S2 Workers in the value chain

ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model

Based on the analysis and the conditions in a global supply chain, the likelihood of systematic violations of labour rights and inadequate working conditions, including child and forced labour, is assessed as high, particularly in connection with the extraction of cotton for textiles, metals and crude oil for plastic production. The following groups of workers in AddLife’s upstream value chain have been assessed as particularly vulnerable:

• Migrant workers, who often lack adequate legal protection and may be exposed to forced labour or precarious forms of employment.
• Women and children, where women in certain manufacturing industries may face discrimination and unsafe working conditions, and where child labour occurs in certain high‑risk sectors for raw material extraction.
• Workers engaged in trade union activities, who in some regions may be subject to reprisals or prevented from organising.

AddLife’s impact on workers in the value chain through its relationships with upstream suppliers is managed as part of the Group’s process for sustainability due diligence in the supply chain. For more information on AddLife’s sustainability due diligence process, see “Sustainability due diligence in the supply chain” in section G1 Business conduct.

S2-1 Policies related to value chain workers

During the reporting period, AddLife updated the Code of Conduct and the Supplier Code of Conduct to clarify the Group’s commitment to respect and promote human rights and labour rights for all workers in the upstream value chain. These governing documents are based on commitments under the UN Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises and the ILO core conventions, and address issues such as forced labour and child labour. During the reporting period, a Sustainability Due Diligence Policy and a Sustainable Sourcing Policy were also developed. All newly developed and updated governing documents were adopted by the Board of Directors after the end of the financial year. For more information about AddLife’s policies, their content and the responsibility for implementation, see “Code of Conduct and group-wide policies” in chapter G1 Business conduct.

S2-2 Processes for engaging with value chain workers about impacts

In AddLife’s double materiality analysis, it was identified that particularly vulnerable groups of workers are mainly found in the Group’s upstream value chain. Given AddLife’s role as a distributor, operating further downstream in the value chain, the Group has limited possibility for direct dialogue with these groups. AddLife therefore primarily engages with its direct suppliers, mainly as part of the continuous business dialogue between the subsidiaries and their suppliers. Within this dialogue, issues relating to human rights and labour rights in the upstream value chain will be addressed as part of the Group’s process for sustainability due diligence in the supply chain, supported by the joint commitments set out in the Supplier Code of Conduct. AddLife also monitors these issues through reports and analyses from international and local organisations and trade union representatives with insight into workers’ situations, in order to guide the strategic sustainability work and the double materiality analysis. For more information on AddLife’s sustainability due diligence process, see “Sustainability due diligence in the supply chain” in chapter G1 Business conduct.

S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns

It remains for AddLife to formalise a fully developed process for addressing and remediating identified negative impacts. During the reporting period, AddLife has relied on the Group’s whistleblowing system to enable the detection and reporting of any potential irregularities and suspected wrongdoing that may affect the organisation, people, society or the environment. The whistleblowing channel is available to both employees and external stakeholders via the Group’s website. Building on the whistleblowing channel, AddLife intends to develop a formal process and grievance mechanism over the coming years to address and remediate negative impacts, both in the Group’s own operations and in the upstream and downstream value chain. For more information on the Group’s whistleblowing channel, see “Whistleblowing channel” in chapter G1 Business conduct.

S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action

Actions to prevent, mitigate and remediate negative impacts on workers in the upstream value chain are identified as part of the Group’s process for sustainability due diligence in the supply chain. During the reporting period, one case of inadequate working conditions in the upstream value chain was identified, in violation of AddLife’s requirements on human rights. Together with the external party, an action plan for corrective actions, including remediation to the affected workers, has been developed and initiated. The work to follow up and verify the actions will continue during the next reporting period in consultation with the external party. For more information on other actions carried out during the year in relation to workers in the value chain, see “Sustainability due diligence in the supply chain” in chapter G1 Business conduct.

S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

AddLife’s target related to workers in the value chain coincides with the Group’s target for sustainability in the supply chain. AddLife has not engaged external stakeholders, including workers in the value chain, their representatives or credible proxies, in the process of setting the target. For more information on this target for sustainability in the supply chain, see “Targets related to business conduct” in chapter G1 Business conduct.