ENVIRONMENTAL, SOCIAL RESPONSIBILITY, AND GOVERNANCE POLICY

This ESG Policy outlines the SFF Group’s approach to Environmental, Social, and Governance (ESG) issues. The SFF Group is committed to incorporating ESG considerations in every aspect of our operations. We strive to protect people, property, and environment. The SFF Group puts the health and safety aspects as a top priority for all parties that engage with us – both internal and external. Therefore, we take a holistic stakeholder approach in all our decision-making processes.

Our mission is to deliver superior piping solutions to the energy and industrial markets in the most responsible manner possible. The company shall always be regarded as an active and positive contributor in the communities we operate in.

As part of that, we will always – as a minimum – comply with applicable laws and regulations. Further, we will develop specific goals, including HSE aspects, that go beyond the basic regulatory requirements.

This ESG Policy further details the SFF Group’s specific commitments and goals for each of the ESG factors.

ENVIRONMENTAL

Emissions in our operations:

The SFF Group recognizes that climate change will have a profound impact on our planet. Mitigation of environmental risk is a collective responsibility, and we are therefore committed to minimizing our environmental footprint. Going forward, we aim to measure and analyse the entire SFF Group’s Scope 1 and Scope 2 emissions more accurately. To reduce our emissions, we must first understand it.

Goal 2023: Accurately measure all SFF Group companies’ Scope 1 and Scope 2 emissions and report them in the ECO-Lighthouse system.

Providing safe, reliable piping products:

By sourcing piping products from high-quality suppliers, we prevent hydrocarbons, gases and other substances from leaking into the environment.

Goal 2023: Zero hydrocarbon leakages from piping products supplied by SFF Group.

Certification to environmental standards:

Our headquarter in Sandnes, Norway, has been Eco-Lighthouse certified since 2007. The Eco-Lighthouse Foundation is recognized by the European Commission as being on par with European and international eco-certification schemes (EMAS and ISO 14001) from a public procurement standpoint.

The criteria of this certification is based on requirements within the areas of work environment, procurement, energy, transportation, waste, emissions and aesthetics.

We encourage all our key suppliers to be certified to an environmental standard, such as ISO 14001. Furthermore, we favour suppliers who utilize renewable energy sources in their production facilities.

Goal 2023: Minimum 95% of manufacturing partners shall be certified to ISO 14001.

Waste management and recycling:

By improving our recycling habits, we can help keep the environment clean and preserve our natural resources. A circular economy allows us to use raw materials in a more intelligent and careful manner, thus greatly reducing waste and pollution.

Goal 2023: Recycle a minimum of 85% of all waste at HQ. The branches shall set individual goals, depending on their recycling possibilities..

SOCIAL

The SFF Group is known for its great company culture and loyal workforce. This can be attributed to the company’s active policy to create a diverse and inclusive workplace. We are widely recognized as one of the pioneers in recruiting personnel with special needs and different backgrounds. Our hypothesis is that we deliver great results because of – and not despite of – our recruitment policy. The SFF Group has been awarded several prizes for this work:

Alternative recruitment:

Inclusion and diversity is – and always has been – an essential part of the SFF Group’s DNA. Since 1995, we have been committed to systematically giving people with special needs or a troubled past an opportunity in the professional world. We have named this initiative “alternative recruitment”. Traditionally, these groups of people have struggled to enter the workforce. We believe that everyone – irrespective of age, gender, sexual orientation, disability, religion or troubled past – deserves an opportunity to succeed in the professional world.

Goal 2023: 20% of the SFF Group’s workforce shall be recruited from “alternative channels”.

Absenteeism:

It is difficult to accurately measure our workforce’s morale and motivation. One useful metric, however, is the absenteeism rate. This builds on the belief that a happy, motivated employee is less likely to be absent. The observed absenteeism rate is therefore a great proxy for understanding if we have managed to create a positive working environment. We have consistently outperformed the national averages, which tend to be between five and seven percent.

Goal 2023: Sick leave shall be lower than 2.5%.

Staff turnover:

Our skilled, motivated, and loyal workforce is our biggest asset. We strive to create a best-in- class working environment, with possibilities for personal and professional growth. It takes many years to develop expertise within our field of work, and we invest heavily in equipping our staff with the right tools and knowledge to succeed. Staff loyalty is therefore crucial for continuity and future organizational development.

Goal 2023: Staff turnover shall not exceed 5%.

GOVERNANCE

Sound corporate governance plays a crucial role in the development of our company. Our goal is to operate with accountability, integrity and equality in all our practices.

Code of Conduct:

The SFF Group is committed to conducting its worldwide operations in a legal, ethical, and socially responsible manner. We expect every supplier whom we do business with to uphold the same ethical standards. To ensure compliance, we request that all suppliers adhere to our Supplier Code of Conduct. This document outlines the behaviors, practices, and responsible business standards we expect from our supply chain. We perform periodic risk- adjusted audits to verify compliance.

Goal 2023: 100% compliance with Supplier Code of Conduct.

Anti-Bribery and Anti-Corruption:

We want to win business because of our quality and competitiveness. The SFF Group takes a zero-tolerance approach to bribery and corruption and will therefore never attempt to win on any other basis.

All our employees, who we trust to manage our resources, are expected to act in good faith and use proper judgment, integrity, and common sense. Bribery and corruption are an ever- present threat, and our employees must therefore be trained to understand its causes and effects, as well as ways to combat it. Furthermore, we expect all our business partners to abide by the same anti-bribery and anti-corruption standards that the SFF Group has established as part of our ethics and compliance program.

Goal 2023: 100% of our workforce (except warehouse personnel) shall have performed our Anti-Corruption and Anti-Bribery course.

Boye O. Christiansen
Managing Director, SFF Group
31.01.2023