Abco ESG Sustainability Report

ESG SUSTAINABILITY REPORT

2024

Table of

CONTENTS 01

Message from the CEO

02

About Us

03

ESG Materiality and Approach

04

UN Sustainable Development Goals

05

Key Highlights

06

Environment

13

Social

19

Governance

Message from the CEO

Since recently joining Abco, I have spent considerable time listening, learning, and observing what makes this business truly distinctive. What stands out most is the dedication of our people and the sense of purpose that drives us—to empower our people, empower cleaners, and empower the community.

Like many businesses, we don’t have everything figured out when it comes to sustainability and ESG but we are definitely moving in the right direction and focused on improving in line with our core values. Certain areas are still evolving, and others present genuine challenges but importantly these are all opportunities to be built upon. They allow us to explore different approaches, learn through experience, and develop solutions that are both practical and meaningful.

We’ve already taken some important steps such as measuring our emissions, adopting a Reconciliation Action Plan, and strengthening our supplier standards. Now the opportunity is to build on this foundation with even more momentum. By being honest about where we are today and bold about where we want to be tomorrow, I believe we can drive real progress and create positive change for our people, our customers, and our communities.

I am genuinely excited for the journey ahead and confident that by working together, we can transform these opportunities into meaningful and lasting impact.

Nick Dileo Chief Executive Officer

1

About Us Since its beginnings in 1998 as a small family-run business in Western Australia, Abco Products Pty Ltd (Abco) has grown into one of Australia’s leading suppliers of commercial cleaning products, equipment, services, and technology.

Today, with over 120 employees and five strategically located distribution centres nationwide, Abco is recognised for its ability to combine scale and reliability with a deeply personal, service-driven approach.

At the heart of Abco is a simple purpose: to empower our people, empower cleaners, and empower the community.

This purpose shapes how we work with our customers, partners, and suppliers—always striving to deliver practical solutions that create real impact. Collaboration has been a defining part of Abco’s success, allowing us to anticipate industry needs, embrace new technologies, and champion more sustainable ways of working.

What sets Abco apart is the way we seamlessly integrate service, innovation, and sustainability into everything we do.

Our proprietary platform, Abconet, provides customers with a simple and transparent way to order, track, and report, streamlining operations and improving efficiency. We back this with a strong commitment to service excellence, offering a zero back-order guarantee on core stocked items and managing our own metro delivery fleet to ensure reliability and control. At the same time, Abco leads with innovation in sustainable cleaning through our Enviroplus range, which redefines what “green cleaning” means by delivering products that are not only safer for people and the environment but also high-performing alternatives to traditional chemistry. Independent certifications such as GECA and Global GreenTag reinforce the integrity of our claims, while customer feedback consistently validates their effectiveness in practice.

Looking ahead, Abco has sharpened its focus on Environmental, Social, and Governance (ESG) priorities, recognising that our role extends beyond supplying products to making a positive contribution to the environment, our people, and the communities we serve. We know there is always room to grow, and we are committed to challenging ourselves, adapting to evolving expectations, and pursuing opportunities that drive progress for the industry and for society.

About the report This report presents Abco’s ESG performance against our key targets and objectives, covering all operations owned and controlled by the company. Unless otherwise stated, all reported data and actions are current as of June 30, 2024.

This is Abco’s second ESG report, re-aligned to the financial year and contains some overlap of details from our inaugural 2023 calendar year report.

2

ESG Materiality and Approach Our materiality assessment remained unchanged from the prior year, drawing on input from Directors, internal stakeholders, major customers and suppliers, as well as industry and regulatory insights. ESG topics were grouped into themes and prioritised based on stakeholder importance, Abco’s ability to influence, industry relevance, regulatory context, and alignment with our values and long-term strategy. These were mapped into a materiality matrix to define our key ESG focus areas. The next materiality review is planned for late 2024.

From our materiality assessment, we have selected several core themes to focus our efforts with reference made to the UN Sustainable Development Goals to ensure our goals are aligned with global challenges and broader societal objectives as highlighted against each category.

3

UN Sustainable Development Goals Environment

Our People

Carbon Management

Work Health, Safety and Wellbeing

Renewable and Clean Energy

Training and Development

Product Stewardship

Diversity, Equity and Inclusion

Circular Economy Responsible Resource Management

Social

Governance

Indigenous Engagement

Ethics and Integrity

Human and Labour Rights, and Modern Slavery

Transparency and Reporting

Responsible Supply Chain

ESG Policies

Consumer Health and Safety

Privacy and Data Security

More information about the United Nations Sustainable Development Goals can be found on www.un.org/sustainabledevelopment. The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States.

We support the Sustainable Development Goals

4

Key Highlights 1469 Books Contributed to the ILF

88%

6,372,000 Litres of clean water contributed to communities via Made Blue Foundation through our supply partner iTeam

7.9

Supplier Code of Conduct Acknowledged

Employee happiness average

607,400+

306,900+

kg’s of post-consumer recycled plastic used potentially diverting at least one cycle of plastic waste from landfill

Scope 3 Carbon Measured

kg’s of sugarcane waste replacing a portion of virgin wood pulp in ECO Paper Range

Reconciliation Action Plan launched in December 2023

Product Certifications Awarded Bronze Sustainability Rating from EcoVadis

5

ENVIRONMENT

Carbon Management In FY24, Abco added Scope 3 carbon measurements using spend based methodology covering all our spend in the financial year and using Emitwise to perform the calculations. This has provide significant insight into our largest emissions contributors of which scope 3 remains the biggest challenge. The following years focus will be engaging our suppliers to discover their carbon goals and engaging consultants to assist in our carbon reduction strategy with a view to formal target setting which are challenging yet realistic and practically achievable. In total, our carbon emissions intensity has been determined to be 0.588 kg CO2e/USD revenue.

With regard to Scope 1 and Scope 2 emissions, the following sections provide a detailed analysis of our electricity and fuel consumption, which are the primary contributors to these carbon emissions.

OBJECTIVES

Reduction in carbon intensity of the business and setting reduction targets

Have net-zero targets established by FY26 TARGETS

Engage suppliers on their carbon goals to help formulate reduction strategy by FY25 Reduce Scope 2 emissions through adoption of solar power

PROGRESS

6

Solar panels installed in Park Ridge site in mid 2023.

ENVIRONMENT

Renewable and Clean Energy Installation of solar panels at our Park Ridge site was completed at the end of May 2023. Initial estimates indicate that up to 74% of the site’s energy usage could be supplied by solar power, potentially avoiding up to 48 tonnes of CO₂e emissions annually. However, based on energy usage data, several factors have contributed to reductions in grid consumption being lower than expected, and ongoing monitoring is in place to optimise performance.

Abco will continue with plans to install solar panels at its other sites. While initial targets focused on Abcoowned sites, consideration is now being given to prioritising locations with the highest energy usage to maximise reduction impact.

OBJECTIVES

Transition to solar power at Abco sites facilitating reduction in carbon intensity and renewable energy sources

TARGETS

Solar panels to be installed at strategic Abco sites. targeting one site by 2026

PROGRESS

Installed at QLD; assessments and site selection to take place in FY25

7

ENVIRONMENT

Energy Management

Across all sites, total energy consumption increased compared to the previous financial year, though usage remained more stable when normalised against order fulfilments and annual revenue. At the QLD site, a significant portion of the facility was leased to a third party at the beginning of the reporting period, which partly explains the increase in energy consumption despite the installation of solar panels. Based on floor area, this additional activity accounts for approximately 30% of the increase, though the nature of the tenant’s business reflected a much higher intensity of energy use than Abco’s own operations. Analysis with our energy service provider is ongoing to better understand system performance and identify opportunities for efficiency improvements. Looking ahead, Abco will work with its tenants to explore energy management options and implement further measures to improve efficiency and maximise the benefits of renewable energy generation.

Abco will continue to pursue additional initiatives aimed at improving energy efficiency across its operations.

Measures under consideration include the installation of light sensors within warehouse facilities to reduce unnecessary energy consumption, as well as the strategic scheduling of work shifts to optimise operational efficiency and minimise energy use. These initiatives form part of Abco’s broader commitment to sustainable practices and reducing the environmental impact of its operations through responsible consumption.

8

ENVIRONMENT

Fuel Use Management

Abco has increased the number of electric vehicles in its fleet to eight, however overall fuel consumption remained higher than the previous financial year, even when normalised against revenue and order fulfilments. This increase is likely due to a greater push for in-person client site visits as well as increased requirements from contract servicing. Further analysis will be conducted to identify the primary drivers of this increase with the aim to help with reduction strategy.

Additionally, electric vehicles have proven unsuitable for many of our applications due to heavy usage demands and limitations in charging speed. Where feasible, Abco will continue to adopt electric vehicles; however, it is recognised that, given current technology, alternative strategies will also need to be developed.

9

ENVIRONMENT

Waste Management Total waste, comprising general waste and paper/cardboard recycling, increased in absolute terms but remained relatively consistent when normalised against order fulfillments and annual revenue. Abco continues to promote effective waste segregation and encourages customers to purchase in quantities that reduce the need for excess packaging. A significant portion of Abco’s waste is soft plastic pallet wrapping, presenting an opportunity to divert this material from landfill. In the coming year, Abco will explore soft plastic recycling initiatives to minimise landfill waste and contribute to a circular economy.

Waste volumes have been converted to kilograms using our waste management provider’s excess weight thresholds for standard bin sizes— specifically, 240 kg per 3 m³ bin for general waste and 105 kg per 3 m³ bin for paper recycling. This approach may slightly overestimate actual weights but is considered a reasonable and consistent method for reporting purposes.

Minimise waste in operations by optimised waste segregation and reusing materials OBJECTIVES

where possible Explore soft plastic waste recycling to reduce waste to landfill

10

TARGETS

Commence soft plastic recycling in at least one site by 2026

PROGRESS

Further investigations to commence in next reporting period

ENVIRONMENT

Product Stewardship As part of product stewardship, we continue to maintain independent certification of key lines to provide assurance to our customers and stakeholders of our commitment to provide products which make environmental impacts at the forefront of consideration. The GECA certification for our key Enviroplus products in particular, ensures products come from a responsible source, contain ingredients that are considered safe to both human health and the aquatic environment, are biodegradable and contain minimal packaging. Furthermore, our Bioactive paper range is also rated Gold by Global GreenTag LCARate which assesses the environmental impacts over the entire product life cycle and has determined the product to be a carbon sink which removes greenhouse gases over its life cycle.

Abco also has a compostable range of bin liners derived from corn starch which are certified to meet the Australian Standards for both home and commercial composting which helps to reduce reliance on the petrochemicals for the production of virgin polymers used in traditional liners, and will biodegrade under composting conditions reducing its long term persistence in the environment

A total of 15 of our own-branded products are covered by independent certifications relating to minimising environmental impacts including many more which are covered by supplier certifications such as FSC certification on paper-based products.

Complementing our commitment to product stewardship, selected Abco paper products sold provide contribution to GreenFleet which is a not-for-profit organisation dedicated to planting native biodiverse forests in Australia and New Zealand for restoration of critical ecosystems to fight climate change, improve soil and water quality, and provide vital habitat for native wildlife. In FY24, 317 trees were planted as a result of the program

OBJECTIVES

Product and packaging designed to consider entire product life cycle.

TARGETS

Maintain product eco-label certifications.

Establish minimum criteria for all new product development by FY25

PROGRESS

Certifications under renewal

11

ENVIRONMENT

Circular Economy Abco recognises the importance of promoting a circular economy to reduce waste and encourage the responsible use of limited resources. As part of this commitment, we have introduced 50% post-consumer recycled (PCR) packaging into our key 1L Enviroplus range, while ensuring that the functional features of the unique dosing bottle are maintained. This initiative alone is expected to avoid over 370 kg of virgin plastic annually.

Projects are currently in our pipeline which include 100% PCR in our 5L Enviroplus range, as well as 2 new product developments incorporating 80 to 100% PCR in the finished product. Abco has started documenting the PCR content for our full product range on our website to help empower customers to make informed decisions when it comes to promoting a circular economy. While most of our product packaging is typically recyclable, Abco is keen to explore ways to promote and increase rates of recycling through a collection scheme facilitated by the fact that Abco conduct their own metro deliveries and often return to our sites with an empty vehicle. We are committed to exploring proposals and conducting feasibility assessments to ensure both practical and environmental considerations can be met.

While we are confident that the majority of our cardboard is appropriately recycled, soft plastic waste remains a key opportunity to help support a circular economy.

OBJECTIVES

TARGETS

PROGRESS

Promote circular economy in product design; encourage customers to make responsible choices; and encourage recycling internally and externally.

2 new PCR product or packaging projects in 2024 PCR content available on website for all products by June 2024.

Used packaging collection proposal finalised for Board consideration by June 2024.

Enviroplus 1L X Range changed to 50% PCR bottles.

PCR Content is available for customer accounts on Abconet Proposal under consideration

12

SOCIAL

Health, Safety and Wellbeing Our employees are what set Abco apart, and their safety and wellbeing remain our highest priority. The period at the end of FY24 is therefore particularly disappointing. The increase in work-related injuries coincided with a persistent upward trend in order fulfilments following a dip at the end of 2023. While this does not excuse the incidents, it highlights the need to better anticipate and mitigate risks during sudden or unexpected increases in workload.

At the time of this report, Abco has engaged external Workplace Health and Safety (WHS) consultants to identify gaps and opportunities for improvement within our management system. Key initiatives include the formation of a formal WHS committee comprising both management and employee representatives, with some members elected by their colleagues to ensure workforce perspectives are fully represented.

An internally appointed WHS Coordinator commenced formal qualification training in January, strengthening the company’s capacity to proactively manage workplace safety. Abco remains committed to a target of zero injuries and continues to maintain monthly dedicated safety toolbox meetings alongside formal site inspection checks to ensure ongoing compliance and safety awareness.

To support employee wellbeing, Abco provides access to a comprehensive human resources platform offering a range of benefits and resources for personal development. In addition, the company launched its Growth by Sharing program towards the end of 2023, which provides financial bonuses to employees aligned with business performance and targets. This initiative complements annual pay reviews, which are designed to help mitigate cost-of-living pressures and further reinforce Abco’s commitment to recognising and rewarding employee contributions.

OBJECTIVES

TARGETS

PROGRESS

Ensure a safe work environment for all employees and stakeholders, while actively promoting worker wellbeing 0 LTIFR Establish a WHS committee by end of 2024

WHS improvement plan in progress

13

SOCIAL

Our People To monitor and enhance employee wellbeing, Abco conducts a quarterly “Employee Happiness Survey” to assess staff engagement and satisfaction, providing employees with the opportunity to share feedback and suggest areas for improvement. In FY24, the average score was 7.9 out of 10 which is slightly below our target of 8. Plans are underway to refine the survey to capture more detailed insights and encourage higher participation rates, ensuring a more comprehensive understanding of employee wellbeing across the organisation.

Training and Development While Abco has invested in training and development opportunities for its workers with both internal and external training, we are committed to establishing a formal training program which helps to identify gaps and opportunities to develop our employees. Abco will be looking to appoint a specialist in People and Culture in the coming financial year period to help strengthen our programs around staff training, development and ensuring a strong and engaged work culture.

Diversity, Equity and Inclusion Abco recognises the significant benefits of a diverse workplace with the different backgrounds and experiences that each individual brings and strongly believes in providing an equal opportunity for all when it comes to employment, training, promotion or any other related opportunites. Strengthening and reinforcing the principles in various policies including Anti-Discrimination, Bullying and Harassment, Equal Opportunity, HR Recruitment Policy have reaffirmed our commitment to ensure that opportunities are promoted and evaluated in ways that take diversity and inclusion into account.

OBJECTIVES

TARGETS

PROGRESS

14

Build up the skills, knowledge and capabilities of employees.

Foster a workplace culture that values respect, diversity, inclusion, and equity Maintain high levels of employee engagement and wellbeing Implement formal training and development program.

Aim for employee happiness above 8/10 Provide annual training on DEI and Anti-Discrimination by 2025 Recruit a People and Culture specialist by 2025 Program framework and training under development

SOCIAL

Indigenous Engagement Building upon its mission to empower, reconciliation with First Nations peoples is about building relationships for a united future. Abco is excited to explore a broader approach to reconciliation in addition to our existing contributions to the Indigenous Literacy Foundation Book Supply Program which was chosen for its promotion of literacy as a key foundation to maximising choices and opportunities for Aboriginal and Torres Strait Islander children, especially in remote Communities.

For the 2024 financial year, Abco has contributed over $146,000 to the Book Supply Program, resulting in over $319,000 since the start of the our contribution partnership.

By formally adopting a Reconciliation Action Plan (RAP), Abco has established a structured, respectful, and consultative approach to guide and educate our actions in reconciliation and Indigenous engagement. Our RAP was formally endorsed by Reconciliation Australia and commenced in December 2023. It outlines key goals and deliverables, providing a roadmap for our initiatives over the coming 18 months.

The RAP Working Group (RWG), comprising representatives from operations, sales, procurement, marketing, and ESG departments, has met bi-monthly since the launch. First Nations representation was provided by Zac Alvisse, a valued member of our WA receivals team.

As of June 2024, Abco is on track with the RAP, having completed 18 of the 32 deliverables outlined in the plan, demonstrating strong progress towards our reconciliation objectives.

OBJECTIVES

TARGETS

PROGRESS

Strengthen relationships and facilitate equal opportunity with First Nations Peoples.

Deliverables achieved according to 18-month plan Continued contributions to ILF Book Supply Program.

18 out of 32 deliverables completed.

15

SOCIAL

Human and Labour Rights Respecting the dignity and rights to which all individuals are entitled, Abco takes proactive measures to ensure that human and labour rights are upheld across its operations and, in particular, throughout its supply chain, where visibility into labour practices can be limited.

Within our own operations, Abco is committed to full compliance with all applicable human and labour rights legislation, conducting regular reviews to ensure our practices remain aligned with evolving legal requirements.

Although Abco is not currently required to report under the Commonwealth Modern Slavery Act 2018, we have voluntarily implemented a Modern Slavery Risk Management Plan, with a view to making a formal report at the end of 2025. As part of this program, annual assessments are conducted for major suppliers, and new suppliers are screened and assigned a risk rating based on potential red flags and other high-risk indicators for modern slavery. Abco was encouraged by the strong engagement from suppliers during the first year of the program, with 86% of targeted suppliers responding to the assessment. We are currently reviewing these assessments to determine further actions that can contribute to the global effort to combat modern slavery, an area in which the private sector plays a critical role. The next round of assessments is scheduled to commence in the new financial year.

In addition, Abco has established a Supplier Code of Conduct covering various aspects of human and labour rights. Over 88% of our suppliers have acknowledged and agreed to comply with this Code, demonstrating their commitment to ethical and responsible practices.

OBJECTIVES

TARGETS

Ensure human and labour rights are respected in our operations and supply chain

Establish a Human and Labour Rights Policy by 2025 100% policy acknowledgement by staff Ensure principles are covered by the Supplier Code of Conduct

PROGRESS

16

Policy under development

SOCIAL

Responsible Supply Chain Abco sets clear expectations for its supply chain partners through its Supplier Code of Conduct, which also extends to sub-tier suppliers. Priority areas of responsible sourcing include Modern Slavery, Human and Labour Rights, and Environmental Sustainability. To support this, Abco conducts an annual self-assessment questionnaire with key suppliers, helping to flag potential modern slavery risks and highlight areas that may require further investigation, such as high-risk countries or industries. In the coming financial year, Abco plans to broaden this assessment to include additional sustainability areas, particularly carbon reduction goals, creating opportunities for greater collaboration and shared impact.

Abco also chooses to partner with suppliers who take positive action for sustainability including i-Team who contributes clean water to those who need it most via the Made Blue Foundation for purchases of its i-Mop.

Ensure supply chain partners are aligned with ESG values and responsible practices OBJECTIVES

Give preference to suppliers who are value aligned 100% key suppliers acknowledge or demonstrate alignment to Supplier Code of

TARGETS

Conduct 100% key suppliers assessed for Modern Slavery Risks with actions taken to address identified risks Staff training to be conducted annually with 100% completion.

PROGRESS

88% Signed Code of Conduct 86% Completed Modern Slavery Risk assessment

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SOCIAL

Customer Health and Safety Ensuring the safety of products for the people who use them most—the cleaners—is central to Abco’s corporate purpose. As part of our commitment to customer health and safety, the Enviroplus line has been designed with cleaner health and safety as a priority, while also protecting the occupants of the cleaned environment. This commitment is independently verified through the Platinum HealthRATE rating certified

by Global GreenTag, which assesses products for safety to human health through experienced auditors and consultant toxicologists. Achieving the highest rating underscores our dedication to developing products that are as safe as possible in use. Several products within the Enviroplus range are also rated Asthma and Allergy Sensitive, ensuring they are free from all known allergens and triggers. This is also supported by GECA certification which further demonstrates our focus on delivering products that minimise safety risks without compromising cleaning performance.

Abco regularly conducts innovation sessions to communicate hazards, promote safer alternatives, and encourage the use of closed-loop systems to reduce exposure to hazardous chemicals. Through these sessions, our teams explore practical ways to improve the safety, efficiency, and sustainability of cleaning processes.

We work closely with suppliers to drive innovation that supports cleaner safety, operational efficiency, and ergonomic wellbeing. This includes introducing equipment that reduces physical effort, optimises chemical usage, and enhances overall safety for users. By combining product innovation, independent certification, and collaborative supplier engagement, Abco continually strives to ensure that our products are safe, effective, and environmentally responsible.

OBJECTIVES

Ensure the safety of products to customers Ensure products comply with relevant standards and safety requirements Investigate product development or improvement opportunities to enhance

TARGETS

customer safety Document product recall procedure and conduct testing to ensure effectiveness by end of 2025

PROGRESS

18

Development work commenced on specialty kitchen and laundry products which traditionally have higher hazards

SOCIAL

Governance Ethics and Integrity Ethical business conduct has long been a cornerstone of our Code of Conduct. During this reporting period, we formalised our commitment by introducing an Anti-Bribery and Corruption Policy, clearly defining our stance and expectations. Looking ahead, Abco will expand on this foundation with the implementation of a comprehensive Business Ethics Policy, which will address key areas such as conflicts of interest, anti-competitive behaviour, and information security in greater detail in addition to bribery and corruption. To support this, we will provide targeted training and resources to employees, ensuring that ethical conduct is consistently understood, reinforced, and embedded in everyday business practices.

All staff to be aware and adhere to company policies around ethics and OBJECTIVES

integrity to ensure ethical conduct at all times.

Ethics Policy to be developed and implemented by end of FY25

TARGETS

100% policy acknowledgement by all staff Staff training to be conducted annually with 100% completion.

100% Anti-Bribery and Corruption Policy acknowledged

PROGRESS

Ethics Policy and training under development.

Transparency and Reporting With the aim of increasing transparency around our ESG targets and commitments, Abco continues to share its sustainability journey through an annual report. Following our realignment to the financial year, this FY24 report includes relevant aspects from our first report where the reporting periods overlap with the 2023 calendar year.

Third-party benchmarking provides valuable insight into Abco’s performance and progress, helping us identify opportunities for improvement. In March 2024, Abco received a Bronze Rating from EcoVadis, recognising our sustainability efforts to date. Looking forward, we are committed to achieving year-on-year improvements across all sustainability pillars.

ESG Policies ANo new policies were developed in the second half of the reporting period in addition to the 16 ESG-related policies that were either developed or updated in 2023.

19

SOCIAL

Privacy and Data Security The largest risk to cyber security remains with staff either accessing malicious malware or providing credentials to phishing scams. Targetted testing was conducted in August 2023 with largely positive results and encouraging indicators where a large number of employees informed the IT team and other colleagues of a potential cyber threat. Of the targetted users, 6% clicked on a potentially malicious link with only 1 person proceeding further.

Abco continues to send regular reminders to workers throughout the year to stay vigilant against potential cyber attacks and both training and testing activities are targetted to take place at least once per year.

Staff well trained to identify and avoid cyber security risks.

OBJECTIVES

Periodic testing to ensure effectiveness of training and system security

100% testing success within each test TARGETS

100% staff training completion annually Testing conducted at least once per year

6% risk events occurred 100% staff involved in risk events completed training. All staff PROGRESS

training program to be revised.

Test program completed for FY24

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