CLS : DNV Assurance Statement – CLS Holdings Annual Report and Accounts 2022

Independent Limited Assurance Report

to the Directors of CLS Holdings plc

CLS Holdings plc ("CLS") commissioned DNV Business Assurance Services UK Limited ("DNV", "us" or "we") to conduct a limited assurance engagement over Selected Information presented in their Annual Report and Accounts 2022 (the "Report") for the reporting year ended 31 December 2022.

Our Conclusion: Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Selected Information is not fairly stated and has not been prepared, in all material respects, in accordance with the Criteria.

This conclusion relates only to the Selected Information, and is to be read in the context of this Independent Limited Assurance Report, in particular the inherent limitations explained overleaf.

Our observations and areas for improvement will be raised in a separate report to the Management of CLS. Selected observations are provided below. These observations do not affect our conclusion set out above.

• The data for all reported KPIs were manually consolidated from spreadsheet-driven sources, which increases the risk of human errors. We understand that CLS plans to implement a consolidated reporting system over the next year to streamline and improve the consistency of the data collection processes across its portfolio.
• The waste calculation for Germany and France apply the UK density per bin type as a proxy. We noted that the density calculation did not adjust for the quantity of bins, resulting in a material overstatement that CLS corrected prior to the report publication. We recommend a formal review and update of all key assumptions annually to ensure their relevance for the period and mitigation of calculation errors.
• We observed that for Scope 3 reporting, CLS applied Quantis factors to the spend-based method for GHG emissions from new construction and other capital goods (tCO2e) and GHG emissions from purchased goods and services (tCO2e). We recommend that CLS engages with suppliers to improve the quality of primary data for Scope 3 reporting. CLS should consider collecting supplier-specific data where possible and fill in any gaps by using secondary sources to improve the completeness and reliability of reporting.
• CLS's reported water usage included estimations based on a water intensity factor. The calculation incorrectly multiplied the Net Lettable Area by the number of meters installed at the sites, resulting in an understatement. Prior to publication, CLS amended the calculation to reflect the number of sites instead. We recommend that CLS installs smart meters and automates processes to reduce manual estimations and improve reporting accuracy.

Selected information

The scope and boundary of our work is restricted to the 2022 sustainability performance measures included within the Report (the "Selected Information") as listed below:

• Scope 1 GHG emissions (tCO2e)
• Scope 2 GHG emissions - location and market-based (tCO2e)
• Total Group Scope 1 & 2 GHG emissions - location-based (tCO2e)
• Total Scope 1 & 2 GHG emissions intensity (kgCO2e/ m2/year)
• Total Group energy consumption in landlord spaces (kWh)
• Scope 3 GHG emissions - GHG emissions from new construction and other capital goods (tCO2e), GHG emissions from purchased goods and services (tCO2e), GHG emissions from T&D and WTT losses (tCO2e), GHG emissions from water and waste treatment (tCO2e), GHG emissions from business travel (tCO2e), GHG emissions from employee commuting, including homeworking (tCO2e) and GHG emissions from sub-metered utilities and occupier-controlled utilities (tCO2e)
• Water - Total landlord-obtained water (m3)
• Waste - Total hazardous waste (tonnes), Total non-hazardous waste (tonnes), Total waste collected (tonnes), Total waste recycled (tonnes), Total waste incinerated with energy recovery (tonnes), Proportion of waste recycled (%) & Proportion of waste incinerated with energy recovery (%)
• Progress against NZC Pathway target - Total scope 1 & 2 emissions (%)

To assess the Selected Information, which includes an assessment of the risk of material misstatement in the Report, we have used the CLS "Sustainability Metrics: Scope, Boundaries & Methodology" (the "Criteria"), which can be found on pages 234 - 237 of the Report.

We have not performed any work, and do not express any conclusion, on any other information that may be published in the Report or on the CLS website for the current reporting period or for previous periods.

Our competence, independence and quality control

DNV established policies and procedures are designed to ensure that DNV, its personnel and, where applicable, others are subject to independence requirements (including personnel of other entities of DNV) and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability assurance professionals. Our multi- disciplinary team consisted of professionals with a combination of environmental and sustainability assurance experience.

Standard and level of assurance

We performed a limited assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000 revised - 'Assurance Engagements other than Audits and Reviews of Historical Financial Information' (revised), issued by the International Auditing and Assurance Standards Board. This standard requires that we comply with ethical requirements and plan and perform the assurance engagement to obtain limited assurance.

DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2015 - Conformity Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement; and the level of assurance obtained is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. We planned and performed our work to obtain the evidence we considered sufficient to provide a basis for our opinion, so that the risk of this conclusion being in error is reduced but not reduced to very low.

Basis of our conclusion

We are required to plan and perform our work in order to consider the risk of material misstatement of the Selected Information; our work included, but was not restricted to:

• Conducting interviews with CLS management to obtain an understanding of the key processes, systems and controls in place to generate, aggregate and report the Selected Information;
• A site visit to Düsseldorf, Germany to review the processes and systems for preparing site level data consolidated centrally. DNV were free to choose the site on the basis of materiality in the overall portfolio;
• Performing limited substantive testing on a selective basis of the Selected Information to check that data had been appropriately measured, recorded, collated and reported;
• Reviewing that the evidence, measurements and their scope provided to us by CLS for the Selected Information is prepared in line with the Criteria;
• Assessing the appropriateness of the Criteria for the Selected Information; and
• Reading the Report and narrative accompanying the Selected Information within it with regard to the Criteria.

DNV Business Assurance Services UK Limited

London, UK

8 March 2023

Inherent limitations

All assurance engagements are subject to inherent limitations as selective testing (sampling) may not detect errors, fraud or other irregularities. Non-financial data may be subject to greater inherent uncertainty than financial data, given the nature and methods used for calculating, estimating and determining such data. The selection of different, but acceptable, measurement techniques may result in different quantifications between different entities. Our assurance relies on the premise that the data and information provided to us by CLS have been provided in good faith. DNV expressly disclaims any liability or co- responsibility for any decision a person or an entity may make based on this Independent Limited Assurance Report.

Responsibilities of the

Directors of CLS and DNV

The Directors of CLS have sole responsibility for:

• Preparing and presenting the Selected information in accordance with the Criteria;
• Designing, implementing and maintaining effective internal controls over the information and data, resulting in the preparation of the Selected Information that is free from material misstatements;
• Measuring and reporting the Selected Information based on their established Criteria; and
• Contents and statements contained within the Report and the Criteria.

Our responsibility is to plan and perform our work to obtain limited assurance about whether the Selected Information has been prepared in accordance with the Criteria and to report to CLS in the form of an independent limited assurance conclusion, based on the work performed and the evidence obtained. We have not been responsible for the preparation of the Report.

DNV Business Assurance

DNV Business Assurance Services UK Limited is part of DNV - Business Assurance, a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance. www.dnv.co.uk/BetterAssurance