Annual Report and Sustainability Report 2019

SUSTAINABILITY

It is fundamentally important for us to conduct our business in a responsible manner

Responsible Business Conduct

KONGSBERG has more than 200 years of tradition and history as a defence supplier and as a technology company. It is fundamentally important for us to conduct our business in a responsible manner. It involves following the laws and regulations applicable in the countries where we operate, our own corporate Code of Ethics and Business Conduct and other national and international principles and frameworks for responsible business conduct.

We operate in industries and countries that can involve different types of risk. We conduct risk analysis and seek to prioritise and manage risk to prevent and mitigate to the greatest possible extent.

The defence industry

The Norwegian Armed Forces safeguard important social functions both in peacetime, crisis situations, armed conflict and in war. A modern defence calls for state-of-the-art defence systems, and KONGSBERG’s defence systems and products are an integral part of this. KONGSBERG’s role as a supplier of defence products must be seen in the context of Norway’s national security policy, and Norway’s international obligations as a member of the United Nations and NATO. The Norwegian Armed Forces and KONGSBERG collaborate extensively to develop customised systems for the country’s specific needs. KONGSBERG has developed high-tech defence systems that also play an important role on the international arena. In 2019, defence business represented about 30 per cent of our turnover.

Export of defence material

Norwegian rules for export of defence material are among the most restrictive in the world. The Norwegian parliament has sanctioned that defence products can only be sold to pre-approved countries. Transparency about export of defence material is an important principle in Norway. KONGSBERG consistently complies with all requirements set by the Ministry of Foreign Affairs regarding the application process, reporting and statistics.

KONGSBERG also holds shares in companies, and have partners, suppliers and customers in other countries. Export control regulations in other countries must therefore also be complied with. KONGSBERG has a comprehensive programme for internal control and training in connection with our export activities.

We will engage in development of autonomy and artificial intelligence, safeguard norms and values in line with our ethics and business behaviour policies, as well as comply with national and international laws and regulations.

Maritime industries

About 70 per cent of the Group’s revenue in 2019 are related to maritime industries. The world is still in need of energy and transport, but with emphasis on low carbon solutions. This provides commercial opportunities for the sustainable innovative solutions we are developing together with our partners and customers. KONGSBERG’s systems and products are to a large extent associated with optimisation, security, operation and control of machines, production processes and equipment. We deliver systems and services that contribute to better utilisation of resources, more efficient navigation and safer operation of complex vessels and installations. Read more about this in the chapter on sustainable innovation.

Autonomy and Artificial Intelligence (AI1))

KONGSBERG develops advanced technology, which includes autonomous systems and AI, e.g. in offshore transport and drone technology. Artificial intelligence in the form of machine learning is used within a secure framework by our simulators. Wherever this technology is utilised in autonomous solutions, human monitoring is always in place to provide additional security. This raises ethical questions that we have high attention on. Our Ethics Council has the theme on the agenda, and we are part of the international discussion through our membership of Ifbec2). Autonomy and AI affects society, working life and legislation. Our approach to AI is to engage in development, safeguard norms and values in line with our ethics and business behaviour policies, as well as comply with national and international laws and regulations.

Conflict minerals

KONGSBERG comply with legal requirements and customer requirements for prohibitions and restrictions related to the purchase of conflict minerals.

Conflict minerals include the minerals tin, tantalum, wolfram (tungsten) and gold, including their derivatives, which are mined in the Democratic Republic of Congo or adjacent states. In order to follow up responsible purchases of minerals, we require our suppliers that they have routines and procedures that include:

  • Implementation of appropriate surveys in the country of origin for the conflict mineral when the mineral is used in products included in deliveries to KONGSBERG.
  • Risk analysis and procedure to remedy unacceptable conditions related to the extraction of the minerals.
  • Implementation of necessary investigations (Due Diligence, with reference to OECD/RMI guidelines or similar) to determine whether the minerals purchased from these countries directly or indirectly relate to armed conflicts in the country.

1) AI is defined by the EU as "Artificial Intelligence systems (AI) are software (and possibly even hardware) designed by people who, if given a complex goal, act in physical or digital dimensions by recognizing their environment through data collection, they interpret structured or unstructured data, reasoning on this knowledge, or processing of the information, derived from this data and determining the best action(s) to take to achieve the given goal."
2) The International Forum on Business Ethical Conduct for the AeroSpace and Defence Industry.

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