Arjo : Read Arjo’s Sustainability Report 2023

Sustainability is key to Arjo's success

ARJO 2023 SUSTAINABILITY REPORT

CONTENT

ARJO'S SUSTAINABILITY WORK

Sustainability is key to Arjo's success	3
Better and more sustainable healthcare	4
2023 Highlights	5
Impacts and actions throughout Arjo's value chain	7
Material topics form a base for priorities	9
Arjo Sustainability Framework	10
SUSTAINABILITY NOTES
Sustainability governance	21
A sustainable offering	25
A responsible company	31
An attractive employer	34
Taxonomy	38
GRI Index	43
Auditor's Report	48

ARJO HÅLLBARHETSREDOVISNING 2023

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

SUSTAINABILITY IS KEY TO ARJO'S SUCCESS

"We want to be part of the transition to a more sustainable society and, together with our customers and partners, we can contribute to more sustainable healthcare."

Joacim Lindoff

President & CEO

Sustainability is key to Arjo's success and the company sees opportunities to further strengthen its competitiveness by offering more circular solutions and business models. As a global medtech company, Arjo plays an important role in society. The company's products and solutions contribute daily to increased patient safety, a better work environment for healthcare professionals and more efficient work processes in care envi- ronments.

With the Group's Sustainability Framework, Arjo works actively to reduce climate and environmental impact throughout the value chain, to ensure responsible and ethical business operations and to be an attractive and responsible employer.

This chapter describes Arjo's sustainability efforts in brief. For more in-depth descriptions of targets and activities, as well as the initiatives carried out during the year, see the full Sustainability Report starting on page 21.

Read more about Arjo's GRI reporting on page 43

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

Better and more sustainable healthcare

The global healthcare system is facing significant ­challenges with a growing and aging population, more lifestyle-­related complications and a higher number of people living with a combination of different health conditions. At the same time, staff shortages, an uncertain economic situation and a greater focus on the climate and environmental impact of healthcare are putting health and medical care under increasing pressure.

Arjo contributes to better and more sustainable healthcare­ that can meet the challenges of both today and tomorrow. This is achieved through the company's products and solutions that, on a daily basis, increase safety and the quality of life for patients, improve the work environment for healthcare professionals, add more resource-efficient work processes and reduce healthcare-­ related costs.

In addition, Arjo is committed to reducing its climate and environmental impact while offering circular solutions that help

customers­ achieve their sustainability targets.

Arjo thereby contributes to better and more sustainable health- care by creating value for patients, healthcare professionals, healthcare providers, shareholders and society as a whole.

Environment and climate

• Reduce the climate and environmental impact of the company's own operations and value chain
• Offer circular solutions and products that reduce healthcare's climate and environmental impact

Social values

• Increase safety and quality of life for patients
• Improve the work environment for healthcare professionals
• Ensure responsible and ethical business
• Be an attractive and responsible employer

Financial values

• Ensure profitable growth for Arjo
• Create long-term value for Arjo shareholders
• Create more efficient work processes and resource effi- ciency in healthcare
• Reduce costs in healthcare and thus for society as a whole

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ARJO'S SUSTAINABILITY WORK

SUSTAINABILITY NOTES

2023 Highlights

-11%	37%	91%
greenhouse gas emissions	share of	share of purchases of direct
from own­operations­ (scope	female managers	materials from suppliers­	who
1 & 2) since base year 2021	in senior positions	have signed Arjo's Business
		Partner Code of Conduct
AA	20.5
ranking according to	improved ESG risk rating
Morgan Stanley Capital	from Sustainalytics, top ten in
International (MSCI)	medical technology sector

Sustainability targets in incentive programs

To strengthen internal governance and mon- itoring, Arjo decided during the year that incentive programs for managers reporting directly to the the Management Team should include targets for reduced greenhouse gas emissions. Arjo's Group Management Team already has sustainability targets included in its variable remuneration.

3,400,000

single use medical consumables have

been reprocessed during the

year through Arjo ReNu

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

Rankings and collaboration

Improved ESG risk rating

In 2023, Arjo received an improved Environmental, Social and Governance (ESG) rating from analyst firm Sustainalytics. This was the result of a significant improvement in the ESG risk rating, meaning that Arjo ranks among the ten best performing companies in terms of listed, ranked medical technology companies.

Arjo works continuously to reduce its exposure to sustainability risks throughout the value chain. In 2023, the company conducted an internal program to develop and communicate its work with sustainability-related risks. Arjo's positions and policies in a number of ESG topics have been developed and are now available in a new ESG index on Arjo's website and in a document containing the company's positions regarding responsible and sustainable business operations.

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

VÄRDEKEDJA

Impacts and actions throughout Arjo's value chain

Arjo's sustainability efforts are based on an analysis of the impacts from the company's value chain. The Group works continuously to assess and manage the company's impact throughout the value chain.

To maximize positive impacts and minimize negative impacts, Arjo continuously analyzes­ how the company's operations impact various sustainability areas in the value chain. These efforts identify opportunities and risks related to sustainability aspects in the areas of environment and climate, social responsibility and corporate governance. The analysis forms the basis of Arjo's Sustainability Framework and is crucial in determining the company's sustainability priorities.

The illustration on the following page demonstrates the degree to which the Group can influence various sustainability aspects in the value chain. Arjo has a high degree of influence on the operations that the company controls, such as its own factories and offices. Impacts deriving from supplier's part of the value chain are outside of Arjo's direct control and therefore require close collaboration with suppliers and other business partners.

For a more detailed account of the impact and actions, see page 24

"We are continuously developing our collaboration with suppliers and other partners, which is crucial in transforming to a more sustainable value chain."

Jonas Cederhage

EVP Supply Chain and Product

­Development & Operations

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

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Research and development

Arjo's research and development process has a high degree of influence on various sustainability aspects and the company works continuously to develop existing and new products based on, for example, resource and energy efficiency, circularity and product safety.

Purchasing

With regards to purchasing, Arjo has a moderate degree of influence on various sustainability aspects since the company does not have direct control over the supply chain. Arjo collaborates with suppliers throughout the value chain and has launched a program to transition to a more sustainable supplier base.

Production

The company has a high degree of influence on its own production given that Arjo has full control over the operations. Arjo's efforts focus on the transition to renewable electricity, energy efficiency ­enhancements, waste reduction efforts and occupational health and safety.

Transportation

Arjo has a moderate degree of influence on transportation since this is carried out by external parties. Arjo works continuously to reduce the impact of transportation through in-depth collaborations with transport providers and continuous development of packaging as well as the transition to low-emission transport options.

Service, rental and sales

Within Arjo's own service, rental and sales operations, the company has a high degree of influence on various aspects of sustainability. These primarily involve increasing the use of renewable electricity in buildings, reducing emissions from company vehicles and focusing on health and safety in the workplace. Arjo ReNu enables the reuse of medical consumables, which reduces the climate impact from healthcare.

Usage

In the usage phase, Arjo has a low degree of influence on various sustainability aspects, but by offering high quality products with long life cycles, its impact can be limited. Arjo works continuously to improve the resource and energy efficiency of its products.

End-of-life

Arjo has a low degree of influence on sustainability aspects in end-of-lifecycle treatment since this is carried out by external parties. Both the preparation of product dismantling instructions and the improvement of possibilities to recycle material from the company's products are currently being evaluated.

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ARJO'S SUSTAINABILITY WORK	SUSTAINABILITY NOTES

MATERIALITY ASSESSMENT

Material topics ­form a base for priorities

Regular materiality assessments of Arjo's impact and an ongoing dialogue with stakeholders in the value chain ensure that the Group's efforts are targeted to the areas where they have the greatest effect.

The materiality assessment is carried out by Arjo's sustainability function, in close collaboration with other internal functions and in dialogue with the Management Team and Board of Directors. The relevance of various sustainability aspects are assessed and matters that are material for the company's sustainability efforts are identified through interviews and surveys with internal and external stakeholders.

The 2023 assessment found that those topics identified with the latest materiality assessment performed in 2022 were unchanged.

During the first half of 2024, Arjo will conduct a double materiality assessment in accordance with EU's new Corporate Sustainability ­Reporting Directive (CSRD). This will pave the way for beginning to report on sustainability in accordance with the CSRD.

Arjo's material topics:

• Product quality and safety
• Compliance, ethics and anti-corruption
• Occupational health and safety
• Circularity in product design
• Purchasing/supplier base
• Greenhouse gas emissions and energy efficiency
• Human capital and fair labor conditions

For more detailed information on Arjo's material topics, see page 22

"By mapping the needs of

our stakeholders and analyzing our impact in the value chain, we can identify our most material topics and ensure that we target our ­efforts in an efficient manner."

Marion Gullstrand

EVP HR & Sustainability

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ARJO'S SUSTAINABILITY WORK

SUSTAINABILITY NOTES

Arjo Sustainability Framework

Contributing to more sustainable healthcare is at the core of Arjo's business model. To achieve this, a framework has been developed with three focus areas. These focus areas are based on the results of regular materiality ­assessments and analysis of the company's positive and negative impacts throughout the value chain. The framework forms the foundation of Arjo's sustainability efforts and is based on the three pillars of environ- ment, social responsibility and governance (ESG). The work is driven and developed by the company's own

1. sustainable offering

Arjo works actively to reduce emissions from its own operations and from the value chain. The company's product development is based on the principles of EcoDesign and Arjo strives to reduce resource consump- tion and offer customers more circular solutions.

Read more on page 11

1. responsible company

Arjo's relationships with various stakeholders are based on a high level of business ethics and com- pliance. The company sets the same high demands for its own operations as for its business partners, with zero tolerance for corruption, fraud and bribery.

Read more on page 14

An attractive employer

Arjo promotes a culture of diversity, equity and inclusion and the continual development of employees. Health and safety in the workplace is of utmost importance to Arjo and the company follows international frameworks and guidelines for human rights and fair labor conditions.

Read more on page 17

ambitions­ as well as increased demands from customers and other stakeholders.

Clear governance ensures results

Arjo's sustainability efforts are based on directives, policies and clear governance involving all levels in the company

- a systematic work process that enables the implementation of approved activities.

Read more about the governance of Arjo's sustainability efforts on page 21.

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