Norsk Hydro

The role of the administrative, management and supervisory bodies

Composition of administrative, management and supervisory bodies

Board of Directors

The Board held 11 members as of December 31, 2024. Seven are elected by the general meeting of shareholders, four are elected by and among the company's employees in Norway. All shareholder elected board members are elected for a period of up to two years. The employee representatives on the Board each have a personal deputy.

Gender distribution:

• Board of Directors, women: 4 persons (36%)
• Board of Directors, men: 7 persons (64%)

Independence: All shareholder elected members were in 2024, deemed to be independent according to the Norwegian standards. None of the company's non-employee board members had any other service contractual agreements with the company. No members elected by and among the employees, are part of the company's executive management. Employee elected directors have no other service contractual agreements with the company outside of their employee contracts, though they are subject to their duties as board members.

Board of Directors members (as of December 31, 2024):

Executive Leadership Team (ELT)

Gender distribution:

• Executive Leadership Team, women: 5 persons (56%) in 2024
• Executive Leadership Team, men: 4 persons (44%) in 2024

ELT members (as of December 31, 2024):

Management diversity (levels 0-3):

• Women at management levels 0-2: 29 persons (35%)
• Women at management levels 0-3: 179 persons (38%)

Board committees with sustainability oversight

Board Audit Committee

The Board Audit committee consists of four of the Board members and meets the Norwegian requirements for independence and competence. The committee assists the Board in exercising its oversight responsibility with respect to:

• The integrity of the company's financial statements and sustainability reporting
• The financial and sustainability reporting processes
• Internal controls and systems of risk management
• The compliance system
• Qualifications, independence, and performance of the external auditor
• Hydro's internal audit function

As part of overseeing the external auditor's independence and performance, the audit committee maintains a pre-approval policy governing the external auditor's engagement. The Board Audit Committee performs an annual self-assessment. To ensure the independence of the internal audit function, the Chief Audit Executive reports to the Board through the audit committee and meets with the Board of Directors for approval of the audit plan and annual report. The Chief Compliance Officer has a dotted reporting line to and meets regularly with the audit committee.

People and Remuneration Committee

The committee consists of three members of the Board of Directors. The committee shall assist the Board in exercising its oversight responsibility in relation to:

• Compensation matters pertaining to the President & CEO and other members of the Executive Leadership Team (ELT)
• Other compensation issues of principal importance
• Strategic people processes in the company such as succession planning, leadership and talent, and diversity and inclusion

The committee shall regularly consider the appropriateness and competitiveness of the remuneration arrangements for the President & CEO and other members of the ELT.

Sustainability expertise and training

All new board members take part in an onboarding process focusing on Hydro's industries, operating model, risk management and sustainability approach, including its Code of Conduct. Regular orientations and discussions are performed in the board on the same topics.

Board competency matrix:

Note: Employee representatives bring significant experience in HR/remuneration, workers and human rights, and environment and climate.

Frequency and nature of sustainability discussions

The Board has an annual work plan with particular emphasis on objectives, strategy and implementation. It includes recurring topics such as:

• Strategy review
• Business planning
• Risk and compliance oversight
• Financial reporting
• People strategy
• Succession planning
• Health and safety
• Sustainability, including social responsibility, climate and environment

The Board works to ensure that sustainability is considered in the company's activities and value creation, and is regularly informed by the President & CEO about material impacts, risks and opportunities related to sustainability matters.

In 2024, the Board had a deep dive on the EU Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

The Board oversees that Hydro has appropriate global directives for issues including risk management, business conduct, health and safety, people management, social responsibility and human rights.

Impact, risks and opportunities related to sustainability, including environment and climate change, social responsibility, diversity, health, safety and compliance, are integrated into the group's risk management and strategy processes, and are at the center of the Board's considerations and decision making throughout the year.

Specific roles assigned

President & CEO and Executive Leadership Team (ELT)

According to Norwegian Public Limited Liability Companies Act, the President & CEO constitutes a formal governing body responsible for the day to day management of the company. The President & CEO leads Hydro with the assistance of the Executive Leadership Team (ELT).

The ELT, including the President & CEO, has a shared responsibility for promoting Hydro's objectives and securing the company's property, organization, and reputation.

The ELT oversees the management of Hydro, including governance processes and business conduct, controls and procedures to monitor sustainability related impacts, risks and opportunities. The ELT is regularly informed about such sustainability related impacts, and risks and opportunities which are considered in all major business decisions, including new projects and major changes to existing facilities.

In 2024, the ELT had several deep dives, including, but not limited to:

• Risk Management
• Cyber
• HSE
• People
• Human Rights
• Operational and safety deep dives on Energy, Bauxite & Alumina and Recycling

The ELT also received introductions to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

Chief Compliance Officer

The chief compliance officer reports to the Board of Directors through the Board Audit Committee at his own discretion. In addition, he participates in all Board Audit Committee meetings and provides quarterly compliance updates to the audit committee. He also meets with the Board of Directors periodically.

Chief Audit Executive (CAE)

The Chief Audit Executive (CAE) is independent from the line organization and reports to Hydro's Board of Directors and the Board Audit Committee. The CAE participates in all Board Audit Committee meetings and provides quarterly updates to the Committee and Corporate Management on matters reported through the AlertLine and internal audit activities.

Delegation and oversight mechanisms

Hydro's corporate directives and procedures delegate responsibility for sustainability due diligence, and managing sustainability related impacts, risks, and opportunities to corporate staff and line management in the business areas.

Corporate staff and the Business Areas report on Hydro's performance against targets and KPIs on a quarterly basis.

The division of functions and responsibilities between the President & CEO and the Board is defined in greater detail in the rules of procedures for the Board of Directors, a governing document established and approved by the Board.

Board effectiveness and self-assessment

The Board conducts an annual self-assessment of its work, competence, skills and expertise, and cooperation with management. This assessment also includes an assessment of the chairperson.

There is a yearly compliance deep dive session for the Board Audit Committee.

Integration of sustainability in remuneration

Sustainability is integrated in the remuneration incentives of the Executive Leadership Team (ELT). Hydro's performance against targets for climate and nature comprise four percent of the CEO's short-term incentive plan and two percent or more of the short-term incentive plan of other members of the ELT. In 2024, the CEO received a climate related bonus equivalent to 2 percent of the base salary.

Progress on risk mitigation is reflected in the remuneration schemes of the Chief Executive Officer (CEO) and Executive Leadership Team (ELT).

Integration of sustainability-related performance in incentive schemes

Overview

Norsk Hydro incorporates sustainability-related performance in the remuneration incentives of the Executive Leadership Team (ELT). The integration of sustainability in incentive schemes is described in the company's Remuneration report.

Roles covered

The integration of sustainability-related performance applies to:

• CEO
• Other members of the Executive Leadership Team (ELT)

Specific sustainability KPIs

Sustainability performance integrated into incentive schemes includes:

• Climate: Performance against targets for climate
• Nature: Performance against targets for nature

Weighting and performance period

Short-term incentive (STI)

CEO:

• Hydro's performance against targets for climate and nature comprise 4 percent of the CEO's short-term incentive plan

Other ELT members:

• Hydro's performance against targets for climate and nature comprise 2 percent or more of the short-term incentive plan of other members of the ELT

Climate-related bonus

In 2024, the CEO received a climate related bonus equivalent to 2 percent of the base salary.

Reference

For more detailed information on incentive schemes, refer to Hydro's remuneration report.

Business Strategy and Model

Hydro is a leading aluminium and renewable energy company committed to a sustainable future. Hydro's purpose is to create more viable societies by developing natural resources into products and solutions in innovative and efficient ways. Hydro is present throughout the global aluminium value chain, from energy to bauxite mining and alumina refining, primary aluminium, aluminium extrusions and aluminium recycling.

Business Areas

Hydro Bauxite & Alumina represents the first two steps in the aluminium value chain through bauxite mining and alumina refining. Hydro Bauxite & Alumina covers Hydro's bauxite mining activities in Paragominas and the company's 62 percent interest in the Brazilian alumina refinery, Alunorte, both located in Pará State, North of Brazil. Alunorte is the biggest alumina refinery in the world outside China, with nameplate capacity of 6.3 million tonnes per year.

Hydro Aluminium Metal is the world's (excluding China) sixth largest producer and supplier of primary aluminium and value added casthouse products. The business area consists of five wholly owned aluminium metal plants in Norway, five partly owned plants in Qatar, Brazil, Canada, Australia, and Slovakia (currently curtailed), in addition to several advanced R&D facilities. Hydro's total annual primary aluminium capacity is about 2.1 million tonnes.

Hydro Metal Markets consists of the Recycling and Commercial business units. The Recycling business unit consists of 12 recyclers in Europe and the U.S., producing extrusion ingot and recycled foundry alloys with a total annual capacity of 995,000 tonnes. The Commercial unit supplies Hydro's value added products to a global market through a wide range of product offerings and services, including low-carbon aluminium products.

Hydro Extrusions operates the world's largest network of aluminium extrusion and recycling plants, counting 70 production sites in 20 countries. The extrusion production capacity amounts to 1.4 million tonnes annually, and the market shares are 16 percent in Europe and 19 percent in North America in 2024.

Hydro Energy is one of the three largest operators of hydropower production in Norway, and a large power market player in the Nordic region and Brazil. In Norway, Hydro Energy operates 40 renewable power plants, with combined installed capacity of 2.8 GW. In a normal year, Hydro Energy operate 13.7 TWh production, of which 9.4 TWh is captive power.

Value Chain

Hydro's main inputs and outcomes include:

Main inputs

• Bauxite: Bauxite resources, water
• Alumina: Bauxite, caustic soda, coal, lime, natural gas, oil, water
• Energy: Water resources, wind resources
• Primary aluminium: Alumina, aluminium fluoride, anodes, coke, pitch, power, water
• Casting: Alloying materials, natural gas, NGLs, post-consumer scrap, primary aluminium, process scrap
• Extrusion: Electricity, extrusion ingot
• Recycling: Standard, sheet and extrusion ingots, primary foundry alloys and wire rod, forge stock

Main outputs and outcomes

• Bauxite: Bauxite, rehabilitated land, tailings, land use change
• Alumina: Alumina and alumina hydrate, bauxite residue, GHG emissions, non-GHG emissions
• Energy: Hydropower, flood control, regulated watersheds, land use change
• Primary aluminium: Primary aluminium, GHG emissions, non-GHG emissions, spent potlining
• Products: Extruded products, Hydro CIRCAL, Hydro REDUXA, primary foundry alloys, wire rod and forge stock, standard, sheet and extrusion ingot

Ultimate outcomes: A more viable society by developing natural resources into products and solutions in innovative and efficient ways; Income and shareholder value; Salaries, taxes and supplier income; Community and industry impact; Full value chain provenance

Interests and views of stakeholders

Stakeholder engagement overview

Engaging with Hydro's stakeholders helps the company understand what is expected of it, what is important to them, how Hydro impacts them and how Hydro can solve common challenges. Hydro consults affected stakeholders to identify, assess, and manage material social, health, safety, environmental, and economic impacts associated with its activities and business relationships. Dialogue with affected stakeholders gives input to action plans to manage Hydro's impacts and the views of affected stakeholders are integrated in the reporting on sustainability topics to Hydro management. Hydro strives to act in an ethical and transparent manner, and gather views from interested parties, aiming for a common understanding of the decisions that are made so Hydro can act with integrity in everything it does.

Identified stakeholder groups

Hydro's engagement includes representatives of affected stakeholders, such as unions, work councils, local community groups and non-governmental organizations, suppliers, business partners, customer representatives, and industry associations. Hydro also engages and partners with sustainability experts from academia, and actively engages users of Hydro's sustainability statements such as authorities, banks, and investors on Hydro's sustainability ambitions and progress toward Hydro's sustainability goals.

Information on Hydro's engagement of affected stakeholders is described in the chapters Own workforce, Workers in the value chain and Affected communities.

Stakeholder engagement structure

Stakeholder engagement is organized both at the corporate level and in the business areas through local community meetings, bilateral engagement of individual stakeholders, national, and international multi-stakeholder meetings, and through industry associations. All business areas have a forum for dialogue between management and union or employee representatives.

Stakeholder dialogue framework

Market

• Commodity and stock exchanges
• Competitors
• Customers
• Insurers and banks
• Partners and joint ventures
• Suppliers
• Other business relations

Owners

• Owners and shareholders
• The Norwegian government
• Financial markets
• Analysts
• Traders
• Brokers
• Ratings agencies

Society

• Academia
• Authorities
• Industry associations
• Lobby groups
• Local communities
• Media
• National and international unions
• NGOs
• Politicians
• Public offices
• R&D funding bodies

Internal

• Board of Directors
• Employee representatives
• Employees

Stakeholder dialogue approach by level

Hydro's approach to stakeholder dialogue is summarized in three levels of engagement based on a global, regional and local approach:

Global organizations:

• International Aluminium Institute - IAI
• Int. Council for Mining & Metal - ICMM
• Aluminium Stewardship Initiative - ASI
• Amnesty International
• UNICEF
• International Labor Organization - ILO

Regional expertise:

• Nordic Business Network for Human Rights - DIHR
• Regional human rights experts
• European Aluminium
• Eurometaux
• Regional NGOs
• Academia
• Unions

Local stakeholders:

• Local communities
• Municipalities
• Local NGOs
• Customers
• Suppliers

Integration of stakeholder views in materiality assessment

The views of Hydro's stakeholders are integrated in the materiality assessment that is updated every year. Hydro's group functions and business areas summarize input provided to them through their engagement with affected stakeholders, and their interaction with external sustainability experts and users of Hydro's sustainability statement.

Key stakeholder concerns and views by sustainability topic

Strategic sustainability trends

Stakeholder expectations on Hydro's sustainability performance continue to evolve. Key stakeholders are increasingly looking beyond carbon and focusing on the overall sustainability footprint, including nature, social factors and their trade-offs. Global awareness and attention toward sustainability continue to accelerate. Regulatory changes are reacting to and driving decarbonization pressure while consumers are taking a wider sustainability perspective. The focus is increasingly shifting to include the impact of human activities and climate crisis on nature and social development, as well as transparency and traceability along the entire value chain.

Sustainability requirements are increasing in terms of scale, scope and complexity due to growing interdependencies with trade policies. Investments are expanding towards the research and development of greener solutions, which increases the drive to deliver sustainable materials. In general, all geographies, industries and companies are expected to come under additional scrutiny.

Value chain concentration and community engagement in Brazil

Hydro's mapping of sustainability trends and expectations indicates that interconnectedness and complexity between nature, environment, and social themes will only increase in and outside Brazil. The strength of Hydro's integrated value chain is increasingly valuable to Hydro customers that require sustainable and traceable raw materials.

In Brazil, Hydro is engaged in a systematic dialogue with political, governmental, non-governmental, and local communities regarding the social and regulatory challenges facing its operations and the communities in which it operates. Mercedes-Benz has joined Hydro in the Corridor program to create a collaborate network that drives local sustainable development, demonstrating the value of Hydro's integrated value chain from a customer perspective.

Topic-specific stakeholder engagement

Climate change

Hydro engages with a broad set of stakeholders on climate related issues, including industry organizations, international standard setters, and local stakeholders in countries where it has significant operations, such as Norway, Brazil and the U.S., as well as with regional structures like the European Union. Hydro also engages and partners with customers in different industries to deliver low-carbon aluminium and to develop technical solutions for low-carbon products.

Pollution

Hydro engages regulators, local authorities and communities directly on its environmental management and potential incidents of pollution. Potentially affected stakeholders or communities can use Hydro's grievance mechanism, AlertLine, to report environmental and social issues concerning Hydro operations. Hydro also engages civil society on environmental issues. This includes Hydro's membership in the World Economic Forum's Alliance for Clean Air to promote collective action to reduce air pollution and works with the Stockholm Environment Institute to develop value chain inventories and baselines of material air pollutants.

Water

Hydro engages regulators, local authorities and communities directly on water related issues. For the hydropower operations in Norway, water resources are followed up by authorities through regional water management plans, in line with the EU Water Framework Directive.

Biodiversity and ecosystems

Hydro engages local authorities and people in local communities directly on biodiversity and ecosystems impacts, including recreational impacts, from on going operations as well as the planning and execution of new projects. To increase Hydro's knowledge and secure a science based approach to biodiversity management and forest rehabilitation, Hydro supports the Biodiversity Research Consortium Brazil-Norway (BRC). Hydro has also established a partnership and actively engage with two Brazilian NGOs in the State of Pará on the conservation and sustainable development of the Brazilian Amazon. For its hydropower operations, Hydro engages the International Hydropower Association and Renewables Norway, as well as the Norwegian Institute for Nature Research to take a scientific approach to managing biodiversity impacts.

Resource use and circular economy

Hydro has strategic partnerships with many customers to design and develop more sustainable products. The company engages industry associations, standard setters, and local stakeholders in countries where it has significant operations, as well as with regional structures like the European Union, on topics related to the environmental and social impacts of resource use. Hydro engages local authorities and communities directly in relation to tailings and bauxite residue management through on-site inspections, third party audits. Hydro engages several commercial partners and supports R&D projects connected to management and utilization of bauxite residue, and has established partnerships to develop more circular solutions to other waste streams.

Own workforce

Hydro engages its employees on health and safety issues through frequent health and safety network meetings in business areas. Engagement on diversity and inclusion issues is primarily done through employee reviews and the range of initiatives sponsored by members of the Executive Leadership Team.

Workers in the value chain

Contractors working on Hydro's sites are engaged directly on health and safety standards the same way as Hydro's own workforce. Other potentially affected workers in the value chain are engaged indirectly though Hydro's requirements and expectations for workers' rights as set out in Hydro's Supplier Code of Conduct.

Affected communities

Potentially affected stakeholders in local communities are engaged directly through stakeholder dialogues and through local media, and informed and consulted when potential impacts have been identified. Local authorities and NGOs are also engaged on impact assessments to identify potential risks.

Hydro has committed to engage in regular dialogue with communities in line with the risk based approach established through its human rights due diligence process, including having more frequent and structured dialogue in communities with higher risk of adverse human rights impacts.

Business conduct

Hydro engages its major shareholder, the Norwegian state, on compliance and business conduct in quarterly meetings and engages local authorities, civil society, and industry associations and other companies regularly. Hydro also participates in the development of industry practices through engagement with organizations such as Transparency International Norway, the Maritime Anti-Corruption Network, the International Council on Mining and Metals (ICMM) and the Aluminium Stewardship Initiative (ASI).

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

Integration of IROs in strategy and business model

The Board of Directors works to ensure that sustainability is considered in the company's activities and value creation, and is regularly informed by the President & CEO about material impacts, risks and opportunities related to sustainability matters. In 2024, the Board also had a deep dive on the EU Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

Impact, risks and opportunities related to sustainability, including environment and climate change, social responsibility, diversity, health, safety and compliance, are integrated into the group's risk management and strategy processes, and are at the center of the Board's considerations and decision making throughout the year.

The Executive Leadership Team (ELT) oversees the management of Hydro, including governance processes and business conduct, controls and procedures to monitor sustainability related impacts, risks and opportunities. The ELT is regularly informed about such sustainability related impacts, and risks and opportunities which are considered in all major business decisions, including new projects and major changes to existing facilities. Hydro's corporate directives and procedures delegate responsibility for sustainability due diligence.

All identified material sustainability topics are considered in the definition of Hydro's overall strategy. The overall strategy is supported by specific strategies on climate change, environment and people. Sustainability is integrated in the remuneration incentives of the Executive Leadership Team (ELT). Hydro's performance against targets for climate and nature comprise four percent of the CEO's short-term incentive plan and two percent or more of the short-term incentive plan of other members of the ELT. In 2024, the CEO will receive a climate related bonus equivalent to 2 percent of the base salary.

All significant investment decisions are assessed for their impact on Hydro's climate strategy according to Hydro's policies addressing climate change mitigation.

List of material impacts, risks and opportunities

Material topic: Climate Change

Related to Risk 1, Risk 2, Risk 4, Risk 5, Risk 6, Risk 7 described in the risk review.

Material impacts:

• Negative impacts on climate change associated with GHG emissions from fossil fuel use, as well as process emissions from the production of primary aluminium
• Value chain impacts on climate change associated with the carbon footprint of raw materials that Hydro depends on in its aluminium production processes
• Positive impacts on climate change mitigation associated with generation of renewable energy, development of new renewable energy assets, and production of low-carbon primary and secondary aluminium

Material risks and opportunities:

• Transition risks related to carbon taxes, dependency on electricity, and development of technologies for net-zero emission primary aluminium production
• Physical risks associated with changes in rainfall patterns, flooding, shortages of water or other natural resources, variations in sea levels, storm patterns and intensities as well as temperatures
• Market opportunities associated with premiums for delivering lower-carbon aluminium products and Hydro's production of strategic input materials to technologies that enable the transition to a net-zero GHG emissions economy
• Opportunities associated with development of new renewable energy assets

Due diligence activities and processes: Hydro identifies and measures impacts on climate change by calculating and managing its GHG emissions from all its operations. All existing and planned production assets are screened and all GHG emissions resulting from energy use and aluminium electrolysis processes are calculated.

Material GHG emissions in Hydro's value chain are identified and calculated based on the International Aluminum Institute's guideline.

Hydro has conducted a climate risk assessment, described in the climate change chapter, in line with assumptions related to the disclosures on climate risk and opportunities in Note 1.1 to the financial statement.

Transition risks and opportunities are assessed through scenarios for technology, regulatory and policy development, and markets consistent with a 1.5-degree scenario. Relevant transition events are identified through on going stakeholder engagement. Assets and business activities are screened for transition risks and compatibility with a 1.5-degree scenario as part of enterprise risk and strategy processes.

Climate related physical risks are assessed using models for future weather patterns and their impact on production facilities in different scenarios from the Intergovernmental Panel on Climate Change (IPCC) in 2030, 2040 and 2050.

Stakeholder engagement: Hydro engages with a broad set of stakeholders on climate related issues, including industry organizations, international standard setters, and local stakeholders in countries where it has significant operations, such as Norway, Brazil and the U.S., as well as with regional structures like the European Union. Hydro also engages and partners with customers in different industries to deliver low-carbon aluminium and to develop technical solutions for low-carbon products.

Material topic: Pollution

Related to Risk 1, Risk 4, Risk 7, Risk 15, Risk 16 described in the risk review.

Material impacts:

• Potential negative impacts associated with unintended or accidental emissions of pollutants to air or water from alumina refining or primary aluminium production
• Potential negative impacts associated with unintended or accidental emissions of pollutants to air or water in Hydro's supply chain for raw materials and energy

Material risks and opportunities:

• Risks associated with stricter regulation of emissions to air or water in the aluminium value chain
• Potential incidents of pollution that trigger clean up or remediation costs, litigation costs, fines or penalties

Due diligence activities and processes: Hydro identifies and assesses potential pollution impacts from all its operations by assessing risk of accidental spills, leakages, or other unplanned events and by monitoring emissions to air and water from its operations in the aluminium value chain based on the Best Available Techniques Reference documentation (BREF) for the non-ferrous metals industries.

Hydro has established action plans and controls to manage potential pollution impacts, such as spill kits, secondary containment, storage basins.

Environmental incidents are classified based on potential and actual impact; all material incidents, as well as all emissions to air and water above the thresholds defined in the European Pollutant Release and Transfer Register (E-PRTR), are reported in the Pollution chapter.

Stakeholder engagement: Hydro engages regulators, local authorities and communities directly on its environmental management and potential incidents of pollution. Potentially affected stakeholders or communities can use Hydro's grievance mechanism, AlertLine, to report environmental and social issues concerning Hydro operations. Hydro also engages civil society on environmental issues. This includes Hydro's membership in the World Economic Forum's Alliance for Clean Air to promote collective action to reduce air pollution and works with the Stockholm Environment Institute to develop value chain inventories and baselines of material air pollutants.

Material topic: Water

Related to Risk 6 described in the risk review.

Material impacts:

• Potential negative impacts of freshwater withdrawals on local water resources
• Positive impacts on flood control from regulated watersheds

Material risks and opportunities:

• Risks associated with water availability for electricity generation, cooling, operations or transport/logistics in the value chain

Due diligence activities and processes: Hydro identifies and assesses potential water impacts by monitoring water withdrawals and water use at all production assets, and follows the International Council on Mining & Metals' (ICMM) standards and requirements for measuring and reporting its water interaction and the quality of water discharges. Hydro uses the WRI Aqueduct tool to analyze Hydro's freshwater footprint in water stressed areas. Hydro's operational sites are screened for water related risks, and develops management plans and context relevant targets to address any material risks identified.

Stakeholder engagement: Hydro engages regulators, local authorities and communities directly on water related issues. For the hydropower operations in Norway, water resources are followed up by authorities through regional water management plans, in line with the EU Water Framework Directive.

Material topic: Biodiversity and ecosystems

Related to Risk 1, Risk 4, Risk 15, Risk 16 described in the risk review.

Material impacts:

• Impacts associated with land use change in mining operations and new renewable energy development, and impacts from water use change in hydropower operations
• Impacts associated with greenhouse gas emissions and potential incidents of pollution in alumina refining and primary aluminium production
• Impacts associated with sourcing of energy and raw materials
• Potential impacts associated invasive species introduction resulting from transportation of materials to and from Hydro operations

Material risks and opportunities:

• Risks associated with changing regulations or expectations for the impact on drivers of biodiversity loss, including land use change, water use, climate change and pollution
• Risks associated with Hydro's dependency on ecosystem services for water flow, flood and storm protection, mass stabilization and erosion control

Due diligence activities and processes: Hydro identifies and assesses impacts, risks and dependencies on biodiversity in its operations and value chain according to the LEAP methodology. Hydro conducts environmental impact assessments for its operations, new project development, and in relation to merger and acquisition processes. The assessments identify potential impact on biodiversity and ecosystem services within the operation's area of influence and assess the materiality of these impacts to the operation, environment and affected communities. This assessment shall also identify and describe any priority biodiversity features or ecosystem services that occur within the operation's area of influence and consider the full lifecycle of the operation, including closure.

On going impacts are monitored by tracking the impact of land use change on local biodiversity and ecosystems. Sites located near biodiversity sensitive areas, their potential impacts and mitigation measures are disclosed in the Biodiversity chapter. Any accidents that result in pollution are assessed and classified according to actual and potential impacts. The impacts of water withdrawal and emissions are estimated using a lifecycle assessment model.

Stakeholder engagement: Hydro engages local authorities and people in local communities directly on biodiversity and ecosystems impacts, including recreational impacts, from on going operations as well as the planning and execution of new projects. To increase Hydro's knowledge and secure a science based approach to biodiversity management and forest rehabilitation, Hydro supports the Biodiversity Research Consortium Brazil-Norway (BRC). Hydro has also established a partnership and actively engage with two Brazilian NGOs in the State of Pará on the conservation and sustainable development of the Brazilian Amazon. For its hydropower operations, Hydro engages the International Hydropower Association and Renewables Norway, as well as the Norwegian Institute for Nature Research to take a scientific approach to managing biodiversity impacts.

Material topic: Resource use and circular economy

Related to Risk 1, Risk 2, Risk 3 described in the risk review.

Material impacts:

• Value chain impacts associated with Hydro's dependency on raw materials for alumina refining and primary aluminium production
• Impacts associated with resource outflows, including tailings from mining operations, bauxite residue from alumina refining and waste generation from operations in the aluminium value chain

Material risks and opportunities:

• Risks associated with Hydro's dependency on raw materials in a concentrated aluminium value chain
• Opportunities associated with having an integrated value chain with traceable, secure material supply, including recycled aluminium, and opportunities associated with developing more circular production models in the aluminium value chain

Due diligence activities and processes: Hydro identifies and assesses impacts, risks, and dependencies associated with resource use and circular economy by measuring its resource use and resource outflows from all operations. This includes energy and raw material use for production processes, recycled content in resource inflows, as well as the generation of tailings, residue and waste from its operations, and the waste treatment and disposal methods for different waste streams.

Stakeholder engagement: Hydro has strategic partnerships with many customers to design and develop more sustainable products. The company engages industry associations, standard setters, and local stakeholders in countries where it has significant operations, as well as with regional structures like the European Union, on topics related to the environmental and social impacts of resource use. Hydro engages local authorities and communities directly in relation to tailings and bauxite residue management through on-site inspections, third party audits. Hydro engages several commercial partners and supports R&D projects connected to management and utilization of bauxite residue, and has established partnerships to develop more circular solutions to other waste streams.

Material topic: Legacy assets

Related to Risk 1, Risk 4, Risk 15, Risk 16 described in the risk review.

Material impacts:

• Potential incidents or accidents affecting the health and safety of people or the environment near legacy industrial sites

Material risks and opportunities:

• Risks associated with obligations or changing expectations for the management of tailings facilities and industrial legacy sites, restoration or remediation of waterbodies or land areas, or future closure and clean up obligations for industrial sites

Due diligence activities and processes: Impacts and risks are assessed through on going assessment of legacy sites and industrial operations. Sites are screened for potential impacts and risks, land and waterbodies near material industrial sites are tested for pollution. Hydro's legacy project has developed a methodology to evaluate legacy risks and their potential financial effects for Hydro.

Stakeholder engagement: Potentially affected stakeholders are engaged directly and through local media, and informed and consulted when potential impacts have been identified. Local authorities and NGOs are also engaged on impact assessments to identify potential risks.

Material topic: Own workforce

Related to Risk 10, Risk 13, Risk 14, Risk 16 described in the risk review.

Material impacts:

• Potential fatal or life changing accidents affecting own workforce
• Potential incidents of discrimination or harassment affecting own workforce
• Positive impacts associated with employees personal and career development and social protection

Material risks and opportunities:

• Risks associated with fatal or life changing accidents
• Risks associated with actual or alleged incidents of discrimination, harassment, or other breaches of employee's rights
• Opportunities associated with being perceived as an attractive and responsible employer

Due diligence activities and processes: Impacts and risks are identified and assessed using employee engagement surveys, grievance mechanisms including AlertLine, root cause reviews of incidents affecting employees, health and safety network meetings, and regular employee reviews meetings conducted by line managers.

Stakeholder engagement: Hydro engages its employees on health and safety issues through frequent health and safety network meetings in business areas. Engagement on diversity and inclusion issues is primarily done through employee reviews and the range of initiatives sponsored by members of the Executive Leadership Team.

Material topic: Workers in the value chain

Related to Risk 10, Risk 13, Risk 14, Risk 16 described in the risk review.

Material impacts:

• Potential fatal or life changing accidents affecting workers in the value chain
• Potential incidents resulting in breaches of the rights of workers in the value chain
• Positive impacts associated with supplier engagement on workers rights, including health and safety standards

Material risks and opportunities:

• Risks associated with fatal or life changing accidents involving workers in the value chain
• Risks associated with actual or alleged incidents of discrimination, harassment or other breaches of the rights of workers in the value chain

Due diligence activities and processes: Contractors working on Hydro's sites are subject to the same requirements and due diligence on health, safety and worker's rights as Hydro's own workforce. Impacts and risks on other workers in the value chain are identified and assessed by performing supplier due diligence activities using data on inherent risk of negative impacts by geography and industry. High and medium risk suppliers are subject to further due diligence using self-assessments, screening tools, direct engagement and audits to determine residual risk of negative impacts, and direct engagement on corrective action plans related to residual risk of negative impacts.

Stakeholder engagement: Contractors working on Hydro's sites are engaged directly on health and safety standards the same way as Hydro's own workforce. Other potentially affected workers in the value chain are engaged indirectly though Hydro's requirements and expectations for workers' rights as set out in Hydro's Supplier Code of Conduct.

Material topic: Affected communities

Related to Risk 10, Risk 16 described in the risk review.

Material impacts:

• Potential incidents affecting the rights of people in local communities
• Potential accidents negatively impacting the health and safety of people in local communities
• Positive impacts from contributing to resilient local communities in a changing world, and skills and jobs for the future low-carbon economy

Material risks and opportunities:

• Risks associated with accidents impacting health and safety, and risks associated with actual or alleged incidents affecting the rights of people in affected communities across the value chain
• Opportunities associated with being perceived as a cornerstone company in the communities where we operate

Due diligence activities and processes: Impacts and risks are identified and assessed by mapping the local sustainability context and transition challenges where Hydro operates using data on inherent risk of negative impacts by geography and industry. Potential human rights impacts are further assessed by direct engagement of potentially affected stakeholders through stakeholder dialogue to understand what is expected of the company, what is important to local communities, how Hydro impacts them and how the company can solve common challenges.

Stakeholder engagement: Potentially affected stakeholders in local communities are engaged directly through stakeholder dialogues and through local media, and informed and consulted when potential impacts have been identified. Local authorities and NGOs are also engaged on impact assessments to identify potential risks.

Material topic: Business conduct

Related to Risk 8 described in the risk review.

Material impacts: Not explicitly stated in excerpts.

Material risks and opportunities:

• Risks associated with actual or alleged breaches of regulations, standards or stakeholder expectations for business conduct
• Opportunities associated with responsible business conduct

Due diligence activities and processes: Hydro identifies inherent risk of corruption and other business conduct issues through corruption indexes and other screening tools, and assess potential impacts and risks through supplier and business partner due diligence processes. Hydro monitors business conduct incidents through cases reported to line management, supporting staff functions, Hydro's grievance mechanisms, AlertLine and Canal Direto, quarterly and year end compliance reporting from its business areas, and information collected from Hydro's legal and compliance departments.

Stakeholder engagement: Hydro engages its major shareholder, the Norwegian state, on compliance and business conduct in quarterly meetings and engages local authorities, civil society, and industry associations and other companies regularly. Hydro also participates in the development of industry practices through engagement with organizations such as Transparency International Norway, the Maritime Anti-Corruption Network, the International Council on Mining and Metals (ICMM) and the Aluminium Stewardship Initiative (ASI).

Methodology for materiality assessment

Hydro assesses material sustainability related impacts, risks, and opportunities according to the ESRS concept and requirements of double materiality. The assessment is validated by Hydro's disclosure committee and approved by the Board of Directors.

The materiality assessment is based on input from Hydro's subject matter experts in group functions for climate, environment, social responsibility, health and safety, communication and investor relations, compensation and benefits, diversity, inclusion and belonging, compliance, and enterprise risk management, as well as input from risk management and sustainability functions in each business area.

Impact materiality is assessed in terms of actual and potential, positive and negative sustainability impacts from Hydro's own activities and/or business relationships in the upstream and downstream value chain. The assessment of impacts is in accordance with the GRI Standards and OECD Due Diligence Guidance for Responsible Business Conduct.

The materiality of impacts is assessed based on the severity and likelihood of impacts occurring. When exercising judgment on whether an impact is considered material, reference is made to the primary consequence scales in Hydro's global ERM directive. For environmental impacts, reference is also made to the environmental consequence scales in Hydro's Guidance for HSE Incidents management. For human rights impacts, reference is made to the metrics for assessing severity of human rights impacts defined in the ICMM Human Rights Due Diligence Guidance.

Financial materiality is assessed in terms of risk of negative reputational, financial or commercial consequences for Hydro that are associated with sustainability topics, as well as potential sustainability related upside risks, or opportunities, for Hydro. The materiality of risks and opportunities is assessed based on the likelihood and magnitude of anticipated effects on Hydro's performance, financial position, cash flow, access to finance or cost of capital.

All identified sustainability related impacts, risks and opportunities, including risks arising from Hydro's potential sustainability impacts and dependencies, that are considered material for affected stakeholders or users of Hydro's sustainability statements are presented on the next four pages and described in the sustainability statement. These sustainability related risks are prioritized in the same way as other risks Hydro is exposed to, however, not all sustainability related risks in the sustainability statements are specifically highlighted in Hydro's aggregate risk profile described in the Risk review section.

Hydro's sustainability statements include separate chapters on all material sustainability topics covered by ESRS. In addition, Hydro has included one Hydro specific sustainability topic: Legacy impact.

Resilience to material IROs

Hydro has conducted a climate risk assessment, described in the climate change chapter, in line with assumptions related to the disclosures on climate risk and opportunities in Note 1.1 to the financial statement.

Transition risks and opportunities are assessed through scenarios for technology, regulatory and policy development, and markets consistent with a 1.5-degree scenario. Assets and business activities are screened for transition risks and compatibility with a 1.5-degree scenario as part of enterprise risk and strategy processes.

Climate related physical risks are assessed using models for future weather patterns and their impact on production facilities in different scenarios from the Intergovernmental Panel on Climate Change (IPCC) in 2030, 2040 and 2050.

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

Methodology

Hydro has conducted a double materiality assessment to determine its material impacts, risks and opportunities (IROs). The assessment was performed in line with the European Sustainability Reporting Standards (ESRS) and follows a structured process.

Step-by-step process

The materiality assessment followed these key steps:

1. Identification of potential IROs: Potential impacts, risks and opportunities were identified based on ESRS sector-agnostic standards, sector-specific guidance, internal expertise, and stakeholder input

2. Assessment of impact materiality: Each potential impact was assessed based on severity (scale, scope, and irremediable character) and likelihood

3. Assessment of financial materiality: Each potential risk and opportunity was assessed based on magnitude of financial effect and likelihood

4. Determination of material IROs: IROs meeting the materiality thresholds were determined as material

5. Validation and approval: The assessment was validated by subject matter experts and approved by management

Inputs to the assessment

The materiality assessment drew on multiple sources:

• ESRS sector-agnostic standards and guidance
• Sector-specific benchmarks and best practices
• Internal subject matter experts across business areas and functions
• External consultants to facilitate the process
• Stakeholder consultation and engagement
• Existing risk management processes and registers
• Value chain mapping

Scoring criteria

Impact materiality was assessed using:

• Severity: evaluated through scale (extent of impact), scope (number of people/area affected), and irremediable character (whether impact can be remedied)
• Likelihood: probability of the impact occurring

Financial materiality was assessed using:

• Magnitude: size of the potential financial effect
• Likelihood: probability of the risk or opportunity materializing

Materiality threshold

An IRO is considered material if it meets the threshold for either impact materiality or financial materiality (or both).

Frequency and timing

The double materiality assessment was conducted in 2024 as part of Hydro's preparation for first-time CSRD reporting. The assessment will be reviewed periodically to ensure it remains current and relevant.

Use of value chain mapping

Value chain mapping was used as part of the identification process to understand where impacts, risks and opportunities occur across Hydro's upstream and downstream value chain. This helped ensure comprehensive coverage of IROs beyond Hydro's own operations.

Transition plan for climate change mitigation

Scope of the plan

Hydro's climate strategy and transition plan is an integral part of its overall business strategy. The transition plan covers Hydro's operations across the full aluminium value chain, including:

• Bauxite & Alumina: Operations in Brazil (Paragominas mine and Alunorte refinery)
• Aluminium Metal: Primary aluminium production at smelters in Norway and equity share in international operations
• Metal Markets: Recycling operations across 12 recyclers in Europe and the U.S.
• Extrusions: Global extrusion network
• Energy: Hydropower operations in Norway and renewable energy development through Hydro Rein

The plan encompasses Scope 1, Scope 2, and material Scope 3 emissions across Hydro's ownership equity in operations globally.

Target years and milestones

Net-zero target: Net-zero Scope 1 and 2 GHG emissions by 2050 or earlier

Interim reduction targets (against 2018 baseline):

• 2025: 10% reduction in Scope 1 and 2 GHG emissions
• 2030: 30% reduction in Scope 1 and 2 GHG emissions
• 2030: 30% reduction in upstream Scope 3 GHG emissions per tonne aluminium

2024 Performance:

• Achieved 16.1% reduction in Scope 1 and 2 GHG emissions (exceeding the 2025 target)
• Current 2018 baseline: approximately 10 million tonnes CO2e (Scope 1 and 2)
• 2024 total emissions: 8.98 million tonnes CO2e (Scope 1 and 2, location based, ownership equity)

2030 Strategic ambitions:

• Post-consumer scrap recycling capacity: 850-1,200 thousand tonnes per year (from 451 kt in 2024)
• Industrial scale pilots for near-zero emission aluminium by 2030
• Demonstrate technology enabling near-zero emission aluminium in industrial pilot setting by 2030

Baseline year and scope of emissions

Baseline year: 2018 (rebased post-Alunorte transaction as of December 1, 2023)

Current baseline composition (approximately 10 million tonnes CO2e):

• Electrolysis process emissions: ~30%
• Natural gas used in casthouses, recycling, remelting, extrusion, and anode production: ~10%
• Electricity generation (Scope 2): ~35%
• Fossil fuel consumption at Alunorte alumina refinery: ~25%

Scope 3 baseline: 2018 baseline for 30% reduction per tonne aluminium by 2030

• 2024 upstream Scope 3 emissions: 11.08 million tonnes CO2e (ownership equity)

Alignment with 1.5°C / SBTi validation

Hydro's net-zero ambitions are based on a successful transition to a 1.5-degree economy and are in line with climate science and the Paris Agreement. Hydro's climate strategy is consistent with the International Aluminium Institute's (IAI) GHG emission reduction pathway for primary aluminium production toward 2050, which aligns with the Paris Agreement and IEA's 1.5-degree scenario.

Hydro states: "When the Science Based Target Initiative (SBTi) has developed a sectoral decarbonization approach (SDA) for the aluminium sector, Hydro will consider verifying the climate strategy against SBTi."

Key decarbonization levers and pillars

1. Bauxite & Alumina decarbonization

Fuel switch at Alunorte:

• Completed Q4 2024: Switch from heavy fuel oil to natural gas
• Emission reduction: ~434,000 tonnes CO2e at Alunorte (Hydro equity share)
• Cost savings: USD 160-190 million per year

Electrical boilers:

• Completed Q4 2024: Three 60MW electrical boilers installed
• Emission reduction: ~248,000 tonnes CO2e at Alunorte (Hydro equity share)
• Combined with fuel switch: ~70% emissions reduction at Alunorte by 2030

Future initiatives:

• Potential for four additional electrical boilers by 2030
• Substitution of coal with biomass
• Solar and wind farms in Brazil's Northeast by 2025
• Biomass fuel pilot: açaí pits mixed with coal (60,743 tonnes biogenic CO2 in 2024)

2. Primary aluminium production

Process improvements:

• Implementation of Karmøy Technology Pilot elements across existing smelters
• Husnes line B (started 2020)
• Ongoing relining at Sunndal

Three pathways to net-zero:

a) HalZero chloride process (for new capacity):

• Proprietary technology producing oxygen instead of CO2
• Test facility under construction in Porsgrunn, Norway
• Industrial scale pilot facility planned by 2030
• Targets greenfield plants or brownfield replacement of obsolete potlines

b) Carbon capture and storage (CCS) (for existing operations):

• Off-gas capture at existing smelters
• Direct air capture (DAC) units exploration
• Evaluation of 50+ CCS technologies
• Roadmap for testing to industrial scale pilots

c) Bio-carbon anodes:

• R&D programs supported by Norwegian Research Council
• Substituting packing coke in baking furnace
• Using bio-material in anode for electrolysis
• Laboratory and pilot scale testing ongoing

3. Casting, recycling, and remelting

Renewable energy sources:

• Biomethane at Sunndal casthouse (20,000 tonnes CO2e reduction per year)
• Plasma technology pilot at Sunndal R&D center (direct electrification)
• Green hydrogen pilot at Høyanger recycling plant (starting 2026)
  • Three-year pilot replacing natural gas with green hydrogen
  • One remelting furnace initially

4. Renewable energy and power

Current renewable power position:

• ~70% of primary aluminium electricity from renewable power
• ~80% of primary aluminium capacity powered by renewable electricity
• 9.4 TWh captive hydropower production (ownership share)
• Purchase of 9+ TWh renewable power annually under long-term contracts

Energy growth strategy:

• Hydro Rein joint venture (with Macquarie since June 2024)
• Illvatn pumped storage hydropower plant investment
• Substantial capacity increase in Røldal-Suldal power system
• Target: NOK 3.5 billion EBITDA from Energy by 2030 (excluding Hydro Rein)

5. Recycling and circular economy

Capacity expansion:

• 2024: 451 kt post-consumer scrap recycled
• Target: 850-1,200 kt recycling capacity by 2030

New facilities:

• Høyanger, Norway: 36,000 tonnes capacity (opened April 2024)
• Székesfehérvár, Hungary: 90,000 tonnes capacity (opened 2024)
• Cassopolis, Michigan: Advanced specialty recycling (ramping up)
• Torija, Spain: EUR 180 million investment, 120,000 tonnes capacity (decision 2024)

Sorting technology:

• HySort proprietary technology rollout
• Alusort JV with PADNOS (started operations 2024)
• Three additional HySort machines: Wrexham UK, Nowa Sol Poland

Low-carbon products:

• Hydro CIRCAL: ≥75% post-consumer scrap, 1.9 kg CO2e/kg aluminium
• Hydro CIRCAL 100R: 100% post-consumer scrap, <0.5 kg CO2e/kg aluminium
• Hydro REDUXA: Renewable energy-based, 4.0 kg CO2e/kg aluminium

6. Extrusions

Energy efficiency:

• Power purchasing agreements (PPAs) with renewable producers
• On-site renewable generation (solar panels, windmills)
• Battery and solar rooftop operations at Offenburg (started November 2024)

Renewable gas pilot:

• Drunen plant exploring renewable gas from automotive waste
• Laboratory scale testing for natural gas replacement
• Potential full operations early 2026

CapEx and investment commitments

Improvement programs (2024-2030 against 2024 baseline):

• Operational improvement: NOK 2.5 billion
• Procurement improvement: NOK 1 billion
• Commercial excellence: NOK 3 billion
• Total improvement program: NOK 6.5 billion by 2030

Specific investments announced:

• Torija, Spain recycling plant: EUR 180 million
• Husnes electrolysis upgrade: NOK 225 million
• Illvatn pumped storage plant (investment ongoing)
• Green hydrogen pilot Høyanger: Three-year program
• Plasma technology pilot Sunndal: Under construction

Business area EBITDA ambitions 2030:

• Extrusions (including recycling): NOK 10-12 billion
• Recycling capacity contribution: NOK 5-8 billion
• Energy: NOK 3.5 billion (excluding Hydro Rein)
• Commercial excellence greener premium uplift: NOK 2 billion

Capital allocation: New 6.5 billion improvement program supporting profitable growth throughout aluminium value chain while maintaining adjusted net debt target of NOK 25 billion over-the-cycle.

Locked-in emissions and stranded asset analysis

The disclosure does not provide explicit locked-in emissions calculations or stranded asset analysis. However, the transition plan addresses existing assets through:

• Retrofit solutions (CCS) for existing smelters
• Brownfield replacement options using HalZero for obsolete potlines
• Continuous relining and technology upgrades (Karmøy Technology Pilot implementation)
• Alunorte fuel switch completed, eliminating heavy fuel oil dependency
• Focus on extending asset life through decarbonization rather than retirement

Use of carbon credits and removals

Hydro's decarbonization roadmap addresses actual GHG emission reductions and the ambition is to reach the reduction targets without using carbon offsets.

The technology roadmap diagram shows carbon removal as an R&D initiative to "cover any residual emissions" by 2050, but this is presented as a last resort for unavoidable emissions rather than a primary decarbonization strategy.

No current reliance on carbon credits or offsets is disclosed for meeting 2025 or 2030 targets.

Governance and implementation

The technology and decarbonization roadmap is:

• Approved by the Executive Leadership Team
• Overseen by a technology board consisting of ELT members
• Business areas responsible for their own technology development and execution
• Corporate technology office ensures holistic and long-term approach

Baseline recalculation approach: Hydro recalculates the baseline after portfolio changes to ensure progress towards targets reflects actual decarbonization efforts rather than divestments.

Key milestones status

Integration with business strategy

The climate strategy is presented as fully integrated with Hydro's 2030 business strategy "Pioneering the green aluminium transition, powered by renewable energy."

Four strategic pillars explicitly incorporate decarbonization:

1. Advance low-carbon position through recycling growth
2. Step up renewable power generation ambitions
3. Execute on decarbonization roadmap
4. Shape the market for greener aluminium through partnerships

The plan anticipates demand for low-carbon aluminium to outpace overall market demand towards 2030, positioning decarbonization as a competitive advantage and earnings driver rather than a cost center.

Policies related to climate change mitigation and adaptation

Norsk Hydro does not explicitly name or describe specific policies related to climate change mitigation and adaptation in the extracted excerpts. The company cross-references ESRS E1-2 to the "Climate change: Strategy and transition plan" section in its sustainability statement.

The company describes its climate strategy and transition plan as "an integral part of its overall business strategy," with net-zero ambitions based on a successful transition to a 1.5-degree economy and aligned with climate science and the Paris Agreement. The company refers to a white paper titled "Positioning Hydro for the just and green transition" from 2025 that describes "Hydro's climate strategy according to Hydro's policies addressing climate change mitigation."

Governance and oversight

• The technology and decarbonization roadmap is approved by the Executive Leadership Team
• Hydro has a technology board consisting of members from the Executive Leadership Team which sets direction and priorities in the technology area
• Business areas are responsible for their own technology development and execution of respective technology strategies
• Hydro's corporate technology office ensures a holistic and long-term approach to Hydro's technology strategy and agenda

Key content and approach

While specific policy names are not disclosed, the company describes its approach to climate change mitigation through:

• A defined ambition to reduce GHG emissions from own operations and reach net-zero GHG emissions by 2050 or earlier
• A technology and decarbonization roadmap with targets to reduce direct and indirect GHG emissions by 10% by 2025 and 30% by 2030, from a 2018 baseline
• The decarbonization roadmap addresses actual GHG emission reductions with an ambition to reach reduction targets without using carbon offsets
• Baseline recalculation after portfolio changes to ensure progress reflects actual decarbonization efforts

Actions and resources in relation to climate change policies

Greener sourcing and scope 3 emissions reduction

Scope: Upstream value chain

Description: Hydro aims to source aluminium metal with a lower-carbon footprint and to increase the use of post-consumer scrap in its metal production. The majority of Hydro's scope 3 emissions come from externally purchased aluminium and metal required for alloys supplied to casthouses, recyclers and extrusion plants.

Targets linked: 15% reduction in total upstream scope 3 emissions by 2030 (vs 2018 baseline); 30% reduction in upstream scope 3 emissions per tonne aluminium delivered to market by 2030 (vs 2018 baseline)

Outcomes achieved: 2024 results show 44% reduction in total upstream scope 3 emissions and 40% reduction per tonne aluminium delivered to market (vs 2018 baseline). Reductions mainly due to more conscious sourcing of metal and lower volumes in Extrusions.

Future considerations: Upstream scope 3 emissions may increase due to higher activity and more external metal input. Hydro is currently considering setting a net-zero target also for upstream scope 3 emissions.

Hydro Rein - Renewable energy solutions

Scope: Own operations and support to other industrial companies

Description: Hydro Rein is a leading provider of renewable energy solutions to industry. Supports Hydro and other industrial companies to decarbonize through large renewables energy projects in addition to onsite generation, energy efficiency, energy storage and flexibility management.

Portfolio: Currently has a diversified portfolio of more than 60 renewable energy projects in core markets in the Nordics and Brazil, plus a pipeline of energy solutions projects in Europe and North America.

Partnership: During Q2 2024, Hydro Rein and Macquarie Asset Management became partners to further accelerate Hydro Rein's growth in renewable energy. The two companies were already partners in a large-scale onshore wind farm in northeast Brazil which became commercially operational in Q4 2024.

Specific project outcome: The Brazil wind farm is estimated to avoid 11,767 KT CO2e over the project life. Through Power Purchase Agreements (PPAs), this project will supply electricity to Hydro's bauxite mine in Paragominas and its alumina refinery in Alunorte to reach Hydro's GHG reduction target.

Partnership history: Hydro has been partnering with Macquarie since 2017 to enable the development of renewable energy capacity.

Batteries business unit (being phased out)

Time horizon: Established 2020; being phased out in 2024

Scope: Battery materials value chain

Description: The Batteries business unit in Hydro Energy was established in 2020 with an ambition to invest and grow sustainable battery materials companies. Portfolio includes Hydrovolt, E-magy, Lithium de France, Northvolt, Corvus and Vianode.

Action in Q4 2024: Hydro increased ownership of Hydrovolt to 68%.

Strategic decision: To strengthen the focus on Hydro's 2030 strategy and address challenging market conditions in the batteries sectors, battery materials will no longer be strategic growth areas for Hydro and the Batteries business unit will therefore be phased out.

Technology development for climate transition

Scope: Own operations (primary aluminium production)

Time horizon: Long-term (linked to 2050 net-zero target)

Description:

• HalZero technology: Hydro is developing new, emission-free technology for use in future aluminium production facilities
• Carbon capture solutions: Assessing options to implement carbon capture solutions at existing smelters to achieve near-zero emission production and preserve the value of existing aluminium assets
• Objective: Developing technology that can be fitted to existing production facilities at an affordable price is critical for retaining strategic benefit of lower-carbon emissions

Resources: Non-financial resources mentioned but not quantified. Technology development is positioned as critical to avoiding technology risk and carbon lock-in.

Climate risk assessments

Time horizon: Ongoing; assessments conducted in 2018 and updated in 2023

Scope: Own operations (physical climate risks)

Description: To understand and mitigate climate-related physical risks, Hydro has performed several climate risk assessments:

• 2018: Modelled future weather patterns and their impact on facilities based on climate models and scenarios from the Intergovernmental Panel on Climate Change (IPCC)
• 2023: Updated physical climate risk assessment, which included modelling the risk of climate-related events in the current situation

Resources: Non-financial resources (assessment processes, modeling capabilities)

---

Note: While Hydro describes several strategic actions related to climate change policies, the disclosure lacks detailed quantification of financial resources (capex/opex budgets) allocated to specific actions, and provides limited detail on time horizons beyond general references to 2030 and 2050 targets.

Climate Change Targets

Total greenhouse gas emissions: 10 percent reduction by 2025 and 30 percent by 2030 against 2018 baseline. Net-zero by 2050 or before.

Indirect Scope 3 GHG emissions: 30 percent reduction per tonne aluminium by 2030 against 2018 baseline.

2024 Performance

In 2024, Hydro's total scope 1 and 2 emissions were 16.1 percent lower than the 2018 climate strategy baseline, exceeding the target of 10 percent reduction compared to the baseline. Total scope 3 emissions represent a 40 percent reduction of upstream scope 3 emissions per tonnes aluminium produced compared to the 2018 baseline, surpassing the 2030 reduction target of 30 percent.

Energy consumption and mix

Norsk Hydro reports energy consumption primarily through segment-level disclosures and greenhouse gas emissions reporting. The company does not provide a fully disaggregated energy mix table according to the ESRS E1-7 standard structure in the 2024 reporting.

Energy consumption highlights

Electricity consumption: Approximately 70% of electricity used in Hydro's primary aluminium production is based on renewable power. Hydro Energy operates 40 hydropower plants in Norway with combined installed capacity of 2.8 GW, producing 13.7 TWh in a normal year (9.4 TWh captive power based on ownership equity). Additionally, Hydro purchases more than 9 TWh of renewable power annually in the Nordic market under long-term contracts, resulting in a total market portfolio of 18 TWh per year in the Nordics in a normal year.

Fossil fuel consumption: The main fossil fuel sources are:

• Heavy fuel oil and natural gas at Alunorte alumina refinery (Brazil)
• Natural gas in casthouses, recycling, extrusion processes, and anode production (~10% of total GHG emissions)
• Coal at Alunorte (being phased out through fuel switch project and electrical boiler installations)

Energy-related GHG emissions (ownership equity basis):

Scope 1 emissions are calculated based on anode consumption during electrolysis and fossil fuel use. Scope 2 emissions are calculated using the location-based method with IEA emission factors. For Hydro's decarbonization strategy, green Power Purchasing Agreements (PPAs) result in zero scope 2 emissions where they exist (Norway, Brazil-Albras, Canada).

Segment breakdown (2024, ownership equity)

Energy intensity at Alunorte: 0.55 tonnes CO2e per tonne alumina refined (2024), down from 0.61 (2023) and 0.65 (2020), reflecting fuel switching and electrical boiler implementation.

Electrolysis intensity: 1.52 tonnes CO2e per tonne aluminium (2024), stable from 2023.

Scope and methodology

Energy consumption metrics are reported through the GHG emissions lens using ownership equity principles per the WRI/WBCSD GHG Protocol. The reporting includes Hydro's share of emissions from all operations including non-consolidated operations where Hydro has a minority interest. Emission factors updated using UK Government GHG Conversion Factors (DEFRA 2023) and IPCC AR6 Global Warming Potentials.

Biogenic CO2 from Alunorte's pilot use of açaí residue biomass totaled 60,743 tonnes in 2024 (not included in Scope 1 reported above).

Hydro Energy power production (2024): 9.3 TWh hydropower production (13.7 TWh in normal year). Solar and onshore wind projects (gross capacity): 8.4 GW. External power sourcing: 10.7 TWh in 2024.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 and 2 GHG emissions by ownership equity

Hydro reports Scope 1 and Scope 2 greenhouse gas (GHG) emissions by ownership equity share. The following table presents total GHG emissions for the reporting year and comparative periods:

Scope note: Scope 1 and 2 GHG emissions by ownership equity. See note E1.1 for more information. Greenhouse gas emissions were lower in 2020 due to production embargo at Alunorte and curtailed production at Albras and Paragominas. Emissions have decreased since 2021 mainly due to shut down of primary production at Slovalco plant, and implementation of emission reduction efforts.

Scope 1 GHG emissions sub-breakdown

No detailed sub-breakdown of Scope 1 emissions by stationary combustion, mobile combustion, process emissions, or fugitive emissions is disclosed in the 2024 report.

Scope 2 GHG emissions: location-based and market-based

The report does not separately disclose Scope 2 emissions on both a location-based and market-based methodology. The Scope 2 figure presented (3.31 million mt CO2e for 2024) is reported by ownership equity but the methodology basis is not specified.

Scope 3 GHG emissions

Hydro reports upstream Scope 3 GHG emissions per tonne aluminium delivered to market. The following metrics are disclosed:

Scope note: Indirect Scope 3 GHG emissions by ownership equity. Comprises material upstream Scope 3 categories. See note E1.2 for more information. Hydro targets 30 percent reduction in upstream scope 3 emissions per tonnes aluminium produced by 2030 against the 2018 baseline.

No breakdown of Scope 3 emissions by GHG Protocol category (1-15) is provided in the excerpts. The report references that upstream Scope 3 categories are included, but individual categories are not itemized.

Total GHG emissions

Note: Total figure is estimated from Scope 1 (5.67) + Scope 2 (3.31) + Scope 3 (12.5) = 21.48 million mt CO2e for 2024. Prior years' total not explicitly stated.

GHG intensity

No GHG intensity metric (e.g. tCO2e per million EUR revenue or per tonne aluminium) is explicitly disclosed in the excerpts for Scope 1+2+3 combined.

Biogenic CO2 emissions

No separate disclosure of biogenic CO2 emissions is provided in the excerpts.

Regulated emissions (EU ETS)

No specific disclosure of emissions covered by the EU ETS or other compliance schemes is provided in the excerpts.

Methodology and basis of preparation

• Emissions are reported by ownership equity share, including Hydro's share of emissions from joint ventures and associates.
• Scope 1 and 2 emissions follow the GHG Protocol Corporate Accounting and Reporting Standard.
• Scope 3 covers material upstream categories but individual categories are not itemized in the excerpts.
• Historical emissions have been recalculated to provide comparative data following ESRS E1 requirements.
• The 2018 baseline is used for climate targets and comparison.
• Metrics are collected using Hydro's environmental reporting system on an annual basis.

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

Phase-in exemption

Hydro follows the ESRS recommendations regarding phase in periods for disclosure requirements E1-9, E2-6, E3-5, E4-6, E5-6.

The following E1-9 requirements are explicitly listed as phased-in:

Physical climate risks - methodology

To understand and mitigate climate related physical risks for Hydro's operations, the company has performed several climate risk assessments. In 2018, Hydro modelled future weather patterns and their impact on its facilities based on climate models and scenarios from the Intergovernmental Panel on Climate Change (IPCC). In 2023, Hydro updated the physical climate risk assessment, which included modelling the risk of climate related events in the current situation, in addition to RCP 4.5 and RCP 8.5 in a 2030, 2040 and 2050 scenario.

Hydro is working to assess the potential consequences and necessary mitigating actions, and plans needed to adapt for climate change. The findings from the updated climate assessment are being integrated in Hydro's risk management system. Several of Hydro's assets have already undertaken significant upgrades to manage climate related risks such as the effects of increased precipitation and associated flood risks.

Transition risks - scenario alignment

Hydro has assessed regulatory risks, market risks and technology risks consistent with a 1.5-degree scenario. As a result, Hydro's long-term positioning, and operational and financial planning, reflect the company's assessment of transition risks in a 1.5-degree scenario.

Internal carbon pricing

A large amount of Hydro's aluminium operations falls within the scope of the EU Emissions Trading System (EU ETS). Hydro purchases and surrenders allowances (EUAs) to fulfil the company's compliance obligations under the EU ETS, and receives a proportion of free EUAs. The amount of purchased and received EUAs is publicly available information at a national level by the respective local EU ETS authorities.

Hydro uses the EU ETS carbon price in internal decision making processes inside and outside of the EU/EEA, and the cost of carbon is integrated in financial and operational decisions. By including a carbon price in Hydro's analysis, costs related to CO2 emissions become a variable operational cost at plant level and CO2 price expectations influence future investment decisions.

Hydro's part owned primary aluminium producer, Alouette, is also subject to carbon market compliance obligations (under the Québec cap-and-trade system which is part of the Western Climate Initiative (WCI)).

Specific assets flagged for transition risk

Qatalum carbon lock-in: At Hydro's joint venture in Qatalum, Qatar, the electricity used for primary aluminium production is provided from an integrated natural gas-fired plant.

Alunorte fuel switch: The fuel switch project in Alunorte is an intermediate step towards full decarbonization of alumina refining by 2040 and this is therefore not considered as a long-term lock-in effect on GHG emissions.

Other Emissions Targets

Hydro targets 50 percent reduction in material non-GHG emissions by 2030 against 2017 baseline, including:

• Sulfur dioxide (SO2) emissions: 50 percent reduction by 2030 against 2017 baseline
• Nitrogen oxide (NOX) emissions: 50 percent reduction by 2030 against 2017 baseline
• Particulate matter (PM) emissions: 50 percent reduction by 2030 against 2017 baseline

Hydro also has a fluoride performance target of 0.35 kg F / tonne aluminium for its fully owned smelters, by 2030.

Other emissions (SO2, NOX and PM)

Target: 50 percent reduction in material non-GHG emissions by 2030 against 2017 baseline

A key driver for this improvement has been the replacement of heavy fuel oil with natural gas at the Alunorte alumina refinery.

Substances of concern and substances of very high concern

Management approach

Hydro's global procedures for health risk management and environment management require all operational sites that are fully owned or operated by Hydro, identify, risk assess, minimize, evaluate for substitution and appropriately manage all hazardous materials or substances, purchased or generated in its processes, that have the potential to cause ill health, or to negatively impact the environment.

Hydro's products are subject to compliance declarations according to different EU and U.S. legislations. This includes registration, evaluation, authorization and restriction of chemicals (REACH) and restriction of hazardous substances (RoHS) in the EU, and the Toxic Substances Control Act and California's proposition 65 in the U.S. This gives Hydro's customers assurance that its aluminium profiles do not contain the prohibited substances above the defined limits.

Stakeholders and potentially affected communities can use AlertLine as a communication tool to report environmental and social issues concerning Hydro operations.

Quantitative disclosure

There is significant uncertainty in the data reported. Hydro's interaction with SoC and SVHC are primarily as part of mixtures, such as paints and solvents used in surface treatment of extruded aluminium profiles, cold tar pitch used for anode production, and cryolite bath used in primary aluminium.

Substances are reported as the sum of mixtures containing SoCs and SVHC, by main hazard classes, based on the amount of the mixtures used in the reporting year. Data on contents per mixture is not available at a consolidated level, and many substances are classified in several hazard classes. The sum of the substances reported by hazard class, below, therefore does not reflect total mixtures containing substances that are generated or used in production activities.

Substances used in non-production activities, such as construction, maintenance and repair, research and laboratory, and other substances used in quantities below one tonne per year, are not included.

The majority of reported mixtures containing SoC and SVHC are procured for use. The majority of mixtures reported are used for anodizing, painting, powder coating and other surface treatment of extruded aluminium profiles, anode production, or manufacture of primary aluminium.

Anticipated financial effects from pollution-related impacts, risks and opportunities

Phase-in exemption

Norsk Hydro follows the ESRS recommendations regarding phase in periods for disclosure requirements E1-9, E2-6, E3-5, E4-6, E5-6.

Policies related to water and marine resources

Global Procedure for Water Stewardship

• Approval and oversight: Approved by EVP Chief Financial Officer
• Scope: All operational sites that are fully owned or operated by Hydro
• Key content and principles:
  • Requires all covered operational sites to evaluate water related risks and opportunities at a catchment scale
  • Requires development of management plans to address any material risks identified
  • Operational sites must develop context relevant targets and maintain a sufficiently detailed water balance account to reflect the site's water risk exposure
  • Requires compliance with the International Council on Mining & Metals' (ICMM's) requirements for water reporting
  • Operational sites must manage the quality of water discharges and run-off to fulfil legal permit limits and mitigate impacts
• Links to international standards: Aligned with International Council on Mining & Metals (ICMM) requirements for water reporting
• Monitoring and implementation: Operational sites must develop context relevant targets; sites must maintain water balance accounts reflecting water risk exposure

Hydro does not have group-wide targets for water. Water management is addressed through site-specific plans, monitoring of discharges to ensure compliance with permit limits and regulatory frameworks, and regional water basin management plans (WBMP) for hydropower operations.

Water consumption

Total water interaction

Reporting boundaries: Water interaction data covers 116 locations in Hydro's consolidated operations. All operations in the aluminium value chain maintain water balances according to ICMM Water 2021 Good Practice Guide. Methods are site-specific: third-party supply based on invoiced volumes; direct extractions measured via flow meters or inferred from pumping capacity and run times.

Water intensity

The water intensity per revenue was 68.39 m³ per million NOK in 2024.

Water withdrawal by country

Note: Brazil figures include 15.5 million m³ of rainwater that is treated and discharged (varies with precipitation).

Water consumption in water stressed areas

Hydro uses the WRI Aqueduct tool to analyze freshwater footprint in water stressed areas (high or extremely high baseline water stress). Approximately 1% of freshwater withdrawals relate to operational assets in water stressed areas. 34 sites are located in water stressed areas.

Water recycled and reused

Total water recycled or reused in 2024: 68.9 million m³

• In 2024, 26% of surface water withdrawals was rainwater, primarily captured at Alunorte and Paragominas
• Approximately 76% of Paragominas' water demand was met by recovery of water from the beneficiation process
• Alunorte received 11.5 million m³ of water entrained in bauxite product through the pipeline; 45% was reused in the refining process
• Around 77% of total water withdrawal occurs in Norway from fjords (seawater) and rivers (freshwater); all seawater withdrawal used in gas treatment centers

Anticipated financial effects from material water and marine resources-related impacts, risks and opportunities

Phase-in exemption applied

Norsk Hydro follows the ESRS recommendations regarding phase in periods for disclosure requirements E1-9, E2-6, E3-5, E4-6, E5-6.

Actions and resources related to biodiversity

Actions to mitigate and compensate for mining impacts on biodiversity

Reforestation program

• Description: Developed to mitigate forest removal at the bauxite mine in Pará State, Brazil
• Scope: Own operations (Paragominas bauxite mine)
• Target: Progressive rehabilitation of mined areas within two complete hydrological seasons (1:1 rehabilitation target)
• Time horizon: Ongoing operational activity
• Expected outcomes: Minimize and restore impacts on local fauna and flora species; achieve No Net Loss for biodiversity

Enhanced No Net Loss ambition (announced 2023)

• Description: Expanded scope beyond future mine expansion to include impacts since 2020 for existing mining footprint
• Scope: Own operations (bauxite mine)
• Time horizon: Medium to long-term
• Resources (non-financial): Partnership established with a Brazilian Research Institution actively engaged in scientific research on biodiversity restoration within the Amazon biome
• Expected outcomes: Deliver on No Net Loss roadmap for biodiversity

Biodiversity Research Consortium Brazil-Norway (BRC)

• Description: Renewed in 2023 for a further five years to secure science-based approach to biodiversity management and forest rehabilitation
• Scope: Own operations (mining operations in Brazil)
• Time horizon: 5-year renewal (2023-2028)
• Resources (non-financial): Consortium consisting of University of Oslo and Brazilian partners (Museu Paraense Emílio Goeldi, Federal University of Pará, Federal Rural University of the Amazon), plus Hydro
• Key activities: Twenty-five research projects funded to date; new research program developed in 2023
• Expected outcomes: Create environmental research program; strengthen ability to preserve natural biodiversity and rehabilitate mined areas

Tailings dry backfill methodology

• Description: Developed at Paragominas mine to reduce environmental impact
• Scope: Own operations (Paragominas mine)
• Expected outcomes: Eliminates need for new permanent tailings storage facilities; permits faster rehabilitation of mined areas
• Note: Area reserved for new tailings ponds expected to be reduced because of this technology

Tailings rehabilitation research

• Description: Ongoing research into developing specialized rehabilitation technique for clay-like tailings material
• Scope: Own operations (long-term infrastructure)
• Activities: Amending tailings with organic material like green manure and decaying wood, with promising results at pilot scale (Barral das Neves et al. 2024)
• Time horizon: Long-term (research phase)

Corridor Program

• Description: Multi-stakeholder partnership with three Brazilian NGOs (Imazon, CEA, IPAM) to explore opportunities for biodiversity conservation and restoration along the bauxite pipeline between Paragominas and Barcarena
• Scope: Upstream value chain (indirect nature-related risks)
• Time horizon: Initial phase (projects, activities and targets still to be developed)
• Resources (non-financial): Partnership with research institutions, NGOs, companies, and communities; Memorandum of Understanding with Mercedes-Benz Group (September 2024) as active partner
• Expected outcomes: Scale biodiversity projects; generate sustainable income for local communities; identify opportunities for conservation and restoration of nature

Actions to minimize impacts in hydropower operations

Biodiversity Action Plans for hydropower and wind operations

• Description: Biodiversity risk assessments being performed for all operated hydropower and wind power in Norway by third-party specialist
• Scope: Own operations (all hydropower and wind in Norway)
• Time horizon: Risk assessments to be finalized in 2025; Biodiversity Action Plans to be established by end of 2025
• Expected outcomes: Identify main risks to priority biodiversity features; systematically perform mitigation activities targeted on biodiversity risks; include both mandatory and voluntary measures

Concession renewals with biodiversity measures

• Description: Rehabilitation projects in rivers and lakes to improve fish habitats and aesthetic qualities
• Scope: Own operations (hydropower)
• Current status: Two revisions in process (Fortun-Granfasta and Vigelandsfoss), awaiting approval from Norwegian Water Resource and Energy Directorate (NVE)
• Activities: For Fortun-Granfasta, all necessary studies filed with proposed restoration and improvement activities targeting aquatic biodiversity; for Vigelandsfoss, biodiversity studies on fish performed with measures to reduce impacts to eel proposed

Operational mitigation measures (hydropower)

• Activities implemented:
  • Release of water to maintain ecological flow (winter and summer)
  • Release of fish in reservoirs and rivers, planting fertilized eggs and yolk sac fry
  • Salmon ladders and other fish passages (two-way) at ponds/thresholds and natural migration barriers
  • Restoration in water bodies
  • Controlled effect power production
  • Site-specific measures for wild reindeer areas with involvement of relevant externals
  • Participation in relevant fora (action plans per wild reindeer area)
  • Removal or closure of relevant roads in dialogue with authorities and stakeholders
• Scope: Own operations (hydropower facilities)
• Expected outcomes: Reduce impacts on aquatic biodiversity, fish populations, and wild reindeer

Wild reindeer strategy

• Description: Dialogues established with Norsk Villreinsenter Sør to develop a wild reindeer strategy
• Scope: Own operations (areas where Hydro operates, including Hardangervidda and Setesdal-Ryfylke)
• Time horizon: To be developed during 2025
• Expected outcomes: Systematic approach for reducing impacts to wild reindeer and their habitats

Industry collaboration

• Resources (non-financial): Active membership in International Hydropower Association (IHA) and Renewables Norway's sustainability network; collaboration with other power producers in Norway; supporting and collaborating with research on nature impacts from renewable energy
• Scope: Own operations and industry-wide
• Expected outcomes: Address negative impacts on nature for new projects and operations; scientific approach to managing biodiversity impacts

Actions to minimize impacts in development of wind and solar power (Hydro Rein)

Biodiversity management/action plans for existing projects

• Description: Developing plans to align existing projects to international standards (IFC Performance Standards and Equator Principles)
• Scope: Joint venture operations (Hydro Rein projects)
• Activities: Using projects' fauna and flora monitoring campaigns to identify significant residual impacts to priority biodiversity features; addressing and mitigating impacts during construction and operation
• Time horizon: Ongoing

Enhanced biodiversity studies for new projects

• Description: Working with project partners and qualified specialists to perform additional studies
• Scope: Joint venture operations (new projects)
• Activities: Collision Risk Modelling, Critical Habitat Assessment, Ecosystem Services Assessments in project areas and surroundings
• Expected outcomes: Define project-specific biodiversity strategies

Vegetation compensation measures (Brazil projects)

• Description: All Brazilian projects in Hydro Rein's portfolio have explicit vegetation compensation commitments
• Scope: Joint venture operations (Brazil)
• Activities: Operation of seedling nurseries; reforestation actions in project area, surroundings, or other areas within same hydrological basin
• Compliance: Compliant with local regulation
• Resources (non-financial): Continuous monitoring with support from local qualified specialists in biodiversity management
• Status: No vegetation suppression in 2024, but ongoing reforestation measures related to past vegetation removals

Mitigation measures for specific projects

Stor-Skjälsjön wind farm (Sweden):

• Dialogue with Sami communities (Ohredahke sameby) during development and EIA process, facilitated by Sami-speaking representative
• Agreed mitigation measures included as permit conditions:
  • Minimizing project activities during winter grazing period unless agreed
  • Annual information to Sami communities about construction, maintenance, services, repair, and ice-related risks
  • Support for relocating reindeer if needed
  • Previous support for reindeer infrastructure
• Implementation of permit conditions reported to supervisory authority annually

Ventos de São Zacarias (Brazil, under construction):

• Resettlement Action Plan developed in accordance with IFC Performance Standards for six families (two from Mendubim)
• Livelihood Restoration Plan established and monitored
• FPIC consultations with two self-identified Quilombola communities in accordance with ILO Convention 169 and IFC Performance Standards
• Compensation actions agreed upon in FPIC consultation are ongoing or completed

Policy commitments supporting actions

• No development commitment: Not develop new projects in UNESCO World Heritage Sites and Legally Protected Areas classified as IUCN Protected Area Management Categories I-IV; not develop in other Legally Protected Areas if causing irreversible impacts to biodiversity values
• Minimum requirement: New projects and major changes to existing operations risking natural and critical habitat must establish biodiversity action plan documenting credible No Net Loss strategy, aligned with mitigation hierarchy, designed to deliver No Net Loss within project lifetime or sooner

Biodiversity Impact Targets

Rehabilitation of mined areas: 1-to-1 rehabilitation of mined areas in Paragominas, Brazil, within two hydrological cycles

No net loss – bauxite mine: No net loss of biodiversity for Hydro's bauxite mine, from a 2020 baseline

No net loss – new projects: No net loss of biodiversity in new projects

2024 Performance

Rehabilitation of mining areas: 100% - All suppressed land that has been released for rehabilitation prior to 2023, has been rehabilitated within the target of two years hydrological cycles, and a total of 292 hectares started rehabilitation in 2024.

Impact metrics related to biodiversity and ecosystems change

Land use footprint

Aluminium value chain total land use:

• Total footprint: 24,868 hectares (ca. 25,000 ha)
• Of which upstream bauxite and alumina: ca. 23,000 ha

Paragominas bauxite mine (Brazil):

• Total MPSA Property: 18,763 ha (2024)
• Long-term infrastructure: 234 ha
• Tailings storage facilities: 2,396 ha
• Current mining operations: 2,083 ha
• Area under ongoing rehabilitation: 3,467 ha
• Legal reserves (ARL and PPA): 3,680 ha
• Remainder of property: 6,903 ha
• Total mined area outside MPSA property: 395 ha
• Total affected area: 8,575 ha (2024)
• Pipeline easement track: 489 ha
• Transmission line track: 1,893 ha

Aluminium value chain footprint by habitat type:

Hydropower footprint:

Wind and solar footprint:

Deforestation footprint

Paragominas mine - area suppressed (forest removal):

Note: suppression includes 394 ha in Legal Reserves (ARLs) in 2024, authorized by environmental agencies and compliant with national legislation.

Operations in protected areas / Key Biodiversity Areas

Aluminium operations with proximity to biodiversity sensitive areas:

• Paragominas mine: Within 30 km of 1 legally protected area and 1 Key Biodiversity Area (Rio Capim KBA - direct overlap)
• Alunorte refinery: Within 20 km of 2 legally protected areas and 1 Key Biodiversity Area
• Albras smelter: Within 20 km of 2 legally protected areas and 1 Key Biodiversity Area
• Multiple other sites in proximity (within 5-20 km depending on activity type) to protected areas

Hydropower operations:

• RSK: 8 legally protected areas (21,894 ha overlap)
• Fortun: 4 legally protected areas (19,200 ha overlap)
• Tyin/Holsbru: 3 legally protected areas (18,017 ha overlap)
• Stavanger: 10 legally protected areas (16,928 ha overlap)
• Telemark: 11 legally protected areas (105,253 ha overlap), 1 Key Biodiversity Area

Wind and solar:

• Stor-Skalsjön (Sweden): 30 legally protected areas
• Ventos de São Zacarias (Brazil): 1 legally protected area (790 ha overlap)
• Boa Sorte (Brazil): 2 legally protected areas

Species impact metrics

Threatened species within Paragominas mine area of influence (cumulative 2011-2024):

Note: Species may be covered by more than one database; numbers cannot be summed across columns.

Threatened species in hydropower operations (Norwegian red list):

Restoration metrics

Paragominas mine - land rehabilitation:

Annual mining and rehabilitation activity:

Target: 1-to-1 rehabilitation of mined areas within two hydrological cycles (100% achievement for 2022 and earlier releases).

Ambition: No net loss of biodiversity for bauxite mine from 2020 baseline, including future expansion and existing mining footprint since 2020.

Overburden moved

Note: Strip mining technique used; overburden used to reconstruct topography of previously mined strips prior to rehabilitation.

Anticipated financial effects from biodiversity and ecosystem-related impacts, risks and opportunities

Norsk Hydro follows the ESRS recommendations regarding phase in periods for disclosure requirements E1-9, E2-6, E3-5, E4-6, E5-6.

Resource Use and Circular Economy Targets

Recycled post-consumer scrap: 850 – 1,200 thousand tonnes recycling capacity per year by 2030

Waste generation and waste recycling:

• Eliminate landfill of recoverable waste by 2040
• <35 percent of spent pot linings to landfill by 2030

Hydro aims to eliminate the need for new bauxite residue storage areas by 2050 and to eliminate the landfilling of all other recoverable waste streams by 2040.

E5-4 Resource Inflows

Hydro identifies and measures resource use by calculating resource inflows and outflows from all operations, including energy use and key materials needed for its industrial and commercial processes. Hydro's reporting on resource inflows covers the most material raw materials and inputs used in the industrial processes.

Primary resource use in alumina refining and primary aluminium production is defined as a driver of potential negative impact on resource use, as these industrial processes are energy and material intensive.

Resource Use per Material (1,000 metric tonnes)

Notes:

• Lime, caustic soda, sulfuric acid and flocculants (thickener) are primarily used in the alumina refining process. Flocculants are also used at Hydro's Bauxite mine in Paragominas.
• Alumina and aluminium fluoride are primarily used in the electrolysis process.
• Hydro follows strict procedures and policies related to storing, usage and handling of the materials.
• Reporting of material use is based on direct measurements through Hydro's internal systems.
• Aluminium scrap inflows are reported based on the amount of pre and post-consumer aluminium scrap used in Recycling and Extrusions' remelters.
• Hydro uses a definition for recycling agreed on by the European Aluminium Association, dividing recycled scrap into process scrap (pre-consumer scrap from downstream casthouses) and post-consumer scrap purchased from third parties.

Hydro also reports that in 2024, approximately 451 thousand tonnes of post-consumer scrap was recycled, with an ambition to increase post-consumer scrap recycling capacity from 560,000 tonnes in 2023 to 850,000-1,200,000 tonnes by 2030.

Resource outflows

Hydro differentiates its product portfolio through its production of renewable energy, low-carbon primary aluminium, and recycled aluminium of post-consumer scrap. The company produces two main low-carbon aluminium brands:

Hydro CIRCAL: A certified recycled and low-carbon product with more than 75% post-consumer scrap (PCS). Hydro CIRCAL has a carbon footprint of 1.9 kg CO2e/kg aluminium (previously 2.3 kg CO2e/kg). In 2024, Hydro sold 57,000 tonnes of CIRCAL.

Hydro CIRCAL 100R: Produced at Hydro's recycling plant in Clervaux, Luxembourg, with 100% post-consumer aluminium scrap and a carbon footprint below 0.5 kg CO2e/kg aluminium. In 2024, Hydro produced 130 tonnes of this near-zero carbon aluminium.

Hydro REDUXA: Low-carbon aluminium using renewable energy from water, wind and solar in the production phase. This reduces the full value chain carbon footprint to 4.0 kg CO2e per kg aluminium, significantly less than the global average of 14.8 kg CO2e/kg. Hydro has an ambition to deliver Hydro REDUXA 2.0 with a carbon footprint of less than 2 tonnes CO2e per mt of aluminium by 2030.

Durability: Aluminium can be recycled infinitely without degradation in quality. Aluminium recycling requires 95% less energy than primary aluminium production.

Design-for-circularity: Hydro works closely with customers through the Hydro EcoDesign process, which helps customers create better products with increased functionality and a lower-carbon footprint. The company is investing in technologies to increase usage of end-consumer scrap while securing access to scrap.

Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities

Phase-in exemption

Hydro follows the ESRS recommendations regarding phase in periods for disclosure requirements E1-9, E2-6, E3-5, E4-6, E5-6.

Waste

Hydro aims to eliminate landfill of all recoverable waste by 2040, and to landfill less than 35% of spent pot linings (SPL) by 2030. In 2024, Hydro landfilled 19% of its waste and 43% of its SPL.

Waste generation and waste recycling targets

Waste management approach

Hydro identifies and assesses impacts, risks, and dependencies associated with resource use and circular economy by measuring its resource use and resource outflows from all operations. This includes energy and raw material use for production processes, recycled content in resource inflows, as well as the generation of tailings, residue and waste from its operations, and the waste treatment and disposal methods for different waste streams.

Impacts associated with resource outflows include tailings from mining operations, bauxite residue from alumina refining and waste generation from operations in the aluminium value chain.

Hydro is developing circular production models in the aluminium value chain and has established partnerships to develop more circular solutions to waste streams. In relation to bauxite residue, Hydro engages several commercial partners and supports R&D projects connected to management and utilization of bauxite residue.

The Tailings Dry Backfill technology allows new tailings from bauxite mining to be returned to open and mined areas before the rehabilitation process, instead of being deposited in separate, permanent storage areas. Hydro aims to eliminate the need for new bauxite residue storage areas by 2050 and to eliminate the landfilling of all other recoverable waste streams by 2040.

Policies related to own workforce

Hydro has established several policies and governance documents that relate to its own workforce, covering health and safety, human rights, labor rights, diversity, and business conduct.

Code of Conduct

Scope: Applies to all Hydro employees throughout the world, as well as to board members of Hydro and its subsidiaries. For legal entities where Hydro holds less than 100 percent of the voting rights, Hydro's representatives in the Boards of Directors or in other governing bodies shall act in compliance with Hydro's Code of Conduct and endeavor to implement the principles as laid down therein.

Approval and oversight: The Code of Conduct is a constituting document approved by Hydro's Board of Directors.

Key content/principles: The Code of Conduct addresses compliance with laws and matters such as handling of conflicts of interest and a commitment to equal opportunities for all employees. The defined programs contribute to compliance with anti-corruption and basic human rights, and other relevant governance areas.

Public availability: Available at Hydro.com/principles.

International standards alignment: Not explicitly stated in excerpts for Code of Conduct specifically.

Monitoring: The Code of Conduct is systematically implemented and maintained through Hydro's compliance system, which is based on a clear governance structure defining roles and responsibilities to manage the relevant compliance risks. Hydro monitors business conduct incidents through cases reported to line management, supporting staff functions, Hydro's grievance mechanisms (AlertLine and Canal Direto), quarterly and year-end compliance reporting from business areas, and information collected from Hydro's legal and compliance departments.

Human Rights Policy

Scope: Covers all operations and workforce.

Approval and oversight: Approved by the Executive Leadership Team (ELT). The operational responsibility for ensuring engagement is conducted as set out in the policy is delegated to the business areas.

Key content/principles: Hydro's commitment to respect the human rights of affected communities and to manage any potential or actual adverse impacts. The policy explicitly addresses forced or compulsory labor and child labor (though these are not identified as salient risks for Hydro's own workforce).

International standards alignment: The policy is aligned with the UN Guiding Principles on Business and Human Rights and Hydro's commitment to respect human rights is guided by internationally recognized human rights and labor standards, including those contained in the International Bill of Human Rights. The policy provides reference to the UN Declaration on the Rights of Indigenous Peoples and the Indigenous and Tribal Peoples Convention (ILO Convention 169).

Monitoring: Potential or actual adverse impacts on local communities and workforce are managed through human rights due diligence processes.

HSE Policy

Scope: All own employees and contractors.

Approval and oversight: Owned by the EVP for People and HSE. The CEO HSE Committee is the strategic decision making committee for all main HSE related matters for the Hydro group, led by the President & CEO and consisting of the members of the Executive Leadership Team (ELT) and the head of global HSE.

Key content/principles: Hydro's health and safety activities are governed by the company's HSE policy. Hydro's ambition is to provide safe and healthy workplaces, promote health and wellbeing, and prevent work related injuries and illness. The HSE Policy includes Hydro's requirements for independence, shareholder interests, competence, capacity, and diversity.

International standards alignment: Health and safety standards are aligned with ISO standards.

Monitoring: The Board oversees that Hydro has appropriate global directives for issues including risk management, business conduct, health and safety, people management, social responsibility and human rights. Health and safety are identified as salient human rights with potential adverse impacts on employees and contractors across Hydro's operations.

Global HSE Directive

Scope: Applicable for all own employees and contractors.

Approval and oversight: Owned by the EVP for People and HSE.

Key content/principles: Governs Hydro's health and safety activities.

Monitoring: Not explicitly detailed in excerpts.

Additional governance documents

Hydro's governance structure is based on applicable laws and regulations, and Hydro's corporate directives, with delegation of responsibility to the business areas and to corporate functions. To maintain uniformly high standards, Hydro sets common requirements in the form of constituting documents and global directives. Constituting documents are approved by Hydro's Board of Directors or the general meeting of shareholders, while global directives are approved by the President & CEO.

The Board oversees that Hydro has appropriate global directives for issues including risk management, business conduct, health and safety, people management, social responsibility and human rights.

Monitoring and implementation

Hydro's governing documents and global directives help ensure that all employees carry out their activities in an ethical manner, and in accordance with current legislation and Hydro standards. All new board members take part in an onboarding process focusing on Hydro's industries, operating model, risk management and sustainability approach, including its Code of Conduct.

Impact, risks and opportunities related to sustainability, including environment and climate change, social responsibility, diversity, health, safety and compliance, are integrated into the group's risk management and strategy processes.

Taking action on material impacts on own workforce

Training and Skills Development

Organizational Upskilling Initiative (2024)

• Scope: Own operations (whole organization)
• Time horizon: Short to medium term (2024-2025)
• Description: Investing in upskilling of the whole organization, focusing on key skills needed to deliver on the company's strategic goals
• Key training programs delivered in 2024:
  • Sustainability training (most frequently completed)
  • Artificial intelligence training (most frequently completed)
  • Digital literacy training (most frequently completed)
• Resources allocated: More than NOK 13 million spent on external training resources in 2024
• Future focus: Digital literacy for all employees will continue as a prioritized area of training in 2025

Executive Education Programs (2024)

• Scope: Own operations (selected participants)
• Time horizon: Short term (2024)
• Programs delivered in cooperation with universities:
  1. "Leading sustainable organizations" (Oxford)
  2. "AI Implications for Business Strategy" (MIT)
• Outcomes: Very high completion rates and very positive feedback from participants

Training Performance Metrics

Note: Training initiatives can vary from year to year based on business needs and initiatives.

Own Workforce Targets

Number of fatal accidents: Zero fatal accidents

Total recordable injuries: Zero life-changing injuries

Share of women employees: 25 percent share of women by 2025 (in permanent and temporary positions combined)

Share of women leaders: 25 percent share of women leaders by 2025

Employee inclusion: 78 percent inclusion index score by 2024

Employee characteristics

Total workforce: 32,000 employees at more than 140 locations in 42 countries

The company has 32,000 employees, at more than 140 locations in 42 countries, more than 30,000 suppliers, and serves more than 30,000 customers around the world.

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

Non-employee workers

Hydro engages a small number of non-employee workers and consultants that are not included in Hydro's employee data. Contractors working on Hydro's sites are subject to the same requirements and due diligence on health, safety and worker's rights as Hydro's own workforce.

Health and safety metrics including contractors

Hydro reports combined health and safety metrics that include both employees and contractors, measured per million hours worked:

Total recordable injuries, lost-time injuries, and fatal accidents

Methodology note: In 2024, there was one contractor fatality in consolidated operations at the Albras aluminium smelter. In 2023, there was one contractor fatality in consolidated operations that is still under investigation for work relatedness, as well as one contractor fatality at the joint venture Qatalum that is not part of consolidated statistics.

High risk incidents (HRI)

Methodology notes:

• Health and safety data covers employees and contractors at all consolidated units within Hydro, including sales offices and administrative functions.
• Employees include agency workers for the purpose of recording health and safety statistics.
• Contractors are workers under contract to execute work for Hydro, under the direct supervision of the contractor and operating at Hydro premises under Hydro's indirect supervision.
• TRI, LTI and HRI rates are calculated per one million hours worked.
• TRI is calculated as the sum of lost time injuries (LTI) + restricted work cases (RWC) + medical treatment cases (MTC).

Collective bargaining coverage and social dialogue

Overall collective bargaining coverage

Overall, 67 percent of Hydro's global workforce are covered by collective agreements.

Regional and geographic breakdown

Hydro's major sites in Europe and Brazil are unionized. In North America, 44 percent of Hydro's employees are covered by collective bargaining agreements.

Collective bargaining coverage by region

Data on collective bargaining coverage is presented using ESRS templates for countries of significant employment:

Social dialogue mechanisms

Hydro actively engages with its workers on labor rights through a variety of channels, including:

• Meetings with labor unions
• Work councils
• Joint management worker committees

Hydro has maintained a Global Framework Agreement since 2011.

Hydro's European Works Council agreement was revised in 2022.

Topics covered in social dialogue

Discussions with employee representatives cover topics such as:

• Hydro's people strategy, policies and procedures
• Health and safety
• Standards for decent work
• Human rights
• Labor rights
• Compliance with applicable regulations in each country of operation

Non-unionized workers

In Norway, non-organized workers typically benefit from the same compensation adjustments negotiated at the industry level. In addition, workers on individual agreements may receive adjustments based on company and individual performance, and external benchmarking.

Collective bargaining frequency

Collective bargaining takes place at a frequency agreed with the local unions.

Reporting principles

Data on collective bargaining and social dialogue is based on local HR records. An estimated 67 percent of the global workforce is covered by collective agreements, but the records may be incomplete in certain countries due to the sensitive nature of information about individual employment terms and participation in labor unions. The reported data includes all employees in countries of significant employment.

Gender Balance Performance

Hydro targets 25 percent women employees in permanent and temporary positions combined, and 25 percent women in leadership positions by 2025.

Hydro's overall gender balance improved one percentage point from 2023, with 24 percent of the Hydro workforce comprising women at the end of 2024. The share of women in management has also increased by one percentage point in the same period, with 21 percent of leadership positions in Hydro comprising women at the end of 2024.

Adequate wages

Benchmark used

Hydro conducted a wage analysis in 2024 to benchmark against a living wage in the markets where Hydro operates. The company has partnered with FairWage Network to assess compensation, targeting to ensure sustainable compensation for its employees.

Hydro's compensation approach is based on a transparent reward strategy with due regard to the basic needs of the worker. The company has an ambition to improve lives and livelihoods wherever it operates and to ensure transparent compensation with due regard to the basic needs of the worker.

Coverage and findings

Out of 29,564 employees assessed, 396 individuals (1.3 percent) were identified to have earnings below what is considered "decent living" covering the basic needs of workers.

Geographic scope

The analysis covered markets where Hydro operates globally. The disclosure does not specify geographic exclusions.

Targets and commitments

Hydro is committing to close the gaps by setting and maintaining wages that reflect both industry standards and the cost of living. The company has developed a dashboard to track employees earning below the living wage and will continue to map wages below the living wage and close the wage gap in 2025.

Methodology

Hydro partnered with FairWage Network for the assessment. The company has developed a dashboard to track and monitor employees earning below the living wage threshold.

Value chain extension

Hydro has incorporated living wage requirements into its procurement processes. According to the Supplier Code of Conduct, wages and benefits paid for a standard working week shall as a minimum meet national legal or industry standards, whichever is higher. Wages should be sufficient to cover basic needs and provide some discretionary income.

Social protection

All Hydro employees are covered by social security systems in their respective countries. At a minimum, all employees receive business travel insurance, benefits covering work-related events (accidents and illnesses), and retirement benefits. Hydro introduced a global minimum standard of 16 weeks fully paid parental leave for primary caregiver and four weeks fully paid leave for secondary caregiver in 2024.

Social protection

Coverage and benefits

At a minimum, all employees receive (in combination with statutory benefits and social security) business travel insurance, benefits covering work related events (accidents and illnesses), and retirement benefit.

As part of the global reward strategy, Hydro introduced a global minimum standard of 16 weeks fully paid parental leave for primary caregiver and four weeks fully paid leave for secondary caregiver in 2024.

Collective bargaining and social protection

Overall, 67 percent of Hydro's global workforce are covered by collective agreements. Collective bargaining takes place at a frequency agreed with the local unions.

In Norway, non-organized workers typically benefit from the same compensation adjustments negotiated at the industry level. In addition, workers on individual agreements may receive adjustments based on company and individual performance, and external benchmarking. In regions where union representation is not [text incomplete in source].

Norway-specific pension plans

Most employees in Norsk Hydro ASA are covered by a defined contribution plan. Norsk Hydro ASA has closed the main defined benefit plans. The defined benefit plans are funded for benefits earned on salaries up to 12G, where G equals the base amount in the National Insurance Scheme. Benefits earned on salaries above 12G, and early retirement and termination benefits are unfunded. The plans comply with legal requirements for occupational pensions in Norway.

Norsk Hydro ASA participates in a pension plan that entitles the majority of its employees life-long benefits in addition to other pension benefits. The benefits are financed through a pooled arrangement by private sector employers (avtalefestet pensjon, AFP) where also the Norwegian state contributes. The plan is a defined benefit plan with limited funding and where plan assets are not segregated. The information required to calculate the share of the plan and account for the plan as a defined benefit plan is not available from the plan administrator. Hydro therefore accounts for the plan as if it were a defined contribution plan.

Parental leave - Norwegian entities (2024)

Global parental leave policy

In December 2023 Hydro agreed on a global parental leave policy for all employees. The global parental leave policy set a minimum standard, which gives 4 months fully paid leave for primary caregiver and one month fully paid leave for secondary caregiver. The global parental leave policy will be rolled out in 2024, however where local standard already has a more beneficial scheme, this will supersede the global plan. Local deviation to the global plan can also be made if this is required by local law and/or regulations applicable in the jurisdiction.

Part-time work (Norway)

Part-time employees normally work full time. The opportunity to work part time is considered a benefit for which a special application must be made. In 2023, a review confirmed that all employees working part time had applied for reduced working hours (no cases of involuntary part-time work identified).

Persons with disabilities

Overall disclosure

Hydro does not report an overall percentage of employees with disabilities across its global operations.

Country-specific data: Brazil

Hydro is required to employ at least 5 percent employees with disabilities in Brazil. At the end of 2024:

Methodology and scope

No global methodology or definition for disability reporting is disclosed. The Brazil data appears to be based on legal compliance requirements (5% minimum employment quota).

No country exclusions related to disability status reporting restrictions are explicitly disclosed.

Multi-year comparison

No multi-year data is provided for disability metrics.

Policy context

Hydro has developed a global guide for inclusion of people with disabilities and seeks to foster an environment where people of different physical, cognitive and mental health abilities can feel supported. The company is continuously adjusting working conditions so that all employees have the same opportunities in their workplace.

Training and skills development metrics

Training hours and participation

Training investment

Hydro spent more than NOK 13 million on external training resources in 2024.

Training focus areas

Training initiatives can vary from year to year based on business needs and initiatives. In 2024, Hydro has been investing in upskilling of the whole organization, focusing on key skills needed to deliver on the company's strategic goals. The most frequently completed training programs in 2024 were on sustainability, artificial intelligence and digital literacy. Digital literacy for all employees will continue as a prioritized area of training in 2025. In cooperation with Oxford and MIT, Hydro also ran two executive educational programs for a selected number of participants: "Leading sustainable organizations" (Oxford), and "AI Implications for Business Strategy" (MIT).

Health and safety metrics

Coverage of health and safety management system

Hydro's health and safety activities are governed by the company's HSE policy and the Global HSE Directive, which are applicable for all own employees and contractors. Health and safety data covers employees and contractors at all consolidated units within Hydro, including sales offices and administrative functions.

Fatalities

One contractor fatality occurred at the Albras aluminium smelter in Brazil in July 2024 during maintenance (relining) activities; root cause related to electrocution. In 2023, there was one contractor fatality in consolidated operations that is still under investigation for work relatedness, as well as one contractor fatality at the joint venture Qatalum that is not part of consolidated statistics.

Total recordable injuries (TRI) and lost-time injuries (LTI)

High risk incidents (HRI)

High risk incidents include major accidents and incidents with major potential.

Occupational illness and sick leave

Methodology notes

For the purpose of recording health and safety statistics, employees include agency workers. Contractors are workers under contract who operate at Hydro premises under Hydro's indirect supervision. Total recordable injuries (TRI) is calculated as the sum of lost time injuries (LTI) + restricted work cases (RWC) + medical treatment cases (MTC). Rates are calculated per one million hours worked. Sick leave includes all absence due to illness, measured as number of days lost as a percentage of possible working days excluding holidays.

Work-life balance metrics

Parental leave entitlement and policy

In December 2023, Hydro agreed on a global parental leave policy setting a minimum standard of:

• 16 weeks fully paid parental leave for primary caregiver (introduced in 2024)
• 4 weeks fully paid leave for secondary caregiver (introduced in 2024)

Where local standards already have a more beneficial scheme, this supersedes the global plan. Local deviation to the global plan can also be made if required by local law and/or regulations.

Parental leave taken - Norway

The following table shows average weeks of parental leave taken per employee who took parental leave in 2024 for Norwegian entities:

Note: Average number of weeks parental leave per employee who has taken parental leave in the reporting year.

Work-life balance monitoring

Hydro tracks perceptions of healthy balance between work and spare time and stress levels as important indicators for a sustainable work environment through its employee engagement survey (Hydro Monitor).

Part-time work - Norway

Part-time employees in Norway normally work full time. The opportunity to work part time is considered a benefit for which a special application must be made. In 2023, Hydro reviewed if there were any cases of involuntary part-time work in Norwegian activities and confirmed that all employees working part time had applied for reduced working hours.

Compensation metrics

Pay gap

Hydro analyzed global pay statistics in 2024 and found an unadjusted gender pay gap of six percent. Hydro analyzes equal pay by accounting for factors such as job type, job level and complexity, experience, education, tenure, performance and work location, in addition to gender. The analysis shows an adjusted pay gap of seven percent, due to gender and other potentially unidentified factors.

Hydro will address this pay gap and work to ensure equitable compensation for work of equal value. To identify areas for improvement and gain actionable insight, the company conducted a detailed analysis across 42 business units in 21 countries.

Remuneration ratio

The ratio of the highest base salary to the median base salary for all permanent employees was 17.4. For more information, see the Remuneration report.

Methodology

Pay gap data are based on local payroll systems, and the average salary per gender per job level is calculated based on real paid out amount through 2023. The gender pay gaps reported in the Own workforce chapter are based on requirements in the Norwegian equality and anti-discrimination act. For detailed pay gap statistics for Norwegian employees according to the Norwegian Equality and Anti Discrimination Act, see Note S1.6 in the appendix.

Hydro's global job architecture framework is built on Mercer's International Position Evaluation system (IPE). Job levels 1 to 3 typically cover operators, levels 5 and 6 jobs require higher education (e.g., bachelor or master with typically 1-5 years of experience), levels 6 and 7 are jobs that require extensive experience in their area of expertise, and levels 8 and 9 cover the most senior specialist and management positions.

Incidents, complaints and severe human rights impacts

Cases reported regarding breaches of Hydro policy

Discrimination and harassment incidents

Corruption, fraud and conflict of interest

Fines and sanctions

Severe human rights impacts

Cases of non-respect of UN Guiding Principles on Business and Human Rights: One case identified in 2024 involving affected communities in the value chain - the Fosen Wind case in Norway. See Affected communities chapter for details.

Additional grievance mechanisms:

• AlertLine: Group Internal Audit and Investigation (GIA&I) oversees all alerts, assesses criticality, and investigates severe cases. A Review Committee comprised of representatives from Legal, HR and Compliance supports investigations.
• Canal Direto (Brazil): Operational level grievance mechanism for external stakeholders. In 2024, registered 633 reports, of which 84% were requests for information and 92% of registrations were identified. Most frequently registered topics included sponsorships, job and career opportunities, visits to operations, donations, commercial matters, auctions and interest in research, innovation and new technologies.

Methodology notes

From 2024, Hydro made a distinction between Alerts and Non-Alerts, wherein Non-Alerts are minor complaints related to personal grievances, disputes over terms and conditions, individual preferences or professional disagreements. Since 2022, Hydro has had several awareness raising campaigns about AlertLine, which contributed to the significant increase in total cases reported. All confirmed cases in 2024 are isolated incidents and have not been considered structural in nature. One additional confirmed case related to working time was identified through AlertLine in 2024.

Policies related to value chain workers

Norsk Hydro has established policies and procedures to manage impacts on workers in the value chain, embedded in its sustainability strategies and business processes.

Hydro's Code of Conduct

Scope: Applies to Hydro's operations and is referenced in relation to value chain management.

Key content:

• Part of Hydro's requirements for sustainability due diligence and risk management
• Embedded in business processes through global policies, directives and procedures

Linkage to international standards:

• Aligned with Hydro's human rights policy and sustainability strategies

Supplier Code of Conduct

Scope: All suppliers to Hydro

Key content:

• Sets out minimum sustainability requirements for all suppliers
• Requires suppliers to conduct due diligence in their own supply chain
• Includes provisions that are fully in line with applicable ILO standards
• Incorporates living wage requirements: wages and benefits paid for a standard working week shall as a minimum meet national legal or industry standards, whichever is higher, and should be sufficient to cover basic needs and provide some discretionary income
• Explicitly addresses trafficking in human beings, forced labour or compulsory labour and child labour

Public availability:

• Principles made binding through contractual clauses
• Sustainable procurement expectations reflected in supplier self-assessments and assessed in visits and audits

Linkage to international standards:

• Based on internationally recognized standards including:
  • Universal Declaration of Human Rights
  • International Labor Organization (ILO) Core Conventions
• Aligned with UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, and OECD Guidelines for Multinational Enterprises

Governance and oversight:

• Trond Olaf Christophersen, EVP and Chief Financial Officer, is responsible for supply chain policy

Implementation and monitoring:

• Suppliers subject to mandatory due diligence process described in company-wide procedure "Sustainability in the supply chain"
• More than 9,000 potential or existing counterparties screened for human rights violations, corruption, money laundering, politically exposed persons, and violations relating to sanctions using Moody's Grid integrity risk tool during 2024
• High and medium risk suppliers subject to further due diligence using self-assessments, screening tools, direct engagement and audits
• Suppliers in North America screened using MK Denial tool against 16 official sanction lists multiple times per year (approximately 13,600 customers and vendors screened in 2024)
• All suppliers, customers and business partners registered in main accounting systems screened weekly against recognized international sanction lists
• Failure to comply may result in contract termination as a last resort, though Hydro seeks to work with suppliers for continuous improvement

Human Rights Policy

Scope: Embedded in business processes and applicable to value chain management

Key content:

• Part of requirements for sustainability due diligence and risk management
• Embedded in Hydro's global policies, directives and procedures

Linkage to international standards:

• Referenced in context of alignment with human rights due diligence requirements

Procedures for Sustainability in the Supply Chain

Key content:

• Outlines mandatory process for due diligence of all suppliers
• Includes supplier screening, assessment, and corrective action procedures

Implementation and monitoring:

• Inherent risk assessment using data on geography and industry
• High and medium risk suppliers subject to self-assessments, screening tools, direct engagement and audits to determine residual risk
• Direct engagement on corrective action plans related to residual risk of negative impacts

Taking action on material impacts on value chain workers

Supplier Due Diligence Process

Scope: Upstream and downstream value chain workers

Description: Three-step approach based on UN Guiding Principles on Business and Human Rights and OECD Guidelines:

1. Mapping of risks and due diligence activities - All suppliers subject to qualification process including screening for human rights and workers' rights risks
2. Risk assessment by geography and industry - High and medium risk suppliers subject to further due diligence using self-assessments, screening tools, direct engagement and audits
3. Corrective action plans - Direct engagement on corrective action plans related to residual risk of negative impacts

Resources allocated:

• Supplier audits: 215 audits conducted in 2024 (141 in 2023)
• Non-financial: Process of implementing and improving procedure on sustainability in supply chain; several Business Areas strengthened capacity on this topic

Expected outcomes/KPIs:

• Total suppliers screened: 9,520 in 2024 (10,446 in 2023)
• High and medium sustainability risk suppliers: 2,878 in 2024 (1,095 high risk only in 2023)
• Supplier audits leading to corrective action plans: 107 in 2024 (50 in 2023)
• Almost 100% of corrective actions proposed by Hydro resulted in improved performance by end of 2024
• Supplier contracts terminated due to sustainability risks: 2 in 2024 (3 in 2023)

Target: New target set to track share of suppliers with corrective action plan for human rights residual risks (reporting begins 2025)

Key findings from audits: Lack of management systems, environmental awareness, compliance controls and emergency preparedness. Around 30% of audits led to action plans.

Links to policy: Hydro's Supplier Code of Conduct sets out requirements and expectations for workers' rights

Aluminium Stewardship Initiative (ASI) Engagement

Scope: Aluminium suppliers in value chain

Description: Active ASI membership promoting certification program to aluminium suppliers for sustainable development of operations

Resources allocated: Non-financial: Membership engagement, promotion activities

Links to policy: Supports responsible value chain within Just Transition framework

External Stakeholder Collaboration

Scope: Value chain workers globally

Description: Cooperation with unions and industry associations to develop and implement supplier development programs

Resources allocated: Non-financial: Partnerships with unions, industry associations

Country/Region-Specific Actions

Wind and Solar Projects in Brazil (Hydro Rein)

Scope: EPC (Engineering, Procurement and Construction) service workers

Risks addressed: Inadequate and unfair working conditions, discrimination and harassment

Actions:

• Working with business partners to implement IFC Performance Standards
• Facilitate effective communication between project and workers during induction, training sessions and open dialogue

Links to policy: IFC Performance Standards

China Operations

Scope: Suppliers in China

Risks addressed: High inherent risk due to limited state protection of human rights; Xinjiang-related forced labor risks

Actions:

• 2023 externally-led human rights assessment (continuing to inform approach in 2024)
• No sourcing of materials and alloys from Xinjiang region
• Close monitoring and re-visits of suppliers for verification of positive change
• No indications of forced labor identified at supplier sites

Resources allocated: Non-financial: External human rights assessment, supplier re-visits

Qatar (Qatalum Joint Venture)

Scope: Contracted workers (approximately 25% of 1,350 workforce)

Actions:

• Audits and inspections of contractors' housing facilities
• Board visits to contractor camps
• ASI Performance and Chain of Custody certification (received 2022, re-certified 2024 with new version)
• Discussions with local stakeholders and organizations on recruitment of migrant workers
• Sharing knowledge on working conditions in Qatar

Resources allocated: Non-financial: ASI membership, stakeholder engagement, audit program

Links to policy: ASI Performance Standard (certified by DNV 2024); Qatalum CSR program; Hydro standards for contractor housing

Transparency and Traceability Initiative

Target: Transparency and traceability of key sustainability data for products by end of 2025

Scope: Value chain

Actions:

• Mapping metal flow beyond external smelters to understand bauxite and alumina origins
• Vast majority of bauxite from handful of countries and ASI-certified mines or mines with supplier-specific data
• Continuing to develop understanding of flow for smaller volumes

OECD Guidelines Assessment

Time horizon: Completed early 2024

Resources allocated: Non-financial: Deloitte assessment of due diligence system

Expected outcomes: Improved approach to sustainability in supply chain management against OECD guidelines

Supplier Screening Tools

Resources allocated (non-financial):

• Moody's Grid integrity risk tool
• MK Denial sanctions screening tool
• Supplier self-assessment questionnaires
• EcoVadis ESG screenings
• Desktop assessments

Material Issues Identified in 2024

Findings:

• Pre-screening: Document retention for sub-supplier (1 case)
• Pre-screening: Lack of overtime payment for sub-supplier (1 case)
• Standard audit: Insufficient management systems leading to unhygienic working conditions (1 case)

Outcomes: All material issues closed or in process of being closed by year-end 2024

Links to policy: Corrective action plans established in dialogue with suppliers

Policies related to affected communities

Hydro does not disclose a specific named policy dedicated to affected communities in the excerpts provided. However, the company references several policy commitments and frameworks relevant to affected communities:

Policy commitments and frameworks

Alignment with international standards:

• The company commits to respect for the UN Guiding Principles on Business and Human Rights
• Alignment with the ILO Declaration on Fundamental Principles and Rights at Work
• Compliance with OECD Guidelines for Multinational Enterprises

Key content and approach:

• General approach to respect for human rights of communities, including indigenous peoples
• Commitment to engagement with affected communities
• Measures to provide and/or enable remedy for human rights impacts

Monitoring implementation:

• Effects are monitored through human rights due diligence and human rights risk assessments
• Human rights data collection is conducted
• Human rights risk levels per country are used to guide management, based on independent sources such as the UN Human Development Index and TI Corruption Perception Index
• Assessments draw on materiality assessments conducted by the International Aluminium Institute (IAI)
• Human Rights Impact Assessments are conducted (e.g., ongoing assessment in the state of Pará, Brazil, with findings expected in 2025)
• A Human Rights Action Plan has been implemented at Alunorte, Albras and Paragominas since 2020

Grievance mechanisms:

• Canal Direto in Brazil registered 633 reports in 2024, with 84% related to requests for information
• AlertLine confidential reporting channel available

Non-compliance:

• One case of non-respect of the UN Guiding Principles on Business and Human Rights, ILO Declaration and OECD Guidelines was identified in 2024, involving the Fosen Wind case in Norway (affected communities in the value chain)

Stakeholder engagement:

• The company engages with global organizations (IAI, ICMM, ASI, Amnesty International, UNICEF, ILO)
• Regional expertise partners (Nordic Business Network for Human Rights - DIHR, regional human rights experts)
• Local stakeholders (local communities, municipalities, local NGOs, customers, suppliers)

Public availability:

• Global Tax Policy published on Hydro.com (approved by Board of Directors in December 2024)
• Specific policies related to affected communities are not explicitly stated as publicly available in the excerpts

Governance:

• Global Tax Policy approved by the Board of Directors
• Oversight and governance structures for affected communities policies not explicitly disclosed in the excerpts

Affected Communities - Actions and Performance

Hydro aims to improve lives and livelihoods wherever it operates by contributing to the protection of human rights and access to equal opportunities, resilient local communities in a changing world, and development of skills and jobs for the future low-carbon economy.

Community Investment and Support

In 2024, Hydro spent NOK 300 million in its local communities including community investments, TerPaz (local community centers), donations and sponsorships, and launched its program to increase funding to projects aligned with Hydro's Just Transition priorities in the communities where it operates.

In addition to this, Hydro made a provision in December 2024 of NOK 300 million to support communities along the pipeline between the Paragominas mine and Alunorte refinery in Brazil. The provisioned funds will support infrastructure, local production facilities, and skills development.

Skills Development Program

Hydro has a target to equip 500,000 people with new skills and education by 2030. Hydro progressed towards this target by reaching more than 44,000 people in 2024. In total, 241,000 people have benefitted from Hydro's education and skills initiatives since 2018.

Social Programs

100,000 people have been assisted by social programs since 2018 at Bauxite & Alumina operations.

Affected Communities Targets

Persons empowered with skills and education: Provide quality education and capacity building for 500,000 people by 2030

2024 Performance

Hydro progressed towards its target to equip 500,000 people with skills and education for the future low-carbon economy by 2030, reaching more than 44,000 people in 2024. In total, 241,000 people have benefitted from Hydro's education and skills initiatives since 2018.

Business Conduct and Corporate Culture

Hydro's values of care, courage and collaboration, reflect how the company aims at interacting with its employees, local communities, customers and suppliers.

Care

We act with respect for people and the environment, and place safety at the heart of our operations.

Courage

We break new ground and take measured risks with agility, accountability, and foresight.

Collaboration

We work as partners internally and externally to unite competencies and create win-win opportunities.

Management of Relationships with Suppliers

Hydro works with more than 30,000 suppliers around the world. The company maintains supplier relationships across its global value chain operations in more than 140 locations in 42 countries.

Prevention and Detection of Corruption and Bribery

Hydro has governance and compliance indicators including:

Combat corruption: Target of zero substantiated claims of corruption

Building a culture of integrity and trust:

• Compliance training and tracking performance on integrity culture index
• Compliance awareness and training

Performance Metrics

Incidents of corruption or bribery

Confirmed incidents

Hydro reports on cases investigated through its AlertLine reporting mechanism. In 2024:

• Total cases reported through AlertLine: 703 cases
• Alleged cases of corruption, fraud, corruption and/or conflict of interest: 39 cases
• Confirmed cases of corruption, fraud, corruption and/or conflict of interest: 19 cases
  • Confirmed cases of corruption: 1 case
  • Confirmed cases of fraud: 4 cases
  • Confirmed cases of conflict of interest: 14 cases

Convictions and fines

No new non-compliances with laws and regulations that resulted in significant fines were registered in 2024.

From the Business conduct chapter:

"No new non-compliances with laws and regulations that resulted in significant fines were registered in 2024."

The company reports the following for non-compliance with laws and regulations:

Disciplinary actions

Dismissals due to breaches of policy: 18 employees in 2024 (compared to 8 in 2023).

All confirmed cases are described as isolated incidents and have been addressed with corrective actions in place.

Contracts terminated

In the Workers in the value chain section, Hydro reports:

Supplier contracts terminated due to sustainability risks: 2 contracts in 2024 (3 in 2023).

While not explicitly stated as corruption-related, these terminations relate to sustainability due diligence processes that include business conduct screening.

Investigation and speak-up mechanisms

Hydro maintains the AlertLine, a confidential reporting channel available 24/7 in multiple languages via toll-free telephone or online. Reporting may be anonymous or identified, with strong anti-retaliation protection. The company also operates Canal Direto, a grievance channel for external stakeholders in Brazil (which received 633 reports in 2024, primarily information requests).

All cases reported through AlertLine are classified and investigated. Group Internal Audit & Investigations leads investigations, ensuring independence and objectivity, with external third parties conducting investigations when appropriate.

Hydro's Anti-Corruption Program includes risk assessments, policies and procedures, training and communication, third-party risk management, reporting mechanisms, and disciplinary measures.

ESRS and OECD compliance

The company states:

"With reference to ESRS criteria S1-17, S2-1 and S3-1, Hydro has identified one case of non-respect of the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises. This is the case of Fosen Wind in Norway, which involves affected communities in the value chain."

This case does not appear to be corruption-related but rather relates to indigenous peoples' rights.

Political influence and lobbying activities

Political engagement approach

Hydro recognizes the value of engaging with public authorities and other stakeholders in relation to the development of various policy initiatives that impact its industry. Hydro interacts primarily with decision makers in countries where it has significant operations, such as Norway, Brazil and the U.S., as well as with regional structures like the European Union institutions and the relevant EU Member States. These interactions are mainly related to securing competitive, stable and predictable industry framework conditions, taxes and legislation that affect Hydro's activities. Hydro's public affairs activities are generally focused on issues related to energy, industry policy, climate, sustainability, and trade.

Hydro promotes its views on issues of importance either through direct interaction with public authorities and other stakeholders, or through various industry associations. In addition, Hydro participates in think tanks, especially in Brussels and Washington D.C., and engages regularly in discussions with various NGOs.

Hydro's climate strategy advocacy work on future climate-related legislation, technology, and market strategies aims to be consistent with a 1.5-degree scenario. Hydro's long-term positioning, operational and financial planning reflect its assessment of related transition risks.

Key advocacy positions

Carbon pricing and climate policy: Hydro supports market-based solutions for pricing of carbon emissions, like the EU Emissions Trading System (ETS). The company believes it is important that CBAM (Carbon Border Adjustment Mechanism) is reviewed and tested both before final implementation and continuously during the live phase, that loopholes in the mechanism are closed and that indirect cost compensation remains as an important carbon leakage instrument.

European Green Deal: Hydro sees interesting opportunities in the European Green Deal roadmap, and the Critical Raw Materials Act and Net Zero Industry Act. The political agenda of the EU is shifting, and Hydro expects a stronger emphasis on competitiveness, resilience, and defense.

Trade policy: Hydro supports the principles of free and fair trade, and efforts to create a global level playing field. In advocacy, Hydro also supports the climate targets set in the Paris Agreement.

Norwegian policy: In Norway, Hydro works to ensure long-term predictable frame-conditions for industry, particularly relating to access to renewable power at competitive prices and effective measures to mitigate against carbon leakage. In 2024 the Norwegian government entered into an agreement on a framework for the CO2-compensation scheme toward 2030, which included the removal of the CO2-price floor, the introduction of a funding cap at 7 BNOK, and a climate and energy-connection where companies eligible for compensation are required to spend 40 percent of the compensation on climate and energy-measures.

Following changes in regulation in Norway regarding onshore wind-development, Hydro has worked to build understanding for the need for more renewable power in municipalities and regions.

U.S. policy: Hydro has established an office in Washington D.C. with the objective to support Hydro's leading position in recycling and extrusion business in the U.S. market. Norway signed an MoU with the U.S. government on trade of critical minerals. Hydro supports collaboration on high-standard, market-oriented trade and is supportive of increased trade between Norway and the U.S.

Lobbying resources and registration

In 2024, a total of 16 full-time equivalents (FTE) were dedicated to public affairs and lobbying. This includes persons in Norway, EU, Brazil and the U.S.

EU Transparency Register: Within the EU, lobbying activities are publicly reported through the EU Transparency Register.

U.S. registration: In the U.S., Hydro is registered and complying with the Lobby Disclosure Act.

Most resources are dedicated to advocacy activities within the EU, Brazil, the U.S. and Norway, through business associations, and to direct dialogue with authorities and decision makers. When relevant, Hydro is in dialogue with applicable tax authorities in Norway, the EU and Brazil. Hydro may also discuss fundamental tax developments and issues with other enterprises.

Political contributions

According to Hydro's global directives, Hydro may not make financial contributions to political parties. Hydro has no indications that such contributions took place in 2024.

Trade association memberships and partnerships

Hydro works through industry and aluminium associations to improve the ESG standards within its industry and to establish a level playing field for global aluminium production.

Key memberships include:

• International Council on Mining and Metals (ICMM)
• Aluminium Stewardship Initiative (ASI) - founding member
• Biodiversity Research Consortium Brazil-Norway (BRC) - established in 2013
• Transparency International Norway
• Maritime Anti-Corruption Network (MACN)
• Business Pact for Integrity and Against Corruption (Brazil) - signatory since 2018
• Nordic Business Network for Human Rights

For an overview of Hydro's memberships in different industry associations, see Hydro.com.

Research and development partnerships

In Norway, Hydro participates in numerous research, development and innovation projects and centers supported financially by public Norwegian or EU agencies. These include The Research Council of Norway, Enova, Innovation Norway, SIVA and EU Horizon. Financial support from The Research Council of Norway is mainly paid to reimburse R&D costs in projects where Hydro is partnering with academia and research institutes such as the Norwegian University of Science and Technology (NTNU) and the research institute SINTEF.

Hydro was in 2024 partner in 11 research and innovation centers partly funded by the Research Council of Norway under the Centers for Environment-friendly Energy Research, including HighEFF, InterPlay, ZeMe, NTRANS, HydroCen, HYDROGENi, MoZEES, NorthWind, BLUES, NORCICS, and PhysMet.

Ethical standards

Hydro can contribute to responsible business conduct through its regular engagement with suppliers, customers, and business partners. By being vocal about compliance and ESG topics, consistently acting with integrity, following ethical standards, and requiring counterparts to adhere to the same standards, Hydro can have a positive impact on business conduct more broadly.

Hydro aims to have a positive impact on the fight against bribery, corruption, and human rights breaches through participation in partnerships and industry associations, and by actively engaging with public authorities and other stakeholders on these issues.

Payment practices

Management approach

Hydro tracks on-time payment statistics to prevent late payments to suppliers, with automatic dashboards to track performance on a daily basis for approximately 80 percent of Hydro's units globally.

Average payment terms by business area (2024)

Payment terms vary between categories of purchase, between regions, and by type of business.

On-time payment performance (2024)

92 percent of invoices were paid on time in line with agreed-upon terms.

Standard contractual payment terms

Payment terms for products vary between customer segments and regions. The predominant terms vary between 30 to 90 days, and up to 210 days in some markets.

Legal proceedings for late payment

No information disclosed regarding legal proceedings outstanding for late payment.

Prompt payment code participation

No information disclosed regarding participation in prompt payment codes.