GARO : Sustainability report 2023

2023	SUSTAINABILITY REPORT	GARO

Sustainability Report

Sustainability strategy and targets

GARO's sustainability efforts are based on three pillars, each of which is part of the strategic framework: Climate, Circular economy and Ethical and responsible business. This strategy is the foundation that allows GARO to respond to regulatory requirements, meet growing market expectations and pursue growth and return for investors, while focusing on strengthening GARO's social capital by attracting, encouraging and retaining employees.

GARO's operations are to be conducted in a sustainable manner in which all employees are to be offered safe and comfortable workplaces. The products and services that GARO provides create the preconditions for and enable the growth of a fossil-free society. GARO's overall climate target is to

become climate neutral by 2040 and develop into a circular company.

GARO works toward the UN Sustainable Development Goals (SDGs). From the 17 SDGs, the Group has selected four that we believe we can create the greatest value and make the most difference.

As different areas of materiality have varying degrees of impact, which may also change over time, GARO adapts measures, action plans and resources on a step-by-step basis. Reporting and monitoring of KPIs involves broad collaboration and continuous dialog to ensure responsible and effective measurement of progress towards the SDGs.

Climate

ACHIEVE CLIMATE NEUTRALITY

GARO aims to be climate neutral throughout the value chain by 2040. This is in accordance with the Paris Agreement whose goal is to limit global warming to 1.5°C.

TARGET:

• Emissions related to the operations in GARO's own premises are to only come from fossil-free sources for electricity and heating production by 2025.
• All electricity in the Group's facilities is to come from fossil-free sources by 2025.

OUTCOME:

• 690 tons CO²e emissions (Scope 1 and 2).
• 81% of electricity from fossil-free sources in own operations.

Read more on page 30.

Circular economy

SUCCEED IN ACHIEVING THE CIRCULAR COMPANY

GARO strives to ensure that its products are climate-smart, recyclable and reusable, thereby optimizing the conditions for GARO to become a circular company. This requires GARO to continue to develop products and services where materials and natural resources are used throughout the entire life cycle. This transition not only reduces climate impact but also offers financial benefits such as cost savings and strengthens GARO's position in an increasingly sustainability-driven market.

TARGET:

• Achieve a recycling level of over 98% by 2025.

OUTCOME:

• The recovery rate amounted to 87%.
  Read more on page 33.

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Sustainability Report

Ethics and responsible business

BE AN EMPLOYER RECOMMENDED BY

RESIDENTS, EMPLOYEES, CUSTOMERS AND

INVESTORS

GARO believes that sustainability is the key to a successful and ethical corporate culture. GARO values and promotes an environment of ethical and responsible behavior at both the individual and corporate level and complies with international standards and conventions such as the UN SDGs.

TARGET:

• Zero serious workplace accidents and a downward trend for minor workplace accidents.
• To strive for equality in all occupational groups in the company.
• To strive for equality among senior executives.

OUTCOME:

• 24 serious workplace accidents and 58 minor workplace accidents.
• The percentage of women during the year was 41%.
• The percentage of women in senior executive positions amounted to 18%.

Read more on page 36.

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Sustainability Report

Climate

Achieve climate neutrality

Climate change is a global matter that threatens to result in serious consequences for our planet. GARO's overall aim is to be climate neutral throughout the value chain by 2040.

GARO wants to be an enabler that contributes to the UN 2030 Agenda, the European Green Deal, Fit for 55 and the goals of the Paris Agreement.

The challenges of achieving climate neutrality and the SDGs are significant, but GARO's ambition and objective is to develop the necessary solutions together with suppliers and partners.

GARO's products and services are integrated throughout the low voltage sector, which contributes to and enables efficient energy use with low climate impact.

FOSSIL-FREE

ENERGY IN OWN

OPERATIONS

81%

KEY FIGURES

COMPANY CARS

RUNNING ON

ELECTRICITY FROM

2025

100%

GREENHOUSE GAS

EMISSIONS

690 tons

EMISSION INTENSITY1

4.9 tons

	Goal	2023	2022	2021	2020	2019
CO e emissions (tons).	Climate neutrality (Scope	6902	250	279	246	229
1, 2, 3) by 2040
²
	All electricity in the
Percentage of electricity from fossil-free sourc-	Group's facilities is to	81	92	-	-	-
es in own operations.	come from fossil-free
	sources by 2025.
Energy consumption electricity and heat		3,777	3,140	3,321	3,058	2,939
(MWh)
Water consumption		7,838	4,274	-	-	-

1. Emission intensity is measured as a company's carbon dioxide equivalents (CO2e) in relation to the portfolio company's revenue. The emission intensity figures (annual CO2e in tons/company's annual revenue in USD million) are primarily intended to allow for relevant comparisons regardless of the size of the companies
2. Scope 1 and 2 in 2023.

The increase for 2023 temporarily includes two production sites in Poland, the former being divested in the fourth quarter, and owned and leased vehicles, which were not reported in previous years.

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Sustainability Report

Products, services and systems enabling the new flexible,

­decentralized and sustainable energy and transportation system

GARO designs and manufactures products and complete solutions for electricity distribution and EV charging with a focus on safety, governance and metering as well as sustainability.

• Climate transition - when fuel will be phased out to the benefit of solar and wind power combined with batteries to relocate electricity and power in time, when and where it is required.​

GARO - A LINK IN THE ENERGY CHAIN ​

GARO's product development and ability to be innovative enables people to contribute to the transition and companies and sectors to invest in the ongoing sustainability transition. The fact that operations that manufacture products for the distribution of electricity play an important role in the transition is a factor that is particularly highlighted in the EU taxonomy. This concerns the upgrade of existing electricity distribution, use and new establishment, which is increasingly supplied via solar and wind power. Electricity distribution then enables the charging of electric vehicles and the transition to 100% electrified properties and societies. The trend demonstrates that the future will include more complex and entire system solutions since residential areas, logistics hubs, industries, harbors and cities' electricity use will increase both in the short and long term with the following driving factors:

• Energy efficiency - transition to cooling and heat pumps. ​
• Population densification - demand for electricity and power increases. ​
• The electrification of the entire transport and energy sector and more local electricity distribution.​

KEY EVENTS IN 2023

• The wall boxes of the new GARO Entity technical platform reach the market, offering smarter EV charging in part through the Price Adaptive Charging (PAC) function. The function enables provides the opportunity to charge when the price of electricity is lower, which occurs when the burden on the electricity grid is low. ​
• Focus on heavy vehicles and construction transport by expanding the product offering.

Fossil-free energy only

GARO's ambition is to use only fossil-free energy in its own operations and throughout the value chain. GARO believes that direct and indirect operational emissions from premises in terms of electricity and heating will be zero tons by 2025. The company also focuses on reducing emissions from suppliers and partners in logistics, commuting and business travel.

GARO sees opportunities in reducing the company's operational emissions by 2030 by:

• increasing the share of fossil-free energy for heating and cooling by, when possible, phasing out gas to the benefit of energy, cost and emission reducing heat pumps.
• increasing solar electricity production with lower electricity costs, reduced transmission costs and more efficient use of energy as a positive consequence.
• increasing the use of electric vehicles for business travel, work vehicles and logistics transport, reducing the com- pany's dependence on fuel and further reducing GARO's climate emissions.

KEY EVENTS IN 2023

• As of 2023, 100% of official vehicles are ordered with electric power, which reduces GARO's climate impact and provides financial benefits through lower fuel costs.
• New production and logistics facility in Poland inaugurated The facility has a clear focus on sustainability, and factors such as the exclusion of gas heating contribute to reducing climate emissions.
• More than 100 employees have been trained in the rapid development of the new sustainable energy system, its benefits and the role of GARO.

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Sustainability Report

Fossil-free emissions from the supply chain

GARO's efforts focus on encouraging the use of fossil-free energy in suppliers' operations. In order to reduce emissions in the logistics chain and promote the transition to electric freight transport, collaboration with suppliers, logistics and transport operators, as well as stakeholders in the deployment of charging infrastructure, is required.

KEY EVENTS IN 2023

• In 2023, GARO intensified the degree of its influence on supplier sustainability performance. The target is for suppliers and partners to use 100% climate neutral energy in their production processes by 2025 for all components and services delivered to GARO.

• GARO has consolidated its own production and logistics facilities in Sweden from three to two in order to improve logistics and reduce emissions.

Collaborations

It is naturally important for GARO to take social responsibility, both at an overall level and a local one in the locations where the Group operates. GARO can contribute to reducing emissions alone and in collaboration with other players with new knowledge and an established exchange of frontier research.

PROJECT DIALOGS IN 2023:

• University, research and student dialog.
• During the year, bachelor and master's theses on sus- tainability from six different universities were supported. Particular focus was placed on a case study exploring

how industry, including GARO, can contribute to the new flexible electricity system and the financial benefits this can create.

• Together with researchers at RISE, dialog was initiated on collaboration to integrate more climate-smart materials in GARO's products, with a particular focus on wood materials.
• GARO has participated in the "SuperEffekt" project led by Blekinge Institute of Technology. The project focused on exploring the combination of solar energy, batteries, hydrogen and artificial intelligence (AI).

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Sustainability Report

Circular economy

Succeed in achieving the circular company

At GARO, awareness of the circular economy is steadily increasing, reflecting not only a general industry trend but also influenced by changes in global financial, political and societal spheres. GARO is aware that all materials used have an im- pact, and that there is a need to quantify and assess its degree of impact in order to find new alternative materials.

Faced with a time of more stringent requirements and regulatory commitments, such as the EU taxonomy and CSRD, GARO is aware that action and transformation is required to ensure that products, operations and the company develop in a sustainable way. These driving requirements affect GARO's strategic direction and its ability to lead the transition to a circular company.

At the same time, investors, customers and wholesalers are becoming increasingly aware of and demanding a ­higher

share of circular materials, such as recycled plastics, in products and processes, as well as opportunities for return. This increased awareness and demand is something that GARO is actively embracing and responding to. By reducing the use of raw materials and increasing the use of recycled materials, GARO also facilitates the path to climate neutrality, reduced impact on biodiversity, reduced water use, minimized pollution risks and inefficient land use.

GARO's strategy includes an action plan for sustainable products and services that spans the short, medium and long term and supports the company's overall corporate objectives and key results. Through a circular economy, a more sustainable and future-proof business can be achieved in line with the demands and expectations of our time.

RECYCLING LEVEL

INCREASED RECYCLING

LEVEL

WASTE DECREASE

LANDFILL

87%

+5%

WITH 2019 AS THE BASE YEAR

-21%

WITH 2019 AS THE BASE YEAR

-62%

WITH 2019 AS THE BASE YEAR

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Sustainability Report

GARO focuses on the circular economy in the following areas:

MATERIAL CHOICES

Nature provides us with raw materials for prod- ucts, directly or through subcontractors. GARO sets requirements and evaluates all material purchases. The Group's suppliers are mainly located in Europe, which limits the risk of non-compliance with the Group's Code of Conduct.

All suppliers with whom GARO enters into strategic partnerships are continually assessed to ensure that they meet the Group's quality and sustainability requirements. GARO works together with suppliers to develop and achieve a sustainable working method through cooperation and dialog.

Market requirements regarding the choice of mate- rials, certification and/or standards are rising at the same or faster pace than legislation requires, particular in the EU. One area is legislation and the use of conflict materials, such as tin, tungsten, tantalum and gold that are used in a variety of everyday products.

Efficient material choices: GARO strives to systematically minimize material use while maintaining resistance and quality and meeting increased safety and sustainability requirements.

Low carbon footprint: GARO prioritizes materials with low carbon footprints. This includes using local materials and materials produced with renewable energy.

Sustainability over the life cycle: GARO's target is to assess the environmental and social impact of the material throughout its life cycle, from raw material extraction to disposal. This helps to identify the most sustainable materials.

Sustainable materials: The choice of sustainable and long-lasting materials reduces the overall environmental impact of the product over time.

Recyclable and reusable materials: Materials that can be easily recycled or reused are prioritized.

COLLABORATION FOR THE CIRCULAR ECONOMY

GARO works with industry peers, universities, NGOs and authorities to promote circular economy principles and drive sustainability developments with a focus on electrification.

MATERIAL WASTE AND RECYCLING

GARO's objective is that no waste goes to landfill and the Group operates based on the EU waste hierarchy, which mainly involves minimizing and reusing resourc- es. When this is not possible, waste is recycled and, in a last case scenario, waste goes to landfill.

MODULARITY AND REPARABILITY

Modularity and reparability is an important area for GARO in the development of products and represents a significant strength for the overall sustainable business model. Through identified sustainability aspects, products are developed with a focus on their entire life cycle. These aspects include, for example, ensuring that GARO allows, as far as possible, for upgrades to be made without having to replace entire units. The fact that certain modules or components can be replaced separately promotes a circular economy that contributes to a lower environmental impact by reducing waste.

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Sustainability Report

KEY EVENTS IN 2023

• In 2023, efforts began on evaluating system suppliers to ensure that the use of materials for GARO's products is in line with set sustainability targets and the requirements of the EU taxonomy. This strategic action aims to strengthen internal understanding and the conditions for achieving a circular economy.
• During the year, the review of choices of materials contin- ued and needs were identified. This concerned prioritizing the materials that we use in our product portfolio to an even greater extent. These efforts will continue for many years and could have a direct impact on the choice of materials, suppliers, circular flows, packaging and waste management.
• New, more climate-smart packaging was gradually imple- mented during the year. This is applied to all new packag- ing and will also be applied to the existing range in 2024.
• During the year, GARO continued its dialog with compa- nies that offer cable and electronics recycling. The aim of this was to increase the conditions for recycling materials for new products.

• GARO has implemented a proactive strategy to diversify its EU-based subcontractors with a focus on sustainability standards. This includes careful consideration of supplier certifications and recyclability, reducing the risk of prob- lematic origins.

When GARO develops products, the objective is for them to offer high functionality and be energy- and cost- efficient while having the least possible environmental impact throughout their life cycle. The operations have

a life cycle perspective integrated in all product development projects and include the entire GARO value chain, from the choice of materials to reparation and recycling.

KEY FIGURES

	Goal	2023	2022	2021	2020	2019
Waste recycling rate (%)	Achieve a recycling level of	87	82	84	85	72
over 98% by 2025.

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Sustainability Report

Ethics and responsible business

GARO is to be an employer recommended by residents, employees, customers and investors

It is important for GARO to be part of the society it operates in. Conducting responsible and ethical business is fundamental for operations, the brand and its long-term success. ​

Maintaining consideration for employees who we see as the key to the Group's continued development and success is just as meaningful. By placing people in the focus and offering favorable personal development opportunities and safe workplaces,

GARO gains access to motivated employees who thrive at work. When combined with an open corporate culture that pro-

motes innovation and new thinking, the result is an engaged workforce that contributes to a dynamic and innovative organization that can more rapidly adapt to change and meet the challenges of the future. This forms the basis of positive and stable operational development.

EQUALITY

WOMEN/MEN IN SENIOR

POSITIONS

19% 81%

WOMEN MEN

EQUALITY

WOMEN/MEN TOTAL

41% 59%

WOMEN MEN

ACCIDENTS

AND INCIDENTS

24 58

ACCIDENTS INCIDENTS

KEY EVENTS IN 2023

• The continuous monitoring of employee well-being through engagement surveys is an important part of the develop- ment of the working environment within the Group. This has begun to be implemented Group-wide and will be fully integrated in 2024.
• More than 100 employees from the GARO Electrification business area have undergone training in rapid societal development and opportunities within the new sustainable energy system.
• Intensified sustainability work that ensures coordination,

management and monitoring of environmental and social aspects.

• GARO achieved a high ranking in the EcoVadis sustain- ability assessment, demonstrating its strong commitment to sustainability and responsibility. This ranking provides GARO with valuable insights for further improvements in its sustainability efforts. EcoVadis is a global leader in sustainability ratings, focusing on environmental concerns, fair labor practices, ethics and sustainable sourcing, and following international standards such as GRI, UN Global Compact and ISO 26000.

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KEY FIGURES

	Goal	2023	2022	2021	2020	2019
Number of employees		478	521	498	412	421
Number of serious workplace	Zero serious workplace accidents
and a downward trend for minor	24	26	18	21	15
accidents
workplace accidents.
Proportion of women in the	To strive for equality in all occupa-	41	42	-	-	-
organization (%)	tional groups in the company.
Proportion of women in senior	To strive for equality among senior	19	16	-	-	-
positions (%)*	executives.

• Senior positions includes members of Group Management and the Board of Directors.

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