Executive summary

SG Armaturen AS (SG) develops and sells lighting solutions and installation materials to the European market. As a company subject to the Transparency Act, SG is committed to respecting fundamental human rights and ensuring decent working conditions, both in its own operations and in the supply chain.

SG has established internal guidelines for ethics, health, safety and the environment, as well as data discipline, and all employees receive training in these. There is zero tolerance for discrimination, harassment and violence in the workplace. SG facilitates freedom of association and engages in dialogue with employee representatives.

SG has identified risks related to labour conditions in the supply chain, particularly for production in China. These include the risk of low wages, long working hours, lack of safety and limited freedom of association. SG has therefore established a structured process for due diligence based on OECD guidelines and has distributed its Code of Conduct to all key suppliers.

As a further development of this work, SG carried out a double materiality analysis over the past year in preparation for reporting under CSRD. The analysis has been used to prioritise focus areas, and SG has used selected indicators from the World Benchmarking Alliance in its follow-up of suppliers. The work includes monitoring wages, safety and labour rights for workers in the value chain.

SG updates this report annually and makes it publicly available on the company's website.

Introduction

SG's core business is to design, manufacture, market and sell lighting solutions and installation materials for private and professional use. SG has the following operational structure: Product development and design in Norway and Denmark, factories in China and Denmark and distribution units (central warehouses) in Norway and Belgium. Sales operations are established in Norway, Sweden, Denmark, Finland, Germany, Austria, Switzerland, Belgium, the Netherlands and France.

The purpose of the Transparency Act is to promote companies' respect for human rights and decent working conditions, and to ensure public access to information. The Act stipulates that companies must carry out due diligence and investigate not only their own operations, but also their supply chain and business partners to identify potential risks. SG Armaturen AS is subject to the Transparency Act.

SG takes responsibility for social conditions and is committed to maintaining a safe and inclusive workplace. We believe in long-term relationships with employees and business partners and ethical business practices that safeguard the welfare of everyone involved in the production of our products.

Manufacturing in China and distribution in the European market entails risks related to basic human rights and decent working conditions. SG has identified the following risks:

Labour rights: Transport workers face risks such as irregular working hours, inadequate wages and lack of safety. Weak labour rights can lead to poor working conditions, increased stress and health risks. In factories in China, there is a risk of labour rights violations such as forced labour, low wages, long working hours and poor working conditions. Inadequate law enforcement and bans on trade unions exacerbate the situation, leading to health and safety risks for workers.

Health and safety risks: Manufacturing can pose health and safety risks to workers, and this is especially true for industries where hazardous materials or machinery are involved. Workers may lack adequate protective equipment or training, increasing the risk of accidents.

Environmental impact: The production of goods can lead to environmental pollution, which can jeopardise the community's right to a healthy environment. This is a particular concern in industries such as electronics, where the production and disposal processes can generate harmful waste.

Lack of freedom of association: In some regions, workers may face restrictions on their right to organise, form trade unions and bargain collectively. This limits their ability to advocate for better working conditions.

Exploitation of migrant workers: There may be risks associated with the exploitation of migrant workers who may be more vulnerable to abuse due to a lack of knowledge of the local language, laws or rights.

Own business

SG is established and developed close to Nordic culture and a commitment to protecting human and labour rights in all its operations. We respect individuals and emphasise openness, fairness and social responsibility. These values have created a strong ethical foundation for SG, which characterises our working environment and business practices.

In accordance with Norwegian labour legislation and international labour standards, we ensure fair wages, acceptable working hours and a safe and healthy working environment for our employees. We have zero tolerance for all forms of discrimination, harassment or violence in the workplace.

We also respect the right of our workers to form and join trade unions and we are committed to promoting good dialogue with workers and their representatives. We recognise that open communication and the opportunity for collective bargaining are essential to maintaining good working conditions and an efficient and good working environment.

SG has clear guidelines for ethics, HSE and data discipline that all employees must follow. This policy governs our business and demonstrates our commitment to the welfare of our employees, ethical business behaviour and responsible data handling.

We are committed to a good working environment, and we have working environment committees (AMU) in Norway and co-operation committees (SU) in Denmark. Managers and employees work together in these committees to address health and safety issues. The committees meet regularly, discuss issues relating to the working environment and come up with solutions or proposals. All employees can provide input and everyone receives minutes after the meetings. In other countries we do not have formal committees, but managers are encouraged to maintain a close dialogue with employees and ensure a good working environment.

The value chain

SG's supply chain essentially consists of the development, production, distribution and sale of lighting solutions. We have suppliers who provide everything from steel, aluminium, plastic, packaging and electronic components to logistics companies that transport our products.

SG's purchasing policy is based on our internal ethical guidelines. This includes acting ethically, preserving confidentiality, ensuring a safe working environment, promoting diversity, rejecting any form of corruption and promoting sustainable and environmentally friendly business practices.

Historically, physical visits and on-site inspections have been crucial to SG's supplier follow-up, especially for production in China. Not only do these visits enable SG to gather direct insight into supplier operations, but they also strengthen our professional ties. Owning our own factories in Denmark and China gives us a great advantage, allowing our local managers to perform direct follow-up with suppliers on an ongoing basis.

In recent years, SG has distributed its Code of Conduct to all major suppliers, establishing clear expectations for ethical business practices. SG also ensures that suppliers formally accept and commit to the Code of Conduct by providing a signed copy of the Code. This helps to reinforce the principles of the Code and emphasise the importance SG places on maintaining ethical practices in the supply chain.

Over the past year, we have not uncovered any serious shortcomings or breaches of our Code of Conduct. This can be attributed to our regular visits to key suppliers where we ensure that ethical business practices are maintained. Through our ownership of the factory in China, we have the opportunity for continuous follow-up, which further contributes to maintaining our ethical standards.

SG is committed to maintaining transparency in its operations and updates its report on the Transparency Act every year. This report will be easily accessible to all interested parties on the company's website.

Our Sustainability Manager is the main contact for questions related to this report or our practices.

For those wishing to access more detailed information, requests can be sent directly to the company's official email address: firmapost@sg-as.no.