Nordic Semiconductor

The Board of Directors bears the ultimate responsibility for the Group's governance, social, and environmental matters. The Board of Directors oversee risk management through biannual reviews of the Group's most important areas of exposure and internal controls, and on an ongoing basis in relation to the assessment of specific projects or other matters of regular business.

Board of Directors Composition:

Birger Steen | Chair, shareholder elected independent director Chair of the Board since 2018 and board member since 2017. Member of the People & Compensation Committee. Birger Steen is General Manager of NORSAR, a Norway based not-for-profit applying seismology, IoT and data science to the monitoring of global compliance with the Comprehensive Test Ban Treaty, as well as other applications. Over the last 30 years, he has served in leadership roles in the technology sector, including as SVP at Schibsted ASA, CEO of Scandinavia Online AB (publ.), Vice President at Microsoft Corp., CEO of Parallels, Inc. Thematic Partner at Summa Equity and CEO of Freyr Battery, Inc.

Employee elected directors:

• Morten Dammen | Employee elected director since 2019. Member of the People & Compensation Committee. Procurement Director with Master of Science degree in Electrical Engineering from NTNU.
• Anja Dekens | Employee elected director since 2022. Member of the Sustainability Committee. Project Manager with background in Hardware Design and Digital Design Discipline.
• Monika Lie Larsen | Employee elected director since 2024. Principal Project Manager leading Nordic's Bluetooth LE protocol software development.
• Jon Helge Nistad | Employee elected director since 2017. Senior engineering manager in Long Range BU Customer Success.

Shareholder elected independent directors:

• Helmut Gassel | Board member since 2024. Seasoned semiconductor executive with more than 30 years in the industry.
• Annastiina Hintsa | Board member since 2019. Chair of the People & Compensation Committee. Member of the Sustainability Committee.
• Anita Huun | Board member since 2019. Chair of the Audit Committee.
• Snorre Kjesbu | Board member since 2023.
• Dieter May | Board member since 2024.
• Inger Berg Ørstavik | Board member since 2017. Chair of Sustainability Committee. Member of the Audit Committee.

The Board of Directors oversee risk management through biannual reviews of the Group's most important areas of exposure and internal controls, and on an ongoing basis in relation to the assessment of specific projects or other matters of regular business.

The Board has established the following committees:

People & Compensation Committee:

• Chair: Annastiina Hintsa
• Members: Birger Steen, Morten Dammen, Dieter May

Audit Committee:

• Chair: Anita Huun
• Members: Inger Berg Ørstavik

Sustainability Committee:

• Chair: Inger Berg Ørstavik
• Members: Annastiina Hintsa, Anja Dekens

Board meeting attendance in 2024: 11 meetings were held, with high attendance rates across all board members.

Equity-based compensation was USD 11.7 million in 2024, compared to USD 6.5 million in 2023.

Executive Management Team holdings include performance shares and RSUs (Restricted Stock Units) tied to sustainability-related performance:

• Vegard Wollan (CEO): 131,000 shares, 21,733 RSUs and 21,733 performance shares
• Øyvind Birkenes (EVP BU Long-Range): 9,540 shares and 5,000 RSUs and 5,000 performance shares
• Ola Boström (SVP Quality): 5,927 shares and 6,594 RSUs and 6,094 performance shares

Employee board members also participate in equity-based compensation programs with performance shares linked to company sustainability targets.

Nordic has designated processes for protecting its information and intellectual property rights, including through contractual mitigation. Nordic participates in industry and standard setting groups to engage with the development and implementation of industry standards in the field.

Nordic seeks to continuously enhance its compliance system and programs, internal controls, and risk mitigating measures, including efforts to strengthen its culture of integrity.

Nordic implements a sanctions & trade compliance program, and continuously enhances the program, including monitoring, to ensure compliance with, and avoid circumvention of, the increasingly complex regulations.

Credit monitoring routines are integrated into any new credit lines, requiring security in the form of payment guarantees or advance payment requirements if needed.

Risk Management Framework: Nordic has a well-established corporate level risk framework to manage risks and opportunities that may impact the strategic objectives in a proactive and systematic manner. Risks are evaluated by the Executive Management Team and put into actions and priorities proportionate to identified risks and opportunities to reach or maintain target risk levels.

Process: The Board of Directors oversee risk management through biannual reviews of the Group's most important areas of exposure and internal controls, and on an ongoing basis in relation to the assessment of specific projects or other matters of regular business.

Categories: Nordic utilizes a methodology to assess risks within six categories: Strategic, Operational, Financial, Legal & Compliance, Climate & Environmental and Social, and rates likelihood and impact, as well as how Nordic may influence the risks as means of prioritizing appropriate risk mitigating measures.

Internal Controls: A summary of internal controls related to the accounting process can be found in the Corporate Governance section of this Annual Report. Nordic has implemented disaster recovery plans and backup routines in order to mitigate any effects of potential cyberattacks and seeks to maintain appropriate insurance coverage to support the management of potential threats and attacks.

Business Model: Nordic Semiconductor (Nordic or "the Group") is a fabless semiconductor company designing, marketing, selling, and supporting hardware products, embedded software, and cloud-based services enabling wireless connectivity solutions.

Nordic has been a pioneer in low-power wireless connectivity since its beginning in 1983 as an integrated circuit consultancy. Starting with proprietary 2.4GHz technology for PC accessories in 2002, Nordic has developed into a leading global supplier of Bluetooth® LE and multiprotocol solutions for short-range connectivity. The Group has also established a leading position in the emerging market for cellular IoT, and in 2020 expanded into next-generation Wi-Fi technology to cover the embedded Wi-Fi market. In addition to expanding into next-generation Wi-Fi technology, the Nordic has further diversified its portfolio by entering the Power Management Integrated Circuit (PMIC) market.

Value Chain: Nordic's product offerings include integrated circuits (ICs), Systems-on-Chip (SoCs), Systems-in-Package (SiPs), and software development tools. The Group sources components, assembles and packages the products through world-class subcontractors in Asia, and distributes its products to branded electronics manufacturers through an extensive network of global and regional distribution partners.

Strategy: 2024 has been a transformative year for Nordic, navigating the challenging semiconductor market and positioning the company for future growth. Under the new leadership of CEO Vegard Wollan, key strategic initiatives have been implemented to enhance operational agility, drive innovation, and capitalize on emerging market opportunities.

Business Units: One of the major structural changes in Nordic over the year has been to reorganize its previous R&D department into four dedicated business units: Short-Range, Long-Range, Wi-Fi, and Power Management. This aims to sharpen the company's strategic focus and enhance engineering execution under a new and strengthened executive management team.

Financial Ambitions: Overall, the financial ambition for the Group is to deliver annual revenue growth above 20% through the decade, and to move towards an operating model of around 25% EBITDA within five years.

Stakeholder Engagement: Nordic actively engages with key standard-setting organizations to standardize communication protocols, aiming to increase competition and innovation in the industry. These include CSA, Bluetooth SIG, DECT Forum, Thread Group, Wi-Fi Alliance, and GSMA.

Nordic is a part of the Bluetooth Special Interest Group (Bluetooth SIG), which is continuously developing the Bluetooth standards. Nordic joined the Board of Connectivity Standards Alliance as a Promoter Member, the highest level of membership in 2022. This allows the Group to further shape the Alliance's continued development of standards such as Matter, which will ensure interoperability between smart home devices and accelerate the mainstream adoption of smart home technologies.

Customer Relationships: Nordic maintains strong relationships with customers through its world-leading customer support. The Group works closely with many key customers and leading broad market customers who are developing new products powered by our technologies. Nordic has global upstream and downstream operations with customers worldwide.

Supplier Relationships: As a fabless semiconductor company, Nordic outsources the capital-intensive production of silicon wafers, packaging, and testing of its products to third-party suppliers, mainly in Asia. Nordic maintains close dialogue with customers and suppliers to identify and address supply risks.

Material Impact Assessment: The Group's corporate level risk management framework aims to proactively identify and manage the risks that may impact our ability to deliver on our strategic objectives. Nordic utilizes a methodology to assess risks within six categories: Strategic, Operational, Financial, Legal & Compliance, Climate & Environmental and Social.

Key Material Risks and Opportunities:

Strategic Risks:

• Cyclical nature of semiconductor industry - The semiconductor industry faces rapid technological shifts, swift product obsolescence, volatile pricing, evolving standards, short life cycles, and erratic supply and demand
• Customer concentration - In 2024, Nordic derived around 58% of its total Bluetooth® LE revenue from its 10 largest customers
• Competitiveness of Nordic products - Competition from existing companies and new entrants, mainly from China
• Trade tensions - Political and trade tensions among major economies affecting supply chains and market access

Climate and Environmental Risks:

• Acute physical events and natural disasters - Risk of supply disruptions from climate events affecting suppliers in Southeast Asia
• Constraints in supply of wafers - Disruption at third-party suppliers could negatively affect revenue

Key Growth Opportunities:

Targeting growth in megatrends:

1. Hybrid work and play - Demand for seamless transitions between professional and personal life
2. Connected health - Healthcare digital transformation with remote patient monitoring
3. Industrial IoT - Smart manufacturing, predictive maintenance, and connected logistics
4. Edge AI and Machine Learning - AI-driven and connected devices requiring local processing

Product Innovation Opportunities:

• Launch of nRF54 Series offering significant performance improvements
• nRF9151 SiP - world's smallest and most energy-efficient cellular module
• Expansion into Wi-Fi and Power Management markets

Risk Identification Process: The Group's corporate level risk management framework aims to proactively identify and manage the risks that may impact our ability to deliver on our strategic objectives. The Executive Management Team (EMT) is accountable for managing risks and opportunities at a consolidated corporate level.

Assessment Methodology: Nordic utilizes a methodology to assess risks within six categories: Strategic, Operational, Financial, Legal & Compliance, Climate & Environmental and Social, and rates likelihood and impact, as well as how Nordic may influence the risks as means of prioritizing appropriate risk mitigating measures.

Governance and Oversight: The Board of Directors oversee risk management through bi-annual reviews of important areas of exposure and controls, as well as on an on-going basis in relation to specific projects or other matters of regular business. Risks are evaluated by the Executive Management Team and put into actions and priorities proportionate to identified risks and opportunities to reach or maintain target risk levels.

Materiality Assessment Categories: Risks are assessed across multiple dimensions including:

• Influence (Nordic's ability to control or influence the risk)
• Impact (potential effect on business objectives)
• Likelihood (probability of occurrence)

Risk levels are categorized as High (75-100%), Medium (25-75%), and Low (0-25%) based on these assessments.

ESRS Coverage: Based on Nordic's materiality assessment and content covered in this sustainability statement, the following ESRS topics are considered material and reported:

ESRS 2 - General Disclosures: All governance, strategy, and impact management disclosures

Environmental Topics:

• E1 Climate Change: Material due to energy consumption, GHG emissions, and climate risks to supply chain
• E2 Pollution: Material due to semiconductor manufacturing impacts and regulatory requirements
• E3 Water and Marine Resources: Material due to water consumption in operations
• E5 Resource Use and Circular Economy: Material due to product design and packaging considerations

Social Topics:

• S1 Own Workforce: Material due to talent attraction and retention being critical for innovation
• S2 Workers in Value Chain: Material due to reliance on global supply chain partners
• S4 Consumers and End-Users: Material due to product safety and security requirements

Governance Topics:

• G1 Business Conduct: Material due to compliance requirements and business ethics

Topics assessed as not material:

• E4 Biodiversity and Ecosystems: Not material for fabless semiconductor operations
• S3 Affected Communities: Not material based on business model and operations assessment

Transition plan for climate change mitigation

In 2024, Nordic began formulating a transition plan for climate change mitigation. Nordic will continue working on the transition plan in 2025, ensuring it is embedded in and aligned with our overall strategy and annual business and financial planning.

Nordic is not excluded from the EU Paris-aligned Benchmarks, as the company does not engage in activities that would lead to exclusion, including controversial weapons, tobacco production, violations of UN Global Compact principles or OECD Guidelines for Multinational Enterprises, or deriving significant revenue from fossil fuel activities.

Paris alignment and net-zero commitment

Nordic's strategy for climate change mitigation is coherent with the principle of limiting global warming to 1.5°C, in line with the Paris Agreement and the EU's climate goals.

Through our targets that have been validated by the Science Based Targets initiative (SBTi), our strategic ambition is to reduce Scope 1, 2, and 3 GHG emissions already by 2030 and shift towards net-zero GHG emissions across our value chain by 2050.

In April 2024, our science-based targets were validated by SBTi. Through these targets, and as part of our emissions roadmap, we pledge to cut absolute GHG emissions across Scopes 1 and 2 by 60%, and Scope 3 emission intensity by 60%, by 2030 from a 2019 base year, with ongoing reductions every decade aiming for net-zero emissions by 2050.

We will prioritize decarbonization through direct emissions reductions. All residual emissions are planned to be neutralized in line with SBTi criteria before reaching net-zero emissions by 2050.

Scope of the plan

The transition plan covers Nordic's global operations and value chain. As a fabless semiconductor company, the plan addresses:

• Own operations (offices globally)
• Upstream: outsourced manufacturing suppliers (particularly wafer suppliers and OSAT suppliers)
• Downstream: product distribution and end-use

Science-based targets

*Value added calculated as: value added = sales revenue—the cost of goods and services purchased from external suppliers

Nordic has selected 2019 as the year for its science-based targets in accordance with SBTi criteria. The baseline value reflects the full scope of relevant activities including all relevant emission sources across Scope 1, 2, and 3, as well as accounts for changes in production volumes and energy sourcing.

Progress against targets

As of 2024, compared to 2019, Nordic's Scope 3 emissions intensity (emissions per USD value added) has decreased by 16%, while Scope 3 absolute emissions have increased by 22%. We expect an increase in Scope 3 absolute emissions in the near future while achieving further reductions in Scope 3 emissions intensity in line with our science-based targets.

Relative to the 2019 base year, our Scope 1 and 2 emissions have already decreased by 94% in 2024, thus far beyond the 60% target.

Due to increasing production activities with our manufacturing suppliers, we assume an increase in absolute Scope 3 emissions until renewable energy availability is improved in the countries where our suppliers are located, while still reducing Scope 3 emissions intensity.

Decarbonization levers and key actions

Renewable electrification of own operations

To meet our scope 1 & 2 targets, Nordic has and will continue to purchase renewable energy for our offices. By investing in renewables, 95% of the total purchased energy for Nordic's own operations originated from renewable energy sources in 2024. Compared to the 2019 baseline, Nordic has already achieved a 94% scope 2 market-based emissions reduction as a result of this strategy.

Investing in renewable energy sourcing is integrated into our financial planning but depends on the availability of renewable energy instruments for countries where Nordic offices are located. By 2030, Nordic strives for the share of renewable electricity to reach 100% of our consumption.

Supplier engagement

Due to the advanced, capital-intensive technologies required for semiconductor fabrication that only a few suppliers, like TSMC and Global Foundries, can provide, Nordic is limited in its choice of wafer suppliers. Additionally, Nordic's strict performance and reliability standards for critical applications further narrow the pool of qualified suppliers. As such, the key action for reducing emissions from purchased goods and services (approximately 80% of total emissions) is to engage with our outsourced manufacturing suppliers, who have the largest impact on our GHG emissions.

The situation is similar when it comes to suppliers providing outsourced semiconductor assembly and testing (OSAT). Changing OSAT suppliers would be challenging because it involves re-qualifying specialized processes, ensuring consistent quality, and mitigating risks of supply chain disruptions. Additionally, long-term partnerships, trust, and tailored solutions developed with the existing supplier are difficult to replicate quickly with a new partner. Engaging with key suppliers is, therefore, a key action in this area as well.

Engagement with our suppliers is an ongoing action and will continue long-term as we work towards our emission reduction targets.

Scope 3 emissions from our outsourced manufacturing accounts for over 60% of our total emissions. Many of our manufacturing suppliers are already transitioning to renewable energy and adapting new technologies for emissions reduction, but emissions from manufacturing are still significant. Engaging with manufacturing suppliers allows us to collaboratively tackle production-related GHG emissions, supporting our efforts to achieve our emission reduction targets.

Sustainable procurement practices

Beyond outsourced manufacturing, a significant portion of Nordic's emissions arises from purchasing services and capital goods. To address this, the Group is actively enhancing its procurement policies by embedding sustainability practices and improving data collection, enabling more precise identification of emission reduction opportunities within its supply chain. As part of these efforts, a new sustainability rating platform will be implemented in 2025 to strengthen supplier assessment processes and enhance value chain information collection.

Energy-efficient product design

Nordic is developing new products with advanced low-power technologies, enabling devices to operate efficiently while minimizing energy consumption. Focusing on innovations such as optimized System-on-Chip (SoC) designs and enhanced power management features helps reduce the environmental impact of connected devices across various applications. Advancing low-power solutions will remain an ongoing priority as we continuously integrate these technologies into our IoT product portfolio.

Optimized system-on-chip (SoC) designs and enhanced power management features helps reduce the environmental impact of connected devices across various applications.

CapEx and investment

The implementation of Nordic's climate change mitigation actions does not require significant CapEx or OpEx expenditure at this stage. Our ability to implement these actions depends on the continuous availability and strategic allocation of resources, including financial investments, technological innovation, and collaboration with our partners. We are committed to transparently managing these resources to maximize our impact on climate change mitigation and adaptation.

Scenario analysis and climate resilience

We have not yet conducted a formal scenario analysis to assess climate-related physical and transition risks. However, alongside the risk assessment carried out as part of our Double Materiality Assessment, the TCFD framework, based on scenario analysis, addresses the resilience aspect. To strengthen our climate-related vulnerability management capabilities and ensure that our business model remains resilient and adaptable to the evolving challenges posed by climate change, we aim to complete the scenario analysis and resilience analysis in the future.

Locked-in emissions and stranded assets

Not disclosed in the excerpts provided.

Carbon credits and removals

We will prioritize decarbonization through direct emissions reductions. All residual emissions are planned to be neutralized in line with SBTi criteria before reaching net-zero emissions by 2050.

Nordic has taken actions to lower its carbon footprint by purchasing renewable energy verified by Guarantees of Origin (GOO), International Renewable Energy Certificates (I-REC), Taiwan Renewable Energy Certificates (T-REC), Renewable Energy Guarantees of Origin certificates (REGO), and Renewable Gas Guarantees of Origin certificates (RGGO).

Governance and monitoring

Our GHG emission reduction targets are monitored systematically. We collect energy and emissions data from our own operations and supply chain and assess the progress against our 2019 GHG emission baseline levels and emission reduction targets. The performance and metrics related to our GHG emission reduction targets are regularly reviewed in management meetings.

For the EMT, climate-related considerations are factored into remuneration through the Environmental component of the ESG KPIs in the LTI program. These climate targets, which represent approximately one-third of the total ESG component (20% of PSUs).

Policy alignment

Nordic's Climate Change Policy sets requirements for responsible practices across the Group's own operations and value chain. The policy addresses all our identified climate-change-related material IROs and outlines the Group's approach and commitment to implementing measures for climate change mitigation through our commitment to reducing GHG emissions in line with SBTi targets and climate change adaptation through assessing climate-related risks and building resilience against climate-related impacts. The policy also covers our commitment to improving energy efficiency and transition to renewable energy across our own operations, as well as our efforts to work with suppliers, promote sustainable sourcing practices, and continuously strive to improve our environmental performance with respect to our business operations.

The Chief Executive Officer is responsible for the policy's execution and its alignment with Nordic's strategic goals. The policy is reviewed on an annual basis by the Executive Management Team.

Policies related to climate change mitigation and adaptation

Climate Change Policy

Nordic has adopted a Climate Change Policy that sets requirements for responsible practices across the Group's own operations and value chain.

Scope:

• Covers the Group's own operations and value chain

Key content and principles:

• Addresses all identified climate-change-related material impacts, risks, and opportunities (IROs)
• Outlines the Group's approach and commitment to implementing measures for climate change mitigation through commitment to reducing GHG emissions in line with Science Based Targets initiative (SBTi) targets
• Covers climate change adaptation through assessing climate-related risks and building resilience against climate-related impacts
• Includes commitment to improving energy efficiency and transition to renewable energy across own operations
• Covers efforts to work with suppliers and promote sustainable sourcing practices
• Commits to continuously striving to improve environmental performance with respect to business operations

Governance:

• The Chief Executive Officer is responsible for the policy's execution and its alignment with Nordic's strategic goals
• The policy is reviewed on an annual basis by the Executive Management Team

Public availability:

• Available for all employees on Nordic's intranet
• Publicly available on Nordic's website

Monitoring:

• The policy is reviewed annually by the Executive Management Team
• Implementation is monitored through science-based targets validated by SBTi, targeting 60% reduction in Scope 1 & 2 absolute emissions and 60% reduction in Scope 3 emission intensity by 2030 from 2019 baseline
• As of 2024, Scope 3 emissions intensity has decreased by 16% compared to 2019

Actions and resources in relation to climate change policies

Nordic Semiconductor's approach towards climate change mitigation encompasses a diverse array of strategies undertaken during 2024 and planned future actions to significantly reduce the carbon footprint.

Key actions and strategies

The company has identified the following key actions:

1. Renewable energy transition in own operations

• Action: Transition to renewable energy for all offices in coming years and focus on lowering climate impact through energy efficiency in office buildings
• Scope: Own operations
• Current status: More than 90% of purchased energy is already renewable; more than 50% of employees work in offices with green building certifications (BREEAM and LEED)
• Time horizon: Coming years (medium term)
• Resources: Not quantified
• Link to targets: Supports science-based targets validated by SBTi in April 2024

2. Supplier engagement on manufacturing emissions

• Action: Engage with main manufacturing suppliers to define GHG emission reduction targets in collaboration
• Scope: Upstream value chain (outsourced manufacturing operations)
• Current status: Many suppliers are already transitioning to renewable energy
• Time horizon: Long-term strategic planning
• Resources: Not quantified
• Link to targets: Addresses significant production-related climate impacts inherent to fabless business model

3. Low-energy IoT product portfolio development

• Action: Developing IoT product portfolio with low-energy solutions to enable customers' end devices to reduce their carbon footprint
• Scope: Downstream value chain
• Expected outcomes: Smart lighting powered by Nordic's technology has enabled customers to reduce emissions; scale of avoided emissions is considered substantial, contributing positively to global GHG reductions
• Resources: Not quantified
• Link to targets: Supports customers' decarbonization efforts and demonstrates resilience of business model in supporting climate transition

Performance and outcomes

Achieved results (2024 vs. 2019 baseline):

• Scope 3 emissions intensity (emissions per USD value added): decreased by 16%
• Scope 3 absolute emissions: increased by 22%

Expected future trajectory:

• Near-term expectation: Increase in Scope 3 absolute emissions
• Continued reductions in Scope 3 emissions intensity in line with targets
• Focus on achieving measurable reductions aligned with science-based targets (SBTi validated April 2024)

Approach to evaluation

The company evaluates outcomes through:

• Comprehensive tracking of achieved and expected reductions in GHG emissions
• Meticulously tracking and assessing emission reductions for transparency
• Consistent assessment of strategy efficiency to drive continuous improvement

Targets related to climate change mitigation and adaptation

Nordic Semiconductor has established science-based targets validated by the Science Based Targets initiative (SBTi) in April 2024. The company has selected 2019 as the baseline year in accordance with SBTi criteria.

Near-term GHG Emission Reduction Targets (2030)

*Value added calculated as: value added = sales revenue—the cost of goods and services purchased from external suppliers

Long-term GHG Emission Reduction Targets (2050)

Interim Targets Referenced (2026)

The company also references interim targets aligned with SBTi-validated goals:

• 35% reduction of absolute scope 1+2 GHG emissions by the end of 2026 (vs 2019 base year)
• 35% reduction of scope 3 GHG intensity by the end of 2026 (vs 2019 base year)

Progress to Date (2024)

Scope 1+2 emissions:

• 2024 achievement: 94% reduction from 2019 baseline (market-based)
• Status: Already exceeds the 60% 2030 target

Scope 3 emissions:

• 2024 intensity: 16% reduction from 2019 baseline
• 2024 absolute: 22% increase from 2019 baseline (due to increasing production activities)
• The company expects continued increases in absolute Scope 3 emissions in the near future while achieving further reductions in Scope 3 emissions intensity

Target Scope and Coverage

Geographic/operational scope:

• Own operations: Parent company Nordic Semiconductor ASA and wholly owned subsidiaries
• Value chain: Upstream and downstream emissions included
• Primary focus areas: Office energy consumption (own operations) and outsourced manufacturing (value chain)

Key decarbonization levers:

• Renewable energy purchasing for offices (targeting 100% renewable electricity by 2030)
• Supplier engagement with manufacturing partners
• Sustainable procurement practices
• Energy-efficient product design (low-power IoT technology)

Monitoring and Review

Targets are monitored systematically through:

• Collection of energy and emissions data from own operations and supply chain
• Assessment of progress against 2019 baseline
• Regular review in management meetings
• Annual performance assessment
• Commitment to update targets at least every five years in line with SBTi criteria

Energy consumption and mix

E1-5 Energy consumption and mix

Scope and methodology:

Energy consumption data covers Nordic's own operations (office facilities) across the parent company Nordic Semiconductor ASA and its wholly owned subsidiaries. As a fabless semiconductor company, energy usage in own operations is only related to office work.

Revenue used for calculating energy intensity in 2024: USD 511,415 thousand.

Renewable energy is verified by Guarantees of Origin (GOO), International Renewable Energy Certificates (I-RECs), Taiwan Renewable Energy Certificates (T-RECs), Renewable Energy Guarantees of Origin certificates (REGO), and Renewable Gas Guarantees of Origin certificates (RGGO).

Self-generated renewable energy (43 MWh) consists of solar energy generated onsite at Nordic's head office in Trondheim.

More than 50% of Nordic's employees work in offices with green building certifications (BREEAM and LEED).

Gross Scopes 1, 2, 3 and Total GHG emissions

Reporting Approach

Nordic reports its GHG emissions across all three scopes following the European Sustainability Reporting Standards (ESRS) and guidance from the Greenhouse Gas Protocol. The GHG inventory covers Nordic's own operations (parent company Nordic Semiconductor ASA and its wholly owned subsidiaries), and upstream and downstream value chain. The base year for reporting is 2019. For consolidation of emissions in the GHG inventory, Nordic has used the operational control approach as outlined in the GHG Protocol.

Methodology Updates in 2024:

In 2024, Nordic made significant updates to its Scope 3 reporting and emission calculation methodologies to enhance accuracy:

• Included emissions from Scope 3 Category 10 (Processing of sold products)
• Incorporated emissions from the manufacturing of development kits under Category 1 (Purchased Goods and Services)
• Adopted more accurate supplier-specific emission factors from one of the key manufacturing suppliers, which have been verified by an external assurance body. These factors follow a cradle-to-gate approach.

These enhancements led to a 31% increase in reported Scope 3 emissions compared to prior 2023 disclosure. To ensure consistency and comparability with prior reporting periods, Scope 3 emissions have been retrospectively recalculated until the 2019 base year.

Scope 1 GHG Emissions

Scope 1 emissions include all direct emissions from the Group and its operations. As a fabless semiconductor company, Nordic controls and owns very few GHG sources. Scope 1 emissions are minor and generated only in abnormal situations. Data for Scope 1 emissions is collected annually in the form of service reports from 3rd party service providers. Emissions are calculated using IPCC emission factors.

Scope 2 GHG Emissions

Nordic's Scope 2 emissions include indirect GHG emissions from consumed electricity and heating in offices.

Emissions are calculated using location-based and market-based methods. Emission factors are derived from established sources such as countries' governmental pages, the Association of Issuing Bodies (AIB), and, where applicable, directly from energy providers.

In 2024, Nordic purchased renewable energy for offices, verified by Guarantees of Origin (GOO), International Renewable Energy Certificates (I-RECs), Taiwan Renewable Energy Certificates (T-RECs), Renewable Energy Guarantees of Origin certificates (REGO), and Renewable Gas Guarantees of Origin certificates (RGGO). In 2024, 95% of the energy used in offices originated from renewable energy sources.

Scope 3 GHG Emissions by Category

Nordic reports GHG emissions data on Scope 3 Categories 1-12. Categories 13-15 are not applicable to the business and are thus excluded from reporting. 95% of Scope 3 emissions is calculated using primary data obtained from suppliers or other value chain partners.

Category-specific methodology notes:

• Category 1: Calculated using hybrid method for outsourced manufacturing (supplier-specific emission factors and Nordic's production records) and spend-based method for other purchased goods and services (using economic value and emission factors from Defra, BEIS, EPA, Climatiq).
• Category 2: Based on Nordic's financial reports. Calculated using average-spend-based method with emission factors from Defra, BEIS, EPA, and Climatiq.
• Category 3: Calculated using average-data method with Well-To-Wheel (WTW) emission factors for purchased fuel, electricity, and heat, and T&D factors for purchased electricity and heat (Defra).
• Category 4: Uses distance-based method with shipping data from transport company and Well-To-Tank (WTT) and Tank-To-Wheel (TTW) emission factors for freight (Defra).
• Category 5: Calculated using quantified waste information from major offices, extrapolated to all Nordic sites, with average-data method and emission factors from Climatiq.
• Category 6: Based on air travel distance and travel class data from travel companies, calculated with Defra emission factors using distance-based method.
• Category 7: Based on employee survey results detailing transportation modes, commuting frequency, and distance. Calculated using Defra emission factors with average-data method.
• Category 8: Based on Nordic financial reports. Calculated using average-data method with emission factors from Climatiq.
• Category 9: Calculated using supplier-specific methods, point-of-sale data, and Defra WTT and TTW emission factors for freight.
• Category 10: Estimated using the article "Comparing Embodied Greenhouse Gas Emissions of Modern Computing and Electronics Products" (acs.org). Emissions per weight of electronics are averaged and extrapolated to total emissions of all Nordic's products sold.
• Category 11: Calculated using direct use-phase emissions method based on number of Nordic products produced per year and power consumption in normal operation, assuming customer end product powered on 100% during 5-year lifetime within realistic duty cycle. Uses global emission factors from IEA.
• Category 12: Based on assumption that all Nordic products sold are eventually recycled. Estimated that from units sold and eventually scrapped annually, equal parts will be recycled, incinerated, or sent to landfills. Calculated using waste-type-specific method with WEEE emission factors from Climatiq.

Total GHG Emissions

GHG Emission Intensity

Revenue used for calculating GHG emissions intensity in 2024: 511,415 USD 1000. This corresponds to the revenue reported in the financial statements for 2024.

Data Sources and Quality

GHG emissions data originates from Nordic's own data sources and data received from manufacturing suppliers. For some Scope 3 emission categories (especially categories 10-12), Nordic used estimates to calculate emissions. A more detailed description of the value chain is included under SBM-1 Strategy, business model, and value chain.

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in exemption statement

For this disclosure requirement, we have chosen a phase-in option for this year's reporting. We will begin reporting from next year.

TCFD framework alignment

Nordic has established a systematic approach to identifying climate risks, including potential future costs and new opportunities. The Group's climate risk and GHG emissions management follow the Task Force on Climate-Related Financial Disclosures (TCFD) framework.

Transition risks and opportunities related to the transition to a low-carbon economy

Risks

Policy and legal

Financial risks from customer GHG expectations:

Nordic faces financial risks related to customer expectations and regulatory requirements concerning GHG reductions. If Nordic's products and supply chain fail to meet customer demands for reduced GHG emissions or renewable energy sourcing, the company may face loss of business or strained relationships with key customers. Additionally, failure to meet renewable energy-related contractual requirements with customers could result in increased costs from carbon taxes, reduced access to capital, and reputational damage. Nordic's ability to manage these expectations is critical to maintaining market share and customer trust. Climate-related customer and regulatory risks are identified and assessed, and risk-mitigating activities are defined through Nordic's ERM process.

Technology

As a fabless company with outsourced production, the ability to adapt, invest, and support new energy-saving/GHG emissions reduction technologies lies with our manufacturing suppliers. Nordic's business model is not impacted by technological shifts towards a low-carbon economy, which allows us to take advantage of these advancements without carrying the risks ourselves.

Market

Semiconductor manufacturing consumes a significant amount of energy. The markets indicate the increased cost of energy alongside growing demand for products with a low carbon footprint. Nordic has taken actions to lower its carbon footprint by purchasing renewable energy verified by Guarantees of Origin (GOO), International Renewable Energy Certificates (I-REC), Taiwan Renewable Energy Certificates (T-REC), Renewable Energy Guarantees of Origin certificates (REGO), and Renewable Gas Guarantees of Origin certificates (RGGO). In 2024, Nordic's science-based GHG emission targets were approved by the Science Based Targets initiative (SBTi).

Opportunities

Resource/Product energy efficiency

Nordic strives to make its products more intelligent and efficient while continuously targeting to reduce the power consumption of products. Through low-power Internet of Things (IoT) solutions, Nordic has an opportunity to contribute to solutions for energy efficiency and energy management, attract new customers and increase demand for its products. These present an opportunity to capitalize on the market's demand for lower energy consumption in end-user devices and expand the energy-saving capabilities of our IoT solutions.

Opportunities in climate-resilient products

Nordic has the opportunity to develop and market products and services that support customers' efforts to adapt to climate change impacts. This could include climate-resilient technologies, such as smart sensors, cellular IoT and energy harvesting, and infrastructure designed to withstand extreme weather or changing environmental conditions. Such innovation helps businesses prepare for climate risks, strengthen customer relationships, and open new revenue streams. As more sectors recognize the importance of resilience, demand for such solutions is expected to grow.

Energy source

Nordic is working to increase the use of renewable energy and reduce GHG emissions in its offices. In our European offices, most of the energy comes from renewable sources. More than 50% of our employees work in energy-efficient buildings with green-building certifications like BREEAM and LEED. Outsourced manufacturing partners are focused on implementing new energy-saving measures to increase energy efficiency and use of renewable energy in the production process.

Policies related to pollution

Nordic has identified material pollution impacts including air emissions in the production process, hazardous substances in products, and air pollution from transportation of products.

Environmental Impact Reduction policy

Key content and principles:

• Addresses air emissions in the production process, hazardous substances in products, and air pollution from the transportation of products
• Commitment to environmental protection and pollution prevention and control
• Sets requirements for identifying, controlling, and monitoring pollution sources within Nordic's operations
• Adopting measures to prevent air, water, and soil pollution
• Encourages waste reduction and promotes reuse and recycling
• Aims to minimize the use of substances of concern and replace substances of very high concern by promoting the adoption of safer alternatives or technologies where technically and economically feasible
• Mandates compliance with applicable requirements and customer commitments
• Ensures that suppliers meet Nordic's standards for pollution prevention, as well as report and handle protocols for pollution incidents and emergency situations

Governance and oversight:

• Implementation falls under the accountability of the Chief Executive Officer

Link to international standards:

• Adheres to internationally recognized standards, such as ISO 14001 for environmental management

Stakeholder consideration:

• Policy development informed by consideration of interests of key stakeholders, including regulatory bodies, customers, and suppliers
• Informed by direct engagement sessions with stakeholders and feedback mechanisms, including surveys

Public availability:

• Available to all employees and stakeholders through the company website, intranet platforms, and distributed internal communications

Monitoring and implementation:

• Training programs and regular updates ensure continuous awareness and understanding among employees, with a focus on roles with interfaces to suppliers
• Strengthened environmental questionnaire systematically distributed to all manufacturing suppliers to evaluate environmental impact and ensure adherence to latest standards
• Regular monitoring and analysis of pollution data collected from suppliers to track policy effectiveness

Actions and resources related to pollution

Strengthened environmental questionnaire for suppliers

Action description: Nordic has strengthened its environmental questionnaire to better assess pollution of air, water, and soil, as well as the use of substances of concern and substances of very high concern in manufacturing operations.

Scope: Upstream value chain (manufacturing suppliers)

Time horizon: Implemented during 2024

Implementation: The updated questionnaire has been systematically distributed to all manufacturing suppliers to evaluate the environmental impact of supplier operations and ensure adherence to the latest environmental standards.

Link to policy: Supports pollution prevention policy and environmental standards compliance.

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Hazardous Substances Specification for Suppliers

Action description: Manufacturing suppliers are required to sign and adhere to a declaration confirming their compliance with requirements outlined in the Hazardous Substances Specification for Suppliers.

Scope: Upstream value chain (manufacturing suppliers)

Coverage: The specification outlines requirements for substances including:

• Volatile organic compounds (VOC)
• Ozone-depleting substances (ODC)
• Substances of very high concern (SVHC)

Maintenance: The specification is regularly reviewed and updated to ensure alignment with applicable requirements.

Link to policy: Upholds standards for the use of hazardous substances and pollution prevention.

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Product testing for hazardous substances

Action description: Continuous testing of products to ensure the absence of hazardous substances.

Scope: Own operations (product testing)

Implementation:

• Each product is tested for all restricted and banned substances
• Material composition confirmed through independent third-party testing
• Material composition reports and hazardous substance testing certificates available on company website (https://docs.nordicsemi.com/)

Link to policy: Ensures compliance with hazardous substance restrictions and pollution prevention standards.

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PFAS-free material qualification program

Action description: Program for qualifying PFAS-free material for existing and future CSP (Chip Scale Package) product portfolio.

Background: Per- and polyfluoroalkyl substances (PFAS) are extremely persistent in the environment ("forever chemicals") and are currently used in Nordic products delivered as CSP packages. In response to increasing concerns and restrictions, Nordic is qualifying PFAS-free alternatives.

Scope: Own operations and upstream value chain (product design and manufacturing)

Time horizon: Ongoing program continued in 2024

Methodology:

• Identifying all existing CSP products containing PFAS
• Qualifying PFAS-free alternatives for the products
• Collaboration with manufacturing suppliers to ensure effective transition away from PFAS materials

Expected outcomes: Support efforts to ban PFAS use and minimize potential release and accumulation in air, water, and soil.

Link to policy and targets: Aligns with policy objectives for pollution prevention and strategy to reduce hazardous substances. Links to target for PFAS-free material qualification covering all CSP products (see E2-3).

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Training programs on environmental requirements

Action description: Training programs and regular updates to ensure continuous awareness and understanding among employees.

Scope: Own operations

Focus: Roles with interfaces to suppliers

Resources (non-financial): Employee training and awareness programs

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Collaboration with suppliers on air emissions control

Action description: Collaboration with manufacturing suppliers to ensure they meet pollution prevention standards and implement appropriate measures to control and reduce air emissions.

Scope: Upstream value chain (manufacturing suppliers)

Note: As a fabless semiconductor company, Nordic does not have direct control over air emissions generated in manufacturing processes. No specific targets set for air emissions in production process.

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Monitoring air pollution from product transportation

Action description: Complete mapping of distributor partners to track effectiveness of policy and actions related to air pollution from transportation.

Scope: Downstream value chain (distribution)

Time horizon: Completed in 2024

Note: Transportation operations are managed by distributors; Nordic does not have direct control. No specific targets established for air pollution from transportation.

Targets related to pollution

PFAS-free material qualification

Target description: PFAS-free material qualification for CSP products in Nordic's product portfolio

Target metric: Percentage of CSP products qualified as PFAS-free

Target value: 90% of CSP products qualified as PFAS-free

Target year: 2025

Baseline year: Not explicitly stated (qualification program started in 2023)

Baseline value: Not disclosed

Scope: Own operations - covers all CSP products in Nordic's product portfolio

Type: Absolute target (percentage of product portfolio)

Validation: Internal target, approved by the Executive Management Team

Progress to date: Qualification program started in 2023. PFAS-free material is progressively being incorporated into production processes. Specific percentage achieved by end of 2024 not disclosed.

Supporting actions:

• Identifying all existing CSP products containing PFAS
• Qualifying PFAS-free alternatives for these products
• Collaboration with manufacturing suppliers to ensure effective transition away from PFAS materials

Strategic alignment: The target supports pollution prevention policy objectives and aligns with anticipated future regulations to restrict the use of PFAS. It reinforces commitment to ensuring compliance with evolving regulatory standards and customer requirements.

Air pollution

No specific targets have been set for:

• Air emissions in the production process (fabless model - Nordic does not have direct control)
• Air pollution from transportation of products (managed by distributors)

Nordic collaborates with suppliers to ensure pollution prevention standards are met and has undertaken comprehensive mapping of distributor partners to track policy effectiveness.

Semiconductor production is known to cause pollution. Potential pollution of air, soil and water in upstream operations due to raw materials mining, smelting, and semiconductor manufacturing is strictly regulated by authorities and adherence to regulations is strictly monitored by the Group's customers. Failure to meet regulatory and/or customer requirement frameworks related to substances of concern may negatively affect market access and customer's interest towards the Group's products.

Nordic addresses pollution risks through strict adherence to regulatory frameworks and customer requirements related to substances of concern in the semiconductor manufacturing process.

Substances of concern and substances of very high concern

Nordic has identified substances of concern and very high concern based on the criteria outlined in Articles 57 and 59 (1) of the REACH Regulation, as well as the hazard classification specified in Part 3 of Annex VI of the CLP Regulation. The presence of these substances in Nordic products is identified through supplier disclosures. The metrics presented below for the substances have not been validated by external bodies other than our assurance provider.

Monitoring and management approach

Global environmental regulations, industry standards, and customer requirements impose restrictions on substances deemed hazardous to the environment. To uphold our standards for the use of hazardous substances and pollution prevention, manufacturing suppliers are required to sign and adhere to a declaration confirming their compliance with the requirements outlined in the Hazardous Substances Specification for Suppliers. This specification outlines requirements for substances such as volatile organic compounds (VOC), ozone-depleting substances (ODC), and substances of very high concern (SVHC). The specification is regularly reviewed and updated to ensure alignment with applicable requirements.

We continuously test our products to ensure the absence of hazardous substances. Each of our products is tested for all restricted and banned substances. Material composition of Nordic products is confirmed through independent third-party testing. Material composition reports, and hazardous substance testing certificates for all products are available on the company website (https://docs.nordicsemi.com/).

Nordic is dedicated to conducting its operations in a way that prioritizes the protection of human health, safeguards ecosystems, and actively advances environmental sustainability. Through the reinforcement of its environmental policy and focus on pollution prevention, the Group is committed to systematically identifying, assessing, and addressing pollution sources, as well as ensuring that its operations align with wider sustainability and environmental goals and related regulations.

Hazardous substances in products

Certain hazardous substances, such as NMP, PFAS, boron oxide, and lead oxide, are present in Nordic products. Toxic characteristics of these substances pose potential risks to health and the environment, including pollution and harm to living organisms. While the quantities of these substances in products are relatively small, their characteristics, such as bioaccumulation and persistence, can lead to significant long-term health and environmental consequences.

Policies related to water and marine resources

Environmental Impact Reduction policy

Nordic Semiconductor has an Environmental Impact Reduction policy that includes provisions for water, covering all geographies in which the company operates.

Governance and accountability:

• The Chief Executive Officer is accountable for the implementation of the policy

Scope:

• Covers water consumption, reuse and recycling, wastewater treatment, and pollution prevention in suppliers' operations
• Applies to all geographies in which Nordic operates

Key content and principles:

• Work proactively to reduce any negative impact on the environment
• Incur no loss of business or profitability due to incidents or issues related to disturbance to health or the environment
• Suppliers are required to have measures in place to manage their water consumption and wastewater treatment
• Suppliers must maintain contingency measures for potential shortage incidents

Alignment with international standards:

• The Environmental Impact Reduction policy adheres to internationally recognized standards such as ISO 14001 for environmental management

Stakeholder involvement:

• The policy has considered the interests of key stakeholders, including regulatory bodies, customers, and suppliers
• Direct engagement sessions with stakeholders and feedback mechanisms, such as surveys, have informed policy development

Implementation and monitoring:

• Water management and contingency plans have been addressed with key suppliers directly and with all tier-1 subcontractors through the distribution of an environmental survey
• In 2024, Nordic focused on monitoring water consumption in the value chain
• Water consumption data are regularly reported by subcontractors for monitoring, assessment of risks, and contingency planning
• Risk assessments are carried out using external resources such as WWF Water Risk Filter
• In 2024, out of 13 companies approached for water reporting, 11 replied, with 8 providing quantitative water consumption data

Public availability:

• Not explicitly disclosed in the excerpts

Marine resources:

• No material impacts, risks, or opportunities have been identified addressing marine life, so the policy focuses only on water aspects

Actions and resources related to water

Overview

In line with the Environmental Impact Reduction policy, Nordic has focused in 2024 on monitoring water consumption in the value chain. The implementation of the action plan related to water resources does not require significant operational expenditures (OpEx) and/or capital expenditures (CapEx).

Systematic monitoring of water usage in outsourced manufacturing

Action description: The main action in 2024 has been to establish systematic monitoring of water withdrawal, consumption, treatment, and discharge for outsourced manufacturing.

Scope: Upstream value chain - most of Nordic's outsourced production takes place in Southeast Asia, which is at medium physical water risk per WWF.

Time horizon: Short-term (2024 baseline establishment); medium-term (comprehensive targets by 2026)

Resources allocated:

• External resources such as WWF Water Risk Filter for risk assessments
• Partnership with Position Green planned in 2025 to develop metrics and targets
• Water consumption data regularly reported by subcontractors

Expected outcomes:

• Reliable and quantifiable data about outsourced production processes' water usage
• Insight into suppliers' potential water pollutants
• Enhanced ability to identify and assess water-related risks, particularly in water-stressed regions
• Better understanding of required contingency measures for facilities in medium to high-water-risk areas

Progress: In 2024, out of 13 companies approached, 11 replied, with 8 providing quantitative water consumption data. This 2024 data will serve as the baseline period.

Link to policy/target: Aligns with Environmental Impact Reduction policy. Targets to be implemented by 2026, focusing on supplier engagement and water-related risk management, including supplier emergency response plans.

Stakeholder engagement: Water management and contingency plans have been addressed with key suppliers directly and with all tier-1 subcontractors through the distribution of an environmental survey. Stakeholders are located in the Philippines, Taiwan, Germany, China, Singapore, Poland, and Malaysia.

Targets related to water

Nordic Semiconductor has not yet set specific quantified targets related to water resources.

Current Status

• Application of transitional provisions: Nordic is applying the transitional provisions as allowed under ESRS E3 for metrics related to value chain water consumption
• Baseline establishment: 2024 data will serve as the baseline period. Of 13 companies approached for water reporting in 2024, 11 replied, with 8 providing quantitative water consumption data
• Target timeline: The company aims to implement comprehensive targets by 2026

Planned Target Focus Areas

• Supplier engagement
• Water-related risk management
• Supplier emergency response plans

Interim Effectiveness Tracking

While developing targets, Nordic is tracking effectiveness through supplier engagement process:

• In 2024: out of 13 companies approached, 11 replied (8 provided quantitative water consumption data)

Future Development

The company will work with Position Green in 2025 to develop water-related metrics and targets, with continued monitoring and assessment of water usage throughout the value chain.

Water consumption

Materiality and scope

Nordic Semiconductor operates as a fabless semiconductor company. Water consumption in Nordic's own operations is deemed not material due to the fabless structure and low water consumption volumes in office locations.

Material negative impact has been identified in the upstream value chain related to high water consumption in semiconductor production. Semiconductor manufacturing uses water for cooling, cleaning, and mechanical operations (dicing and sawing). The semiconductor industry consumes approximately 1 liter of water per chip produced.

Geographic scope and water stress

Most of Nordic's outsourced production takes place in Southeast Asia, which is at medium physical water risk per WWF Water Risk Filter. Manufacturing facilities are located in:

• Taiwan (water-stressed areas)
• Philippines (significant water withdrawal)
• Singapore (near marine ecosystems)
• China, Malaysia

Water consumption data (2024 baseline)

Nordic distributed environmental surveys to tier-1 subcontractors in 2024 to establish baseline measurements:

• 13 companies approached for water reporting
• 11 suppliers replied
• 8 suppliers provided quantitative water consumption data
• 3 suppliers unable to provide quantitative data

No specific water consumption volumes (m³ or megalitres) are disclosed in the 2024 sustainability statement. The company states this 2024 data will serve as the baseline period.

Water recycling and reuse

Nordic notes that suppliers have implemented water treatment and recycling mechanisms, but the overall demand for water remains substantial. No quantitative data on recycled or reused water volumes or percentages are disclosed.

Water withdrawal and discharge

No data disclosed on:

• Total water withdrawal by source (surface water, groundwater, municipal supply)
• Total water discharge by destination
• Water intensity metrics

Targets and future disclosure

Nordic is applying transitional provisions under ESRS E3 for metrics related to value chain water consumption. The company has not yet set specific targets as it is establishing baseline measurements. Nordic aims to:

• Implement comprehensive targets by 2026
• Work with Position Green in 2025 to develop metrics and targets
• Focus on supplier engagement and water-related risk management
• Develop supplier emergency response plans

Monitoring approach

Water consumption data are regularly reported by subcontractors for monitoring, risk assessment, and contingency planning. Risk assessments use external resources such as WWF Water Risk Filter.

Policies related to resource use and circular economy

Environmental Impact Reduction policy

Nordic has implemented an Environmental Impact Reduction policy that provides a framework for promoting sustainable resource use and fostering circular economy principles across the company's own operations and manufacturing suppliers.

Scope:

• The company's own operations and manufacturing suppliers
• Addresses all the material impacts, risks, and opportunities (IROs) as listed in E5-ESRS 2 SBM-3

Key content and principles:

• Explores and adopts innovative solutions for reducing dependence on virgin resources
• Prioritizes the procurement of sustainable and responsibly sourced materials
• Integrates recycled and recyclable materials into product designs and packaging where relevant
• Promotes practices that minimize waste in production processes
• Ensures responsible recycling of products

Public availability: For details on the implementation responsibility of the Environmental Impact Reduction policy, standards committed through the policy, interest of stakeholders in setting the policy, and availability of the policy, the company refers to E2-1 Policies related to pollution (not included in the provided excerpts).

Implementation and monitoring: The company monitors implementation through regular environmental surveys with manufacturing suppliers, collecting waste-related data to understand waste generated in outsourced production and suppliers' waste handling processes. This action was implemented in 2024 as part of the annual environmental survey with manufacturing suppliers, using resources allocated through the Quality and Supply Chain departments.

Actions and resources related to circular economy

Waste management in production

Scope: Upstream value chain (manufacturing suppliers)

Description: As a fabless semiconductor company, Nordic works continuously with manufacturing suppliers to minimize waste from production and ensure responsible waste handling. The company regularly monitors and analyzes waste data collected from suppliers.

Time horizon: Ongoing (2024 baseline year)

Resources allocated: No significant operational (OpEx) and/or capital (CapEx) expenditures required.

Expected outcomes/KPIs: Track effectiveness of policy and action through waste data monitoring using 2024 as baseline year.

Link to policy: Aligned with Environmental Impact Reduction policy.

Recycled plastic material for Nordic products packaging

Scope: Upstream value chain (assembly suppliers)

Description: Nordic has requested assembly suppliers to further increase the use of recycled plastic in packaging, specifically for device containers (reels).

Time horizon: Ongoing (2021 baseline year)

Resources allocated: No significant operational (OpEx) and/or capital (CapEx) expenditures required.

Expected outcomes/KPIs:

• Share of containers made from recycled plastic
• Total volume of recycled plastic used in production
• 2024 results: 46% of device containers made from recycled plastic; 42% of total plastic weight (16,444 kg out of 39,019 kg) was recycled plastic
• Baseline (2021): 0% recycled plastic usage

Link to policy: Aligned with Environmental Impact Reduction policy and commitment to reducing reliance on virgin plastic resources.

Limitations: Some customers still require devices to be packed in trays for which no recycled plastic version is available, impeding use of recycled plastic for a bigger portion of production volumes.

Circular product design

Scope: Own operations (product development)

Description:

• Products designed with emphasis on reliability (durability and long-lasting performance) with minimum expected operational lifespan of 9 years (based on 1000 hour HTOL test with acceleration factor 78.6, using 0.7 eV activation energy and 55°C use temperature)
• Ultra-low power solutions with very low operating voltages and currents
• Firmware updates over the air capability, allowing products to remain functional and up-to-date without requiring remanufacturing
• Product development and reliability testing processes go beyond industry baseline (JEDEC)
• Products contain recyclable metals in components that can be recovered and repurposed
• Packaging for development kits made of 100% recyclable FSC-certified cardboard
• Reels made from recycled plastic and are 100% recyclable

Time horizon: Ongoing

Resources allocated: Not specified

Expected outcomes/KPIs: Enhanced product lifetime, minimized waste and resource consumption.

Link to policy: Commitment to advancing circular economy and sustainable practices.

Note: Products are not designed for repair. Recycled materials are not suitable for nanometer-scale technology production due to high purity requirements. Biological materials are not used.

Targets related to circular economy

Nordic has not set any measurable targets for resource use and circular economy. The company states this needs further groundwork to ensure that any established goals are meaningful, measurable, and achievable within clear timeframes.

Monitoring activities (not formal targets)

While no formal targets are set, Nordic monitors the following metrics related to recycled plastic usage in device packaging:

• Metric: Share of containers made from recycled plastic and total volume of recycled plastic used in production
• Baseline year: 2021
• Scope: Device packaging in own operations (assembly suppliers)
• Progress monitoring: Ongoing since 2022 through the plastic reduction program

For waste management at manufacturing suppliers' sites (material impact but outside direct control):

• Baseline year for monitoring: 2024
• Scope: Upstream value chain (manufacturing suppliers)
• No targets set due to being outside direct control

E5-4 Resource inflows

In the semiconductor manufacturing process, the primary raw materials used include silicon and a range of essential metals, such as aluminum, copper, tin, and silver. These raw materials are integral to the creation and functionality of semiconductor devices. The manufacture of wafers for Nordic products involves trace amounts of rare earth elements, however, these are not contained in the final products.

During 2024, the manufacturing of Nordic products encompassed approximately 32 tons of material, including all materials, substances, and components used in the products. This metric is based on product material composition reports, which provide accurate product weight data and Nordic's internal production records for 2024.

Semiconductor production requires materials of high purity to meet the high demands of nanometer-scale technology nodes. Therefore, recycled materials are not suitable for Nordic products. Biological materials are not used in the production of Nordic products or packaging.

Plastic in device containers

By the end of 2024, the share of device containers made from recycled plastic was 46%. The total weight of plastic used for device containers in 2024 was 39,019 kg, of which 16,444 kg (42%) was recycled plastic. Recycled plastics usage data is tracked and verified through supplier documentation. The methodology involves cross-referencing supplier-provided data on recycled materials with Nordic's internal procurement records to ensure accuracy and consistency.

For Nordic's development kits, the packaging is made of Forest Stewardship Council (FSC) certified, recyclable cardboard. FSC certification for the packaging material ensures that the cardboard is sourced from responsibly managed forests.

In the semiconductor manufacturing process, significant volumes of water are used. For detailed information on water resources in outsourced manufacturing, please refer to Chapter E3: Water and Marine resources.

The metrics related to our resource inflows have not been validated by external bodies other than the assurance provider.

46% of device containers made of recycled plastic

Nordic has incorporated recycled plastic into component reels and device containers as part of its circular economy initiatives, demonstrating commitment to reducing resource consumption and waste in packaging materials.

Waste

Waste from production (upstream)

Waste is generated during the semiconductor manufacturing process from the use of materials and components. This waste includes offcuts and defective products, which manufacturing suppliers manage through established recycling processes. Nevertheless, production waste still contributes to Nordic's overall environmental footprint.

As a fabless semiconductor company, Nordic does not directly control manufacturing waste generation. The company's business resilience depends on continuous improvement in manufacturing efficiency and waste reduction by suppliers.

Waste from packaging materials

Handling waste from packaging equipment by Nordic's direct customers and distributors can have environmental impacts. Improper waste management, such as related to incineration, landfilling, or recycling, may lead to the release of pollutants. While some recycling efforts are in place, effective waste management and continued use of plastic packaging materials remain challenges.

Waste in own operations

In Nordic's own operations, the company uses small amounts of laboratory chemicals, the majority of which are recycled. The small remaining amount does not produce significant pollutants that could impact air, water, or soil quality.

Waste quantification - Scope 3 Category 5

Nordic includes emissions related to third-party disposal and treatment of waste generated in operations in its GHG inventory (Scope 3 Category 5). GHG emissions are calculated using quantified waste information from major offices for the reporting year and extrapolated to cover all Nordic sites. This category represents a very small part of Nordic's GHG inventory (less than 0.1% in 2024).

E-waste from end-user disposal

Downstream customers assemble Nordic's components into final products. When end-users or customers improperly dispose of electronic waste (e-waste), hazardous chemicals might be released into the air and contaminate soil and water sources, especially if hazardous substances are incinerated or disposed of in landfills. While Nordic provides information on responsible waste handling through product data sheets, the company has limited control over how its products are disposed of at the end of their lifecycle.

End-of-life treatment - Scope 3 Category 12

Nordic estimates total expected end-of-life emissions from products sold annually, based on the assumption that all Nordic products sold are eventually recycled. The company does not have visibility into consumers' waste disposal behavior. Nordic estimates that from units sold and eventually scrapped annually, equal parts of units produced will be recycled, incinerated, or sent to landfills. The estimated emissions from this category represent a very small part of Nordic's GHG inventory (less than 0.1% in 2024).

Waste management approach

Nordic's Environmental Impact Reduction policy encourages waste reduction and promotes reuse and recycling. The policy sets requirements for identifying, controlling, and monitoring pollution sources within Nordic's operations. The policy mandates Nordic to ensure that suppliers meet its standards for pollution prevention and report and handle protocols for pollution incidents.

Policies related to own workforce

Nordic Semiconductor has established a comprehensive set of policies to uphold ethical standards and promote a safe, inclusive, and supportive work environment. These policies are guided by international frameworks and conventions such as the UN Global Compact, the UN Guiding Principles for Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the International Bill of Rights, and ILO core conventions.

Code of Conduct

Policy name: Code of Conduct

Scope: Binding for all employees in Nordic; entities and individuals the company does business with are expected to comply as well.

Key content / principles:

• Commitment to conducting business with integrity and upholding high ethical standards
• Fostering a respectful, inclusive work environment
• Establishes commitments and expectations regarding human and labor rights, health and safety, security, diversity, equity and inclusion, and personal conduct
• Addresses identified impacts including gaps in representation and equal opportunity, and a decentralized approach to skill development

Governance and oversight:

• Approved by the Board of Directors
• Chief Executive Officer is accountable for implementation

Public availability: Published on the company's Intranet

Links to international standards:

• UN Global Compact
• UN Guiding Principles for Business and Human Rights
• OECD Guidelines for Multinational Enterprises
• International Bill of Rights
• ILO core conventions

Monitoring implementation:

• Mandatory e-learning implemented to ensure all employees are familiar with and understand the Code
• In 2024, more than 95% of all employees and Executive Management Team (EMT) members completed this training

Equal Opportunities Policy

Policy name: Equal Opportunities Policy

Scope: Applies to all members of the company's own workforce; covers recruitment, hiring, promotion, training, compensation, and all other aspects of employment.

Key content / principles:

• Amends Chapter 2 of the Code of Conduct ("Protecting our workplace, people, and culture")
• Reinforces commitment to creating equal opportunities for everyone, regardless of gender, race, age, ethnicity, gender identity, sexual orientation, abilities, religion, socioeconomic status or cultural background
• Outlines specific commitment to fostering a workplace that embraces diversity through fair and inclusive recruitment practices
• Promoting equity in daily practices through addressing systemic barriers
• Continuing to ensure equitable pay
• Advancing inclusion by supporting initiatives for underrepresented groups

Governance and oversight:

• Board of Directors has overall oversight
• People & Compensation Committee monitors implementation
• EMT and senior leaders are accountable for embedding equal opportunities principles into business operations
• People managers execute the strategies in their teams
• People & Communication department develops and maintains supporting processes, tracking key metrics and ensuring consistent application

Monitoring implementation:

• Regular reviews of workplace practices
• Soliciting feedback from employees on diversity, equity, and inclusion efforts
• Annual reporting on progress to all stakeholders

Health and Safety / Safety Management System

Policy name: Safety management system (serves as workplace accident prevention policy and management system)

Scope: Covers all operations and all workers on site.

Key content / principles:

• Commitment to providing a safe and healthy work environment through proactive identification, assessment, and management of workplace risk

Governance and oversight: Not explicitly stated for this policy

Certification:

• In Norway and Finland, the system is certified under ISO 45001 for Health & Safety
• Working towards extending certification in other countries of operation

Human Rights Policy

Policy name: Human Rights Policy

Scope: Applies to all employees in Nordic; suppliers and business partners are expected to adhere to the spirit and intent of this policy by complying with all relevant laws and regulations.

Key content / principles:

• Amends the Code of Conduct
• Outlines commitment to respecting and upholding human rights and decent working conditions in operations and throughout the value chain
• Explicitly addresses human trafficking, forced or compulsory labor, and child labor
• Provides framework for the human rights program, addressing all identified material impacts through systematic due diligence
• Includes guidance on human rights due diligence processes and approaches to identifying, preventing, and mitigating potential human rights impacts throughout the value chain

Governance and oversight:

• Adopted by the Board of Directors
• Chief Executive Officer is accountable for implementation

Public availability: Available on the public website and Intranet

Links to international standards:

• Complements the Corporate Social Responsibility Policy
• Aligns with the requirements of the Norwegian Transparency Act
• UN Guiding Principles for Business and Human Rights
• ILO Declaration on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises

Monitoring implementation:

• Awareness raised among employees through Code of Conduct training
• Annual reporting on commitments, actions taken, and targets in ESRS Sustainability report
• Employees and other stakeholders can report breaches through confidential reporting mechanisms and grievance procedures
• Monitoring of adherence through tracking cases raised through internal grievance mechanisms and regular audits of suppliers
• Regular engagement with key stakeholders who could be impacted by operations
• No severe human rights incidents involving own workforce reported during the period

Learning and Development Policy

Status: The organization does not currently maintain a formal Learning and Development Policy. Training needs have been managed on an as-needed basis at the team- or project level. However, given rapid growth, the company recognizes the importance of a more structured approach and is currently working on a comprehensive L&D policy to support long-term skill and career growth among the workforce, which they aim to implement in 2025.

Taking action on material impacts on own workforce

Nordic Semiconductor has established processes to engage with the workforce to assess whether actions to mitigate negative impacts are effective, particularly through employee surveys (to be enhanced in 2025) and regular consultations with employee representatives.

Managing the transformation

Action: Managing the workforce transformation and downsizing process

• Scope: Own operations
• Description: Balancing financial sustainability objectives with measures that mitigate impact on employees during transformation and downsizing. The transformation aims to respond to customer needs more efficiently, accelerate innovation cycles, and maintain competitive edge.
• Time horizon: Ongoing (2024-2025)
• Resources allocated:
  • Severance packages covering 100% of affected roles
  • Outplacement services to aid transition into new employment
  • Access to counseling services
  • E-learning sessions on Change Management
• Approach:
  • Transparent communication through regular town halls and all-hands meetings
  • Regular engagement with employee representatives throughout the transformation
  • Task forces formed to involve employees in shaping aspects of the process
  • Expanded engagement survey with specific questions on transformation experiences
• Plans for 2025: Continue supporting employees with training for working effectively within new structure, including ongoing leadership training and team development initiatives

Employee feedback and engagement mechanisms

Action: Shift from annual engagement surveys to regular pulse surveys

• Scope: Own operations
• Description: Moving from one large annual engagement survey to regular pulse surveys to gauge employee sentiment more frequently and address emerging needs promptly
• Time horizon: Starting 2025
• Expected outcomes: More timely insights to guide future actions, particularly as latest engagement survey was conducted before downsizing process began
• Linkage: Addresses identified underrepresentation of women as a potential negative impact through gender perspective analysis in surveys
• Current performance: 80.7% of employees formally completed annual appraisal conversations in 2024

Establishing a structured approach to skill development

Action: Implementing e-learning infrastructure

• Scope: Own operations (global workforce)
• Description: Introduction of e-learning tools to provide equal access to learning opportunities regardless of location, enabling centralized, company-wide training available online
• Time horizon: 2024-2025
• Expected outcomes: Enable employees to access training across different time zones, work schedules, and personal learning preferences; support inclusive development for global workforce

Action: Defining and tracking competencies

• Scope: Own operations
• Description: Making general competency registry more user-friendly, agile, and effective; formally defining relevant competencies beginning with a leadership competency framework
• Time horizon: 2024-2025
• Approach:
  • Conducted needs assessment gathering feedback from users across various levels
  • Creating leadership competency framework to guide training programs and offer equal development opportunities
• Plans for 2025:
  • Continue strengthening competency management approach by mapping and registering existing competencies
  • Gradually roll out leadership training framework, starting with comprehensive onboarding program for new leaders
  • Improve access to learning opportunities by extending e-learning course offerings
  • Centralize administration of learning events within internal LMS
• Expected outcomes: Ensure employees develop skills that directly contribute to long-term business success; enhance sustainability reporting on development efforts

Promoting strategic talent development and career planning

Action: Developing a leadership pipeline framework

• Scope: Own operations
• Description: Identifying, nurturing, and preparing top talent for future leadership and critical business roles
• Time horizon: Long-term initiative started in 2024
• Approach: Framework will outline criteria for leadership pipeline
• Linkage: Complements skill development initiatives, building on leadership competency framework

Targets related to own workforce

Nordic Semiconductor has disclosed the following targets related to its own workforce:

Managing the transformation

Employee engagement - Transformation & change score

• Target metric: Overall Transformation & change score (employee engagement survey)
• Target value: 7.0
• Target year: End of 2025
• Baseline year: 2024
• Baseline value: 6.6
• Type: Internal score-based target
• Scope: Own workforce

Employee engagement - Overall Engagement score

• Target metric: Overall Engagement score (employee engagement survey)
• Target value: 7.7
• Target year: End of 2025
• Baseline year: 2024
• Baseline value: 7.3
• Type: Internal score-based target
• Scope: Own workforce

Targets under development

The company has identified the following areas where targets are being developed but not yet established:

Talent development and leadership pipeline

• Goal: Build a robust leadership pipeline that prioritizes internal growth
• Status: Long-term project in process of defining aspirations, strategy, and baselines
• Timeline: Targets to be established by end of 2025

Gender parity and equal opportunities

• Goal: Align promotion rates for women with overall representation in workforce and improve gender representation in leadership roles
• Status: Awaiting results of Equal Opportunities Analysis in 2025 to define clear baselines and targets
• Timeline: Targets to be established in 2025

Structured approach to skill development

• Goal: Monitor progress through Learning & Growth scores
• Status: In development, no specific targets disclosed yet

58 nationalities represented in Nordic's workforce across 22 countries

As of year-end 2024, the Group has offices in Trondheim and Oslo (Norway); Beijing, Shanghai, Shenzhen, and Hong Kong (China); Oulu, Espoo, Tampere, and Turku (Finland); Düsseldorf (Germany); Hyderabad (India); Tokyo (Japan); Manila (the Philippines); Krakow and Wroclaw (Poland); Singapore (Singapore); Seoul (South Korea); Stockholm and Lund (Sweden); Taipei, Taoyuan, and Hsinchu (Taiwan); Bristol and Hatfield (UK); and Seattle and San Diego (USA).

Nordic remains committed to maintaining a highly skilled, diverse, and inclusive workforce comprising a multitude of different nationalities. With an average tenure of more than six years, the Group's global workforce of close to 1,400 people is well equipped for the task.

Characteristics of non-employees in the undertaking's own workforce

Non-employee workforce headcount

As of December 31, 2024, Nordic's workforce comprised 51 non-employees. These consist of contractors counted at the end of the year.

Methodology

The contractors are employed by third parties but engaged in employment activities with Nordic. The number is gathered from the company's HRIS as of December 31st, 2024.

This provides a snapshot of the use of non-employees in the Group. The downside of this is that the number fluctuates throughout the year and will not capture these fluctuations. The upside is that, by consistently reporting this number from the same date, Nordic will be able to see trend changes in the use of non-employees.

Contractor definition: A person hired through a third party on a time-limited contract.

Breakdown by type

Not disclosed. The company reports all 51 non-employees as "contractors" without further breakdown by specific contractor types (e.g., agency workers, self-employed).

21.1% female share of talents promoted into leadership positions

Nordic demonstrates commitment to gender diversity in leadership roles, with more than one in five leadership promotions going to female talents, supporting the company's diversity and inclusion objectives.

Social protection

Parental leave coverage

100% of employees are entitled to parental leave.

Parental leave = leave from work to take care of the newborn child in accordance with local law and legislation.

Retirement and pension coverage

Norway:

• Defined benefit pension plan: For members of the Group Management Team born before 1960 with more than 2 years of service before January 1, 2016, the retirement plan is unfunded and of the defined benefit type that provides a retirement benefit calculated based on number of years of credited service. At the end of 2024, the pension liability was USD 396,358.
• Defined contribution pension plan: All employees in Norway have a defined contribution pension plan since January 1, 2016. The main benefit is a contribution of 7% of salary up to 7.1 basis points (G) and 18% of salary between 7.1 and 12 basis points. In addition to this, the company offers a disability pension of approximately 66% of salary including estimated social security based on 40 years of full employment. In 2024, the cost of the defined contribution pension was USD 378,618, and the plan had 581 members.

Finland:

• Earnings-related pensions are financed with insurance contributions paid by employers and employee.

Poland:

• Employers and employee contribute to a social security plan including pensions and disability insurance. In addition, the company offers an employee capital plan (PPK) financed jointly by the employee, the employer, and the government.
• Each employee who retires is entitled to retirement and pension severance pay from the employer, regulated by the Polish Labor Code.

India:

• The company provides for gratuity, a defined benefit plan covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employee's last drawn basic salary per month, computed proportionately for 15 days' salary multiplied by the number of years of service.
• Defined contribution plan: Contributions are made to provident fund at the rate of 12% of basic salary. The contributions are made to registered provident fund administered by the government.

Training and skills development metrics

Disclosure Status

Nordic Semiconductor has chosen the phase-in option for S1-13 in 2024. As stated in the report:

"We have chosen the phase-in option for this year. As elaborated in S1-4, we plan to centralize our training reporting structure to be able to fully report on our efforts in skill development. We will report on this from next year onward."

Current Training Approach

The company notes that:

• Technical skill development is integrated into daily work, making upskilling agile and flexible
• Training needs have been managed on an as-needed basis at the team- or project level
• The organization does not currently maintain a formal Learning and Development Policy
• A comprehensive L&D policy is being developed for implementation in 2025

Planned Enhancements for 2025

Nordic is developing infrastructure to support structured training reporting:

• Implementing e-learning infrastructure for equal access to learning opportunities across global locations
• Mapping and registering existing competencies
• Rolling out a leadership training framework with onboarding program for new leaders
• Extending e-learning course offerings
• Centralizing administration of learning events within internal LMS

Quantitative Metrics

No quantitative metrics are disclosed for 2024 due to the phase-in option:

• Average training hours per employee: Not disclosed
• Average training hours by gender: Not disclosed
• Average training hours by employee category: Not disclosed
• Percentage of employees receiving performance and career development reviews: Not disclosed
• Total investment in training: Not disclosed

Work-life balance metrics

Entitlement and uptake of parental leave

100% of Nordic's employees are entitled to parental leave.

In 2024, 4% of employees took parental leave, of which 71% were men and 29% were women.

Definition: Parental leave = leave from work to take care of the newborn child in accordance with local law and legislation.

Compensation metrics

Pay gap

Nordic Semiconductor reports gender pay ratios calculated as the average across positions:

Within the R&D department in Norway specifically, the average salary in 2024 for women was 82% of the average salary for men. The average global salary for female employees in all departments was 75% of that of men, excluding executive management. Within executive management, the average salary for female employees was 74% of that of men.

The company notes that the general salary gap between women and men is explained by a larger share of men in senior positions, in addition to a higher proportion of men in customer-facing roles with higher salaries. Nordic also sees a predominance of women in junior and administrative positions, particularly in low-cost countries, where salary levels are below the Group average. This affects the ratio, for instance, in the Supply Chain department, where the company's main locations are in Asia.

Nordic states it is committed to monitoring and analyzing the gender pay ratio across the world, focusing both on diversity and roles while adhering to currently challenging local market practices.

Remuneration ratio

In 2024, the ratio of the highest-paid individual's annual total remuneration to the median annual total remuneration for all employees (excluding the highest-paid individual) was 8.41:1. This calculation includes base salary, bonuses, stock options, and other benefits.

Nordic continues to review its remuneration structures to ensure they remain competitive and fair while aligning with market practices and business strategy.

Incidents, complaints and severe human rights impacts

S1-17 Incidents, complaints, and severe human rights impacts

In 2024, we recorded four employee complaints through our Integrity Line and other grievance channels. There were no incidents of discrimination or harassment, no severe human rights incidents (such as forced labor, human trafficking, or child labor) connected to our own workforce, including no cases of non-respect of the UN Guiding Principles, ILO Declaration, or OECD Guidelines. There were no related fines or penalties during the reporting period.

Metrics

Grievance mechanisms

Employees and other stakeholders can report breaches of the Human Rights Policy and Code of Conduct, including human and labor rights breaches, through our confidential reporting mechanisms and grievance procedures.

Nordic has a zero-tolerance policy for retaliation against anyone who speaks up in good faith by raising a concern, reporting a suspected violation, or participating in an internal investigation. The Head of Compliance is responsible for regular reporting to the Chief Executive Officer and the Audit Committee of the Board.

All reports are taken seriously, ensuring sensitivity and, where possible, confidentiality. Upon receiving a grievance, a thorough due diligence process is conducted to collect and verify the facts about a case and, when necessary, implement corrective actions to address any negative impacts. Concerns are tracked in a case system and reported to the Audit Committee for monitoring.

Annual Engagement Survey feedback

In the annual Engagement Survey, feedback indicates that people have a strong belief that unethical and illegal behavior is not tolerated and feel generally comfortable reaching out and trusting the process that follows. However, the company recognizes the need to strengthen awareness of reporting channels.

Policies related to value chain workers

Nordic's approach to value chain workers is guided by several policies that address identified material impacts including labor rights and safety risks in the upstream supply chain, worker safety and forced labor risks in Tier 1 suppliers, gender disparities in manufacturing facilities, and working conditions for transport workers.

Corporate Social Responsibility Policy

Scope:

• Addresses the entire value chain
• Applies to labor practices, human rights, worker safety, and environmental responsibility across the value chain

Key content and principles:

• Prohibits forced labor, child labor, and human trafficking
• Ensures protection against retaliation for those reporting concerns of misconduct
• Aligns with the International Bill of Rights, core International Labour Organization conventions, and the UN Guiding Principles on Business and Human Rights
• Requires manufacturing suppliers to sign adherence to the RBA Code of Conduct, with an obligation to cascade these requirements to their next tier of suppliers
• Nordic does not maintain a separate supplier code of conduct; the RBA Code of Conduct serves as the supplier code of conduct
• Addresses worker safety risks and gender disparities, covering worker safety, precarious work conditions, and the use of short-term contracts, third-party employment arrangements, and subcontracted labor
• Provisions align with ILO standards and international frameworks, with provisions addressing informal work arrangements

Governance:

• The Senior Vice President of Quality is accountable for implementing the Corporate Social Responsibility Policy

Monitoring:

• Policy implementation is monitored through RBA audits, worker feedback, and grievance procedures, with remediation processes for any identified issues
• During the reporting period, no actual negative human and labor rights impacts were identified, and there were no reported cases of non-respect of the UN Guiding Principles, ILO Declaration on Fundamental Principles and Rights at Work, or OECD Guidelines for Multinational Enterprises in the upstream or downstream value chain

Training:

• In 2024, employees in Supplier Development and Procurement units received training on policy implementation and compliance

Public availability:

• The policy is available in English on the company's public website

Human Rights Policy

Scope:

• Provides a framework for the human rights program
• Addresses all identified material impacts through systematic due diligence

Key content and principles:

• Complements the Corporate Social Responsibility Policy
• Aligns with the requirements of the Norwegian Transparency Act
• Includes guidance on human rights due diligence processes and approaches to identifying, preventing, and mitigating potential human rights impacts throughout the value chain
• Follows the OECD Guidelines and the Norwegian Transparency Act

Governance:

• The Chief Executive Officer is accountable for the implementation of the Human Rights Policy

Public availability:

• In accordance with the Norwegian Transparency Act, Nordic's Human Rights Statement for 2024 will be available on the website at www.nordicsemi.com/Corporate-Social-Responsibility/Policies-and-Statements
• The policy is available in English on the company's public website

Conflict Minerals Policy

Scope:

• Covers the entire upstream supply chain involved in sourcing and processing of 3TG (tin, tantalum, tungsten, and gold)
• Particular focus on conflict-affected and high-risk areas, including the DRC and adjoining countries
• Applies to all relevant suppliers who must adopt similar policies and due diligence measures throughout their own supply chains

Key content and principles:

• Specifically addresses labor rights and safety risks in the upstream supply chain
• Outlines requirements ensuring the supply chain remains free from materials that finance or benefit armed entities
• Follows the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

Governance:

• The Executive Vice President of Supply Chain is accountable for implementing the Conflict Minerals Policy

Monitoring:

• Policy implementation is monitored through RBA audits, worker feedback, and grievance procedures, with remediation processes for any identified issues

Supply Chain Management: As a fabless semiconductor company, Nordic outsources the capital-intensive production of silicon wafers, packaging, and testing of its products to third-party suppliers, mainly in Asia. The manufacturing pipeline involves multiple stages with multiple suppliers. Disruption at any of these third-party suppliers could negatively affect revenue and customer relationships.

Supply Chain Resilience Measures: Nordic maintains close dialogue with customers and suppliers to identify and address supply risks. The standard practice of keeping buffer stock of wafers and finished goods continues. Supply chain options are considered when selecting suppliers and technologies to minimize impact of future supply constraints, including sourcing of materials from different regions. Long term supply agreements have been used in connection with introduction of new technologies.

Dual-Source Strategy: The adoption of 22-nanometer wafer process technology for the nRF54 Series allows Nordic to source wafers from two fabricators, TSMC and Global Foundries, positioning the company for additional supply chain resilience moving forward. For medium-term risk mitigation, Nordic utilizes a second-sourcing strategy to secure against widespread supply disruptions.

Targets related to value chain workers

Nordic Semiconductor has not established quantified targets for value chain workers as of the reporting period. The company states:

"While Nordic is developing specific targets for impacts on value chain workers, we track policy and action effectiveness using 2024 as our baseline year."

Current Objectives (2024 baseline)

The company's objectives are aligned with Norwegian Transparency Act requirements and RBA framework, focusing on:

• Human rights framework development
• Partner risk assessments
• Conflict minerals reporting

Progress Tracking Metrics

Progress is tracked through the following metrics (no specific targets disclosed):

Future Development

The company acknowledges:

"While we recognize the need to establish more specific targets that include defined baseline values, clear timeframes, specific measurement methodologies, and quantitative performance metrics, these will be developed as part of our ongoing human rights due diligence framework enhancement."

No target years, quantified target values, or science-based validation are disclosed.

Policies related to consumers and end-users

Nordic Semiconductor's approach to protecting consumers and end-users is governed by three main policies addressing product security, quality, and information security.

Information Security Policy

• Scope: All product development activities and customer interactions globally
• Key content: Establishes security requirements aligned with the Platform Security Architecture (PSA) initiative by Arm and Security Evaluation Standard for IoT Platforms (SESIP) methodology standards. Encompasses secure development lifecycle processes and vulnerability management through Nordic's Product Security Incident Response Team (PSIRT)
• Monitoring: Policy implementation is monitored through customer feedback loops, security assessments, and ISO 27001-certified information security management system
• International standards alignment: Aligned with Platform Security Architecture (PSA) initiative by Arm and Security Evaluation Standard for IoT Platforms (SESIP) methodology standards

ISMS Secure Development Policy

• Scope: All product development activities and customer interactions globally
• Key content: Addresses product security vulnerabilities covering both own operations and downstream value chain where solutions are integrated into end-user devices. Applies secure development lifecycle processes
• Monitoring: Monitored through customer feedback loops, security assessments, and ISO 27001-certified information security management system
• International standards alignment: ISO 27001-certified

Quality Policy

• Key content: Commits to customer satisfaction and profitability through meeting quality objectives: delivering products on time and without defects, communicating clearly with stakeholders, complying with applicable standards and regulations, and continuously reducing waste in processes. Guides development of ultra-low-power products, supporting positive impact through sustainable IoT applications
• Governance: Implementation is overseen by the Quality Systems & Environment Group Manager
• Monitoring: Monitored through customer feedback and product performance metrics

Human rights commitments related to consumers and end-users

• Key content: Processes and mechanisms to monitor compliance with the UN Guiding Principles and OECD Guidelines for Multinational Enterprises (detailed in S2-1 Policies related to value chain workers)
• International standards alignment: UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises

Product security policies

• Status: Dedicated product security policies currently being formalized
• Key content: Address material risk of product security vulnerabilities, exposing users to cyber risks

Material impacts on human rights

Based on the materiality assessment, Nordic has not identified material impacts on human rights of consumers and end-users beyond the product security considerations addressed in the policies above.

Product Security: There is a risk that released products have security vulnerabilities, and that Nordic does not meet all customers' expectations with regards to their preferred mitigating measures (which may vary from application to application). Although Nordic certifies products in accordance with security industry standards, there is a risk of loss of reputation and recognition due to cyberattacks in end products.

Security Measures: Nordic continues to invest in security architecture, and we continuously enhance our well-established processes for incident management. Our dedicated Product Security Officer is working with industry standards on security and certifying Nordic products to relevant standards.

Product Safety and Quality: Given the timetables for some key product introductions, tight control over the New Product Introduction process is imperative, including quality assurance during high volume product ramps. In addition, Nordic has invested heavily in its own failure analysis lab to solve any issues as quickly as possible.

Targets related to consumers

Target 1: Vulnerability Response Time

Target metric: Response time for vulnerabilities

Target value (quantified):

• Software vulnerabilities: 90 days (absolute target)
• Hardware vulnerabilities: 180 days (absolute target)

Target year: End of 2025 (for implementing systematic tracking system)

Baseline year: 2025 (to be established when tracking system is implemented)

Baseline value: Not yet established

Scope: All reported vulnerabilities across global product portfolio and downstream value chain, with exceptions for protocol embargoes or open-source dependencies

Type: Absolute target

Validation: Developed in consultation with PSIRT (Product Security Incident Response Team), aligned with industry standards and upcoming EU Cyber Resilience Act

Progress to date: Tracking system to be implemented by end of 2025; baseline measurements will be established in 2025

---

Ambition: Positive Impacts Through Sustainable IoT Applications

Status: No specific, measurable targets yet established

Level of ambition: Quantify contribution to sustainable applications across critical sectors

Indicators under consideration:

• Number of low-power IoT solutions deployed in sustainability-critical applications
• Estimated energy savings enabled by technologies
• Potential environmental impact reduction

Planned baseline year: 2025

Note: Company plans to develop more precise, outcome-oriented targets in next reporting period

Culture and Integrity: 8.2 score on employees' perception of integrity culture out of 10 8.9 score on employees' perception of peer relationships out of 10

Nordic seeks to continuously enhance its compliance system and programs, internal controls, and risk mitigating measures, including efforts to strengthen its culture of integrity. The company maintains high standards of business conduct supported by strong employee perceptions of integrity culture and peer relationships.

Compliance Framework: Nordic is subject to the regulatory regimes of each country in which it operates, including, among others, those relating to antitrust, anti-corruption, sanctions and export controls, corporate governance, labor, tax, customs and environmental regulations. Although the Group has internal controls and compliance systems to comply with such laws and regulations, the company continuously works to strengthen these systems.

Supplier Relationship Management: As a fabless semiconductor company, Nordic outsources the capital-intensive production of silicon wafers, packaging, and testing of its products to third-party suppliers, mainly in Asia. Nordic does normally not have long term supply contracts with its suppliers, and delivery of materials and services is dependent on the supplier's ability to deliver on requested volume.

Supplier Risk Management: Nordic maintains close dialogue with customers and suppliers to identify and address supply risks. Supply chain options are considered when selecting suppliers and technologies to minimize impact of future supply constraints, including sourcing of materials from different regions. Qualification of a new vendor can take at least twelve months and will also require customer involvement, as the customer will need to qualify the vendor as well.

Supply Chain Resilience: Long term supply agreements have been used in connection with introduction of new technologies. Nordic seeks to have insurance to cover financial losses from supply disruptions related to disasters. The adoption of 22-nanometer wafer process technology allows Nordic to source wafers from two fabricators, TSMC and Global Foundries, positioning the company for additional supply chain resilience.

Nordic implements a sanctions & trade compliance program, and continuously enhances the program, including monitoring, to ensure compliance with, and avoid circumvention of, the increasingly complex regulations.

The Group has internal controls and compliance systems to comply with laws and regulations relating to anti-corruption, sanctions and export controls. Nordic seeks to continuously enhance its compliance system and programs, internal controls, and risk mitigating measures, including efforts to strengthen its culture of integrity.

Incidents of corruption or bribery

Confirmed incidents

Nordic Semiconductor reported zero confirmed incidents of corruption or bribery during the 2024 reporting period.

Convictions and fines

The company reported:

• Zero convictions for anti-corruption law violations
• Zero fines (EUR 0) for anti-corruption law violations
• Zero public legal cases regarding corruption

Disciplinary actions

No employees were dismissed or disciplined for corruption or bribery-related matters in 2024.

Contracts terminated

No business partner contracts were terminated due to corruption-related violations during the reporting period.

Summary metrics table

Investigation procedures and speak-up mechanisms

Nordic maintains distinct investigation procedures for business conduct incidents identified through management channels, audits, or compliance monitoring. For medium- and high-risk cases, the Head of Compliance supervises investigation teams, which may include subject matter experts and external advisors when necessary.

Whistleblowing channels:

• Employees and external stakeholders can report concerns through line management, HR Business Partners, and the Integrity Line system
• Reports are managed according to the Reporting and Handling of Concerns Procedure, ensuring confidential investigation and protection against retaliation in accordance with EU Directive 2019/1937
• The process includes a seven-day acknowledgment and three-month update timeline with secure documentation and risk-based escalation
• The Integrity Line allows for anonymous reporting with strict confidentiality measures

Prevention and detection: Nordic's anti-corruption program includes:

• Corporate risk assessments and internal controls
• Business partner due diligence
• Training tailored to different risk levels, with the Board and Executive Management Team receiving in-depth compliance updates
• The Sales & Marketing department identified as containing high-risk functions due to frequent external interactions

Training completion: In 2024, Nordic rolled out mandatory e-learning on the Code of Conduct, including anti-corruption, which more than 95% of all employees, including Executive Management Team members, completed. Targeted compliance training was completed by 76% of high-risk functions in the Sales & Marketing department.

Statement on compliance: As there were no breaches of anti-corruption procedures or standards in 2024, no remedial actions were required.

Credit monitoring routines are integrated into any new credit lines, requiring security in the form of payment guarantees or advance payment requirements if needed.

Nordic is exposed to credit risk pursuant to trade credit arrangements with its distributors and certain customers. The main counterparties are international distributors of electronic components. The Group has not historically suffered any significant credit losses pursuant to its trade credit arrangements with its distributors or customers.