Fagerhult Group AB

The role of the administrative, management and supervisory bodies

Reference: page 56.

Board of Directors: six non-executive members elected by the AGM plus two Board members and two deputy Board members elected by the trade unions. Board gender diversity is 63 per cent female. "Ultimate responsibility for the Group's sustainability work lies with the Board of Directors. They oversee the Group sustainability strategy, performance and sustainability reporting." The Audit Committee (two Board members) monitors Group sustainability reporting.

CEO and Group Management Team (GMT): eight executive members, 50 per cent female. "The GMT oversee the sustainability strategy, the management of impacts, risks and opportunities in Group companies, and monitor progress," are involved in the double materiality assessment and approve sustainability-related policies and targets. Ultimate responsibility for sustainability performance rests with the CEO.

Delegation: operational responsibility sits with the Head of Sustainability and, for certain social matters, the Chief People Officer (CPO). In the decentralised model, each Group company Managing Director (MD) is responsible for its own sustainability work and implementing the Code of Conduct locally.

"Internally in our Group we have experts in all material topic areas," supported at Group level by the Group Sustainability Team and Group Legal Counsel.

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

Reference: page 57.

The CEO regularly updates the Board on key sustainability matters. The Board is informed at least once per year by the Head of Sustainability about the double materiality assessment results and performance on key metrics, and about major policy changes, due diligence process changes and new targets.

The Head of Sustainability regularly updates the CEO and GMT on strategic developments and performance; the CEO and GMT are involved in the DMA each year and in due diligence process development.

"In 2025, two acquisitions were completed by the Group and there were no sustainability-related trade-offs needed in these processes as both companies fit well into the strategic vision of improving our sustainability impacts across the Group." The Board and GMT were updated on all material impacts, risks and opportunities during 2025, with specific focus on climate, circularity, operational health and safety, Group culture, diversity and inclusion, and anti-corruption.

Integration of sustainability-related performance in incentive schemes

Reference: page 57 (see also E1 GOV-3, page 65).

In 2024 the AGM approved a long-term incentive (LTI) scheme for senior management including, for the first time, a sustainability-related target. The scheme is 90 per cent financial performance and 10 per cent sustainability performance, over a three-year term. "There are currently two LTI schemes containing sustainability-related targets in place, measuring performance to the target years of 2026 and 2027."

The sustainability target concerns "progress in reaching the Group's SBTi-approved near-term climate goals," specifically the reduction of Scope 1 and 2 GHG emissions between the 2021 base year and each scheme's target year. The Board approves the resulting variable remuneration once the target year has passed and performance can be measured. "This incentive scheme was the first such scheme with included sustainability-related performance; its target period ends in 2027, hence no remuneration related to the program has been paid during 2025."

For more detail, see Guidelines for remuneration to senior management, pages 114-115 in the Corporate Governance Report.

Statement on due diligence

Reference: page 57.

Fagerhult Group maps the core elements of due diligence to sections of the sustainability statement:

Risk management and internal controls over sustainability reporting

Reference: page 58.

As a decentralised Group, "our Group companies have autonomy in determining which data management systems they use," and business systems are generally not connected across brands, so responsibility for sustainability data reporting lies in each Group company.

Mitigation: the Group Sustainability Team runs annual and multiple online training webinars for all reporters, with written guidance. The most complex data area is GHG emissions, particularly Scope 3 and model-based calculations, where "extra efforts are in place... through trainings, discussions, and an annual review of key assumptions with the responsible reporters in each brand company."

Internal controls: the Group Sustainability Team reviews reported data once submitted in January, using "an analytical risk assessment approach... where risks of material misstatements are identified through close analysis of year-on-year variance," prioritising higher-risk reporting areas. Significant material risks or internal-controls findings are shared with the CEO, who informs the Board as appropriate; the auditors' risk assessment and any significant findings are shared with the Audit Committee at least once per year.

Strategy, business model and value chain

Reference: pages 58-59; see also Operational statement pages 49-52 and note 1, pages 131-132.

Fagerhult Group "creates innovative, smart and sustainable lighting solutions for both indoor and outdoor environments," consisting of thirteen lighting brands and two technology platforms. It is a UN Global Compact participant and "dedicated to achieving the Paris Agreement's 1.5°C target." Main sustainability goals are the SBTi-approved climate targets (E1-1, E1-4), with highest priority on lowering emissions from the use phase of products.

Value chain (page 59): upstream covers material extraction, processing and component manufacturing (metals, plastics, electronics, packaging), managed by each brand in the decentralised model, mostly from first-tier suppliers close to factories. Own operations span innovation and design, manufacturing of luminaires, and retrofit/refurbishment. Downstream covers sales and customer engagement, smart lighting services, design and installation of lighting projects, use of products over a typical life span of 20 years, and end-of-life, where luminaires "designed to be easily dismantled and recycled as far as possible in local waste systems."

The Group completed two acquisitions in 2025 (Trato-TLV Group and Capelon AB), which materially expanded its operational and organisational boundaries and required recalculation of the GHG emissions base year.

Interests and views of stakeholders

Reference: page 60.

Stakeholder engagement is described as "essential for our business and for understanding the importance of various sustainability topics." The double materiality assessment forms part of this engagement through "targeted stakeholder dialogues and internal forums." In 2025 sustainability-focused dialogue included interviews with business partners on the future of the lighting industry and discussions with property owners (a key customer segment).

A stakeholder table names the dialogue form, issues in focus, and the Group's response for: employees (surveys, dialogue, leadership training), customers and end-users (business meetings, LCAs/EPDs, product development), suppliers/business partners (procurement process, supplier assessments), investors (annual/interim reports, AGM), local communities (website, sponsorship), authorities (networks, compliance), schools and universities (collaborative partnerships), and industry associations.

"Although an important stakeholder, workers in the value chain are not named below as we do not currently conduct direct stakeholder dialogue with them."

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

Reference: pages 60-61.

"Fagerhult Group's material sustainability matters span environmental, social and governance areas and map to six of the ten ESRS topical standards." These result from the double materiality assessment described in IRO-1, "which did not identify any material entity-specific matters." Detailed descriptions sit in the SBM-3 section of each respective topical standard.

"In relation to financial materiality, our sustainability-related risks and opportunities can materialise over different time periods and are associated with a high degree of uncertainty. We have not quantified the current or anticipated financial effects from these risks and opportunities."

"The management of our material impacts, risks and opportunities are well integrated into our overall business strategy. We have policies, processes and action plans to address the most material sustainability matters. We have not performed a formal resilience analysis covering all matters." (A dedicated climate resilience and scenario analysis was performed for E1 specifically; see E1-3-Resilience.)

The six material topical standards, per the topical SBM-3 sections and the IRO-2 content index, are E1, E5, S1, S2, S4 and G1.

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

Reference: page 62.

The process is developed over many years and run by the Group Sustainability Team. Fagerhult reported under GRI from 2008-2024; it conducted its first double materiality assessment in 2023, developed the methodology and conducted targeted stakeholder dialogue in 2024, and "refined the assessment and took in additional expert perspectives" in 2025.

Step 1 - identification: covers the entire value chain (upstream and downstream), using the ESRS list of topics/sub-topics/sub-sub-topics as a complement to prior materiality work.

Step 2 - stakeholder dialogue: see SBM-2.

Step 3 - analysis and prioritisation: impact materiality scores scale, scope and irremediability (negative impacts) plus likelihood, combined into a severity score against a staggered threshold; for social impacts, the highest score on scale or irremediability alone can make an impact material regardless of likelihood. Financial materiality scores potential size against operating profit and likelihood, "done together with the Group Chief Financial Officer."

Step 4 - approval: results are validated by the GMT (August 2025) and, per SBM-1/GOV-2, discussed with the Board.

"Our double materiality assessment is not integrated into our enterprise risk management processes to date... Opportunities for future alignment will be considered in 2026."

Results are then mapped to the ESRS disclosures required, listed in the Appendix (pages 107-108) per IRO-2.

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

Reference: page 62; Appendix, pages 107-108.

"The double materiality assessment results in the impacts, risks and opportunities which are deemed to be material for our Group... The results are also then mapped to the ESRS disclosures to determine which information prescribed in the ESRS is material for our reporting; the list of ESRS disclosures shared in our sustainability statement as required by IRO-2 can be found in the Appendix on pages 107-108."

The Appendix content index maps each disclosure requirement covered to its Section (SUS/CGR/FIN/OPS) and page, across ESRS 2, E1, E5, S1, S2, S4 and G1. Disclosure requirements and datapoints not material to the Group are marked "Not material" in the index (e.g. E1-7, E1-8, G1-2, G1-5, G1-6, and the ESRS 2 Appendix B datapoints on fossil fuel/chemical production/controversial weapons/tobacco involvement); those subject to transitional relief are marked "Phase-in" (E1-9, E5-6, S1-11, S1-15). The index also references Appendix B datapoints derived from SFDR, Pillar 3, the Benchmark Regulation and the EU Climate Law, several marked "Not material" for the Group, including E2-4's E-PRTR pollutant datapoint, the E3-1/E3-4 water datapoints, and the E4-2 sustainable land/oceans/deforestation datapoints. E2, E3, E4 and S3 do not appear in the index as topical standards at all.

Transition plan for climate change mitigation

Reference: pages 65-66; incentive scheme context E1 GOV-3, page 65.

Fagerhult Group's climate transition plan, established in 2023, "serves as the primary framework guiding all Group companies in achieving the Group's set GHG emission reduction targets," identifying key decarbonisation levers and an actionable roadmap. It is approved by both the GMT and the Board, and is broken down and operationalised in every brand.

"Although more than 90 per cent of our total value chain emissions occur in the use phase of our products," the plan covers the full value chain: materials and components, own operations, use phase, and circular business. Scope 1 and 2 are under 1 per cent of total value chain emissions, but the painting process (high-temperature ovens, often gas-powered) is identified as a source of locked-in emissions until the ovens are replaced; this "currently does not pose a risk for us reaching our target."

Investment character: some levers (light-weighting, logistics optimisation, material efficiency) yield cost savings; others (reduced driver casing, renewable sourcing) are cost-neutral; fossil-free steel and ultra-low-CO2 aluminium "currently involve higher costs." "The transition plan does not rely on any separate form of funding, such as green bonds and similar instruments."

Progress: "Total scope 1 & 2 emissions have been reduced by 52 per cent since 2021... Scope 3 emissions have been reduced by 50 per cent." Fagerhult Group is not excluded from the EU Paris-aligned benchmarks. Under the EU Taxonomy, it assesses eligibility/alignment against activity 3.5 (manufacture of energy efficient equipment for buildings), driven mainly by smart lighting/sensor-equipped luminaires.

Identification of climate-related risks and scenario analysis

Back-filled from ESRS 2/E1 IRO-1, where this content is disclosed in the FY2025 report (pages 66-67). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

During 2025 Fagerhult Group "performed a Group-wide climate resilience analysis, including climate scenario analysis," covering the whole Group including the value chain; physical risk analysis is performed for manufacturing sites.

Scenarios used (page 66): three IPCC scenarios - SSP1-2.6 ("Taking the green road," <2°C, lower physical/higher transition risk), SSP3-7.0 ("Regional rivalry," >3°C, high physical and transition risk), and SSP5-8.5 ("Fossil-fuelled development," >4°C, high physical/lower transition risk). Due to limited projection data, physical risk was assessed using only SSP1-2.6 and SSP5-8.5; transition risks and opportunities used all three scenarios.

Time horizons differ from those elsewhere in the report: short term 0-3 years, medium term 4-10 years, long term 11-20 years, aligning with the 2045 net-zero target year.

Assumptions: macroeconomic trends including carbon pricing, energy demand/cost changes, and low-carbon technology deployment (electrification, renewables, storage, smart buildings). Data sources included the WWF risk filter suite and En-ROADS (Climate Interactive/MIT), with geospatial data on manufacturing sites as the physical-risk basis.

Transition risks/opportunities (page 66): higher raw material/component costs (especially metals) in all scenarios, with SSP1 costs rising from emissions pricing; higher/more volatile electricity prices across all scenarios; SSP3's weak international cooperation creates fragmented, less predictable regulation. Opportunities: growing demand for energy-efficient, connected lighting in all scenarios, and (under SSP1) circular business models and renovation-driven demand.

Physical risks (page 67): acute events (flooding, wildfires, storms) could damage facilities/equipment and cause downtime; chronic changes (sea-level rise, temperature/precipitation shifts) may require renovation or relocation. "Whilst all of these risks are present, we currently do not judge them to pose significant risks to our business in the short- to medium-term horizon of our analysis," partly due to the decentralised, locally-present operating model. No named financial figures for physical or transition risk quantities are given; the global average temperature projection per scenario beyond the scenario names themselves is not separately stated.

Resilience in relation to climate change

Back-filled from ESRS 2/E1 SBM-3 "Climate resilience analysis," where this content is disclosed in the FY2025 report (page 67). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

"Our strategy and business model centers around creating efficient and sustainable lighting solutions. Therefore, our most significant opportunities are associated with a scenario of a global shift towards a low-carbon economy." While transition risks exist in such a scenario, the company states it is "well positioned to mitigate the most material risks and further improve the sustainability performance of our products through innovation and continuous upskilling of our workforce." The Climate transition plan "establishes how we contribute to mitigating climate change and consequently adapting to future requirements, and we believe we have the ability to finance and execute these activities."

High-temperature scenario: "we are faced with higher physical risks which may impact short-term production capacity, supply chains and require adaptation strategies. Local adaptation actions are implemented at the brand level. Our decentralised model with manufacturing close to customers allows for greater flexibility and resilience."

Regional rivalry scenario: poses "challenges from geographical differences in climate policies and weak international cooperation... This may lead to differences in the corporate environment and may hinder competition across regions," mitigated by brands' strong local market positions combined with Group-level global reach.

Note that the Group's general (non-climate-specific) statement elsewhere reads "We have not performed a formal resilience analysis covering all matters" (SBM-3, page 61); the climate-specific analysis above is the resilience work performed for E1. No stated significant areas of remaining uncertainty are separately itemised beyond the scenario limitations noted in E1-2-ScenarioAnalysis.

Policies related to climate change mitigation and adaptation

Reference: page 68.

Climate commitments and measures are stated in the Group-wide Code of Conduct, Code of Conduct for business partners, Group Environmental Policy, and company-specific sustainability policies. The Climate transition plan (E1-1) is "the key Group-wide tool used to govern and guide our efforts." The Code of Conduct, Code of Conduct for business partners and the transition plan are "endorsed and owned by the GMT," with no scope exclusions - they cover own operations and the entire value chain.

The Group Environmental Policy was adopted by the GMT at the end of 2025, with key principles: reducing energy use and improving efficiency while increasing renewable deployment; continuously improving product energy efficiency; mindful material/resource use (reused, recycled or renewable materials); reducing operational waste while maximising recycling/reuse; and monitoring physical/transition climate risks with business continuity strategies.

Group companies also independently develop local climate-related policies (emergency/disaster routines, chronic-change adaptation) complementing the Group Environmental Policy, operating in line with the UN SDGs, the Paris Agreement and the European Climate Law.

Actions and resources in relation to climate change policies

Reference: page 68.

The Group Climate transition plan is built on decarbonisation levers identified when setting the SBTi-validated targets, organised into four areas.

Own operations (Scope 1&2): main sources are natural gas for space heating/paint plants, non-renewable electricity and company-car fuel. Scope 1&2 emissions fell 11 per cent versus 2024 and 52 per cent versus the 2021 baseline. 2025 improvements: on-site solar PV now covers 18 (14) per cent of total electricity consumption; renewable electricity share rose to 81 (77) per cent.

Materials and components: emissions from purchased materials/components fell 4 per cent vs 2024 and 26 per cent vs 2021, via new lower-impact products, material-efficiency improvements (lower scrap rates), and designs using less material.

Use phase: over 90 per cent of emissions occur here; use-of-sold-products emissions fell 19 per cent vs 2024 and 51 per cent vs 2021, via smart lighting technology and LED upgrades with optimised optics to minimise light spill.

Circular business: several Group companies offer refurbishment services, reusing existing luminaires with updated LED technology.

"All actions are part of our continuous improvement efforts in all our brands, hence we do not report the time horizon for each action."

Targets related to climate change mitigation and adaptation

Reference: page 69.

Fagerhult Group's near- and long-term GHG targets are validated and approved by the SBTi:

• Near-term (2021-2030): reduce Scope 1 and 2 emissions by 70 per cent; reduce Scope 3 emissions by 30 per cent.
• Long-term: reach net-zero emissions by 2045.

2021 is the base year; "we have not been required to normalise any data to achieve comparability over years." Scope 2 is measured market-based. "Most of our GHG emissions occur during the use phase (scope 3 category use of sold products), therefore, the most impactful decarbonisation levers are increasing the energy efficiency of our luminaires, increasing the adoption of smart lighting controls which reduces the energy need, and the decarbonisation of electricity grids." Target-setting analysed "more than 20 emission reduction activities," factoring in growth-driven emissions increases; "stakeholders have not been involved in setting these targets."

Two 2025 acquisitions (Trato TLV, Capelon) were retroactively consolidated into the 2021 base year for consistency (see BP-2). 2025 outcome: Scope 1&2 down 52 per cent, Scope 3 down 50 per cent, versus the 2021 baseline (chart, page 69).

Energy consumption and mix

Reference: page 70.

Energy consumption, MWh:

"During 2025, total energy consumption increased by 3 per cent following acquisitions, and energy intensity per net revenue increased by 8 per cent." Coal is not used and not reported. "Fagerhult Group operates in the manufacturing sector, hence all energy consumption relate to high climate impact sectors." Energy intensity uses net sales (page 122) as the denominator.

Gross Scopes 1, 2, 3 and Total GHG emissions

Reference: pages 71-72.

Gross emissions, tCO2eq (2021 base year → 2024 → 2025):

"Fagerhult Group's total GHG emissions are composed of less than 1.0 percent direct (scope 1) and indirect (scope 2) emissions, while the remaining 99.0 per cent consists of other indirect emissions (scope 3)." Total GHG emissions fell 18 per cent, "mainly driven by lower emissions from the use of sold products."

Restatement: historical data (2021-2024) was restated for the Trato TLV/Capelon acquisitions and for identified reporting errors (primarily Scope 3 categories 1 and 11). Prior to restatement, total market-based emissions for 2021-2024 were 3,284,437 / 3,467,282 / 2,744,517 / 2,159,043 tCO2eq respectively.

Methodology: Scope 1 uses DEFRA emission factors; Scope 2 market-based uses country-specific residual mix factors and renewable-instrument purchases (78 per cent of purchased electricity carries guarantees of origin, 98 per cent of those bundled); Scope 3 purchased goods and services uses representative-product weight data extrapolated by production volume. Fagerhult Group is not covered by a regulated emissions trading scheme.

Policies related to resource use and circular economy

Reference: page 75.

Resource use and circularity are managed through several policies. The Group Climate transition plan guides work on reducing environmental impact from resource use (E1-1/E1-2/E1-3), complemented by the Group Environmental Policy (adopted end of 2025). Several Group companies also hold their own resource-use/circular-economy policies within wider environmental policies; "all policies address transitioning from the use of virgin resources, sustainable sourcing and using renewable resources."

Towards the end of 2025, Fagerhult Group implemented a Circularity charter across the Group - high-level guiding principles built on four pillars: Narrow (use less), Slow (use longer), Regenerate (make clean), and Cycle (use again), each posed as a guiding question for product, HR, operations, supply chain, marketing, sales and finance teams. It is "approved by the GMT and owned by the Group Head of Sustainability and Group Director of Sustainable Innovation."

Actions and resources related to resource use and circular economy

Reference: pages 75-76.

Actions are organised under the Circularity charter's four principles, reported without time horizons or quantified financial resources ("we have not quantified the financial resources allocated"):

• Narrow (use less): efficient material use, reduced reliance on critical raw materials, waste prevention (packaging-on-demand), optimised production material efficiency.
• Slow (use longer): circular upgrades and modular development retaining luminaire frames/ends/modules while upgrading electronics, including integrating smart lighting into existing luminaires.
• Regenerate (make clean): increased use of renewable materials (linen, wool, hemp, cardboard) in applications not requiring harsh-environment durability.
• Cycle (use again): refurbishing existing luminaires (body reuse, LED upgrade); 23 (33) per cent recycled content in products and packaging in 2025.

Named examples (page 76): Fagerhult Wrapped - the first cardboard pendant luminaire, replacing a heavier aluminium body, at 900mm versus the industry-standard 1,200mm. I-Valo - robust, harsh-environment bodies with retrofit packs. iGuzzini's Ribeira - designed without glues/silicones for complete disassembly and recycling. Ateljé Lyktan's Second Life - upgrades existing fixtures, preserving outer frames while renewing internal technology.

Targets related to resource use and circular economy

Reference: page 76.

"We do not have a Group-wide target related to resource use and circularity specifically." Instead, resource use and materials/components emissions are measured, monitored and followed up as part of the effort to reach the Group's climate targets, covering total resource use, recycled materials used and refurbished products among other aspects.

"Each of our Group brands drive their own improvements in environmental performance and many set local targets in relation to circularity and resource use, such as reducing primary material use by 2030, yearly targets for zero landfill, and for 100 per cent of new product developments to include circular design principles." No Group-wide quantified target is disclosed; progress is instead tracked via the metrics in E5-4/E5-5.

Resource inflows

Reference: page 77.

Key materials: steel, aluminium, various plastics, glass, rubber and electronics (LED drivers/modules, cables), plus a growing but still small share of non-conventional materials (wood, linen, wool, hemp). The Group operates 19 manufacturing sites.

Resource inflows, tonnes:

Calculated by scaling a selection of products' material content per manufacturing site by sold-product volume (same method as GHG accounting), so inflow data is estimated. The methodology was adjusted during the year to include all relevant material categories; the 2024 comparative figure previously reported (10,708 tonnes) did not include all categories, and comparative recycled-share data is unavailable under the prior method. Cardboard is the majority of packaging material; approximately 65 per cent is recycled and 51 per cent sustainably sourced (including FSC certification).

Resource outflows

Reference: page 78.

Circular design principles (reusability, upgradability, reduced virgin materials) are embedded across the Group's product development. Standard luminaire durability ranges 35,000 to 100,000 hours, depending on application, customer specification and light-quality needs; refurbishment extends useful life beyond the specified light-output hours, for Fagerhult Group's and other manufacturers' products alike.

Repairability: luminaires are designed to be disassembled and repaired by professionals.

Recyclability: depends on material composition, product design, local collection/recycling infrastructure and disposal behaviour; products are subject to national WEEE regulations. The Group does not measure recyclability across the whole portfolio, since rates differ by country, but analyses of selected products with recyclers and producer-responsibility organisations found recyclability ranging 50 to 100 per cent. 94 per cent of packaging materials are cardboard (100 per cent recyclable); the remainder is largely polystyrene/polyethylene, technically recyclable though polystyrene is "often downcycled."

Detailed waste tonnage, diversion and disposal data is presented in E5-5-Waste.

Waste

Reference: page 78 (waste tables).

"During 2025, total waste generated increased by 16 per cent, mainly due to the inclusion of Trato TLV. 860 tonnes (18 per cent) of the total waste generated was not recycled or reused."

Total waste generated: 4,713 tonnes (2025) vs 4,046 tonnes (2024). Total hazardous waste 540 (385); total radioactive waste 0 (0).

Waste diverted from disposal, tonnes (2025 / 2024): Hazardous - preparation for reuse 75/2, recycling 315/224, incineration with energy recovery 118/108, anaerobic digestion 0/0, other recovery 11/41. Non-hazardous - preparation for reuse 287/86, recycling 3,175/3,007, incineration with energy recovery 394/321, anaerobic digestion 8/3, other recovery 31/21. Total weight diverted from disposal: 4,416 / 3,813 tonnes.

Waste directed to disposal, tonnes (2025 / 2024): Hazardous - incineration without energy recovery 4/0, landfill 4/10, other disposal 13/0 (subtotal 20/10). Non-hazardous - incineration without energy recovery 25/27, landfill 253/196, other disposal 0/0 (subtotal 278/223). Total weight directed to disposal: 297 / 233 tonnes, 6 per cent of total waste generated in both years.

Waste data is collected at manufacturing sites, based on actual measurements from waste management suppliers where available, otherwise estimated from historical or extrapolated data.

Policies related to own workforce

Reference: pages 85-86.

Workforce-related policies "are aligned with relevant internationally recognised instruments, including the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises." Two new Group policies were approved by the GMT in 2025 - Health and safety, and Diversity and inclusion. "We do not have any specific policy commitments related to inclusion or positive action for workers from vulnerable groups."

• Group Code of Conduct: states support for fair labour practices, a safe/healthy environment, diversity and equal opportunities; explicit zero tolerance for child labour and forced labour, and implicit zero tolerance for human trafficking; addresses harassment implicitly and non-discrimination across gender, ethnicity, religion, age, disability and other grounds.
• Code of Conduct for business partners: covers non-employees supplied by business partners - local labour law adherence, safety standards, forced/child labour and trafficking.
• Group Working conditions policy: working hours, overtime, compensation, health/safety risk reduction, training, freedom of association/collective bargaining, data privacy.
• Group Human rights policy: own workforce and value chain commitments, covering trafficking, harassment, discrimination.
• Group Health and safety policy: commits that "no worker suffers an injury or ill-health due to the working environment," covering accident prevention, training, near-miss reporting, safety-first/psychological-safety culture.
• Group Diversity and inclusion policy (page 86): equal treatment, equal access to opportunity, inclusion, eliminating discriminatory treatment, inclusive-leadership training.

Implementation of all policies is local, tailored by Group company MDs/HR to local requirements.

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

Reference: page 86.

Engagement varies by brand (from over 1,100 to under 50 employees) given the decentralised model. Nine of thirteen lighting brands have worker representation with elected employee representatives, engaging management monthly to quarterly and involved ahead of major business changes (metrics in S1-8). Smaller brands (under 180 employees) without formal representation engage via townhalls, one-on-ones and individual consultations at times of change.

Engagement is followed up through annual employee, well-being and pulse surveys, or individual manager discussions; resources for engagement are not separately tracked. The most senior role responsible is the HR manager or MD locally; key topics and planned actions are shared in the Group-wide HR forum led by the Chief People Officer (CPO), a GMT member.

"Steps to consider impacts on all particularly vulnerable or marginalised groups across the Group are still in their infancy and considered valuable development areas."

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

Reference: pages 86-87.

Guided by the Code of Conduct, aiming for "open and transparent culture where grievances can be shared confidentially, potential cases can be acted upon swiftly." Concerns can be raised via line managers, company open forums, engagement surveys or worker representatives (S1-2); unlawful conduct or Code breaches can be reported to senior management or the whistleblowing portal, open to internal and external stakeholders (detail in G1-1).

Remediation: handled case-by-case, involving the CEO and appropriate senior management functions, aiming to right the wrong, satisfy affected individuals, and prevent recurrence. "Assessment of the effectiveness of these processes has not been conducted."

Local issues are tracked by HR managers and MDs, with the MD responsible for informing the CEO of serious incidents; whistleblowing-system issues follow the investigative process described in G1-1/G1-2/G1-3. "The effectiveness of these channels in terms of capturing all possible negative impacts and the trust of our workforce in these processes has not been evaluated."

Taking action on material impacts on own workforce (S1-4: Action plans and resources)

Reference: pages 87-88.

Actions are ongoing, "do not have defined time horizons" unless stated:

• Good working conditions: Group Core values and Leadership Guidelines roll-out; brand-level focus on transparency, communication, workload management, work-life balance and well-being, tracked via employee surveys.
• Health and safety: zero-accident target (S1-5); the majority of workers are covered by a health and safety management system; actions include onboarding/ongoing training, on-site procedures, incident tracking, safety-first culture, risk assessments and automation to remove risk; a Group-wide Health and Safety Forum (started 2022) shares practice and aligns metrics.
• Diverse and inclusive workplace: awareness-building from the top down; Leadership Guidelines incorporated into Group Talent Management; 50/50 gender representation achieved in the GMT this year (previously lower); ongoing gender pay gap assessment; most brands worked on D&I in 2025, including anti-discrimination/unconscious-bias training and, at some companies, active recruitment of female or younger workers.
• Employee expertise and development: a Group-wide initiative to align performance management; ongoing training across competence mapping, career pathways, learning platforms and new areas such as AI.

"During the year, there have been no material negative impacts which have required remedy."

Targets related to own workforce

Reference: page 88.

One Group-wide target: zero accidents causing absence from work, covering all workers at all sites, in place since 2022. "Worker representatives were not directly engaged in setting this target, as it strives for the highest possible standard in terms of accident prevention." The target links to the Group Health and Safety policy and Code of Conduct; performance is reported in S1-14. Some brands track additional KPIs (working days lost, days between accidents, near-miss incidents).

Other material matters are monitored rather than governed by quantified Group targets: good working conditions via employee surveys, turnover and sickness-absence proxies; diversity and inclusion via gender ratios in leadership/managerial roles and an ongoing gender pay gap assessment; employee expertise/development via performance development reviews. "We have not tracked the effectiveness of our policies and actions in relation to our material impacts further than through the measures mentioned above."

Characteristics of the undertaking's employees

Reference: page 89.

Total headcount: 4,153 (2025) vs 4,079 (2024). By gender: male 2,797 (2,703), female 1,356 (1,376); "Prior to 2025, we did not collect data on employees who identify as neither male nor female."

By region: Europe 3,325 (3,224), Asia 444 (443), North America 207 (227), Australasia 177 (185).

By contract (2025): permanent 3,977, temporary 139, non-guaranteed 37; full-time 3,883, part-time 233.

By age: under 30: 469; 30-50: 2,217; over 50: 1,467 (2025).

Total employee turnover: 15 per cent (2025) vs 12 per cent (2024).

The largest employee-count countries are Sweden, Italy, Germany and the United Kingdom; the largest year-on-year country change is France, due to the Trato-TLV Group acquisition. The workforce is 60/40 white-collar/blue-collar, similarly split within each gender (60 per cent white-collar among male workers, 61 per cent among female).

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

Reference: page 90.

"Non-employees in our own workforce are working in both blue collar and white collar roles, employed most often by a recruitment agency or self-employed, and their tasks are similar to those of own employees." They are typically used at production peaks, to cover unplanned absence, family-related leave, or personnel turnover.

"At the end of 2025, Fagerhult Group contracted 171 non-employees."

Headcount is measured on 31 December 2025, except where factories are closed for extended winter/summer breaks, in which case the last working day of the year is used instead.

Collective bargaining coverage and social dialogue

Reference: page 90.

"Freedom of association and the right to collective bargaining are basic rights for all our employees." At year-end, 52 per cent of employees were covered by collective bargaining agreements and 67 per cent by workplace representation.

The coverage-rate table bands EEA/non-EEA countries by collective bargaining coverage rate: 0-19% - Asia, North America, Australasia; 20-39% - Non-EEA Europe; 40-59% - Spain; 60-79% - Germany; 80-100% - Sweden, Italy, France, Netherlands. Workplace representation is shown for the same higher-coverage EEA countries (Germany, Sweden, Italy, France, Netherlands) where the Group has more than 50 employees.

Diversity metrics

Reference: pages 90-91.

"The gender balance among employees is 33 per cent female, in top management 31 per cent female, and among managers 24 per cent female. The majority of our employees are above 30 years old, with 35 per cent older than 50 years."

Gender by level, 2025 (2024): all employees - female 1,356/33% (1,376/34%); all managers - female 148/24% (132/23%); top management - female 28/31% (26/29%).

Age distribution, 2025 headcount: under 30: 469; 30-50: 2,217; over 50: 1,467.

Managers are defined as employees with staff responsibility; top management as the GMT together with Group brand-company leadership teams.

Adequate wages

Reference: page 91.

"All employees are paid an adequate wage." The adequate minimum wage benchmark is "the greater of legislated minimum wage or minimum wage levels as agreed in collective bargaining agreements or other agreements made with worker representative bodies." Where neither exists, a benchmark of "the greater of 50 per cent of gross average wage or 60 per cent of median wage in the respective country" is used. No percentage of employees below the benchmark is separately disclosed (none, per the statement that all employees are paid adequately), and no country-by-country breakdown of applied benchmarks is given.

Training and skills development metrics

Reference: pages 90-91.

Training focuses heavily on on-the-job learning, which is excluded from the hours reported below; reported hours instead reflect "centrally organised trainings or other documented trainings or courses taken by employees."

Average training hours per employee, 2025 (2024): blue-collar men 12.6 (10.9); white-collar men 15.9 (21.0); blue-collar women 5.9 (7.2); white-collar women 12.6 (17.0).

Performance development dialogues, 2025 participation % (dialogues, number): blue-collar men 79% (888); white-collar men 83% (1,382); blue-collar women 78% (408); white-collar women 80% (669). "In 2025, 81 per cent of our employees had at least one performance development dialogue" (target: at least one per year for all employees).

Training hours are calculated as total documented hours divided by year-end headcount; the participation rate is employees with at least one dialogue divided by year-end headcount per category.

Health and safety metrics

Reference: page 92.

"Health and safety management systems cover 87 per cent of our workforce." Against the zero-accident target, "the number of work-related recordable injuries each year fluctuates and we have some way to go to meet this target."

Employee injuries and ill-health, 2025 (2024 / 2023): fatalities 0 (0/0); high-consequence injuries 1 (5/0); injuries 59 (28/43); ill-health 22 (17/10); total 82 (50/53). Working days lost in 2025: 813 (injuries), 1,177 (ill-health) - "prior to 2025, data was not collected regarding working days lost due to work-related recordable injuries and ill-health."

Rate of recordable work-related injuries: 8.4 per one million hours worked.

A high-consequence injury is one from which "the worker cannot, does not, or is not expected to recover fully to pre-injury health status within six months." First-aid-only incidents with a return to work are excluded.

Remuneration metrics (pay gap and total remuneration)

Reference: page 92.

"The difference in average pay level between all female and male employees across our Group in 2025 was 21 (22) per cent." This is the difference between average male and female hourly gross pay, expressed as a percentage of male average hourly gross pay, calculated from total 2025 gross pay (base salary plus variable remuneration) divided by hours worked.

"The total remuneration ratio for 2025 was 12.0 (11.2)" - the ratio of the Group CEO's gross pay to the average gross pay of all other employees (disclosed via note 2 and note 24 of the financial statements). "Due to our decentralised organisation with separate payroll systems across the Group, we are currently not able to calculate this ratio in terms of median wage for the Group. Further work will be done in 2026 to investigate the possibility for using the median wage."

Incidents, complaints and severe human rights impacts

Reference: pages 91-92.

"During the year, there have been four confirmed incidents of discrimination in our Group. These cases all followed due process, were all resolved during 2025 and in which no laws were broken and no fines, penalties or compensation for damages were paid. There have been zero incidents regarding severe human rights impacts in our workforce during the year."

Workforce fatalities/injuries during 2025, by worker category (own employees / non-employees / other workers on company sites): fatalities 0/0/0; high-consequence injuries 1/0/0; injuries 59/1/0. (Own-employee totals reconcile to S1-14.)

Policies related to value chain workers

Reference: pages 94-95.

Policies "are aligned with relevant internationally recognised instruments, including the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises. No cases of non-respect of these instruments have been identified or reported in our upstream and downstream value chain to our knowledge to date."

• Group Code of Conduct for business partners (main guiding document): applies "throughout our value chain, all geographies and stakeholders in its intention," currently shared with the majority of direct suppliers (signed, or an equivalent own Code); addresses child labour, forced labour, human trafficking, local labour law/collective agreement adherence, and high safety standards including occupational health and safety, per the OECD Due Diligence Guidance. Breaches can lead to reduced/terminated business; compliance is monitored via supplier questionnaires, site visits and audits.
• Group Human rights policy: expects business partners to document safeguards for fair/safe working conditions, human rights and environmental protection, and to ensure sustainable supply chains, based on OECD due diligence guidance.
• Group Conflict minerals policy: ensures products do not contain tantalum, tin, tungsten and gold ("3TG minerals") sourced from conflict regions, via supplier origin confirmation and a preference for suppliers with their own due diligence processes.

Processes for engaging with value chain workers about impacts

Reference: page 95.

Main upstream engagement is through supplier assessments covering environmental, social and governance topics, including supplier workers' conditions and overall sustainability management. Before engaging a supplier, due diligence including sustainability is conducted; during the relationship, several Group companies perform recurring assessments, which can include audits.

"In the past year, 334 (420) suppliers were evaluated using environmental criteria, of which 42 (33) were new partnerships. As for social criteria, 289 (301) suppliers were evaluated, of which 47 (61) were new." Responsibility for supplier assessments sits with Group company MDs.

"Engagement with value chain workers downstream and further upstream in our supply chain, whether direct or through credible proxies, would improve our knowledge and due diligence work, and further processes for such engagement will be considered in the coming years."

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

Reference: pages 95-96.

Guided by the Code of Conduct and Code of Conduct for business partners. Concerns can be reported to relevant contacts in Brand companies (procurement managers, sales personnel), senior management, or the Fagerhult Group whistleblowing system, all open to internal and external stakeholders. "We do not have a Group-wide approach to taking additional steps to support or require the availability of grievance mechanisms in the workplaces of value chain workers."

Remediation is handled case-by-case, involving the relevant brand company MD and senior management, with Group senior management assistance as relevant; continued-business decisions with the supplier also involve senior management.

Local issues are tracked by relevant managers, with MDs informing the CEO of serious incidents; whistleblowing-system issues follow the process in G1-1/G1-3. "The effectiveness of these channels... and the awareness and trust of value chain workers in these processes... has not been evaluated."

Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities

Reference: page 96.

Group companies "reserve the right to continuously monitor the business operations of our business partners and their compliance with our Code of Conduct for business partners" through information requests, site audits and documentation reviews. Many brand companies run risk assessments, questionnaires and third-party audits. Unwillingness to sign or agree to the Code of Conduct for business partners is treated as a breach, potentially leading to reduced or terminated business.

"Our longer-term plan is to develop a more established process to identify specific impacts and risks to value chain workers," including more detail on prevention/mitigation/remediation as part of "a more rigid due diligence process." All companies have started mapping suppliers on a Group-wide platform for supplier risk evaluation. "We are not aware of any reported severe human rights issues and incidents connected to either our upstream or downstream value chain."

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

Reference: page 96.

"Fagerhult Group does not have any Group targets that specifically relate to our material sustainability-related risks for workers in the value chain." The Group instead works actively on engaging suppliers to sign or agree to the Code of Conduct for business partners, monitors performance through tracking any cases/reports of policy breaches, and prioritises business partners who can concretely commit to human rights principles. "Quantitative metrics or targets to support making progress in these areas have yet to be identified."

Policies related to consumers and end-users

Reference: pages 97-98.

The Group's overall guiding document is the Code of Conduct (setting the general expectation to be "a responsible, trusted, long-term business partner"); "we do not have Group-wide policies that explicitly address our material topics of product safety, cyber security and social impact of light, rather these topics are addressed by Group companies through well-established processes or local policies." "During 2025, no cases of non-respect of the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, or OECD Guidelines for Multinational Enterprises, involving customers or end-users have been reported or come to our knowledge."

Brand-specific processes: most manufacturing companies hold ISO 9001 quality management certification, structuring design, procurement, production, testing and customer support. For cyber security, the Group is compliant with the EU Radio Equipment Directive (RED), in force from August 2025, covering health/safety, cyber security/network protection and privacy/data protection; Organic Response (smart indoor lighting) holds ISO 27001 certification.

Processes for engaging with consumers and end-users about impacts

Reference: page 99.

All Group companies maintain regular customer contact, "from product inquiries and feedback to various sustainability-related matters," complemented by customer surveys, market days and industry events. The MD or Head of Sales in each company oversees engagement, using surveys, personal feedback and KPIs such as Net Promoter Score and quotation-to-deal ratios to track effectiveness.

"While end-users are not directly involved in transactional processes, many companies engage with them through credible proxies, such as property managers or municipalities," particularly for public-area installations. "Group companies have processes in place to consider the rights and needs of vulnerable groups when their products are used in particularly relevant settings, such as children in schools or patients in hospitals."

Processes to remediate negative impacts and channels for consumers and end-users to raise concerns

Reference: page 99.

All Group companies provide accessible channels: annual surveys, post-order questionnaires, website feedback forms, and claims handling, typically via quality managers or sales teams; end-users generally raise concerns through first/second-tier customers. Serious concerns can be reported to local senior management, customer contacts, or the whistleblowing service (detail in G1-1).

Remediation aims to resolve the issue, support affected stakeholders and prevent recurrence, tailored case-by-case, involving the MD and relevant senior management. "The effectiveness of these channels in terms of capturing all possible negative impacts and maintaining customer trust has not been formally evaluated."

Taking action on material impacts on customers and end-users, and approaches to managing material risks and opportunities related to consumers and end-users, and effectiveness of those actions

Reference: pages 99-100.

Actions are "part of our continuous efforts and do not have set time horizons." Product safety: "rigorous safety testing and assessments for every luminaire before delivery," compliance enabling CE and UL certification, with electrical/mechanical/thermal risk management and customer guidance to reduce improper use. Cyber security: ISO 27001-aligned information security management, encryption and secure network protocols reducing disruption, privacy breach and unauthorised-access risk. Social impact: human-centric lighting principles supporting circadian rhythms and visual comfort, with consideration for vulnerable groups (children, elderly, patients); outdoor lighting designed to improve safety, "democratise spaces," and minimise light pollution and energy use.

Effectiveness is monitored via customer surveys, after-sales feedback and warranty tracking. "During the year, there have been no material negative impacts which have required remedy."

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

Reference: page 100.

"Fagerhult Group does not have Group targets specifically addressing material sustainability-related impacts and risks related to customers and end-users." Brands and smart-lighting companies instead work systematically on product safety and cyber security as part of daily operations, ensuring each product is tested and certified to relevant standards. "Quantitative metrics or targets to support making progress in relation to the identified impacts, risks and opportunities have yet to be identified."

Business conduct policies and corporate culture

Reference: pages 102-103.

Group culture: built on a decentralised structure with core values Curious Creators, Committed Together, Aim Higher (introduced 2021) and leadership guidelines developed 2023/24, driven by the CPO working with brand HR.

Policies: the Code of Conduct establishes Group culture and business-conduct approach, states "zero tolerance for corruption," sets guidelines for lowering corruption risk, and covers human rights, compliance and environmental responsibility. The Code of Conduct for business partners covers human rights, environment and business conduct - full legal/regulatory compliance including fair competition/anti-trust law, zero tolerance for corruption, conflicts of interest and IP rights; implementation "so far has focused predominantly on our supply chain." Several Group companies hold local anti-corruption policies (whistleblower, gifts/entertainment).

Reporting and whistleblowing (page 103): incidents/concerns can be reported to senior management, line managers, or the Group's third-party whistleblowing service (WhistleB, Whistleblowing Centre), accessible online and via intranets, with a centralised Group channel plus local channels; reporters choose channel, language and format, and may remain anonymous. Reports are acknowledged within seven days, with a resolution approach set within three months.

Protection of whistleblowers: Group Whistleblowing Guidelines follow legal frameworks; case handling is confidential via the external, encrypted, password-protected WhistleB channel, "removing fear of potential retaliation."

Business conduct training: bi-annual Code of Conduct training for functions-at-risk (detail in G1-3).

Prevention and detection of corruption and bribery

Reference: page 103.

"Risks for corruption and bribery are present in our organisation and value chain," with any incidents having potentially widespread negative consequences. Reported concerns or potential Code breaches are investigated by a small investigating committee (two individuals, occasionally one to two more, to preserve reporter confidentiality); anyone connected to the matter is excluded from the committee. Findings go to the CEO, who is responsible for reporting significant deviations, critical matters and stakeholder feedback to the Board.

Training: the GMT and all functions-at-risk (all managers, purchasing, sales, and employees with external contacts) participate in bi-annual Code of Conduct training, covering all Code topics; mandatory for all employees in scope, with participation "monitored closely by the Group CPO." The most recent training launched in late 2025; several Group companies expanded its scope beyond functions-at-risk to 2,547 individuals, more than half of all employees. "To date, we do not conduct training with our suppliers in our Code of Conduct for Business Partners."

The Code of Conduct and Code of Conduct for business partners are available on the external website and via intranets; HR introduces new employees to the Code during onboarding.

Targets related to business conduct

Fagerhult Group's FY2025 statement is prepared under the 2023 ESRS, under which G1-3 covered corruption prevention/detection rather than targets, and business-conduct targets fell under MDR-T. No quantified anti-corruption or business-conduct target is stated; instead the G1 chapter (G1-3, page 103) describes how the effectiveness of prevention and detection is tracked in the absence of one.

There is no numerical target for corruption/bribery prevention or business-conduct outcomes anywhere in the G1 chapter (pages 101-103). Effectiveness is instead tracked through process and monitoring mechanisms: a defined investigating committee process for any reported concern, with findings escalated to the CEO and, for significant matters, the Board (G1-3, page 103); mandatory bi-annual Code of Conduct training for all functions-at-risk plus an expanded population of 2,547 individuals in the 2025 round, with participation "monitored closely by the Group CPO"; and incident monitoring, reported in G1-4 as "no incidents of corruption or bribery during the year." This combination - a defined committee/escalation process, monitored mandatory training, and annual incident tracking - constitutes the description of how effectiveness is tracked in the absence of a stated numerical target.

Incidents of corruption or bribery

Reference: page 103.

"There have been no incidents of corruption or bribery during the year within the Group. No violation of anti-corruption or bribery laws have occurred and there have been no associated convictions or fines."