Sustainability Report 2023

As a company, we have a responsibility for our employees, community, customers, country, and planet. That’s common sense. That’s also good business. And that’s what sustainability means to us.

Sustainability is a proces. Not a destination.

SUSTAINABILITY REPORT 2023

I. INTRODUCTION

II. STRATEGY

II.1. CONCEPT OF SUSTAINABILITY INITIATIVE EVALUATION .....................

II.2. UN SUSTAINABILITY DEVELOPMENT GOALS

II.3. CODE OF CONDUCT

II.4. EXAMPLES

II.5. SOCIAL DIMENSION

III. FACTS & FIGURES ............................................

III.1. THE CLIMATE COMPASS

III.2. METHODS .........................................

III.3. MAIN FIGURES .................................

IV. TODAY AND THE FUTURE

IV.1. MEASURES ALREADY IMPLEMENTED OR BEING IMPLEMENTED .................................

IV.2. MEASURES APPROVED BUT NOT YET BEING IMPLEMENTED .......

IV.3. MEASURES BEING CONSIDERED ......

V. CONCLUSION

VMS Group is an internationally known and preferred partner of superior maritime solutions.

VMS Group recognizes the importance of sustainability for both society and the environment. Therefore, we have prepared this sustainability report to account for our efforts and results in relation to sustainability.

Environment

VMS Group A/S is committed to minimizing our environmental impact and we are continuously working on reducing our CO2 emissions. We have implemented a range of initiatives to reduce our energy consumption and waste production.

We also use reusable materials where possible and have a program to reduce our paper consumption.

Social responsibility

In VMS Group A/S we recognize our social responsibility as a global company and have therefore initiated initiatives to improve working conditions for our employees and support local communities.

Governance

VMS Group A/S recognizes the importance of having a healthy economy to continue our efforts for sustainability. We work to optimize our business practices to ensure that we deliver quality products and services in a cost-effective manner.

We also work to minimize our risks and ensure that we comply with all relevant laws and regulations.

Kristian Larsen: Executive Vice President Kim Bengtsen: CEO

Our sustainability strategy is based on the following principles.

• The concept of “Common sense. Good business. Sustainability.”

• UN Sustainable Development Goals

• Code of Conduct

II.1. THE CONCEPT OF SUSTAINABILITY INITIATIVE EVALUATION

We strive to be in compliance with the Ten Principles of the United Nations Global Compact and the UN Sustainable Development Goals.

In addition to the these principles, we have developed our own internal concept of Sustainability Initiative Evaluation. This concept takes into account that we as a business are working in an industry naturally associated with fossil fuel emmisions and that as a company, we must balance business, jobs, health & safety, community, and the environment in which it all exists.

This goal is selected based on the desire for ”disease prevention, as well as the general health level” of our employees.

• Research possibilities of easy and affordable access to fitness centers nationally/and abroad and not limited to the location of our HQ in Frederikshavn. This is a means to promote wellbeing and health.

• Perform surveys exploring health and well-being among our employees

• Further develop our HSEQ department to strengthen the well-being and general level of health of our employees.

We simply evaluate and prioritize our sustainable intiatives by asking ourself, does it make COMMON SENSE? Is it GOOD BUSINESS?

Realising that this is an evaluation most company must use, we have decided to be clear and transparent about this going forward in our sustainability development.

II.2. UN SUSTAINABILITY DEVELOPMENT GOALS

At VMS Group, we have selected the following UN Sustainable Development Goals as part of our initial sustainability development for the next x years.

9 INDUSTRY, INNOVATION AND INFRASTRUCTURE

This goal is selected based on a desire to contribute to reducing CO2 emission

• Improve/strengthen awareness of the ”green engines” using new marketing.

• Develop our washing facilities with a view to energy optimization and thus a reduced CO2 footprint.

12 RESPONSIBLE CONSUMPTION AND PRODUCTION

II.3. CODE OF CONDUCT...

VMS Group’s Code of Conduct is based on the Ten Principles of the United Nations Global Compact. our Code of Conduct, we…:

”...intent to communicate clear standards of ethics and integrity and give guidance to employees on how to deal with certain situations and daily decisions,and actions.”

”...intent to meet the expectations of our colleagues, customers, shareholders and the communities in which we work.”

Our Code of Conduct is designed to support our four corporate values.re

Care - Knowledge - Agility - Trustworthiness

This goal is selected based on a desire to be responsible consumers in the market. This is already a major part of our business when we overhaul (recondition) engines thus providing lifetime extension to the engine instead of scrapping and buying new equipment.

• Ensure that we have a Chemical Policy at VMS

• Acquire a cardboard press and ensure that our suppliers are continuously asked for reusable solutions both for recycled plastic and recycled cardboard.

Our CoC covers issues like dignity, respect, fairness and non-discrimination in both our internal relationships as well as our external relationships. Both types of relationships are vital to a global company - as are Health, Safety, Security and Environment.

II.4. EXAMPLES...

To kick-off our journey to become a more sustainable company, we decided to involve our employees. We held an array of workshops at our HQ in Frederikshavn to receive input from the heads and hands that make up the company and naturally to create buy-in and responsibility from our employees

During the workshops, we became aware that we are already doing a great deal in a sustainable way.

Recon - reuse of engine parts

VMS Group has long focused on reusing as many parts of the diesel engine as possible instead of replacing them with new parts. That saves a lot of energy and transport. It’s also good business.

Engine maintenance

A well-maintained engine uses less fuel and pollutes much less than a poorly maintained engine. That is again a green result of what we do as core part of our business. A damaged propeller blade causes a ship to use more fuel than a new one - or a well-overhauled one, which is much cheaper, greener, and often much stronger. Pieces to the green puzzle.

Engine technology partnerships

VMS Group works with some of the leading and most innovative companies in the maritime industry, e.g., Bergen, Kongsberg Maritime, Yanmar and Wabtec.

As Channel partner for the Wabtec engine, we supply VMS designed, produced, and fully classified generator sets, propulsion engines/systems.

The Wabtec engine is the only medium speed Diesel engine on the market that meets IMO III and EPA Tier 4 without the use of any aftertreatment system, (SCR) or any need for Urea injection. This unique engine technology is is incorporated in the engine and significantly reduces the total system weight and space requirements significantly which equals to reduced emissions and better OPEC for the vessel operators.

This enables us to deliver some of the greenest propulsion systems on the market not only measured in NOx regulated by IMO but also the particulate matter (PM / soot) regulated by EPA, clean and improved air quality.

Green detergent

As part of a routine check of our processes and procedures, we switched the detergent used in our washing facilities to an eco-friendly type. The new detergent not only complies with our environmental requirements but has also proved to be more effective than the old detergent - at a lower temperature, and even at a better price.

Apprenticeship program

At VMS Group we take on our responsibility as a local employer and workplace. We run an extensive apprenticeship program to help secure our own pipeline of skilled people and to help local youngsters gain a foothold in the job market.

II.5. SOCIAL DIMENSION

We strive to provide a safe and secure environment for all employees. To achieve this, we have implemented several new initiatives focused on work environment and safety measures. One such initiative is our Remote Safety Onboarding program, which ensures that every employee completes a comprehensive safety questionnaire. This questionnaire is designed to assess their understanding of safety protocols and is to be repeated annually to reinforce knowledge and promote continuous learning.

To enhance safety awareness and facilitate a smooth onboarding process of new employees, we have introduced the concept of Safety Bob and welcome folders. Safety Bob is designated individuals who assist new employees in familiarizing themselves with safety practices and protocols.

Additionally, they distribute welcome folders containing essential safety information and resources. To further reinforce these messages, our VMS Safety Buddies are positioned at different locations, carrying safety messages that are contextually relevant to each area.

II.5. SOCIAL DIMENSION

We understand the importance of injury prevention, which is why we have integrated a ”60 sec to re-think” campaign into our workshops and intranet system. By providing a brief moment for reflection and evaluation, we aim to promote a safety-conscious mindset among our employees. This campaign has been made even more accessible through the inclusion of a checklist on our HSEQ management platform. QR codes, available as stickers, have been introduced, allowing employees to conveniently access the checklist and participate in the campaign.

Our commitment to safety also extends to our core values. We believe in fostering a culture where we care for each other’s well-being. To measure and address employee well-being effectively, we have implemented the GAIS well-being measuring tool. This tool helps us gain insights into areas of improvement and ensure that our employees enjoy a healthy work-life balance.

In our pursuit of continual improvement, we are exploring opportunities for a new safety and Q-reporting system to enhance documentation structure and assign clear responsibilities for each case. After narrowing down our search, we have identified a suitable system, which will now undergo evaluation by the management before any further actions are taken.

To promote quality awareness and ensure adherence to safety protocols, we will soon be launching a Quality Awareness Test on our corporate HSEQ Management site. This test will assess employees’ understanding of the specific focus areas and provide valuable insights for improvement. Should the need arise, we are also prepared to provide translations of relevant materials in local languages to ensure accessibility and inclusivity.

By implementing these new initiatives, we are dedicated to creating a positive work environment that prioritizes the safety and well-being of our employees. Together, we strive to foster a culture of continuous learning, awareness and care, where everyone feels supported and motivated to perform well.

STRATEGIC SOCIAL INTIATIVES

• Remote Safety Onboarding

• Safety Buddy & welcome folders

• “60 sec to re-think”

• GAIS well-being measuring tool

• Research for safety & Q-reporting system opportunities.

• Quality Awareness Test

III.1. THE CLIMATE COMPASS

The Climate Compass is our tool for data collection and extraction. The Climate Compass is intended as an overall tool from the Danish Business Authority, in which companies can assign and extract data according to predetermined emission factors. The data reported and extracted in this report should be seen as a baseline and will represent future data points. The data extracted from the Climate Compass cannot be considered as verified or audited statement of VMS Groups carbon footprint but acts only as a guideline for the company.

III.2. METHODS

The results are based on a number of methodological choices made in connection with the calculations. In the table below, you can see whether the Radiative Forcing Index (RFI) is included in connection with emissions from air transport.

Taking into account (or correcting for) RFI means that it has been taken into account that CO2e emitted higher up in the atmosphere has a greater greenhouse effect than CO2e emitted at land.

The table also shows whether the emission factor for electricity is based on the annual average for the composition of the production of electricity (environmental declaration), or whether the emission factor is corrected for companies’ purchase of green certificates, so-called guarantees of origin (electricity declaration).

III.3. MAIN FIGURES

The company’s total CO2e emissions are given in table 1.

The CO2e emissions are given in tonnes of CO2 equivalents, and the table shows the emissions distributed among the different main categories.

Note that outside scopes, the climate footprint is not included according to the GHG protocol, but can be disclosed separately.

Table 1: Overview of the company’s CO2e emissions

Summary of the company’s calculated CO2 e-discharges

The figures below summarize the company’s calculated CO2e emissions. Figure 1 indicates the company’s absolute CO2e emissions in tonnes of CO2e equivalents, divided into main categories. Figure 2 shows the percentage distribution of CO2e emissions by main category.

Figur 2: Procentfordeling af CO2e-udledning (scope 1+2+3) fordelt på hovedkategorier

Energi & processer Primære og Sekundære indkøb Transport Affald & genbrug Solgte produkter

Figure 1: CO2e emissions in tonnes (Scope 1+2+3) distributed on main categories

Figure 2: CO2e emissions in % (Scope 1+2+3+outside scopes) distributed on main categories

Figure 3: CO2e emissions in tonnes (Scope 1+2+3) distributed on main categories

Figur 2: Procentfordeling af CO2e-udledning (scope 1+2+3) fordelt på hovedkategorier

Energi & processer Primære og Sekundære indkøb Transport Affald & genbrug Solgte produkter

Figure 4: CO2e emissions in % (Scope 1+2+3+outside scopes) distributed on main categories

Based on input from our employee workshops, we defined many initiatives to improve sustainability in VMS Group. Some have already been implemented while others are in process.

We prioritized the proposed initiatives according to our internal Concept of Sustainability Initiative Evaluation described in II.2 (p. 3).

IV.1. MEASURES ALREADY IMPLEMENTED OR BEING IMPLEMENTED

• Reduction of food waste

• Home workplace (Work life balance)

• Charging stands for electric cars – Both VMS & customers

• Tools must return home from jobs faster than the next job

• Evaluate which of the 17 global goals we as a company must work with.

• Define our CSR policy

• Develop the Sustainability Scorecard

• The ”green” engines of the future - Wabtec

• Make the sustainable story of the month.

• Recon.

• LED lighting

• Lower the temperature of washing machines

• Sensor on lighting

• Sort metal by type

• Wood presses/plastic presses/cardboard presses

• Limit printed paper.

• Personal bins are abolished in favor of a common one

• Cooling water in machine shop – Replacement or maintenance

• Electric trucks

• Limits volume when we ship our parts.

• Nudging in the warehouse

• Correct package methods in relation to different customers.

• Flat pack

• Reduces travel time in relation to the location of the task.

• Poole delivery with one weekly shipment

• Use a local supplier for packing material

• Reporting and measurement at the supplier in relation to developments regarding the weight/ volume of the shipped item.

• Make an agreement with suppliers to limit single packages and collect instead (Wabtec).

• Use cardboard instead of wooden pallets.

• Dialogue with suppliers regarding the desire for a different packaging and the way it is carried out

• Internal planning of transport

• Find a fixed day for shipping the goods that allows it.

• Company electric cars

IV.2. MEASURES APPROVED BUT NOT YET BEING IMPLEMENTED

• Charging stands for electric cars – Both VMS & customers

• Include a focus on soft values on social media

• Investigate the green profile of suppliers

• Buy environmental electricity

• Recon locally.

IV.3. MEASURES BEING CONSIDERED

• Plant a tree per used pallet

• Retrofitting

• Batteries/Peak Shaving

• Cooperation with universities

• Become part of a larger green joint project –Energy City

• Heat container is insulated

• Extraction as needed

• Solar cells on the roof or in the park

• Utilization of excess heat

• Gates for blocking the cold

• Prevent temperature changes on more square meters than necessary.

• Optimizing the ventilation system

• Carbon capture

• Divide waste rags into used and less used

• Certificates of origin in relation to packaging materials

• Get a reporting system that can handle supplier feedback.

• Choose the right supplier based on CO2 footprint.

• Requirements for supplier of parts. NEW/Recon.

• Transfer requirements for waste management to the customer.

• Have a buffer of spare parts with you on larger projects and avoid forwarding

• Employee e-bikes.

VMS Group A/S is committed to sustainability and has implemented various initiatives tto minimize environmental impact, promote social responsibility, and ensure a healthy economy.

VMS Group aims to reduce CO2 emissions, minimize waste production, and use reusable materials where possible.

We prioritize safe working conditions for our employees, diversity and inclusion, and we are supporting local communities through charity work and sponsorships.

VMS Group recognizes the importance of a healthy economy to sustain our sustainability efforts. We focus on optimizing business practices, minimizing risks, and complying with relevant laws and regulations.

Our sustainability strategy is based on the principles of common sense, good business and sustainability.

We align our initiatives with the United Nations Sustainable Development Goals (specifically the goals related to good health and well-being, industry, innovation and infrastructure, and responsible consumption and production) and have a Code of Conduct based on the Ten Principles of the United Nations Global Compact.

VMS Group has already implemented several sustainable measures, and many more are in pipeline. We have made efforts to reduce waste, optimize energy usage, and promote responsible consumption and production.

We use the Climate Compass tool for data collection and extraction to assess our greenhouse gas emissions and evaluate the climate impact of our measures.

Slet dette: We have already implemented or are in the process of implementing various sustainability measures, including reducing food waste, implementing home workplaces for work-life balance, installing charging stands for electric cars, implementing LED lighting, and implementing waste sorting and recycling practices.

We have also approved additional measures that are yet to be implemented.

Overall, VMS Group A/S is committed to continuously improving our sustainability performance, and we plan to report on our progress in future reports.

SUSTAINABILITY REPORT 2023