Workers in the Value Chain

Strategy

Material Impacts, risks, and opportunities and their relationship to strategy and business model
AddLife has identified that certain groups of workers in the group's value chain may be particularly vulnerable to negative impacts related to human rights and working conditions. These workers are primarily found in the supply chain, particularly in the extraction, processing, and manufacturing of the products AddLife distributes. In its analysis, AddLife has identified five categories of workers in the value chain who may be significantly affected:

1. WORKERS OPERATING AT ADDLIFE FACILITIES BUT NOT PART OF THE COMPANY’S DIRECT WORKFORCE

These workers include, for example, temporary labor operating at AddLife’s offices, warehouses, and production facilities but employed by other companies. At present, these groups have been assessed as not material and are therefore not further analyzed in this report.

2. WORKERS IN THE UPSTREAM VALUE CHAIN

The most significant risks of negative impacts are found upstream in the value chain, particularly among workers in:

• Raw material extraction and Processing – Exposure to forced labor and child labor in countries where these risks are systemic, as well as health risks associated with hazardous working conditions.
• Manufacturing and component production – Systematic risks related to low wages, long working hours, and limited trade union rights in certain regions where our suppliers operate.

Although AddLife currently has no confirmed cases of human rights and labor rights violations within its direct supplier network, the company acknowledges, based on existing industry data, that these issues likely exist within its supply chains. Therefore, AddLife considers these identified impacts as material to its business operations and integrates them into its due diligence efforts.

These risks arise as a direct consequence of AddLife’s business model, where the company, primarily as a distributor, is dependent on an extensive supplier network to ensure product availability. Traceability in these complex supply chains presents a challenge, requiring AddLife to continuously develop and strengthen its due diligence processes to identify, manage, and mitigate these risks.

The identified risks have led to increased internal requirements for traceability and supplier accountability in the company’s procurement processes. As part of its strategic adaptation, AddLife is developing guidelines and processes to better integrate sustainability due diligence into its decision-making. In the long term, this may affect the company’s supplier relationships and procurement strategy, with AddLife prioritizing partnerships with entities that share its commitment to human rights and sustainable business practices.

The financial impacts of these risks and opportunities are not yet fully quantified, but AddLife already sees that increased traceability and supplier controls may raise operating costs. In the short term, this entails higher expenses for supplier evaluations and the development of expanded due diligence processes. In the medium and long term, changes in supplier relationships and stricter regulatory requirements in regions like the EU and Norway may lead to adjusted procurement costs and potential price shifts in the company’s product range. To address these financial implications, AddLife will allocate internal resources to ensure that its sustainable supply chain strategy remains both economically viable and generates long-term value.

Beyond the risks associated with human rights management in the supply chain, AddLife also identifies business opportunities linked to its sustainability due diligence efforts. By strengthening traceability in the supply chain and ensuring favorable working conditions, AddLife can reduce financial and operational risks, enhance its reputation, and create competitive advantages. Increased regulatory requirements may initially lead to costs but also provide opportunities to position AddLife as a leading company in sustainable supply chains. Additionally, AddLife sees a potential positive financing impact by attracting investors and customers with growing demands for corporate social responsibility.

3. WORKERS IN THE DOWNSTREAM VALUE CHAIN

This category includes workers in logistics, distribution, and retail. While some negative impacts may occur, such as poor working conditions in transportation and warehousing, the most significant risks are assessed to be in the upstream value chain.

4. WORKERS IN JOINT VENTURES AND SPECIAL PURPOSE ENTITIES INVOLVING ADDLIFE

After reviewing its business model and organizational structure, AddLife concludes that it has no joint ventures or special purpose entities directly involving the company. Therefore, this category of workers in the value chain is not considered material and is not further analyzed in this report.

5. PARTICULARLY VULNERABLE WORKERS

AddLife has identified that certain workers in the value chain face a higher risk of exploitation and other negative impacts, including:

• Migrant workers – Often lacking legal protection and at risk of forced labor or precarious employment conditions.
• Women and children – Women in certain manufacturing industries may face discrimination and unsafe working conditions, and child labor remains present in some high-risk raw material sectors.
• Trade union-affiliated workers – In some regions, these workers may face retaliation or obstacles to organizing.

AddLife actively works to increase its understanding of these risks and will strengthen traceability in its supply chains, improve engagement with suppliers and external experts, and develop measures to minimize negative impacts.

Beyond these specific groups, the company’s analysis indicates that the risks of child and forced labor are relevant across all of its value chains, although AddLife currently lacks detailed traceability at the geographical level. The raw materials identified as particularly high-risk include metals, cotton, ceramics/composites, and petroleum-based materials for plastic production. To understand and manage these risks, AddLife regularly analyzes industry data and engages in dialogues with suppliers and external experts. The company actively works to enhance supply chain traceability and implement measures to reduce these risks.

The identified financial risks are particularly relevant in supplier networks with a high concentration of low-income workers, migrant workers, and workers in countries with weak labor regulations. Increased traceability and compliance requirements may lead to higher costs for suppliers in these regions, which could, in turn, affect the company’s procurement prices. At the same time, improved management of working conditions may strengthen business relationships and reduce the risks of supply chain disruptions. In the longer term, this can create competitive advantages and strengthen the company’s brand in procurement processes where social sustainability is a key factor.

Managing Impacts, Risks, and Opportunities

Policies for workers in the value chain
As part of AddLife’s sustainability due diligence process, which will be implemented in 2025, the Supplier Code of Conduct will be updated to ensure compliance with international guidelines and to strengthen requirements for working conditions in the supply chain. The update will include:

• Stricter requirements for suppliers regarding labor conditions, including protection against forced labor, child labor, and human trafficking, as well as ensuring safe working environments.
• Consideration of particularly vulnerable groups, such as migrant workers and women in the supply chain.
• Implementation and monitoring mechanisms, including evaluation processes and action plans for deviations.

In addition, the Due Diligence Policy for Sustainability and Guidelines for Sustainable Procurement will be updated to better integrate sustainability principles and ensure responsible management of social and environmental impacts in the value chain. These updates will include:

• Clarified processes for identifying and managing sustainability-related risks in the supply chain, aligned with OECD guidelines and the UN Guiding Principles on Business and Human Rights.
• Concrete requirements for sustainability evaluations of suppliers, along with specific methods for monitoring and reporting.
• Integration of sustainability into procurement decisions, including guidelines for selecting suppliers that actively work with climate and social issues.

Compliance with these policies will be monitored through continuous supplier audits, evaluations via third-party tools such as EcoVadis, and internal follow-ups. Deviations will be managed according to an action plan with clear consequences for non-compliance, along with potential support from AddLife for corrective measures.

AddLife currently does not have a systematic reporting mechanism to compile cases of non-compliance with the UN Guiding Principles, the ILO Declaration, or the OECD Guidelines in its supply chain. Within the framework of the group's sustainability due diligence process, AddLife plans to implement such a structure in 2025 or 2026 to systematically identify and manage deviations.

The updated policies will cover the entire upstream value chain, ensuring that suppliers, including their subcontractors, are subject to requirements related to labor conditions, human rights, and sustainability performance. AddLife’s Board of Directors is ultimately responsible for the implementation and monitoring of these policies. These policy updates are designed to align with the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the ILO Core Conventions.

In developing these new policies, AddLife has engaged experts who have conducted dialogues with external stakeholders. These insights have helped identify challenges and areas for improvement regarding the situation of workers in the supply chain. The policies governing suppliers, primarily the Supplier Code of Conduct, will progressively be incorporated into the company’s supplier agreements and serve as the foundation for AddLife’s sustainability dialogues with suppliers.

To ensure understanding and compliance, AddLife plans to make the policy content accessible to suppliers through dedicated training initiatives as well as by publishing it on the group's website.

AddLife currently has no established model for direct engagement with workers in the value chain but is exploring methods to facilitate this. As part of the group's development efforts, AddLife will evaluate various approaches, such as collaborations with industry organizations, external experts, and third-party assessments, to better understand and address risks related to working conditions in the supply chain.

At present, AddLife lacks a formalized process to ensure remediation of negative human rights impacts in the supply chain. Within the framework of the group's due diligence process, AddLife plans to develop such a mechanism in 2025 or 2026. The aim is to establish structured procedures for managing identified deviations, including action plans and follow-up requirements for suppliers.

Procedures for contact with workers in the value chain regarding impacts
As AddLife is a distributor operating further down the value chain, establishing direct contact with workers in the supply chain presents a challenge. Therefore, the group's engagement primarily occurs through credible intermediaries, i.e., organizations and experts with a deep understanding of the situation of these workers. These intermediaries include civil society organizations, international trade unions, and industry actors focused on sustainability and human rights, who act as intermediaries to ensure that workers' perspectives are considered.

The group's previous materiality analysis and risk assessment have shown that certain regions and industries within the supply chain present an elevated risk of labor rights challenges. This has been a guiding factor in the decision to strengthen dialogue with credible intermediaries and, in the long term, explore the possibility of direct contact with workers in these areas.

So far, AddLife's dialogue with credible intermediaries has taken place within the scope of its materiality analysis and risk assessment of the supply chain. The company is working to establish structured procedures for ongoing dialogue regarding workers' rights, both with credible intermediaries and with its suppliers. In the long term, AddLife intends to develop methods for direct dialogue with workers or their representatives, particularly in the supplier tiers where the company has identified an elevated risk due to labor rights challenges.

Currently, the group's engagement with credible intermediaries takes place in connection with risk assessments and supplier evaluations. AddLife is exploring the possibility of integrating more regular engagement into its processes, for example, through:

• Recurring consultations with credible intermediaries.
• Dialogues with suppliers during relevant business interactions.

These measures aim to ensure that workers' perspectives are considered and that AddLife can proactively address human rights risks in its value chain.

AddLife's Head of Sustainability is responsible for ensuring that these dialogues take place and that insights from them inform corporate decision-making and processes. The Head of Sustainability reports to executive management, and the outcomes of these dialogues are included in sustainability reporting presented to the Board of Directors.

At present, AddLife does not have global framework agreements with trade unions related to workers in the value chain. However, the company is considering the possibility of strengthening collaboration with global labor organizations and industry initiatives on human rights.

Insights from dialogues with credible intermediaries are currently used to inform risk assessments and potential actions in the supply chain. During 2025–2026, AddLife plans to further develop its methodology for systematically evaluating whether its engagement leads to actual improvements for workers, such as through follow-up mechanisms or indicator-based measurements.

As part of this effort, AddLife also recognizes the need to better understand the perspectives of particularly vulnerable workers in the value chain, such as women, migrant workers, or people with disabilities. The company therefore plans to explore ways to enhance its collection of insights into their working conditions, for example, by strengthening dialogues with credible intermediaries and industry collaborations.

Process for remediating negative impacts and channels for workers in the value chain to report irregularities
AddLife will develop a grievance mechanism and a process to manage and remediate negative impacts on workers in the group's value chain. This mechanism will be based on the group-wide whistleblowing channel, which is accessible to all stakeholders and provided through AddLife’s external partner, WhistleB. The communication channel is encrypted and password-protected, and all reports are handled confidentially.

To ensure that workers in the supply chain have access to an effective grievance mechanism, AddLife plans to:

• Develop a framework for managing, following up on, and addressing complaints related to working conditions in the supplier network.
• Increase requirements on suppliers to implement their own grievance mechanisms accessible to their workers.
• Explore the possibility of collaborating with external, sector-specific, or general grievance mechanisms to enhance accessibility for workers to report human rights violations.

During 2025–2026, AddLife will establish a model to track, analyze, and follow up on cases reported through the grievance mechanisms. The company will explore potential methods to assess both the number of reports and the effectiveness of the mechanism, such as through regular reviews of reported cases in collaboration with relevant stakeholders.

At present, AddLife lacks a structured method to assess how many workers in the supply chain are aware of and trust the group's whistleblowing channel. As part of its due diligence efforts, AddLife plans to explore ways to measure this in connection with monitoring supplier compliance with the group's Supplier Code of Conduct.

To strengthen worker protection, AddLife plans to clarify in its Supplier Code of Conduct in 2025 that individuals who report via the group's whistleblowing channel are protected from retaliation. This protection will also extend to those who, in the future, report incidents through the group's upcoming grievance mechanism.

Measures regarding material impacts on workers in the value chain and strategies to manage material risks and leverage material opportunities for workers in the value chain, and the effectiveness of these measures
During 2024, AddLife, in collaboration with selected subsidiaries, has developed a sustainability due diligence process for the supply chain through a pilot project. The aim has been to establish a structured method for identifying and managing risks, with a particular focus on human rights. The pilot project has included an analysis of existing processes and governance documents, as well as mapping potential areas for improvement. A key insight has been the need for a more systematic risk assessment and a clearer, formalized strategy at the group level.

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Metrics and targets

Goals for managing material negative impacts, strengthening positive impacts, and addressing material risks and opportunities
AddLife has not yet established long-term, measurable, and outcome-oriented targets for sustainability in the supply chain but plans to do so in 2025. The company is working on identifying relevant key performance indicators (KPIs) and target levels to strengthen workers' conditions and minimize negative human rights impacts.

As an interim step, AddLife has set the goal of evaluating 90 percent of the group's procurement volume of products and logistics from a sustainability perspective by the end of 2024. This goal aims to ensure a systematic assessment of the group's suppliers' commitments and risk levels in the area of sustainability.

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