Scandinavian Tobacco Group A/S

STG manages its material sustainability topics through its Rolling Responsibly agenda, led by the Sustainability Center of Excellence (CoE). The Board of Directors oversees the sustainability agenda and includes ESG goals when awarding executive compensation, while the Audit Committee reports to the Board and assesses the reporting processes for transparency and compliance through dialogue with the CFO, Corporate Finance and the CoE. The Executive Board acts as the Sustainability SteerCo, directing the agenda, allotting budget and approving the final Double Materiality Assessment outcome. A Governance Group of Executive Board members and implementation partners meets quarterly to handle prioritisation, budget and resource allocation, supported by Topic Owners, Workstream Leads and Delivery Teams. The identity of the bodies responsible for oversight of material impacts, risks and opportunities is set out in the Board of Directors section on page 47. Reference: page 59

Material topics are reported up through STG's governance structure to the supervisory bodies. The Head of Sustainability and the CoE report to the Executive Board (which serves as the Steering Committee) and inform the Board of Directors, while the CEO and Head of Sustainability are responsible for updates to the Board and the CFO ensures data quality and oversees the Annual Report. The Governance Group communicates progress and results, with a quarterly meeting cadence, and Topic Owners ensure quarterly results sharing including mitigating actions and prioritisation of initiatives. The Audit Committee receives the approach and findings of the sustainability work on a regular basis and is broadening its understanding of the control mechanisms and the outcomes of the Double Materiality Assessment. The CoE and workstreams together hold sustainability-related expertise across material topics, supplemented by external subject matter experts where gaps exist. Reference: page 59

STG began aligning financial rewards with its environmental and social goals in 2022 and has implemented a sustainability-linked incentive scheme within its Long-Term Incentive Program (LTIP). The scheme is tied to two pillars: Net zero along the journey of the leaf, based on Scope 1 and 2 emissions reduction targets from E1 Climate Change, which carries a 5% weight of the remuneration reward; and Sustainable Community Pioneers, a qualitative evaluation by the Board of Directors on plan and execution, which also carries a 5% weight. The term of the LTIP is three years, and based on proposals from the Remuneration Committee the Board of Directors decides the KPIs and scales for the program. Reference: page 60

STG sets out how it embeds due diligence across its governance, strategy and business model, with the relevant disclosures mapped across the sustainability statement. Embedding due diligence in governance, strategy and business model is covered on pages 22, 26 and 58 to 59, and engaging with affected stakeholders in all key steps is covered on pages 61, 64, 74 and 78. Identifying and assessing adverse impacts is addressed on pages 61 to 63, while taking actions to address those adverse impacts and tracking the effectiveness of these efforts are both covered across pages 65 to 85. The statement notes that STG's engagement did not include direct consultation with affected stakeholders, with external perspectives included indirectly through subject matter experts. Reference: page 57

To ensure its sustainability risk assessment and reporting process is accurate and robust, STG applies the same principles as its financial reporting risk assessment process. Risks are identified against the standard audit assertions of Completeness, Accuracy, Cut Off, Occurrence, Presentation & Disclosure and Rights & Obligations, then assessed for likelihood and impact, with controls designed for those deemed material per the DMA. STG has established policies, procedures and internal control systems across the organisation, designed with input from key stakeholders and external consultants, and risks and controls are evaluated on an annual basis. Material topics are linked to relevant Executive Board members, and the approach and findings are reported to the Audit Committee and Board of Directors on a regular basis. STG's financial and sustainability reports are audited by the same independent audit firm, and the sustainability data is subject to limited assurance based on CSRD requirements. Reference: page 60

STG sets out its strategy, business model and value chain in the management review, incorporated by reference, with the strategy on page 22, the business model on pages 10 to 11 and the value chain on pages 20 to 21. STG is a global tobacco company producing handmade and machine-rolled cigars, smoking tobacco and next generation products, operating across business segments including North America Online & Retail, North America Branded & Rest of World, and Europe Branded. The Group manages its material sustainability topics through its Rolling Responsibly agenda, led by the Sustainability Center of Excellence, and works at Impact, Risk and Opportunity level across each chapter. Its value chain spans upstream tobacco leaf sourcing, own manufacturing operations and downstream distribution to consumers, with a wide network of suppliers for direct materials including tobacco leaf, non-tobacco materials and finished products. Reference: page 65

STG sets out how it interacts with its key stakeholder groups across its value chain and business model. Employees and future employees in own operations are engaged through regular supervisor and coworker meetings and a survey system, with the most recent community workshops in 2023, and works councils and unions represent employee interests. Leaf suppliers and workers in the value chain (upstream) are engaged through online channels, regular meetings and occasional visits, with indirect engagement with farmers through associations and the Sustainable Tobacco Program. Consumers (downstream) have limited engagement opportunities given the highly regulated tobacco industry, while investors and shareholders are engaged through proactive communication on strategy and performance. Information from each engagement is aggregated and communicated to supervisors and, if necessary, escalated to management to decide on any changes needed to the business model or strategy. Reference: page 64

STG's Double Materiality Assessment identified material IROs across six topics, mapped to its strategy, business model and value chain. Under E1 Climate Change, material impacts cover climate change adaptation and mitigation (across the value chain) and energy (own operations); under E5 Resource use and circular economy, resource inflows and resource outflows (across the value chain). Material social topics include training and skills development and harassment and discrimination under S1 Own workforce, working time, adequate wages, work-life balance, health and safety and child labour under S2 Workers in the value chain, and consumer health and safety and protection of children under S4 Consumers and end users, plus corruption and bribery incidents and whistle-blower protection under G1 Business Conduct. STG defines short term as within the reporting year, medium term within the next five years and long term beyond five years, with all IROs identified as short to medium term. The Group has not identified current or anticipated material financial implications from its impacts, risks and opportunities. Reference: page 65

STG conducted a Double Materiality Assessment, led by the CoE, across the ESRS topics and sub-topics relevant to its business, using a four-phase process of Interpretation, Identification, Assessment and Application. The Group reviewed its structure and business activities to identify concentrated areas of IROs across operations and the upstream and downstream value chain, drawing on internal stakeholders and subject matter experts from Finance, Operations, Legal, HR and Public Affairs, with external perspectives included indirectly through consultants. Impact materiality was scored on scale, scope and irremediability (each rated 1 to 5) plus likelihood, with final scores ranging from 0.03 to 5, while financial materiality was scored on the size of the financial effect against a threshold of 5% EBT (approximately 70m DKK), with final scores ranging from 0.03 to 4.88. Sub-topics were deemed material if the respective IROs scored 3.01 or above in either assessment. The engagement did not include direct consultation with affected stakeholders, six topics were deemed material, and STG will revisit the DMA in 2025. Reference: page 62

STG provides an index of the ESRS disclosure requirements covered in its sustainability statement, mapping each requirement to its location in the report. The index covers ESRS 2 General Disclosures, E1 Climate change and E5 Resource use & circular economy in the environment section, S1 Own workforce, S2 Workers in the value chain and S4 Consumers and end-users in the social section, and G1 Business conduct in the governance section. E2 Pollution, E3 Water and marine resources, E4 Biodiversity and ecosystems, and S3 Affected communities were deemed not material during the DMA process described on pages 61 to 63. Certain disclosures, including some SBM-1 content, are incorporated by reference in the management review within pages 1 to 55, and data points are incorporated in the data section within pages 86 to 102. Phase-in data points include non-employee characteristics, training and skills development, resource outflow metrics and anticipated financial effects for Climate Change and Circular Economy. Reference: page 57

STG does not yet have a fully developed transition plan for climate change mitigation, but states it will be developed in the short to medium term and is expected to be compatible with limiting global warming to 1.5C in line with the Paris Agreement. The Group is focusing on detailed abatement plans to achieve absolute emissions reductions across all scopes, following GHG Protocol guidelines and SBTi requirements. To reach net-zero by 2050, STG aims for a 90% reduction in absolute emissions for Non-FLAG emissions and 72% for FLAG emissions (Forest, Land and Agriculture related), and then using high quality offsets for the remaining unabated emissions. No GHG removals or carbon credits were used in the reporting period, and STG is excluded from EU Paris-aligned Benchmarks. STG notes that a concrete plan for neutralizing unabated emissions is still to be developed. Reference: page 68

STG has issued Environmental Actions and Commitments and committed to reducing Scope 1, 2 and 3 GHG emissions in line with near- and long-term science-based targets. This means increasing its share of renewable energy use and pursuing more efficient energy management, assessing its material impacts and risks across operations and the value chain, and setting strategies and actions to improve its environmental performance and support adaptation to climate change. The most senior level accountable for implementation is the Group's Head of Sustainability and the Chief Supply Chain Officer. STG's policies are available on its website at st-group.com. Reference: page 69

To progress its decarbonization journey, STG has identified all sources of emissions within Scope 1, 2 and 3 and implemented a cross functional process for assessing, selecting and prioritizing initiatives, requiring global execution and supplier collaboration. Key planned Scope 1 and 2 reduction areas include renewable electricity (transitioning to grid renewable electricity and installing solar panels at several production sites), equipment and refrigerants (replacing outdated equipment, modern refrigerants, LED lighting and energy audits), fuel switch (a fleet transition from diesel to petrol and electric vehicles) and network optimisation. In 2024 STG transitioned to 100% renewable electricity in several US sites and installed LED lights in the Bethlehem warehouse (1,375 tonnes CO2e reduction), replaced an outdated steam generator in its Belgium manufacturing site (66 tonnes CO2e reduction) and continued its fleet transition, delivering a 4.4% emission reduction from combined gasoline and diesel consumption. Solar panels installed in San Pedro, Dominican Republic at the end of 2024 are expected to reduce emissions by around 350 tonnes CO2e, representing a 23% contribution to the Scope 1 and 2 yearly targets. For Scope 3, reduction levers cover leaf and 3rd party cigars, wood, non-tobacco materials, and transportation and distribution. Reference: page 69

STG has set near- and long-term science-based emissions reduction targets, and its targets for all scopes have been validated by the SBTi in 2024. For Scope 1 and 2, STG targets a 42% absolute reduction by 2030 (near-term) and a 90% absolute reduction by 2050 (long-term), both against a 2020 base year. For Scope 3, STG targets a 25% absolute reduction in Non-FLAG GHG emissions and a 30.3% absolute reduction in FLAG GHG emissions by 2030 (near-term), each against a 2022 base year, rising to 90% and 72% respectively by 2050. The overall goal is to reach net-zero GHG emissions across the value chain by 2050. STG does not have a separate target for energy consumption and efficiency but expects an overall decrease in energy consumption and intensity, and has adopted a recalculation policy to keep calculations, targets and progress accurate. Reference: page 70

Total energy consumption of the Group was 91.7 GWh in 2024, up from 86.6 GWh in 2023, an increase of 5.9% driven by the acquisition of Mac Baren; without Mac Baren, total energy consumption decreased by 1.9% compared to 2023. Total fossil energy consumption was 69.7 GWh (2023: 67.4 GWh), comprising 16.0 GWh from crude oil and petroleum products, 25.0 GWh from natural gas, and 28.7 GWh from purchased electricity, heat, steam and cooling from fossil sources. Total renewable energy consumption was 21.1 GWh (2023: 18.4 GWh), including 20.4 GWh of purchased renewable electricity, heat, steam and cooling and 0.7 GWh of self-generated non-fuel renewable energy, with 0.9 GWh from nuclear sources. The energy mix was 76.0% fossil, 23.0% renewable and 1.0% nuclear, a 1.8 percentage point increase in the renewable share versus 2023. Energy intensity was 10.0 GWh per DKK billion of net sales (2023: 9.9), against net sales of DKK 9,202.1 million. Reference: page 97

STG reports gross Scope 1, 2 and 3 emissions in 1,000 tonnes CO2e. Gross Scope 1 GHG emissions were 12.1 (2023: 11.6), and gross market-based Scope 2 GHG emissions were 15.3 (2023: 16.5), a 7.7% decrease, while gross location-based Scope 2 emissions were 18.6. Total gross indirect Scope 3 GHG emissions were 273.2 (2023: 271.0), an increase of 0.8%, made up of total Category 1 purchased goods and services of 168.0, Category 4 upstream transportation and distribution of 33.2, Category 9 downstream transportation of 15.5, Category 12 end-of-life treatment of sold products of 22.4, and other categories of 34.1. Total GHG emissions (market-based) were 300.6 (2023: 299.1) and total location-based emissions were 303.9. STG's emissions reductions in 2024 excluding the Mac Baren acquisition were Scope 1 -5.2%, market-based Scope 2 -9.4% and Scope 3 -1.9%; base years are 2020 for Scope 1 and 2 and 2022 for Scope 3. Reference: page 92

STG's policy for resource use and circular economy is anchored in its Environmental Actions and Commitments. The Group acknowledges that it has not yet adopted a circular business model and does not have a well-established process to develop products based on circular principles, as it has newly begun the journey to optimize resource use and address resource outflows. Its current R&D processes include some circularity aspects from cost efficiency projects, and past projects have simplified packaging, developed solutions that facilitate higher recyclability and reduced resource use and outflows by avoiding unnecessary packaging where possible. STG is developing a methodology to assess resource use changes in future R&D packaging projects. Material negative impacts relate to packaging materials including plastic, wood, cardboard and paper, and metal, while tobacco was not deemed material as it is not considered a scarce resource and can be replenished through regrowth. Reference: page 72

STG describes its actions on resource use, noting it uses a wide range of raw materials and semi-finished and finished goods across its own operations and upstream value chain, and is engaging with a vast network of suppliers for direct materials including tobacco leaf, non-tobacco materials and finished tobacco products. Given the wide range of materials and extensive supplier base, the Group is focusing on collecting data and assessing resource inflows and outflows for the products and materials critical to its operations, and is prioritizing engagement with its direct suppliers. The Group conducted additional workshop sessions with internal stakeholders from Procurement, R&D, Commercial and Finance to align circularity impacts with the findings of the DMA. STG's consultations have been limited to subject matter experts within the organization and external consultants and have not included engagement with affected communities. Reference: page 72

STG indicates that it has newly begun its journey to optimize resource use and address resource outflows and does not yet have a circular business model in place. Past R&D projects have simplified packaging, developed solutions that facilitate higher recyclability and reduced resource use and outflows in packaging by avoiding unnecessary packaging where possible. The Group is developing a methodology to assess resource use changes in future R&D packaging projects. In the reporting year, STG began to identify the level of recyclable content in the products and packaging in scope, and through its supplier data collection process initiated in 2024 it expects to gain better visibility of recyclability in the years to come. Reference: page 72

STG reports resource inflows by material group for the first time, with a total weight of both technical and biological materials of 151,000 tonnes (151.0 thousand tonnes) in 2024. Wood was the primary material at 117.9 thousand tonnes (78% of total weight), of which 43.7 thousand tonnes came from certified sources (29%). Wooden boxes accounted for 14.8 thousand tonnes (10%), of which 8.2 thousand tonnes were from certified sources (5%), while plastic was 9.7 thousand tonnes (6%), cardboard and paper 5.8 thousand tonnes (4%), metal 1.1 thousand tonnes (1%), aluminium 0.4 thousand tonnes (0%) and other materials 1.3 thousand tonnes (1%). Biological materials predominate, accounting for 77% of total materials used. Tobacco inflows (including leaf and semi-finished products) are not included in these disclosures as tobacco was deemed immaterial for E5, and are instead accounted for under E1 Climate Change; in the reporting year STG did not have access to data distinguishing virgin from reused or recycled material, so all materials are considered virgin to follow a conservative approach. Reference: page 98

STG reports that metrics for resource outflows are missing for this year's overview, as the Group has newly begun its journey to optimize resource use and address resource outflows across its business. STG identifies a material negative impact in that it creates a significant amount of packaging material waste in the downstream value chain, which is not part of a closed-loop system and has a high chance of ending up in natural environments and landfills rather than waste management facilities such as recycling centers, increasing finite material consumption. In the reporting year STG began to identify the level of recyclable content in the products and packaging in scope. As part of the supplier data collection process initiated in 2024, the Group expects better visibility of the recyclability of materials and packaging, which will allow it to assess the rate of recyclable content and gain better insights into resource outflows in the years to come, consistent with the ESRS phase-in for value chain data. Reference: page 98

STG's main own-workforce policy is its Diversity and Inclusion (D&I) policy, owned by the Chief Human Resources Officer, which aims to create a culture where people can be themselves and contribute equally to STG's growth. STG does not tolerate any form of harassment or discrimination, including on the basis of gender, age, race, religion, nationality, ethnicity, political opinion, sexual orientation, union membership, disability or health status. The cornerstone policy on responsible behaviour is the Code of Conduct, owned by the General Counsel and sponsored by the CEO, which references the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Guiding Principles on Business and Human Rights and several ILO conventions including No. 182 and No. 138 on child labour and No. 184 on safety in agriculture. STG also has a Training and Skills Development policy that applies to all employees globally and is owned by the CHRO. Reference: page 75-76

STG engages with its employees through interactions such as meetings and dialogues among supervisors, managers and colleagues, plus a feedback survey system. The Group runs a global employee engagement survey once every three years and a pulse survey for all office employees worldwide on specific topics once or twice a year. HR and the Executive Board analyse the results of every survey, communicate key takeaways and, where needed, attach action plans at top management level and within individual teams. Employee surveys also assess feelings of inclusion, belonging and satisfaction, with sales reps and customer-facing associates in scope, and managers work with their teams to create relevant improvement actions. Reference: page 74-76

Remedies for human rights impacts on STG's own workers are captured by existing structures and reporting channels such as management, HR departments, Works Councils, unions, employee representatives and the whistleblower scheme. In late 2023 STG introduced a process under which all suspected or actual breaches of law and STG policies, including the Code of Conduct, must ultimately be reported by Managers or HR via the whistleblower platform to ensure a consistent investigation approach and a Group-level overview, including for incidents related to human rights, discrimination and harassment. Employees can raise issues with any manager, Executive Board or Management member, local or Group HR, the Legal function, union representatives, local works council representatives or employee-elected board members. Further detail on the whistleblower scheme is provided in the G1 Business Conduct section on pages 82-85. Reference: page 75

On harassment and discrimination, STG's training plan covers foundational D&I awareness, and the Group is replicating into 2025 the training structure already used successfully in the US across the global Senior Leadership Community, with content customised to regional social and cultural norms. Main training topics are inclusive leadership practices, foundational D&I training (unconscious bias, microaggressions and positive workplace culture) and allyship. STG has established a global D&I committee overseen by the CHRO and used an external consultancy for specific initiatives, and it runs employee surveys on inclusion and belonging. On training and skills development, STG implemented a policy and increased people-development capacity by hiring resources, holds annual performance discussions with yearly employee evaluation cycles, and plans to define further relevant actions in 2025. Reference: page 75-76

STG has not set any targets in relation to harassment and discrimination; training will continue to be reinforced for managers in North America and Europe, with instructions on reporting allegations via the whistleblower portal, and targets will be developed once this is in place. The Group has also not set any targets or metrics for training and skills development, as it is currently maturing and building capabilities and looking for a system to track relevant metrics. STG notes it tracks and measures training at a local level because it currently lacks a system to gather this information at Group level. Relevant metrics are reported on pages 99-102. Reference: page 76

At year-end 2024 STG had a total of 10,219 employees, of which 9,353 were permanent (down 6.66% from 10,020 in 2023) and 866 were temporary. By gender the workforce comprised 6,355 female, 3,860 male, 2 other and 2 not disclosed. By age, 1,829 employees were under 30, 5,573 were 30-50, and 1,951 were over 50. By region there were 4,749 employees in the Americas, 2,746 in Europe and 2,724 in the rest of the world, and the Group represents 75 nationalities across its workforce. Total employee turnover rose to 22.7% in 2024 from 18.3% in 2023, with 2,205 employees leaving, driven mainly by production employees in Latin America and retail employees in North America. Reference: page 99-101

Gender distribution in Top Management showed a slight increase in females, from 24.5% in 2023 to 25.3% in 2024, attributed to the share of females in Senior Leadership rising from 24.1% to 25.0%. In 2024 Top Management comprised 99 people (74 male, 25 female), of which Senior Leadership was 88 (66 male, 22 female) and Executive Management was 2 (1 male, 1 female). The Board of Directors, including employee-elected members, totalled 9 (7 male, 2 female) and was unchanged from 2023. For the shareholder-elected Board, the share of female directors was 33.33% and male 66.67%, board national diversity was 4 nationalities (up from 3), and the share of independent directors rose to 66.67% from 55.56%. Reference: page 101

STG reported 1 work-related incident of discrimination and harassment in 2024, the same number as in 2023, with no amount of fines related to work-related grievances. For corruption and bribery there were no convictions and no fines. Under human rights issues, there were no total confirmed incidents, no confirmed incidents considered human rights violations and no related fines. In the "Other" reported incidents category there were no incidents in 2024 (compared with 1 in 2023), and 90.44% of employees considered "functions-at-risk" had been assigned training. STG also stated that none of the reported whistleblower cases were critical to its business or caused adjustments to its financial results. Reference: page 102

STG's key policy for workers in the value chain is its Supplier Code of Conduct, owned by the Group's General Counsel and sponsored by the CEO, with implementation led by Procurement, the SVP of Procurement and the SVP of Leaf. The Code applies to all STG suppliers regardless of goods or services and sets expectations around labour practices, health and safety, human rights and ethical business conduct, with STG encouraging suppliers to extend its spirit through their own supply chains. Suppliers must, as a minimum, comply with local labour laws including rules on minimum wage, working hours and overtime, and respect international standards expressed in the International Bill of Human Rights. STG does not accept child labour or forced labour of any kind and will react to below-standard working conditions in its supply chain, with the material sub-topics covering working conditions (working time, adequate wages, work-life balance, health and safety) and other work-related rights (child labour and forced labour), especially in upstream tobacco farming. Reference: page 78

STG has no direct engagement with workers in its value chain; instead its Procurement function engages with a network of over 5,000 suppliers worldwide, and the Supplier Code of Conduct defines STG's expectations towards them. Workers involved in tobacco growing indirectly influence STG's strategy and business model through supplier engagement, which involves meetings and occasional visits to foster mutual understanding, and STG has close relationships with direct leaf suppliers sharing a desire to eliminate child and forced labour. The Group also captures workers' views and interests through industry collaborations including the Sustainable Tobacco Program (STP) and the Eliminating Child Labour in Tobacco Growing Foundation (ECLT). Because it does not engage workers directly, STG relies on third-party data from its risk assessment tools, supported by internal Procurement and Sustainability team members. Reference: page 78-79

STG does not have a formal process for handling and remediating negative impacts on value chain workers, and any reports are managed on a case-by-case basis. Incidents may come to STG's awareness through its due diligence process in the leaf tobacco supply chain (the Sustainable Tobacco Program), via supplier visits, via reports directly to Management or other Company representatives, or via the Whistleblower Channel, although STG acknowledges that most value chain workers are likely unaware of its Whistleblower Scheme at present. There have been no reports made via STG's reporting channels of severe human rights issues or incidents, though STG recognises a general risk of child labour and other severe human rights issues in its upstream value chain relating to tobacco growing. Suppliers are expected to implement internal controls and reporting channels so that human rights issues can be raised confidentially and investigated, and non-compliance may lead to termination of the supplier agreement. Reference: page 78-79

In 2024, via a tool developed by the STP Secretariat, all STG leaf suppliers conducted a self-assessment addressing different ESG topics to identify potential risks by country and supplier and to flag any breaches; where risks are identified a risk analysis is carried out that may lead to in-depth assessment of selected suppliers. A supplier audit may be considered to verify information where high risks have been identified, with corrective actions issued and followed up for suppliers performing below standards. STG is a long-standing contributor to the Eliminating Child Labour in Tobacco Growing Foundation (ECLT), which runs awareness and on-the-ground projects and training programmes that STG's Procurement and Leaf teams follow, and continuing education in human rights due diligence on child labour and forced labour is mandated. STG works towards full supplier oversight through its collaboration with the STP for leaf tobacco suppliers. Reference: page 79

STG met this year's objective of covering more than 90% of suppliers in rolling out its Supplier Code of Conduct, specifically to its tobacco leaf suppliers and to in-scope non-tobacco materials suppliers identified on spend-based information. The Group has not yet set additional targets, as it is currently working to better understand value chain data from its suppliers, and it aims to define targets in the short to medium term. Looking to 2025 and beyond, STG will leverage its supplier relationships through the STP, including in-depth analyses and necessary actions across priority areas, and will continue to integrate sustainability principles into its operations and supply chain through due diligence of leaf tobacco suppliers. Reference: page 79

STG's material sub-topics for consumers and end-users center on personal safety, namely the health and safety risks of tobacco and nicotine consumption and the protection of children and minors. The Group's key policy is its Marketing Principles, which direct that marketing, advertising and promotion are not aimed at anyone under the age of 18 (or a higher age where set by local law), that all promotional activity targets only adults, and that consumers are always warned about the health risks of the products. Where applicable laws and the Marketing Principles differ, STG applies the more restrictive rule. The Marketing Principles are owned by the Group's General Counsel and sponsored by the CEO. The Group does not have a policy related to protecting children from second-hand smoke, noting that the ability to fully remediate this impact remains limited to regulatory initiatives and responsible consumer behaviour. The Marketing Principles do not strictly address human rights commitments such as the UN Guiding Principles, the ILO Declaration, or the OECD Guidelines. Reference: page 82

STG reports that in most of its markets regulation prevents any engagement with consumers. Information to consumers about the health risks of the products is conveyed through health warnings on product packaging and, where advertising is permitted, in advertising materials, in compliance with applicable laws and the STG Marketing Principles. The disclosure does not describe a direct dialogue or consultation process with consumers and end-users. STG's influence on consumers is described as limited due to industry regulations and restrictions on marketing and communication in most markets. Reference: page 82

Consumers can submit complaints about STG's products through the Group's website, although STG states it rarely receives complaints regarding health and safety aspects. When complaints are received, STG says it meets them with responsibility and attention. The Group does not assess whether consumers or end-users are aware of and trust this consumer reporting function, nor does it assess the effectiveness of the channel. STG also states there is no clear way to remedy the inherent risks associated with the use of its products; in some markets it offers oral products as an alternative for nicotine users who prefer not to smoke, though these also carry health risks. Reference: page 82

STG's main action is training in the STG Marketing Principles, delivered to the relevant functions in the Group, with Group Legal leading the delivery of trainings. The training is set to continue in 2025 to ensure compliance. STG states that the effectiveness of the training is not currently assessed. The Group frames its overall approach around responsible marketing practices, compliance with applicable laws in every market, and applying the more restrictive of local law or its Marketing Principles. Reference: page 82

STG reports that it does not have any targets or metrics in this area. In line with its belief in responsible business conduct, the Group states that it strives to always act in full compliance with all applicable laws and regulations as well as its self-imposed Marketing Principles. No quantitative target or time-bound objective is disclosed for the consumers and end-users topic. Reference: page 82

STG describes a number of Group-wide policies aimed at maintaining high ethical standards and compliance with laws and regulations, with the Code of Conduct as the cornerstone. The Code is supplemented by more detailed policies on marketing principles, anti-corruption and anti-bribery, competition law, data ethics, trade restrictions, protection of personal data, diversity and inclusion, IT security, and others. The Code of Conduct and several pertaining policies are approved by the Board of Directors, with the rest approved by the Executive Management or Executive Board, and all policies are reviewed annually. Employees complete training on relevant policies at onboarding and at regular intervals, generally as e-learning, with in-person training for Operations employees who lack online access; Code of Conduct training covers all employees. Corporate culture is reinforced through the Speak Up approach and the Whistleblower Policy, which protects anyone reporting in good faith against retaliation in line with EU Directive 2019/1937, and a group-wide speak-up campaign was most recently launched in 2023 by the CEO. The Group notes it does not have a specific policy for training in business conduct, although training is conducted in relation to the Code of Conduct and supporting policies. Reference: page 84

STG's prevention and detection of corruption and bribery relies on its Whistleblower Scheme, an internal reporting channel open to employees, customers, suppliers, business partners and other stakeholders, alongside financial controls. All incoming reports are reviewed by an external law firm to avoid conflicts of interest before being forwarded to the Group General Counsel, and a written procedure ensures prompt, independent and objective investigation of all reported matters, including incidents of corruption and bribery, in accordance with the EU Whistleblower Directive. Anti-corruption and anti-bribery training is mandatory for all employees with a corporate email address, including the Executive Management, and is integrated into onboarding; it covers how to identify corruption risks, the implications of corruption and bribery, conflicts of interest, and how to respond. The online training is available in all relevant languages, with two exceptions to be addressed in early 2025. Board members, except employee-elected members, are not required to take the training because the Board annually adopts the Code of Conduct and the Anti-corruption Policy. Incidents detected via the Whistleblower Channel, financial controls or otherwise are reported to the Executive Management and the Audit Committee and investigated by the Group's legal, financial and/or HR functions. STG also reports that 90.44% of employees considered "functions-at-risk" were assigned training in 2024. Reference: page 84

STG reports zero confirmed incidents of corruption or bribery in 2024. The Group recorded no convictions and no fines for violations of anti-corruption and anti-bribery laws in 2024 (both shown as nil, the same as 2023), and total confirmed incidents and confirmed incidents considered human rights violations were also nil. STG states that 90.44% of employees considered "functions-at-risk" had been assigned training in 2024 (not reported in 2023). Incident statistics are based on data from STG's Whistleblower Scheme and data manually collected by Group Legal. Reference: page 102