Brødrene A & O Johansen A/S

The role of the administrative, management and supervisory bodies

Reference: pages 54, 99 (detail incorporated by reference from Corporate Governance, pages 31-36).

"Clear policies and guidelines for how to conduct and do business are important for AO. Management and other administrative bodies and leaders are expected to set a good example and are responsible for developing and implementing clear policies and guidelines for business conduct" (page 54). The statement points readers to "the Corporate Governance section on page 31-36 ... cf. DR ESRS GOV-1" for Board composition, experience and background.

Under G1 (page 99): "The administrative, management and supervisory bodies of AO play a significant part in ensuring good business conduct. They are responsible for assuring a clear definition and approach in its corporate governance."

The EU-legislation datapoints table (page 62) cross-references board gender diversity (21(d)) and the percentage of independent board members (21(e)) to the Corporate Governance section, pages 33-35.

Information provided to and sustainability matters addressed by the administrative, management and supervisory bodies

Reference: pages 53-54.

Sustainability is governed by the ESG Council, "which consists of the Executive Board and the head of Climate & Sustainability (1 female and 4 males)," supported by "a permanent taskforce for the green transition." Strategy and material IROs "are discussed at quarterly meetings, or when necessary, in the ESG Council," which "reports to the Board of Directors multiple times a year. When presenting initiatives, no trade-offs have been identified during the assessment."

In 2025 the Council's focus areas included: further CO2 reductions and an updated SBTi roadmap ("with a focus on Scope 3 Category 1 emissions"); an updated ESG Roadmap aligned with business strategy, "adding S2 – Workers in the value chain as a new material topic"; and continued "Hverdagens Grønne Partner" employee-engagement activities (page 54).

Integration of sustainability-related performance in incentive schemes

Reference: page 54.

"The incentive schemes related to the Executive Board are currently not linked to sustainability or climate-related targets. Inclusion of sustainability and climate-related targets in future incentive schemes are allowed for in the remuneration policy and will be considered annually."

This is a plain statement that, as at FY2025, no Executive Board remuneration is tied to ESG or climate performance, with the door left open for future years.

Statement on due diligence

Reference: page 54.

AO maps its due diligence process against the five core UNGP/OECD elements, each with a section and page reference (page 54): (1) embedding due diligence in governance, strategy and business model (General, pp.54-55); (2) engaging with affected stakeholders in all key steps (General, p.56); (3) identifying and assessing adverse impacts (General, Environment, Social, Governance, pp.57-61, 66, 73, 76, 84, 96, 99); (4) taking actions to address adverse impacts (Environment, Social, pp.66-67, 77-78, 88-89, 97); (5) tracking effectiveness and communicating (Environment, Social, pp.66-68, 74, 77-78, 88-89, 97).

The EU-legislation datapoints table (page 62) separately confirms "ESRS 2 GOV-4 | 30 | Statement on due diligence | SUS | 54."

Risk management and internal controls over sustainability reporting

Reference: page 54.

"The business environment is becoming increasingly volatile ... The most significant risks to the company are regularly monitored and reviewed and are reflected in the Risk management section on page 25-28." AO cites cyberattacks and data breaches as examples of risks it monitors with contingency measures.

On the sustainability statement specifically: "The sustainability statement is exposed to the risk of human error and incomplete data, as the process of data collection consists of data from multiple external sources and, in certain instances manual collection and handling of data. To best mitigate the risks, automated data collection processes has been established, where possible, and data is thoroughly analysed and reviewed."

Strategy, business model and value chain

Reference: ESRS 2 SBM-1, incorporated by reference from the Strategy section, pages 13-17; further detail in the sustainability statement, page 55.

AO is a Danish wholesaler of plumbing, heating, sanitary (VVS/VA/VAGA), electrical and tools products for the construction trade and private consumers, working with "more than 1,000 suppliers" and around "600,000 SKUs," picked roughly 90% automatically from its central warehouse in Albertslund and logistics centre in Horsens (page 13). Sales run through B2B (tradesmen, project sale, construction) and B2C (webshops, stores) channels across Denmark, Sweden and Norway, with a global upstream supply chain.

Sustainability strategy (page 55) sets three focus areas tied to material IROs: climate (CO2e reduction targets, SVHC phase-out), people (health, safety, training, satisfaction), and governance (anti-corruption training, payment terms, supplier code of conduct and risk assessment), each with stated actions and targets.

Interests and views of stakeholders

Reference: page 56.

AO identifies five main stakeholder groups: customers, employees, suppliers, shareholders and "environment." "In 2025, AO have strengthened this work by enhancing processes for engaging and documenting input from AO's stakeholders," feeding into the double materiality assessment.

Each group's engagement channel is described: customers through regular business interactions ("Customer is King"); employees through the intranet, development conversations, the Works Council, surveys and a whistleblower system; suppliers through industry forums, contract management and business interactions; shareholders through investor relations, conference calls and briefings; and the environment is treated as a stakeholder affected by AO's value chain from raw-material extraction to product use and disposal. "Significant decisions are presented to and discussed by the Executive Board and, where appropriate, the Board of Directors," to reflect affected stakeholders' views.

Material impacts, risks and opportunities and their interaction with strategy and business model

Reference: pages 58-61.

The DMA found six of the ten ESRS topics material: "E1 Climate change, E2 Pollution, E5 Resource use and circular economy, S1 Own workforce, S2 Workers in the value chain, G1 Business conduct" (page 61), following the acquisition of Work Wear Group (AO Workwear), which made S2 newly material for 2025.

The SBM-3 table (pages 58-59) lists 15 rated IROs across the six topics with type, value-chain location and time horizon, e.g. E1 "Climate change mitigation" (impact, actual, negative, own operations/downstream, all horizons) and E1 "Climate change adaptation" (opportunity, downstream, long-term). Not material: E3 Water and marine resources, E4 Biodiversity and ecosystems, and (reviewed as immaterial before the full DMA) S3 Affected communities and the G1 sub-topics animal welfare and political engagement/lobbying (page 61).

Description of the process to identify and assess material impacts, risks and opportunities

Reference: page 57, with methodology detail on pages 60-61.

"In 2023, AO began working towards CSRD readiness and compliance by completing AO's first Double Materiality Assessment (DMA) and GAP analysis." The 2024 review used specialised consultants; in 2025 AO reassessed IROs "that could be impacted by AO's expanded business" following the Work Wear Group acquisition, concluding S2 is now material.

Scoring used Scale, Scope and Irremediability for actual impacts (plus Likelihood for potential impacts), each 1 (lowest) to 5 (highest), with human-rights sub-topics scored on severity alone once severity reached 4 or higher. "The final threshold was set at 3," approved by the Board of Directors along with the list of material IROs and topics. Value-chain assessment relied on direct-supplier data, internal knowledge and SASB-based assumptions "as AO does not have direct insight into the actual conditions."

Disclosure requirements in ESRS covered by the undertaking's sustainability statement

Reference: page 50 (this index); the EU-legislation cross-cutting datapoints table is on pages 62-64.

AO publishes a full IRO-2 concordance table mapping each cross-cutting and topical disclosure requirement (ESRS 2 general disclosures, and E1, E2, E5, S1, S2 and G1 as the six material topics) to a section and page, or to a dash where not disclosed. The table also cross-references SFDR, Pillar 3, Benchmark Regulation and EU Climate Law datapoints, marking many of these EU-legislation-specific items — e.g. benchmark-portfolio physical-risk exposure under E1-9, the E-PRTR pollutant datapoint under E2-4, and the full E3/E4/S3/S4 datapoint rows — explicitly "Not material" or "Not relevant" for AO's business.

This index is the basis on which every disclosure in this file is classified reported, not_material or omitted.

Transition plan for climate change mitigation

Reference: page 67.

AO "has developed a transition plan for climate change mitigation, endorsed by management and integrated into corporate governance and financial planning to ensure coordinated implementation and monitoring." SBTi has validated the targets as 1.5C-aligned: "Reduce Scope 1 and 2 emissions by 80% by 2030 from a 2022 base year," "Reduce Scope 3 emissions by 42% by 2030 from a 2022 base year," and "Reach net-zero emissions across the value chain by 2045."

"No material locked-in emissions have been identified that could hinder target achievement. AO reports annually on progress, actions, and adjustments to maintain alignment with its SBTi-validated pathway."

On implementation, E1-3 is more guarded: "There is no concrete actions to mention and are not significant resource-intensive investments compared to manufacturing industries," and the Taxonomy section confirms "no capital expenditure plan for upgrading AO's investments to become environmentally sustainable in the longer term has been made" (page 79), with 0% of turnover, capex or opex assessed as Taxonomy-aligned.

Identification of climate-related risks and scenario analysis

Reference: back-filled from ESRS 2 IRO-1 and E1 SBM-3, page 66. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

AO's process combined "GHG emission calculations and a flood risk assessment of AO's physical locations using external expertise and recognised flood risk tools." The company states plainly: "No full scenario analysis has been conducted. Only a few sites were found to be exposed to climate-related hazards."

Risks are classified by type: physical ("Two retail sites are located in high risk of flooding areas ... posing limited operational and financial risk due to short downtime and proximity to alternative locations. No safety risks have been identified") and transition ("Regulatory changes, evolving market preferences and technology shifts may affect operations," mitigated by "AO's diverse supplier base and ability to substitute suppliers").

Because no scenario analysis was performed, ESRS E1-2 paragraph 17 (scenario selection, temperature pathways, assumptions) does not apply; this is a disclosed methodology choice, not a gap.

Resilience in relation to climate change

Reference: back-filled from ESRS 2 SBM-3, page 66. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

The resilience analysis "conducted internally in 2023, assessed the vulnerability of physical sites and the robustness of the supply chain to climate-related disruptions ... performed at a high level without formal scenario analysis." In 2025 AO "reassessed whether the results of the 2023 analysis are still applicable and have concluded that the circumstances are not materially different," with no new analysis performed in the year.

Stated uncertainty: "The primary uncertainty in the resilience analysis lies in the lack of no formally documented scenario methodology behind the assessments. Additionally, timing and severity of climate-related events and regulatory changes is uncertain."

Capacity to adjust is set out across five dimensions: strategic flexibility (diversified, flexible sourcing), access to finance (maintaining strong financial-partner relationships), asset management (ability to redeploy, upgrade or decommission assets, "currently very limited"), product/service shifts, and workforce reskilling.

Policies related to climate change mitigation and adaptation

Reference: page 67.

"The scope of AO's Climate and Environmental Policy is covering the entire value chain across all geographies and all identified stakeholders. The ESG Council is responsible for the implementation of the policy." The policy "solely covers climate change mitigation and adaptation, energy efficiency, pollution, waste management, circular economy."

"AO's most significant climate and environmental impact lie within our value chain, meaning a crucial part of our task is collaborating with customers and suppliers to drive change in our industry." As "the Everyday Green Partner," AO says it assists customers "by offering environmental data, products, and services that support more sustainable constructions and societies," while also working to reduce impacts in its own operations "regardless of their significance across the value chain."

Actions and resources in relation to climate change policies

Reference: pages 67-68.

Building on the transition plan, the Climate and Environmental Policy sets decarbonisation levers: reducing Scope 1-3 emissions per SBTi-validated goals; phasing out fossil fuels in heating, company vehicles and forklifts; increasing the share of sustainable products sourced; and inspiring partners and the industry. Adaptation levers include adapting locations to climate impacts and providing products that help customers and communities adapt.

"In 2025 AO continued to work towards implementing actions to achieve its SBTi-validated climate targets," with a particular focus on "purchased goods and services" and "use of sold products," but the text is explicit that "There is no concrete actions to mention and are not significant resource-intensive investments compared to manufacturing industries. AO does not have an expected GHG emission reduction for the ongoing actions in the transition plan, beside the target approved by SBTi." A supplier ESG assessment system is being implemented to collect verified supplier data.

Targets related to climate change mitigation and adaptation

Reference: page 68.

"AO submitted a target to reduce absolute Scope 1 and 2 GHG emissions by 80% by 2030 from a 2022 base year and reach net-zero greenhouse gas emissions across the value chain by 2045, which was validated by SBTi." A Scope 3 target of -42% by 2030 (2022 base) sits alongside it. Targets were "approved by the ESG-Council and Board of Directors." "No additional E1-related targets have been defined beyond the SBTi-aligned reduction and net-zero goals."

Progress table (page 68): achieved GHG emission reductions vs the 2022 base year were -29.8% in 2025 (down from -36.0% in 2024), against an expected -80.0% (Scope 1&2) / -42.0% (Scope 3) by 2030 and -90.0% (Scope 1,2&3) by 2045.

Energy consumption and mix

Reference: page 68.

"Energy efficiency and the transition to renewable energy are central to AO's climate strategy," through energy-efficient technologies, solar panels, and phasing out fossil fuels in heating, company vehicles and forklifts.

2025 energy consumption mix: total fossil energy consumption 12,337.4 MWh (97.9% of the mix, down from 13,015.1 MWh/97.9% in 2024), split between crude oil/petroleum products (597.7 MWh), natural gas (171.4 MWh) and purchased electricity/heat/steam/cooling from fossil sources (11,568.3 MWh). Total renewable energy consumption was 259.4 MWh (2.1% of the mix), all self-generated non-fuel renewable energy; total energy consumption was 12,596.8 MWh, down from 13,295.0 MWh in 2024.

Gross Scopes 1, 2, 3 and Total GHG emissions

Reference: pages 69-71.

2025 figures (tCO2e): gross Scope 1 emissions 194 (down 53.8% year on year, -87.9% vs the 2022 baseline); gross location-based Scope 2 2,108 (+8.6% YoY); gross market-based Scope 2 3,832 (-18.7% YoY); Scope 3 730,893 (+9.7% YoY, -29.7% vs baseline). Total GHG emissions (market-based) were 734,919 tCO2e, up 9.5% year on year but down 29.8% against the 2022 baseline of 1,047,281.

The largest Scope 3 categories are Category 11 "Use of Sold Products" (533,415 tCO2e) and Category 1 "Purchased Goods & Services" (167,159 tCO2e). "The increase in the Group's GHG emissions is primarily driven by an unexpected rise in the electricity grid emission factor, which impacted Category 11 ... In addition, Category 11 emissions increased due to CO2 emissions from the washing of sold workwear products within AO Workwear." Categories 8, 10, 14 and 15 are excluded as not relevant to AO's business model (pages 70-71). GHG intensity was 120.1 tCO2e per DKK million (market-based), down from 123.6 in 2024.

Policies related to pollution

Reference: page 73.

"The scope of AO's climate & environmental policy is covering the whole value chain across all geographies and all identified stakeholders," solely covering "climate change mitigation and adaptation, energy efficiency, pollution, waste management, circular economy." The CTO is responsible for implementation, supported by the ISO 14001-certified environmental management system.

Key policy contents (page 73): pollution prevention and control (minimising air/water/soil pollution through ISO 14001 compliance, employee involvement, performance monitoring); substitution and phase-out of harmful substances, with AO "annually analyses its product portfolio and engages suppliers to reduce and phase out Substances of Very High Concern (SVHCs)," targeting "a full phase-out by 2030"; and incident prevention and control, embedding "emergency handling and spill prevention" in the ISO 14001 system.

Actions and resources related to pollution

Reference: page 74.

Actions on harmful substances span upstream and downstream: annually analysing and reducing environmentally harmful substances "by engaging in dialogue with suppliers on how to replace or phase them out, particularly in products sold to private consumers and substances of very high concern (SVHC)"; and increasing the share of sustainable products sourced, "through prioritisation and dialogue," to shift customer focus.

AO also describes ISO 14001 process actions: "actively involving employees in environmental efforts," including environmental topics on internal sales, board and management agendas, and measuring departments on environmental performance. AO consulted customers by interview (autumn 2023) on its sustainability work including harmful substances, though "neighbours were not consulted regarding the matter."

Targets related to pollution

Reference: page 74.

"AO's target is to eliminate all SVHC-substances in products AO sell by 2030 and reduce substances of concern, where substitutes are technically and commercially viable." As an interim step, "the interim target is to decrease the sales of chemical products with SVHC substances each year." The target, set in 2024, ties to "the EU's chemicals strategy for sustainability towards a toxic-free environment."

Progress toward the 2030 target: 91.5% (baseline 2024: 94.1%, unit not fully specified in the source table, page 74) tracked as "Progress towards SVHC 2030 target," against a 2030 goal of 100%. "No official methodology and no significant assumptions has been used to set the target." Effectiveness is tracked yearly by "analysing the substances in chemicals using specialised software and track the amounts sold" of SVHC and other REACH-restricted substances.

Substances of concern and substances of very high concern

Reference: page 75.

AO reports total weight of products containing substances of very high concern (SVHC) leaving its facilities as part of products: "Amount of substances of very high concern that leave facilities as part of products by main hazard classes of substances of concern": 1,226.1 tonnes (SVHC measure) in 2025, up from 913.3 tonnes in 2024 (restated) and 679.8 tonnes (2024 original). A second, narrower SCIP-database measure shows 34.1 tonnes (2025) vs 26.1 / 9.6 tonnes (2024 restated/original). Percentage of net revenue from SVHC-containing products/services was 8.5% (SVHC) and 0.03% (SCIP) in 2025.

"The 2025 reporting period introduces a revised number ... The metric in last year's report did not capture the total weight of all sold products. In contrast, the 2025 metric now reflects the total weight for all sold products classified as substances of very high concern," so 2024 was restated for comparability. Process: chemicals are analysed against REACH restriction lists using safety data sheets, and SVHC-containing articles are tracked through the ECHA SCIP database; "the disclosure is not validated by an external body."

Policies related to resource use and circular economy

Reference: page 76.

"AO's Climate and Environmental Policy cover the full value chain and all stakeholders across geographies. Given that most material impacts occur upstream, the policy primarily targets supplier and product-related activities, while also addressing AO's own waste reduction and resource efficiency efforts." The ESG Council is responsible for implementation.

Beyond the core policy, AO "prioritises waste reduction and minimising the use of virgin resources ... through reducing own packaging amounts and procuring reusable transport packaging or packaging made of recycled materials if possible," an ongoing effort "supported by Packaging and Packaging Waste Regulation timeline." All employees must complete online training on environmental and climate practices.

Actions and resources related to resource use and circular economy

Reference: pages 76-77.

In Q2 2025, "packaging flows at the central warehouse were mapped to identify challenges and opportunities regarding reduction of used packaging," with some suggested initiatives implemented in Q4 2025. In Q4 2025 AO also investigated damaged/defective goods "to identify potential for resell options," and mapped Extended Producer Responsibility packaging requirements and design criteria, which "will in 2026 contribute to setting packaging reduction targets."

AO plans to "track the effectiveness of its actions yearly by analysing the amount of waste that is sorted for further treatment and amount of residual waste," using 2024 as baseline. Two community initiatives are named: the "NEXT" programme, donating unsellable-but-usable materials (e.g. expired screws) to a vocational school, and the "RED" project with customer Finn L. & Davidsen, donating slow-moving stock and cosmetically damaged returns to DIY enthusiasts.

Targets related to resource use and circular economy

Reference: page 77.

"AO's target is to have 90% of waste sorted for further treatment by 2030 and residual waste should be no more than 10% of all waste produced by AO. This relates to recycling in the waste hierarchy." Sorted waste excludes residual and landfill waste. 2025 performance was 86% sorted, against the 2030 target of 90%.

"Danish legislation does not set any specific waste sorting targets that companies must reach. AO's waste sorting targets are not based on any significant assumptions but inspired by legislation and driven by AO's environmental ambitions." Packaging targets will follow in 2026 based on the Packaging and Packaging Waste Regulation. "Due to the complexity of AO's value chain, AO is currently not focusing on circular resources in the products' value chain."

Resource inflows

Reference: page 78.

AO is direct about the limits of its inflow analysis: "Due to the extent of AO's product range and consequently its wide-reaching and complex value chain, AO has not executed an analysis of its full resource inflows." Regarding its own operations, "AO mapped its own packaging consumption to start working on reduction of procured packaging. These are the resource inflows that are within AO's full control," while supplier-level packaging data collection (under Extended Producer Responsibility) is described as "outside AO's control" at this stage.

The impact of resource use across the value chain is cross-referenced to the E1 Climate change section (page 66), where Scope 3 purchased-goods emissions are quantified.

Resource outflows

Reference: page 78.

"AO's main activities are procurement and sales, with limited own production, making waste management a key environmental focus area." By material, "cardboard packaging is AO's largest material waste stream, accounting for 38% of its total waste," followed by wood (~27%), incinerated waste (~20%), plastic (4%) and steel/other metals/ceramics combined (3%); other streams are each below 1.5%.

2025 total waste generated was 1,714 tonnes (2024: 1,708 tonnes). Waste diverted from disposal in 2025: recycling 1,385 tonnes (2 hazardous + 1,383 non-hazardous), other recovery 202 tonnes, preparation for reuse 5 tonnes; directed to disposal: incineration 112 tonnes, landfill 10 tonnes. "Waste data is collected from certified waste management partners who sort, weigh, and report data monthly based on verified measurements and invoices," across all AO locations in Denmark, Sweden and Norway.

Waste

Reference: page 78.

Non-recycled waste was 329 tonnes in 2025 (18.4%... reported as 19.2% of total waste, up from 315 tonnes / 18.4% in 2024). Total waste generated: 1,714 tonnes (2025) vs 1,708 tonnes (2024). Treatment split (2025, hazardous/non-hazardous tonnes): recycling 2 / 1,383; other recovery operations 1 / 201; incineration 0 / 112; landfill 0 / 10; preparation for reuse 0 / 5.

Cardboard packaging is AO's largest waste stream (about 38% of total waste), followed by wood (~27%) and incinerated waste (~20%), with plastic and metals/ceramics making up the remainder. "Waste treatment volumes are reported in absolute tonnage ... of waste collected from AO's location during the reporting period. All data is third-party and actual data."

Policies related to own workforce

Reference: pages 84-85.

AO's "employee code of conduct, including guidelines and company's ethics and compliance policy defines and establishes the expected behaviour," covering "health and safety, discrimination, anti-corruption and bribery, environment, data protection, etc." HR activities sit under a central function headed by the CHRO.

On human and labour rights: AO "complies with and upholds fundamental international human rights standards, including the UN Universal Declaration of Human Rights, the core principles on human rights as described in the UN Guiding Principles on Business and Human Rights, the EU Convention on Human Rights," and core ILO conventions. "AO does not tolerate forced labour, child labour, or discrimination. AO's policies do not address trafficking in human beings as AO complies with national and local rights as well as EU legislation." Diversity policies exist "for the company's management" and "for all employees," and a statutory report on diversity in management is published separately.

Processes for engaging with own workforce and workers' representatives about impacts

Reference: page 86.

Engagement channels include the intranet, the "AO Campus" e-learning portal (with a mandatory "Ethics and Compliance" course), kick-off and team meetings, and job satisfaction surveys and workplace assessments (APVs), which AO uses to "assess the effectiveness of its engagement with its own workforce."

A Works Council, required for companies with more than 35 employees under the Danish Cooperation Agreement, meets every two months with six management and six elected employee representatives, "to achieve a common understanding" on workplace matters. Separately, three of AO's eight Board members are employee representatives, elected for four-year terms and "involved in identifying and assessing actual and potential impact on AO's workforce." AO "has not entered into an agreement with its employees to set up a European Works Council."

Processes to remediate negative impacts and channels for own workforce to raise concerns

Reference: page 87.

"AO has established processes to ensure that employees have effective and safe mechanisms to raise concerns, seek remediation, and have adverse impacts addressed in line with AO's Policy for Respect for Human Rights." The primary channel is "AO's whistleblower portal, accessible via AO's intranet and websites, which guarantees confidentiality and independence"; employees may also raise issues directly with their line manager or HR.

"Grievances are handled in accordance with established procedures, ensuring timely responses. The effectiveness of these channels is evaluated on an ongoing basis through the monitoring of cases." Workplace accidents are separately reported through the health and safety committee to public authorities via a safety management system.

Taking action on material impacts on own workforce

Reference: page 88.

Implemented measures include "enhanced well-being initiatives, flexible work arrangements, health programmes, and a clearly defined code of conduct." The HR department monitors implementation "by conducting assessments of the employees involved and affected."

Health and safety actions: the occupational health and safety committee "continuously works to prevent accidents by updating and establishing new standards and policies," runs regular safety training, refresher courses and interactive workshops, and conducts workplace assessments (APVs) that feed action plans. AO has "implemented ergonomic workstations and robotic technology in its warehouses to reduce physical strain." Average seniority across the Group is 9.7 years, with 33% of employees having more than 10 years' tenure.

Targets related to own workforce

Reference: page 89.

Target table (2026 target vs 2025/2024 actual): rate of recordable work-related accidents for own workforce (incl. non-employees) — target <10, actual 12.2 (2025) vs 7.5 (2024); work-related fatalities — target 0, actual 0 in both years.

"AO's health and safety goal is to establish a zero-accident culture, partly through risk assessments of work processes to identify potential hazards and initiate preventive actions." Targets for training/development and overall employee satisfaction are "in development": "In early 2026 AO will conduct an employee satisfaction survey which will be the baseline for a future target," and training targets await integration of the group's subsidiary HR systems with the parent company.

Characteristics of the undertaking's employees

Reference: pages 89-90.

Total headcount 1,070 in 2025 (2024: 1,029), of which 773 male / 297 female. By country (2025 headcount): Denmark 994 (286 female, 708 male), Sweden 68, Norway 8. By contract type (2025): 1,020 permanent, 50 temporary, 0 non-guaranteed hours employees. Employee turnover: 134 leavers in 2025 (12.5%) vs 130 (12.6%) in 2024.

Age distribution (2025 headcount): under 30 — 186; 30-50 — 450; over 50 — 434.

Characteristics of non-employee workers in the undertaking's own workforce

Reference: page 91.

"Number of non-employees in own workforce": 71 FTE in 2025, up from 65 FTE in 2024. Both "self-employed people" and "people provided by undertakings primarily engaged in employment activities" sub-categories are reported at 0 FTE in both years, meaning the 71/65 FTE figures fall outside those two named sub-categories.

"Non-employees working through an external agency are entitled to similar basic conditions as direct hires" (page 85).

Collective bargaining coverage and social dialogue

Reference: page 91.

Collective bargaining agreement coverage is reported at "80-100%" for Denmark, Norway and Sweden, with the remaining coverage bands (0-19% through 60-79%) all empty. Social dialogue is also shown covering Denmark, Norway and Sweden at the 80-100% band.

Separately, "percentage of employees in each country with significant employment (in the EEA) covered by workers' representatives": Denmark 100% and Sweden 100%, unchanged between 2024 and 2025.

Diversity metrics

Reference: page 90.

Gender distribution at top management: 2025 — 3 female / 8 male / 11 total (27% female / 73% male); 2024 — 3 female / 7 male / 10 total (30% female / 70% male).

Context from page 85: "Historically, more men have pursued careers within the construction sector, in which AO operates, and the majority of the talent pool is therefore made up of men," and AO states it "strives to have at least one woman among the last three candidates" for open roles as part of its diversity approach.

Adequate wages

Reference: page 85.

"AO pays a fair wage to their employees in line with national legislation, market trends and agreements with trade unions." Employment terms are governed by collective agreements (salaried employees and hourly workers) or, for managers, the National Salaried Employees Act aligned with the salaried-employee collective agreement on specific issues.

AO states it "practices equal pay for equal work," with the gender pay gap "expected to be reduced" over time as diversity initiatives take effect (also see S1-16 for the measured 19.7% gap in 2025).

Social protection

Reference: page 85.

"All employees are covered by social protection, through public programmes in both Denmark, Sweden and Norway." AO also offers a company health insurance plan giving employees "quick and professional treatment or assessment if they experience discomfort, illness, or injury," extendable to children and, optionally, spouses/partners.

The EarlyCare programme supports employees on sick leave or at risk of it, with access to "Health Guides who can offer treatment guidelines," aimed at helping "the employee return to work in a safe, quick, and successful manner." A senior policy lets employees approaching retirement plan working-hour changes in advance.

Training and skills development metrics

Reference: page 91.

Average training hours per person (2025): female 17.1, male 24.5, total 22.4 (up sharply from 5.0 / 9.0 / 7.9 in 2024). Percentage of employees participating in regular performance and career-development reviews (2025): female 14.1%, male 15.9%, total 15.4% (down from 18.2% / 19.6% / 19.2% in 2024).

Narrative support (page 85): AO's "Learning Universe" intranet platform offers ongoing learning, and a trainee programme provides "hands-on learning, professional development, and mentorship" for young people; unskilled warehouse workers are offered a skills assessment enabling progression into a warehouse/terminal operations training programme (page 88).

Health and safety metrics

Reference: page 92.

2025: 0 fatalities in own workforce; 16 recordable work-related accidents for own workforce (Denmark 15, Sweden 1), rate 9.5 (9.6 DK, 9.4 SWE); 6 recordable accidents for non-employees, rate 52.1; 55 days lost to work-related injuries/illness. 100% of own workforce is covered by a health and safety management system based on legal requirements/recognised standards, in both 2025 and 2024.

"The 2025 reporting period introduces a revised definition of health and safety incidents. The metric in last year's report captured all incidents without distinction. In contrast, the 2025 metric reflects a new five-tier severity classification, with reporting limited to incidents falling within the three highest severity tiers," so 2024 figures were restated (11 accidents, rate 6.9, comparable basis) from the originally reported 20 accidents/rate 12.3.

Work-life balance metrics

Reference: page 92.

"Percentage of employees entitled to take family-related leave": 100% for female, male and total, unchanged 2024-2025. Of entitled employees, 47 took family-related leave in 2025 (17 female, 30 male; 3.9% of entitled employees overall — 5.0% female, 3.5% male), down from 53 (17 female, 36 male; 5.2% overall) in 2024.

Compensation metrics (pay gap and total compensation)

Reference: page 93.

"Gender-pay gap (male vs female)": 19.7% in 2025, improved from 20.4% in 2024. "Annual total remuneration ratio": 24.3 in 2025, up from 23.2 in 2024.

Incidents, complaints and severe human rights impacts

Reference: page 93.

2025: 0 incidents of discrimination (including harassment); 1 complaint filed through channels for own-workforce concerns (0 in 2024); 0 complaints filed to National Contact Points for OECD Multinational Enterprises; 0 fines, penalties or compensation for discrimination/harassment incidents or complaints; 0 severe human rights issues or incidents connected to own workforce, and 0 cases of non-respect of UN Guiding Principles/OECD Guidelines; 0 related fines or compensation. All metrics unchanged from 2024 apart from the single complaint recorded in 2025.

Policies related to value chain workers

Reference: page 96.

"AO's commitment to comply with national laws and international labor and human rights standards is also expected by all its business partners and suppliers, which is outlined in AO's supplier code of conduct." The code is "based on ILO (International Labour Organisation) conventions," and AO's textile division additionally applies "BSCI (Business Social Compliance Initiative)-aligned standards," requiring "third-party social audits" and updated documentation.

"AO's code of conduct explicitly states that forced and child labor are not accepted under any circumstances," and is "aligned with the UN Guiding Principles on Business and Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work." The CCPO is responsible for implementing all value chain policies and the code of conduct.

Processes for engaging with value chain workers about impacts

Reference: pages 96-97.

"AO does not have direct engagement with the workers in its value chain but has a whistleblower system in place that is accessible for all value chain workers," alongside the requirement that suppliers agree to and live up to AO's code of conduct.

A supplier assessment system requires suppliers "to yearly verify and present their policies, actions and targets regarding human and labor rights as well as other ESG areas," giving AO "broader visibility and proactive risk management." Its purpose "is not only to assess and monitor, but also to support AO's suppliers with identifying risks and reduce or mitigate them." AO's textile section carries "an additional level of assessment with third-party social audits and requesting updated documentation." "No actual or potential impacts on value chain workers have been identified that would impact on AO's strategy and business model" as of the current assessment.

Processes to remediate negative impacts and channels for value chain workers to raise concerns

Reference: page 97.

"Signing and living up to AO's code of conduct is mandatory, and AO expects its suppliers to require the same level of commitment and standards from their own suppliers." Reporting of concerns is encouraged "through its whistleblower system," which "is managed by an external partner and ensures that you can anonymously report without risk of retaliation."

"AO has not received any reports of severe human or labor rights incidents connected to its value chain. Appropriate resources are assigned to AO's whistleblower system and supplier assessment system to manage any incidents, should it arise." Should a supplier fail to meet the code of conduct, "a corrective action plan will be initiated," escalating to termination if the supplier refuses to comply.

Taking action on material impacts on value chain workers

Reference: page 97.

"AO has defined a set of actions to mitigate incidents ... by following its policies and code of conduct. The ongoing communication with AO's suppliers and business partners helps monitor potential risks through daily engagement." Incidents are routed through "the supplier assessment system or whistleblower program, depending on the channel it is reporting on and the severity of the incident."

Forward actions (page 97): continue informing value chain workers about the whistleblower system; monitor and communicate on issues identified via the supplier assessment system; support suppliers in mitigating risks; and continue third-party social audits in the textile sector. "At this time AO has not been made aware of any incidents or complaints that have or could have a negative impact." Effectiveness is assessed through "the mechanisms, use of its channels and the type of inquiries received."

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Reference: page 97.

"In connection with the implementation of the supplier assessment system, AO has defined one target and is working additional targets regarding risk assessment and supplier audits on AO's own textile production." Two metrics are tracked: share of direct suppliers with an agreed and signed code of conduct — 85.0% in 2025 against a 2030 target of 95.0%; share of direct suppliers with a risk assessment — 2030 target of 90.0% (2025 baseline not yet populated in the table).

"Target at 95% is set as some suppliers will be small Danish local suppliers who are subject to Danish legislation which already meets the same requirements as our code of conduct." Targets are "defined by the Senior Management Team and approved by the Board of Directors," and "tracked and assessed quarterly using data from AO's contract system and risk assessment system."

Business conduct policies and corporate culture

Reference: page 100.

AO's "Supplier Code of Conduct" is "a key part of the commercial agreements between AO and its suppliers," setting expectations on "workers' rights, human rights, environmental protection, and the prevention of bribery and corruption," and holding "both its suppliers and their subcontractors accountable." "In 2025, AO recorded no breaches or instances of non-compliance with its Supplier Code of Conduct."

On whistleblowing: "AO has established a whistleblower scheme for employees and external stakeholders to report serious violations or suspicion thereof in a confidential matter," administered by an independent third party. "One whistleblower report was received in 2025." "In 2024, it was decided to extend the scheme to include external stakeholders," and the Board assesses annually whether the scheme works as intended. On tax: AO "pursues a responsible and transparent tax practice and does not support tax evasion, contribute to tax speculation, or misuse of tax laws."

Management of relationships with suppliers

Reference: page 101 (heading "G1-2 + G1-6").

"AO is committed to fair and transparent payment practices for all suppliers, regardless of their size including SMEs. AO ensures that all suppliers, whether SME or a large company, across all categories, are treated equally with respect to payment terms, maintaining consistent conditions." AO "accepts reverse factoring as a payment option," letting suppliers "be paid within a few days from delivery."

With the supplier assessment system, "the risk assessment of its supply chain provides an opportunity for both AO and its suppliers to better understand the risks and improve on the challenged areas for both social and sustainability matters." AO expects suppliers to comply with the code of conduct on "human and labor rights, impact on the environment, corruption among other international standards."

Prevention and detection of corruption and bribery

Reference: pages 102-103 (heading "G1-3 + G1-4").

"AO complies with applicable legislation and international conventions on corporate governance, including workers' rights, human rights, environment, bribery, and corruption ... AO maintains a zero-tolerance approach to violations of these conditions." AO "regularly monitors purchasing patterns and the origin of its goods to ascertain the risk of non-compliance," noting 81% of purchases originate from Europe (2024: 82%), which it uses to support a "limited risk" conclusion on indirect involvement in rights or anti-corruption violations.

Training metric (page 103): "the percentage of functions-at-risk covered by training programmes (Corruption and Bribery) - Passed" was 86.0% in 2025 (2024: 92.0%) against a stated target of 100.0%; "not started/in progress" was 14.0% (2024: 8.0%). Functions-at-risk are defined as "purchasing department, sales management & IT management."

Targets related to business conduct

Reference: back-filled from the G1 chapter and the strategic focus-area table; pages 55, 103. This disclosure requirement was renumbered from MDR-T under the 2023 ESRS the report was prepared against.

AO's strategic sustainability focus areas (page 55) state explicit governance targets: "100% of employees (employed more than 3 months) have completed corruption and bribery training," "More than 95% of payments made within AO's payment terms," "More than 95% of supplier spend is covered by a signed code of conduct," and "Have a risk assessment on 90% of all direct suppliers by 2030."

The G1-3 metrics table (page 103) operationalises the training target directly, showing a stated "Target" of 100.0% for the percentage of functions-at-risk employees who have passed corruption and bribery training, against 86.0% achieved in 2025 (2024: 92.0%). AO therefore has a stated, quantified business-conduct target with year-on-year tracked progress, satisfying the (renumbered) MDR-T requirement.

Incidents of corruption or bribery

Reference: pages 102-103.

2025 metrics: 0 convictions for violation of anti-corruption/anti-bribery laws; 0 fines for such violations; 0 actions taken to address breaches in anti-corruption/anti-bribery procedures and standards — all unchanged from 2024. "The number of incidents reported are limited, but all incidents will be followed up with the direct involvement of the CHRO."

"In 2024, AO decided to implement a mandatory online corruption and bribery course for all employees ... It is the target that all employees undergo the training within 3 months after joining AO." "Number of incidents is based on reported incidents that has led to conviction for a violation. Incidents are included if considered substantiated cases."

Payment practices

Reference: page 101 (heading "G1-2 + G1-6").

Metrics table: average number of days to pay invoices was 1.3 in 2025 (2024: 1.5) against a 2030 target of under 1.5 days; percentage of payments aligned with standard payment terms was 94.3% (2024: 94.9%) against a target of 95% or more; outstanding legal proceedings for late payments were 0 in both years.

"AO Groups standard payment terms are 'Current month plus 60 days,' unless other payment terms are agreed with the supplier," and "payments to suppliers are made twice a week in accordance with agreed payment terms." AO says it "can calculate the number of days before payments are processed through its system, further ensuring timely and reliable payments to its partners."