Business and ethics topics

102–10 Significant changes to the organisation and its supply chain

In 2021 we acquired Electro-Therm SAS, Go Geothermal Ltd Heat Safe Cable Systems Limited, Heat Trace Holdings Limited, Heat Trace Limited, Brewer and Bunney Limited and Graybar Ltd.

The following companies were acquired in 2020 and were included in sustainability reporting for 2021: Heating Group International B.V., Elektrotermija d.o.o, Jac. De Vries Gesta B.V, WATERKOTTE GmbH, VEÅ AB, Termotech S.R.L, VOLTANOVA b.v, Sun Electric Heater Company, Tiki, Üntes, Hydraulik-Service i Markaryd AB and Nathan Holding. There were no significant changes to the supply chain.

102-11 Precautionary Principle or approach.

We apply the precautionary principle in all our development work and comply with applicable national and international chemicals legislation such as REACH and RoHS. We are working actively to phase out chemicals in our manufacturing processes as per the substitution principle. Continuous risk assessments ensure that the right protective equipment is used if there is a risk of exposure and that chemicals are used and stored correctly.

STRATEGY

102-14 Statement from senior decision-maker.

The Chief Executive’s report is on pages 14-17. The annual report contains descriptions of strategic priorities, trends and goals, what has been achieved and the outlook for the future.

102-12 External initiatives.

NIBE signed the 2014 Global Compact, which is one of our major initiatives alongside the Sustainable Development Goals. Read more about the Global Compact and the SDGs to which we contribute on page 64–65. We also work in compliance with ISO 26000 – Guidance on social responsibility and the ‘Code to Prevent Corruption in Business’ of the Swedish Anti-Corruption Institute (Institutet Mot Mutor (IMM)). As part of our climate work we have started working with the TCFD (Task Force on Climate Related Financial Disclosures) initiative, which identifies climate-related risks and opportunities. The Global Reporting Initiative (GRI) is the reporting standard that NIBE has chosen as the reporting method for stakeholders. This means we commit to conduct business in a global context in a responsible manner in compliance with applicable laws and internationally adopted standards.

102–13 Membership of associations.

NIBE is a member of several trade associations in which relevant short-term and long-term aspects are discussed, for example the GEO-Exchange Coalition, ASHRAE, the Swedish Society of Refrigeration (Svenska Kyltekniska Föreningen), as well as various standardisation organisations. We also work with high-profile universities and organisations such as Tekniska museet (the Swedish Museum of Technology) and the Nobel Prize Museum.

ETHICS

102–16 Values, principles, standards and code of conduct.

NIBE’s ethical guidelines are defined in Our Values, Our Business

Principles and our policies. There are several related policies at Group level, as well as local adaptations of NIBE’s policies. NIBE’s values and guidelines are, however, generally applicable and all other policies are subordinate to them. Our guidelines are available in 20 languages, on NIBE’s intranet and at www.nibe.com. Read more on pages 12–13 and 149 (our values and policies).

NIBE’s employees are urged to report departures from NIBE’s values to their managers or local HR departments or to forward the matter to other senior managers. Employees may also report to a groupwide whistleblower portal (www.https://report.whistleb.com/ en/NIBE). The reporting channel is managed by a third party, and reports may be made anonymously in the reporter’s own language. NIBE has a strict policy against reprisals against persons who report suspected infringements in good faith.

GOVERNANCE

102–18 Governance structure.

The company’s Managing Director and CEO is appointed by the Board of Directors and is responsible for ongoing management of the company’s operations in compliance with the guidelines and instructions issued by the Board of Directors. The Executive Committee and the Board of Directors have the ultimate responsibility for adopting NIBE’s business concept and ensuring that work is governed based on the company’s values and drivers. The sustainability team reports directly to the CEO and is responsible for ensuring that all relevant aspects of sustainability are managed and integrated in all operations and activities of the Group and for the preparation of policy documents, strategies and objectives linked to NIBE’s overarching sustainability initiatives. Each operational unit is responsible for sustainability initiatives, which should be implemented according to the strategy and basic requirements adopted by Group management. Each business area is responsible for implementing the sustainability programme in the line organisation. Each company

In 2021, five cases were submitted to NIBE’s whistleblower

system. Four of the reports were received anonymously through NIBE’s web portal for whistleblowing cases and one was received by the management of one of the subsidiaries. Two of the reported cases were classified as whistleblowing cases and investigated within the framework of the whistleblowing policy. One reported case was without merit and the other two were categorised as HR cases and were submitted for handling by NIBE outside the whistleblower system.

CEO is responsible for their company’s results, comprising financial performance, social impact, compliance and other aspects specified

in the NIBE Group’s guidelines for management at company level. Read more about management and governance on pages 173–177.

102-40 List of stakeholder groups.

The biggest high-influence groups of stakeholders are owners, customers, employees, suppliers, investors and fund management companies as well as government authorities and the local community.

See page 148 for a list of stakeholder groups.

102-41 Collective bargaining agreements.

In most countries in which NIBE operates, the employees have collective bargaining agreements. Collective bargaining agreements cover 45% of all production employees.

102-42 Identifying and selecting stakeholders.

Through a continuous dialogue with our stakeholders, we ensure that we have identified our most important sustainability areas and

that we focus on the right issues for the future as well. In 2016, we conducted the first major dialogue with a selection of stakeholders from most of these groups. In addition to sending a targeted survey to around 300 representatives of various stakeholder groups, we conducted several interviews and gathered data from analyses of the company. We then supplemented this data by continuously gathering additional information in connection with spontaneous contacts with the various stakeholder groups, at face-to-face meetings and through questionnaires, and added it to the materiality analysis. In addition to the usual surveys, interviews or visits are often requested.

Read more on pages 68 and 148 about our work with stakeholders. The method used is Mitchell et al. 1997.

102–43 Approach to stakeholder engagement.

The materiality analysis conducted at the end of 2016 was updated in respect of this year’s developments and stakeholder dialogue. The analyses and boundaries for the topics were set in dialogue with management and stakeholders based on trends and GRI topics, along with their impact on our value chain both within and outside the organisation. Our strategic focus areas are described on page 68. If we compare NIBE’s current work in the areas identified as strategic focus areas, it is well aligned with the choices and priorities made by NIBE to date.

102-44 Key topics and concerns raised.

Key topics identified are Climate, the Environment and Corruption,

as well as Diversity and Human Resource Management.

Read more on page 68.

REPORTING PRACTICE

102-50 Reporting period

1 January to 31 December 2021.

102-51 Date of most recent report.

The most recent Annual Report was published on 12 April 2021.

102–52 Reporting cycle.

Annual.

102-53 Contact point for questions regarding the report.

sustainability@nibe.se

102-45 Entities included in the consolidated financial statements.

For figures for entities included in the consolidated financial statements, see page 100 and 117–119.

102-46 Defining report content and topic boundaries.

NIBE aims to give stakeholders relevant information about operational, financial, environmental and social topics. To do this, NIBE applies reporting principles as per GRI (Global Reporting Initiative) which include stakeholders, the sustainability context, materiality and completeness. The boundaries of the topics were assessed based on organisational and business contexts and from the point of view of stakeholders. They were also assessed based on to what extent they can affect and contribute to the UN’s Sustainable Development Goals. When stakeholders are asked proactively, the respondent usually receives a summary of topics that may be material. The stakeholders are asked to emphasise the topics that are important to their evaluation and decision in relation to NIBE. They are also asked to add other topics or remove those they deem to be irrelevant. NIBE uses these views in risk assessments to define environmental, economic and social impact. The common boundary that exists for both the Sustainability Report and the Materiality Report is that companies acquired in 2021 are not included in the reports. See pages 137–140 for the companies that are included in the Sustainability Report.

102-47 List of material topics.

The description above, combined with views collected previously from stakeholder groups, produces a result that has been converted and presented according to the topics in the GRI standard. All these topics are deemed material and relevant to the report. As shown on page 68, several topics stand out as material. The ambition is to provide an approximate assessment. The content, scope and boundaries for each topic, and the management strategy, are described in further detail in the more specific disclosures on pages 153–171.

102-48 Restatements of information.

The 2021 report includes the companies acquired in 2020. See 102–10 above.

102-49 Changes in reporting.

No significant changes were made in material areas in 2021.

102-54 Claims of reporting in accordance with the GRI Standards.

This report was compiled in accordance with the GRI standard’s Core.

102-55 GRI content index.

The content index is at www.nibe.com/gri-index

102-56 External assurance.

No external audit of the sustainability report was conducted. NIBE Industrier AB’s Board is responsible for ensuring that risks are managed and that sustainability initiatives comply with laws and the requirements of authorities, shareholders and other stakeholders.