Rockwool

The role of the administrative, management and supervisory bodies

We act with integrity and in accordance with our values, rules and regulations.

ROCKWOOL's governance principles and structure are designed to ensure alignment with long-term shareholder interests and to enable prudent management of the Group in accordance with relevant national and international regulations as well as applicable corporate governance recommendations.

The Board of Directors appoints the Registered Directors, consisting of the CEO and CFO, who undertake the day-to-day management of ROCKWOOL.

Shareholders and general meeting

The Annual General Meeting (AGM) is the supreme body of the corporate governance structure and elects the Board of Directors as well as independent auditors. The AGM approves any changes to the articles of association and to the capital structure, including any issuance of new shares.

The shareholders have the ultimate authority over the company and can exercise their rights by passing resolutions at general meetings. Resolutions are adopted by simple majority of votes, unless otherwise provided by legislation or by the articles of association.

ROCKWOOL is not aware of shareholder agreements containing pre-emption rights or restrictions on voting rights. There is an agreement among members of the founding Kähler family to meet regularly to discuss their interests in the company, including items at the AGM, but there is no requirement for them to vote jointly.

Board of Directors

The Board of Directors currently consists of eight non-executive members, five of whom are elected by the shareholders at general meetings. Of these, three members are deemed independent according to the Danish Recommendations on Corporate Governance. Three members are elected by the employees for a period of four years, pursuant to the Danish Companies Act. The next ordinary employee election takes place in 2026.

On 1 September 2024, Jes Munk Hansen stepped out of the Board of Directors and became the CEO of ROCKWOOL Group. The Board of Directors will consist of nine members following the AGM in 2025.

The roles and responsibilities of the Board of Directors are defined in the Business Procedure for the Board of Directors. The members of the Board of Directors are elected by the general meeting for a period of one year and may be re-elected. The members of the Board of Directors are non-executive members in accordance with the Danish Companies Act.

The Board of Directors is responsible for the overall purpose and strategy and shall ensure proper organisation of ROCKWOOL as well as monitors and oversees progress related to sustainability strategy. The Board of Directors also ensures that the company is developing on track toward agreed short- and long-term business and sustainability goals. The Board of Directors formally approves the Code of Conduct, and the Audit Committee ensures compliance hereof in the Group. The Board of Directors has also approved the double materiality assessment with respect to the Corporate Sustainability Reporting Directive (CSRD) reporting.

Once a year, the Board of Directors performs an overall self-evaluation focusing on the composition and competencies of the Board and the results achieved. The evaluation also considers relevant sustainability competencies. The Board of Directors has decided that an external consultancy shall facilitate an in-depth self-evaluation every third year, most recently in 2024.

In 2024, the Board of Directors conducted the annual evaluation based on external facilitation. Based on this evaluation, the Board concluded that its present composition is appropriate and sufficient for it to perform its tasks and support long-term value creation for the shareholders.

The Board of Directors held seven board meetings and a strategy session in 2024. The meeting agenda is set according to the annual cycle of the Board, thus ensuring that the strategic and operational policy framework of the Group is reviewed and up to date.

The Board of Directors has established a Chairmanship, an Audit Committee, and a Remuneration and Nomination Committee. The Committees report to the Board of Directors.

Diversity of Board of Directors

The Board of Directors has diverse professional experience and competencies and consists of three nationalities. As of December 31, 2024, three (38 percent) out of all eight members of Board of Directors, are independent, three are employee-elected members (38 percent), and four members (50 percent) are female. Out of the shareholder-elected members, 60 percent are independent board members and 40 percent are female.

Registered Directors

The Registered Directors are the CEO and CFO, who are registered as directors with the Danish Business Authority. The Registered Directors are responsible for the day-to-day management of the company and compliance with the guidelines and recommendations set forth by the Board of Directors. The Registered Directors' responsibility covers organisation of the company as well as allocation of resources, producing and implementing strategies and policies, including those referring to material sustainability topics, and ensuring timely reporting to the Board of Directors.

Group Management

Group Management is formed by the Registered Directors together with six senior vice presidents responsible for division management and Group functions.

Diversity of Group Management

Group Management has diverse professional experience and competencies and consists of four different nationalities. Thirteen percent of the members are female.

Remuneration of the Board of Directors and Registered Directors

Remuneration of the Board of Directors and Registered Directors is carried out in accordance with the Remuneration Policy as adopted by the Annual General Meeting. The remuneration policy is available at www.rockwool.com/group/about-us/corporate-governance/remuneration/. The remuneration of the Board of Directors amounts to 1 MEUR. The specific Board remuneration and the remuneration components granted to each Registered Director can be found in the 2024 ROCKWOOL Remuneration Report at www.rockwool.com/group/about-us/investors/.

Board Chairmanship and Committees

The Board of Directors has established three substructures.

The Chairmanship

The Board of Directors has established a Chairmanship consisting of the Chairman (who is considered not to be independent) and the Deputy Chairman (who is considered independent). They prepare the Board meetings.

Audit Committee

The Board of Directors has appointed an Audit Committee consisting of three members. The majority of its members are independent.

The Audit Committee monitors and reports on the statutory audit, accounting and audit policies and the financial and sustainability reporting processes including auditor independence. The Committee also decides which policies or processes, as determined by the Board of Directors or the Audit Committee, should be subject to thorough evaluation.

The Audit Committee monitors compliance with applicable legislation, standards and regulations as well as the internal controls and risk management systems. Through quarterly updates, the Audit Committee monitors the compliance with the CSRD regulation including approval of the double materiality assessment and the disclosures in the sustainability statement.

The Audit Committee also monitors cases from the whistleblower system.

Remuneration and Nomination Committee

The Board of Directors has appointed a Remuneration and Nomination Committee consisting of two members of the Board of Directors: the Chairman and the Deputy Chairman.

The Committee ensures that the company maintains a remuneration policy for the members of the Board of Directors, the Registered Directors and senior executives, including compliance hereof.

The Committee makes proposals for the remuneration of the Board of Directors and Registered Directors and reviews and approves remuneration for other members of Group Management.

The Committee also ensures the preparation of the annual Remuneration Report. The Remuneration Report is subject to a non-binding advisory vote from the shareholders. The Remuneration Report can be found on the Group website.

The Committee identifies and recommends to the Board of Directors persons who are qualified to become members of the Board of Directors and Registered Directors. The Committee further recommends removal of such persons, if relevant. The Committee reviews and suggests changes to relevant corporate policies, including corporate governance.

Recommendations on Corporate Governance

The Board of Directors has discussed and reviewed the recommendations for Danish listed companies as provided by the Danish Committee on Corporate Governance. ROCKWOOL complies with all but two of the recommendations.

With respect to recommendation 3.3.2, to publish information about the number of shares, options, warrants or similar in the company, and other Group companies, owned by each member of the Board of Directors, the company considers this to be a private matter. It is ROCKWOOL's judgement that disclosure of such information will not add additional value for shareholders and other stakeholders. Board member remuneration does not include share-based elements.

The recommendation 3.4.2, that a majority of the members of board Committees should be independent, is not applied in the Remuneration and Nomination Committee. The Board of Directors finds that the Committees can perform their functions in a prudent manner even if the majority of the members are not independent.

A detailed review of ROCKWOOL's position on each of the recommendations and a description of the internal control and risk management system relating to financial reporting can be found in the statutory report on corporate governance prepared pursuant to section 107b of the Danish Financial Statements Act at www.rockwool.com/group/about-us/corporate-governance/.

Data ethics

In 2021, guidelines on data ethics were implemented in accordance with the Danish Financial Statements Act section 99d.

The guidelines describe how data ethics are considered and included in the use of data as well as the design and implementation of technologies used for processing of data within ROCKWOOL. The Group's Integrity Committee reviews and assesses the adequacy hereof on an annual basis. The guidelines are published and are available for all employees on the Group Intranet.

Integration of sustainability-related performance in incentive schemes

Coverage and Approach

The incentive schemes to Registered Directors and Group Management do not include metrics directly related to sustainability-related performance. The long-term commitment to drive our sustainability agenda is supported by the externally communicated goals under UN SDG and SBTi. Management has assessed that no further incentive is currently needed to drive ROCKWOOL's sustainability agenda.

Governance Context

The Remuneration and Nomination Committee ensures that the company maintains a remuneration policy for the members of the Board of Directors, the Registered Directors and senior executives, including compliance hereof. The Committee makes proposals for the remuneration of the Board of Directors and Registered Directors and reviews and approves remuneration for other members of Group Management.

The Committee also ensures the preparation of the annual Remuneration Report. The Remuneration Report is subject to a non-binding advisory vote from the shareholders. The Remuneration Report can be found on the Group website.

Strategy, business model and value chain

What does ROCKWOOL Group do?

We transform volcanic rock into stone wool, a versatile material with many inherent strengths that make it ideal for use in a range of applications in buildings, industry, transportation, horticulture and water management.

Our business model

Volcanic rock is mixed with lime stone before being heated to more than 1,500°C. The molten rock is spun into wool. A binder and either a special oil or wetting agent are added depending on the end product application. A final heat treatment cures the binder, giving the stone wool dimensional stability, before final processing into a wide range of products.

Our business is defined by:

• Our purpose
• Low-risk transactional sales
• Local business
• Capital intensive production

Manufacturing capital

• 42 factories*
• Board approval for four additional factories (France, India, Sweden, United States)

Human and intellectual capital

• Approx. 12,000 employees of which 47% in Western Europe, 32% in Eastern Europe and Russia, 12% in North America and 9% in Asia and others
• R&D based on inhouse experts and engineers

Financial capital

• Healthy financial standing generating solid profitability and being net debt free
• 387 MEUR of CAPEX of which 68 percent is EU Taxonomy-aligned

Social and relationship capital

• We work with approx. 11,000 suppliers
• 85% of sales do not cross customs borders
• 400 km is the average transport distance for insulation in Europe

Energy and natural capital

• 2,097 kt of stone, sand and cement consumed in 2024
• 5,085 GWh of energy consumed in 2024

Systems segment

Systems segment generates 21% of our revenue

Insulation segment

Insulation segment generates 79% of our revenue

Our impact on society

We see enormous opportunity to leverage the natural power of stone to create products that accelerate progress towards a safer, healthier, low-carbon future.

Stone wool is fire safe, durable and recyclable

• Fire safe insulation that can reduce heating needs up to 70%
• All Rockpanel boards are durable, easy to cut, and resistant to the effects of moisture, temperature, fire and weather
• ROCKWOOL Prefab Building Systems meets the demand for energy-efficient, high-quality prefab homes with circular, reusable components
• ROCKWOOL Rainwater Systems can absorb up to 95% of its volume in water
• In schools with no sound absorption, children cannot hear up to 70% of consonants their teachers speak
• Providing high-performance and precision-engineered stone wool solutions for urban acoustics, friction, gaskets and sealings for industries and cities
• Controlled environment horticulture can reduce water use for vegetable growing by up to 50%
• ROCKWOOL product recycling services to recycle stone wool in our factories

Our products are sold in more than 120 countries primarily via B2B channels including installers and distributors. Revenue generated in the geographical segments:

• 56% in Western Europe
• 20% in Eastern Europe and Russia
• 19% North America
• 5% Asia and others

*ROCKWOOL previously counted 'manufacturing facilities' based on the number of brands producing at a given location. For simplicity, we now count 'factory locations' regardless of which brands produce there. The number of physical locations has not changed.

Interests and views of stakeholders

Identified key stakeholder groups and engagement methods

ROCKWOOL has identified the following key stakeholder groups, their relationship to the business model and strategy, topics addressed, engagement methods, and purpose/outcomes:

Integration into strategy and stakeholder engagement process

Interests and views of internal and external stakeholders were considered through analysis of environmental and human rights risk assessments, past events, and internal and external surveys carried out within the past two years. ROCKWOOL conducted additional comprehensive surveys and structured one-to-one interviews among representatives of selected internal and external stakeholders. This included human resources, business entities and finance as well as financial institutions, customers and business partners so that different concerns and perspectives were taken into account. Additionally, we engaged internal subject matter experts by carrying out two workshops dedicated to environmental and social topics. There has been no direct consultation with affected stakeholders.

Distinction between affected stakeholders and users of sustainability information

The stakeholder table distinguishes between:

• Affected stakeholders (those impacted by the business): Employees, local communities, end-users
• Users of sustainability information: Financial institutions (ESG ratings entities, insurance companies, investors and banking sector)
• Both affected and users: Customers (who are both affected by products and use sustainability information for decisions)

The whistleblower platform is available to all external stakeholders, including local communities in all languages of countries where ROCKWOOL has business entities, and is accessible from the corporate website.

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

The impacts, risks and opportunities are categorised in own operations (OO), upstream (U), downstream (D), or within our value chain (VC). It is also indicated whether the impacts are positive or negative.

List of Material Impacts, Risks and Opportunities

Linkage to Strategy and Business Model

ROCKWOOL delivers products that help customers and communities tackle sustainability challenges, from energy consumption, decarbonisation and fire resilience to noise pollution, water scarcity and flooding. As a durable, recyclable, non-combustible, and versatile material, stone wool forms the basis of our business. Sustainability is the foundation that underpins the ROCKWOOL business model and value chain.

Since 2016, ROCKWOOL has been aligned with the United Nations Sustainable Development Goals (UN SDGs) framework. Drawing on extensive consultation with both internal and external stakeholders, we have prioritised 10 of the 17 SDGs. This was confirmed by the double materiality assessment. Gender equality (SDG 5) and Peace, justice and strong institutions (SDG 16) were added in 2024.

Most of ROCKWOOL's goals are set prior to implementing the CSRD regulation. The goals are aligned with the 10 SDGs that we have identified as most applicable, and these serve as the guiding framework. Two of the sustainability goals are validated by the Science Based Targets initiative (SBTi).

How Material IROs Interact with the Business

Climate Change: With a large number of factories and production processes that are both capital- and energy-intensive, ROCKWOOL is subject to climate-related transitional and physical risks. In terms of transitional risks, regulations can represent both a major risk and opportunity for ROCKWOOL – an opportunity from rising demand for energy saving solutions for buildings and technical installations – and a risk as regulations like Emission Trading Schemes (ETS) can increase the financial burden. The decarbonisation strategy will reduce the GHG emissions intensity, as we are increasingly using low-carbon and renewable energy sources.

Circularity: ROCKWOOL supports circularity in the construction sector by offering durable products made of recyclable stone wool. Most ROCKWOOL products are durable and designed for disassembly, allowing them to be returned to the factories for recycling. ROCKWOOL's products' circular characteristics, our capacity to take back used stone wool from the market, and our aim to reduce the use of virgin materials, including in packaging, are all important elements of ROCKWOOL's business model and key considerations in meeting customer expectations.

Local Communities: With 42 factories in 23 countries, we are a global company, while our business is local. We produce close to customers and buy products and hire services in the communities where we operate. ROCKWOOL generates employment, invests, pays taxes, and provides business for local companies directly within communities where we manufacture.

Product Benefits: ROCKWOOL products are designed to last – both to stand the test of time themselves as well as to extend the lifespan of the structures they protect. The longevity of ROCKWOOL products ensures that their benefits can be gained for decades, leaving a lasting positive impact on the safety, health, and wellbeing of end-users. These characteristics address customers' expectations as well as drive market opportunities and generate preference for ROCKWOOL, which directly pertains to the business strategy.

Resilience to Material IROs

Climate Resilience: In 2022, a climate scenario analysis was conducted to evaluate physical climate-related risks across ROCKWOOL's global manufacturing footprint. Two alternative climate change scenarios were analysed – a 'high physical impact' 4°C warming scenario and a 'rapid transition' scenario, where warming is limited to 1.5-2.0°C. In each scenario case, the time horizons 2030 and 2050 were used. The analysis and assessments are carried out every three to five years and form the basis for implementing and refining the resilience strategy. The ROCKWOOL resilience strategy consists of a transition plan and environmental targets with the purpose to reduce GHG emissions and limit the environmental footprint.

Financial Risk Management: For the period 2025-2030, the financial impact of climate-related risk at Group level is assessed to be between 0-100 MEUR. ROCKWOOL's energy strategy has been reviewed and includes the use of power purchase agreements to ensure stable supply and to reduce future fluctuations in energy prices. In 2024, a power purchase agreement for part of our business in the Netherlands was finalised.

Water Resilience: In addition to the climate scenario analysis, a separate water scarcity assessment was carried out. As a result of this assessment, we identified one additional factory in a water stressed area. In total, seven stone wool factories are located in water stressed areas. To mitigate the risk of limited access to water, we have set a Group target for all stone wool factories to reduce the water use per tonne of stone wool produced.

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

Timing and frequency

The double materiality assessment (DMA) was carried out in the second half of 2023 and updated in 2024. The DMA will be reviewed and updated annually. Moreover, ROCKWOOL will revisit the assessment if any significant internal or external changes occur, such as significant strategy reviews, regulatory developments, or evolving stakeholder expectations.

Scope of assessment

The DMA covered the entire ROCKWOOL Group, the whole value chain and all geographies. In the upstream value chain assessment, ROCKWOOL focused mostly on Tier 1 - direct suppliers and business partners, but also considered Tier 2 and cradle-to-Tier 3 whenever material (e.g. raw materials extraction, specific geographies with assessed high human rights risks and/or with high environmental risks). In the downstream value chain assessment, Tier 1 (corporate customers), Tier 2 (end-users of products) and Tier 3 (e.g. owner of buildings) were considered. For relevant topics that could give rise to heightened risk, potential negative impacts were discussed with the different stakeholders.

Methodology

Through the DMA, material sustainability impacts, risks and opportunities were identified. More than 50 sustainability topics were assessed using the methodology described below.

Materiality was assessed from both an impact and financial perspective:

From an impact materiality perspective, actual and/or potential negative impacts over short-, medium- or long-term time horizons and based on scale, scope, and irremediable character of the impact, were assessed. Actual and/or potential positive impacts were assessed based on scale, scope and in case of potential positive impact, on likelihood.

From a financial materiality perspective, ROCKWOOL assessed over short-, medium- or long-term time horizons, actual and/or potential risks and opportunities using the two parameters: likelihood of occurrence and the potential magnitude of financial effects.

Inputs to the assessment

Interests and views of internal and external stakeholders were considered through analysis of environmental and human rights risk assessments, past events, and internal and external surveys carried out within the past two years. ROCKWOOL conducted additional comprehensive surveys and structured one-to-one interviews among representatives of selected internal and external stakeholders. This included human resources, business entities and finance as well as financial institutions, customers and business partners so that different concerns and perspectives were taken into account. Additionally, ROCKWOOL engaged internal subject matter experts by carrying out two workshops dedicated to environmental and social topics. There has been no direct consultation with affected stakeholders.

Scoring criteria

Evaluation of impact materiality was a result of four parameters, all of which were scored on a scale of one to five.

The financial materiality score was a quotient resulting from the size of the potential financial effect (risk and/or opportunity) added with its likelihood, each scored on a scale of one to five, and then divided by two.

For likelihood, whenever an impact has occurred, even if the event took place in a single geographical area or in a particular business entity, the likelihood was scored as five.

The size of the potential financial effect (risk and/or opportunity) was aligned with Group financial materiality, referring to revenue, EBIT or assets.

While scoring risks, both gross risk and mitigating actions were assessed. Any risk was first assessed as a gross risk (hazard, exposure, vulnerability), and then reassessed with mitigation measures in order to determine the potential impact on ROCKWOOL's assets and supply chain. Additionally, whenever a potential negative human rights impact was identified, the severity of the impact took precedence over its likelihood.

Throughout the DMA analysis and impact prioritisation, risks and opportunities, global trends, and market-specific regulatory requirements were considered. This included factors that could affect relationships with customers, distributors, or local markets. From an input parameters perspective, the following sources covering all ROCKWOOL global activities and geographies, were used: international customers' expectations with focus on customers from the most regulated market; local environmental authority requirements; past events with local communities; internal employee satisfaction surveys; financial institutions ratings; and recommendations.

Materiality threshold

For impact materiality, the threshold was set at above two (informative), which means that topics with impact materiality lower than or equal to two have minimal informative value.

The financial materiality threshold was set at equal to and above three (significant) and is aligned with financial materiality at Group level.

Validation process

After assessment of the topics based on the described process, the consolidated results were reviewed and validated by Group Management and the Board of Directors.

The sustainability topics identified as material are not new to ROCKWOOL and most of them have been part of the Enterprise Risk Management process for a number of years.

Material sustainability topics identified

The DMA identified 13 material sustainability topics:

Environment:

1. Climate change adaptation and mitigation
2. Energy
3. Pollution of air
4. Substances of concern
5. Resources use
6. Resources outflows, incl. waste, packaging, and circularity principles
7. Water withdrawal

Social: 8. Own workforce health and safety, human rights 9. Own workforce gender equity and gender pay gap 10. Affected communities: communities' economic and social rights 11. Consumers and end-users' health and safety

Governance: 12. Prevention of corruption and bribery 13. Protection of whistleblowers

Transition plan for climate change mitigation

Alignment with Paris Agreement and Net Zero

The transition plan and targets related to climate change mitigation refer to stone wool factories and are approved by the Board of Directors, strategically managed by Group Management and executed operationally by Group Operations and Technology.

Paris Agreement alignment: The Group's mitigation efforts are aligned with the Paris Agreement, compatible with limiting global warming to the well-below 2°C pathway, approved by SBTi in 2020, and the objective of achieving Net-Zero by 2050 with residual GHG emissions. In 2019, when setting these targets, ROCKWOOL assumed a steady company growth coupled with a decarbonisation focus on Europe and North America.

1.5°C alignment status: The transition plan is not aligned with the 1.5°C trajectory. Together with other companies in the non-metallic mineral manufacturing sector, ROCKWOOL is discussing a sectoral pathway approach with SBTi. The company continues to evaluate and model potential scenarios in order to align with the 1.5°C pathway.

Scope of the plan

Geographic and operational scope: ROCKWOOL has factories in 23 countries, each with different political, economic and business conditions, maturity of renewable energy infrastructure, supply chain constraints and customer preferences.

Entity coverage: The transition plan refers to stone wool factories. The plan is approved by the Board of Directors, strategically managed by Group Management and executed operationally by Group Operations and Technology.

GHG emission reduction targets

Baseline year and targets

Baseline year: 2019

SBTi validation:

• Scope 1+2 target: 38% absolute reduction by 2034 (baseline 2019), approved by SBTi in 2020, aligned with well-below 2°C pathway
• Scope 3 target: 20% absolute reduction, approved by SBTi in 2020 but not in scope of limited assurance

Additional intensity target: By 2030, reduce emissions of CO2 per tonne of stone wool produced by 20% (2015 as baseline). As of end 2024, achieved 23% reduction - target achieved ahead of schedule.

Net Zero by 2050: Target of ~90% reduction in GHG emissions, with possible carbon offsets for residual emissions.

Key decarbonization levers

The transition plan is structured around three main levers:

1. Energy efficiency

Improvement of stone wool factories and administrative buildings, leading to reduction of energy consumption and reducing Scope 1 and 2 GHG emissions:

• Optimising production processes (heat recovery)
• Upgrading equipment (solar panels, insulation, electric forklifts, and more energy efficient machinery)
• Improving facility management
• Target: By 2030, reduce energy consumption (kWh/m²) in own office buildings by 75% (2015 baseline). Progress at end 2024: 39%

2. Technology innovation

Leading to reduction of GHG emissions in Scopes 1, 2 and 3:

• Electrification of production lines - the most impactful lever for reducing Scope 1, 2 and category 3 in Scope 3
• Securing renewable energy supply
• New capacity with electric melting technology
• Conversions from coal to natural gas or biogas
• R&D focused on binders
• Infrastructure linked to new binders

3. Circularity

Leading to reduction of GHG emissions in Scope 3:

• Durability
• Programmes and infrastructure for taking waste back from the market (incl. Rockcycle and briquetting plants)
• Designing out waste and pollution
• Keeping materials at their highest value
• Reducing the amount of virgin materials used

Capital expenditure and investment commitments

2024 investments:

• 262 MEUR in electrification, upgrading of factories (including digital investments), abatement technologies to reduce GHG emissions, conversions and optimisation of production lines and preparing new ones
• 67 MEUR research and development costs (expensed)
• 8 MEUR investment in third-party assets related to electricity grids
• Total allocation for transition plan: 337 MEUR

R&D allocation: In 2024, 20% of R&D costs were allocated for research and development on new binder technologies or on factory emission reduction initiatives.

Regional and infrastructure considerations

Among the most salient factors influencing electrification plans and priorities are:

• The readiness of a region's electricity grid to handle large-scale factories
• Availability and access to sufficient quantities of low-carbon electricity

Even in countries with clear electrification strategies, there can be considerable delays before infrastructure catches up. In some instances, it can take up to 10 years to connect to the electricity grid.

Energy strategy and supply

ROCKWOOL's energy strategy has been reviewed and includes the use of power purchase agreements to ensure stable supply and to reduce future fluctuations in energy prices. In 2024, a power purchase agreement for part of the business in the Netherlands was finalised.

The plan for converting existing assets into electric melting technologies also considers the impact on the expected lifetime for the relevant assets.

Carbon pricing

Internal Carbon Price (ICP): An internal carbon price of 125 EUR/t CO2e is applied to the assumptions and economic impacts for all investments above 1 MEUR to promote decarbonisation. The application of ICP for investments below 1 MEUR is optional. The ICP is reviewed every year.

Shadow carbon price for risk assessment: For assessing transitional risk linked to increasing carbon costs in 2024, ROCKWOOL applied a shadow carbon price of 90 EUR/t CO2, rising to 150 EUR/t CO2 by 2030.

Use of carbon credits

ROCKWOOL does not remove GHG emissions through carbon credits (E1-7). The 2050 Net-Zero target indicates possible carbon offsets for residual GHG emissions.

Governance

Board of Directors oversight:

• Responsible for ensuring that the Group's risk exposure, including climate-related topics, is consistent with the targeted risk profile
• Approved the SBTi goals in 2020; monitors progress
• Reviews and guides annual budgets, including decarbonisation and transition plans
• Oversees major capital expenditures
• Reviews innovation and R&D priorities linked to climate-related risks and opportunities

Group Management role:

• Risk management is part of the CFO's area of responsibility
• CEO is responsible for climate-related issues, including annual budgets for climate mitigation and adaptation activities
• Enterprise Risk Management Committee reviews and updates the internal risk management framework
• Climate-related risks and opportunities are integrated into different business unit strategies, updated annually

Locked-in emissions and stranded assets

The plan for converting existing assets into electric melting technologies also considers the impact on the expected lifetime for the relevant assets. No further detail on locked-in emissions or quantified stranded asset analysis is disclosed.

Progress to date

2024 performance vs 2019 baseline:

• Scope 1+2 (market-based): 1,711 kt CO2e, representing 18% reduction (46% progress toward 38% target for 2034)
• CO2 intensity per tonne stone wool: 23% reduction vs 2015 baseline (exceeding 2030 target of 20%)
• Scope 2 (market-based): 109 kt CO2e, 67% reduction vs 2019 due to acquiring Energy Attribute Certificates across Europe and China

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

Phase-in provision applied

ROCKWOOL uses the phase-in provisions for indicator E1-9. As stated in the disclosure requirements table (p. 59):

E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities: Not reported for 2024 due to use of phase-in provision.

This indicator is explicitly listed among the phase-in provisions used by ROCKWOOL for 2024 material sustainability topics, along with E2-6, E3-5, E5-6 and S1-7.

Pollution of air, water and soil

Emissions to air

Rockwool's production process requires melting raw materials at temperatures about 1,500°C and curing wool fibres at around 450°C. This process generates pollution of air other than GHG emissions.

Emitted pollutants (in tonnes), 2024:

Note: Emitted pollutants per factory above thresholds set by the European Pollutant Release and Transfer Register "E-PRTR Regulation"

Accounting policies - Air emissions

All non-GHG air emissions are calculated as total emissions in tonnes per component. Reported emissions comply with the EU Industrial Emissions Directive (IED), the EU BREF for glass wool (covering mineral wool production facilities), and PRTR Directive requirements. Emissions data are derived from analytical measurements aligned with permit requirements and operational conditions at each factory.

95% of data is measured, with the remaining 5% based on estimates. Of the 95% measured data, 20% is based on quantification of emissions data conducted by independent certified laboratories and deemed representative for the year per permit conditions. The remaining 80% of measurements are not further validated by external parties.

Emission data carry inherent uncertainties due to reliance on nationally prescribed methods and variability in sample representativeness, flow measurements, and analytical methods.

Rockwool has not disclosed the changes in air emissions over time, as the methodology was adjusted to align with CSRD requirements.

Emissions to water

Based on earlier assessments, pollution to water was assessed as not material for Rockwool.

Emissions to soil

No disclosure of emissions to soil identified in the sustainability statement.

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

Phase-in provision

ROCKWOOL uses the phase-in provisions for the following indicators that refer to 2024 material sustainability topics: E1-9, E2-6, E3-5, E5-6 and S1-7.

E2-6 Anticipated financial effects from pollution-related impacts, risks and opportunities: Not reported for 2024 due to use of phase-in provision.

Water consumption

Total water consumption and metrics

Water withdrawal

Water withdrawal is reported per source, including:

• Groundwater (water beneath the soil, including pumped from onsite well)
• Surface water (water withdrawn from the surface of Earth e.g. river, lake, wetland)
• Public supply (water from municipal or private water supply)
• External source (wastewater from another organisation)
• Rainwater (precipitation collected directly and stored by the factory)

Starting 2024, factories also report water recycled, water reused, and water stored.

Water stress areas

Seven stone wool factories are located in areas of high or extreme high water stress:

• Caparroso (Spain)
• Dahej (India)
• Flechtingen (Germany)
• Ploiești (Romania)
• Roermond (the Netherlands)
• Troitsk (Russia)
• Zheleznodorozny (Russia)

In all cases, the factories' water usage is estimated to be immaterial, using less than one per mille of available water of the regional fresh water basin resources in m³.

Water use intensity target

Group target: Reduce water use per tonne of stone wool produced by 20% from 2015 to 2030.

2024 result: 17% reduction compared to 2015 baseline (index 83 in 2024, baseline index 100 in 2015).

Methodology

Water consumption is calculated as total water withdrawn from sources minus water discharged and minus water stored. Withdrawals are primarily measured or based on invoices, while rainwater is mostly estimated using rainfall data, collection area, or flow measurements. Approximately 50% of discharged water is metered, with the remainder estimated based on best available methods. For smaller offices, water consumption is estimated based on working hours (less than 1% of total water consumption).

Water scarcity assessments conducted in 2017 (all stone wool factories) and 2022 (all stone wool factories excluding Russia) identified seven factories in areas of high or extremely high water stress using the World Resources Institute Aqueduct (WRI) tool.

Water recycled and reused is calculated based on binder dilution rates and operation time of the melters or based on actual measurements. Water stored is calculated as the sum of the full capacity of the water storage tanks at stone wool factories. As part of normal operations, tanks are kept full with no changes to storage.

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

Phase-in exemption

ROCKWOOL uses the phase-in provisions for E3-5.

E3-5 Anticipated financial effects from water and marine resources-related impacts, risks and opportunities is not reported for 2024 due to use of phase-in provision.

Characteristics of the undertaking's employees

Total headcount and FTE

Headcount (as of 31 December 2024): 12,873 employees
Headcount (as of 31 December 2023): Not disclosed in excerpts
Average FTE 2024: 12,174
Average FTE 2023: Not disclosed in excerpts

Headcount by gender (headcount as of 31 December 2024)

Headcount by region and country (headcount as of 31 December 2024)

Headcount by employment contract type (headcount as of 31 December 2024)

Note: ROCKWOOL does not have any non-guaranteed hours employees.

Headcount by employment type (full-time/part-time)

Not disclosed in the excerpts provided.

Employee turnover

Employees who have left ROCKWOOL (2024): 1,471
Employee turnover rate (2024): 12%
Prior year comparison: Not disclosed in excerpts

Calculation methodology: Turnover is calculated as the total number of employees who have left the company divided by the average headcount for the year. Total turnover includes all terminations (voluntary, involuntary, mutual, retirements, and death in service) for both permanent and temporary contracts. Terminations are counted starting from the month the employee leaves ROCKWOOL.

New hires

Share of female in new hires for middle manager positions (2024): 32%
Share of female in new hires for middle manager positions (2023): 32%

Total number of new hires not disclosed in the excerpts provided.

Accounting policies

Headcount includes the total number of employees, regardless of full-time or part-time status. Employee data is calculated based on all headcounts as of the reporting date (31 December 2024), broken down by country, gender, contract type and turnover calculations.

Gender data is based on headcount, with no use of estimates. Employees have the option to choose a gender category that aligns with their identity. The available choices are: man, woman, non-binary, other, or choose not to disclose. Permanent employees have open-ended contracts, while temporary employees have contracts with defined start and end dates, with possible extensions.

Employee data is centrally managed per GDPR guidelines and covers all employees, also the entities not in Human Capital Management (HCM) system, as this have been collected manually.

Full time equivalent (FTE) represent an employee's contractual hours as a percentage of a full-time contract for the same positions and country. The average FTE is calculated across each legal entity as a monthly average over the year, based on month-end measurements. The headcount and FTE includes both permanent and temporary employees on local payroll, as well as inactive employees on sick leave or parental leave.

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

Disclosure Status

Rockwool has applied the phase-in provision for ESRS S1-7 and does not report characteristics of non-employee workers for 2024.

Contextual Information on Non-Employee Workers

While detailed S1-7 metrics are not disclosed, the sustainability statement provides contextual information about non-employee workers:

Contractors in Own Workforce:

• In 2024, one external contractor died while working at the factory in Rayong, Thailand. A root cause analysis was conducted and preventive actions were shared with all factories.
• Stone wool factories use contract workers to adapt to changes in production capacity.
• Contractors are categorized as:
  • Permanent contractors: individuals with long-term duties for or on behalf of Rockwool
  • Occasional contractors: those performing short-term work, such as on-site maintenance

Health & Safety Metrics Including Contractors (for reference):

The following health and safety metrics include both employees and contractors:

Methodology Note:

• Incidents involving both permanent and occasional contractors are recorded and included in the Group Lost Time Incident (LTI) rate
• Contractor working hours are calculated using actual hours logged on-site or as specified in tender documents
• All non-employee workers are covered by Rockwool's health and safety management system

Human Rights Manual on Contingent Workers

Rockwool has developed a "Group Human Rights Manual - Forced and Child Labour - contingent workers" which includes:

• Checklists and provisions for working with contract workers
• Mandatory procedures regarding employment process
• Criteria and documentation requirements including age verification
• Employment conditions covering working hours, living wage, rest periods, accommodation standards, contract termination, and grievance mechanisms

Scope: All entities, including stone wool factories and those located in water-stressed areas as well as civil works and contractors.

Planned Disclosure

As stated in the phase-in disclosure (p. 45 and p. 60), Rockwool plans to report full S1-7 metrics in future reporting periods following the phase-in timeline.

Diversity metrics

Gender diversity in leadership and governance

Board and management metrics (2024 vs 2023):

Gender breakdown of total workforce by region and contract type (2024)

All employees (permanent and temporary combined):

Permanent employees:

Temporary employees:

Gender pay gap

Gender Pay Gap in % (2024):

• All employees (direct and indirect): 1.6%
• Indirect employees (adjusted for objective factors): 2.5%

Note: The unadjusted pay gap is calculated without considering country, responsibilities and work experience. The adjusted pay gap for Indirect employees considers objective factors such as different responsibilities, work experience, type of work, and assigned grades. Data covers 80% of employees (13 factory locations for Direct employees plus HCM system data for Indirect employees).

Other workforce metrics (2024)

• Employee turnover rate total: 12%
• Employees who have left ROCKWOOL: 1,471
• Annual total remuneration ratio (Indirect employees): 34

Methodology notes:

• Gender data based on headcount as of reporting date. Employees may choose: man, woman, non-binary, other, or choose not to disclose.
• Permanent employees have open-ended contracts; temporary employees have defined start/end dates.
• ROCKWOOL does not have any non-guaranteed hours employees.
• Age band distribution: Not disclosed.

Adequate wages

Rockwool references living wage in the context of its "Group Human Rights Manual - Labour - contingent workers", which includes provisions regarding "employment conditions such as limits of working hours per week, living wage, rest periods, annual holidays, statutory taxes and social security, minimum criteria for accommodation or housing, termination of the contract, grievance mechanism and remedy."

The manual addresses contingent (contractor) workers specifically, setting mandatory provisions for their employment.

In 2024, the Group Internal Audit team executed seven audits covering five stone wool factories and two administrative/commercial offices, focusing on two social topics: (1) own workforce working hours compliance with local working regulations and/or ILO principles, and (2) the salary level of ROCKWOOL's own workforce.

No specific living wage benchmark (e.g., Fair Wage Network, Anker Methodology, WageIndicator) is disclosed. No coverage percentage or proportion of workforce assessed against a living wage standard is provided. No geographic scope, targets, or methodology details for living wage calculation are disclosed.

Social protection

Pension and retirement coverage

Rockwool provides both defined contribution and defined benefit pension plans to employees.

Pension costs (MEUR)

Defined benefit pension obligations (MEUR)

The weighted average expected duration of the defined benefit obligations is 14 years (2023: 14 years).

Plan characteristics:

• The pension benefit plans in the United Kingdom and Switzerland have assets placed in independent pension funds (funded plans)
• Remaining plans are unfunded, where the main part relates to Germany. For these unfunded plans, retirement benefit obligations amount to approximately 23% (2023: 24%) of the total gross liability
• In 2025, the Group expects to pay contributions of 5 MEUR to defined benefit plans

Accounting approach:

• Funded benefit plans have assets placed in trustee-administered pension funds, governed by local regulations and practice in each country
• Defined benefit plans typically guarantee employees a retirement benefit based on the final salary at retirement
• During 2024, a buy-in/buy-out process was initiated related to the pension benefit plan in the United Kingdom. In November 2024, the UK pension benefit plan was insured with Royal London (buy-in). The buy-out process is expected to be completed in 2025

Other social protection coverage

The company notes that headcount and FTE includes both permanent and temporary employees on local payroll, as well as inactive employees on sick leave or parental leave, but does not disclose specific coverage percentages for sickness, maternity, paternity, disability, unemployment or parental leave benefits.

Health and safety metrics

Performance of health and safety management system among own workforce (headcount)

Coverage

All locations are covered by ROCKWOOL's health and safety management system. The data covers all employees, also the entities not in Human Capital Management (HCM) system, as this has been collected manually. Incidents involving both permanent and occasional contractors are recorded and included in the Group Lost Time Incident (LTI) rate.

Methodology notes

Work-related ill health refers to any condition rising from workplace exposure to physical, chemical, or biological agents that disrupts normal physiological functions. Work-related incidents are incidents that occur in connection with work on ROCKWOOL premises, during travelling, visiting building sites or otherwise working for ROCKWOOL Group. The LTI rate is calculated as the total LTI per one million working hours. An LTI is defined as an incident that prevents an employee from performing any regular work on any calendar day following the incident. In accordance with CSRD, the number of fatalities is included in the LTI count and LTI rate. The number of days lost for employees due to LTI are tracked in the safety management system, with fatalities set at 180 days lost as per U.S. Occupational Safety and Health Administration guidance. Working hours for ROCKWOOL employees are calculated based on payroll data. For safety and working environment reporting, contractors are considered as employees and included in the numbers. Contractor working hours are calculated using actual hours logged on-site or as specified in tender documents.

Incidents, complaints and severe human rights impacts

Grievance mechanisms and complaints

ROCKWOOL provides a range of grievance mechanisms and reporting channels for employees to raise concerns, report suspicions or confirmations. The most common channels used are the whistleblower platform and through the Integrity Committee. Employees are regularly informed that these are available and how they can be accessed.

Based on the outcomes from grievance reports and on the scale of the issue, a proportionate remedy is proposed, accepted, implemented, tracked and monitored by the Integrity Committee. On a quarterly basis, the Board of Directors receives a report on this from the Integrity Committee.

Regarding health and safety, all incidents and audit findings are documented in the RockSHE system. Everyone can report incidents including good catches, near misses and accidents. All reports are followed up and the outcome is shared with the person raising the report.

Discrimination and harassment

In 2024, an internal human rights risks assessment focused on non-discrimination with priority for three traits: gender, nationality and disability. The criteria were that this group includes newcomers, direct and indirect employees as to involve affected stakeholders into the assessment process and evaluate the effectiveness of actions to prevent discrimination.

Based on a risk assessment of entities, the factory in the Netherlands was selected for a more in-depth analysis. The information gathered showed that there is generally a good awareness of the phenomena of discrimination and harassment, mainly with respect to indirect employees, including the HR team. There were also cases mentioned by interviewed employees related to discrimination, limited to "inappropriate" behaviours (e.g. harassment) that were witnessed in the production area and between employees.

Human rights risks and impacts

ROCKWOOL's objective is to address the following salient human rights risks in own workforce: working conditions, health and safety as well as counteracting any occurrence of child and/or forced labour.

The Group Human Rights Manual on forced and child labour states zero tolerance for human trafficking and violations of human rights.

In 2024, the Group Internal Audit team executed seven audits covering five stone wool factories and two administrative and/or commercial offices, focusing on: (1) Own workforce working hours where compliance with local working regulations and/or ILO principles, rest periods, and paid overtime were verified; and (2) salary level of ROCKWOOL's own workforce.

Note: No quantitative metrics on number of incidents, complaints, severe human rights impacts, or fines/sanctions are disclosed in the provided excerpts.