements to the report is provided in the referenced appendix rather than restated in the general disclosures.

ALK describes the risk management and internal controls over sustainability reporting. The Sustainability Department is responsible for preparing the sustainability statement, overseeing the Double Materiality Assessment process and advising on data collection, while the Corporate Finance Department collaborates closely on numeric data collection. Data is gathered quarterly for ongoing progress tracking and verification, with all information stored centrally. ALK identifies human error and data misalignment as key challenges in creating unified disclosures across various business units and locations. To minimise reporting errors, internal controls and standard operating procedures for critical metrics have been established based on a risk assessment, and a four eyes principle is applied. The Sustainability Committee, the Executive Leadership Team and the Audit Committee receive quarterly updates on progress on the sustainability statement, and all data comply with the principles outlined by the ESRS. Separately, risks identified in the Double Materiality Assessment feed into the Enterprise Risk Management process, though the methodologies cannot be fully aligned because the assessment uses gross risks while Enterprise Risk Management includes mitigation.

ALK conveys its strategy, business model and value chain largely through incorporation by reference. Information on the key elements of general strategy, significant groups of products and services, and significant markets and customer groups is incorporated by reference to the Sales and market trends section of Financial performance. Sustainability related goals across products, customer categories, geographical areas and stakeholder relationships are incorporated by reference to the Introduction to Allergy+ section, and strategy elements relating to sustainability, including main challenges, critical solutions and projects, are referenced to the Expanding the addressable markets section. Employee headcount by geographical area is referenced to ALK at a glance, and the business model itself to the Business model section of the Introduction. ALK is a pharmaceutical company focused on allergy immunotherapy, and its strategy was updated in 2024 with the launch of the Allergy+ strategy, structured around pillars including Innovate, Focus, Optimise and Cultivate. The reporting is prepared on a consolidated basis covering the entire ALK group in line with the financial statements.

ALK identifies its key stakeholder groups as employees, consumers and the general public, healthcare professionals, suppliers and contract manufacturers, investors and shareholders, and regulatory authorities. For each group the statement sets out how engagement is organised, its purpose and examples of outcomes. Engagement with employees uses surveys, employee elected board members, workers' councils, development dialogues and meetings; consumers are reached through digital media, websites, apps and email; healthcare professionals through webinars, symposia, publications and clinical trial data sharing; suppliers through contract negotiations and the Third party Code of Conduct; investors through reports, announcements, meetings and ESG ratings; and regulatory authorities through continuous interaction. Active engagement is described as fundamental to the sustainability strategy and integrated across functions including finance, legal, environment, health and safety, procurement, people and organisation, research and development, commercial and the Executive Leadership Team. Stakeholder interests inform the Allergy+ strategy pillars. ALK states its overall business model was not amended in response to engagement, although the strategy was updated in 2024, and the bodies are informed of stakeholder views through sustainability strategy updates.

ALK presents the material impacts, risks and opportunities identified in the Double Materiality Assessment alongside the relevant topical standards, spanning climate change (E1), pollution (E2), water and marine resources (E3), biodiversity and ecosystems (E4), resource use and circular economy (E5), own workforce (S1), workers in the value chain (S2), consumers and end users (S4), and business conduct (G1). Climate change and business conduct are double material, while pollution, water and marine resources, biodiversity, circular economy, own workforce and consumers show impact materiality, and workers in the value chain is financially material. For each material topic ALK lists specific IROs with their location in the value chain and time horizon, for example greenhouse gas emissions and refrigerant use, REACH substance usage, water consumption, elimination of hornets and wasps for venom harvesting, single use packaging materials, employee skills and retention, value chain worker health and safety, allergy treatment benefits and barriers to access, patient safety, animal welfare and potential bribery of healthcare professionals. The opportunity linking climate change and respiratory health appears under both E1 and S4.

In 2024 ALK updated its initial 2023 Double Materiality Assessment through a shortened review process, focusing on implementing regulatory changes and engaging stakeholders to check for significant changes to the business model, value chain or sustainability information. Adjustments included revising positive impacts so they are recognised only where business model related or clearly beyond standards, updating the workbook for ESRS aligned scoring in inherent gross format, and a greater focus on value chain IROs. Sustainability matters were identified following ESRS 1-AR16, drawing on internal documents, SASB publications for the biotech and pharmaceuticals sector, and a human rights risk assessment. Environmental IROs were assessed using tools including the WWF Water Risk Filter, the WRI Aqueduct Water Risk Atlas and the WWF Biodiversity Risk Filter, with Post Falls in the USA the only material site for biodiversity. Scoring applied impact and financial materiality thresholds, the financial threshold consistent with the Enterprise Risk Management framework and the human rights impact threshold lowered per ESRS 1-45. In total 178 IROs were identified, comprising 97 impacts of which 30 were material and 81 risks and opportunities of which 8 were material, mapped to 22 material sustainability matters, with results approved by the Executive Leadership Team, Audit Committee and Board.

ALK indicates that its material topics span ESRS 2 general disclosures together with climate change (E1), pollution (E2), water and marine resources (E3), biodiversity and ecosystems (E4), resource use and circular economy (E5), own workforce (S1), workers in the value chain (S2), consumers and end users (S4) and business conduct (G1). Affected communities (S3) was not found material. There were no changes in materiality at the topical level compared with the previous year, although some sub topics moved from double material to financial or impact materiality and others became non material after the 2024 review. The thresholds used for the assessment are described within the materiality assessment process. The content index of ESRS disclosure requirements and the list of datapoints that derive from other EU legislation, required under ESRS 2-IRO2-56, are incorporated by reference to the appendices Content index of ESRS disclosure requirements and List of datapoints that derive from other EU legislation.

In January 2024 the Science Based Targets initiative validated and approved ALK's absolute CO2 reduction targets, aligning them with the latest climate science and the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius. ALK states that changes to its business model will not be necessary, but specific actions will be implemented through four decarbonisation levers: transitioning towards renewable energy, electrifying boilers and the company vehicle fleet, substituting refrigerant chemicals in coolers, and implementing energy efficiency measures. The transition plan focuses on reducing emissions from ALK's own operations and is embedded in the company's strategy, funded through the annual business and financial planning process, and approved by ALK's Investment Portfolio and Sustainability committees. Boiler electrification requires CapEx and is reported as a taxonomy-eligible activity. ALK has not claimed alignment of its activities under the Taxonomy Regulation but states it is not excluded from EU Paris-Aligned Benchmarks. Certain locked-in emissions were considered during target setting and do not jeopardise the GHG reduction targets. Sustainability-related incentives in the Executive Leadership Team remuneration schemes support decarbonisation.

ALK is in the process of addressing its most significant categories of GHG emissions, including all of its scope 1 categories as well as purchased goods and services and business travel in scope 3. This is reflected in local policy updates covering the company fleet and business travel. As a result, ALK reports that it has not had the need to establish a formal global policy related to climate change mitigation and adaptation, energy efficiency or renewable energy deployment. The company addresses its climate change impacts and its climate-related opportunity through four decarbonisation levers: transitioning towards renewable energy, electrifying boilers and the company vehicle fleet, substituting refrigerant chemicals in coolers, and implementing energy efficiency measures.

ALK has developed a roadmap out to 2030 to reduce its carbon emissions, built through a mapping exercise and accounting over time for projected business growth, prioritising investments that reduce the environmental impact of its own operations in scope 1 and 2. ALK has purchased third-party audited Renewable Energy Certificates for electricity since 2019, covering 100 percent of its electricity consumption at production sites where direct renewable sourcing is not possible, amounting to DKK 0.5 million in 2024. Production boilers are being converted from natural gas to electricity: a boiler at the Hoersholm site in Denmark was replaced in 2022, a gas boiler in France began replacement in 2024 with operations expected by 2026, and the last boiler replacement will be initiated by 2028 with full implementation planned for 2030. ALK allocated DKK 4 million in CapEx in 2024 to support the France boiler project. The company fleet transition to electric vehicles continued in 2024, focused on Northern Europe. Since 2023 ALK has mapped cooling systems and refrigerants and introduced energy-saving measures such as LED and sensor-controlled lighting.

ALK has set two targets related to climate change mitigation, both approved by the Science Based Targets initiative in January 2024 and compatible with limiting global warming to 1.5 degrees Celsius. The first is to reduce its absolute CO2 emissions by 42 percent between 2022 and 2030 in its own operations, covering market-based Scope 1 and Scope 2. The second is to have 80 percent of its emissions from suppliers with science-based targets by 2028, covering Scope 3. The 2022 base year for the own-operations target reflects Scope 1 and 2 market-based emissions of 5,492 tonnes CO2eq, with Scope 1 representing 90 percent. The boundaries of the target exclude ALK's sales offices, which account for less than 5 percent of its total emissions. The remaining assumptions and methodologies align with the GHG emissions reporting disclosed under E1-6.

ALK reports total energy consumption of 51,407 MWh in 2024, up from 50,550 MWh in 2023. Energy consumption from fossil sources totalled 27,092 MWh, comprising 2,420 MWh from crude oil and petroleum products, 14,524 MWh from natural gas, and 10,148 MWh of purchased electricity, heat, steam or cooling from fossil sources. Energy from nuclear sources was 4,505 MWh, and energy from renewable sources was 19,810 MWh, all from purchased electricity, heat, steam and cooling. The share of renewable sources in total energy consumption was 39 percent in 2024, down from 47 percent in 2023, a decrease ALK attributes to more accurate documentation from energy providers. Because ALK's activities belong to a high climate impact sector, energy intensity is calculated on total revenue and was 9.3 MWh per DKK million in 2024, down from 10.5 in 2023, reflecting more efficient energy use at production sites.

For 2024 ALK reports total Scope 1 emissions of 4,925 tonnes CO2eq, comprising direct energy consumption of 3,325, company fleet of 1,383, and refrigerants of 217. Scope 2 location-based emissions were 6,720 tonnes CO2eq and market-based were 756, reflecting renewable energy certificates for all sites. Total Scope 1 and 2 was 11,348 tonnes CO2eq location-based and 5,384 market-based, a 2 percent reduction from the 2022 baseline. Total Scope 3 emissions were 74,506 tonnes CO2eq, up from 64,067 in 2023, driven mainly by purchased goods and services (Category 1) at 53,825 tonnes CO2eq. Other Scope 3 categories include capital goods 3,307, fuel and energy related activities 2,985, upstream transportation 5,614, business travel 2,626 (down from 4,615), and employee commuting 5,696. Total emissions were 86,151 tonnes CO2eq location-based and 80,187 market-based. GHG intensity was 1.0 tonnes CO2eq per DKK million for Scope 1 and 2 market-based, 15.6 for total location-based, and 14.5 for total market-based. The share of suppliers with science-based targets rose to 37 percent from 33 percent.

ALK ensures compliance with local regulations and REACH requirements for chemical use and handling in production, with relevant actions and resources evaluated and allocated at the operational level as appropriate. As a result, ALK has not identified the need for a centralised global policy on pollution that specifically addresses actions within the mitigation hierarchy, such as pollution avoidance, reduction or restoration where air, water or soil has been polluted. The use of REACH-regulated chemicals highlights the shared responsibility among producers and users to minimise potential environmental impact and to consider possible substitution. ALK acknowledges that continued use of such chemicals contributes to their commercialisation, which can result in broader environmental consequences if not carefully managed.

ALK is committed to maintaining compliance with the REACH regulation and local legislation and to responsibly managing the chemicals it uses. Initiatives are directed at ensuring safe handling, storage and use of regulated chemicals at all production sites, with ongoing updates to data and processes as required by evolving regulations. As part of these initiatives, ALK worked in 2024 on mapping and establishing an overview of purchased quantities of Substances of Concern and their subset, Substances of Very High Concern, in its own operations. This aims to improve visibility and understanding of the volume and use of these chemicals across the organisation, supporting compliance and informed analysis and decision-making. Since ALK does not yet have a global policy, it did not take specific actions in 2024 to achieve pollution-related policy objectives.

ALK has passed all the latest Local Environmental Authorities' requirements and inspections at all of its sites. However, since 2024 is the first year of global consolidated reporting of substances of concern, ALK has not set global targets for preventing and controlling air pollutants, emissions to water, soil pollution, substances of concern and substances of very high concern beyond what is determined by local regulations. Compliance with REACH-regulated chemical standards highlights the challenge of balancing operational needs with environmental and regulatory requirements. As phase-outs and restrictions are implemented, ALK remains flexible to ensure compliance and mitigate risks. The company is evaluating its approach and considering future targets to align with evolving sustainability priorities and regulatory expectations, and it will focus on reducing substances of very high concern by implementing process improvements at one of its material production sites.

ALK uses chemicals that fall within the scope of the REACH Regulation, and it recognises that some may appear on restricted or phased-out lists, such as the Candidate List of Substances of Very High Concern, requiring careful management to ensure legal compliance. ALK has not yet formalised policies or targets on Substances of Concern or Substances of Very High Concern, but it ensures compliance with local regulations and REACH requirements for chemical use and handling in production. In 2024, ALK reported procured quantities of these substances in its own operations. Substances of concern procured amounted to 5.0 tonnes, and substances of very high concern procured amounted to 0.9 tonnes.

ALK monitors water use in its production facilities to ensure compliance with local wastewater discharge regulations and to minimise the impact on local water resources. It does not have a formal global policy on water management, treatment or pollution beyond local regulations. There are currently no policies guiding product and service design in addressing water-related challenges, nor commitments to decrease material water consumption in regions facing water risks. Addressing such challenges could involve adopting advanced technologies, recycling wastewater or optimising processes, in line with local legal authorities and pharmaceutical production. As sustainable oceans and seas is not deemed material, no related policy has been adopted. ALK has not adopted a policy covering its Madrid, Spain production site, located in an area of high water stress. In 2024 the focus was on mapping impacts, risks and opportunities linked to water, and the company will consider adopting such a policy in coming years.

ALK aligns its practices with regulatory requirements and environmental considerations, seeking opportunities for efficient water use and sustainable management. Water management is an integral part of ALK's environmental and health and safety management tasks. The demand for water in ALK's production processes underscores the need to balance operational requirements with environmental sustainability. To ensure operational efficiency and minimise consumption, ALK has installed water meters to monitor and control water usage, which is particularly important in areas with existing water-related challenges. In 2024, ALK focused on mapping consumption from the installed meters to evaluate opportunities for efficient water use and sustainable management, aiming to reduce the environmental impact of water consumption while supporting operational needs. As a result, no actions were taken in 2024 in relation to general water use, or specifically to ALK's Madrid, Spain production site. At the time of reporting, no action plan for 2025 had been developed yet.

ALK has not set global targets for reducing water consumption or managing marine resources and water risk areas beyond local legal requirements. In 2024, ALK installed meters at all production sites to monitor water usage, both in production areas and for irrigation. This enables ALK to assess efficiency and consumption across different processes, supporting effective future water use. The disclosure frames these metering efforts as the basis for evaluating opportunities rather than as quantified reduction targets.

In 2024, ALK's overall water consumption was 405,306 m3. This figure includes irrigation for all leased land used for ALK source materials, which was measured with newly installed meters and totalled 312,773 m3, alongside domestic water use of 92,533 m3 (2023: 101,413 m3). Water consumption at the Madrid, Spain site, an area at material water risk, was 11,495 m3 (2023: 10,646 m3); this site sits in the Tagus river basin, which has low water quality and quantity. ALK reused and recycled 18,624 m3 of water for irrigation on land where allergenic source material crops are cultivated. Water intensity was 73.2 m3 per DKK million. No water was stored, as ALK does not currently have water storage facilities. Water in production must meet strict quality and sterility standards, making reuse or recycling complex. In 2023, ALK reported total water consumption of 128,087 m3, excluding irrigation from leased land for which data was not available.

ALK's allergenic source materials, covering pollens, mites and molds, are cultivated and collected, while insect venom is obtained by electro-stimulation of bees and by collecting wasp and hornet nets, before purification into active pharmaceutical ingredients. ALK applies sustainable agricultural practices to limit its impact on nature, including diversifying crop species to provide varied pollination times for pollinators such as bees, minimising pesticide and fertiliser inputs through Integrated Pest Management principles, protecting native flora and fauna with large buffer zones, and limiting soil disturbance through lime application. As part of the materiality assessment, ALK reviewed its production sites using the WWF Risk Filter, and Post Falls in the USA met the materiality threshold for biodiversity. ALK has not yet conducted a comprehensive resilience analysis of its strategy and business model in relation to biodiversity and ecosystems, so a transition plan has not been created. Analysis of ALK's material sites in terms of dependencies and ecological status will be performed over the coming years.

ALK adheres to national legislation and regulatory demands, described in procedures that form part of its Quality Management System covering the portion of the supply chain ALK controls. The company reports having carried out several initiatives over the years to support biodiversity at its material site in Post Falls, USA. Because ALK has not yet performed a biodiversity-related resilience analysis, it does not currently have a formal policy on biodiversity and ecosystems. Specifically, ALK has not adopted a policy addressing its material impacts or dependencies or their social consequences, and it has no policies on responsible production, sourcing or consumption from ecosystems, or on the traceability of products, components and raw materials. ALK does not have a biodiversity and ecosystem protection policy covering operational sites owned, leased or managed in or near a biodiversity sensitive area, nor any policy on sustainable land and agriculture, sustainable oceans and seas, or deforestation.

During 2024, ALK's focus was on mapping its impacts, risks and opportunities relating to biodiversity and ecosystems. No new actions were taken in 2024 on this matter beyond what is already implemented as part of daily management. In particular, no biodiversity offsets were used, and local and indigenous knowledge and nature-based solutions were not considered. ALK reports ongoing agricultural practices at its operations, such as species diversification, Integrated Pest Management, buffer zones and controlled soil management, but frames the year's work around understanding and mapping its biodiversity impacts rather than launching dedicated new action programmes.

ALK states that it intends to conduct a deeper analysis of its biodiversity impacts in the coming years, drawing inspiration from the Task Force on Nature-related Financial Disclosures framework. Because this analysis has not yet been performed, ALK has not set any targets related to biodiversity and ecosystems. In particular, no ecological thresholds or allocations of impacts were applied, and no biodiversity offsets have been used. ALK also notes that the Kunming-Montreal Global Biodiversity Framework, the EU Biodiversity Strategy for 2030 and other biodiversity and ecosystem-related national policies and legislation have not been used in setting targets.

Waste at ALK is managed at site level to meet local legal requirements, and the company states that it has not previously had the need to establish a formal global policy on resource use and circular economy. ALK plans to introduce a global waste policy in 2025 to address landfill waste. On circular economy, ALK has not adopted global policies specifically focused on transitioning away from the extraction of virgin resources. It also does not have global policies on sustainable sourcing and use of renewable resources, or on addressing impacts, risks and opportunities in its upstream and downstream operations.

Because ALK has not yet developed resource use and circular economy policies, no actions were undertaken in 2024 to achieve related policy objectives. Relevant actions and resources are instead evaluated and allocated at the operational level as appropriate to meet local regulatory requirements. As part of its ongoing initiatives, ALK's focus in 2024 was on improving the mapping of its waste types and fractions in alignment with the ESRS. ALK has also launched initiatives focused on developing plans to reduce and eliminate the amount of waste that is not part of a reuse or recycling programme.

ALK's focus in 2024 was on aligning its waste reporting with the ESRS in order to establish a baseline. As a result, ALK has not currently set targets related to any layer of the waste hierarchy for resource inflows and outflows, in particular for waste, products and materials, whether mandatory or voluntary. ALK states that it is evaluating its approach and considering implementing relevant targets in the future to align with evolving sustainability priorities and regulatory expectations.

ALK does not currently gather global data on its material resource inflows but plans to map this out during 2025 for future reporting. In describing its operations, ALK notes that it requires single-use plastics in production and single-use aluminium bottles for transporting active pharmaceutical ingredients, and that it uses non-recycled paper and plastics, which it considers vital for maintaining sterility and efficiency. ALK identifies the use of non-recycled paper, single-use aluminium and single-use plastic as an actual negative impact, and it is exploring opportunities to move towards more sustainable packaging, for example by introducing recycled paper and cardboard. Beyond these qualitative descriptions, ALK does not report quantified global figures for its material resource inflows or for packaging and single-use plastics used.

ALK reports that all of its waste is directed towards recycling, reuse, incineration with energy recovery and landfill, and that it has no waste managed as other disposal operations. Total waste generated diverted from disposal amounted to 2,337 tonnes in 2024, of which 1,408 tonnes were prepared for reuse and 929 tonnes were directed to recycling. Within these figures, preparation for reuse comprised 24 tonnes hazardous and 1,384 tonnes non-hazardous, while recycling comprised 221 tonnes hazardous and 708 tonnes non-hazardous. Waste directed to disposal totalled 545 tonnes, split into 403 tonnes incinerated and 142 tonnes sent to landfill. ALK does not currently gather global data on the rate of recyclable content but plans to map this out during 2025 for future reporting. ALK also separates its waste into two primary streams, pharmaceutical waste such as chemical and medical waste, and agricultural waste such as mite media and organic plant-based materials.

Total waste generated in 2024 amounted to 2,882 tonnes, up from 1,939 tonnes in 2023, an increase of 49% attributed to improved waste reporting and the inclusion of organic materials in the reporting. Of the total, 86%, equal to 2,478 tonnes, was non-hazardous, and 404 tonnes were hazardous and radioactive. ALK reports that 81% of the waste, or 2,337 tonnes, was diverted from disposal through reuse or recycling, while non-recycled waste amounted to 544 tonnes, or 19%. Within diverted waste, 40%, equal to 929 tonnes, went to recycling and 60%, equal to 1,408 tonnes, was prepared for reuse, aligning with the Waste Framework Directive 2008/98/EC. Of the 545 tonnes directed to disposal, 74%, or 403 tonnes, was incinerated and 26%, or 142 tonnes, was sent to landfill. Waste is managed at site level to meet local legal requirements, with greater reliance on landfills in the USA than in Europe. ALK is enhancing waste tracking and plans to introduce a global waste policy in 2025 to address landfill waste.

ALK endorses the UN Guiding Principles on Business and Human Rights and is a signatory to the UN Global Compact, with these commitments integrated into its Code of Conduct, which applies to all employees. The Code of Conduct explicitly prohibits employees from condoning or engaging in any form of child or forced labour, and it addresses harassment. It does not specifically mention human trafficking, which ALK states is not a high-risk topic in its industry. Alongside the Code of Conduct, ALK has adopted a Diversity and Inclusion policy that aims to eliminate discrimination and promote equal treatment and opportunities for all employees. The policy names age, gender, race, ethnicity, religion, sexual orientation, disability and other characteristics as unacceptable grounds for discrimination, but does not include specific commitments for at-risk or vulnerable groups. The ALK Sustainability Committee is the most senior level accountable for implementing the policy. On health and safety, ALK adheres to national legislation in all countries of operation and complies with OSHA standards in the USA, and has not previously identified the need for a global environmental, health and safety policy or management system.

ALK anchors its engagement with the workforce in two key processes, the workers' councils and the annual employee engagement survey, and this engagement has informed the material impacts and opportunities around development plans, learning opportunities and health and safety. Formalised workers' councils are established at all European sites where legally required, serving as forums where employees and management can address issues ranging from company competitiveness to employee engagement. In the USA and China, dialogue is facilitated through the People and Organisation departments. Workers' council meetings are held several times a year, and engagement can take the form of information-sharing, consultation or co-determination, with involvement in decision-making following local legal principles. Direct engagement with all employees is driven by the annual global employee engagement survey. The 2024 participation rate was 95%, unchanged from 2023, and the overall engagement score was 8.3 compared with 8.4 in 2023, placing ALK in the top 5% against the international healthcare benchmark. The Executive Vice President of People and Organisation is responsible for ensuring engagement happens and informs the Executive Leadership Team of results and actions.

For health and safety, ALK emphasises engaging workers to foster shared responsibility. It conducts risk assessments across all production sites to identify hazards, implement measures to reduce risks and evaluate the effectiveness of existing safety measures, with workers contributing input on hazards and helping develop site-specific safety measures. Workplace injuries are recorded and monitored, and for USA operations ALK adheres to OSHA standards for tracking and reporting injuries, providing insight into safety trends and helping ensure legal compliance. Employees are encouraged to report unsafe conditions or hazards, which are promptly reviewed and addressed to improve workplace safety, and regular training ensures workers understand health and safety procedures and risks relevant to their tasks. All employees can also raise concerns through the whistleblower platform ALK Alertline, which is described in detail in the G1 disclosures. ALK reports that its engagement has ensured employees' exposure to chemicals and substances is minimised and reduced.

Development plans at ALK depend on an employee's life-cycle stage, covering new hires, experienced professionals and resigned employees. These plans are linked to job content and performance goals and are updated annually between March and October, tracked through the human resources system, with a completion rate of 93% for 2024. ALK follows the 70-20-10 learning principle, meaning 70% on-the-job training, 20% peer learning and 10% classroom learning. It does not currently have a process to assess the quality of development plans, so it cannot document the exact linkage between development actions and individual performance. ALK plans to review and improve the development plan process in 2025 through clearer guidance and enhanced training for employees and leaders, to enhance its diversity and inclusion strategy to include parameters such as geography, and to update its talent approach. It continued the rollout of its Leading with Impact leadership programme for 186 leaders. On health and safety, ALK maintains continuous focus and is engaged in projects to improve material risk and workforce exposure, and tracks yearly training to ensure employees have the competences to perform safe work processes.

As part of its CSRD implementation, ALK prioritised establishing baseline data for its reporting before starting the target-setting process. As a result, it has not yet set targets to address the material impacts and opportunities within its own workforce, and it has not engaged with employees or their representatives specifically on this matter. ALK states that the need for additional targets will be reviewed in 2025.

ALK employs 2,812 employees at the end of 2024, down from 2,889 in 2023, of which 2,574 are permanently employed compared with 2,638 in 2023. The workforce is presented by country, with Denmark the largest at 942 employees, followed by the USA at 547, Spain at 364, France at 357, China at 175, Germany at 137 and Poland at 96, with 194 in other locations. By gender, there are 1,065 male, 1,743 female and 4 who choose not to self-identify. Permanent employees comprise 970 male and 1,601 female, while temporary employees number 95 male and 142 female. ALK also reports 238 temporary employees in total and 35 non-guaranteed hours employees. Employee turnover was 17% in 2024, up from 12% in 2023, representing 463 departures, of which 283 left voluntarily and 180 involuntarily. ALK attributes the decrease in employee numbers and rise in turnover to organisational adjustments relating to the Allergy+ strategy. It notes that full-time equivalent employees, disclosed in the consolidated financial statements, are the most representative measure of total headcount.

ALK reports participation in performance and career reviews for 2024, with total participation at 93%. Broken down by gender, participation was 91% among male employees, 94% among female employees and 100% among those who choose not to self-identify. ALK reports one performance review per employee per year. The average number of training hours per employee is subject to phase-in provisions and is not disclosed for 2024, so ALK's training and skills development metrics focus on performance and career review participation rather than training time. Elsewhere in the statement ALK describes its development approach, including the 70-20-10 learning principle and a development plan completion rate of 93% for 2024.

ALK reports 112 work-related accidents in 2024, up from 106 in 2023, with a work-related accident rate of 1.5 compared with 0.8 in 2023. It recorded no fatalities as a result of work-related incidents in either year. The share of employees covered by a health and safety management system was 74% in 2024, with no comparable figure available for 2023. ALK notes that it had 6 accidents with lost time absence ordered by a medical professional in 2024, up from 3 in 2023, resulting in the accident rate of 1.5. Certain datapoints, including work-related ill health and lost-time injury metrics, are subject to phase-in provisions and are not fully disclosed. For USA operations, ALK adheres to OSHA standards for injury recording and reporting.

ALK reports a gender pay gap of 17% for 2024, up from 16% in 2023. It explains that the gender pay gap reflects the disparity in representation, as ALK currently has a higher proportion of men than women in senior leadership positions, and states that it is continuously working to ensure gender equality in leadership positions. For total remuneration, ALK discloses the ratio of the annual total compensation of the highest-paid individual, its CEO, to the median annual total compensation of all employees, which was 33 times in 2024 compared with 30 times in 2023. The 2023 figures are not covered by the independent auditor's limited assurance report.

ALK does not present detailed metrics on incidents, complaints and severe human rights impacts within the S1 own workforce section. Instead, it directs readers to its G1 business conduct disclosures for information on this disclosure requirement. The related whistleblower platform, ALK Alertline, through which all employees can raise concerns, is also described in detail in the G1 disclosures.

ALK's Third-Party Code of Conduct sets out the standards of behaviour it expects from all third parties globally in relation to business conduct and treatment of employees. It is aligned with the Ten Principles of the United Nations Global Compact and follows the UN Guiding Principles on Business and Human Rights, along with applicable laws, regulations, standards and labour agreements. Key areas covered include health and safety, animal welfare, anti-corruption, environmental practices, working conditions, human rights (including child and forced labour, anti-discrimination and fair pay), interaction with healthcare professionals and patient organisations. The policy does not specifically mention human trafficking. Any violations can be reported through the whistleblower platform. The Code is an integral part of ALK's GxP supplier agreements, and all new suppliers must commit to it as a prerequisite for collaboration. The Chief Finance Officer is the most senior executive accountable for its implementation. ALK also adheres to the UK Modern Slavery Act and publishes an annual statement of compliance.

ALK does not currently have a formal process in place to engage with value chain workers about impacts. It states that it is committed to developing robust engagement strategies to enhance communication and strengthen its connection with value chain workers in the future, and that it is actively working to establish processes for engaging with value chain workers in 2025. The Senior Vice President of Global Procurement is responsible for supplier engagement.

Value chain workers can raise concerns through the whistleblower platform ALK Alertline. No complaints involving such workers were substantiated in 2024. ALK does not have structures or processes to assess whether value chain workers are aware of and trust ALK Alertline. The Alertline is described in detail in the G1 business conduct section. ALK monitors potential negative impacts it might cause through its business relationships, and where there is a potential case, appropriate actions are taken accordingly.

ALK prioritises collaboration with reputable suppliers who adhere to high labour standards, which it says reduces the likelihood of serious working conditions issues. It establishes long-term contracts to provide suppliers with financial stability and reliable revenue, enabling investment in infrastructure, training, safety initiatives and job security. To address supplier risk, ALK continued its collaboration with an external supplier evaluation platform to identify environmental, labour and human rights, and procurement risks, and continues to conduct high-level assessments to determine whether further engagement may be required. The potential negative impact is monitored through business relationships. No severe human rights issues or incidents connected to ALK's upstream and downstream value chain were reported in 2024. The sustainable procurement manager is a newly established role responsible for oversight of the sustainable procurement programme globally. ALK identified no material actual negative impacts and plans to implement a comprehensive monitoring system with regular assessments and feedback mechanisms. It is committed to enhancing its due diligence processes by 2025.

ALK will update its responsible supply chain strategy in 2025 and consider the need for specific targets to manage health and safety related impacts on workers in the value chain. As of 2024, ALK has not yet identified the need for targets related to workers in the supply chain, or for engaging with workers in the value chain or their representatives.

ALK's Access to Medicines Policy sets out the company's ambition to reach more patients. It focuses on three key principles: improving quality of life through better treatment options and earlier diagnosis, supporting healthcare systems with training and education on allergy care, and forming partnerships for broader access. The policy is continually reviewed by the Executive Leadership Team (ELT) to ensure alignment with the overall strategy, and reporting is done through ALK's website and annual report. Oversight, accountability and responsibility for implementation rest with the Board of Directors, which has delegated this to the ELT. The policy covers both people with allergy and healthcare professionals and relates to material impacts on access to treatment and access barriers. ALK notes the pharmaceutical industry is heavily regulated, with human rights topics such as the right to health and informed consent in clinical trials already embedded in legislation, so it does not have specific consumer policies aligned with the UN Guiding Principles on Business and Human Rights. External stakeholders with a business-related connection can report potential human rights impacts through the Alertline.

For its processes to engage with consumers and end-users about impacts, ALK refers to the disclosure under ESRS 2-SBM2 on pages 39 to 40 of the report, rather than providing separate detail in this section. Elsewhere in the S4 disclosure, ALK identifies healthcare professionals and patients as the materially impacted consumers and end-users, and states that it developed its understanding of material impacts based on engagement with internal stakeholders representing affected stakeholder groups. It acknowledges that a more detailed understanding of how particular products may create specific negative impacts is still to be developed.

ALK works closely with doctors, pharmacists and other healthcare professionals to ensure they have the information needed to advise patients. Its digital universe empowers people to proactively manage their allergies through information and guidance on avoiding or alleviating symptoms and seeking treatment. ALK engages systematically in educational activities, training and dialogue with healthcare professionals, much of it digital, and collaborates with patient organisations to raise awareness of patient care and product safety. Rigorous industry regulations ensure that safety data from any source, including clinical trials, healthcare professionals or patients, is collected and analysed systematically by ALK's global pharmacovigilance team, so that the safety profile of products is optimised and relevant authorities can be made aware of any safety issue. Patients are informed of how to contact ALK to report potential side effects in the leaflets for all products. External stakeholders with a work-related connection to ALK can raise concerns through the whistleblower platform ALK Alertline.

Helping more people with allergies is central to ALK's Allergy+ strategy. ALK will prioritise and focus its commercial activities to strengthen its global leadership in respiratory allergies, including targeted expansion of sublingual immunotherapy tablets to new patient groups and geographies, digital mobilisation and investments in high impact markets. Sublingual immunotherapy tablets offer accessible long-term treatment that can be administered at home, do not require up-dosing or refrigeration, and are available for five of the most common respiratory allergies. ALK aims to price its treatments fairly and competitively, with affordability often supported by public or private insurance and reimbursement schemes. It conducts clinical trials in close collaboration with authorities, healthcare professionals, scientists and patients, upholding safety, privacy, ethics and respect, and adheres to the Principles for Responsible Clinical Trial Data Sharing from EFPIA and PhRMA. Further information on actions is incorporated by reference to the Allergy+ implementation review on pages 10 to 11 and the addressable markets section on pages 16 to 17.

ALK aims to help 5 million allergy patients by 2030 to advance its positive impact and opportunity. The target covers ALK's downstream activities in the countries where it operates. In 2024, ALK reached an estimated 2.6 million patients in treatment as a result of its commercial activities. ALK states it will assess the potential necessity for additional targets related to access barriers and patient safety in 2025. It has not engaged directly with patients or their representatives on target setting, but information has been obtained indirectly through market insights.

ALK's approach to business conduct is grounded in a comprehensive framework of policies centred on its Code of Conduct, which applies to all employees and sets the tone for business integrity and ethical principles. It affirms ALK's commitment to upholding human rights, safeguarding confidential business information, and promoting zero tolerance for corruption and fraud. The Executive Leadership Team is responsible for oversight of the Code of Conduct. The Code is complemented by additional policies that are publicly accessible on the ALK website, including a Whistleblowing Policy that defines the organisation and processes to ensure ethical concerns are treated seriously, sets standards for investigating cases, protects whistleblowers, and includes a non-retaliation commitment. The ALK Audit Committee has overall responsibility for the Whistleblowing Policy and reviews the effectiveness of actions taken, while Corporate Affairs and Legal has day-to-day operational responsibility. The Policy for Anti-Corruption addresses general anti-bribery and anti-corruption legislation and industry-specific standards on interactions with healthcare professionals, consistent with the United Nations Convention against Corruption. ALK is also developing a global animal welfare policy scheduled for implementation by 2025.

ALK has established a whistleblowing system, ALK Alertline, accessible to its own workforce, value chain workers and other external stakeholders with a work-related connection to ALK, for raising serious and sensitive concerns including suspicions of breaches of the Code of Conduct, anti-corruption laws and laws within the scope of the EU Whistleblower Protection Directive. It is confidential, offers anonymous reporting as a protection against retaliation, and is available by phone or online in eight languages via the intranet and public websites. Reports are entered into an independent company's secure server, with access managed by Corporate Affairs and Legal and limited to pre-appointed individuals. Financial control systems act to prevent and detect corruption and bribery events. ALK assesses awareness and trust in the reporting channels through questions in its annual engagement survey, and launched manager training in 2024 on recognising and responding to whistleblower reports, including reporter protections. Training on relevant business conduct topics is administered to employees, and 99% of employees in functions at risk completed the global Code of Conduct e-learning course in 2024.

ALK takes a zero-tolerance approach to corruption and bribery. Should an allegation be made through ALK Alertline, the ensuing investigation is governed by ALK's Compliance Investigations Process, with each case overseen by an investigation supervisor, typically the Vice President of Corporate Affairs and Legal or their designee within the Legal or Compliance functions. Where appropriate, an investigation supervisor independent from the chain of management oversees the case, such as external legal counsel or the Chair of the Audit Committee. The Chair of the Audit Committee is notified of reports concerning corruption and decides whether to approve case recommendations, and Corporate Affairs and Legal updates the Audit Committee annually on all Alertline activities. In 2024, ALK had no convictions or related fines for violations of anti-corruption and anti-bribery laws. The reported figures for convictions and for fines for corruption and bribery convictions were both nil for 2024.