Sdiptech : The most common ESG questions we get

To facilitate investors with their analyzes of our sustainability opportunities and risks, we have listed the most common ESG questions we receive, based on among others Carnegie's and Spiltan's questionnaire to issuers.

Environmental issues:

Is Sdiptech planning for any climate-related investments?

Our business model is based on acquiring companies that contribute to more sustainable, efficient and safe societies. Our responsibility as owners is to develop these companies so that their products and services can reach more customers and markets. Climate-related investments, both acquisitions and business development, are thus the core of our business. Sdiptech has for many years worked with sustainable acquisition. Going forward, we are working just as much with internal issues by developing and helping our existing companies to make even more long-term sustainable decisions. As Sdiptech consists of roughly 30 business units with different operations, challenges and opportunities, there are not one solution that fits all, it will be different > 30 strategies based on each of the business unit's biggest impact and opportunities to lower their emission. Some examples of activities are:

• Shift to renewable energy
• Convert to an electric vehicle fleet
• Check the traceability of materials (the proportion of recycled materials and the possibility of tracing purchases from raw material) with existing suppliers
• Choose the material with the least climate impact
• Map the proportion of waste that arises in the business and measure per waste category, for example in kg of material that becomes waste and CO2e footprint for each category
• Objectives for minimizing waste and consider an action plan for goal fulfillment
• Choose fossil-free transport
• Map how the premises are equipped to enable efficient waste management
• Buy recycled material

What are Sdiptech's main climate-related opportunities?

As consumer behaviors are changing, politicians adapt with updated laws and regulations. These are implemented in our infrastructure, which creates a constant flow of technical improvements that are developed for our infrastructure. Since all of our companies contribute to more sustainable, efficient and safe societies, we believe that we are at the forefront and have an advantage in the transition to more sustainable societies. Read more about this in our TCFD summery on page. 47-49 in ourSustainability report.

What are Sdiptech's main climate-related risks?

Our diversified structure with over 30 companies in different industries and geographic markets gives us a very good risk spread, creating the conditions for stability. Sdiptech has no operations that could entail any significant physical or transition risks for the whole Group. We rather see opportunities with the shift as the companies we own in many cases already are at the forefront in terms of sustainability. In addition, we believe that the transition towards more sustainable societies will result in more new companies with new technologies within our area, in which we can invest in. However, there are a couple of Sdiptech's approximately 30 business units that are exposed to both physical and transition risks. With regard to physical risks, for example, some of Sdiptech's companies that are exposed to winter related road conditions, such as Hilltip and Thors Trading, may be affected if the average temperature should increase significantly. On the other hand, there are other companies within the Group that benefit from milder temperatures. When it comes to transition risks, laws, policies, increased reporting requirements and changed customer behavior can affect some of our business units. But again, Sdiptech has a number of companies that would benefit from the same events. Read more about this in our TCFD summery on page. 47-49 in ourSustainability report.

Is Sdiptech's business based on any asset or resource of which there is a shortage of?

On the contrary, several of Sdiptech's operations work with offers that can help more people manage important assets and resources, such as water and energy, through various water treatment products and energy optimization solutions.

Social issues:

Has Sdiptech historically had problems with work environment accidents?

Safety is deeply integrated into Sdiptech's core business, where several of our companies contribute to protecting employees and promoting a safe and secure work environment. Some examples of Sdiptech's business units that in various ways contribute to creating safer work environments are:

• Alerter Group works with fire alarms for the hearing impaired and deaf.
• Optyma Security Solutions sells security systems to, among others, hospitals and railway stations.
• Multitech Site Services sets up security stations at construction sites.
• Medicvent's technology improves the working environment in hospitals by maximizing the uptake of unhealthy leaking gases.

We try to live as we learn where safety for Sdiptech's employees comes first. There are therefore clear safety routines regarding how employees should protect themselves and stay safe at each business unit.

Does Sdiptechs engage in any community involvement, in addition to those that are directly linked to the business?

During 2020, Sdiptech and our business units invested approximately EUR 80,000 in local social engagement and sponsorship of various sustainability initiatives. For example, we have been sponsoring the think tankGlobal Utmaning, an independent organization that works for socially, economically and climatically sustainable development, for the last two years. We are primarily be involved in the organization's Sustainable Cities program, which focuses on the cities' increasingly important role as a driving force towards a globally sustainable development. #Urbangirlsmovement is one of several important initiatives within the program, with the aim of prioritizing young women's needs in urban development and thereby be able to create more inclusive and sustainable cities.

How does Sdiptech work with circular economy - in what way is purchases and wasted handled?

Sdiptech AB, as well as all our business units, are recycling products to different extend. This is being measured in Sdiptech ESG reporting, with initiatives to increase the amount of circularity and waste. Sdiptech is encouraging all our business units to follow the waste hierarchy developed by the EU:

1.Waste prevention: Lowering the amount of waste produced, e.g. by consuming as little as possible and produce goods in the most resource efficient way. Ask yourself if a purchase is really needed? Can you rent instead of buying something new? Are there alternatives that are more environmentally friendly than others?
2.Reuse: Use materials repeatedly as much as possible. Sell or give away things that you do not need anymore but can be used again.
3.Recycle: If you can not reuse the product, then recycle the material.
4.Energy from waste: If you can not reuse or recycle the material, recover energy from the waste created.
5.Disposal: The material simply becomes trash. This is the last and least desired alternative. Avoid this as much as possible.

Does Sdiptech have goals, policies or a code of conduct for suppliers?

Approximately 25 percent of our business units has a supplier Code of Conduct, in addition to that, we encourage our business units to send Sdiptech's Code of Conduct to their suppliers. As a minimum requirement, we expect customers and suppliers to have knowledge of and comply with current legislation. We have carried out a supplier mapping during 2021.

Ownership issues:

Does Sdiptech have an external whistleblower function?

Yes, see here.

Are there any ongoing or historical incidents regarding corruption, cartels or other unethical business activities? What preventive measures are taken?

No, there have been no such incidents.

We have an Anti-Corruption Policy, see here. Where does Sdiptech pay tax?

We pay tax in the countries where our business units operate, i.e. Sweden, Norway, Finland, the United Kingdom, Netherlands and Croatia.

Are there independent members of the board?

Yes.

Does Sdiptech conduct any related party transactions?

No.

Is compensation to the CEO and the management team in line with the rest of the industry?

Yes, benchmark analyzes have been carried out.

What is the gender composition at all levels?

At present, the gender distribution looks like below. However, our goal is to have an even gender distribution in the board, management and in leading positions between as of 2030.

Board of Directors:
• Status 2020: 40/60 women/men
• Goal 2030: Retain a gender distribution of 40/60, which means at least 40 percent of the underrepresented gender

Group management:
• Status: 0/100 women/men
• Goal 2030: Achieve a gender distribution of 40/60, which means at least 40 percent of the underrepresented gender

Leading positions:
• Status 2020: 31/69 women/men
• Goal 2030: Achieve a gender distribution of 40/60, which means at least 40 percent of the underrepresented gender

Is the sustainability manager in the management team? If not, who is reporting to?

Sdiptech's sustainability manager reports to the company's CFO. However, we have a sustainability council where three of the five participants are in the management team (CEO, CFO and Head of Water & Energy).

What policies and codes does Sdiptech have?

• Code of Conduct (including Gender Equality Policy, Whistleblowing & Anti-Corruption Policy): See here.
• Sustainability policy
• Investment policy for sustainable companies
• Corporate Governance policy
• Risk Management policy
• HR policy
• Information security policy
• Insider policy

Overall issues:

What are Sdiptech's main contributions to the UN Sustainability Goals (SDGs)?

Infrastructure has an evident role in several of the UN's sustainability goals and is a unifying issue across political boundaries. Sdiptech contributes to 13 of the 17 goals, as well as 38 of 169 targets. Please find a detailed summery of Sdiptech's contribution to the SDGs on page. 36-43 in ourSustainability report.

Is Sdiptech involved in the production of controversial goods or services, such as coal, weapons, alcohol, tobacco or pornography?

No, Sdiptech only invests in companies that contribute to creating more sustainable, efficient and safe societies. We have a clear acquisition strategy with sustainability criteria that every company we invest in goes through. See more information in Sdiptech's handbook for responsible investments.

What is the biggest sustainability-related challenges in your industry?

Increase the number of women in an otherwise male-dominated entrepreneurial technology industry. We offer equal opportunities for employment for all, and we work to counteract any form of discrimination in the workplace or in the treatment of employees when it comes to wage setting and career development. However, it is a challenge for the technology industry in general to attract more women and create a more even gender composition, especially in the entrepreneur-led technology companies that we acquire.

We want everyone to feel welcome and we want to contribute to more women becoming interested in technology and community building at an early age. One way for us to do that is by supporting the organizationGlobal Utmaning. Among other things, they work with the initiative #Urbangirlsmovement, which aims to prioritize young women's views on urban development so that cities become inclusive and sustainable. In order for us to be able to find new target groups and diversify our candidates for recruitment, we also work for more diversity and a more even gender distribution by:
▪ Map the current situation and set ambitious diversity and gender equality goals.
▪ Review and analyze our external communication, including our recruitment material, to create a more inclusive visual and written tonality.
▪ Broaden our networks and open recruitment processes through new channels and ways to screen candidates.
▪ Ongoing review our forms of employment from a perspective that can attract more women, such as parental pay, flexible working hours, work remote and no qualifying period.
▪ Include both women and men in the recruitment group.
▪ Work with succession planning.
▪ Work with education.

Where is your company in relation to industry colleagues when it comes to sustainability work?

We have a firm belief that sustainable innovations drive long-term profitability and growth, which is exactly what we are looking for in the companies we acquire. We have a clear investment focus on products and services that contribute to more sustainable, efficient and safe societies, as we believe that it minimizes risk and creates opportunities to long-term growth. From that perspective, we consider ourselves to be at the forefront of the area.

Has Sdiptech signed the UN Global Compact or Science Based Targets?

Yes. Sdiptech has signed and follow the ten principles of the UN Global Compact. In addition, Sdiptech is evaluating the possibilities to set Science Based Targets.

Does Sdiptech report to CDP or other relevant initiatives in sustainability issues?

Yes, Global Compact and Nasdaq's ESG transparency Partner.

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