Annual Report and Sustainability Report 2020

SUSTAINABILITY

Technology for global challenges

Sustainability and ESG strategy and priority

Sustainable innovation is an integrated part of KONGSBERG’s business strategy. Our most significant contribution to achieving the sustainability goals is the supply of high-tech products and services, which reduce our customers’ emissions of harmful greenhouse gases.

Our business strategy

Sustainability and ESG are anchored and integrated into our business strategy, both in terms of business opportunities and initiatives in our internal operations. We will position ourselves and seize the opportunities inherent in the ”green and digital shift”, the transition to zero emission society, and the challenges our customers face. We shall be in forefront to meet the accelerating regulatory changes and our stakeholders’ expectations and requirements.

Our unique position of collaboration and use of crossover technology between our business areas enables innovation in terms of both technology and sustainability.

This is particularly relevant in the field of Green Shipping, through the development of autonomous vessels, hybrid systems and electric ferries. Through our unique position, which makes use of crossover technology and collaboration between our business areas, we facilitate innovation in both technology and sustainability. We work with private and public parties to reduce harmful effects on the oceans, through control systems for aquaculture facilities, monitoring marine areas for illegal fishing and fishing quotas, plastic trawler management, marine surveillance, etc. Applying more sustainable thinking in our innovation also strengthened our global competitiveness.

Although our internal operations have a relatively low emissions level, we are actively working on measures to achieve our target to reduce greenhouse gases. We have had a climate plan for the period 2015-2020 with the goal of 20 per cent reduction of greenhouse gases, read more about it in the chapter on climate and the environment. We will implement a new climate plan in 2021 for our internal operations, with the goal of contributing to Norway’s climate targets for 2030, and fulfillment of the Paris Agreement’s intention.

Materiality assessment

During the last quarter of 2019, we performed an extensive materiality assessment in order to learn more about what our owners, staff, business partners, finance institutions and the society expect of us in terms of sustainability, financial, environmental, social and governance matters (ESG), and what they consider most important, seen in context with our own assessments. This will form the basis of our strategic work and prioritisations for the future. We will conduct materiality assessments periodically, to follow up on new issues considered material. For 2020, it was natural to take in the COVID-19 situation in the topic of HSE and lift it up from medium to high materiality. Read more about this under the chapter for HSE. The topics are presented in the matrix related to the sustainability goals where we believe we can contribute the most.


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Operationalization of our Sustainability- and ESG strategy

In 2020, we have conducted a process that has involved all of our business areas and management, to define our main goals for ESG for 2021 and onwards, and which KPIs to measure achievement of the goals. We will start reporting on the KPIs from 2021. The sustainability report for 2020 reports on the targets set in 2019, effective for 2020.

Prioritizing our most material sustainability and ESG issues

Environment and climate
  • We will increase our market focus, research and development and innovation for solutions for tomorrow’s challenges which contribute to climate neutrality, resource efficiency and circular solutions for our customers.
  • We will reduce our own climate footprint in collaboration with our suppliers, especially for transport and travel, as well as increase circularity in our own operations.
Social matters
  • We will work actively to have an inclusive culture without discrimination.
  • We shall prevent violations of human rights or labour rights in our operations.
  • We will ensure that we increase and maintain the competence of our employees.
Governance
  • Our business practices shall be conducted in a responsible and ethically way.
  • Our management system and compliance programme shall support our culture and behavior.
  • Our risk-based internal control systems shall be designed to protect and follow up our operations.

Integration of ESG into our business processes

We are continuously working to integrate our ESG targets into our business. Examples include:

  • Strategy; we closely monitor and analyse regulatory requirements and stakeholders’ expectations to understand the implications for our strategy. We are looking out for both risk and market opportunities to make a significant and positive contribution to sustainability and ESG.
  • Finance; We are continuously working on improvement of our systems and reporting processes, to ensure high levels of transparency, and to be able to report on new requirements, such as the EU Taxonomy.
  • Procurement and supply chain; we update our supplier selection criteria and procurement requirements in line with our own goals.
  • Evaluation and selection of business partners; in addition to the necessary skills, we emphasize the business partners ESG-profile.

EU Green Deal and Action Plan for Sustainable Finance

We are preparing for new reporting requirements that will follow the EU Taxonomy. We expect that the development of this taxonomy will be a driving force for innovative, technological business opportunities within market segments where we are strong and have the potential for further development.

UN Sustainable Development Goals

The UN’s 17 Sustainable Development Goals are intended to help ensure that the overall goal for a sustainable planet will be achieved by 2030. These Sustainable Development Goals can only be achieved through the efforts of businesses.

We have selected the Sustainable Development Goals to which we believe we can make the biggest contribution, while remaining fully aware that all the goals are important. We strive to support all the goals through our operations, both in terms of reducing any negative impact and by seizing any business opportunities which may be presented by the goals.

UN Sustainable Development Goals

Goals 7, 9 and 14 are the goals we believe we can make the largest contribution to, through innovation and by developing technology for sustainable solutions. Our products and solutions contribute to reduced energy consumption, increased efficiency and transition from fossil fuels to cleaner energy sources for our customers. This also provides great business opportunities while helping to achieve the SDG’s. Examples are autonomous and electric ferries, control systems for use in aquaculture, on fishing trawlers, monitoring of marine areas for illegal fishing and controls of fishing quotas and plastic in the oceans. Technological development in the defence part of the business is enabling many of the innovative sustainable solutions, known as “cross-over” technology. We will also reduce our own energy consumption by efficiency and sound attitudes, and we will optimise use of energy from renewable sources in our buildings and in transport. We have developed plans for skills for future for our employees, both with regard to technical and behavioural matters. We also stimulate employee-driven innovation by project participation and by education. We participate in partnership projects supported by public programs for innovative sustainable solutions. Together, these measures support goal number 13, ‘Stop climate change’.

We support goal number 4 by working extensively with universities and colleges, setting up student programmes and hosting summer students in order to motivate those studying natural sciences to complete their education. We support the science centre Vitensenteret in Kongsberg science centre and work with natural science teaching in primary and secondary schools. We strive to continue a corresponding engagement in our international operations.

We support goal number 5 by working actively to improve the gender ratio and ensure that the genders have equal rights, thereby helping to improve equality in a traditionally male-dominated working environment. We are actively working on gender equality by setting gender distribution targets in our total workforce and in management teams. We have an equal pay policy for women and men, and we have zero tolerance for discrimination and harassment.

We support goal number 8 by using Norwegian standards and ILO Conventions as a basis for our activities in every country and impose the same requirements on our suppliers. We thereby help to protect employee rights and promote a safe and secure working environment for all employees in our operations and in our supply chain. We strive to contribute to sustainable economic growth through innovation and research and development, also in collaborative projects with other companies and organisations. We hire people for work training to support that people who may otherwise be at risk of falling out of work come back to work.

We support goal number 16 by having comprehensive and robust internal controls and sanctions in place for exports, in particular to eliminate the risk that our defence products could be used in contravention of international rules and humanitarian law. We also have a comprehensive anti-corruption programme across all our international operations. We have established whistleblower channels where employees can report suspected violations of laws or our code of conduct, and we have strict requirements on our supply chain to avoid illegal use of labour or materials.

We support goal number 17 by working closely with our business partners. Examples are technology development, projects for monitoring plastic in the oceans and collaboration for ethical business conduct, anti-corruption and export. We emphasise sustainable development when we enter into new strategic partnerships, in our relationship with our suppliers and when we work with charitable organisations. Examples include collaboration with Zero for the climate dimension, the Norwegian Church City Mission for the social dimension, the UN Global Compact membership, together with the implementation of e-learning and webinars for our suppliers on sustainability and ESG-issues.

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