Borregaard Asa

Board and governance structure

Reference: pages 22-23.

Borregaard's Board has seven members: five (71%) shareholder-elected, two employee-elected, plus two employee-elected observers. Three members are female (43%), exceeding the company's internal 40% target and the Norwegian Companies Act gender-balance requirement (Aksjeloven Section 6-11a). All seven are non-executive; shareholder-elected members are independent of management, major shareholders and significant business associates.

The Board has an Audit and Sustainability Committee (ASC) that "oversees the impacts, risks, and opportunities related to material sustainability matters," and a separate Remuneration Committee covering ESG-linked performance criteria.

The internal Sustainability Board (SB), chaired by the SVP of Public Affairs and Sustainability and reporting to the CEO, includes three Group Executive Management (GEM) members. GEM has 10 members, 35% female. Managers must include at least one sustainability-related target in their annual appraisal dialogue.

Information flow to governance bodies

Reference: page 23.

The CEO reports current matters, including climate- and nature-related issues, to the Board (at least 8 meetings/year) and the ASC (at least 6 meetings/year). The Board oversees major capital expenditure, acquisitions and divestitures where ESG risks are considered.

The double materiality assessment (DMA) is presented to and discussed with the ASC before being finalised, and "the Board of Directors approves the materiality assessment on an annual basis."

Sustainability in incentive schemes

Reference: pages 23-24.

Short-Term Incentives (STI): for Executive Management it is mandatory to include at least one sustainability/climate goal (of 3-5 goals); achievement of personal goals can yield a bonus of up to 10% of fixed salary. Mandatory safety/health criteria add up to a further 7.5% of fixed salary.

Long-Term Incentives (LTI): fulfilment of a sustainability criterion, including climate, is a prerequisite for part of the option allocation, worth 10% of fixed salary for the CEO and 5% for other Executive Management members. "Climate-related parameters... cover progress on climate-related goals such as emission reductions and energy efficiency."

Statement on due diligence

Reference: page 45 (due diligence table mapping the five core elements to report pages).

Borregaard maps the five UNGP/OECD due-diligence elements to its statement: (1) embedding in governance/strategy, citing GOV-2/3 and SBM-3 (pp.45, 103, 122); (2) engaging stakeholders, citing SBM-2/IRO-1 (p.32); (3) identifying and assessing adverse impacts via the DMA (IRO-1, p.43, plus topical pages 68, 90, 102, 112, 123, 139); (4) taking actions, referenced per topic (pp.71, 92, 108, 114, 126, 141); (5) tracking effectiveness through annual metrics and targets (pp.77, 80, 95-96, 110, 116, 118, 129-130, 143, 145).

Risk management and internal controls

Reference: pages 25-26.

A central risk-management function is headed by the Chief Risk Officer (CRO), who "shall facilitate the risk assessment process" across business areas. Top-down evaluation focuses on climate, EHS and profitability; the overall risk assessment is reviewed quarterly by the ASC and at least annually by the Board. Each operating unit identifies its own principal risks.

Climate and nature risk assessments follow ESRS/CSRD and are informed by TNFD. Mitigations include the transition plan, diversified sourcing with a 100% certified-wood target, and process-safety standards. "Key ESG data are reviewed by the ASC prior to the Board meetings."

Strategy, business model and value chain

Reference: pages 26-31.

Borregaard operates "one of the world's most advanced biorefineries," converting wood (fibres, lignins, sugars) into lignin-based biopolymers and biovanillin, speciality cellulose, cellulose fibrils, fine chemical intermediates and advanced bioethanol, utilising 94% of its wood feedstock.

Six production sites (Norway plus USA, Germany, Czech Republic and UK), manufacturing and sales offices in 13 countries. At year-end 2025: 1,228 employees (1,177 FTE), total revenue NOK 7.7 billion. About 70% of demand for caustic soda (main basic chemical input) is met through captive, renewable-powered production at Sarpsborg. A value-chain diagram (p.28) maps material topics by upstream/own-operations/downstream location and impact/risk/opportunity type.

Interests and views of stakeholders

Reference: pages 32-35.

Stakeholders include customers, investors and lenders, employees, authorities, suppliers, local communities, business partners, organisations and media, identified "by surveying groups, organisations, and individuals who are either impacted by our operations or influence our business." Input feeds the DMA via the Sustainability Board.

Engagement covers EUDR compliance, grid-capacity planning, the "Glomma Sor" Water Framework Directive working group, and industry associations (CEPI, CEFIC, Federation of Norwegian Industries). On political engagement: "Borregaard does not make financial contributions to political parties." As a cornerstone employer in Sarpsborg, the company runs an annual reputation survey among the local (Ostfold) population.

Material IROs and changes versus 2024

Reference: pages 36-42 (overview of the IROs); page 43 (changes to material IROs).

The 2025 DMA identifies 24 individually classified IROs (impacts, risks, opportunities, numbered 1-24 in the overview table) across E1, E2, E4, E5, S1 and G1. E3 and S2 are not material (see IRO-2). "There are no current significant financial effects related to our identified risks and opportunities" beyond what is described per topic.

Changes versus 2024: the E1 subtopic Energy was reclassified from a material positive impact to non-material (remains material as a negative impact); six S1 sub-subtopics (diversity, gender equality, violence and harassment, collective bargaining, health and safety, work-life balance) were reclassified from material positive to non-material; Corporate Culture (G1) moved from non-material to material; and Management of relationships with suppliers, including payment practices, was reclassified "from a material positive impact and opportunity to a potential negative risk," with the result that "metrics related to payment practices are no longer considered relevant."

Double materiality assessment process

Reference: pages 43-44.

Impact materiality: scored on scale, scope and irremediable character (plus likelihood for potential impacts), with "severity takes precedence over likelihood" for potential negative human-rights impacts. Financial materiality: risks and opportunities are scored by actual/potential impact on EBITDA and investment level, including likelihood; a descending-rank threshold then separates material from non-material topics.

The assessment is run by Borregaard's Sustainability Board (SB), drawing on climate/nature scenario analysis (TNFD LEAP), value-chain mapping, stakeholder dialogue, LCAs and risk-management systems (ISO 31000). It "is reviewed annually," and material topics "are approved by Borregaard's Board of Directors."

Content index and materiality of ESRS topics

Reference: pages 45-52.

Borregaard publishes a "List of ESRS Disclosure Requirements" content-index table (pp.49-52) mapping each covered DR to a page reference, plus a separate "List of datapoints from other EU legislation" (Appendix B-style table, pp.46-49) marking specific datapoints "Not material" or "Phase-in."

Confirmed not material: "ESRS S2 Workers in the value chain has been assessed as not material for Borregaard... based on a risk analysis that considers the countries, industries and value chains in which we operate... the vast majority of our sales are executed through our own sales force" (human rights/working conditions are nonetheless reported under the Norwegian Transparency Act). "ESRS E3 (Water and Marine Resources) is not considered material, as Borregaard has secure access to abundant water resources and water-related risks are assessed as low," with water information instead folded into ESRS E2.

The content index itself (see individual DR entries) does not list E1-7, E4-5, S1-11, S1-12, S1-15, or G1-3/G1-4/G1-5/G1-6 as covered disclosure requirements.

Transition plan for climate change mitigation

Reference: pages 61-65.

SBTi-approved near- and long-term targets for Scope 1, 2 and 3, aligned with 1.5 degC. Transition-plan CapEx of approximately NOK 1,000 million through 2030, of which ~85% relates to ongoing/completed projects and NOK 446 million was spent by end-2025; 2026-2028 investment is planned at NOK 350-450 million.

Key Scope 1/2 levers and their 2020-2030 reduction contribution: electricity for drying (-30,000 t, completed H2 2024), electricity for steam (-25,000 t, investment decision taken 2025), internal bioenergy/bark (-28,000 t), energy efficiency (-15,000 t) - summing to the 83,000 t (42%) target by 2030; 29,000 t had been achieved by end-2025. Scope 3 levers include supplier engagement (sodium hydroxide switch: -5,500 t CO2e in 2025) and a Marginal Abatement Cost Curve (MACC). "Borregaard is not excluded from EU Paris-aligned Benchmarks."

Identification of climate-related risks and scenario analysis

Back-filled from ESRS 2 content disclosed under E1.IRO-1 (pages 68-69) and E1.SBM-3 (pages 66-67) of the FY2025 report. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

Borregaard uses at least three CMIP6-based scenarios: SSP1-2.6 (low-emissions), SSP5-8.5 (high-emissions, severe physical risk) and the IEA Net Zero Emissions by 2050 (NZE 2050) scenario. Physical risks are assessed at named sites (Sarpsborg biorefinery, Fernandina Beach, Florida, Karlsruhe logistics hub) and dependencies (Rhine River, European/American forests). Transition risks cover carbon pricing, EU RED III and EUDR.

Gap: no global average temperature projection is stated for any scenario, and the analysis date/update frequency is not specified beyond "updated annually, or more frequently if significant changes occur."

Resilience in relation to climate change

Back-filled from ESRS 2 content disclosed under E1.SBM-3 (pages 66-67) of the FY2025 report. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

The resilience analysis was "presented in our Climate and Nature Risk Report published 19 March 2025," using adapted time horizons (short 1 year, medium 2-9 years, long 10+ years - see BP-2). Conclusion: Borregaard's "business model is strong and adaptable," citing a diversified portfolio of more than 800 products that reduces exposure to cyclical markets, proven ability to adjust production/workforce to climate-driven demand shifts, and infrastructure investment against physical risk. Overall: "a low to medium level of risk from new climate-related regulations."

Policies related to climate change mitigation and adaptation

Reference: page 70.

Borregaard has no dedicated standalone climate policy; climate mitigation and adaptation are addressed through the Group-wide Policy for Environment, Climate, Health and Safety Engagement, approved by the Board and chaired/owned by the SVP of Public Affairs and Sustainability. The policy "sets out our expectations for suppliers and key partners" and aligns the business model with "limiting global warming to 1.5 degC." Goals, targets and action plans under the policy are continuously monitored and updated.

Actions and resources related to climate change

Reference: pages 71-76.

Norway accounts for 84% of Scope 1+2 emissions. Two 10-year PPAs (Aa Energi from January 2024, Hafslund Kraft from January 2025, 88 GWh/year each) raise the renewable share of electricity. The Scope 3 Programme, reporting to the Sustainability Board, cut emissions via supplier chemical sourcing (sodium hydroxide: -5,500 t CO2e in 2025) and transport (rail-over-road incentive: -500 t); overall Scope 3 fell 10% year-on-year.

Innovation resourcing: 98 R&D employees (32 PhDs), a NOK 100 million investment in a new biopolymer technology platform, and an approximately NOK 800 million Sarpsborg debottlenecking project expected to lift capacity 5-10% from Q2 2027. 41 EPDs are expected once the Sarpsborg update is finalised.

Targets related to climate change mitigation and adaptation

Reference: pages 77-79.

SBTi-approved targets, 2020 base year: Scope 1+2 -42% absolute by 2030 (2025 result: -15%, i.e. 167,473 tCO2e vs 196,500 base; 2026 target revised up to -17%); net-zero by 2050 ("90% absolute reduction and 10% carbon offsetting"). Scope 3: -25% by 2026, -90% by 2050 (2025 result: -14% vs a recalculated base of 727,387 tCO2e, up from 399,998 tCO2e due to improved data - see BP-2). Heat-consumption target at Sarpsborg (21.7 GJ/TAD) was not achieved due to a more specialised production mix. Innovation rate 11% (2024: 14%) - the company attributes the fall to the definition's five-year rolling window, "rather than indicating a reduction in innovation activity." Targets will be reviewed in 2027 against the revised SBTi methodology.

Energy consumption and mix

Reference: pages 80-81.

Total energy consumption 1,846,803 MWh in 2025 (2024: 1,858,886 MWh, -1%). Renewable share 68% (2024: 66%; 2020 base: 63%), up on increased renewable electricity use at Sarpsborg. Fossil share 32% (-6% YoY). Energy intensity in the high-climate-impact sector: 0.00024 MWh/NOK net revenue (flat vs 2024). Borregaard's biorefinery sector is classified "Manufacturing," a high-climate-impact sector under ESRS, so sector energy intensity equals Group intensity.

Gross Scope 1, 2, 3 and total GHG emissions

Reference: pages 82-86.

Gross Scope 1: 105,935 tCO2e (2024: 120,312, -12%). Scope 2 location-based: 61,539 tCO2e; market-based: 462,129 tCO2e (-37% vs the 196,500/336,964 2020 base split). Scope 1+2 location-based total: 167,473 tCO2e (-8% YoY, -15% vs 2020 base). Gross Scope 3: 624,618 tCO2e (-10% YoY, -14% vs the recalculated 2020 base of 727,387 tCO2e, up from 399,998 tCO2e). Largest Scope 3 categories: purchased goods and services 185,301 t, processing of sold products 281,433 t. 59% of Scope 3 uses primary data (2024: 54%). Total GHG market-based: 1,192,682 tCO2e (flat YoY). Scope 3 base-year recalculation reflects "better data quality only and does not represent a real increase in Borregaard's historical emissions."

Internal carbon pricing

Reference: page 86.

Borregaard applies the prevailing EU ETS allowance price as an internal decision input rather than a separate shadow price: "this carbon price is not applied as a separate internal shadow price but is inherently embedded in the financial cost of electricity and fuels." Metrics: carbon price applied NOK 812/tCO2e in 2025 (2024: 1,019; 2023: 844); covers 86% of gross Scope 1 emissions (91,000 t) and 79% of gross Scope 2 emissions (48,000 t). It is used when comparing long-term PPA options against fossil alternatives and feeds the Ministry of Finance carbon-price curve used in longer-term assessments.

Anticipated financial effects from climate-related risks and opportunities

Reference: pages 86-89.

"For the disclosure requirements under E1-9, we will make use of the phase-in opportunities and therefore not yet fully address all requirements. However, a thorough qualitative assessment of future impacts has been conducted."

Current exposure is nonetheless quantified per material IRO: EU ETS 90,718 tCO2 in 2025 against 647,269 allowances owned; CO2 tax on waste incineration 42,385 tCO2; energy 8% of total cost (NOK 472 million); CO2 compensation NOK 125.6 million (Note 34). Future (2030) exposure: EU ETS shortfall of ~20,000 t/year with no free allowances expected; limited CBAM exposure (EU-sourced raw materials); a 35 MW grid-capacity increase needed; and, for Scope 3, more challenging Rhine/Glomma river conditions and rising EU ETS-linked transport costs. Value creation per tonne of Scope 1+2 CO2 rose 12% year-on-year.

Policies related to pollution

Reference: pages 91-92.

E2 materiality is scoped to pollution of air and water ("Pollution to air and water have been assessed as material," E2.IRO-1, p.90). Policies: the Group-wide Policy for Environment, Climate, Health and Safety Engagement (Board-approved, owned by the SVP Public Affairs and Sustainability) governs emissions reduction across the value chain; a separate Process Safety Policy, aligned with the Seveso III Directive, applies to Sarpsborg under the SVP of Manufacturing and Technology, supported by a formal process-safety-management system.

Actions and resources related to pollution

Reference: pages 92-95.

Water: a long-term action plan submitted to the Norwegian Environment Agency targets COD below 46 t/day by 2026 and 40 t/day by 2030 (2025: 47 t/day), via recipe/process optimisation, improved washing/evaporation and spill collection; a NOK 30 million provision (2024) covers extending the mercury groundwater barrier around the legacy chlor-alkali plant (completing 2026).

Air: SO2 scrubbers capture most emissions (air quality within limits 99% of the time); spray dryers converted from LNG to electricity-generated steam have eliminated drying-stage NOx.

Process safety: an independently-assessed consideration zone has been established around Sarpsborg per DSB guidelines under the Seveso III Directive; process hazard analyses (2022-2023) drive an ongoing digester/HCl-plant safety programme through 2026.

Targets related to pollution

Reference: pages 95-96.

COD to water: 47 t/day in 2025 (target was 47 t/day for 2025), 46 t/day by 2026, 40 t/day by 2030 - a 60% reduction versus the 2018 baseline of 61 t/day, aligned with the EU Water Framework Directive goal of "good ecological status of the River Glomma by 2033." Air quality: target of 0 hourly exceedances of local SO2 limits by 2026 (2025: 3 exceedances - two scrubber failures, one valve leak). Process safety: a target to reduce fire incidents (2025: 3, same as base year; target 0 by 2026).

Metrics related to pollution of air and water

Reference: pages 96-99.

Air (2025 vs 2024): SO2 57 t (flat); NOx 102 t (-9%); dust particles 66 t (+19%, "the reason for the increase is not fully understood"). Water: COD 47 t/day (-13%); AOX 67 t (-28%); nitrogen 114 t (+1%); phosphorus 11 t (+34%); copper emissions down 23% versus 2018. Mercury in groundwater/sewage: 1.1 kg/year, "well below the permitted level of 3 kg/year." Zero incidents of non-compliance with long-term discharge limits. More than 99% of water effluents and 90% of air emissions originate from the Sarpsborg biorefinery.

Substances of concern and substances of very high concern

Reference: page 100; accounting policy page 99.

"We have assessed the total amount of substances of concern that are generated, used during production, or procured." Borregaard's main substance of concern is SO2, used at 34,947 tonnes in 2025 (2024: 35,244 t, -1%). Neither of the company's main products (lignin biopolymers, speciality cellulose, ~80% of revenue) requires REACH registration, and "Borregaard does not produce substances included in" the REACH Candidate or Authorisation Lists - a nil return for substances of very high concern.

Gap: no hazard-class split is given for the SO2 volume (paragraph 34 requires this), and the outflow leg of the two-limb test is addressed only indirectly, via the separately reported SO2 emission to air of 57 tonnes under E2-4 rather than a cross-referenced E2-5 outflow figure.

Anticipated financial effects from pollution

Reference: pages 100-101.

"We will continue our efforts to report in accordance with all disclosure requirements regarding E2-6, and in the coming years we will phase in the financial metrics for this material topic."

Qualitative context given: the COD investment plan (targeting a 60% reduction versus 2018 by 2030) forms part of the Sarpsborg debottlenecking and transition-plan CapEx streams; "In 2025, there was no major incidents or deposits that had an impact on OpEx or CapEx"; the mercury-remediation provision of NOK 30 million (2024) is described in Notes 13 and 35.

Transition plan and biodiversity in strategy

Reference: pages 102-105.

The single material E4 sub-topic is "Direct impact drivers of biodiversity loss," tied to wood sourcing. Resilience rests on the Scandinavian wood-sourcing model, FSC(R)/PEFC certification (target 100%) and diversified sourcing.

Physical risk: under SSP5-8.5, "rising temperatures and drier growing seasons could accelerate forest degradation" and pest pressure (e.g. spruce bark beetle). Transition risk: EUDR and LULUCF compliance costs. Systemic risk: salt-mining-related subsidence risk in the Wadden Sea (Netherlands) affecting Borregaard's salt supply, monitored under a Dutch "hand on tap" regime. Two named scenarios - "Ahead of the game" (SSP1-2.6) and "Sand in the gears" (SSP5-8.5) - plus a Global Biodiversity Framework transition-risk scenario, were run using TNFD LEAP.

Policies related to biodiversity and ecosystems

Reference: page 108.

Biodiversity is covered by the Group-wide Policy for Environment, Climate, Health and Safety Engagement, plus the dedicated Responsible Sourcing Policy and Policy for Sourcing of Wood and Wood-Based Raw Materials, all Board-approved. The wood-sourcing target (100% certified) "has been informed by stakeholder engagement," including Borregaard's contribution to the 2023 revision of the Norwegian PEFC standard.

Actions and resources related to biodiversity and ecosystems

Reference: pages 108-110.

100% of sourced wood is FSC(R) Controlled Wood and 98% is PEFC or FSC(R) certified (target 100%); sourcing mix is 40% wood chips/60% small-dimension logs. Supplier financial agreements fund biodiversity measures such as mapping Capercaillie lek sites and soil-moisture mapping to reduce harvesting track damage.

Wild Atlantic Salmon: Borregaard has co-funded a salmon-cultivation facility near its Sarpsborg site since 2012, contributing "approximately NOK 0.6 million annually," with NIVA surveys indicating increased natural reproduction in the River Glomma.

Targets related to biodiversity and ecosystems

Reference: pages 110-111.

Target: 100% PEFC or FSC(R) certified wood at the Sarpsborg biorefinery (2024 base: 95%; 2025 result: 98%; 2026 and 2030 target: 100%). The remaining 2% is verified as "controlled" wood rather than excluded: "Borregaard chose to leverage our buyer influence to support and improve the original sources rather than excluding them." The target supports SDG 15 and is informed by the Global Biodiversity Framework.

Anticipated financial effects from biodiversity-related risks and opportunities

Reference: pages 111-112.

"We will continue our efforts to report in accordance with all disclosure requirements regarding E4-6, and in the coming years will phase in the financial metrics for this material topic... However, we have conducted a thorough qualitative evaluation of the future impact" (cross-referencing E1-9). Wood cost for 2025 is presented in Note 21. Future exposure: sourced wood volume expected to rise 5-10% to 1.05-1.10 million m3 on Sarpsborg debottlenecking, with future price dependent on certification-scheme availability and EU Green Deal-driven forest regulation.

Policies related to resource use and circular economy

Reference: pages 113-114.

Resource use and circularity (Reduce, Reuse, Recycle; the waste hierarchy) are addressed through the Board-approved Policy for Environment, Climate, Health and Safety Engagement, plus the Responsible Sourcing Policy and Policy for Sourcing of Wood and Wood-Based Raw Materials. Waste management at the Norway and Germany sites is ISO 14001 certified. The policy applies Group-wide, with expectations extending to suppliers and key partners.

Actions and resources related to resource use and circular economy

Reference: pages 114-116.

Wood-utilisation target raised from 94% to 97%; a feasibility study is underway to re-capture biogenic CO2 from the bioethanol plant (~17,000 t/year potential, discontinued in the 1990s on profitability grounds).

By-product recovery: process gypsum (~8,400 t/year) - land-spread for soil conditioning in the US and, from 2026, used as a fertiliser input in Norway; bio-sludge (~400 t/year) - soil-improvement/composting trials successful, regular deliveries from 2026; fly ash/bottom ash recovery explored with EarthresQue. Plastic packaging target: -15% from 2018 to 2040 under the EU Packaging and Packaging Waste Regulation (2025 use: ~1,200 tonnes, under 1% of product volume).

Targets related to resource use and circular economy

Reference: pages 116-118.

Gypsum material recovery: 2026 target 80%, long-term 100% (delayed from an original 2025 target of 100%). Material or energy recovery of all waste: 2030 target 100% (2025 result: 53%, down from 66% in 2024, "mainly due to a major investment project at the Sarpsborg biorefinery" generating ~4,000 extra tonnes of contaminated excavated soil - described as "project-specific and exceptional for 2025"). Wood utilisation: 97% long-term target (2025: 94%), which "will be necessary" to achieve via Carbon Capture and Storage of biogenic carbon. Plastic packaging target per the PPWR. "All the targets are voluntary, except for the target on plastic packaging."

Resource inflows

Reference: pages 118-119.

Total materials used: 794,122 tonnes in 2025 (2024: 815,289, -3%); 71% biological materials. Secondary reused/recycled materials: 76,714 tonnes (10% of input, +7% YoY). Wood utilisation at the Sarpsborg biorefinery: 94% (flat vs 2024), of which 82% becomes commercial products and 12% is used for energy. The utilisation metric is "a company-specific indicator" with "no external validation."

Resource outflows

Reference: page 119.

Borregaard describes its cascading biorefinery: cellulose side-streams first feed bioethanol production, with the remainder converted to lignin-based biopolymers, some further into biovanillin and cellulose fibrils; knot pulp is sold for packaging materials and bark for soil conditioning; non-usable side-streams become biogas or process energy. Output products serve sectors with high circularity potential - electronics, batteries, vehicles, packaging, plastics, textiles, construction, food, water and nutrients.

Waste

Reference: pages 119-120 (metrics table).

Total waste generated: 40,468 tonnes in 2025 (2024: 39,815, +2%): hazardous 4,097 t (-19%), non-hazardous 36,371 t (+5%). Diverted from disposal: 17,237 t (-9%); directed to disposal: 23,231 t (+11%), the rise "driven mainly" by the ~4,000 extra tonnes of contaminated excavated soil from a Sarpsborg project (see E5-3). Non-recycled waste: 58% (2024: 52%). Municipal waste incineration ash makes up 91% of hazardous waste (fly ash) and 28% of non-hazardous waste (bottom ash).

Anticipated financial effects from resource use and circular economy

Reference: pages 121-122.

Value creation per solid cubic metre of wood has risen over the last decade; value creation per tonne of Scope 1+2 CO2 rose 12% year-on-year. Planned bark-energy recovery exceeds 75 GWh/year, expected to hold energy costs broadly stable even as capacity expands. Rising landfill/waste-handling costs are expected to be offset by the 100% material-or-energy-recovery plan. CapEx is "primarily efficiency- and replacement-driven... maintained broadly at the depreciation level," with expansion investments requiring an internal rate of return above 15% pre-tax.

Policies related to own workforce

Reference: pages 124-125.

Policies - the Borregaard Way, the Environment, Climate, Health and Safety policy, the Human Rights Policy and the Code of Conduct - apply Group-wide, "to all employees, non-employees and contractors." The ambition is "a safety culture that results in no injuries to employees, contractors, or third parties." Mandatory Code of Conduct training runs every two years and at onboarding. Policies align with the ILO Declaration on Fundamental Principles and Rights at Work and are approved by the Board (which includes two employee-elected representatives).

Engaging with own workforce and representatives

Reference: pages 125-126.

87% of employees work in units with collective bargaining agreements. Two employee representatives and two observers sit on the Borregaard ASA Board (per the Norwegian Companies Act); there is one employee-representative observer on the German subsidiary's board. The legally mandated Working Environment Committee (AMU) monitors sick leave, injury rates and safety targets; the Company Committee (BU) meets quarterly. The 2025 employee engagement survey achieved an 89% response rate, informing workplace improvement actions alongside annual appraisal dialogues and exit interviews.

Remediation processes and grievance channels

Reference: page 126.

Employees may raise concerns with managers, HR, union representatives or through Borregaard's whistleblowing system, with an option for anonymity. Reports are handled by a notification group comprising Legal, the SVP of HR and the SVP of Public Affairs and Sustainability; case volumes are reported annually to the Board in the Compliance Report. "Anyone who raises concerns is legally protected," and the Code of Conduct and grievance channels are actively communicated via the intranet and training.

Taking action on material impacts on own workforce

Reference: pages 126-129.

Health and safety: TRIF, LTIF and high-risk incidents (HRI1/HRI2) are tracked monthly; Human and Organizational Performance (HOP) principles are being rolled out. At the Florida site, safety observation participation averaged 62% of employees per month with a 95% coaching completion rate. Chemical exposure is "the leading incident category" and rose versus 2024 despite training.

Competence development: five structured competence academies targeted per year (7 delivered in 2025); a two-year apprentice programme; a partnership with Borg Upper Secondary School; NOK 7 million in 2025 sponsorship for recruitment-related community initiatives. Direct financial effects of these actions are "not financially material" but are "considered essential" to strategic objectives.

Targets related to own workforce

Reference: pages 129-130.

TRIF: 2025 result 6.8 (2024 base 7.9; 2025 target 3.5) - not achieved. Sick leave: 2025 result 3.4% (target 4.0%) - achieved; 2030 target 3.0%. High-risk incidents (HRI1): 2 in 2025 (2024: 1). New female hires: 25% (target 35%, 2024: 29%) - not achieved. Competence academies: 7 run (target 5) - exceeded. Female employees: 27% (2030 target 35%). Female managers: 26% (2030 target 35%). Voluntary turnover: 2.0% (target 3.5%, 2024: 3.6%) - achieved.

Characteristics of employees

Reference: pages 130-131.

1,228 employees (898 men, 330 women) headcount, 1,177 FTE, at year-end 2025. By region: Norway 892, Americas 189, EMEA 90, Asia 57. 1,162 full-time / 24 part-time; 1,193 permanent / 35 temporary. Employee turnover 6% (2024: 7%); voluntary turnover 2.0% (2024: 3.6%).

Characteristics of non-employees

Reference: pages 130-131.

54 non-employees (headcount) at year-end 2025 (2024: 73, -26%), comprising apprentices undertaking mandatory two-year practical training plus temporary workers engaged through staffing agencies to cover absences such as sick or parental leave.

Collective bargaining coverage and social dialogue

Reference: pages 131-132.

87% of the total workforce is covered by collective bargaining agreements (flat versus 2024); coverage is 100% in Norway by legal requirement. For employees outside the EEA, coverage rates are reported as "not applicable." Non-employees in Norway are subject to the same terms as employees under the collective agreement and national legislation.

Diversity metrics

Reference: pages 132-133.

Top management (levels 1-2): 10 people, 3 female / 7 male (30%/70%). New hires female: 25% (minimum target 35%). Female employee proportion: 27%; female managers: 26% (both minimum target 35%). Age distribution: under 30 - 184; 30-50 - 478; over 50 - 566. New diversity-and-inclusion KPIs were established in 2025, with "results and progress will be measured in 2026."

Adequate wages

Reference: pages 133-134.

"All our employees receive fair and adequate wages for the work they perform, either through local collective bargaining agreements or by referencing external national benchmarks." In 2025, external wage benchmarking was carried out for the China office, confirming compensation "in line with relevant local standards." Non-employees are "entitled to the same pay and benefits as our workforce" by legislation.

Training and skills development

Reference: pages 134-135.

Average 14 training hours per employee in 2025 (2024: 9). 7 competence development programmes delivered (target 5); 29% of group-management programme participants were female, representing 7 nationalities. 893 employees (88%) completed a performance/career development review. 99 new hires in 2025, including 42 onboarded through two headquarters induction programmes.

Health and safety

Reference: pages 135-137.

Zero fatalities. Own-workforce recordable injuries (TRI): 15 (2024: 17, -12%); TRIF 6.8 (2024: 7.9); zero lost-time injuries. Contractor TRI: 7 (2024: 5, +40%; 3 lost-time, including two chemical-exposure incidents), rate 16.9 (2024: 13.8). Two high-risk incidents (HRI1) - a traffic incident and an angle-grinder facial cut. Sick leave 3.4% (2024: 3.7%). 100% of own workforce is covered by a health and safety management system based on legal requirements/recognised standards. Musculoskeletal disorders remain the main sick-leave cause; AI-assisted ergonomic software was piloted at the Wisconsin plant.

Remuneration metrics

Reference: page 137.

Gender pay gap in Norway: -3% (2024: -4%), i.e. women's average base salary (NOK 852,100) is 103% of men's (NOK 826,800), attributed to "a higher proportion of women in positions that require higher education levels." CEO-to-median-employee pay ratio (Norway): 6.5 to 1 (2024: 6.8 to 1).

Incidents, complaints and severe human rights impacts

Reference: pages 137-138.

1 grievance case raised in 2025 (not related to discrimination). Zero incidents of discrimination. "No incidents of severe human rights issues or incidents connected to our own workforce that contravene the UN Guiding Principles on Business and Human Rights and the OECD Guidelines... were reported." Zero fines, penalties or compensation obligations related to such issues. One company office (China) is flagged as a higher-risk location per the Democracy Index and is subject to annual due-diligence evaluation.

Business conduct policies and corporate culture

Reference: pages 140-141.

Policies: Code of Conduct, Environment Climate Health and Safety policy, Human Rights Policy, Anti-Corruption Manual, Responsible Sourcing Policy, Corporate Governance Principles, Competition Law Compliance policy, and a Policy on Animal Testing and Welfare. Group Executive Management oversees implementation; a third-party-operated whistleblowing system covers both employees and external parties.

The main corruption/bribery risk identified sits in "sales to countries with a high risk for corruption," assessed as low given restrictive use of agents, minimal cash transactions, background checks on distributors/customers and targeted anti-corruption training.

Management of relationships with suppliers

Reference: pages 142-143.

Suppliers are assessed via EcoVadis IQ (risk screening) and EcoVadis Ratings (in-depth assessment), and sign a Supplier Code of Conduct. 2025 spend: approximately NOK 5.7 billion across 2,500 suppliers in 43 countries (83% Europe, 16% US/Canada); 303 suppliers exceeded NOK 1 million spend, 225 classed as bottleneck/strategic. EcoVadis IQ covered 1,697 suppliers: 3 had social impacts identified (none strategic) and 267 had environmental impacts identified (38 strategic, 71% of which showed improvement). "No significant confirmed negative environment or social impacts were identified in 2025 and no supplier relationships were terminated for these reasons." Operational cost for the programme: NOK 4.5 million; no investment cost.

Targets related to business conduct (part of MDR-T/GDR-T disclosures)

Back-filled from the "G1.MDR-T" targets section (pages 144-145) of the FY2025 report, prepared under the 2023 ESRS, under which G1-3 targets fell within MDR-T rather than a standalone DR.

The only quantified MDR-T target set Borregaard presents under G1 is scoped to Management of relationships with suppliers (G1-2), not Corporate Culture or corruption prevention specifically: new suppliers signing the Supplier Code of Conduct and assessed for responsible sourcing - 2025 result 98% (target 100%); key suppliers disclosing on EcoVadis Ratings - 2025 result 71% (target 70%; 2026 target 80%); supplier audits - 2025 result 7 (target 8). No separate target is stated for the Corporate Culture subtopic or for corruption prevention/bribery specifically.