Svenska Handelsbanken

The Board is Handelsbanken's highest administrative body, responsible for overall goals and strategy. In 2024 it had nine elected members plus two workers' representatives and two deputies, all non-executive. Women made up 44 per cent of elected members, 11 per cent had a geographical origin other than Sweden, and 78 per cent were independent. Members bring broad business experience as former CEOs, CFOs and board members. The Board accesses sustainability expertise through specialists in the organisation, including a dedicated sustainability and climate unit. The Chief Sustainability and Climate Officer sits on the Executive Team and reports quarterly to the Board and CEO. Governance runs through a Sustainability committee, a Green Finance committee and a decentralised structure. The Corporate Governance Report on pages 40 to 57 gives further detail on Board roles and experience.

Reporting on the Bank's overall sustainability work, including key issues on regulatory frameworks, policies and actions, is provided quarterly to the Board or its designated committee and to the CEO by the CSO. Significant deviations are also reported, and no significant deviations were reported in 2024. The Board considers impacts, risks and opportunities mainly through the steering documents it issues on strategy, transactions and risk management, complemented by internal rules. Items addressed by the Board or committees in 2024 included governance and the climate transition plan, the CSRD and double materiality assessment, sustainability targets under CSRD and under the Principles for Responsible Banking, gender-equal finances, external initiatives and commitments, fossil fuel commitments, and greenwashing risks. The CSO reported to the Audit Committee on material sustainability matters and targets, and the Audit Committee oversees CSRD implementation.

Handelsbanken's remuneration system is designed to promote sound and sustainable operations and is linked to business goals and culture. It includes fixed remuneration, pension and some benefits. Variable remuneration is applied with great caution and is not applied to members of the administrative, management and supervisory bodies, so there is no significant proportion of variable remuneration directly linked to sustainability targets. There are no specific sustainability targets tied to variable remuneration; the focus is on long-term interests and applying fixed remuneration as a general rule. Sustainability-related performance is assessed mainly through the Bank's general principles for sound and sustainable operations rather than specific metrics or benchmarks. The Oktogonen profit-sharing scheme applies to the Executive Team on the same terms as all employees and rewards long-term, stable and sustainable operations. The Remuneration committee prepares proposals for remuneration guidelines.

Handelsbanken presents a Due diligence table giving an overview of how the core elements of due diligence for people and the environment are handled and where the related disclosures can be found in the Sustainability Report. The table maps the elements to specific disclosure requirements and page references: embedding due diligence in governance, strategy and business model is covered under ESRS 2 GOV-2, GOV-3 and SBM-3; engaging with affected stakeholders under SBM-2; identifying and assessing adverse impacts under IRO-1 and SBM-3; taking action to address negative impacts and tracking the effectiveness of those efforts are cross-referenced to the environmental, social and governance sections. This provides a signposting overview linking the due diligence process to the relevant parts of the report.

Handelsbanken Sustainability has overall responsibility for sustainability reporting, including ensuring effective processes for identified risks. In the transition to ESRS reporting the Bank improved its processes: responsibilities were clarified for internal stakeholders that provide information, and stricter traceability requirements were introduced for data sources and supporting documentation, with expanded internal controls where appropriate. A duality requirement was introduced for Taxonomy-related information to reconcile data derived from systems with established control functions. The internal control process rests on a clearly defined division of responsibilities and steering documents. Handelsbanken Sustainability and Handelsbanken Finance identify and evaluate operational control activities linked to sustainability and taxonomy reporting. The greatest risk of significant errors is that operational errors are made in preparing information for reporting. Sustainability risk management follows a three-line-of-defence structure.

Handelsbanken's operations rest on respect and trust in individuals, with the customer relationship at the core. Its strategy integrates sustainability into a decentralised working method with a focus on risk mitigation and long-term customer relationships, providing lending, investment and advisory products tailored to customers' sustainability needs. The Bank aims for better profitability than the average of peers in its home markets through lower costs and more satisfied customers. Home markets are Sweden, the UK, Norway and the Netherlands, with additional business in Luxembourg and the USA; at end of 2024 it had 424 branches and meeting places. The Finnish private, SME and life insurance operations were divested in 2024. The value chain has three parts: lending, asset management and payments, covering upstream, own operations and downstream. Sustainable offerings include green loans, ESG-linked loans, green mortgages, and Article 8 and Article 9 funds.

Handelsbanken's principal stakeholders are customers, co-workers, owners and investors, trade unions, and the rest of society, including special interest organisations, public authorities and legislators. These groups were identified based on their significant impact on, or from, the Bank's activities. The Bank also maintains dialogue with equity research and sustainability analysts, trade associations, non-profit and international organisations, municipalities and regions, suppliers, press and media, and students and educational establishments. A stakeholder dialogue table describes how engagement takes place with each group, such as customer meetings and surveys, employee representatives on the Board, the Annual General Meeting and investor calls, and the European Works Council, and the purpose of each dialogue. Insights are embedded into the Bank's strategy and business model. When affected stakeholders raise views or external factors emerge affecting sustainability, the standard process is for the CSO to inform the Board.

Thirteen sustainability matters were identified as material through the double materiality assessment. These are addressed in the sections E1 Climate change, E4 Biodiversity, S1 Own workforce, S2 Workers in the value chain, S4 Consumers and end-users, G1 Business conduct, plus the entity-specific matters Contribute to society, Counteract financial crime and Financial stability. A summary table sets out for each matter the type of impact, risk or opportunity, the relevant value chain (lending, asset management or payments), whether it is upstream or downstream, and the time horizon. The Bank states it has both direct and indirect impacts on the environment, people and society, with its greatest positive influence coming from supporting customers' sustainable transition. Handelsbanken currently sees no significant changes needed to its business model, value chain, strategy or decision-making from identified impacts, risks and opportunities, and considers its strategy well positioned to manage them.

Handelsbanken began its double materiality assessment in autumn 2023 and adopted the final results in 2024, based on ESRS requirements and EFRAG's draft implementation guide. It combined impact materiality (actual and potential, positive and negative impacts on society, people and climate) and financial materiality (risks and opportunities affecting financial position and performance over short, medium and long term). The method was mainly qualitative given limited data, building on previously reported GRI topics, ESRS sub-topics, SASB and banking-sector matters. It covered all value chains (lending, asset management, payments) and own operations across home markets. Factors assessed included scale, scope, likelihood and irremediable character for impacts, and likelihood and financial impact against monetary thresholds for financial materiality. Group Risk Control and the CSRD steering group were involved, internal control functions reviewed the methodology, and stakeholder dialogues validated the results. E2, E3 and E5 were not assessed as material.

Handelsbanken states that a list of the disclosure requirements covered in the Sustainability Report, based on its double materiality assessment and a materiality assessment at datapoint level, is provided in the introduction to each topic area. It signposts the locations: page 260 for ESRS 2, page 284 for E1 and E4, page 298 for S1, S2, S4 and the entity-specific matter Contribute to society, and page 318 for G1 and the entity-specific matters Counteract financial crime and Financial stability. A description of how the Bank identified material information to disclose in relation to IROs is presented in the IRO-1 section. The datapoint-level materiality assessment was based on the regulations and assessed the materiality of each datapoint for the user. A list of datapoints stemming from other EU legislation is provided on pages 280 to 283.

Handelsbanken published its Transition Plan in 2023 and will update it in 2025. The plan aims to contribute to the EU's climate targets, national climate targets in each of the four home markets (Sweden, UK, Norway, Netherlands) and the Paris Agreement's 1.5C goal, focusing primarily on supporting customers and portfolio companies in their transition to net zero. Implementation is decentralised: each home market Steering Committee develops national roadmaps that are integrated into annual business planning, coordinated by Handelsbanken Sustainability through the Group-wide Task Force on Climate, led by the Chief Sustainability and Climate Officer who reports to the Board, CEO and Executive Team. The Bank's shares are included in the EU Paris-Aligned Benchmarks and the plan is stated to align with the EU Climate Law. For a bank, financed emissions dominate, and the plan's main lever is helping customers decarbonise.

The steering documents that primarily address the Bank's climate change and energy matters are the Policy for sustainability (adopted by the Board), the Credit policy, and the CEO's Guidelines regarding the environment and climate change, which apply across the whole Group. Under these guidelines, the Bank's GHG emissions should be reduced over time in line with the 1.5C goal. The Bank has developed specific criteria for business relationships with fossil energy companies aligned with the IEA Net Zero by 2050 scenario, including not entering new relationships with, financing or investing in companies involved in coal mining or new oil and gas exploration. Handelsbanken expects companies it does business with to operate in line with the Paris Agreement. The subsidiary Handelsbanken Fonder additionally has a policy for shareholder engagement and responsible investment. The guidelines reference international initiatives including the UN Global Compact, Equator Principles and Principles for Responsible Banking.

The Bank describes actions across own operations, lending and asset management. In own operations, energy efficiency measures included replacing fluorescent tubes and low-energy bulbs with LEDs (around 1,600 fittings converted), IT systems efficiency work, and certifying Norwegian branches with the Eco-Lighthouse label (23 certified in 2024, target all 39 by 2027). Since 2018 it has purchased 100 per cent renewable electricity. In lending, new products were launched in 2024 including green transition loans in Norway and the UK, digital tools such as Energikollen (Energy Check) and Hallbarhetskollen (Sustainability Check) in Sweden, a UK sustainability data tool, and training for branch employees. In asset management, Handelsbanken Fonder integrates climate targets into the investment process, offers Paris-Aligned Benchmark index funds, applies fossil fuel exclusion (enhanced criteria to 99.4 per cent of AUM), and conducted climate dialogues with 13 companies representing 70 per cent of financed emissions not yet aligned with net zero.

For own operations the Bank targets a 50 per cent reduction in absolute Scope 1 and 2 emissions by 2030 from a 2021 base year (base year set on SBTi recommendations), with 100 per cent renewable electricity purchased through to 2030. It also targets reducing energy consumption per square metre at headquarters and internal departments by an average of at least 2.5 per cent per year between 2023 and 2030 (not science-based). For asset management, Handelsbanken Fonder set an interim target to reduce the carbon footprint of the investment portfolio, measured in tCO2e per EVIC, by 50 per cent by 2030 from a 2020 base year, covering Scopes 1, 2 and 3 and 89 per cent of total AUM. Reported progress: Scope 1+2 changed minus 4 per cent versus prior year and minus 23 per cent versus base; Scope 3.15 asset management changed minus 18 per cent versus prior year and minus 31 per cent versus base. The Bank also set an aspirational climate adaptation goal.

Total energy consumption was 66,512 MWh in 2024, down from 70,815 MWh in 2023. Total fossil energy consumption was 39,539 MWh, representing 59 per cent of the total (down from 60 per cent in 2023). Total renewable energy consumption was 26,973 MWh, representing 41 per cent, of which purchased renewable electricity, heat, steam and cooling was 26,594 MWh, self-generated non-fuel renewable (solar) energy was 61 MWh, and renewable fuel consumption including biomass was 317 MWh. Since 2018 the Bank has purchased 100 per cent renewable electricity; for 2024 this comprised 92 per cent guarantees of origin from hydropower, 4 per cent from solar and 4 per cent from wind. Energy not originally labelled as renewable is classified as fossil in the accounts. Nuclear energy may be part of the local energy mix but its share is not calculated separately.

For 2024, gross Scope 1 emissions were 143 tCO2e (down from 154 in 2023), gross location-based Scope 2 emissions 4,468 tCO2e and gross market-based Scope 2 emissions 2,205 tCO2e. Total gross indirect Scope 3 emissions were 46,059,746 tCO2e, up 6 per cent, overwhelmingly driven by category 3.15 Investments at 46,053,756 tCO2e (financed emissions from lending and asset management). Total GHG emissions were 46,064,357 tCO2e location-based and 46,062,094 tCO2e market-based. Within financed emissions, lending (real estate) covered mortgages at 302,972 tCO2e and commercial properties at 486,815 tCO2e, while investments (Scopes 1, 2, 3) totalled 45,263,969 tCO2e, of which 39,509,895 was calculated by data providers and 5,754,074 estimated. Calculations follow the GHG Protocol, with lending emissions based on the PCAF standard using energy performance certificates. Scope 1 biogenic emissions were 63 tCO2e. Several Scope 3 categories are partly included or omitted with stated justifications.

In 2024 Handelsbanken purchased and cancelled 172 tonnes of CO2 in carbon removal credits (CORCs) from various biochar suppliers in Europe, certified to the Puro.earth (Puro) standard, which the Bank describes as a nature-based solution providing a carbon bond lasting over 100 years. All credits were purchased from EU projects under a recognised standard, and the project does not count as a corresponding adjustment under Article 6 of the Paris Agreement. These carbon removal credits have not been offset against the Bank's total emissions or carbon targets. To a lesser extent the Bank contributed indirectly to carbon removal financing through a local Swedish district heating agreement, estimated at less than 80 tonnes for 2024 based on the 2023 volume. The Bank states it does not yet have a developed strategy for neutralising unavoidable emissions and has no existing plans, holdings or agreements regarding carbon credits to be cancelled.

Handelsbanken states that it does not apply internal carbon pricing in any of its operating areas.

The Bank states its main impact on biodiversity and ecosystems stems from asset management, primarily through its fund company, with negative impacts identified downstream. It assesses the resilience of its own operations as high because they are not dependent on natural resources, while the value chain strategy is to actively support and accelerate sustainable development. Resilience was assessed as part of Handelsbanken's Nature and Biodiversity Progress Report 2023 (published 2024), and more accurate models for physical, transition and systemic risks in the value chain are under development, including through collaboration in the Mistra BIOPATH research programme. Handelsbanken has not yet defined a detailed transition plan for biodiversity, but because climate change is a key driver of biodiversity loss the Bank considers its climate transition plan (see E1-1) to be a key element of its work in this area.

The steering documents addressing the direct impact drivers of biodiversity loss are the Policy for sustainability, the Guidelines regarding the environment and climate change, and the Guidelines for Handelsbanken's offering in forestry and farming. The Bank wants to promote, through its business relationships, sustainable business models that take biodiversity into account and minimise damage. The guidelines also address the social impacts of biodiversity deterioration, such as food security, and reference several international initiatives including the UN Global Compact, the Equator Principles, the Principles for Responsible Banking, the Principles for Responsible Investment, the Principles for Sustainable Insurance and the Convention on Biological Diversity. The forestry and farming guidelines describe how those sectors are a main cause of global biodiversity loss and set expectations for sustainable land and agricultural methods, although they do not specifically refer to deforestation. Ocean-related sustainability is not explicitly addressed but general environmental guidelines apply to marine activities.

In 2024 Handelsbanken implemented actions to prevent, mitigate and remediate its assumed negative impact on biodiversity, noting that biodiversity loss offsetting has not been implemented in its own actions but may occur indirectly in the value chain, and that actions so far have not included indigenous or local knowledge or nature-based solutions. The Bank is a lead partner in the Mistra BIOPATH research project and a member of Business@Biodiversity Sweden. Handelsbanken Fonder has been a member of Nature Action 100 since 2023, which engages 100 systemically important global companies on reversing nature and biodiversity loss by 2030. In August 2024 the Bank published its first stand-alone report on nature and biodiversity based on TNFD recommendations. As a major investor, Handelsbanken Fonder engaged with companies in several 2024 dialogues to encourage greater knowledge, reporting and transparency on activities with potential negative biodiversity impacts.

Because biodiversity and nature metrics are not as established as carbon footprint metrics, making it difficult to quantify an exact contribution to biodiversity loss at portfolio level, the Bank has defined an interim target based on engagement dialogue. The target is, between 2025 and 2030 through the Bank's asset management, to conduct 20 biodiversity engagement dialogues per year with selected portfolio companies in prioritised sectors, aiming to reduce the Bank's indirect impact on biodiversity and ecosystems. The target is absolute and covers all of the Bank's investor activities in all markets. The base year is 2025, so there is currently no baseline value, and the target will be followed up annually. Dialogues can cover all levels of the mitigation hierarchy; biodiversity offsetting is not relevant to achieving it. The target is not science-based and did not use ecological thresholds, but is designed to support the aims of the Kunming-Montreal Global Biodiversity Framework.

Handelsbanken lists the steering documents that address positive and negative impacts on its workforce: the policy for remuneration, guidelines for work environment, policy for ethical standards, policy for sustainability, and guidelines regarding human rights and working conditions, together with a framework for gender equality, diversity and inclusion. All documents apply across the Group. The Bank commits to a healthy, safe and inclusive workplace built on trust and respect, and to zero tolerance of discrimination, victimisation and harassment. It commits to the UN Guiding Principles on Business and Human Rights, the UN Global Compact, OECD Guidelines and ILO core conventions, and rejects child labour, forced labour and human trafficking. Remuneration is to be market based, gender neutral and support sound, sustainable operations. The Bank respects co-workers' right to union representation and collective bargaining.

Handelsbanken describes its decentralised model, where managers hold close, regular dialogue with co-workers and with trade union or workers' representatives as part of daily operations, allowing early signals such as work environment concerns to be identified. Alongside day-to-day dialogue, the Bank uses a structured process called the Wheel, through which each unit builds its annual business plan and every employee has an individual planning dialogue and performance review (PLUS review) with their manager at least once a year, resulting in an individual action plan. The Bank works with trade unions at national level, has country-specific cooperation forums in Sweden, the UK, Norway and the Netherlands meeting at least quarterly, and a European Works Council. Workers' representatives on the Board ensure workforce perspectives reach board-level decision making.

Co-workers and other stakeholders are encouraged to report suspected irregularities or misconduct, primarily to their immediate supervisor or a senior manager. Where that is not appropriate, they can use Handelsbanken's whistleblower system, managed by an external party with guaranteed identity protection as far as legally possible and protection from retaliation under the ethical standards policy. The system is available via intranet and the public website to co-workers, value chain workers, suppliers and customers. The Group-wide work environment survey measures co-workers' awareness of how to act in cases of victimisation, discrimination, harassment or threatening situations, with 96 per cent reporting good understanding. Work environment incidents are reported in the internal WEIN system and investigated with the affected party involved where possible. The Bank plans to add whistleblower awareness questions to the survey.

Handelsbanken aims to be an attractive employer with competitive terms for permanent and temporary staff (94 per cent permanent during the year). Actions include benefits promoting long-term employment, supplementary parental pay, credit on special terms, competitive pensions and the Oktogonen collective profit-sharing scheme. It runs systematic work environment management built on an annual process using health factors, with surveys, risk assessments, action plans and follow-up conducted per country and covering all co-workers. The 2024 Group-wide survey scored 5.1 on a 1 to 6 scale. Each country monitors efforts through a joint health and safety forum with employer and worker representatives. The Bank works systematically on equal pay, mapping salaries annually in Sweden, Norway and the Netherlands, and trains salary-setting managers. It also drives gender equality, diversity and inclusion through a Diversity Council, local committees and competency-based recruitment training.

Handelsbanken sets targets to manage its workforce impacts, risks and opportunities, using 2024 as the base period. Metrics were reported in prior statements but not previously formulated as targets. The equal pay target aims for equal pay across all areas but is not set as a measurable target, as the Bank judges continuous monitoring more appropriate given the long-term commitment required. The good and inclusive work environment target is for at least 90 per cent of co-workers to perceive the environment as good and inclusive, measured annually (2024 outcome 93 per cent). The gender balance target is for women or men to account for at least 40 per cent of all employees and of managers, to be achieved or maintained by 2026. All metrics and targets were set internally by the Bank, without involvement of the own workforce or workers' representatives.

Handelsbanken reports total employees of 13,291 (head count used for FTE calculation, average for the year), split by legal gender into 6,713 male and 6,578 female, with no employees recorded as other or not reported. By home market: Sweden 7,851, UK 3,184, Norway 1,098 and the Netherlands 508, with Norway and the Netherlands each representing less than 10 per cent of total employees. By contract type (as at 31 December 2024, total 12,800): 12,155 permanent, 156 temporary employees on monthly salary and 489 non-guaranteed hours employees on hourly contracts, broken down by gender. Staff turnover in the Group was 7.5 per cent, with 993 employees ending employment, excluding 272 employees of the divested Finnish operations.

Handelsbanken reports the number of external consultants in its own workforce at 960 for 2024, down from 1,161 in 2023, noting that a majority work with IT-related activities. Characteristics of non-employees are compiled monthly by each country and pertain to consultants contracted on the last day of the preceding month. Consultants are calculated as full-time equivalents based on the scope of the contract, with information drawn from the Bank's consultant procurement in Sweden. Once figures for the preceding year are reported, an average is calculated for the number of non-employees in the Group's own workforce.

Handelsbanken reports that 70 per cent of employees are covered by collective bargaining agreements, pertaining to employees in Sweden, Norway, Finland and Luxembourg. Employees who are not union members are also covered by the terms of the agreements but are not represented in individual matters. A home-markets table shows collective bargaining coverage of 80 to 100 per cent in Sweden and Norway, and 0 to 19 per cent in the Netherlands (EEA) and the UK (non-EEA), with workplace representation at 80 to 100 per cent in Sweden, Norway and the Netherlands. Beyond national union dialogue, the Bank has a European Works Council, active since the 1990s, formalised through a cooperation agreement with Executive Team and worker representatives from Sweden, Norway, the UK, the Netherlands, Finland and Luxembourg, generally holding four scheduled meetings per year.

Handelsbanken reports diversity metrics for 2024. Women accounted for 49 per cent of all employees and 44 per cent of all management positions (gender breakdown 49/51 all employees, 44/56 managers). The Executive Team comprised 4 women and 5 men (44/56). Age breakdown by number for all employees: 2,005 under 30, 5,903 aged 30 to 50 and 4,892 over 50 (15.7 per cent, 46.1 per cent and 38.2 per cent). For managers: 31 under 30, 961 aged 30 to 50 and 846 over 50 (1.7 per cent, 52.3 per cent and 46 per cent). For the Executive Team: none under 30, 2 aged 30 to 50 and 7 over 50 (22.2 per cent and 77.8 per cent).

Handelsbanken states that total employee remuneration is to be on market terms, gender neutral, and support the Bank's competitiveness and profitability, as set out in the remuneration policy approved by the Board. The Remuneration committee assesses the policy and remuneration system annually and reports to the Board. Individual salaries are determined through annual salary reviews between manager and employee, with terms and benefits varying within the Group depending on local market conditions or applicable collective bargaining agreements. The Bank states that all employees receive an adequate salary in line with current reference salaries, which are regulated by collective bargaining agreements and/or local legislation.

Handelsbanken states that all its employees are covered by social protection against loss of income due to illness, unemployment, work-related injury, parental leave and pension. This coverage is regulated either by collective bargaining agreements or in accordance with local legislation in the countries where the Bank operates.

Handelsbanken emphasises continuous learning through both formal training and day-to-day work, with leaders creating an environment that promotes development. All employees are covered by a recurring performance evaluation, and in the year's work environment survey 97 per cent (96 prior year) stated they had a performance review (PLUS) with their manager at least once a year, broken down as 97 per cent women, 96 per cent men, 94 per cent prefer not to state and 100 per cent other. The Bank reports average registered training hours per employee via its training platforms of 22.8 for women and 21.7 for men in 2024. It offers a wide range of courses, including mandatory training in financial crime, security and GDPR, a Leadership programme completed by 183 leaders, and the Sustainability in the financial industry course completed by 96.2 per cent of employees; 3,990 advisors in Sweden took a sustainability refresher course.

Handelsbanken reports that work environment management is carried out based on local legislation and regulations in each country of operation. All co-workers are covered by Handelsbanken's work environment survey, which the Bank has defined as its health and safety management system for preventing work-related injuries. The Bank refers readers to section S1-4 for information on its systematic work environment management and the annual Group-wide survey, and to section S1-5 for additional health and safety metrics.

Handelsbanken states it aims to meet employees' needs during various phases of their life in a flexible way. It reports that 100 per cent of the Bank's employees are entitled to family-related leave, which is regulated by local legislation and/or collective bargaining agreements. In 2024, 19 per cent of the Bank's employees took family leave, of whom 56 per cent were women and 44 per cent were men. The Netherlands is included in the total leave figure, but national legislation there does not permit reporting broken down by gender.

Handelsbanken reports the pay gap as the average salary of men in relation to women for all employees in 2024: 17 per cent in Sweden, 25 per cent in the UK, 13 per cent in Norway, 19 per cent in the Netherlands and 20 per cent in total. The Bank notes that objective factors explaining pay gaps, such as complexity of work duties and experience, were not taken into account, and that figures use the new ESRS calculation basis so no comparatives are provided. It also reports an annual total remuneration ratio of 22, being the ratio of the highest-paid individual to the median annual total remuneration for all employees excluding the highest-paid individual.

Handelsbanken reports that in 2024, 73 cases related to discrimination, including harassment, were reported through the Bank's main Group-wide and local channels. The number of reported complaints related to working conditions and to equal treatment and opportunities for all amounted to 233. The Bank states that the majority of these cases involve persons outside the Bank who have exposed co-workers to situations creating a sense of insecurity or lack of respect in the workplace. All reported cases are handled according to the Bank's procedures and guidelines, reviewed, and followed by actions to prevent recurrence. During the reporting period, Handelsbanken paid SEK 81,043 in compensation, fines or penalties related to the incidents and complaints described.

The Bank identifies the steering documents addressing its material impact on value chain workers: the Policy for sustainability, the Credit policy, Guidelines regarding human rights and working conditions, and Guidelines for supplier arrangements. The human rights guidelines complement the sustainability policy and clarify Handelsbanken's approach to human rights and fundamental labour practices, stating the Bank does not accept child labour or forced labour and referencing international initiatives such as the UN Global Compact. A supplier Code of Conduct based on internationally accepted standards governs procurement. For asset management, Handelsbanken Fonder's policy for shareholder engagement and responsible investments rests on exclusion, inclusion and engagement, is based on international norms covering the environment, human rights, labour practices, corruption and controversial weapons, and reflects the Bank's status as a UN PRI signatory and UN Global Compact supporter. HWAM and Optimix apply their own responsible investment policies with similar norm-based criteria.

Handelsbanken states that structured efforts to protect human rights and good working conditions must be part of its business relationships. The Bank does not engage in direct dialogue with workers in its value chains and has no plans to introduce direct contact with them. Instead it works through established processes to take their perspectives into consideration, having developed other actions to manage impacts. Examples include periodic screening of the companies the Bank invests in to identify negative impacts on value chain workers through asset management, checklists used in credit assessment processes, and a code of conduct for suppliers. It also engages in regular dialogue with suppliers where sustainability is a focus, examining matters such as collective bargaining agreements and health and safety policies. Further detail on procedures and actions is cross-referenced to section S2-4.

Handelsbanken states that its whistleblowing process and system, described in more detail in section S1-3, is also available for use by workers in the Bank's value chain. The channel can be accessed via the Bank's website. The disclosure cross-references the S1-3 section for the full description of how the whistleblowing process operates.

Handelsbanken addresses value chain worker impacts across suppliers, lending and investments. For suppliers, it applies a risk-based method with pre-contract due diligence against its Supplier Code of Conduct, collects external sustainability data, and has engaged an international data provider offering a risk classification tool, with the service starting in 2024. High-risk contracts are monitored at least annually and shortcomings addressed via action plans. In lending, sustainability risks are integrated into credit assessment and all credits are reviewed annually; a specific contractual term for construction sector credits above a limit requires control systems, prior notifications, F-tax and tax debt checks, and physical workplace inspections. In asset management, Handelsbanken Fonder conducts daily norm-violation monitoring, active stewardship, voting (1,275 shareholders' meetings in 2024) and engagement dialogues (62 direct and 144 collaborative on human and labour rights), including anti-modern-slavery work. At end-2024, 71 companies were confirmed in breach of norms, 8 violating workers' rights.

Handelsbanken states that the process for setting targets for value chain workers is described in general terms in the General information section (page 278). Neither workers in the value chain nor appointed representatives were involved in formulating or checking the targets, and progress or lessons learnt have not been analysed since the targets were prepared in 2024. Specific targets set include: a supplier target that 90 per cent of suppliers with annual purchase volume above SEK 5 million must have signed the Bank's Code of Conduct or have their own code approved, covering all home markets, with a 2024 outcome of 83.3 per cent (the prior metric for Sweden reached 85 per cent for 2023). For lending, the Bank set a target that the proportion of lending where social sustainability risk impact on credit risk is deemed higher than normal should be zero per cent, which was achieved in 2024.

Handelsbanken identifies the steering documents addressing its material impact and financial risk for consumers and end-users: the Policy for complaints management, the Policy for operational risk, Guidelines for security and data protection, and Guidelines regarding human rights and working conditions. The operational risk policy, adopted by the Board and covering IT and information security (ICT) risks, states the Bank has a low tolerance for operational risks and should work proactively to prevent them. It is supplemented by CEO-endorsed guidelines focused on security and data protection, which require administrative and technical security solutions, physical protection and protection of sensitive information proportionate to potential harm, given the Bank's need to protect customer privacy. All co-workers are responsible for compliance and receive annual security and data protection training. The complaints management policy states customer complaints should be handled promptly, with the aim that the complainant is very satisfied; the CEO establishes complaints guidelines.

Handelsbanken emphasises availability to customers, combining local branch presence with digital solutions to offer personal customer meetings and advisory services whether the customer visits a branch or uses digital channels. Customers in Sweden can contact the bank at all hours by phone through Personal service, confirming identity with a personal code or Mobile BankID. Communication with customers must inspire trust and be accurate, factual, easy to understand and characterised by openness, accessibility and speed, as set out in the communication policy, applying in normal and crisis situations and covering unplanned events such as IT disruptions. Instructions and templates for continuity planning, including communication of IT outages, are updated at least annually. If a personal data breach is considered to have had a major impact on individuals, they must be informed, with the responsible branch contacting the customer as directed by the Privacy Officer. Complaints are first directed to the person who handled the matter or the local branch.

Handelsbanken aims for customers who lodge complaints to be very satisfied with how the issue is addressed. Complaints can be submitted by e-mail, telephone or letter and are dealt with in accordance with regulations and guidelines, thoroughly and efficiently, with a formal assessment of the factual issue. A written reply may be issued on request, and the customer is given an explanation if the complaint cannot be resolved. If dissatisfied with the Bank's decision and wishing to appeal, the customer may contact the National Board for Consumer Disputes (ARN) in Sweden or the corresponding body in other home markets, and the Bank undertakes to participate in the dispute processing. Information on complaints management is available on the Bank's website. To ensure an efficient process, staff are regularly trained in handling complaints, the number of complaints per channel is measured quarterly, and complaints about the process itself are followed up with adjustments made if necessary.

Handelsbanken maintains security work that responds swiftly to identified threats, with procedures for managing IT environment changes to prevent breaches. It continuously evaluates new threats, including risks from new technologies such as AI, updates instructions and raises awareness. The Bank participates in international cybersecurity forums (Trusted Introducer, FIRST), the Swedish Bankers' Association security committee and the NCSC financial forum, has an enhanced cybersecurity partnership with two other major Swedish banks (with a 2024 joint working group on AI security), and established an operational resilience concept, developing digital resilience in line with the EU DORA regulation. Information security work follows ISO/IEC 27001, with several areas certified and annually audited; the ISMS is based on the ISF Standard of Good Practice using IRAM2 risk methodology. Data protection work complies with GDPR using a risk-based, documented approach, and in 2024 a project began to introduce a governance, risk and compliance (GRC) system. Complaints officers report regularly to the Board and Executive Team.

Handelsbanken's overall target for consumers and end-users is to safeguard the safety, security and privacy of co-workers and customers and to protect the Bank's assets while delivering reliable, secure services with high availability. Specific targets reported: 95 per cent of co-workers to complete annual cybersecurity training, with a 96.6 per cent outcome for 2024; availability of the self-service payment system of at least 99.30 per cent, with 99.41 per cent achieved in 2024. Both targets were set internally without external stakeholder confirmation and are managed internally with no external controls. For transparency, though not set as targets, the Bank reports 28 incidents in 2024 relating to customer privacy or poor data management (21 substantiated customer complaints), and 640 personal data breaches reported internally, of which 17 were reported to the Swedish Authority for Privacy Protection (IMY). The Bank states it has no plan to set a target for incident numbers since it is continuously making improvements.

The Bank describes its corporate culture and the steering documents governing business conduct. Key policies include the Policy for ethical standards, the Policy for management of conflicts of interest, the Policy against corruption and the Policy for sustainability. These documents set out a zero-tolerance approach to corruption, money laundering and terrorist financing, and require conflicts of interest to be identified and managed, with annual reporting on units where the likelihood of conflicts is higher. Heads of units are responsible for continuously identifying potential conflicts, and policies feed into internal work instructions all employees must follow. The corporate culture is based on a decentralised approach built on trust and respect, with a long-term culture target linked to the annual workplace survey covering clear communication, having the right skills, pride, trust and being respected. Codes of conduct set out expectations for employee behaviour, including reporting of suspected irregularities.

Handelsbanken describes its work to prevent and detect corruption and bribery, characterised by high ethical standards and a proactive approach to countering all criminal activity. The Bank's policy against corruption states co-workers must never engage in acts involving bribery or improper influence. Regular risk analyses are undertaken, and the annual evaluation covers the entire Bank, including international branches and subsidiaries, assessing bribery and corruption risk among employees and units corresponding to 100 per cent. Risk areas with elevated corruption risk are specifically identified, such as customers in higher-risk countries or sectors. Employees with customer contact, purchasing or procurement influence, or decision-making mandates are considered particularly exposed. A mandatory anti-corruption and financial crime training course applies to co-workers and consultants with assignments of six months or longer, and the Board and subsidiary Boards receive annual training. The Bank has been a member of Transparency International Sweden since 2017 and operates an external whistleblower system for anonymous reporting, with all reports investigated by an independent function.

In 2024, there were no (0) confirmed incidents of corruption or bribery. There were also no legal proceedings regarding corruption or bribery launched against the Bank or its co-workers, no disciplinary measures or dismissals of co-workers, and no termination of contracts with partners or suppliers as a result of corruption or bribery during the year. The reported figure includes confirmed cases of giving and receiving bribes, breach of trust and use of one's position to gain improper advantage. On training coverage, 92 per cent of employees completed the anti-corruption, anti-money laundering and financing of terrorism training in 2024, against a target of 90 per cent. For Board members, 9 completed the training, representing 100 per cent, and 43 subsidiary Board members completed it, also 100 per cent.