Hexagon Composites : Sustainability report 2023

Sustainability report

2023

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Driving Energy

Transformation

We are the world's leading manufacturer of Type 4 composite cylinders and fuel systems for alternative fuels. Our solutions enable global OEMs, fleet owners and distributors to displace diesel and make the switch to clean energy.

With over 20 years of experience in the industry, our solutions are in use across the world - as fuel systems on commercial vehicles, in gas transportation modules

to provide areas with access to clean energy, and in homes, as its own energy source.

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3 

Contents
Sustainability	4		Appendix	53
	About this report	5		Methodology	53
	ESG governance	6		Stakeholder engagement	54
	Sustainability in Hexagon	8		Hexagon Composites data	56
	Our contribution through our solutions	14		Hexagon Purus data	57
	Minimizing our operational environmental footprint	19		Glossary	58
	Product safety and compliance	30		Financial calendar	60
	Occupational health & safety	33
	Our people	37
	Governance	44
	Accountant's assurance report	50

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4 Sustainability  |  About this report

CONTENTS | SUSTAINABILITY APPENDIX

About this report

This Sustainability report provides

a performance update on Hexagon's 2023 development, targets and initiatives within Environmental, Social and Governance (ESG).

This report has been prepared in accordance with the Global Reporting Initative GRI 2021 Universal standards. Our overview of disclosures according to GRI, including references to sections where GRI indicators are reported upon can be found www.hexagongroup.com. The communication of progress for the United Nations Global Compact will be done through their digital platform and made public on the UN Global Compact website by 31 July 2024.

When we reference Hexagon in this report, unless otherwise stated, we are referencing our portfolio of businesses; Hexagon Agility, Hexagon Ragasco, Hexagon Digital Wave and Hexagon Purus .

The Norwegian Code of Practice for Corporate Governance

The Company shall comply with the Code of Practice established by the Norwegian Corporate Governance Board (NUES). The latest version of the Code of Practice is available at www.nues.no. Further information on corporate governance can be found in the Board of Director's corporate governance report on our website.

Report boundaries

The report boundaries are, in general, drawn around companies under the operational control of Hexagon Composites ASA. Hexagon Purus was deconsolidated as of 29 June 2023 when Hexagon Composites' ownership stake changed from 68% to 38%. Hexagon Purus is included in the report for the period from

1 January 2023 until 29 June 2023. For the period from 1 July 2023 until 31 December 2023 and full year 2023, please refer to Hexagon Purus' Sustainability report available on www.hexagonpurus.com.

100%

38%

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5 Sustainability  |  ESG governance

ESG governance

We are committed to our purpose of driving energy transformation - enabling a positive impact on society, people, and the planet is the reason we come to work every day. In its first year as an integral part of our organization, Hexagon's ESG Team made significant progress in further establishing and driving our ESG initiatives in 2023. The leaders of Hexagon's Environmental, Social and Governance efforts established concrete action plans and targets for the work and priorities within their areas including milestones throughout the year. These plans and targets were also linked to Hexagon's short term incentive programs for executives and business area management teams.

HEXAGON'S ESG ORGANIZATION 2024

BOARD OF DIRECTORS

CEO & GROUP EXECUTIVE TEAM

ENVIRONMENT		SOCIAL		GOVERNANCE		ESG REPORTING AND RATINGS
SVP Sustainability		Sr. Director People & Culture		SVP Legal & Government Affairs		VP IR & ESG

DEDICATED BA RESOURCES AND CROSS FUNCTIONAL TEAMS

CONTENTS | SUSTAINABILITY APPENDIX

Hexagon's SVP Sustainability leads our sustainability ("Environment") strategy, conceptualizing and developing the vision and strategy to drive the company's CO2 reduction efforts, including Hexagon's Science Based Targets, as well as the roadmaps for implementing and executing these initiatives.

Hexagon's Senior Director of People & Culture and "Social" Officer, leads our social criteria strategy, setting targets and goals to drive the company's relationships with employees, suppli- ers, customers, and the communities where we operate.

Hexagon's SVP Legal & Government Affairs and "Governance" Officer, ensures that we as a company comply with outside regulatory and legal requirements as well as internal policies and bylaws, working with management and staff to identify and manage regulatory risk.

These are all highly cross functional leadership roles that partner with the business areas to improve Hexagon's ESG profile and drive

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6 Sustainability  |  ESG governance

CONTENTS | SUSTAINABILITY APPENDIX

innovative solutions that support our material topics and net zero commitment.

Each business area in the Hexagon Group has dedicated resources and cross functional teams which support the development of the relevant strategies and targets, and implement them in local operations.

All three E, S, and G leaders coordinate with our ESG reporting efforts, led by our VP Investor Relations & ESG, to secure the necessary transparency and support improvements in our external ESG reporting.

The key responsibilities of the ESG organization are to:

• Evaluate and provide guidance on Hexagon's ESG strategy, Group policies, and performance
• Assess and monitor annual ESG targets and results
• Discuss and evaluate key ESG strategic deci- sions and directions

• Discuss and assess the impact of current and future ESG trends relevant to the Group
• Evaluate and further develop the Group's approach to ESG risk assessment and trans- parency.

Hexagon's ESG organization is supported by the Group executive team (GET) and the CEO. The highest decision-making responsibility for sustainability is with the company's board of directors and is included in the board's annual strategy process as well as the quarterly reporting to the board's audit committee.

Sustainability topics and stakeholder engagement are reviewed by the GET on a monthly basis and is a fixed topic on the quarterly agenda for Hexagon's audit committee. The development of annual ESG performance indicators as well as tracking of progress towards key targets, is also reviewed regularly by the audit committee. Hexagon's sustainability report is reviewed and approved as part of the annual report by the board of directors.

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7 Sustainability  |  Sustainability in Hexagon

Sustainability in Hexagon

CONTENTS | SUSTAINABILITY APPENDIX

Since its establishment in 2000‌1, Hexagon has been contributing to creating a better future for people and the planet by enabling the transition to clean energy solutions within transportation, infrastructure and leisure. Sustainability for Hexagon means generating positive social and environmental impact and business value through our products and solutions, while at the same time ensuring that sustainability considerations are embedded throughout our products, operations and ways of working.

OUR PEOPLE

1 150Employees‌2

OUR CONTRIBUTION

1Hexagon500Group's solutions have000avoided

metric tons of CO2 equivalent emissions‌3

1. Referring to the establishment of Hexagon Composites ASA
2. Head count
3. The Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET) tool from the Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET®) model has been used for estimating emission reductions.

20%Diversity

women

Committed to reach net-zero by

2050

Avoided 6x more GHG emissions than generated in our operations

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8 Sustainability  |  Sustainability in Hexagon

Material topics

Hexagon provides alternative fuel solutions to commercial vehicles, gas distribution companies and people across the world. Our solutions enable our customers to make the switch to cleaner energy solutions and are key to accelerating the transition towards a cleaner and more low-carbon global society.

Development of material topics

Hexagon's material topics have been identified based on stakeholder expectations, significant impacts, and internal strategic priorities throughout our value chain, first identified through stakeholder dialogue in 2019. Our key stakeholder groups include employees, customers, investors, suppliers, partners and NGO's. See stakeholder engagement chapterfor more details.

The input from stakeholders was prioritized and taken into our strategy and risk planning by Group management, which also evaluated our actual and potential positive and negative impacts on people, planet and society. In 2021, we surveyed our stakeholders, which reconfirmed

CONTENTS | SUSTAINABILITY APPENDIX

our material topics and identified "Diversity and inclusion" and "Minimizing operational environmental footprint" as key issues with a strong increase in relevance for both internal and external stakeholders.

Our material topics have remained unchanged since 2021.

Double-materiality assessment

In the past year, Hexagon has focused on improving performance indicators and ambitions on our material topics, whilst initiating the work on its double materiality assessment. The double materiality assessment will form the basis for our 2024 report.

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9

Sustainability  |  Sustainability in Hexagon

CONTENTS | SUSTAINABILITY APPENDIX

	MATERIAL TOPICS 2023	DESCRIPTION
Environment	Our contribution through our solutions	Hexagon has a positive impact by enabling access to alternative fuel solutions that contribute to reduced impact on the climate.
	Greenhouse gas emissions	We recognize the importance of reducing our own carbon footprint to reach our net-zero commitment by 2050.
	Material waste and circularity	It is essential for us to understand how our own consumption affects the planet and what we can do to minimize our impact.
Social	Product safety	Hexagon's solutions transport and store various highly pressurized gases. If safety is not managed well, it has the potential to
negatively impact people and society.
	Occupational health and safety	Hexagon's manufacturing involves complex machinery and industrial processes, rapidly moving equipment, heat, caustic chemicals,
	and pressurized gas which can cause potential negative impact on people and society if not managed well.
	Diversity and inclusion	Hexagon believes a diverse and inclusive working environment will have a positive impact on the business. The lack of diversity, equal
	opportunities or the presence of biases can lead to potential negative economic and social impacts to our people and our regions.
	Workforce development	With 1 150 employees operating in a fast-paced industry, we recognize the potential positive impacts of engaging and investing in our
	employees' development.
Governance	Business ethics, anti-corruption	We hold ourselves accountable for all our interactions with customers, suppliers and owners, our people and the communities in
and responsible procurement	which we operate. Hexagon is committed to conduct its business fairly, honestly and openly with no tolerance for corruption.

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10 Sustainability  |  Sustainability in Hexagon

CONTENTS | SUSTAINABILITY APPENDIX

Measuring our results

PRIORITIES/MATERIAL TOPICS	OBJECTIVES	MEASURED BY	2022	2023‌1	STATUS 2023
	Increase percentage of women to 25%	Increased percentage	19%‌2	20%
Responsible employer
Keep our employees safe	Reduce number of work-related injuries	25	24
	Create an engaging and attractive workplace	Great Place to Work Trust Index	75%‌2	77%
Product safety	Zero incidents related to product safety	Incidents reported to us by customers	0	4
Our contribution through	Enable our customers to make the switch	Avoided emissions from solutions put into	1 350 690	1 500 000
our solutions	to alternative fuel alternatives	operation on an annual basis
Our greenhouse	Reduce our operational footprint	Metric tons of CO2 equivalent	228 362	255 365
gas emissions
Governance	Raise awareness of business ethics	Number of employees trained	Not applicable	48%
Waste and circularity	Completed waste stream mapping for sites	Number of sites with mappings	Not applicable	4/4
in the US and Germany

  Target met in 2023      Target not met for 2023

1. Excludes data from Hexagon Purus
2. Includes data from Hexagon Purus

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