Castellum Ab

Governance sits with the Board and Executive Management. "Castellum's Board of Directors is ultimately responsible for the company's sustainability and is responsible for adopting the Sustainability Policy and Code of Conduct. The Board and Executive Management adopt the annual sustainability strategy with the appurtenant goals, and adopt the double materiality assessment when it is updated" (p.27). The Board has established an Investment and Sustainability Committee with Board, CEO, Chief Investment Officer and Chief Sustainability Officer representation. At year-end 2025, women accounted for 29% and men 71% of AGM-elected Board members (p.27). The CEO "bears strategic responsibility for the company's sustainability initiatives" and the Chief Sustainability Officer "leads and develops the Group's sustainability and climate programme" (p.27). Board composition/independence detail is incorporated by reference to the Corporate Governance Report, pp.100, 108-111.

"The Board is regularly informed about the sustainability matters that are relevant to Castellum. Every year, the Board examines an analysis in which risks linked to sustainability, the climate, human rights, actions and internal controls are identified and mapped" (p.28). Matters addressed by the Board and Executive Management in 2025 included: Castellum's new SBTi climate target; updates to the Sustainability Policy and sustainability goals; monitoring of strategy and sustainability initiatives; external business intelligence; review of employee surveys and personnel statistics; review of risks and mitigation measures; and implementation of the CSRD (p.28). The Board also receives sustainability-reporting and internal-control updates from the auditors via the Audit Committee.

"In 2025, Castellum offered variable remuneration to both senior executives and its other employees" (p.30). A new long-term performance share programme (2025/2028) covers the CEO, Executive Management and 26 key employees, of which "15 per cent of the allotted share rights are conditional on Castellum following its target plan for reducing GHG emissions under the climate target set in accordance with SBTi." For other employees, 50% of bonus is Group-wide, of which 30% is linked to the 2.5% annual energy-optimisation goal. "The Board of Directors does not have any sustainability-related incentive programmes." Incentive and bonus programmes will be discontinued in 2026 for cost reasons (p.30).

Castellum bases its due diligence on the OECD Due Diligence Guidance for Responsible Business Conduct and the UN Guiding Principles, also used to monitor EU Taxonomy minimum social safeguards (p.30). A due diligence process exists for property acquisitions/transactions; "there is still work to be done on operating activities," with supplier screening and monitoring planned for 2026. The report maps the five core due-diligence elements to specific pages, e.g. (d) Taking actions to address adverse impacts: pp.36-37, 53, 64, 66, 78, 85, 88, 91; (e) Tracking effectiveness: pp.56, 64, 68, 79, 85, 88, 92 (p.30). Material impact areas identified: climate change, biodiversity, resource use, own employees, value-chain workers and tenants.

"The Board of Directors bears ultimate responsibility for efficient internal controls that guarantee reliable and systematic financial and sustainability reporting, with the Audit Committee ensuring transparency and monitoring accounting policies" (p.30). The control system has five components (control environment, risk assessment, control activities, information/communication, monitoring). Sustainability managers review and validate collected data; discrepancies are followed up; the Sustainability Reporting Manager performs trend analysis; final review uses "the four-eyes principle" by the Chief Sustainability Officer before the reporting file is archived. "The main risks identified include human error and completeness of data" (paraphrased from the process description, p.30-31).

Castellum is "one of Sweden's leading property owners," active in Sweden, Denmark and Finland, with 485 employees at 31 Dec 2025 (461 Sweden, 13 Denmark, 11 Finland) (p.31). In autumn 2025 the Board adopted a "Back to Basics" strategy update. The sustainability strategy, The Sustainable City, has three focus areas (Future-proofed assets, Sustainable workplaces, Sound business), "contains 17 measurable goals" and targets net-zero GHG emissions across the value chain by 2040. Headline 2025 KPIs include: GHG emissions -12% vs 2023; 99% fossil-free energy; 130 solar PV systems (23 MW); 1,282 green leases (31% of rental value); CSI score 77; 58% sustainability-certified properties (pp.32-35). Value creation: SEK 677 M in salaries, SEK 4,288 M to suppliers, SEK 578 M property tax, SEK 257 M income tax (p.34).

"Castellum maintains an ongoing dialogue with the company's stakeholders... via various channels" (p.36): online, questionnaires, e-mails, meetings, plus "more than 190 different" social-programme activities. Key stakeholders: tenants and their employees, owners, lenders, suppliers and employees (p.36). A targeted stakeholder dialogue with lenders, tenants and employees during the 2024 double materiality assessment "confirmed that the findings of the double materiality assessment and the sustainability goals are aligned with stakeholder expectations." Creditors' top concerns were energy efficiency/Taxonomy alignment, climate risk and circularity; tenants prioritised energy efficiency, certifications and green leases; employees were split across climate impact, re-use, climate risk and supply chain (p.36).

The double materiality assessment (completed 2024, re-evaluated unchanged for 2025) identifies 16 material sustainability matters across E1, E4, E5, S1, S2, S4 and G1 (p.37), e.g. "E1: Climate change mitigation - GHG emissions linked to construction and management of properties" (actual negative impact, financial risk) and "S4: Personal safety for tenants" (actual positive impact, financial opportunity). Topic detail sits in each topical chapter: E1 pp.49-50, E4 p.63, E5 p.65, S1 p.76, S2 p.84, S4 p.86, G1 p.89. One datapoint is deferred: the phase-in exemptions statement (p.27) names "ESRS 2 SBM-3 paragraph 48 e Anticipated financial effects" specifically, so the quantified financial-effects sub-datapoint is not given this year; the qualitative impact/risk description is.

The double materiality assessment ran in five steps: "1. Mapping and identifying potentially material sustainability matters. 2. Assessment of impacts, risks and opportunities. 3. Stakeholder dialogue. 4. Review, prioritisation and adjustments. 5. Validation and adoption of sustainability matters" (p.38). Actual impacts are scored on severity (scale, scope, irremediability); potential impacts on likelihood and severity; both on a 1-5 scale. "Financial materiality was assessed in terms of the magnitude of the financial effect and likelihood." The assessment covers Castellum's "own operations and the areas where Castellum... or the company's business relationships... have a major impact." Results were validated by the Sustainability and Legal functions against the risk survey and approved by the Board and Executive Management (p.38-39).

Castellum prints a full ESRS content index ("ESRS Index," p.39-41) mapping each disclosure requirement to a page or to "Phase-in." It covers ESRS 2 (BP-1/BP-2, GOV-1 to GOV-5, SBM-1 to SBM-3, IRO-1/IRO-2), E1 (through E1-8; E1-7 and E1-9 absent), E4, E5, S1, S2, S4 and G1 (through G1-4; G1-5/G1-6 absent). No E2, E3 or S3 rows appear. Every E4, S1, S2 and S4 disclosure requirement is listed with "Phase-in" rather than a page number, consistent with the phase-in exemption statement on p.27. A companion table, "List of datapoints from other EU legislation" (pp.39-45), cross-references individual ESRS datapoints to SFDR, Pillar 3, Benchmark Regulation and EU Climate Law references with an explicit Material/Not material tag.

"Castellum adopted a new climate target, validated by SBTi, that is built on the framework for the construction and property sector... net-zero GHG emissions across its value chain by 2040 at the latest (base year 2023)" (p.48). "Castellum was the first company in Europe to have its climate targets validated by the new SBTi framework for buildings." A maximum of 10% of emissions may be compensated under SBTi rules. The Climate Transition Plan covers three areas - property management, new construction, purchased goods and services - with named levers (energy efficiency, tenant energy, portfolio shift, fossil-fuel/refrigerant phase-out, district heating for property management; smart requirements and material choices for new construction). "The climate target was adopted by the Board of Directors and Executive Management"; the Chief Sustainability Officer reports annually on implementation progress (p.48).

Back-filled from ESRS 2 IRO-1 and SBM-3, where this content is disclosed in the FY2025 report (pp.49-52). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against. Castellum used two IPCC scenarios for the world in 2050: "'Fulfilling the Paris Agreement' (RCP 2.6)" and "'On the beaten path' (RCP 8.5)" (p.51-52), plus a long-term scenario assessment to 2100 using RCP 4.5 and RCP 8.5. Under the 10%-likelihood case, short-term climate-related costs are "just under SEK 17 M per year"; the 0.5%-likelihood case reaches "SEK 1,508 M per year." By 2100, RCP 4.5 costs a 10%-likelihood "SEK 19.8 M per year" versus RCP 8.5's "SEK 23.2 M per year" (p.50). "The results show that no properties are deemed to be at risk of permanent flooding in 2100" (p.50).

Back-filled from ESRS 2 SBM-3/IRO-1, where this content is disclosed in the FY2025 report (p.50). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against. Castellum states plainly: "Castellum has not performed a full resilience assessment, but has the ambition to evaluate this" (p.50). The company nonetheless reports a climate risk assessment covering 7% of property value in depth, seven working-procedure steps (desktop analysis through monitoring), and cites the Notre Dame Global Adaptation Initiative (ND-GAIN) finding that "the Nordic countries of Sweden, Denmark, Finland and Norway are considered best equipped to deal with a changing climate," concluding "resilience levels are relatively high, regardless of the climate scenario" (p.50).

Climate-related policies are the Sustainability Policy, sustainability goals annex, Code of Conduct and Code of Conduct for suppliers (p.51). The Sustainability Policy commits to net-zero by 2040 per SBTi, environmental due diligence on acquisitions, climate risk/opportunity assessment for all investments, least-climate-impact energy sourcing, mandatory green appendices on new tenancy agreements, sustainability certification of new construction, and "no new fossil fuel equipment (reserve forces excluded)" for Castellum AB. The Code of Conduct for suppliers requires environmental-legislation compliance and continual environmental-performance improvement from suppliers (p.51).

Actions run across three areas with quantified lever contributions to the 2030 property-management target: energy efficiency ~32%, tenant energy ~7%, portfolio shift ~35%, fossil fuels/refrigerants ~2%, district heating fuel mix ~24% (p.53-54). "Castellum installed 130 solar PV systems, corresponding to over 23 MW, between 2020 and 2025" (14 new in 2025, generating ~24% of 2025 electricity requirement). "At the end of 2025, two oil-fired boilers remained in operation, and one building was still being heated with natural gas." Energy-optimisation investment: "SEK 965 M, corresponding to an average of SEK 193 M per year," between 2021-2025 (SEK 163 M in 2025). New construction relies 95% on Framework-programme requirements (p.54-55).

"Castellum's overall climate target is to achieve net-zero GHG emissions across the value chain by 2040" (base year 2023), "validated by the new SBTi framework for buildings" (p.56). Interim 2030 targets from 2023: -46% property management (Scope 1, 2, 3.13) per sq.m; -46% new construction (Scope 3.2) per sq.m; -52% purchased goods and services (Scope 3.1) per sq.m; and -97%/-97%/-78% by 2040 respectively for new construction/purchased goods/property management on an intensity basis. Property-management intensity: 4.56 kg CO2e/sq.m (2023 base) -> 3.79 (2025) -> goal 2.46 (2030) -> goal 1.01 (2040). Additional non-GHG targets: 11% energy optimisation vs 2021 by 2025; 200 solar PV systems by 2030 ("100 on Solar"); 75% sustainability-certified portfolio by 2030 (p.56).

Total energy consumption was 373,101 MWh in 2025 (414,088 in 2024), or 80 kWh/sq.m (91 kWh/sq.m normalised: 85, down from 93) (p.57). 99% of energy consumed is from renewable sources (368,193 MWh purchased renewable electricity/heat/cooling plus 7,435 MWh self-generated solar), versus 1% fossil (4,042 MWh, mainly district heating from fossil sources, plus 254 MWh oil and 122 MWh natural gas). Coverage: electricity data for 538 of 673 properties, district heating/cooling for 495 of 572, fuels for 11 of 11 (p.57). Castellum's own offices used 2,571 MWh electricity in 2025 (120 kWh/sq.m normalised, down from 134 in 2024) (p.58).

"Of the GHG emissions that Castellum cause, 1 per cent (1) are direct (Scope 1) and 24 per cent (28) are indirect emissions (Scope 2). The remaining 75 per cent (71) is other indirect emissions (Scope 3)" (p.59). Total GHG emissions (market-based): 63,881 tCO2e in 2025 versus 76,242 tCO2e in the 2023 base year; location-based: 76,947 tCO2e versus 87,706 tCO2e. Scope 1: 656 tCO2e (2023 base: 384). Scope 2 market-based: 5,185 tCO2e (base: 10,260). Largest Scope 3 categories: purchased goods and services 36,191 tCO2e, capital goods 11,313 tCO2e, fuel- and energy-related activities 8,076 tCO2e (p.59-60). "Castellum did not conduct any carbon removals nor did it buy, sell or transfer any carbon credits in 2025" (p.59). Categories 3.9, 3.10 and 3.14 are stated as not applicable to Castellum's business.

"Castellum does not currently apply internal carbon pricing. This issue may become relevant going forward, and will be assessed and reported in accordance with applicable requirements" (p.62). This is a complete nil disclosure rather than a gap: the company confirms no internal carbon price is used to steer investment or operating decisions in FY2025 and flags it as a topic it will keep under review.

Resource-use policies sit in the Sustainability Policy, sustainability goals annex, Code of Conduct and Code of Conduct for suppliers (p.66). "The Sustainability Policy and Code of Conduct stipulate that Castellum must build and manage from a life-cycle perspective and promote circular models, that re-use is to be a significant portion of all projects over time and that re-use must be employed in all projects." The Code of Conduct also requires waste to be "regarded... as a resource for re-use and recycling," and the supplier code requires suppliers to consider their own environmental and climate impacts (p.66).

"Castellum implements several measures to reduce resource use and promote circular flows of materials" but "has not yet established any time frames for these efforts and does not currently allocate any specific capital or operational expenditure for the circular economy" (p.66). Key actions: the five-step Re-Use Hierarchy (preserve on site through to waste managed), membership of CCBuild, and regional re-use hubs - REbygg in Gothenburg ("76 projects... materials equivalent to a reduction of 68.7 metric tons of greenhouse gases"), plus new hubs with RagnSells (Stockholm), Wiklunds (Uppsala) and Jensens Genbrug (Copenhagen) (p.66-67).

"Castellum currently has no measurable targets related to resource use and circular economy"; prior targets were folded into the Sustainability Policy commitments (life-cycle building management, responsible waste management, re-use in all projects, sustainability certification, decennial environmental inventories) (p.68). "Castellum is reviewing the possibility of developing time-bound and quantitative targets... but has no set time frame for their implementation." One tracked metric: share of projects with re-use rose to 37% in 2025 from 28% in 2024 (p.68).

"Castellum uses several different types of resources and materials in new construction and reconstruction" - concrete, steel, glass, insulation, wood (p.69). The company is explicit about a data gap: "Castellum does not have reliable data on materials volumes, the proportion of bio-based and certified wood or the amount of recycled and re-used materials across the value chain. In accordance with ESRS 1 10.2, we are unable to report on this, and thus cannot apply the phase-in rule on value chain information" (p.69). Data-collection improvement is underway via supplier requirements in major projects.

"Waste is generated in the company's own operations, through tenants' operations and in conjunction with new construction and reconstructions" - mainly packaging (corrugated cardboard, plastic) in own operations (p.69). Waste data is obtained for 365 of 673 properties (69% of area, down from 77%), sourced from actual supplier data; tenant-subscribed waste and most construction waste (outside completed major projects) is not captured. "Although construction waste is not yet being comprehensively monitored, Castellum is setting requirements for tracking waste in all projects - but the quality of the data varies" (p.69).

The Total Waste table (p.69) splits 2025 tonnage by treatment and source: tenant waste recycling 75 t (2024: 5 t), incineration 1 t (2024: 4 t), landfill/other 2 t; major-project waste recycling 80 t (2024: 48 t), incineration 5 t (2024: 8 t), landfill 0 t (2024: 2 t). "Castellum creates conditions for responsible waste management by minimising and preventing pollutants and by regarding the waste as a resource for re-use for construction goods and recycling" (p.69). Waste sorting is provided for most managed properties, and new-construction projects must prepare waste plans under Taxonomy-aligned framework-programme requirements.

Business-conduct policies are the Code of Conduct, Code of Conduct for suppliers, Sustainability Policy, sustainability goals annex and Insider policy (p.90). "Departures from the Code of Conduct must be reported to an immediate supervisor or, if this is impossible, to another representative of Castellum," escalating to the Chief Legal Officer and Audit Committee. The whistleblower service, run by an external partner, covers employees and external stakeholders; "the individual making the report will receive a response within seven days." All employees are trained on the Codes of Conduct as part of onboarding and quarterly "nanolearning" (p.90).

"Castellum's Code of Conduct for suppliers forms the basis for the company's efforts at limiting negative impacts in the supply chain" (p.91). "In 2025, Castellum conducted site visits at 2 of 18 ongoing major projects," and "beginning in 2025, all projects valued at over SEK 50 million must be subject to at least one site visit." The company purchased goods and services worth "SEK 4,288 M (4,058) from a total of 3,916 (4,157) suppliers," with 6% of suppliers accounting for 80% of purchase volume. "In 2025, zero central supplier agreements were cancelled" for non-compliance (p.91).

"Castellum has a zero tolerance approach to, and works to prevent, bribery and corruption. The Code of Conduct regulates how employees are to act so as not to be exposed to risk in business ethics. The company conducts an annual risk survey that covers corruption and bribery" (p.91). The largest bribery/corruption risks sit in construction and projects; the Code of Conduct for suppliers applies to major procurements. Any changes to the risk assessment go to Executive Management and ultimately the Board. Annual "nano-training" on anti-corruption covers conflict of interest and bribery risks (p.91).

Business conduct targets fell under MDR-T in the 2023 ESRS the report was prepared against. Castellum does not state a quantified business-conduct target, but discloses how effectiveness is tracked in its absence: "Castellum has a zero tolerance approach to, and works to prevent, bribery and corruption... The company conducts an annual risk survey that covers corruption and bribery. If necessary, Castellum's legal division performs a reassessment and proposes any adjustments to the risk assessment and risk level to Executive Management. The final decision on any changes is taken by the Board of Directors" (G1-3, p.91). The whistleblower channel and Chief Legal Officer/Audit Committee/Board reporting line provide the ongoing monitoring mechanism.

"In 2025, no business conduct cases were reported to the whistleblower function... In recent years, neither Castellum nor any representative of the company have been sentenced for any crime that could be linked to a derogation from the company's Code of Conduct, corruption, operations that inhibit competition or violations of anti-trust legislation. Nor was Castellum ordered to pay damages, corporate fines, or material penalties... No supplier agreements were cancelled in 2025 as a result of deviations... There were no convictions, fines or prosecutions for corruption and bribery" (p.92).