Sustainability Report 2023

Sustainability Report 2023

MIKAEL HOIER / MAY 2024

We live in a time of rapid growth in the pharma and biotech industries, which are tackling pandemics, chronic diseases, and improving health for a growing and aging world population.

This calls for advanced solutions within medicine and vaccines, produced in a highly secure and price efficient way.

LOWENCO is committed to contribute to this global effort by providing safe, stable, and highly energyefficient Ultra-Low Temperature storage solutions for vital medicines, vaccines, and components, hence contributing to a healthier world.

We integrate sustainability into everything we do: by lowering our own and our clients’ impact on climate and environment, by acting as a socially responsible workplace, and by governing our business in an ethical and compliant manner.

This is how we contribute to creating a better world – one unit at a time.

01

We are committed to creating a better world

As CEO of LOWENCO, I'm immensely proud of our commitment to sustainability, which shines through in our products' ability to reduce emissions and costs for ultra-low temperature storagebut also in the daily governance of our business. Sustainability is ingrained in every aspect of our operations, from product design to maintenance and service. We prioritize circularity, striving to minimize resource use and maximize recycling efforts.

This year, we conducted a Life Cycle Assessment of our main product, the Large Scale Storage Unit, providing invaluable insights for our sustainability strategy. We've also enhanced due diligence and focus on employee training to uphold our code of conduct.

We are committed to reporting on responsible sourcing of conflict minerals. Furthermore, we've engaged with our suppliers to evaluate their carbon footprints and sustainability practices, aligning with our Business Ethics Policy. This feedback has informed the development of a Supplier Code of Conduct to further support our commitment to sustainability.

All in all, 2023 has proven to us that our journey towards everimproving responsible conduct is on the right path. I look forward to continuing this progress in close partnership with colleagues, vendors and clients.

Mikael Hoier, CEO, LOWENCO

03 We support the UN SDGs

LOWENCO freezer solutions help enable healthy lives

Our ultra-low temperature freezer solutions are used by some of the world's largest producers of medicine to store vaccines and medications for extended periods. These medicines help improve health and well-being for all.

LOWENCO freezers support living conditions in rural areas in a sustainable way

By offering the possibility to operate on solar power, our freezer solutions help people in rural areas with limited or unstable infrastructure to store medicine, vaccines, food, and more under stable, temperaturecontrolled conditions. This improves quality of life and helps save lives.

LOWENCO freezer solutions are energy efficient and some even use sustainable energy

Our freezer solutions are highly energy efficient and operate with very low power consumption more than 80% less compared to other solutions on the market. Our CON20 solution can even be operated by solar power. A LOWENCO product ensures an absolute minimum impact on the environment.

LOWENCO freezer solutions are 99% recyclable

The materials used in our freezers are 99% recyclable. It is very important to us that we produce our products in the most environmentally friendly and sustainable way, to leave the best possible environment for our children, grandchildren, and future generations.

OUR SUSTAINABILITY COMMITMENT

Creating a better world

At LOWENCO we are committed to acting responsibly in all aspects of our company

We are devoted to supporting a sustainable future for all people, the climate and our society.

We strive to ensure that the people, workers, and communities that support our value chain are treated with fundamental dignity and respect.

We strive to ensure that the products and services we provide are produced with respect for human rights.

EcoVadis is the guideline for how to deliver on our commitment to sustainability

Our near-term goal is to achieve EcoVadis Gold level, and long term is Platinum.

To support the well-being and motivation of our employees, we have performed our extended ‘Great Place To Work’ survey.

To improve our procedure regarding environment and occupational health and safety, we are certified with two international standards, ISO 14001 & ISO 45001

→ Sustainability Procurement Policy

Spring 2024

Summer/Autum 2024

2025

→ Science Based Target initiative to be approved 2023

→ Supplier Code of Conduct

→ Business Ethics Policy

→ EcoVadis Silver Rating 80th percentile

→ An LCA for our main product, the LSSU, is executed by a third party

→ A supplier ESG-survey has been executed to give insight in our vendors

→ Implementation of ISO 27001 and certification

→ Prepare enrollment of Science Based Target initiative (SBTi)

ESG KPIs

At LOWENCO we are committed to the principles of documenting our ESG initiatives. Among many actions, we have chosen to focus on a number of Key Performance Indicators which are core to our business and our dedication to sustainability.

Additionally we measure a number of other action points within the same categories. Please dive into our results on the following pages.

Environment

Carbon footprint

We aim to reduce our carbon footprint per unit in 2024, despite an expected growth. Our LCA has given us improved insight in our value chain and inspired us to focus on our suppliers of metal, hence potentially reducing our Scope 3 emissions.

Consumption

Our energy is certified coming from renewable sources. As our internal use of water and electricity is already at a low, future improvements should be found in our value chain.

RESULTS 2023 Environment

Optimizing GWP

We research possibilities to improve our product to continuously be the most environmentally friendly freezer storage solution for the pharma industry. Presently, we are exploring the reduction of the Global Warming Potential (GWP) on a test freezer.

Transportation

We avoid transportation with fossil-fueled cars when possible and welcome the evolution within electric cars. Therefore, we have chosen to lease four new nine-person vehicles for transportation of employees this spring.

Life Cycle Assessment

The LCA of our main product is executed by a third party to confirm that our value chain supports our efforts to be sustainable and recycle as much as possible, to lower our carbon footprint.

Prolonging product life

We support our customer in prolonging the life of the products by offering service agreements at high level, repairs, optimization and technical improvements. Our main product has a long lifetime, hence optimizing the use of resources spent to produce it. We aim to use as few resources as possible and recycle material surplus in production or pass it on to other parties.

Waste & Resources

Waste Management has long been implemented at LOWENCO, with an increasing number of fractions for recycling - more than ten fractions plus different metals since 2022.

Biodiversity

In a partnership with Kolding Kommune we are setting up nest boxes for the endangered bird ‘Mursejler’.

Diversity is often synonymous with gender diversity. At LOWENCO we see diversity in a wider context and have decided to also include age and ethnicity to focus on more parameters.

Diversity

At LOWENCO diversity within age and ethnicity is higher than in Danish society in general. Product engineering is however a male-dominated area, and hard to affect. Since April 2024 we have encouraged all people of diverse backgrounds to apply for jobs at LOWENCO and will evaluate this initiative end 2024.

Well-being and safety

Work-related injuries increased end 2023 for no obvious reasons. 2024 has started out well, though, without injuries and we strive to continue like that. Sick leave decreased end of 2023, hence completing our objective on focus on well-being. This trend seems to continue in 2024.

DK LOWENCO

RESULTS 2023

Social

Work-life Balance

Work-life balance is crucial in our work culture. We are delighted that 100% of our employees feel they can take time off when needed. Ensuring a harmonious balance between work and personal life is a priority for us, as we believe that a healthy balance help our colleagues to bring their extra energy to work. We are honored that our efforts are recognized by our employees.

Making a Difference

At LOWENCO, making a difference drives us, and many employees share this motivation. We are proud that 92% feel they are making a meaningful impact in their roles. This recognition fosters strong motivation and boosts our shared ambitions as a company.

Events, Employee Development Dialogue & Upskilling

• In 2023 we celebrated our team in two events - a summer event sporting teambuilding in nature friendly surroundings, and a traditional Christmas party with entertainment and space for having a good time with colleagues.

• A formalized Employee Development Dialogue was completed for all employees in 2023 and will be repeated in 2024.

• Upskilling in 2023 consisted of Site Manager Training, Management Training and partly mapping the DISC profiles at LOWENCO. The latter is progressing in 2024, and transparency of diversity will be visible in the production in the nearest future.

In June 2023, we proudly achieved 'Great Place to Work' certification with 100% employee participation. This confirmed high satisfaction among our employees and provided insights for improvement. As a result, LOWENCO will now hold regular physical Town Hall meetings as part of our internal communication. Green are positive responses.

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Governance

Due Dilligence

Executive Management has assessed due diligence, and this has led to a systematic training of employees in awareness of LOWENCO’s business ethic policy and how to protect our business value.

RESULTS 2023

Governance

Whistleblower system

In early 2023 we implemented the whistleblower system where inappropriate behavior and conduct can be reported in a discreet manner. This ensures alignment with our code of conduct for all stakeholders, and if someone feels more comfortable with reporting anonymously. Our third-party trusted partner has confirmed that noone has reported any cases in 2023.

Conflict Minerals Report

Conflict Minerals Reports from suppliers were required by LOWENCO in spring 2023. Some of our suppliers were ready to reply in the actual template, but most had to update their data. It was a good exercise and preparation for this year’s update, where more suppliers gain transparency by uploading their status on the company’s homepage.

Standards and certifications

Risk Assessment of stakeholders were executed at our Management Review 2023 according to the International Standard Organization for Quality Management System (ISO 9001). Recertification in ISO 9001 and in two new standards, ISO 14001 & ISO 45001, was effectuated. The external audit didn’t show any deviation, and a few observations and suggestions for improvement were given by an external auditor. A successful recertification as well as new certifications were conducted in October 2023.

06 Double Materiality Assessment

As our customers hold very high standards within ESG, we aim to inspire our partners in the same way. Therefore, we conducted an EcoVadis aligned survey for our suppliers about their ESG efforts.

This insight in our value chain helps us see how vendors and sub-vendors can support us in lowering our carbon footprint.

In 2023 we made a Materiality Assessment for our environmental and social impact. In 2024 we added the impact of our organization’s activities and the financial impact that sustainability related factors can have on our organization (Outside-in view/ Inward Impact).

This insight was supported by a third party validated ‘Life Cycle Assessment’ for our main product and is now part of our Double Materiality Assessment 2024.

As our main product, the LSSU, will reduce cost for the customers, compared to up-right freezers, vaccine, medication etc. could potentially be available for more people for less costs.

Life Cycle Assessment

The outcome of our third party validated LCA supported that to reduce our Scope 3 emissions, materials from suppliers and transportation are key to improvements. Hence, the primary GHG source when manufacturing the LSSU is raw materials, particularly steel.

The green field in the graph illustrates the cumulative impact that could be avoided by predicted future customers choosing a LOWENCO LSSU to an upright freezer.

Supply chain survey 2024

LOWENCO’s suppliers range widely from achieved platinum, to silver, to bronze to just started and not even started assessments in EcoVadis or other ESG-platforms yet.

64% of suppliers have achieved ISO 14001, 46 % have ISO 45001 and most have ambitions to go further. A few other results are presented below:

Environmental Companies producing Renewable energy

Social, Well-being Companies execute employee Satisfaction survey

Governance, ‘Due diligence’ Companies having a Whistleblower procedure

Importance E S G

1. Product durability, safety operations and high quality – High end-product

2. Environmental impacts (ISO 14001 certified)

1. LCA by 3. party - > prioritize efforts: reused/recycle - > reduce sourcing

2. - “ - Transportation: CO2 reduction by using electrical cars

3. Mapping carbon equivalent footprint – base year 2021/22

4. Material optimize/reduce waste - optimize Circularity

5. SBTi enrolled in 2024 and approved in 2025 to be ambitious

3. Biodiversity

4. Social impacts (ISO 45001 certified)

1. Safety & Healthy production and installation – Zero accidents

2. Employee well-being– Great Place To Work re-/certified.

3. Employee development dialogue – Yearly

4. DISC profiles to better cooperate and have well functioning teams

5. Summer & Christmas event for all employees – strengthen cross-collaboration

6. Staff association established - strengthen cross-collaboration

5. Employee diversity – Ages, origin, etc.

6. Due diligence – stakeholders: Employees, suppliers, customers

1. Risk assessment

2. Employee training and testing – due diligence

3. Supplier chain – Survey to map their environmental- and social impact

4. Information technology secured – Implementing ISO 27001

7. Transparency

1. Business Ethic Policy

2. Sustainable Procurement - purchasing ethic and environmentally friendly

3. Supplier code of conduct

07

We

continue our journey

→ We support biodiversity in partnerships when possible

→ We continue to investigate and prioritize options for circularity in our production and for our products

→ We maintain our ISO-certifications 9001, 14001 & 45001

→ We implement the Information Security Management, ISO 27001 to avoid security breaches.

→ We conduct training and testing, according to requirements in ISO 27001 and executive managements risk assessment in due diligence

→ We continuously secure GDPR

→ We implement Science Based Target initiative, SBTi end 2024 and approve in 2025

→ We improve our EcoVadis rating – we strive for gold no later than 2027