Impact report

IMPACT REPORT 2023

CONTENT Responsible development 3 On the way to less climate impact

5

SBTi targets 5 Carbon and the climate

7

Energy and resources 9 Our social commitment 11 Caring for our employees

12

Governance 13 Sustainable Development Goals

15

Key figures

18

Responsible development today and tomorrow As a manufacturing company, we are conscious of our impact on the climate.

Our goal is to continuously minimise this impact and create even better conditions for energy-efficient production and development that take the climate and environment into account. We also strive to create a good working environment with equal treatment for everyone and ensure that Palcut is a great place to work.

The purpose of this report is to provide relevant information about Palcut’s initiatives and goals in relation to climate and environment. It is crucial that initiatives, goals and strategies that affect the climate, environment and people are transparent and accessible to anyone who might have an interest in them.

3

On the way to less climate impact

At Palcut, we care about our planet, and fortunately so do many of our customers and partners. In order not to lose competitiveness and customers, but still show responsibility towards the climate, it is crucial that as a company we reduce emissions of greenhouse gases – especially CO2.

That is why we have also chosen to work purposefully and actively with the UN SDGs, which in our business equates to goals 7, 12 and 15. This means that we will continuously optimise our production equipment and work processes.

Our objective is to reduce our carbon footprint over time.

SBTi targets As a company, Palcut has committed to reducing its Scope 1 and 2 emissions by 42% by 2030 in accordance with the Science Based Targets initiative (SBTi) requirements for small and medium-sized enterprises.

Our goal is to contribute to keeping the global temperature increase at a current level of no more than 1.5 degrees Celsius. To achieve this goal, we are implementing specific carbon reduction measures and optimising our processes to achieve our targets.

5

Carbon and the climate Our impact on the climate comes primarily from carbon emissions from electricity and paper consumption. As our production process is the primary cause of emissions, circular economy is a key focal point in production. The cycle in which our materials and products circulate makes it possible to reduce carbon emissions.

Circular economy in practice – what we are doing cardboard cores (sleeve tubes) from the paper rolls used in production  The are reused approximately five times, so we reduce waste and optimise resource utilisation.

friction material (glue) coated on the paper circulates in a closed  Excess system, so there is no material waste. paper from production is collected, compressed and sent for  Excess recycling.

To further support our commitment to circular economy, we focus on ensuring that all our paper products can be sorted and recycled. Furthermore, the coating liquid we use on the paper is water-based and completely free of harmful solvents, enabling easy and efficient recycling.

CO2e - Scope 1

CO2e - Scope 2

40.3 tonnes

51.3 tonnes

123 tonnes

114 tonnes

2022

2023

2022

2023

Scope 3 covers other indirect carbon emissions that occur in our value chain, including transport and distribution, waste management, and the production and the transportation of raw materials. We continuously work to reduce our Scope 3 emissions by optimising logistics, recycling materials and working with our suppliers on more responsible initiatives.

7

Energy and resources Minimising waste and saving energy is always on the agenda at Palcut. We are constantly working to optimise our production by making sure machines run as efficiently as possible and avoiding paper waste. We reuse sleeve tubes from the paper rolls about five times instead of throwing them away and buying new ones.

POWER

We have optimised our drying section during the coating process to be able to dry the glue at lower temperatures and thus save power. We don’t just put our machines on standby when not in use; we switch them off completely, as this significantly reduces energy consumption.

CARBON CALCULATOR

Our carbon calculator plays a central role in improving energy efficiency. By entering information such as paper weight, roll width, number of metres per delivery and the distance to Palcut in Borbjerg near Holstebro, the calculator can estimate the carbon emissions per order. This tool helps both us and our customers identify the most energy-efficient solutions, including when it makes the most sense to reduce grammage and optimise transport emissions.

By focusing on these areas, we can reduce energy consumption and improve our overall energy efficiency.

Energy consumption

Water consumption

5,850,550 MJ

4,854,393 MJ

830 m3

996 m3

2022

2023

2022

2023

Consumption of renewable energy

43% 2022

43% 2023

9

Our social commitment At Palcut, we know that a good business requires employees who are both skilled and committed. Our long-term success depends on our ability to attract and retain the bestqualified employees. Being an attractive workplace is an important objective for us – for both current and future employees.

DEVELOPMENT DRIVES OBJECTIVES

We listen to the needs and wishes of our employees and give them opportunities for both professional and personal development. When we do that, we engage and motivate them.

This contributes to improved job satisfaction and well-being, and in the bigger picture it strengthens our ability to retain talented employees.

As our people evolve, so do we as an organisation. At Palcut, we work actively with gender diversity – including at management level. We have already made progress; 24% of our employees and 20% of our management are now women, and we are continuing our development. In line with this, we also have a goal of closing the gender pay gap.

Women in upper management

Female full-time employees

20 %

20 %

20.9 %

24.1 %

2022

2023

2022

2023

Energy consumption

Water consumption

5,850,550 MJ

4,854,393 MJ

830 m3

996 m3

2022

2023

2022

2023

11

Caring for our employees Our employees are our most important asset, as they are the ones who keep the whole business running. Our goal is to maintain a level of sickness absence that is below the norm and, as far as possible, reduce sickness absence to the lowest possible level. Not only because it maintains the standard in the industry, but also because it shows that our employees are happy and value their work. We are proud to have an employee turnover rate of only 6.9%, which reflects the high satisfaction among our employees.

WORK-LIFE BALANCE

There needs to be a work-life balance. So our employees should have the opportunity to use their skills at the time that suits them best. When our employees are happy, our customers are happy because they get a better experience and a better product.

This means, for example, that employees with young children can organise their workday to fit in with their family routines.

A SAFE AND HEALTHY WORKING ENVIRONMENT

Looking after our employees is an important responsibility that we take seriously. We focus on providing employees with the best tools to facilitate their workflow, especially in production.

We also offer a health scheme with, including for example a massage therapist, to ensure the employees’ health and prevent injuries.

Full-time employees 26

29

2022

2023

Gender pay gap

12

Sickness absence 6.49 Days/FTE

8.66 Days/FTE

2022

2023

Employee turnover

0.83 Men : women

0.98 Men : women

8.0 %

6.90 %

2022

2023

2022

2023

Management responsibility and governance At Palcut, good corporate governance is essential to achieving our goals. We have therefore established a governance structure with a professional board of directors to ensure effective leadership and strategic direction for the company.

The board of directors consists of a chair and shareholder representatives, ensuring broad representation of stakeholder interests. With 100% attendance at board meetings, we emphasise our professional and responsible management approach.

OPEN AND CONSTRUCTIVE DISCUSSION ACROSS THE ORGANISATION

Openness and involvement go hand in hand with successful leadership. For this reason, we have a flat organisational structure where every employee’s voice matters. Because we succeed best with change when we involve our employees.

Not only do we value open and constructive discussion internally, but also externally. It is important for us to have good discussions with the outside world and the local community, as this is crucial to maintaining a healthy business operation and taking our social responsibility seriously. We therefore endeavour to be as open and transparent as possible in our activities and initiatives.

STREAMLINED PROCESSES AND QUALITY OPTIMISATION

Our ISO 9001:2015 certification has helped us streamline processes and improve operational efficiency. Quality management is now integrated into all areas of the organisation, ensuring that all employees know what is expected of them and that they know their responsibilities.

Attendance at board meetings

Women on the board 0

0

100%

100%

2022

2023

2023

2023

13

SDG 7 – sustainable energy At Palcut, we work with SDG 7, which is about ensuring access to reliable, sustainable and affordable energy for all. Sustainable energy is essential to reduce carbon emissions and minimise our climate impact. By integrating sustainable energy solutions into our operations, we support both our business goals and global sustainability goals.

In continuation of this, we have chosen to focus on target 7.3, as it directly supports our efforts to improve energy efficiency and reduce our energy consumption.

TARGET 7.3 – IMPROVING ENERGY EFFICIENCY Our main focus is to optimise energy consumption during the production of our paper. We are constantly working to find new ways to optimise our energy use, with a particular focus on optimising our production machinery in terms of saving power, minimising waste, increasing efficiency, etc. Here, our carbon calculator plays a key role in identifying energy-efficient solutions to improve overall energy efficiency.

Our objective is to become even better at optimising our production and to reduce the consumption of raw materials and auxiliary products by 2030.

We also have particular focus on optimising our transport of goods to reduce carbon emissions, both internally and externally.

We also strive to be a leader in the transition to carbon-neutral solutions. We continuously implement innovative technologies and processes in our production that promote a carbonneutral future.

15

SDG 12 – responsible consumption and production At Palcut, we work with SDG 12, striving to promote responsible consumption and production. This goal is central to reducing climate impact, minimising waste, optimising resource use and reducing carbon emissions through a circular economy.

Furthermore, we have chosen to focus on target 12.5, as it directly supports our efforts to reduce waste and promote responsible use of paper resources.

TARGET 12.5 – SUBSTANTIALLY REDUCE WASTE With our core product, anti-slip paper, our primary focus is on reducing waste and promoting responsible consumption of paper resources. Our commitment to a circular economy plays a central role in this endeavour, and we have implemented various initiatives to achieve this target.

Overall, the initiatives are about sorting, recycling, reusing and reducing waste, and ensuring that our resources are used responsibly across the organisation. Our objective is to continue optimising production processes and to further reduce the consumption of raw materials and auxiliary products by 2030.

16

SDG 15 – Life on land

At Palcut, we work with UN SDG 15, offering paper products that support sustainable forest management. By purchasing FSCcertified recycled paper, we ensure that we use our resources responsibly. That is why SDG 15 is a natural part of our climate and environmental responsibility and our efforts to care for the Earth’s ecosystems.

In continuation of this, we have chosen to focus on target 15.2, as it directly relates to our efforts for sustainable forest management and responsible use of paper resources.

TARGET 15.2 – END DEFORESTATION AND RESTORE DEGRADED FORESTS All our paper is FSC certified; 95% is recycled and only 5% made from virgin fibre. By prioritising recycled paper, we reduce the need to cut down trees while reducing our climate impact. After processing, our paper products can also be recycled, promoting a circular economy.

We are proud to contribute to a more sustainable future by ensuring that our paper resources are managed responsibly and recycled efficiently.

17

Key figures at Palcut We prepare this Sustainability Report together with our Annual Report, which is based on data from the whole of 2023. Our figures come from our expense, HR and payroll systems and board meeting minutes.

This information is compiled regularly and forms the basis for our reporting.

Environment (Climate and environment)

2022

2023

Unit

Total CO2e emissions in Scope 1

40.3

51.3

tonnes

Total CO2e emissions in Scope 2

123

114

tonnes

Total CO2e emissions in Scope 3

7,602

9,314

tonnes

5,850,550

4,854,393

MJ

Share of energy consumption from renewable energy sources

43

43

%

Annual water consumption

830

996

m3

Social (Employees)

2022

2023

Unit

Average number of full-time employees

26.0

29.0

-

Share of women as full-time employees

20.9

24.1

%

Share of women in upper management

20.0

20.0

%

Gender pay gap

0.83

0.98

Employee turnover

7.7

6.90

%

Sickness absence according to latest figures

6.49

8.66

Days/FTE

Annual energy consumption

Men vs women

Governance

2022

2023

Unit

Number of women on the company’s board

0

0

-

Number of men on the company’s board

3

3

-

Attendance at board meetings

100

100

%

Comments to the report The report has not been verified by an independent third party. Whilst we have endeavoured to ensure that the content is accurate, we do not guarantee its 100% accuracy and/or completeness. We therefore disclaim liability for any damage or loss that may arise as a result of actions taken based on the report.

This Impact Report is made with Valified 19

Contact us Do you have questions about our sustainability initiatives or want to know more about how we are working towards a more climate and environmentally responsible future? We are happy to answer all your questions – big or small.

Hedegaardvej 13, Borbjerg DK-7500 Holstebro (+45) 96 13 31 10 info@palcut.com palcut.com