Scandinavian Tobacco Group A/S

Reference: pages 56-57

"Scandinavian Tobacco Group A/S has a two-tier management structure consisting of the Board of Directors (BoD) and the Executive Management. The BoD is responsible for the overall strategic direction and supervises the activities, management and organisation of the Group" (p.56). Roles are mapped on p.57. The Board of Directors "Oversees the sustainability agenda, approves policy and targets, and is ultimately responsible for the material impacts, risks and opportunities oversight" and "also approves executive incentive schemes linked to sustainability performance". The Audit Committee "Reports to the Board of Directors; assesses reporting processes for transparency and compliance". Executive Management and the Executive Board "Direct the sustainability agenda, allocate resources and validate the outcome of the Double Materiality Assessment. The CEO and Head of Sustainability report progress; the CFO ensures data integrity". Below them sit the Sustainability Execution Group, the Sustainability Centre of Excellence and named Topic Owners, with workstream leads per topic (E1/E4 under the Chief Supply Chain and Commercial Officers, S1 under the CHRO, S2 under the SVP Procurement and Leaf) (p.56).

On expertise, the CoE and workstreams "represent the sustainability-related experience and skills across a range of material topics", with gaps covered by external SMEs (p.57). Board composition metrics are at p.99.

Reference: pages 57, 60, 85 (the ESRS index at p.55 cites page 61)

Information reaches the supervisory bodies through the Sustainability Centre of Excellence and the Sustainability Execution Group: "The CEO and Head of Sustainability report progress; the CFO ensures data integrity" (p.57). The Audit Committee, "Through dialogue with the CFO, Corporate Finance and Sustainability CoE... broadens its understanding of processes built into control mechanisms and procedures to monitor, manage and oversee ESG data, and the outcomes of the Double Materiality Assessment" (p.57).

On the 2025 DMA specifically: "Findings and results were reviewed by all participants, SMEs, topic owners and the Executive Board, to refine the outcome and ensure a thorough process was followed. The results were validated as relevant to STG and presented to the Audit Committee, the Board of Directors and the Executive Board" (p.60).

On cadence: "we have established governance to sustainability reporting by linking material topics to relevant Executive Board members and our approach and findings are reported to the Audit Committee and Board of Directors on a regular basis" (p.85). Board and committee meeting attendance for 2025 is tabulated at p.48. The statement does not list the individual sustainability matters addressed at each meeting during the year.

Reference: page 57

"Sustainability metrics are integrated into STG's remuneration framework through the Long-Term Incentive Plan (LTIP) for 2025-2027, which includes a climate component designed to support progress on decarbonisation objectives. 10% of the LTIP is linked to reducing carbon emissions across Scope 1, 2 and 3, with annual targets expressed in tonnes of CO2e reduced and verified against over- or under-performance compared to prior-year results. These targets are aligned with STG's near-term Science-Based Targets initiative (SBTi) commitments for 2030. Performance is assessed against specific CO2e reduction KPIs, with payout levels indexed to achievement" (p.57).

The Board of Directors "approves executive incentive schemes linked to sustainability performance" (p.57). The climate component is the only sustainability element disclosed; no social or governance metric is linked to pay. The statement does not give the amount actually paid out against the climate KPI in 2025, referring readers instead to the separate Remuneration Policy section and Remuneration Report at st-group.com (p.57).

Reference: page 55 (due diligence map), with the underlying content at pages 58, 59-61 and 62-83

The ESRS content index on p.55 carries the due diligence mapping table required by GOV-4, listing each core element against where it is disclosed: "Embedding Due diligence in governance, strategy, and business model" (incorporated by reference in the management review, pp.1-53); "Engaging with affected stakeholders in all key steps of the Due diligence" (p.58); "Identifying and assessing adverse impacts" (pp.59-61); "Taking actions to address those adverse impacts" (pp.62-83); and "Tracking the effectiveness of these efforts" (pp.62-83).

The engagement limb is qualified by the company itself: "STG did not engage directly with affected stakeholders due to reliance on expert input and prior assessments" (p.59), and for value chain workers "STG does not engage directly with value chain workers but relies on third-party assessments" (p.77). Upstream due diligence runs through the Sustainable Tobacco Program, whose six-step cycle (Commit, Identify, Prioritize, Respond, Measure, Report) is set out at p.78, with self-assessments, Due Diligence Maturity scores and in-depth assessments of priority suppliers. GOV-4 is also cross-referenced in the "Other EU legislation" table at p.101.

Reference: page 85

"To ensure our sustainability risk assessment and reporting process is accurate and robust, we have applied the same principles as our financial reporting risk assessment process. We identify risks linked to the standard audit assertions of Completeness, Accuracy, Cut Off, Occurrence, Presentation & Disclosure and Rights & Obligations. The risks are assessed for likelihood and impact, and controls designed for those deemed to be material as per the DMA" (p.85).

The statement adds that "Risks and controls are evaluated on an annual basis to ensure they are still relevant and working appropriately", that the process "was designed with input from key stakeholders and external consultants", and that "Our financial and sustainability reports are audited by the same independent audit firm, which is elected at the annual general meeting. Our sustainability data is subject to limited assurance based on the CSRD requirements. Observations raised by external auditors are reviewed and addressed with appropriate action plans, which are regularly followed up on until completion" (p.85). Findings are reported to the Audit Committee and Board of Directors on a regular basis. The specific risks identified and their controls are said to be "described in our accounting policies" rather than listed in a dedicated table.

Reference: pages 10-15 and 17-18 (incorporated by reference into the sustainability statement, per the index at p.55)

STG is "a global leader in the cigar industry holding market leading positions in handmade and machine-rolled cigars... the global leader within pipe tobacco and hold[s] strong positions in select markets in fine-cut tobacco and nicotine pouches" (p.10). Four product categories are described: handmade cigars, machine-rolled cigars, smoking tobacco and nicotine pouches (pp.10-13). Scale: "We employ approximately 8,800 people globally, have more than 20 sales offices in North America and Europe, and sell to more than 100 countries" (p.10). Manufacturing sites are in Denmark, Belgium, Italy, the Dominican Republic, Honduras, Nicaragua, Sri Lanka and Indonesia, with 2025 net sales of DKK 3.9bn in Europe, DKK 4.5bn in the Americas and DKK 0.6bn in Rest of World (p.15).

The value chain diagram on p.14 splits upstream (tobacco leaf "ranging from small farmers to multinational wholesalers"; non-tobacco materials including packaging, filters, flavours), own operations (administration, production, logistics, sales and distribution) and downstream (online, B2B/retail, superstores), and maps each material topic onto the relevant stage. The strategy, Focus2030, is set out at pp.17-24.

The report notes the SFDR datapoint "Involvement in activities related to cultivation and production of tobacco" against p.13 (p.101).

Reference: page 58 (the ESRS index at p.55 cites page 61)

"Engagement with stakeholders occurs across different communication channels, including meetings, surveys, online and in other forums, to fit business needs across STG's activities" (p.58). Four stakeholder groups are tabulated with their relationship and engagement channels: own workforce (S1), engaged through "Regular face-to-face/online meetings, Employee surveys, Workshops, Feedback rounds, Open dialogue, Works council/unions"; workers in the value chain including leaf suppliers (S2), through "Supplier engagement through online meetings and visits" and "Indirect engagement with farmers via associations/initiatives through the Sustainable Tobacco Program"; consumers and end-users (S4), where there are "Limited opportunities to communicate due to tobacco industry being highly regulated"; and investors/shareholders, through "Proactive communication across channels on company strategy and performance" (p.58).

Views are aggregated, escalated to management where needed and "channelled through SMEs into the Double Materiality Assessment, where they rate, confirm material topics, and guide updates to policies and targets" (p.58). The limitation is stated plainly: "STG did not engage directly with affected stakeholders due to reliance on expert input and prior assessments" (p.59).

Reference: page 61

The material IRO table on p.61 lists each sub-topic with its value chain position, classification (Actual / Potential), time horizon and the page where it is addressed. Under Impacts: E1 climate change adaptation (Upstream, Actual), climate change mitigation (Across, Actual) and energy (Across, Actual); E4 "Direct impact drivers of biodiversity loss - Land-use change" (Upstream, Actual & Potential); E5 resource inflows and resource outflows (both Across, Actual); S1 equal treatment - training and skills development, and equal treatment - measures against violence and harassment (both Own operations, Actual); S2 working conditions (working time, adequate wages, work-life balance, health and safety) and other work-related rights (child labour, forced labour), both Upstream and Actual & Potential; S4 personal safety of consumers - health and safety (Downstream, Actual) and protection of children (Downstream, Actual; and Own operations, Potential); G1 corruption and bribery - incidents, and protection of whistleblowers (both Own operations, Potential). One Risk row is listed: S4 personal safety - health and safety, Downstream, long-term.

All time horizons are marked "All". "The Group has not identified any current material financial implications from its IROs, and the assessment of anticipated material financial effects is not yet complete" (p.61). Climate-specific risk identification and scenario analysis is also presented under E1-2 (2025 ESRS numbering).

Reference: pages 59-60

"Scandinavian Tobacco Group reviewed its Double Materiality Assessment (DMA) to identify material Impacts, Risks and Opportunities (IROs) across all European Sustainability Reporting Standards (ESRS) topics. Led by the Sustainability CoE, with oversight from the Executive Board, Audit Committee and the Board of Directors" (p.59). "The DMA followed four phases: Interpretation, Identification, Assessment and Application. It was based on an internal methodology, supported by external consultancy, and aligned with ESRS guidance", with SASB standards used in the identification phase (p.59).

Limitations are acknowledged: "The assessment relies on expert judgment and internal consensus scoring, which may introduce subjectivity" (p.59); "The DMA is reviewed annually" (p.60). Climate-specific risk identification and scenario analysis is also presented under E1-2 (2025 ESRS numbering).

Reference: page 55

The statement prints a full ESRS content index headed "ESRS DISCLOSURE REQUIREMENTS" (p.55), listing each disclosure requirement covered with a page reference, organised by ESRS 2 General Disclosures, Environment, Social and Governance. Whole standards are marked as excluded on the face of the index: "E2 - Pollution (not material)", "E3 - Water and marine resources (not material)" and "S3 - Affected communities (not material)". E4 is headed "E4 - Biodiversity and ecosystems (use of phase-in)".

Three notation keys are used: "* Incorporated by reference in the management review section within page 1-53"; "** Incorporated in the data section of the sustainability statement within page 84-102"; and "*** Deemed not material during the Double Materiality Assessment process described in page 59-60."

A separate phase-in note states: "The phase-in data points includes non-employee characteristics, training and skills development, anticipated financial effects, and part of Biodiversity and ecosystems disclosures." A second index of datapoints from other EU legislation follows at pp.101-102.

Reference: page 65

"STG has advanced its low-carbon transition plan, developing a comprehensive emissions reductions roadmap across all scopes. The roadmap follows the Science-Based Targets initiative (SBTi) approved trajectory and outlines strategic decarbonisation levers alongside immediate actions to deliver on the near-term targets. The plan is compatible with the limiting of global warming to 1.5C in line with the Paris Agreement and is approved by the Sustainability Execution Group, Executive Board and the Board of Directors" (p.65).

On integration: "The transition plan is aligned with the Group's current strategy and business model. It aims to build efficient operations to support lower carbon business development, as well as to reduce the impact on the value chain, through both product and process improvements, and by collaborating with suppliers on joint decarbonisation efforts."

On residual emissions: "While a concrete plan for neutralising unabated emissions is still to be developed", the 2050 route is a 72% FLAG cut, a 90% non-FLAG cut "and then use high quality offsets for the remaining unabated emissions". "STG is excluded from EU Paris-aligned Benchmarks" (p.65).

Reference: pages 63-64

Back-filled from the E1 "Climate risk scenario analysis" subsection, where this content is disclosed in the FY2025 report (pages 63-64). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

"In 2024, STG conducted a climate scenario analysis aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) principles to assess physical and transition risks across STG's operations and value chain" (p.63). Risks are classified: physical hazards split into "Chronic Hazards: Changing temperature, precipitation changes, water stress, soil degradation" and "Acute Hazards: Extreme heat, floods, droughts, storms/cyclones/hurricanes"; transition risks are "Carbon pricing, energy price change, regulation & reporting, cost & access to capital, cost & coverage of insurance and consumer concerns."

Method: a "Hybrid scoring approach" combining quantitative and qualitative metrics, rating risks by magnitude and relevance "using geospatial data for own sites and key sourcing regions", with a five-risk heat map by scenario and horizon at p.64. The company separates the analysis from materiality: "Scenario risk ratings reflect TCFD analytical outputs and do not determine ESRS materiality... In 2025, this condition was not met" (p.63).

Reference: page 64

Back-filled from the "Conclusion" and "Resilience assessment" text closing the E1 climate risk scenario analysis, where this content is disclosed in the FY2025 report (page 64). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

"STG's diversified sourcing, operational footprint and decarbonisation roadmap support medium-to-strong resilience across all material risks. No high-risk ratings were identified under current projections. The Group strives to address climate change but acknowledges the uncertainty of the actual climate scenario development and complexity of the adaptation, and mitigation" (p.64).

On capacity to adjust: "STG confirms that all assets and activities are compatible with a transition to a climate neutral economy", and most of the value chain and strategic developments "have opportunities to support the transition provided its given prioritisation and investment" (p.64); "No material stranded-asset risks were identified" (p.65). The assessment is qualitative, with no quantified financial resilience range, and the underlying scenario work dates from 2024 (p.63).

Reference: page 66

"STG's Environmental Actions and Commitments Policy outlines its commitment to reducing Scope 1, 2 and 3 GHG emissions, in line with near-term and long-term science-based targets. This also means increasing the share of renewable energy use and more efficient energy management. Assessing material impacts and risks in its operations and value chain, STG is setting strategies and actions to improve its environmental performance and contribute to own operations' adaptation to climate change. The most senior level accountable for implementation is the Group's Chief Supply Chain Officer and the Head of Sustainability" (p.66).

The policy is the single climate instrument named. It covers the three material E1 sub-topics identified in the DMA (climate change adaptation, climate change mitigation and energy, p.61) and was extended in 2025 to cover biodiversity as well (p.69). The statement does not disclose the policy's scope by geography or value chain tier, whether it was made available to third parties, or how stakeholder interests were considered in setting it. A related Recalculation Policy governs baseline restatement (pp.68, 92).

Reference: page 66

"To progress on the decarbonisation pathway, STG has identified all sources of emissions within Scope 1, 2 and 3, and has implemented a cross functional process for assessing, selecting and prioritising initiatives aimed at GHG emissions reductions" (p.66).

Scope 1 and 2 levers are listed: renewable electricity ("Transitioned to renewable electricity from the grid and installed solar panels at several production sites"); equipment and refrigerants ("replacing outdated equipment to avoid leakages and use modern refrigerants... shifted to LED lighting, used inverters... conducted energy audits"); fuel switch ("a fleet transition plan from diesel to petrol and electric vehicles"); and network optimisation. "Implementation of the initiatives started in 2021 and is continuously reviewed and adjusted" (p.66).

Quantified 2025 actions: refrigerants "863 tonnes CO2e, which represent 42% contribution to the Scope 1 & 2 yearly targets" (p.64); green electricity at Svendborg "417 tCO2e... 20% contribution" (p.67); U.S. inbound shipment consolidation "approximately 240,000 kilometres travelled and more than 200 tCO2e" (p.66); Lummen solar and Westerloo lighting, energy consumption down 26% at those sites (p.68); catalogue optimisation 545 tonnes of paper and "more than 1,200 tCO2e" (p.71); plus Honduras cooling 834 tCO2e, Dominican Republic solar 526 tCO2e and factory/warehouse closures 325 tCO2e (p.91). No CapEx or OpEx figure is attached (p.61).

Reference: pages 65, 68 and 90

"To address climate related material impacts and risks, STG has set near-term (2030) and long-term (2050) science-based emissions reductions targets... STG's targets for all scopes have been first approved by SBTi in 2024. Following the acquisition of Mac Baren Tobacco Company in July 2024, STG recalculated its Scope 1, 2 and 3 emission baselines to reflect the expanded operational footprint, as well as enhancements in data quality and methodology. The updated baselines and adjusted targets have been revalidated by SBTi in 2025" (p.68).

On energy the company states a deliberate absence: "STG does not have a separate target for energy consumption and efficiency, but expects to see an overall decrease" from equipment and efficiency projects (p.68). One caveat is printed at p.90: the total Scope 3 target is a weighted average and is "not validated by SBTi".

Reference: page 93

Total energy consumption was 92.5 GWh in 2025 (2024: 91.7 GWh), "resulting in an increase of 0.9%... mainly driven by the increase in natural gas and electricity consumptions on some of production sites" (p.93).

The mix is disclosed in full: fuel from crude oil and petroleum products 15.6 GWh (2024: 16.0); natural gas 26.4 (25.0); purchased electricity, heat, steam and cooling from fossil sources 26.9 (28.7); total fossil energy 68.9 (69.7). Purchased renewable electricity, heat, steam and cooling 21.0 (20.4) and self-generated non-fuel renewable energy 1.5 (0.7) give total renewable consumption of 22.5 GWh (21.1). Nuclear sources account for 1.1 GWh (0.9). Coal, other fossil fuels and renewable fuel consumption are all nil.

Shares: fossil 74.5% (2024: 76.0%), renewable 24.3% (23.0%), nuclear 1.2% (1.0%). "The energy mix improved with a 1.3 percentage point increase in the energy consumed from renewable sources" (p.93). Excess self-generated renewable energy exported to the grid was 0.2 GWh (2024: nil).

Energy intensity is given against net sales of DKK 9,035.7m (2024: DKK 9,202.1m) at 10.2 GWh per DKK billion (2024: 10.0). Renewable share is reported on the market-based method using Energy Attribute Certificates, and consumption "is based on actual consumption and is primarily based on meter readings or invoices" (p.93). The report does not identify STG as operating in a high climate impact sector, and marks the associated SFDR datapoint N/A (p.101).

Reference: pages 90-92

Gross Scope 1 was 11.5 thousand tCO2e (2024: 12.1; recalculated 2020 base 17.7), down 4.8%. Gross location-based Scope 2 was 17.0 (2024: 18.6) and gross market-based Scope 2 was 13.8 (2024: 15.3; 2020 base 21.9), down 9.6%. "Percentage of Scope 1 GHG emissions from regulated emission trading schemes" is 0%.

Total gross Scope 3 was 227.2 thousand tCO2e (2024 restated: 256.7; 2022 base 291.4), down 11.5%, disaggregated as: Category 1 tobacco, cigars and other FLAG products 121.9 (2024: 92.1, up 32.3%); Category 1 non-tobacco materials 19.7 (38.8); Category 1 other goods and services 19.2 (30.9), giving total Category 1 of 160.8; Category 4 upstream transportation and distribution 23.9 (35.7); Category 9 downstream transportation 10.5 (14.6); Category 12 end-of-life treatment of sold products 4.0 (9.4); and other categories 28.1 (35.2).

Method (pp.91-92): DEFRA factors for Scope 1, IEA and supplier-specific factors for Scope 2, and a hybrid of mass-, supplier- and spend-based methods for Scope 3; Categories 8, 13 and 14 excluded as nil and Categories 5, 10 and 11 "assessed as insignificant". The data "have been reviewed and validated by Integer APS, a sustainability consultancy" (p.92). 2024 Scope 1 and 2 figures were not restated, so those comparisons "are indicative" (p.67).

Reference: page 69

"STG expanded in 2025, its Environmental Actions and Commitments Policy to include biodiversity, following the DMA. STG commits to avoiding deforestation and promoting responsible land use in alignment with STG's No-Deforestation Policy and related due diligence obligations, in alignment with EUDR, and SBTi. STG's scope covers primary commodities linked to deforestation: leaf tobacco and wood for curing, wood and paper-based packaging, and third-party finished tobacco products" (p.69).

The policy scope is therefore commodity-based and upstream, matching the single material sub-topic identified in the DMA: "Direct impact drivers of biodiversity loss - Land-use change", located upstream (p.61). The "Other EU legislation" table lists the SFDR datapoint "E4-2 Policies to address deforestation" against p.69 (p.101).

The statement does not say whether the policy addresses sustainable land and agriculture practices, oceans and seas practices, or traceability of raw materials beyond deforestation, nor whether biodiversity-sensitive areas were screened; and the index footnote records that "only land use change is material" within Biodiversity and ecosystems (p.55).

Reference: page 69

"Following the identification of biodiversity as a material topic, STG initiated targeted efforts to understand its exposure and responsibilities to address potential biodiversity impacts. Focusing on deforestation in key product groups" (p.69). Three action lines are described.

Traceability: "Strengthened supplier mapping and rolled out verification systems to identify potential deforestation impacts, prioritising Tier 1 suppliers as they cover approximately 80% of procurement value."

Responsible wood sourcing practices: "We have begun developing screening procedures for wood, paper, and pulp-based packaging to trace the origin. Align with Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) standards where feasible and promote responsible forest management."

Engaging leaf suppliers: "Continue to work with the Sustainable Tobacco Program to encourage better farming practices, conduct risk assessments, and collaborate with suppliers to reduce ecosystem impacts."

No monetary resources are allocated to these actions, and p.61 records that "No significant resources (CAPEX/OPEX) were used during the reporting year". No biodiversity offsets are claimed.

Reference: page 69

"In 2025, the Group established a clear target and metrics to demonstrate its commitment to biodiversity and to report progress against SBTi No-Deforestation requirements. STG commits to a deforestation-free tobacco and packaging supply chain by 2025. Progress is tracked through supplier-coverage indicators" (p.69).

The target headline is printed as "DEFORESTATION FREE TOBACCO AND PACKAGING SUPPLY CHAIN BY 2025", with a 2024 baseline of: tobacco leaf volume covered by the Sustainable Tobacco Program 81%; sourced leaf volume with a commitment to no-deforestation 85%; and purchased wood, paper and cardboard packaging with a commitment to no-deforestation 64% (p.69).

"A baseline was set using full-year 2024 results. Due to the complexity of data collection and validation, deforestation status is reported with a one year lag from the reporting period" (p.69). The consequence is that the target year and the latest reported data year do not meet: the only figures published against a 2025 target are 2024 baseline percentages, and no 2025 attainment is stated. The basis of accounting for each indicator is footnoted, including that Tier 1 leaf suppliers "represent more than 90% of total procurement value in the category".

The target is a supplier-coverage proxy rather than an ecological state or pressure target, and no ecological threshold or biodiversity science base is cited beyond the SBTi No-Deforestation requirements.

Reference: pages 69 and 94

The metrics disclosed are supplier-coverage indicators rather than ecosystem-condition measures. The E4 chapter publishes the 2024 baseline: tobacco leaf volume covered by the Sustainable Tobacco Program 81%; sourced leaf volume with a commitment to no-deforestation 85%; purchased wood, paper and cardboard packaging with a commitment to no-deforestation 64% (p.69). The basis of accounting is footnoted for each, and "deforestation status is reported with a one year lag from the reporting period" (p.69).

The circular economy section adds a 2025 figure on the same theme: "In 2025, 56% of sourced wood and wooden boxes are covered by No-deforestation commitments related to 2024 confirmations received, or have certificate of origin provided by the supplier" (p.94).

No land-use change area, no hectares of habitat converted or restored, and no species or ecosystem condition metric is given. The index footnote confines the topic: "only land use change is material (Biodiversity and ecosystems)" (p.55), and the E4 block is marked "(use of phase-in)".

Reference: page 71

"STG's Environmental Actions and Commitments Policy outlines the Group's commitment to optimising resource use (affecting inflows and outflows) in non-tobacco materials and other relevant products and ingredient groups. This may include using less material, increasing recycled content in packaging and a greater use of renewable sources, to gradually move away from virgin resources" (p.71).

The policy sits alongside five packaging design principles introduced in 2025: "1. Eliminate unnecessary packaging 2. Reduce weight 3. Substitute materials 4. Increase recycled, reused, or non-virgin content 5. Enhance recyclability" (p.70).

The company is explicit about the limit of its ambition: "While STG has not adopted a circular business model, STG is integrating circular principles into packaging to optimize resource use and address outflows, including future R&D projects" (p.70). Tobacco is deliberately outside the policy scope: "Tobacco, although a core raw material, is excluded from this topic as it is not considered scarce and is replenishable" (p.70). Waste was assessed immaterial (p.55), so the policy does not address waste management.

Reference: page 71

"STG has advanced efforts to increase circularity and optimise resource use. In 2025, the following initiatives across its operations were either implemented or initiated: Reduced mailing volumes of paper catalogues; Downsized plastic bucket packaging, lowering material consumption; Replaced plastic trays with pulp-based alternatives for handmade cigars packaging; Introduced stretch film for pallet wrapping in multiple factories, lowering material consumption; Minimised cellophane use for individually wrapped packs; Substituted wooden boxes with paper wrap solutions for selected handmade cigar brands" (p.71).

One action is quantified: catalogue optimisation in the U.S. online channel "resulted in an overall reduction of paper consumption by 545 tonnes, contributing to a decrease of more than 1,200 tCO2e in Scope 3 emissions" (p.71).

Planned short- to medium-term actions carry an explicit dependency: "Initial implementation depends on resource availability, commercial viability, operational feasibility, business priorities and collaboration with key suppliers" (p.71). No monetary resources are attached.

Reference: page 71

The disclosure is a nil return with an explanation and a described alternative for tracking effectiveness: "STG has not yet established specific targets for resource inflows or outflows; however, effectiveness is monitored through ongoing packaging-related actions. STG has initiated an assessment of its packaging baseline and will consider establishing interim and long-term PPWR-aligned targets in the short- to medium-term, also supporting the Group's broader ambition to reduce Scope 3 Non-FLAG emissions by 25% by 2030" (p.71).

The circular economy metrics section repeats the intention: "In 2025, the Group established a more accurate baseline for future circularity and packaging-reduction targets", and "In the short- to medium-term, STG will refine its recyclability methodology, integrate PPWR-aligned requirements, and develop quantitative reduction targets for packaging materials" (p.94).

So the only quantified target touching resource use is the Scope 3 non-FLAG emissions target of -25% by 2030 (p.65), which is an E1 target. No target exists for material inflow reduction, recycled content, recyclability or waste diversion.

Reference: pages 70 and 94-95

"The total weight of both technical and biological materials inflows was 16,316 tonnes. Cardboard and paper were the Group's primary materials in 2025, followed by wood. Overall, STG's packaging mix included a substantial share of biological materials, which accounted for 25% in 2025" (p.94).

The breakdown by material group is: cardboard and paper 6,109 tonnes (37.4% of total weight); wood including certified sources 5,067 (31.1%); other materials 1,804 (11.1%); plastic 1,733 (10.6%); metal 1,563 (9.6%); wooden boxes including certified sources 23 (0.1%); aluminium 17 (0.1%) (p.94). "All cardboard, paper products, and finished wooden boxes purchased by STG are classified as technical materials due to treatments such as dyeing, printing, or coating. Loose wood is categorized as biological material" (p.95).

The recycled-content limb is answered as an absence: "STG did not have access to data distinguishing virgin from reused or recycled materials. To ensure a conservative approach, all materials are considered virgin" (p.95). 2024 comparatives are not presented "as they are not methodologically comparable with 2025" (p.94).

Reference: pages 70 and 94-95

The outflow disclosure is limited to designed recyclability of packaging. "STG initiated the evaluation of recyclable content in products and packaging within scope. Due to limited insight into consumer disposal and varying waste infrastructure, STG assesses recyclability based on packaging design. From our initial high-level category analysis, we estimate around 50% of packaging materials purchased or produced by STG meet the 'Designed for Recyclability' internal criteria in 2025" (p.70).

The impact is downstream: "Significant packaging waste is generated downstream, as most packaging lacks recyclability and recycled content" (p.70). No tonnage of products or materials leaving the undertaking is given, and no durability, reparability or recycled-content rate for products is disclosed. Waste itself was assessed immaterial (p.55).

Reference: pages 74-75

Two policies address the two material S1 sub-topics. On harassment and discrimination: "Scandinavian Tobacco Group does not tolerate any form of harassment or discrimination based on gender, age, race, religion, nationality, ethnicity, political opinion, sexual orientation, union membership, disability, health status, or any other basis. This commitment is reflected in STG's Employee Belonging Policy which outlines our commitment to fostering an inclusive workplace... The policy does not focus on any vulnerable group, but its ambition applies to all employees. It is owned by the Chief Human Resources Officer (CHRO)" (p.74). The policy was updated in 2025 "to ensure continued alignment with STG's long-term ambitions" (p.74).

On training: "STG addresses the identified impact through its Group-wide Training & Skills Development Policy, which applies to all employees... Training needs are identified through business objectives, performance appraisals and employee feedback... The owner of this policy is the CHRO" (p.75).

Above both sits the Code of Conduct, "owned by the Group's General Counsel and sponsored by the CEO", which commits STG to the International Bill of Human Rights, the ILO Declaration on Fundamental Principles and Rights at work, the UN Guiding Principles, the UN Convention on the Rights of the Child and ILO Conventions 138, 182 and 184 (p.74).

Reference: page 73

"Scandinavian Tobacco Group's strategy and business model is influenced by the interests and views of its employees through interactions such as meetings and dialogues among supervisors, managers and colleagues, and a feedback survey system. To engage with employees, the Group conducts a global employee engagement survey, usually once every three years (with the latest cycle delayed by one year), and a pulse survey for all office employees worldwide on specific topics once or twice a year. P&C and the Executive Board analyse the results of every survey. Key takeaway points are then communicated and when deemed necessary, accompanied by action plans starting from top management level across the organisation and in individual teams" (p.73).

The 2025 survey achieved a "94% participation rate in STG's global employee engagement survey in 2025, up from 88% in 2021" (p.73). The stakeholder table at p.58 adds the channels used: regular face-to-face and online meetings, employee surveys, workshops, feedback rounds, open dialogue, and works councils and unions.

"Employee rights, including human rights, are governed by local legislation and contractual agreements, and where applicable, through union representation" (p.73). The statement does not name a senior person with operational responsibility for the engagement itself, nor does it say whether the effectiveness of engagement is assessed.

Reference: page 73

"Human rights impacts for STG's own workers are captured by the structures and reporting channels in the organisation (e.g. Management, P&C departments, works councils, union and employee representatives, Whistleblower Scheme or other), where necessary remedies are addressed. In late 2023, STG introduced a process that suspected or actual breaches of law and STG policies, including the Code of Conduct, shall ultimately be centrally reported by Managers/P&C departments via the Whistleblower Scheme to ensure both a consistent approach to the investigation of such matters and an overview at Group level of such cases. This also applies to incidents related to human rights, including discrimination and harassment" (p.73).

The statement does not say whether STG assesses employee awareness of, or trust in, the channel. Training on its use is planned rather than delivered: "Training will be reinforced in 2026 with instructions on reporting allegations of discrimination and harassment via the Whistleblower Scheme" (p.75); under G1, "STG does not provide training on how to report, but uses awareness campaigns" (p.83).

Reference: pages 74-75

On harassment and discrimination: "Harassment prevention is a core priority, so the Group places strong emphasis on internal education and awareness, rather than educating customers. Training is embedded in employee onboarding and reinforced through annual refreshers for all U.S. based colleagues. Managers also participate in specialised sessions to support responsible leadership" (p.74). "STG's targetted training promotes awareness of Employee Belonging topics, through a globally consistent framework, adapted to reflect regional cultural norms and social expectations" (p.74). The Employee Belonging Policy was updated in 2025 "while advancing inclusion through strengthened leadership engagement, global awareness efforts and initiatives that enhance employee participation across the organisation" (p.74).

On training and skills development, "The Group strengthened its people development capabilities by expanding resources and programs", with the Senior Leadership Journey programme and a global workshop series that "equipped over 300+ employees" (p.75). Effectiveness tracking is limited by the company's own account: employee surveys assess inclusion and belonging, but "STG currently tracks and measures employee training at the local level, as a centralised system for capturing this data across the Group is not in place" (p.74). No resources are quantified.

Reference: page 75

Both material S1 sub-topics carry an explicit nil return rather than a target.

Harassment and discrimination: "The Group has not set any targets and does not currently assess the effectiveness of its policies and actions. Training will be reinforced in 2026 with instructions on reporting allegations of discrimination and harassment via the Whistleblower Scheme and linked to the Code of Conduct. STG aims to build a baseline to set a proper target" (p.75).

Training and skills development: "The Group has not yet established formal targets and does not currently assess the effectiveness of its policies and actions, as it is currently focused on maturing its approach and strengthening internal capabilities in this area" (p.75).

One quantified gender target does exist but sits under Danish statutory reporting rather than ESRS S1-5: "The Board of Directors has set a target of 30.8% of the underrepresented gender for other management levels to be reached by 30 June 2026" (p.98). During 2025 there was "a focus on setting specific targets for gender representation at senior leadership level" (p.98).

The statement does not describe how workers or their representatives were involved in target setting, since no ESRS target was set.

Reference: pages 96-97

Headcount at 31 December 2025 was 8,858 (2024: 9,353). By gender the split is 5,366 / 3,484 / 8 "other" and none not disclosed; the E1 chapter callout that "61% of STG workforce are women" (p.74) fixes 5,366 as the female count. All 8,858 are permanent: "Number of temporary employees" and "Number of non-guaranteed hours" are nil in both the gender and the regional tables (pp.96-97).

By region: Europe 4,295, Americas 1,887, Rest of world 2,676 (p.97). By country: Dominican Republic 1,626 (2024: 2,115), Indonesia 1,409 (1,472), Honduras 1,382 (1,309), Sri Lanka 1,264 (1,169), United States 883 (875), Belgium 763 (797), Denmark 548 (585), Nicaragua 361 (399), the Netherlands 128 (156), Germany 88 (121), France 76 (83), Italy 76 (78), Portugal 71, Spain 62 (60), United Kingdom 52, and Other 69 (134) (p.97).

Age distribution: under 30, 1,475 (2024: 1,829); 30-50, 5,080 (5,573); over 50, 2,303 (1,951) (p.96).

Turnover fell "from 22.7% to 18.7% in 2025", with 1,696 leavers (2024: 2,205), attributed mainly to production employees in Latin America and retail employees in North America; country movements reflect "integration synergies, activity closures for efficiency purposes, and local volume developments" (p.97).

Reference: page 98

Gender distribution in top management at 31 December 2025: Executive Management 2 people, 1 male and 1 female; Senior Leadership 90 people, 67 male and 23 female; Top Management 92 in total, 68 male and 24 female. The 2024 comparatives are Executive Management 2 (1 male, 1 female), Senior Leadership 88 (66 male, 22 female) and Top Management 90 (67 male, 23 female) (p.98).

The accounting policy defines the population: "The gender representation in Top Management is disclosed in accordance with ESRS S1-9. The data includes the two management levels below the Board, i.e the Executive Management and the Senior Leadership", where Senior Leadership means "employees with titles: Senior Vice President, Vice President, Director or Senior Director" (p.98).

The section also carries the Danish statutory disclosure: at end-2025 "two of six (33.3%) of the shareholder-elected and one of three (33.3%) of the employee-elected members of the Board of Directors were female", and other management levels under the Danish Companies Act were "four females and nine males (30.8% to 69.2% split)", with a 30.8% target by 30 June 2026. A footnote warns that "Other management levels are not equal to Senior Leadership levels as reported under the ESRS requirement" (p.98).

Reference: page 100

Discrimination and harassment: 2 reported incidents in 2025 (2024: 1), with nil "Amount of fines related to work-related grievances" in both years. Other reported work-related incidents: 9 in 2025 (2024: nil). Human rights issues: nil total confirmed incidents, nil "Confirmed incidents considered human rights violations", and nil fines, in both years (p.100).

The company's commentary: "Whistleblower cases are taken very seriously, and we continuously enhance the awareness of good business conduct through education and awareness campaigns to minimise future cases of misconduct. None of the reported cases were critical to our business or caused adjustments to our financial results" (p.100).

Definitions are given in the accounting policies. Discrimination and harassment incidents are counted from the Whistleblower Scheme; "Other reported incidents" are other work-related incidents in the Scheme or manually collected by Group Legal, excluding those already counted; and confirmed human rights violations are those that also breach "the UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work or OECD Guidelines for Multinational Enterprises" (p.100). Data "represent[s] the knowledge of the company at time of reporting" (p.100).

The statement does not disclose the number of severe human rights incidents connected to the workforce separately from the nil confirmed count, nor the amount of any settlement.

Reference: page 77

"STG's Supplier Code of Conduct sets clear expectations for responsible and ethical behaviour across its supply chain. This includes expectations around labour practices, health and safety, human rights, ethical business conduct and the environment. STG's Supplier Code of Conduct can be found on the Group's website st-group.com" (p.77).

Scope and ownership: "The Code applies to all suppliers and STG encourages its adoption by their suppliers. The Code is owned by the General Counsel, sponsored by the CEO and implemented by Procurement, led by the Senior Vice Presidents of Procurement and Leaf" (p.77).

The Group's own position is stated plainly: "STG does not accept child labour and forced labour of any kind, and will react to below-standard working conditions, any breaches of human rights and other labour rights that STG becomes aware of in its supply chain" (p.77).

Reference: page 77

"Supplier engagement, including meetings and site visits, helps STG align its strategy and business model to foster mutual understanding of each other's businesses. STG has close relationships with direct leaf suppliers, sharing a common desire to eliminate child and forced labour. Additionally, STG captures workers' views and interests through industry collaborations, including the Sustainable Tobacco Program (STP) and Eliminating Child Labour in Tobacco (ECLT)" (p.77).

The limitation is disclosed without qualification: "STG does not engage directly with value chain workers but relies on third-party assessments" (p.77). The stakeholder table at p.58 says the same in different words: engagement with workers in the value chain is by "Supplier engagement through online meetings and visits" and "Indirect engagement with farmers via associations/initiatives through the Sustainable Tobacco Program".

No senior person with operational responsibility for value chain worker engagement is named, and the statement does not say whether the effectiveness of engagement is assessed.

Reference: page 77

"STG manages reports of negative impacts on a case-by-case basis, as no formal remediation process is in place" (p.77).

Awareness routes are described: "Incidents may come to STG's awareness in various ways, including the due diligence process in the leaf tobacco supply chain (through STP), visits to suppliers, reports directly to management or other representatives of the Company, or the Group's Whistleblower channel" (p.77). The Whistleblower channel is formally open to suppliers and other stakeholders (p.83).

The company then states the limits of that channel and of its own visibility: "STG acknowledges that value chain workers are likely unaware of its Whistleblower channel. At present, STG is not able to assess its entire value chain for instances of leaf suppliers not respecting human rights principles, however STG gains insights in these areas via STP. STG is aware that there is a general risk of child labour and other severe human rights issues in its upstream value chain, as it relates to tobacco growing" (p.77).

Where breaches are found, "STG may audit high-risk suppliers and issue corrective actions, followed by monitoring to ensure improvement... non-compliance may also result in the termination of STG's agreement with the supplier" (p.78). No grievance volumes, outcomes or remedy provided are reported for value chain workers.

Reference: page 78

Action runs through the Sustainable Tobacco Program's six-step due diligence cycle (Commit, Identify, Prioritize, Respond, Measure, Report), reproduced on p.78. "STG leaf suppliers conduct self-assessments using a tool developed by STP, addressing different ESG topics to gain insights into the potential risks per country and per supplier. The Group relies on third-party data from its risk assessment tools. Identified risks may trigger in-depth assessments (IDAs) of priority suppliers and countries. All strategic leaf suppliers actively participate in STP by submitting due diligence or self-assessment data and receiving a Due Diligence Maturity (DDM) score. Suppliers with prioritized IDA findings implement action plans. Leaf Procurement and Sustainability team support these initiatives in collaboration with industry programs" (p.78).

On child labour, STG "has been a long-standing contributor to the multi-stakeholder initiative Eliminating Child Labour in Tobacco Growing Foundation" (p.78). Constraints are acknowledged: "STG does not have full oversight of all its suppliers to ensure that they meet the standards outlined in the Supplier Code of Conduct", and implementation "depends on supplier capacity and local context" (p.78). No number of IDAs, findings or remediated cases is published, and no resources are quantified.

Reference: page 78

One quantified target is disclosed: "STG's target is to ensure that at least 80% of suppliers, within leaf, direct, and indirect are covered by the Supplier Code of Conduct. A baseline was set in 2023, and progress is monitored annually toward this objective" (p.78).

Beyond that the position is a nil return with a reason: "Similar to 2024, the Group has not yet set additional targets, as it is currently working to better understand the value chain data from its suppliers. It aims to define targets in the short- to medium-term" (p.78).

Attainment against the 80% coverage target is not published in the statement: no 2025 or 2023 baseline percentage is given for leaf, direct or indirect supplier coverage, so the reader cannot tell whether the target is met or how far progress has run. The related no-deforestation supplier-coverage figures at p.69 are E4 metrics on a different scope, not Supplier Code coverage.

The statement does not describe whether value chain workers or their representatives were involved in setting the target or in tracking performance against it.

Reference: page 80

"STG's Code of Conduct provides the foundation for the Group's commitment to responsible marketing and affirms its dedication to respecting human rights across all business activities. These principles are embedded in the Marketing Principles, which guide how STG communicates with consumers and ensures that its marketing activities are conducted responsibly and in full compliance with applicable laws and standards" (p.80).

Two limits are disclosed candidly: "While the Marketing Principles do not explicitly reference the UN Guiding Principles on Business and Human Rights, the ILO Declaration, or the OECD Guidelines, they reflect STG's commitment to responsible business conduct"; and "The Group does not have a policy related to the protection of children from second-hand smoke. The ability to fully remediate this impact remains limited to regulatory initiatives and responsible consumer behaviour" (p.80).

Reference: page 80

Engagement is constrained by regulation, and the company says so: "In most markets, regulations restrict direct engagement with consumers for STG's tobacco brands. Information to consumers about the health risks associated with its tobacco and nicotine products is conveyed via health warnings on the product packaging and, where is permitted, in advertising materials, in full compliance with the applicable laws and the STG Marketing Principles to ensure all outreach is directed solely at adults and never at youth" (p.80).

The stakeholder table gives the same account: consumers and end-users are engaged through "Limited opportunities to communicate due to tobacco industry being highly regulated (with regulators setting legal and regulatory standards, and communicating only when requested and allowed) and STG's adherence to its Marketing Principles" (p.58).

No senior person with operational responsibility for consumer engagement is named, and the statement does not say how the effectiveness of engagement is assessed.

Reference: page 80

"Consumers can submit product complaints via STG's website, though rarely receiving reports on health and safety-related issues. When such concerns arise, STG addresses them with the utmost responsibility and attention. The Group does not currently assess whether consumers are aware of or trust the consumer reporting channel, nor its effectiveness" (p.80).

The impact descriptions say the same: "Due to the inherent nature of tobacco, eliminating these risks entirely is not feasible for our organisation", and on children's exposure to second-hand smoke, "this exposure cannot be prevented, as it is an inherent consequence of how these products are consumed" (p.79). No complaint volumes are reported.

Reference: page 80

"The Group provides training on the Marketing Principles to relevant functions and this initiative will continue in 2026 to support regulatory compliance. Group Legal oversees the delivery of the training, although it's effectiveness is not currently evaluated. In addition, marketing material undergoes legal review to ensure alignment with applicable regulations and safeguard compliance standards" (p.80).

The broader approach: "Nobody under the age of 18 (or older as determined by local law) should buy or consume tobacco or nicotine products", and "STG has a long record of adapting responsibly to regulatory changes and prioritising compliance. The Group remains committed to meeting all legal requirements in every market where it operates" (p.80). Product diversification is presented as a response to consumer preference rather than as harm reduction: "STG's business and strategy focuses on producing and selling tobacco products, while expanding into nicotine pouches, to diversify STG's offerings to its consumers" (p.80), and in some markets STG "offers oral nicotine alternatives for consumers who prefer not to smoke; however, these products also carry health risks" (p.80).

Effectiveness is not tracked. No resources are quantified, no number of employees trained is given, and the "Other EU legislation" table marks "S4-4 Human rights issues and incidents" as N/A (p.102).

Reference: page 80

An explicit nil return with a stated reason: "The Group has not adopted targets nor metrics for this topic as the topic is compliance-driven and regulated. In line with its belief in responsible business conduct, STG strives to always act in full compliance with all applicable laws and regulations as well as STG's self-imposed Marketing Principles" (p.80).

This covers both material S4 sub-topics, consumer health and safety and protection of children, which the material IRO table records as actual downstream impacts plus one own-operations potential impact and one downstream long-term risk (p.61).

Effectiveness in the absence of a target is only partly addressed: marketing material "undergoes legal review", but "Group Legal oversees the delivery of the training, although it's effectiveness is not currently evaluated", and "The Group does not currently assess whether consumers are aware of or trust the consumer reporting channel, nor its effectiveness" (p.80). No consumer-facing metric of any kind is published in the performance and metrics section (pp.84-102).

Reference: pages 82-83

"Scandinavian Tobacco Group has several policies applicable across the Group that serve the purpose of maintaining high ethical standards and ensure compliance with laws and regulations. At the core of these policies is the Code of Conduct, which establishes the principles of responsible behaviour. This is complemented by more specific policies covering areas such as marketing principles, anti-corruption and anti-bribery, competition law, data ethics, trade restrictions, protection of personal data, employee belonging, IT security and others" (p.82).

Approval and maintenance: "The Code of Conduct and several other key group policies are approved by the Board of Directors, while remaining policies are approved by the Executive Management or the Executive Board. All policies are accessible to employees via the Group intranet and, where necessary, translated into local languages used at the Group's sites. Each policy is subject to an annual review and must be reapproved - whether amended or unchanged - by the appropriate governing body" (p.82).

Training on the Code of Conduct "is mandatory for all employees, including the Group's Executive Management", delivered online with in-person equivalents for operational roles, and "Employee performance evaluation includes an assessment of the employee's behaviour and leadership performance in relation to these values" (p.82). Whistleblower protection is set out at p.83.

Reference: pages 83 and 100

"STG maintains a zero-tolerance to corruption and bribery across its entire value chain. The commitment is embedded in STG's Code of Conduct, Supplier Code of Conduct and Anti-corruption Policy. The Anti-corruption Policy provides clear guidelines to prevent any involvement in bribery or corrupt practices and applies globally to all employees, management and individuals acting on behalf of the Group" (p.83).

Training is mandatory "for all employees with a corporate email address, including the Executive Management and the Executive Board", with Board members exempt because "they annually adopt the Code of Conduct and Anti-Corruption Policy". Employees with corporate email in Nicaragua, Honduras, the Dominican Republic, Sri Lanka and Indonesia are classified as "functions-at-risk" and retrained "approximately every 18 months" (p.83). Coverage of functions-at-risk by training was 98.14% in 2025, up from 90.44% (p.100).

Reference: page 83

G1-3 Targets related to business conduct is a standalone disclosure requirement only from the 2025/2026 ESRS. This statement was prepared under the 2023 ESRS, where business conduct targets fell under MDR-T. There is material to draw on: the G1 chapter states two explicit targets and how each is tracked.

Whistleblower protection: "STG's target is zero instances of retaliation against whistleblowers. Progress is tracked annually through whistleblower reports and internal investigations" (p.83).

Anti-corruption and anti-bribery: "STG's target is zero instances of corruption and bribery. Progress is tracked annually through whistleblower reports, internal audits and training completion rates" (p.83).

Both map directly onto the two material G1 sub-topics recorded at p.61, "Corruption and bribery - Incidents" and "Protection of whistleblowers", each a potential impact in own operations. Performance against them is published at p.100: nil convictions and nil fines for violation of anti-corruption and anti-bribery laws in 2025 and 2024, and functions-at-risk training coverage of 98.14% (2024: 90.44%).

No baseline year, no interim milestone and no stakeholder involvement in target setting is described, and the targets are absolute zero-incident objectives rather than measurable improvement paths.

Reference: page 100

"Corruption and bribery: Convictions" is nil for 2025 and nil for 2024, and "Amount of fines" is nil for both years (p.100).

The accounting policy defines the metric: "The number of convictions and the amount of fines (in DKK) received during the reporting period, for violation of anti-corruption and anti-bribery laws. Data is collected by Group Legal" (p.100). Data across this table "represent[s] the knowledge of the company at time of reporting" and incident statistics are "based on data from STG's Whistleblower Scheme" (p.100).

Alongside the nil return, the same table reports 2 discrimination and harassment incidents (2024: 1) and 9 other reported work-related incidents (2024: nil), with the commentary "None of the reported cases were critical to our business or caused adjustments to our financial results" (p.100). The "Other EU legislation" table maps "G1-4 Fines for violation of anti-corruption and anti-bribery laws" to p.100 and "G1-4 Standards of anti-corruption and anti-bribery" to p.83 (p.102).

The statement does not disclose the number of confirmed incidents of corruption or bribery separately from convictions, nor the number of confirmed incidents in which employees were dismissed or disciplined, nor confirmed incidents relating to contracts with business partners.