Kommunal Landspensjonskasse

Reference: page 18

KLP's board of directors comprises eight members, including two employee representatives, plus two deputies (one permanent) and two observers. Management is not represented on the board, so the share of independent directors is 100 per cent, and the board has gender parity (four women, four men). The board is chosen by delegates to the corporate assembly elected by the general meeting, and public-sector employees' organisations are represented in the governing bodies. The board has established three sub-committees: risk, audit and remuneration. Group senior management, whose composition is decided by the CEO in consultation with the board chair, comprises eight members plus the CEO, covering core business (Life and Pension, Pension Operations, Finance) and support functions (Business Development, Corporate Governance, Communication and Markets, Technology, and People and Organisation). Each sustainability goal has a dedicated owner in management (an EVP or subsidiary managing director) who bears ultimate responsibility for managing its impacts, risks and opportunities.

Reference: page 30

Sustainability is integrated into KLP's established strategy and management processes. The board adopts the sustainability strategy as an integral part of the corporate strategy, and sustainability-related matters are included in the board's annual cycle; assessing the company's exposure to and management of sustainability risk is among the tasks set out in the board instructions. Each sustainability goal has an owner in management, with goals presented to Group senior management for discussion. Group senior management receives quarterly reports on target attainment as part of general scorecard reporting, while the board is given a biannual briefing on target attainment. The CEO's instructions require reporting to the board on compliance, risk and target attainment. Management is informed of the results of due diligence assessments and planned measures through appropriate forums depending on the topic, and each year the board discusses and adopts KLP's report on due diligence assessments under the Transparency Act, as well as its report on gender equality.

Reference: page 30

The text does not describe a specific scheme linking sustainability performance to variable remuneration or incentive payments. It notes that the board has established a remuneration committee as one of its three sub-committees, and that further details on the board and senior management are given in note 2 'Composition and competence of the board of directors and senior management.' Sustainability goals each have a dedicated owner in management who bears ultimate responsibility for managing impacts, risks and opportunities, and target attainment is reported quarterly to Group senior management and biannually to the board through scorecard reporting. However, the reviewed sections do not state whether or how sustainability performance is reflected in incentive schemes or the remuneration of administrative, management or supervisory body members.

Reference: page 30

Management is informed of the results of due diligence assessments and planned measures through appropriate forums, depending on the topic. Each year, the board discusses and adopts KLP's report on due diligence assessments under the Norwegian Transparency Act, which is published at klp.no; the same process applies to KLP's report on gender equality. These statements on due diligence assessments and the gender equality report are not part of the annual report and sustainability report and are reported separately. The double materiality analysis is based on established procedures for due diligence and risk assessments, drawing on inputs including due diligence assessments on human and labour rights. The CEO's instructions include a duty to ensure relevant policies are implemented and to report to the board on compliance, risk and target attainment.

Reference: page 30

To deliver secure and competitive services and safeguard the company's assets, KLP has established a system of risk management and internal control. The board determines the risk appetite, and by identifying and analysing relevant risks the company takes measures to manage and control them on an ongoing basis that feeds into all decisions on significant business changes. Sustainability is integrated into established strategy and management processes, including risk management, and assessing exposure to and management of sustainability risk is among the board-instruction tasks. The Policy for investment risk, the Policy for underwriting risk and the Asset Management strategy are particularly relevant. In 2024 the identification and assessment of sustainability risk formed part of the materiality analysis; in future it will be integrated into the annual review of risk management and internal control, feeding the double materiality analysis, with material risks systematically integrated into the risk monitoring system alongside other risks.

Reference: page 23

KLP was established to meet its owners' needs for public-sector occupational pensions, its core product, and aims to be the best provider of public-sector occupational pensions for the Norwegian local government and healthcare sector. The strategy rests on interconnected priority areas: good management, lowest prices, market-leading service and committed people, supported by heavy investment in technology, self-service and automation. As a mutual company, KLP's customers are also its owners. The Group's main activities are pensions, investments in securities and property, lending, and non-life insurance, carried out through subsidiaries including the KLP Banken Group, KLP Eiendom Group, KLP Kapitalforvaltning and KLP Skadeforsikring. The principal value chains cover own operations, investments, suppliers and customers. The investment strategy is built on a long-term perspective, diversified portfolios (over 9,600 companies), cost-effective largely index-tracking management, regulatory-aligned risk management and responsible investment. Sustainability goals in the corporate strategy include being a partner for sustainable transition and aligning with the Paris Agreement and UN SDGs.

Reference: page 51

KLP carried out a stakeholder analysis identifying its internal and external stakeholders. Its most important stakeholders are its customers and owners (municipalities, county authorities, health trusts and companies with public-sector occupational pensions) and its own employees; under the mutual ownership model, customers and owners are the same. Other stakeholder groups include members, employer and employee organisations, authorities, supervisory bodies, politicians, NGOs, investee companies and suppliers. Engagement occurs mainly through established forums such as board meetings, owner meetings, election meetings, collaborative forums and group meetings, supplemented by interviews and questionnaires. A table sets out how each dialogue is organised, its purpose, example outcomes, and how stakeholder views flow to management and the board. Stakeholder input shapes KLP's strategy and priorities and is taken into account when preparing policies. One concrete outcome: customer-owners on the board highlighted 'sustainable working life,' leading KLP to change its strategy and adopt this as a material topic under ESRS S4.

Reference: page 49

The basis for KLP's sustainability strategy and reporting is a double materiality analysis assessing how KLP affects, and is affected by, sustainability concerns. A summary table sets out the material impacts, risks and opportunities for each Group activity, all covered by defined ESRS disclosure requirements. Material topics span ESRS E1 Climate change (positive and negative impacts plus physical and transition risks across securities, banking, property, pensions and non-life insurance), E4 Biodiversity and ecosystems, E5 Resource use and circular economy, S1 Own workforce, S4 Consumers and end-users, and G1 Business conduct. The sustainability goals in KLP's corporate strategy cover and are based on these material topics, further specified into short- and long-term targets with KPIs and actions. The double materiality analysis is the basis for setting sustainability targets in the corporate strategy, and each goal has an owner in management. KLP's assessment is that it is well equipped to manage and leverage the identified material impacts, risks and opportunities.

Reference: page 53

KLP's double materiality analysis, carried out in 2024 as a revision of the 2023 analysis, is based on EFRAG guidance and was led by a project group with members from all business areas. Key changes from 2023 include analysing each value chain separately, weighting results at Group level by the proportion of the consolidated balance sheet derived from each value chain, using a custom scoring model from the 'Rules for risk management and internal control in KLP,' setting specific materiality thresholds per value chain, and assessing at the most detailed sub-sub-topic level. Identification drew on stakeholder input, due diligence assessments on human and labour rights, internal topic analyses (climate and nature), risk management and internal control processes, external analyses and expectation documents, HR analyses, and interviews and surveys with employees, suppliers and customers in the non-life, property and bank businesses. Each IRO is scored on severity (scale, scope, reversibility) and likelihood, and financial impact for risks/opportunities, against a 1-5 matrix, with a materiality threshold then calibrated and quality-checked, and human rights impacts given a special qualitative assessment.

Reference: page 47

This is the first year KLP is covered by the new sustainability reporting rules under Section 2-3 of the Norwegian Accounting Act, and the annual report structure has been amended accordingly. KLP publishes a consolidated report for the KLP Group for FY2024, with reporting based on the double materiality analysis and covering the KLP Banken Group, KLP Eiendom Group, KLP Kapitalforvaltning and KLP Skadeforsikring. All identified material impacts, risks and opportunities are covered by defined ESRS disclosure requirements. A materiality table sets out which topics are material: ESRS E1 Climate change, E4 Biodiversity and ecosystems, E5 Resource use and circular economy, S1 Own workforce, S4 Consumers and end-users, and G1 Business conduct (corruption and bribery) are material, while E2 Pollution, E3 Water and marine resources, S2 Workers in the value chain and S3 Affected communities are assessed as not material at Group level. Section 3.4 provides an overview of the policies addressing these material topics.

Reference: page 113

KLP's transition plan (termed its "climate strategy") focuses on the investment portfolio, where its principal GHG emissions arise, plus its own operations. The base year is 2022 (the first post-pandemic year with normal activity). Targets are science-based; the overall ambition, the property target and the own-operations target to 2030 are SBTi-verified under the near-term criteria for financial institutions (v2.0, May 2024). Targets cover scope 1, 2 and scope 3 category 15 (financed emissions); categories 1-14 (under 0.2% of emissions) are excluded. The headline emission target is to reduce financed emissions by 45% by 2030, 60% by 2035, 70% by 2040, 85% by 2045 and 95% by 2050, on a linear path to 100% in 2040 (1.5C, IPCC 2023 median). The strategy covers 73% of base-year financed emissions (customer-owner capital). The investment-portfolio strategy was adopted by KLP's board of directors; property, mortgage and operations targets were adopted by the respective boards/Group management.

Reference: page 113

KLP's climate work centres on asset management, where the principal GHG emissions and climate risk and opportunities lie. Key governing documents include: KLP's climate strategy (goals and measures to manage the investment portfolio in line with the Paris Agreement; scope: all investments; owner: the board of directors; CEO responsible for implementation; references SBTi and IPCC; available at klp.no); the goal "Reach net zero in the investment portfolio" (implements the climate strategy; owner: Group chief financial officer; Director for strategic asset allocation responsible; references SBTi, IPCC and EU taxonomy; internal strategy document); and "KLP's expectations for companies with respect to climate change and the natural environment" (expectations for investee companies on sustainable impact on climate and nature; owner: CEO; references UN SDGs, UNFCCC and CBD; available at klp.no). An overarching "Policies on sustainability" section provides further guidelines.

Reference: page 118

KLP's action package to reach its 2030 investment-portfolio targets has two focus areas: restructuring of risk sectors and financing of climate and nature solutions. Measures (mostly ongoing, no defined end-date) include: impact work for restructuring through dialogue and voting across all asset classes; prioritising companies with SBTi-approved transition plans for new long-term bonds; climate-based divestment from poorly adapted high-emission sectors (equities and short-term bonds, planned for 2025); investing in climate and nature solutions; an energy-efficient, low-emission property portfolio; and green loans. KLP states the portfolio measures do not require significant capex on its balance sheet, the exception being the property portfolio where energy-efficiency investments are made. No significant opex is expected. KLP has excluded companies with coal revenues (since 2014) and oil sands (since 2018) across all funds. It expects about a third of financed-emission cuts (-15%) to occur in the market without active measures, the rest via active decisions.

Reference: page 116

KLP's science-based targets, base year 2022: Investment portfolio - reduce financed emissions (benchmark 19.1 million tonnes CO2e) by 45% by 2030, 60% by 2035, 70% by 2040, 85% by 2045 and 95% by 2050 (status 2022-24: -5.2%); increase the share of portfolio companies with science-based climate targets from 12% to 55% by 2030, 75% by 2035 and 100% by 2040 (status: +19 pp); invest at least NOK 6 billion a year in climate and nature solutions (achieved: NOK 6.0bn). Property - reduce emissions per square metre (benchmark 3.2 kg CO2e/sqm) by 37% by 2030 and 60% by 2035 (status: -28%). Mortgages - reduce emissions per sqm (3.06 kg CO2e/sqm) by 33% by 2030 rising to 100% by 2050 (status: -7.3%). Own operations - cut scope 1 by 50% and scope 2 by 35% by 2030, and raise renewable electricity to 100%. Results in 2024: financed emissions down 5.2% since 2022; 31% of companies with science-based targets; NOK 17.4bn invested in climate-friendly investments.

Reference: page 127

Energy figures (MWh, 2024 vs 2023). Total energy consumption from KLP's own operations was 4,122 MWh (2023: 4,240), at 144 kWh/m2. Total energy consumption from the property portfolio was 138,520 MWh (2023: 167,600), at 145 kWh/m2. Of property energy, 130,367 MWh (94%) was from renewable sources, 5,236 MWh (4%) from fossil sources, and 2,909 MWh (2%) from nuclear power. Fuel consumption was minimal (5 MWh renewable, 4 MWh natural gas; zero from coal or crude oil). Consumption of electricity/heat/steam/cooling: 130,362 MWh renewable and 5,147 MWh fossil. Energy production in the property portfolio totalled 1,301 MWh, all self-generated renewable (no non-renewable production). Energy intensity for property investments was 0.02. KLP Eiendom is defined as the Group company in a high-climate-impact sector and is included in the energy-intensity calculation.

Reference: page 123

KLP Group climate accounts (tonnes CO2e, 2024). Scope 1: 1.1 (2023: 1.4; base year 2022: 2.2). Scope 2: 21 location-based and 1,482 market-based. Scope 3: category 1 purchased goods and services 15,342; category 3 fuel/energy 11; category 5 waste 10; category 6 business travel 826; category 15 investments (excl. LULUCF) 26,611,000 - of which customer-owners 18,106,000 (68%) and external customers 8,505,000 (32%). Total scope 3 (excl. LULUCF): 26,627,188. Total GHG emissions (location-based, excl. LULUCF): 26,627,211 (market-based: 26,628,672). Total operational emissions (location-based): 16,211. The dominant source is the investment portfolio (scope 3 cat 15). Financed emissions (page 125-126) include scope 1, 2 and 3 per PCAF: securities investments total 25,957,000; property investments 36,230 (location-based); government bonds 568,000 (excl. LULUCF); mortgages 3,000. Total financed emissions (location-based, incl. LULUCF): 26,564,230. 51% of reported scope 3 is self-reported data.

Reference: page 127

KLP has no carbon capture and storage projects of its own. In 2024 it chose to purchase carbon credits to compensate for its remaining direct (scope 1) emissions from own operations, covering capture and storage equivalent to 3 tonnes of CO2e (the table shows 1.1 tonnes for 2024 and 1.4 tonnes for 2023, 100% as reductions outside the value chain). The credits represent carbon sequestration for at least 1,000 years, 100% stored in the North Sea within the EEA via Northern Lights (part of the Langskip CCS project), and represent net CO2 removal certified by recognised third parties such as Puro.earth. The credits relate to capture and permanent storage of emissions from burning biological waste (developed by Norwegian company Inherit); the project is expected to complete in 2026, when credits will be cancelled to offset KLP's 2023 and 2024 scope 1 emissions. Credit purchases are additional to (not part of) the 50% scope 1 reduction target, and KLP does not compensate scope 3 emissions. Guarantees of origin cover scope 2.

Reference: page 128

KLP does not currently operate with an internal carbon price. It is considering establishing an internal carbon price for activities not exposed to effective market carbon prices, such as flights outside the EEA. However, KLP does not want to apply an internal carbon price to activities already covered by quota systems or CO2 taxes, as this would amount to "double taxation" of those activities and create an unhelpful distortion of behaviour. No price figure is stated.

Reference: page 129

KLP assesses climate resilience by analysing its public-sector occupational pension investment portfolio (over NOK 800 billion at end-2024). Scenario analyses conducted in 2024 (using Ortec Finance's ClimateMAPS model with Cambridge Econometrics) across five scenarios (1.5-3.7C to 2100) over a 40-year horizon. Physical risk: in scenarios moving towards 2.6-3.7C warming, portfolio returns are estimated 10-20% lower over a 15-25 year horizon versus under-2C scenarios; 100% of companies and projects are exposed to physical risk over the long term. Transition risk: the business model is judged resilient, as the diversified portfolio has both winners and losers; assets highly exposed to transition risk (10%+ return differences) in the "Net zero financial crisis" scenario are worth approximately NOK 230 billion, about 30% of the portfolio (2023 figures), with oil and gas most exposed. In the net-zero financial crisis scenario, oil and gas faces a 30-50% value decline to 2030 and 50-60% to 2050. KLP also notes reputational risk could materially affect competitiveness; litigation risk is assessed as relatively limited.

Reference: page 137

KLP's nature strategy functions as its transition plan for nature, applying to the whole Group and required to be integrated into all areas of business. The overarching goal is to halt and reverse nature loss, based on the material impacts, risks and opportunities identified through the materiality analysis. With a diversified portfolio of investments in over 9,600 companies, KLP has indirect exposure to all types of natural impacts and dependencies, so the strategy focuses on high-risk sectors identified through nature risk analysis (note 14). The measures taken in KLP's portfolios do not involve any significant investment expenditure (capex) on KLP's balance sheet. Through company dialogue, voting at general meetings and investor initiatives, KLP works to reduce negative impacts on nature. The strategy defines three targets with prioritised high-risk sectors: stop deforestation (especially cattle farming), net zero nature loss (oil, gas, mining avoiding biologically vulnerable areas) and sustainable use of marine resources (aquaculture traceability and fish feed). Property and infrastructure investments are also included.

Reference: page 136

KLP sets out the key policies governing its work on biodiversity and ecosystems in a policy table. The Nature strategy is the central governing document, owned by the CEO with the Group chief financial officer responsible for implementation; its scope is investments, and it functions as a transition plan for nature with respect to impact on nature and nature risk, covering goals and measures to halt and reverse nature loss. It is aligned with the Nature Agreement and the Convention on Biological Diversity (CBD), and is an internal strategy document to be published at klp.no. A second policy, "KLP's expectations for companies with respect to climate change and the natural environment," sets expectations for investee companies on impact on nature and nature risk, covering climate change, land use in particularly vulnerable areas, pollution of freshwater, spread of alien species and pollution, with explicit expectations of selected high-risk sectors. It also covers expectations that companies address social consequences of their impact on nature, references the UN SDGs, UNFCCC and CBD, and is available at klp.no.

Reference: page 139

KLP describes actions and resources for biodiversity, noting climate and nature efforts are closely linked since climate change drives biodiversity impacts. To manage nature risk, KLP conducts risk assessments according to the do no significant harm (DNSH) principle in all direct investments, lending, long-term bonds and property acquisitions. It is strengthening focus on climate and nature solutions to reduce environmental impact and create long-term value, and has tightened green loan criteria for new buildings so they do not contribute to deforestation or ecosystem loss. Impact work for restructuring covers nature through company dialogues, voting and communicating expectations to authorities and stakeholders. The action table lists measures across all asset classes: impact work for restructuring (ongoing), investments in climate and nature solutions (ongoing), property (all new building and refurbishment projects should produce a net improvement in biodiversity, ongoing), DNSH risk assessment (in development) and green loans (in development). KLP notes monitoring nature goals is challenging because indicator quality varies.

Reference: page 138

KLP's nature targets focus on restructuring sectors with the greatest impact on and dependence on nature, supporting the goal to halt and reverse nature loss. Three targets are defined, each under the sustainability strategy goal "Achieve UN Sustainable Development Goals," with 2024 as the base year and benchmark value (the first reporting year) and timelines "not scheduled": Stop deforestation (securities investments in agriculture, forestry and paper production), Net zero nature loss (mining and oil and gas), and Sustainable use of ocean resources (fisheries and animal farming). Each target states that 100% of companies should have defined nature goals and a strategy to achieve them, and report on progress. The targets are rooted in and support the Nature Agreement (Goal 14 on integrating nature concerns into policies and management, and Goal 15 on reporting dependence and impact). They are not based on a science-based methodology as none is available; ecological threshold values and nature credits were not used. Property and infrastructure investments are also included and followed up through separate risk assessments and bilateral dialogue.

Reference: page 140

KLP reports impact metrics under "Results achieved," referencing note 15 "Nature transition." Metrics track, for each high-risk sector group, the number and share of companies that (a) have committed to or signed up to initiatives, (b) assess impact through their value chain, and (c) have taken steps to meet commitments. For forestry, paper production and agriculture (Goal 1, stop deforestation): 173 companies committed (80%), 46 assess value-chain impact (21%) and 80 have taken steps (37%). For mining and oil & gas (Goal 2): 114 committed (41%), 46 assess value chain (17%) and 75 have taken steps (27%). For fisheries and aquaculture (Goal 3): 5 committed (83%), 3 assess value chain (50%) and 4 have taken steps (67%). Fisheries and farming show the highest commitment, with five of six portfolio companies reporting via CDP. Mining and oil and gas show weaker focus. KLP notes indicator quality varies and companies are followed up through active ownership. Unlisted property and infrastructure are not included in the figures.

Reference: page 135

KLP addresses anticipated effects from nature-related risks within its material impacts, risks and opportunities table (SBM3). Identified risks include nature loss as part of systemic market risk, and reputational loss associated with financing environmental degradation (long time horizon, relating to securities investments and banking, downstream investments), and restrictions on land use for new buildings (long horizon, property investments, own operations). A corresponding opportunity is that restrictions on land use for new buildings produce good returns on existing buildings in central locations. A negative impact identified is that KLP contributes to financing nature loss through investments and through changes in land use resulting from property development (medium horizon). KLP's nature risk analysis (note 14) identifies high-risk sectors carrying the greatest impact and risk in the portfolio. The text does not quantify anticipated financial effects; the strategy emphasises that measures taken in KLP's portfolios do not involve significant capex on KLP's balance sheet, and that integrating climate and nature considerations reduces transition risk in the portfolio.

Reference: page 142

KLP presents policies on resource use and circular economy, addressed mainly through non-life insurance claims settlements and property operation. For claims settlements (KLP Skadeforsikring), governing documents include the goals "Push for a circular economy in non-life insurance" and "Partner to the municipalities in the climate transition," the Procurement strategy for KLP Skadeforsikring 2024-2027 (introducing sustainability and circularity KPIs to develop circular settlement processes and reduce consumption of virgin raw materials), the Claims manual (case-handlers must consider cost-effective repair instead of replacement) and Insurance terms for property damage (prioritising sustainable and circular settlement methods). It notes there are currently no policies at the overall level on sustainable extraction and use of renewable resources. For property operation and development (KLP Eiendom), policies include goals to be a "Driver for circular economy" in tenant alterations and newbuilds/refurbishments, the Sustainability strategy for KLP Eiendom (BREEAM/CREEM, limiting material resource use), Guidelines for environmentally-friendly procurement and materials, and a Materials document. Several are internal strategy documents, with some summaries available at klp.no.

Reference: page 148

KLP reports actions on resource use and circular economy separately for claims settlements and property. For claims settlements (KLP Skadeforsikring), actions focus on conserving resources by incentivising asset maintenance and avoiding claims, and prioritising repairs in insurance terms. Measures include systematic re-use of residual assets (steel, concrete, buried infrastructure) in major property damage; Politikerdashboard.no with the Norwegian Municipal Technical Association (NKF); terms and procedures prioritising circular settlement (retail in force from 01.01.2024, enabling repair of about 85% of damaged mobile phones; municipal property from 01.01.2025); new partnerships with repair providers; claims-prevention incentives; and claims-prevention activities (86 inspections and 95 courses with 1,115 participants in 2024, up from 773 in 2023). Most measures are integral to normal operations, not separately budgeted; two employees coordinate circular-economy work. For property (KLP Eiendom), measures over the 2020-2030 horizon include analysing re-use, implementing material requirements, adapting properties for future re-use, calculating emissions and improving waste sorting. KLP Eiendom notes it currently has no action plan for allocating financial resources.

Reference: page 147

KLP sets resource-use and circular-economy targets for both claims settlements and property. Claims settlements (KLP Skadeforsikring) targets, under "Driver for circular economy in non-life insurance"/"Push for a circular economy," with 2024 goals: document 100% of property damage residual assets where claims costs exceed NOK 10 million (introduced late in the year, no relevant claims yet); and repair at least 40% of glass damage in cars rather than replacing (achieved 46%, overfulfilled, though more integrated windscreen technology makes this harder going forward). These are voluntary activity goals, not scientifically based; a new 80% waste-sorting target for frequent property damage is planned for 2025, and the targets align with the Waste Hierarchy (levels 1 and 2). Property (KLP Eiendom) targets, under "Driver for a circular economy in property" with base year 2020: reduce material emissions by 50% by 2030 and 80% by 2035; material recycling rate of 70% by 2030; and waste sorting rates of at least 65% for KLP-operated buildings (62% achieved) and at least 90% for tenant alterations, development and new construction by 2030.

Reference: page 146

KLP describes its resource flows separately for claims settlements and property operation. As a non-life insurance company, two main value chains behind the claims settlement process involve substantial resource use. Remediation of damage to property involves major material groups including timber, glass, plaster, mineral wool and rock fibre, parquet and laminate, MDF and chipboard; in serious damage where steel and concrete structures are not reused, steel and concrete are also important; lower-volume products with environmental impact include paint, disinfectants, silicone and acrylic. Repair of damage to vehicles consumes mainly plastic (various compositions), glass, aluminium and steel, plus lower-volume paints, adhesives, primers, tectyl and rust protection. For property operation and development (page 150), KLP Eiendom's resource flow consists of own property, tenant alterations, development projects and new construction. Upstream resource use is mainly building materials such as concrete, steel and wood, and technical equipment for construction and maintenance, included as direct purchases of goods or indirectly through purchases of services.

Reference: page 155

KLP's own-workforce policies are set out in a table of governing documents covering all employees. The HR strategy provides overall guidelines for achieving the Group strategy from a human and organisational perspective. A corporate agreement and special agreements apply, as KLP is a member of the employers' organisation Finance Norway and is affiliated with its Basic Agreement and General Agreement with the Finansforbundet trade union, supplemented by local guidelines. A 'Goal: Equality and diversity' document covers key objectives, actions and KPIs, linked to the duty of activity and disclosure in the Equality and Discrimination Act. A Policy for salaries and other remuneration aims to reward behaviour and influence culture for sustainable value creation. Rules for dispute resolution describe conflict types and reporting procedures under the Working Environment Act. A Policy for equality and diversity, plus a Position note on Equality and diversity, describe how KLP promotes gender equality and prevents discrimination, harassment and gender-based violence; both are available at klp.no. Most are owned by the Executive Vice-President, People and Organisation, and reference the UN Sustainable Development Goals.

Reference: page 156

Management maintains a good relationship with employees' representatives through the working environment committee and various works councils, with regular joint sessions where elected representatives and safety officers meet management. Several bodies enable involvement: a Gender equality and diversity committee (representatives from management, HR and employees; quarterly meetings) sets goals and action plans for marginalised groups; the Working Environment Committee (AMU), where a central AMU handles company-wide matters with the senior employee representative, chief safety officer, CEO, senior managers, the occupational health service and HR, while local AMUs handle local matters; an AKAN committee for drug-prevention work; and an Employment committee discussing new hires. In the wage settlement, management and staff representatives discuss matters at local level. KLP conducts an annual survey among managers on HSE topics including sick-leave follow-up, overtime, involuntary part-time work, and reporting concerns. In KLP Eiendom Denmark and Sweden, employees are involved through locally elected staff representatives and regular joint meetings with management.

Reference: page 157

KLP has written procedures for dealing with complaints, harassment and other unacceptable conduct, described in its Rules for whistleblowing and Rules for conflict resolution. All employees can use KLP's internal whistleblowing channels to report concerns; the whistleblower is quickly informed that the notification has been received and how the process will proceed, and notifications are investigated as soon as possible. An independent whistleblowing channel has also been created in which an external service provider processes notifications in the first instance. The channel is available to all employees, including permanent, temporary and consultants, via klp.no, and is set up for anonymous reporting. KLP has a whistleblowing ombudsman and a whistleblowing council that includes the chief health and safety officer; the council and ombud work closely with elected representatives to ensure employees are looked after in whistleblowing cases. There was one whistleblowing case reported in 2024, which was handled per KLP's notification procedures and has been concluded and closed.

Reference: page 159

To follow up on its equality and diversity objectives, KLP prepares an action plan with measures to reduce risk and exploit opportunities. No earmarked funds are set aside; costs are charged on an ongoing basis across several companies and accounts. Measures are followed up each quarter by extracting statistics and conducting studies after training activities and the employee survey, with results presented to Group senior management and the central working environment committee, and managers responsible for follow-up. Equality and diversity measures include gender balance in KLP's leadership development programme; adapting language, job ads and interview processes to capture female candidates; partnering with Women in Finance; focusing on equal pay in payroll processes; training and development plans; internships in technology and asset management where recruiting women is hard; marking special occasions promoting inclusion; home-working agreements; and flexible HR arrangements (flexitime, senior schemes, leave). For HSE (page 162), measures include manager courses on sickness-absence follow-up, risk assessments and health checks at KLP Eiendom, mental-health webinars and framework agreements, and follow-up of overtime and pregnant employees.

Reference: page 159

HR prepares an annual risk assessment on gender equality and diversity with the gender equality and diversity committee, and targets are drawn up to address the identified risks. Equality and diversity targets (all by 2026, base year 2023) include: gender balance in executive positions and on the board of minimum 40% of each gender at all management levels and on the board (benchmark values 40/60 women/men for management levels; 43/57 for the board; SHE-index benchmark 11th place); minimum 40% of each gender in higher-paid roles (benchmark 30/70 women/men); working systematically to achieve a pay balance, carrying out salary analyses to identify unjustified imbalances (benchmark: women's earnings relative to men's, total 85%); and ensuring good follow-up and development at all life stages, maintaining flexible-working arrangements and high job satisfaction (job satisfaction benchmark 77 points). For HSE (page 162), the target is annual sickness absence below 4% on average, with base year 2023, benchmark value 4.48%, and timeline 2024.

Reference: page 158

Text and figures relate to the KLP Group's permanent workforce in Norway, Sweden and Denmark unless specified. Total employees by country in 2024: Norway 1,153, Denmark 22, Sweden 11. By contract type, permanent employees totalled 1,167 (561 women, 606 men); temporary employees totalled 19 (11 women, 8 men); part-time employees totalled 48 (36 women, 12 men); and employees without guaranteed working hours totalled 0. All employees combined totalled 1,186 (572 women, 614 men), up from 1,148 in 2023. In 2024, 4.1 per cent of permanent employees worked part-time, a decrease from prior years; 6.4 per cent of women and 2 per cent of men worked part-time. KLP states no employees work part-time against their will and all staff are employed in full-time positions, with part-time occurring only at the employee's request (e.g., parental leave, education). Turnover was 69 (6%); total new hires were 98 (49 women, 49 men).

Reference: page 161

KLP reports gender balance across governance and management levels for 2024. Board of directors: 4 women (50%) and 4 men (50%). Group senior management: 5 women (56%) and 4 men (44%). Management level 1: 7 women (54%), 6 men (46%). Management level 2: 30 women (42%), 41 men (58%). Management level 3: 33 women (43%), 43 men (57%). Total for all management levels: 73 women (41%) and 104 men (59%). Higher-paid positions: 72 women (31%) and 159 men (69%). Employees at senior management level represent 9 people (1% of the total workforce). KLP reports it has reached the goal of at least 40 per cent of each gender for all management levels combined and at the different levels; higher-paid positions show a slow positive trend remaining a focus for 2025. Age distribution in 2024: under 30, 89 (8%); 30–50, 601 (51%); over 50, 477 (41%). In 2024 KLP achieved second place in the SHE-Index survey of gender balance in the financial sector.

Reference: page 158

KLP states that all employees are covered by social security schemes offered by KLP or from the public sector, which insure employees against loss of income due to illness, unemployment, disability, parental leave and retirement. The disclosure references note 16 'Own workforce' in the notes to the sustainability report. This coverage applies to the KLP Group's permanent workforce in Norway, Sweden and Denmark unless otherwise specified.

Reference: page 161

KLP reports work-life balance and family-leave metrics under note 16. For parental leave in 2024, the proportion of women entitled to and taking parental leave was 6.6 per cent and the proportion of men was 4.0 per cent (both reported as new for 2024). The gender distribution of parental leave taken (women/men) was 69 / 31% in 2024, compared with 75 / 25% in 2023, 74 / 26% in 2022 and 75 / 25% in 2021. KLP also offers flexibility through flexitime, senior schemes, leave for various purposes, time off for nursing mothers, and home-working agreements where work tasks allow. Regarding absence for sick children, the gender distribution (women/men) was 59 / 41% in 2024 (page 162).

Reference: page 161

KLP reports remuneration and pay-gap metrics under note 16. The CEO's salary relative to the median salary in the Group was 7.0 in 2024 (up from 6.6 in 2023). Women's earnings relative to men's for all KLP employees were 85% in 2024 (same as 2023). By level, women's earnings relative to men's were: management level 1, 76%; management level 2, 84%; management level 3, 86%; higher-paid positions, 95%; and other employees, 98%. KLP notes a positive development in the salary balance among other employees and at top management level, but a decline at management level 3. Continuing work on pay and gender balance in higher-paid and executive positions will be a particular focus in 2025.

Reference: page 157

KLP reports incidents, complaints and human-rights metrics under note 16 'Own workforce'. In 2024 there was 1 case of discrimination (0 in 2023 and 0 in 2022) and 1 notification received via internal whistleblowing channels (3 in 2023, 2 in 2022). There were 0 complaints to OECD contact points, and 0 fines, penalties or compensation for complaints related to discrimination. KLP states that one whistleblowing case was reported in 2024, handled in accordance with its notification procedures, and has been concluded and closed. The report notes that no cases of discrimination, complaints or violations of social or human rights were recorded in the workforce. Separately, under HSE results (page 162), KLP reports 0 personal injuries in 2024, and states that no serious injuries to staff or other major incidents were reported and there were no work-related fatalities.

Reference: page 164

KLP's two material S4 topics are privacy/data protection and sustainable working life, each governed by distinct policies. For privacy, key governing documents include the Privacy and Information Security Policy (Board-owned), the Privacy policy (CEO-owned, data protection officer responsible), Rules on information security, and KLP's information security strategy and policy. These ensure personal data of members, customers and employees is safeguarded, set information-security and stable-operations requirements, and state a low risk appetite for breaches. Policies align with the EU GDPR, the European Convention on Human Rights and UN Conventions on Human Rights, supported by Group-wide procedures and templates including a procedure for handling rights requests. For sustainable working life, policies include a "Goal of a sustainable working life" (defining goals, measures and KPIs), Action plans, an Operating concept and Process specifications for customer meetings and guidance. These are owned by the Executive Vice-President, Life and Pension, link to UN SDGs, and were shaped by feedback from owners and members.

Reference: page 166

For privacy, KLP discharges its obligations through thorough privacy impact assessments before introducing measures or agreements involving new processing of personal data, including for marketing. These assessments consider the views and rights of customers and members; the data protection officer always participates, and legal, technical and business expertise is involved. Per supervisory-authority guidance, assessments must consider data subjects' views; customers and members are rarely involved directly, but a record is kept of whether they were involved, with an explanation if not. Staff representatives are involved where actions affect employees' privacy. For sustainable working life, the offering is integral to the public-sector occupational pension service for members and employers. KLP arranges regional information days, courses and monthly webinars and maintains regular direct contact for guidance. All offerings are evaluated jointly with customers for value and relevance, and challenges and input are discussed through forums such as resource group meetings and owner meetings with top management.

Reference: page 166

KLP maintains an up-to-date, accurate data protection statement at klp.no with contact details for KLP and the data protection officer, where customers and members can ask questions, complain or exercise privacy rights. KLP responds on an ongoing basis within statutory deadlines to safeguard rights and correct errors and damage. Complaints can also be directed to the Norwegian Data Protection Authority as an independent supervisory function. Customers and members who wish to report matters of concern can use KLP's whistleblowing channel, which can be used anonymously; information on how to report is on KLP's website. The data protection officer is notified of all issues in the incident reporting system and tracks them, and the Compliance function assesses how breach risks are handled. KLP has a statutory duty of confidentiality under the Financial Institutions Act. For sustainable working life, dissatisfaction with the offering can be reported to the account manager in the life company, and all activities are evaluated, providing a channel for assessing service quality.

Reference: page 168

For privacy, KLP has implemented procedures, processes and technical solutions over time to prevent, limit and remedy potential negative consequences of privacy breaches. 2024 measures included keeping the data protection statement and processing log up to date (last Group-wide audit Q2 2024), training and awareness (a new mandatory e-learning module, Security Day/Month with talks from the Norwegian Data Protection Authority, and phishing-test tools), and establishing new channels for secure communication. KLP reports no breaches of privacy with material adverse impact, no cases referred to supervisory authorities, and no incidents related to human rights violations, so no legal remedies or corrective measures were necessary. For sustainable working life, ongoing actions include information days and webinars, compiling demographic data on disability and retirement in a working life report, integrating the topic into the core offering and Customer and Advice Centre, strategic partnerships with owners, unions and researchers, personal guides and "Worth knowing" courses, and information meetings on staying in work longer.

Reference: page 167

For privacy, KLP states it has not considered it natural to set measurable, results-oriented targets, noting this is not required under the personal data regulations; the key is that the company recognises its responsibility and takes necessary measures. The ambition level is instead expressed by setting a low risk appetite for breaching the rules. In autumn 2024, an audit of management and control guidelines specified the risk appetite for information security and privacy in more detail, clarifying what will not be accepted regarding confidentiality, integrity and availability, and the information security strategy will be updated in connection with DORA. For sustainable working life, KLP established a goal of "Integrating sustainable working life into customer work," applying to all account managers, with a 2024 base year, no benchmark value, a 2024 timeline, and 2 development projects. The board highlighted this topic, and KLP aims to help owners keep employees in work longer to ease pension burdens.

Reference: page 174

KLP's business conduct disclosure centres on financial crime, with zero tolerance covered in the corporate strategy and supported by guidelines and underlying procedures. Key policies include "Goal: Fight financial crime" (owned by the Executive Vice-President, Corporate Governance), under which KLP aims to protect its business against adverse events and encourage stakeholders and society to protect themselves; a Policy for conflicts of interest (Board-owned); a Policy for compliance in the anti-money laundering and sanctions area (Board-owned); Regulations on measures against financial crime (CEO-owned, with periodic reporting to the CEO and board); and a Handbook for action against corruption setting the framework for the anti-corruption programme. Most policies reference the UN Sustainable Development Goals and FATF recommendations. KLP states no roles or functions were identified as being at significant risk of corruption and bribery, though purchasing and allocation could pose increased risk on a general basis. The text does not separately describe corporate-culture mechanisms beyond these policies, training and management tone-setting.

Reference: page 174

KLP has an anti-corruption programme to prevent and detect corruption and bribery, comprising: management speaking up for anti-corruption; risk assessments, routines, clear policies and procedures; training and employee awareness; whistleblowing systems, background checks, control and monitoring; sanctions and consequences; and verification of compliance and continuous improvement. Those responsible for the programme are not involved in investigating potential incidents to preserve independence, and the CEO and board are kept informed. In 2024, mandatory e-learning on anti-corruption was provided to all employees (81 per cent completion), with classroom instruction for exposed roles; CEO/Group senior management and exposed roles reached 100 per cent e-learning completion. On confirmed incidents, KLP discloses that it was not the object of any charges, fines or convictions for corruption and bribery in 2024, and that no instances of corruption and bribery involving its employees were recorded in 2024 (zero confirmed incidents). It had no suspicions of contract partners and terminated no contracts. Additionally, KLP's countermeasures uncovered 324 instances of fraud and it reported 99 suspicious matters to Okokrim in 2024.

Reference: page 174

KLP discloses that in 2024 it was not the object of any charges, fines, or convictions for corruption and bribery, and that no instances of corruption and bribery involving its employees were recorded during the year (zero confirmed incidents). It had no suspicions regarding contract partners and terminated no contracts on these grounds. Those responsible for the anti-corruption programme are kept separate from the investigation of any potential incidents in order to preserve independence, and the CEO and board are kept informed. Separately, KLP notes that its countermeasures against financial crime uncovered 324 instances of fraud and that it reported 99 suspicious matters to Okokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) in 2024; these relate to fraud and anti-money-laundering activity rather than confirmed corruption or bribery incidents.