Scandic Hotels Group

The Board of Directors is responsible for the overall governance of Scandic and ensuring that the company operates in accordance with applicable laws, regulations, and the company's articles of association. The Board supervises the CEO and ensures that the company's operations are conducted in a manner that safeguards the interests of shareholders and other stakeholders.

The Board of Directors comprises eight members elected by the Annual General Meeting, including two employee representatives appointed by the trade unions. The Chairman of the Board is elected by the Annual General Meeting.

The Board has established an Audit Committee and a Remuneration Committee to assist in its work. The Audit Committee supports the Board in matters related to financial reporting, internal control, risk management, and auditing. The Remuneration Committee prepares matters related to compensation and other terms of employment for the CEO and other senior executives.

Corporate governance structure:

• Board of Directors: Overall responsibility for governance and supervision
• Audit Committee: Financial reporting, internal control, and risk management
• Remuneration Committee: Executive compensation matters
• CEO and Executive Committee: Day-to-day management and implementation of strategy

Sustainability matters are addressed by the Board of Directors as part of their oversight responsibilities. The Board receives regular updates on the company's sustainability performance, including progress on environmental goals, social initiatives, and governance matters.

Sustainability is integrated into the company's strategic planning and risk management processes. The Board oversees the implementation of Scandic's sustainability strategy, which includes three focus areas: MEET (Health, diversity and inclusion), EAT (Food and beverage), and SLEEP (Rooms and interiors).

The Board monitors key sustainability metrics including:

• Environmental certification progress (96% of hotels certified by Nordic Swan Ecolabel)
• CO2 emissions reduction targets (30% reduction since 2019)
• Employee satisfaction and diversity metrics
• Community engagement through 'Scandic in Society' initiatives

Sustainability reporting is provided to the Board on a regular basis, enabling informed decision-making on sustainability-related matters.

Integration of sustainability-related performance in incentive schemes

Overview of incentive programs

Scandic has an incentive system consisting of a short-term incentive program (STIP) and a long-term incentive program (LTIP). Scandic is continuously evaluating the appropriateness of integrating additional sustainability targets into its incentive programs.

Short-term incentive program (STIP)

The STIP is based on Scandic's fulfillment of predefined financial and sustainability targets linked to Scandic's strategy, and the aim is to incentivize strategic goal achievement and thereby create long-term value.

Roles covered: Not explicitly specified.

Sustainability KPIs and weighting: Not disclosed.

Performance period and target structure: Not disclosed.

Long-term incentive program (LTIP)

From 2015–2019 and 2022–2024, Scandic also launched a share-based LTIP. This program allows participants to be granted performance shares free of charge, depending on the degree of fulfillment of performance criteria. These performance criteria are linked to Scandic's total shareholder return (TSR) on the company's shares.

Currently, no part of the LTIP is directly linked to Scandic's sustainability goals.

The most recent program was adopted at the AGM held on May 16, 2024.

Roles covered: Information on the LTIP is described in Note 05 on pages 102–104 (not included in provided excerpts).

Sustainability integration: No direct linkage to sustainability goals in the LTIP.

Additional information

For more information on the incentive schemes, see the corporate governance report on page 78.

For information on compensation for the CEO and senior executives, see Note 05 on pages 102–104.

Scandic conducts due diligence across its operations and value chain to identify, prevent, and mitigate adverse impacts on people and the environment. The company has established processes to assess and manage sustainability-related risks and opportunities.

Due diligence processes include:

Supplier assessment: Scandic evaluates suppliers based on sustainability criteria including environmental standards, working conditions, and business ethics. The company requires suppliers to comply with relevant legislation and continuously evaluates whether requirements should be tightened.

Property owner collaboration: Through lease agreements, Scandic works with property owners to ensure shared incentives for responsible operations, including requirements for sustainable investments and energy efficiency.

Environmental certification: 96% of Scandic's hotels are certified by the Nordic Swan Ecolabel, which requires compliance with strict environmental requirements across energy, water, waste, chemicals, and biodiversity.

Human rights: Scandic has implemented policies to combat human trafficking and prostitution at all hotels. The company promotes diversity and inclusion through structured programs and partnerships.

Continuous monitoring: Regular assessments are conducted through employee surveys, environmental monitoring, and stakeholder engagement to identify areas for improvement.

Scandic has established comprehensive risk management and internal control systems related to sustainability reporting. These systems ensure the accuracy, completeness, and reliability of sustainability data and disclosures.

Risk management framework:

• Integration of sustainability risks into the company's overall risk management process
• Regular assessment of climate-related physical and transition risks
• Monitoring of regulatory compliance across all markets
• Assessment of reputational risks related to sustainability performance

Internal controls for sustainability reporting:

• Standardized data collection processes across all hotels
• Regular monitoring and verification of environmental metrics
• Third-party verification of key sustainability indicators
• Clear roles and responsibilities for sustainability data management
• Regular reviews of data quality and reporting processes

Governance oversight:

• Board-level supervision of sustainability risk management
• Executive committee responsibility for implementation
• Regular reporting on sustainability risks and performance
• Integration with financial reporting and audit processes

The company maintains detailed documentation of its sustainability reporting processes and ensures compliance with applicable regulations, including the EU Corporate Sustainability Reporting Directive (CSRD).

Business Model

Scandic has established a leading position in the Nordic region and its successful concept is built on a proven business model with a focus on long-term, mainly revenue-based lease agreements.

As a hotel operator, Scandic is responsible for hotel operations as well as the brand and distribution. This allows Scandic to a large extent to ensure that its offering meets guests' expectations. By having responsibility for hotel operations and distribution, Scandic can also leverage economies of scale in areas such as purchasing, administration and investments.

Benefits of leasing model:

• Control over value chain and offering
• Economies of scale in operations and distribution
• Incentives for property owners
• Flexible cost structure

Strategy

Scandic's strategy and financial targets aim to create shareholder value through a balanced combination of growth, profitability and financial strength. The strategy is built on five strategic cornerstones:

1. Portfolio Excellence - Strengthening market-leading position in Nordic countries and selective expansion in Germany
2. Operational Excellence - Leading operational model for high guest and employee satisfaction
3. Commercial Excellence - Strong brand and distribution capacity
4. Engaged and Motivated Team Members - Foundation for guest satisfaction and results
5. Sustainable Business - Integral to all operations

Value Chain

Scandic has an impact throughout the value chain, from the local community where hotels are established and operated to the way items are procured and how waste is managed and recycled. Goods and services are sourced from carefully selected external suppliers. Scandic rents properties and is responsible for the operations, energy consumption and interiors of hotels.

Financial Targets 2025-2027:

• Organic growth: At least 5% per year
• Profitability: Adjusted EBITDA margin of at least 11%
• Capital structure: Net debt in relation to adjusted EBITDA of less than 1x
• Dividends: At least 50% of net profit

Stakeholder Engagement

Scandic engages with various stakeholders to understand their interests and views, which inform the company's strategy and operations.

Key stakeholders and engagement methods:

Employees/Team Members:

• Regular employee surveys to measure engagement, well-being, and inclusion
• Health and well-being programs with over 300 health ambassadors
• Scandic Academy for learning and skills development
• Diversity and inclusion initiatives
• Safety inspections and dialogues

Guests:

• Scandic Friends loyalty program with 3 million members (largest in Nordic hotel industry)
• Guest satisfaction monitoring and feedback systems
• Digital engagement through website and app
• Accessibility standards at all hotels

Property Owners:

• Long-term lease agreements creating shared incentives
• Collaborative approach to investments and sustainability
• Regular dialogue on operational improvements

Suppliers:

• Sustainability criteria in procurement processes
• Collaboration on environmental standards
• Regular evaluation of supplier compliance

Local Communities:

• 'Scandic in Society' initiative with 674 community activities in 2024
• Local hiring and employment opportunities
• Support for local suppliers and businesses

Investors and Shareholders:

• Regular financial and sustainability reporting
• Capital Markets Days and investor meetings
• Transparent communication on strategy and performance

Regulatory Bodies:

• Compliance with environmental regulations
• Participation in industry sustainability initiatives
• Nordic Swan Ecolabel certification process

Stakeholder feedback is systematically collected and analyzed to identify material issues and inform decision-making processes.

Material Impacts, Risks and Opportunities

Through its double materiality analysis, Scandic has identified its most important sustainability issues and their interaction with strategy and business model:

Material Environmental Issues:

• Climate change: CO2 emissions from energy consumption, with 30% reduction achieved since 2019
• Water resources: Water consumption in hotel operations
• Biodiversity: Impact through operations and supply chain
• Resource use: Waste management and circular economy practices

Material Social Issues:

• Well-being of team members: High employee satisfaction and engagement (health and wellness index 7.9/10)
• Impact on local communities: Through 674 'Scandic in Society' activities
• Guest well-being and safety: Comprehensive safety standards and accessibility
• Supplier working conditions: Due diligence in supply chain

Material Governance Issues:

• Corporate governance: Board oversight and risk management
• Business ethics: Anti-corruption policies and procedures
• Sustainable procurement: Environmental and social criteria

Integration with Strategy: Sustainability is integrated into Scandic's business model through:

• Three focus areas: MEET (Health, diversity & inclusion), EAT (Food & beverage), SLEEP (Rooms & interiors)
• Operational excellence: 96% of hotels certified by Nordic Swan Ecolabel
• Commercial advantage: Sustainability as differentiator in market
• Risk management: Climate and regulatory risks integrated into business planning
• Value creation: Sustainable operations contributing to long-term profitability

Financial Implications:

• Sustainability-linked financing tied to environmental goals
• Investment in energy efficiency and renewable energy
• Cost savings through waste reduction and efficiency measures
• Enhanced brand value and customer loyalty through sustainability leadership

Processes to Identify and Assess Material Impacts, Risks and Opportunities

Scandic has established comprehensive processes to identify and assess material sustainability impacts, risks and opportunities through its double materiality analysis.

Identification Process:

Value Chain Analysis: Scandic analyzes its entire value chain from local community impacts where hotels operate, to procurement of goods and services from suppliers, property operations, energy consumption, and waste management.

Stakeholder Engagement: Systematic engagement with key stakeholders including:

• Employee surveys measuring engagement, well-being, and inclusion
• Guest feedback through loyalty programs and satisfaction monitoring
• Property owner collaboration through lease agreements
• Supplier assessments and evaluations
• Community engagement through local initiatives

Industry and Regulatory Analysis: Monitoring of regulatory developments, industry standards, and best practices, including compliance with Nordic Swan Ecolabel requirements.

Assessment Methodology:

Impact Assessment: Evaluation of actual and potential impacts on people and environment across:

• Environmental: Climate change, water resources, biodiversity, resource use
• Social: Employee well-being, community impacts, guest safety, supplier conditions
• Governance: Business ethics, corporate governance, anti-corruption

Risk Assessment: Analysis of how sustainability matters affect business operations, including:

• Physical climate risks
• Transition risks from regulatory changes
• Reputational risks
• Operational risks

Opportunity Identification: Assessment of potential positive impacts and business opportunities through sustainable practices.

Regular Review: The materiality assessment is updated regularly to reflect changing circumstances, stakeholder expectations, and business developments.

Integration: Results are integrated into strategic planning, risk management, and operational decision-making processes.

Disclosure Requirements Covered

Based on the materiality assessment, Scandic covers the following ESRS disclosure requirements in its sustainability statement:

ESRS 2 - General Disclosures:

• GOV-1: Role of administrative, management and supervisory bodies
• GOV-2: Information provided to bodies on sustainability matters
• GOV-4: Statement on due diligence
• GOV-5: Risk management and internal controls
• SBM-1: Strategy, business model and value chain
• SBM-2: Interests and views of stakeholders
• SBM-3: Material impacts, risks and opportunities
• IRO-1: Processes to identify and assess material impacts
• IRO-2: Disclosure requirements covered

ESRS E1 - Climate Change:

• E1-2: Policies related to climate change
• E1-3: Actions and resources for climate policies
• E1-4: Targets for climate change mitigation
• E1-5: Energy consumption and mix
• E1-6: GHG emissions (Scope 1 and 2)

ESRS S1 - Own Workforce:

• S1-1: Policies related to own workforce
• S1-6: Characteristics of employees
• S1-9: Diversity metrics
• S1-13: Training and skills development
• S1-14: Health and safety metrics

ESRS G1 - Business Conduct:

• G1-1: Business conduct policies and corporate culture
• G1-2: Management of relationships with suppliers
• G1-3: Prevention and detection of corruption and bribery

Topics Not Material: Based on the materiality assessment, the following topics were determined not to be material for Scandic:

• E2 (Pollution)
• E3 (Water and Marine Resources) - limited material
• E4 (Biodiversity and Ecosystems) - limited material
• E5 (Resource Use and Circular Economy) - limited material
• S2 (Workers in the Value Chain) - limited material
• S3 (Affected Communities) - limited material
• S4 (Consumers and End-Users) - limited material

Transition plan for climate change mitigation

Overview and scope

Climate change poses potential risks for Scandic's operations, including increased energy costs, carbon taxes, new regulatory requirements, water restrictions, changing customer behaviors, and supply chain disruptions.

Scandic's transition plan to limit climate change is an integral part of its sustainability strategy. The plan is updated regularly in collaboration with relevant parts of Scandic's operations and the SISC, and it is established through approval by both the Executive Committee and the Board.

Scandic typically leases hotel properties through long-term lease agreements. If a property has poor energy efficiency or a suboptimal electricity supply, this can result in "locked-in" emissions throughout the entire lease period. As a hotel operator, Scandic has limited opportunities to influence a property's fundamental construction and technical systems, which creates challenges in efforts to reduce climate impact. To manage this challenge, Scandic creates shared incentives and strives to establish a competitive, sustainable and responsible collaboration with property owners.

Target year and net zero commitment

2030 reduction target (Scope 1 and 2): Scandic has an established goal to reduce carbon dioxide emissions (measured in CO₂ equivalents) by 50 percent per square meter of space by 2030 compared with 2019. This target includes emissions in Scopes 1 and 2. In 2024, Scandic achieved a 30 percent reduction in CO₂ emissions per square meter of space compared to 2019.

Science-based targets: In 2025, Scandic will launch a new sustainability strategy with ambitious goals to further strengthen its sustainable hotel operations. This includes committing to achieving science-based carbon reduction targets in accordance with the Science Based Targets Initiative.

Within Scandic's transition plan, targets for indirect carbon emissions (Scope 3) are also being established, in line with the Paris Agreement and with the approval of the Science Based Targets initiative (SBTi).

Reduction milestones and baseline

Baseline year: 2019

Target: Emissions per square meter must be decreased from 13.02 kg CO2e/m² in 2019 to 6.51 kg CO2e/m² by 2030.

Progress against target:

The decrease can be partly explained by the increased use of renewable electricity and district heating compared with the base year 2019. Together with reduced energy and water consumption, this has led to lower carbon emissions.

SBTi validation status

Scandic is in the process of committing to science-based targets. In 2025, the company will:

• Focus on establishing science-based targets for scope 3
• Revise scope 1 and 2 targets in line with the latest climate science

Targets are being developed in accordance with the Science Based Targets Initiative (SBTi) and in line with the Paris Agreement.

Key decarbonization levers

Energy efficiency and renewable energy transition

To achieve its goal, Scandic follows a clear transition plan focused on mitigating climate change through energy efficiency and increased use of renewable energy, including fossil-free district heating and renewable electricity. Energy efficiency contributes to reduced resource consumption and cost savings.

Scandic systematically works through an environmental management system, where the criteria for Nordic Swan Ecolabel certification set limits for energy and water usage, as well as requirements for sustainable procurement for all hotels.

Actions in 2024

Scope 1 and 2:

• Compliance with sustainability requirements of the Nordic Swan Ecolabel: Scandic has ensured that its operations comply with the Nordic Swan Ecolabel's requirements for sustainable hotel operations, including targets for energy efficiency and sustainable procurement.
• Increased purchases of fossil-free district heating and renewable electricity: To reduce emissions within scope 1 and 2, a larger share of the company's energy consumption was shifted to renewable energy sources.
• Development of a new 5-year plan for energy efficiency: A sustainability fund was established to finance energy efficiency measures. At the same time, property management and work routines related to energy consumption are being strengthened. During 2025, the company will evaluate two different energy management models to identify the most effective strategy for optimizing energy use at its hotels.
• Overview of climate targets: Scandic has begun work to revise scope 1 and 2 targets in line with the latest climate science.

Scope 3:

• Improved metrics: Scandic has further developed its methods for mapping and analyzing emissions related to purchases, enabling more detailed and accurate tracking of scope 3 emissions.
• Identification of high-priority measures: The most effective measures for reducing scope 3 emissions have been mapped to enable targeted improvements.
• Mapping of emissions from forests, land and agriculture: As a major purchaser of food, Scandic is working to gain a deeper understanding of and manage emissions associated with raw material production and the supply chain.
• Science-based targets for scope 3: During 2025, Scandic will focus on establishing science-based targets for scope 3.

Energy consumption and renewable energy progress

Energy consumption and mix, MWh:

Energy usage per square meter decreased by 3.9 percent between 2024 and the base year 2019, which can be partly explained by reduced water consumption, better energy efficiency and improved monitoring. Scandic increased the share of renewable energy from 53.7 percent in 2019 to 54.3 percent in 2024.

CapEx and investment commitments

A sustainability fund was established to finance energy efficiency measures.

During 2025, the company will evaluate two different energy management models to identify the most effective strategy for optimizing energy use at its hotels.

Locked-in emissions and stranded assets

Scandic typically leases hotel properties through long-term lease agreements. If a property has poor energy efficiency or a suboptimal electricity supply, this can result in "locked-in" emissions throughout the entire lease period. As a hotel operator, Scandic has limited opportunities to influence a property's fundamental construction and technical systems, which creates challenges in efforts to reduce climate impact. To manage this challenge, Scandic creates shared incentives and strives to establish a competitive, sustainable and responsible collaboration with property owners.

Supporting policies

Scandic's Code of Conduct, Environmental Policy, Supplier Code of Conduct and Guidelines for Sustainable Procurement together serve as guiding policies to reduce the company's negative environmental impact.

Code of Conduct: The Code of Conduct includes a commitment to minimizing environmental impact, continuously reducing greenhouse gas emissions and decreasing energy consumption.

Environmental Policy: Scandic's Environmental Policy sets out the commitment to operating environmentally sustainable hotels by systematically working to minimize greenhouse gas emissions. By incorporating the environmental principles of the UN Global Compact into the policy, Scandic commits to supporting the precautionary approach to environmental risks, enhancing environmental awareness and encouraging the development of environmentally friendly technology. The ambition is for all hotels that operate under the Scandic brand to be certified by the Nordic Swan Ecolabel.

Supplier Code of Conduct: Scandic sets requirements for its suppliers through its Supplier Code of Conduct, which stipulates that they must have an environmental program with measurable targets for improved environmental performance as well as general health and safety standards. The program must include the management of chemicals and hazardous materials, waste management, energy consumption, water usage, transportation and travel, as well as emissions to air, water and soil.

Sustainable Procurement Guidelines: Scandic's Sustainable Procurement Guidelines are the theoretical framework that underpins all decisions regarding sustainable procurement within the company. The guidelines also provide detailed information on production conditions with specific requirements for energy-efficient production and low carbon emissions.

Stakeholder engagement

Scandic involves relevant stakeholders including team members, guests and suppliers in its work to define and implement its climate targets. Through continuous dialogue and collection of feedback, the company ensures that its targets are both achievable and responsible.

Adaptive approach

To ensure that the climate goals remain relevant and effective, Scandic adjusts its goals and methods as needed, in line with the latest scientific research and changes in legislation. This flexible and proactive strategy enables long-term and sustainable initiatives to reduce the company's climate impact.

Greenhouse gas emissions data

Gross greenhouse gas emissions within scope 1, 2 and 3 and total greenhouse gas emissions, tonnes:

Policies Related to Climate Change

Scandic has established comprehensive policies related to climate change mitigation and adaptation as part of its sustainability strategy.

Climate Strategy: By 2030, Scandic aims to reduce CO2e emissions by 50 percent, measured in carbon dioxide equivalents per square meter compared with the base year 2019 (Scope 1 and 2).

Environmental Certification Policy: Scandic aims for all hotels to be certified by the Nordic Swan Ecolabel or at minimum comply with the limit values for energy consumption, unsorted waste, water consumption and ecolabeled chemicals. At year-end, 96% of Scandic's hotels were certified.

Sustainable Procurement Policy: Sustainability requirements are regularly updated to comply with Nordic Swan Ecolabel requirements. The policy includes guidelines on suitable materials and substances and requirements for environmentally certified products.

Energy Policy: Clear action plans focus primarily on energy efficiency and using green energy, such as fossil-free district heating and renewable electricity. Energy consumption per square meter decreased by 3.9% between 2024 and 2019.

Operational Policies:

• All team members undergo training on Nordic Swan Ecolabel criteria
• Implementation of energy-saving measures including LED lighting and motion control solutions
• Energy-efficient kitchen installations and equipment
• Optimization of operations to reduce energy consumption

Governance: Climate-related policies are overseen by the Board of Directors and implemented through the Executive Committee, with regular monitoring and reporting on progress toward targets.

Actions and Resources Related to Climate Change Policies

Investment in Renovations and Maintenance: Approximately 737 million SEK was invested in renovations and maintenance during 2024, equivalent to about 3.4% of net revenue. These investments include energy efficiency improvements and sustainable technologies.

Energy Efficiency Measures:

• Implementation of LED lighting across all hotels
• Motion control solutions for energy management
• Energy-efficient kitchen installations and equipment
• Optimization of heating, cooling, and ventilation systems

Renewable Energy Transition:

• Increased use of fossil-free district heating
• Transition to renewable electricity sources
• Collaboration with property owners on sustainable energy solutions

Operational Improvements:

• Continuous monitoring of energy consumption per square meter
• Behavioral change programs for team members and guests
• Implementation of energy management systems

Sustainable Financing: Scandic secured sustainability-linked financing tied to its sustainability strategy and specific environmental goals, demonstrating financial commitment to climate action.

Training and Capacity Building:

• All team members receive training on Nordic Swan Ecolabel criteria
• Over 300 health ambassadors engaged in sustainability initiatives
• Continuous education on energy efficiency and environmental practices

Circular Design Implementation: Launched Scandic Go's circular design concept for sustainable and climate-smart interiors, including furniture made from 95% recycled materials and FSC certified wood.

Monitoring and Measurement:

• Regular tracking of CO2 emissions per square meter
• Monthly monitoring of energy consumption
• Annual environmental impact assessments

Targets Related to Climate Change Mitigation

CO2 Emissions Reduction Target:

• Target: Decrease CO2e emissions per square meter by 50% by 2030 compared with base year 2019 (Scope 1 and 2)
• Progress 2024: 30% reduction achieved since 2019 (from 13.1 kg/m² to 9.2 kg/m²)
• Target value by 2030: 6.5 kg/m²

Energy Efficiency Target:

• Continuous reduction in energy consumption per square meter
• Progress 2024: 3.9% decrease between 2024 and 2019
• Focus on fossil-free district heating and renewable electricity

Environmental Certification Target:

• Target: Certify all hotels according to Nordic Swan Ecolabel
• Progress 2024: 96% of hotels certified (increase from 90% in 2023)
• Minimum compliance with limit values for energy consumption per square meter

Operational Targets:

• Implementation of energy-saving measures across all hotels
• Transition to renewable energy sources where possible
• Continuous improvement in energy efficiency through technology upgrades

Timeline and Milestones:

• 2025: Further reduction in emissions intensity
• 2030: Achieve 50% reduction target for CO2e per square meter
• Ongoing: Annual monitoring and reporting of progress

Resource Allocation:

• 3-4% of net revenue allocated to renovations and maintenance including energy efficiency improvements
• Investment in LED lighting, motion controls, and energy-efficient equipment
• Sustainability-linked financing supporting climate targets

Energy consumption and mix

Scandic reports energy consumption disaggregated by source for 2024 and the base year 2019:

Scope and methodology: Energy consumption covers Scandic's hotel operations. Energy usage per square meter decreased by 3.9% between 2024 and 2019, partly explained by reduced water consumption, improved energy efficiency, and monitoring. The increased share of fossil-free district heating and renewable electricity contributed to reduced carbon dioxide emissions.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 emissions (tonnes CO₂e)

Scope 2 emissions (tonnes CO₂e)

Note: Scope 2 emissions are reported on a market-based approach. Location-based emissions are not disclosed separately.

Scope 3 emissions (tonnes CO₂e)

Category 6: Business travel

Franchise hotels emissions

Note: In 2024, Scandic adjusted its carbon emissions calculation methodology in accordance with the GHG Protocol. Emissions from franchisees are now reported under Scope 3 instead of Scope 1 and 2 as previously. Historical data has been adjusted to reflect this change.

Total GHG emissions (all Scopes)

Note: Scope 3 reporting is partial and covers only Category 6 (Business travel) and emissions from franchise hotels. Other Scope 3 categories are not yet disclosed.

GHG intensity metrics

Emission intensity (Scope 1 + 2), kg CO₂e per m²

Note: The target is to reduce CO₂e emissions (Scope 1 and 2) by 50% per square meter by 2030 compared with the base year 2019.

Water consumption intensity

Energy consumption

Total energy consumption by source (MWh)

Note: Energy usage per square meter decreased by 3.9% between 2024 and the base year 2019. Energy data has been updated to exclude franchisees.

Methodology and scope

Calculation methodology: Emissions data is calculated in accordance with the Greenhouse Gas (GHG) Protocol, based on consumption data and supplier statistics. All environmental data has been verified through a third-party review by Ethos International in accordance with AA1000AS v3.

Scope: The report covers Scandic's own operations (Scope 1 and 2) and partial Scope 3 (Category 6: Business travel and franchise hotels). Scandic is working to improve data quality and expand Scope 3 reporting, including increased use of primary data and expansion of reported categories.

Adjustments in 2024: In accordance with the GHG Protocol, emissions from franchisees are now reported under Scope 3 instead of Scope 1 and 2 as previously. Historical data has been adjusted to reflect this change.

Biogenic CO₂: Not separately disclosed.

Regulated emissions (EU ETS): Not disclosed.

Policies Related to Own Workforce

Scandic has comprehensive policies governing its relationship with team members, built on the foundation of its corporate culture and values.

Core Values and Culture: Scandic's culture, established more than 60 years ago, is founded on four core values:

• Be Caring: Showing empathy and consideration
• Be You: Embracing diversity and authenticity
• Be a Pro: Delivering professional excellence
• Be Bold: Taking initiative and driving innovation

Inspiring Culture Program: A well-established culture and values program that plays an important role in recruitment and daily operations. The program defines Scandic's values and provides guidance for integrating these values in team members' daily work.

Diversity and Inclusion Policy: Scandic has a dedicated Diversity and Inclusion Policy that guides work to ensure equality, diversity and inclusion within the organization. This includes:

• Bias-free recruiting practices through partnership with InClue Recruitment
• Training for all leaders on diversity and inclusion
• Workshops with management teams
• Establishment of networks and structures to promote inclusion

Health and Well-being Policy: Comprehensive approach to team member health and well-being including:

• Group-wide health and well-being program
• Over 300 health ambassadors across hotels
• Continuous processes and structures for health initiatives
• Designated team member responsible for health and well-being

Learning and Development Policy:

• Scandic Academy platform for learning and skills development
• Shared learning culture across the organization
• Relevant training and learning tools for leaders and team members
• Skills development to meet current and future guest needs

Employment Practices:

• Clear procedures for both permanent and hourly employment contracts
• Support for young people and first-time workers
• Career development opportunities across different positions
• Regular employee surveys to measure engagement and satisfaction

Processes for Engaging with Own Workforce

Scandic has established systematic processes for engaging with team members and workers' representatives to address impacts and gather feedback.

Employee Surveys: Regular employee surveys are conducted to measure and follow up on:

• Employee engagement
• Well-being and health
• Feelings of inclusion
• Views on leadership
• Overall satisfaction

Survey results are used to develop operations based on team member feedback and inform strategic initiatives.

Health Ambassadors Network: Over 300 health ambassadors from Scandic's hotels are tasked with:

• Ensuring health initiatives are implemented
• Inspiring fellow team members
• Supporting health and well-being programs
• Acting as liaisons between management and staff

Safety and Well-being Dialogues: Regular dialogues with team members covering:

• Physical and psychosocial work environments
• Safety inspections and protocols
• Workplace health and safety matters
• Continuous improvement suggestions

Learning and Development Engagement:

• Scandic Academy provides platforms for skill development
• Regular training sessions and workshops
• Career development discussions
• Feedback on training needs and effectiveness

Management Engagement:

• Direct communication between team members and hotel management
• Regular team meetings and briefings
• Open door policies for raising concerns
• Structured feedback mechanisms

Strategic Initiative Engagement: Team members are actively involved in strategic focus areas:

• Health and well-being initiatives (2023 focus)
• Diversity and inclusion programs (2024 focus)
• Sustainability and environmental programs
• Operational excellence improvements

Representative Structures: While specific details about workers' representatives are not extensively detailed, the company engages with employee representatives as part of its governance structure, including employee representatives on the Board of Directors.

Processes to Remediate Negative Impacts and Channels for Raising Concerns

Crisis Support and Emergency Response: All hotels have access to emergency help from the Scandic Crisis Call Center, a 24-hour service run by trained security staff. Crisis support can include contact assistance and emergency response coordination.

Safety and Security Framework: Comprehensive safety and security measures including:

• Regular safety inspections at all hotels
• Monitoring of physical and psychosocial work environments
• Structured safety protocols and procedures
• Emergency response training for team members

Health and Well-being Support: Structured processes for addressing health and well-being concerns:

• Network of over 300 health ambassadors across hotels
• Designated team member responsible for health and well-being coordination
• Regular monitoring through employee surveys
• Continuous health initiative implementation

Management Communication Channels:

• Direct access to hotel management for raising concerns
• Regular dialogue sessions between management and team members
• Structured feedback mechanisms through employee surveys
• Open communication policies

Training and Development Support:

• Scandic Academy providing learning opportunities
• Skills development programs to address capability gaps
• Career development support and guidance
• Continuous training on safety and operational procedures

Diversity and Inclusion Support:

• Specialized training for leaders on diversity and inclusion
• Networks and support structures for underrepresented groups
• Bias-free recruitment processes to prevent discrimination
• Regular assessment of inclusion practices

Continuous Improvement Process:

• Regular employee surveys to identify issues and concerns
• Systematic follow-up on survey results
• Implementation of improvement actions based on feedback
• Monitoring of workplace satisfaction and engagement levels

While specific grievance procedures are not detailed in the available information, the company's comprehensive approach to employee engagement and support suggests multiple channels exist for team members to raise concerns and seek remediation.

Actions on Material Impacts and Managing Risks and Opportunities

Health and Well-being Actions:

Target: Health and wellness index of at least 8.0 out of 10 by 2025 2024 Result: 7.9 (compared to 8.0 in 2023 and 7.8 in 2022)

Key Actions:

• Launched Group-wide health and well-being program in 2023
• Established over 300 health ambassadors across hotels
• Designated dedicated team member responsible for health and well-being
• Created continuous processes and structures for health initiatives
• Regular monitoring and measurement through employee surveys

Diversity and Inclusion Actions:

Target: Diversity and inclusion index of at least 8.8 out of 10 by 2025 2024 Result: 8.6 (compared to 8.8 in both 2023 and 2022)

Key Actions:

• Partnered with InClue Recruitment for bias-free recruiting practices
• Developed training for all leaders on diversity and inclusion
• Conducted workshops with management teams
• Mapped areas for process development
• Established networks and support structures
• Created solid foundation for continued diversity and inclusion initiatives

Learning and Development Actions:

• Established Scandic Academy platform in 2023
• Focus on creating shared learning culture
• Relevant training and learning tools for leaders and team members
• Skills development programs to meet current and future guest needs
• Career development opportunities across different positions

Employment and Engagement Actions:

• Regular employee surveys measuring engagement, well-being, and inclusion
• Support for young people and first-time workers (39.7% of team members under 30)
• Employment opportunities for 148+ nationalities
• Flexible employment arrangements (39% hourly contracts, 61% permanent)

Effectiveness Measurement:

• Systematic tracking through employee survey indices
• Regular monitoring of health and well-being metrics
• Assessment of diversity representation and inclusion practices
• Continuous feedback collection and improvement implementation
• Annual reporting on progress toward targets

Targets Related to Managing Material Impacts, Risks and Opportunities

Health and Well-being Target:

• Target: Health and wellness index of at least 8.0 out of 10 by 2025
• Baseline: First measurement in 2022 (7.8)
• 2024 Performance: 7.9
• 2023 Performance: 8.0
• Status: Slightly below 2023 performance, continued focus needed to achieve 2025 target

Diversity and Inclusion Target:

• Target: Diversity and inclusion index of at least 8.8 out of 10 by 2025
• Baseline: First measurement in 2022 (8.8)
• 2024 Performance: 8.6
• 2023 Performance: 8.8
• Status: Slight decline from previous years, requiring renewed focus

Supporting Targets and Metrics:

Employment Diversity:

• 39.7% of team members under age 30
• 148+ nationalities represented among team members
• Gender distribution: 63% women, 37% men
• Employment mix: 61% permanent employees, 39% hourly contracts

Organizational Development:

• Establishment of Scandic Academy for continuous learning
• Over 300 health ambassadors across hotel network
• Comprehensive diversity and inclusion training program
• Regular employee engagement surveys

Timeline and Milestones:

• 2025: Achieve target indices for health/wellness (8.0) and diversity/inclusion (8.8)
• Ongoing: Annual measurement and reporting through employee surveys
• Continuous: Implementation of improvement actions based on survey results

Risk Mitigation Strategies:

• Regular monitoring through systematic employee surveys
• Proactive health and well-being programs
• Structured diversity and inclusion initiatives
• Investment in learning and development platforms
• Crisis support services available 24/7

Characteristics of Employees

Total Workforce:

• Total team members at year-end: 16,359
• Gender distribution: 63% women, 37% men

Employment Type:

• Permanent employees: 61% (approximately 9,979 team members)
• Hourly employment contracts: 39% (approximately 6,380 team members)

Age Distribution:

• Under 30 years: 39.7% of permanent employees
• The hotel industry's seasonal variations mean that many team members have hourly employment contracts

Cultural Diversity:

• Nationalities represented: 148+ nationalities among team members
• Scandic serves as a first employer for many young people and others establishing themselves in the labor market

Geographic Distribution: Team members are distributed across Scandic's operations in:

• Sweden (30% of net sales)
• Norway (28% of net sales)
• Finland (22% of net sales)
• Denmark, Germany, and Poland (20% of net sales)

Career Development:

• Many team members gain valuable work experience and develop across different positions within the Group
• Scandic Academy provides learning and skills development opportunities
• Career advancement opportunities from entry-level to leadership positions

Employment Model:

• Focus on providing employment opportunities for diverse groups
• Strong emphasis on inclusion and equal opportunities
• Support for integration of international workers
• First job opportunities for young people entering the workforce

Industry Context: The hotel industry is characterized by seasonal variations, which explains the significant proportion of hourly employment contracts. This employment structure allows Scandic to maintain operational flexibility while providing opportunities for workers at different career stages.

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

Number of non-employee workers

In 2024, a total of 1,796 people employed by external companies contributed to Scandic's operations.

Breakdown by type and geography

The use of non-employee workers is mainly concentrated in Finland, where the company collaborates extensively with external service providers, primarily within cleaning services, but also in other areas. In other countries, the extent of external labor is significantly more limited.

Among the professional groups working at Scandic's hotels that are not part of Scandic's staff, outsourced cleaning staff and workers within construction and renovations constitute the largest group.

Methodology

No specific methodology (headcount vs FTE) is disclosed for counting non-employee workers.

Multi-year comparison

No comparative data for prior years is provided.

Collective Bargaining and Social Dialogue

Employee Representation: The company has employee representatives involved in corporate governance, including two employee representatives appointed by trade unions who serve on the Board of Directors as part of the eight-member board.

Social Dialogue Mechanisms:

• Regular employee surveys to measure engagement, well-being, and inclusion
• Structured dialogues between management and team members on various workplace matters
• Health and safety consultations through regular safety inspections
• Employee feedback mechanisms through management meetings

Collaborative Approaches:

• Partnership with trade unions in board representation
• Collaborative approach to workplace health and safety
• Joint initiatives on diversity and inclusion
• Shared responsibility for implementing health and well-being programs

Communication Channels:

• Over 300 health ambassadors serving as liaisons between management and staff
• Regular team meetings and briefings
• Employee survey feedback processes
• Direct communication channels with hotel management

Nordic Employment Model: Operating primarily in Nordic countries, Scandic operates within established social dialogue frameworks characteristic of Nordic employment relations, including strong traditions of collective bargaining and worker participation in decision-making.

Workplace Democracy:

• Employee representatives on Board of Directors
• Structured feedback mechanisms
• Collaborative approach to workplace improvements
• Regular consultation on matters affecting working conditions

While specific details about collective bargaining coverage percentages are not provided in the available information, the presence of union-appointed board representatives and the Nordic operational context suggests engagement with collective bargaining processes typical of the region.

Diversity Metrics

Gender Distribution:

• Women: 63% of total workforce
• Men: 37% of total workforce
• Total workforce: 16,359 team members at year-end

Age Diversity:

• Under 30 years: 39.7% of permanent employees
• Scandic serves as a first employer for many young people entering the workforce
• Multi-generational workforce supporting career development

Cultural and Nationality Diversity:

• Nationalities represented: 148+ different nationalities among team members
• Significant international diversity across the workforce
• Support for integration of workers from diverse cultural backgrounds

Board Diversity:

• Board composition: Eight members including two employee representatives appointed by trade unions
• Employee representation ensuring workforce perspectives in governance

Geographic Distribution: Workforce distributed across multiple countries:

• Sweden
• Norway
• Finland
• Denmark
• Germany
• Poland

Employment Type Diversity:

• Permanent employees: 61%
• Hourly employment contracts: 39%
• Flexible employment arrangements accommodating different life situations

Diversity and Inclusion Performance:

• Diversity and inclusion index: 8.6 out of 10 (2024)
• Target: 8.8 out of 10 by 2025
• Systematic measurement and improvement of inclusion practices

Industry Role:

• First employer for many young people and those establishing themselves in the labor market
• Provides valuable work experience and development opportunities
• Career advancement opportunities across different positions within the Group

Adequate wages

Scandic ensures that team members in all operating countries receive market-competitive and fair compensation. In countries where collective agreements are not directly applied, the company follows relevant local and regional collective agreements as benchmarks to maintain competitive and fair compensation levels. This approach ensures that Scandic's compensation principles align with current labor market standards and contribute to a sustainable and fair work environment.

84 percent of Scandic's team members are covered by collective agreements.

Social protection

All of Scandic's team members are covered by the social protection provided through their respective country's welfare system, which includes sickness benefits, unemployment benefits, work injury compensation, state pension and parental leave.

Coverage details

• Coverage rate: 100% of team members
• Type of scheme: Public (country welfare systems)
• Benefits included:
  • Sickness benefits
  • Unemployment benefits
  • Work injury compensation
  • State pension
  • Parental leave

Parental leave

All team members at Scandic are entitled to take parental leave in accordance with the statutory provisions and collective agreements applicable in their respective country of operation.

Persons with Disabilities

Accessibility Standards: All Scandic hotels operate based on an Accessibility Standard that focuses on both the physical environment and creating an inclusive guest experience. This standard ensures that persons with disabilities can access and enjoy Scandic's services.

Inclusive Design Philosophy: "Everyone is welcome at Scandic" - this principle guides the company's approach to accessibility and inclusion for both guests and team members.

Physical Environment:

• Hotels are designed and operated to meet accessibility requirements
• Focus on barrier-free access to rooms and facilities
• Compliance with accessibility regulations across all markets

Guest Experience:

• Inclusive guest experience design ensuring equal access to services
• Staff training on accessibility needs and support
• Accommodation of various disability requirements

Employment Inclusion: While specific employment metrics for persons with disabilities are not detailed, Scandic's comprehensive Diversity and Inclusion Policy and focus on creating inclusive workplaces suggests support for employing persons with disabilities as part of its broader diversity initiatives.

Nordic Swan Ecolabel Requirements: As part of the 96% of hotels certified by Nordic Swan Ecolabel, accessibility considerations are integrated into environmental and social standards.

Continuous Improvement:

• Regular assessment of accessibility features
• Updates to facilities during renovations to enhance accessibility
• Training programs for team members on inclusive service delivery

The accessibility standard represents Scandic's commitment to universal design principles and ensuring equal opportunities for all individuals to access hotel services and employment opportunities.

Training and Skills Development Metrics

Scandic Academy: Established in 2023, Scandic Academy serves as the primary platform for learning and skills development across the organization.

Program Structure:

• Focus: Creating a shared learning culture
• Target audience: Both leaders and other team members
• Approach: Relevant training and learning tools
• Objective: Strengthen employee skills development to meet current and future guest needs

Training Coverage:

Environmental Certification Training:

• Coverage: All team members at Scandic's hotels
• Content: Training on Nordic Swan Ecolabel criteria
• Purpose: Ensure compliance with environmental standards and sustainable operations

Leadership Development:

• Diversity and Inclusion Training: Developed for all leaders in 2024
• Management Training: Workshops conducted with management teams
• Leadership Skills: Ongoing development programs for management capabilities

Health and Safety Training:

• Regular safety training and inspections
• Health and well-being program training
• Crisis response and emergency procedures

Operational Training:

• Guest service excellence
• Hotel operations and procedures
• Technology systems training (including Oracle Opera Cloud implementation)
• Food safety and quality standards

Specialized Training Programs:

Health Ambassadors:

• Over 300 health ambassadors trained across hotels
• Specialized training on health and well-being initiatives
• Peer support and leadership development

Cultural Training:

• Inspiring Culture program training
• Values integration in daily work
• Diversity and inclusion awareness

Skills Development Outcomes:

• Career advancement opportunities across different positions
• Support for young people and first-time workers
• Professional development for 148+ nationalities
• Continuous learning culture establishment

Health and safety metrics

Work-related accidents

Scope and methodology: The accident frequency is calculated by dividing the number of incidents by the total number of hours worked by employees, multiplied by 1,000,000. The metrics relate to own workforce only; coverage of contractors or value chain workers is not disclosed.

Work-life balance metrics

Parental leave entitlement

All team members at Scandic are entitled to take parental leave in accordance with the statutory provisions and collective agreements applicable in their respective country of operation.

Social protection coverage

All of Scandic's team members are covered by the social protection provided through their respective country's welfare system, which includes sickness benefits, unemployment benefits, work injury compensation, state pension and parental leave.

Gender pay gap

At the end of 2024, the median salary for women at Scandic was 91 percent of the median salary for men.

Methodology note: Data calculated based on gross hourly wages at the end of the year, excluding any possible additional compensation.

Compensation metrics

Pay gap

At the end of 2024, the median salary for women at Scandic was 91 percent of the median salary for men.

Remuneration ratio

Not disclosed.

Methodology

The gender pay gap data was calculated based on gross hourly wages at the end of the year, excluding any possible additional compensation.

Incidents, Complaints and Severe Human Rights Impacts

Human Trafficking and Prostitution Prevention: Scandic has implemented a policy to fight prostitution and human trafficking at all hotels since 2016. This policy demonstrates the company's commitment to preventing severe human rights violations in its operations.

Crisis Response System:

• 24-hour Crisis Call Center: Staffed by trained security personnel
• Emergency Support: Available for all hotels to handle incidents
• Contact Assistance: Immediate response for crisis situations
• Trained Staff: Security professionals equipped to handle various incident types

Employee Support Mechanisms:

• Employee Surveys: Regular monitoring for workplace issues and concerns
• Management Dialogue: Structured communication channels for raising complaints
• Health Ambassadors: Over 300 ambassadors across hotels serving as support contacts
• Safety Inspections: Regular monitoring of work environments

Diversity and Inclusion Safeguards:

• Bias-free Recruitment: Partnership with InClue Recruitment to prevent discrimination
• Training Programs: Comprehensive diversity and inclusion training for all leaders
• Policy Framework: Dedicated Diversity and Inclusion Policy
• Regular Assessment: Monitoring through diversity and inclusion index (8.6/10 in 2024)

Guest Safety and Security:

• Comprehensive Safety Standards: Applied across all hotels
• Emergency Procedures: Established protocols for various incident types
• Accessibility Standards: Ensuring equal access for all guests
• 24/7 Support: Available through crisis call center

Monitoring and Reporting: While specific incident numbers are not detailed in the available information, the company has established comprehensive systems for:

• Regular monitoring of workplace conditions
• Employee feedback through surveys
• Crisis response and incident management
• Continuous improvement based on feedback

The systematic approach to preventing human rights violations, combined with multiple reporting channels and support systems, demonstrates Scandic's commitment to maintaining a safe and respectful environment for all stakeholders.

Business Conduct Policies and Corporate Culture

Corporate Culture Foundation: Scandic's corporate culture was established more than 60 years ago and is expressed through four core values:

• Be Caring: Showing empathy and consideration for others
• Be You: Embracing authenticity and individual diversity
• Be a Pro: Delivering professional excellence in all activities
• Be Bold: Taking initiative and driving innovation

Inspiring Culture Program: A well-established culture and values program that:

• Defines Scandic's organizational values clearly
• Provides guidance for integrating values in team members' daily work
• Plays an important role in recruitment processes
• Ensures consistent cultural standards across all operations

Business Ethics Framework:

• Anti-corruption and anti-bribery policies
• Clear guidelines on business conduct and professional behavior
• Ethical standards for supplier relationships and procurement
• Compliance requirements across all markets of operation

Governance Integration:

• Board-level oversight of corporate culture and values implementation
• Executive responsibility for maintaining ethical standards
• Regular assessment of cultural alignment through employee surveys
• Integration of values into performance management and decision-making

Stakeholder Relations:

• Transparent and ethical approach to all stakeholder relationships
• Fair dealing with property owners, suppliers, and business partners
• Commitment to honest and accurate communication
• Respect for local communities and regulatory requirements

Cultural Measurement:

• Employee engagement surveys measuring cultural alignment
• Diversity and inclusion index tracking (8.6/10 in 2024)
• Regular assessment of values integration in daily operations
• Feedback mechanisms to ensure cultural standards are maintained

Sustainability Integration: Corporate culture explicitly incorporates sustainability principles as a central pillar of the business strategy, ensuring that environmental and social considerations are embedded in all business decisions and operations.

Management of Relationships with Suppliers

Sustainable Procurement Policy: Scandic has established comprehensive sustainability requirements in its Procurement Policy that are regularly updated to comply with Nordic Swan Ecolabel requirements. These requirements are publicly available to inspire and drive change in the industry.

Supplier Assessment and Selection:

• Sustainability Criteria: Suppliers are evaluated based on environmental standards, working conditions, and business ethics
• Compliance Requirements: All suppliers must comply with relevant legislation as a minimum requirement
• Continuous Evaluation: Scandic constantly evaluates its operations to determine if supplier requirements should be tightened

Environmental Standards for Suppliers:

• Nordic Swan Ecolabel Compliance: Suppliers must meet strict environmental requirements for products and services
• Chemical Standards: Requirements for ecolabeled chemicals for cleaning, laundry, and washing dishes
• Material Specifications: Guidelines on suitable materials and substances
• Circular Economy: Focus on suppliers providing recycled and environmentally certified materials

Food and Beverage Suppliers:

• Organic Food Requirements: 100% compliance with Nordic Swan Ecolabel's limit values for organic food and drinks achieved in 2024
• Animal Welfare: Ensuring suppliers comply with legislation and promoting animal welfare standards
• Sustainable Production: Focus on suppliers producing food in a sustainable way considering people, animals, and environment

Social Criteria:

• Working Conditions: Assessment of supplier labor practices and worker treatment
• Business Ethics: Requirements for ethical business conduct
• Local Sourcing: Support for local suppliers and communities where possible

Partnership Approach:

• Long-term Relationships: Building sustainable partnerships with key suppliers
• Collaborative Improvement: Working with suppliers to enhance sustainability performance
• Shared Standards: Aligning supplier practices with Scandic's values and requirements
• Industry Leadership: Using procurement power to drive positive change in supplier practices

Monitoring and Compliance:

• Regular evaluation of supplier performance against sustainability criteria
• Continuous improvement processes for supplier relationships
• Public disclosure of requirements to promote industry-wide improvements

Prevention and Detection of Corruption and Bribery

Scandic has established policies and procedures to prevent and detect corruption and bribery across all its operations.

Anti-corruption Framework:

• Clear anti-corruption and anti-bribery policies as part of business ethics framework
• Compliance requirements across all markets of operation (Sweden, Norway, Finland, Denmark, Germany, Poland)
• Integration of anti-corruption measures into business conduct policies

Corporate Culture and Values: The company's core values support ethical behavior:

• Be Caring: Emphasizing ethical treatment of all stakeholders
• Be a Pro: Maintaining professional standards and integrity
• Be Bold: Encouraging reporting of unethical behavior
• Be You: Creating an environment where honest communication is valued

Governance Oversight:

• Board-level responsibility for ensuring compliance with anti-corruption requirements
• Executive management accountability for implementing anti-corruption measures
• Regular oversight of compliance programs

Training and Awareness:

• Integration of ethics and anti-corruption training into employee development programs
• Cultural platform and values program that reinforces ethical behavior
• Regular communication about ethical standards and expectations

Supplier and Partner Standards:

• Business ethics requirements included in supplier assessment criteria
• Clear expectations for ethical conduct from all business partners
• Continuous evaluation of partner compliance with ethical standards

Risk Management:

• Integration of corruption risks into overall risk management framework
• Regular assessment of corruption risks across different markets and operations
• Internal controls designed to prevent and detect potential corruption

Reporting and Detection:

• Multiple channels available for reporting concerns through management structure
• Employee survey mechanisms that can identify ethical concerns
• Crisis call center available for serious concerns
• Regular monitoring through internal controls and auditing processes

The company's comprehensive approach to business ethics, combined with strong cultural values and governance oversight, provides a foundation for preventing and detecting corruption and bribery.

Incidents of corruption or bribery

Confirmed incidents

In 2024, Scandic was not convicted or required to pay any fines for violations of anti-corruption or bribery laws.

Convictions and fines

Scandic did not receive any fines, sanction fees or similar penalties in 2024.

Whistleblowing and investigation procedures

Scandic has established a whistleblowing service that allows team members and external stakeholders to anonymously report serious irregularities, including violations of the Code of Conduct, criminal offenses, and human rights violations. Reports submitted to the whistleblowing service are handled by a dedicated whistleblowing group consisting of Scandic's Legal Counsel and representatives from the Executive Committee. The Group is responsible for evaluating the reports, determining necessary actions and ensuring that these are implemented and followed up in a structured manner.

The CEO and the Board, through the Audit Committee, receive regular information about submitted reports and the actions taken. In accordance with Scandic's Whistleblowing Policy and guidelines, it is explicitly prohibited to take reprisals against individuals who, in good faith, report misconduct through the whistleblowing service.

In 2024, Scandic registered 18 cases related to complaints or misconduct through the whistleblowing service (this figure includes various types of misconduct, not limited to corruption or bribery).

Internal Investigation Policy

Scandic's Internal Investigation Policy ensures that incidents related to business ethics, including corruption and bribery, are investigated quickly, independently and objectively. Internal investigations are initiated at the Group level by the CEO, the CFO or the legal department. The policy includes provisions on confidentiality, management of conflicts of interest and actions that may be taken during or after an investigation.

Payment practices

Scandic applies a payment term of 30 days. According to Scandic's general procurement agreements, payment terms are 30 days.

Contracted payments are regularly monitored to ensure compliance.

Standard contractual payment terms

• 30 days - standard payment terms applied according to general procurement agreements

Monitoring

Scandic values its relationships with suppliers and always strives to fulfill the agreements made, including the agreed payment terms. Contracted payments are regularly monitored to ensure compliance.