INCREASE AND SPREAD KNOWLEDGE IN THE ORGANIZATION

Circular business

Selection of activities:

• Material optimization
• Waste handling
• Reduced number of returns

BE Group has commenced an extensive mapping of the company’s operations and impact on the surrounding world. A major part of the work is also looking at the opportunities that exist. How BE Group can help promote a more sustainable steel industry and a better world for future generations.

Climate change and environmental degradation are a threat to the continued stability and development of the EU and the world. The EU has set a target to become the world’s first climate-neutral region in 2050. To achieve this goal, the EU’s Green Deal framework has been launched. The framework includes a number of directives that will affect all people and businesses in Europe, directly or indirectly.

One of the directives called Carbon Border Adjustment Mechanism (CBAM) will affect BE Group’s operations more directly. The Directive, which entered into force in 2023, complements the EU’s emissions trading and acts as an import duty on the carbon dioxide content of selected products. All sectors covered by emissions trading are covered by CBAM, steel and aluminum are two of these. Between 2026 and 2034, customs duties will be phased in at the same time that free allocation in emissions trading for European producers is phased out. Fully implemented, CBAM will increase the cost of steel produced with fossil fuels for producers in the internal market and for those who import to it. BE Group imports a small amount of non-European steel and is therefore included in the CBAM reporting.

Until 2026, the reporting is limited to the carbon dioxide content of the imported products. BE Group’s relevant units submitted their first reports to the European Commission in January 2024. The reports included the last quarter imports in 2023. In 2024, BE Group will work to improve the quality of data that forms the basis for CBAM reporting.

For BE Group, it is important to adapt its operations and offering to the regulations that are being implemented. This requires the company to have a strategy that is not only effective in the short term but also designed to hold in the medium to long term. The purchasing organization must be aware of the impact of the different options and salespeople must be able to provide customers with the information they need to make informed material choices, where price may not always be the most important factor.

Policy and code of conduct

BE Group is supported by several policies and guidelines in its sustainability work: such as the code of conduct, core values, environmental policy, information policy, Safety first policy, anti-corruption policy, sanction policy, the code of conduct for suppliers and the whistleblower policy. Subsidiaries shall comply with these ethical guidelines and policies and the managing director of each company is responsible for their application in the operations.

BE Group’s code of conduct provides guidelines for business ethics and anti-corruption, and this is complemented with an anti-corruption policy. The policy has been translated into the local languages within the Group and clarifies the Group’s framework and rules of conduct. During the year, the Group did not receive any notifications linked to this.

The company’s whistleblower service is published on the website and BE Group has a policy to meet the requirements in each country in which the company operates. A whistleblower committee receives and handles possible cases together with an external advisory party. No qualified whistleblower cases were received during the year.

For many years, health and safety have been a priority area for BE Group. In recent years, the company has reduced the number of accidents leading to absence by nearly 75 percent. This is a major step in the right direction, but the goal is for no employee to get hurt at work.

There is a policy with a zero vision for workplace accidents called Safety First where the basic idea is that all accidents can be prevented and safety must come first at all times. The units works locally to assess and address risks in the operations and to prevent accidents. Governing documents have been established and regular follow-ups, workplace meetings and training are implemented. Each incident and risk observation are reported, evaluated, resolved and followed up.

In 2023, 11 accidents (11) were reported, resulting in more than one day’s absence. However, it is clear that risk awareness has increased among employees. An increasing number of risk observations are being reported and this leads to units being able to work increasingly proactive with improvement projects.

In Sweden, they were certified in accordance with ISO 45001 during the year. This is an international management system standard and a tool for organizations that want to work systematically to strengthen their physical and social health at the workplace. The standard imposes for example requirements on risk management, management commitment and employee participation.

Participation is a focus area for all units and is a prerequisite for successful safety work since behavior that violates the rules is a major cause of workplace accidents. By discussing both what happens, accidents, incidents and risk observations, awareness among the employees increases.

Employees

BE Group strives to be an attractive and reliable employer where employees thrive and can develop. The company is dependent on new staff with new ideas and experiences that balance the long-term expertise that already exists.

Every year, BE Group conducts a Group-wide employee survey to ensure that the strengths and improvement areas that exist in the work environment are illustrated. The employee survey is sent to all employees and 90 percent (85) of the employees participated in the survey in 2023. The results are compiled at department level and every group work on preparing an action plan for the improvement areas established. The goal is that the employees shall have the possibility of influencing their work situation and, besides the employee survey, performance reviews are regularly held with the immediate manager.

In the performance reviews, among other things, discussions are held around the opportunity to develop in the work role and this includes training courses, both external and internal. The units work locally with profession-specific training and during the year, several health and safety trainings were held, including forklift operation, conflict management and change management. In Finland, there is a digital tool, BE Academy, with ready-made short-term training courses where the employees themselves have the opportunity to develop in various work-related areas.

In the 2023 employee survey, 91 percent (89) of employees said that they experienced that their manager always puts safety first. What is also positive is that 89 percent (81) feel they can tell a colleague if they feel that they are not complying with safety regulations. The overall target is that no one should be injured at BE Group’s workplaces and that everyone should have the prerequisites to be able to do the right thing in an easy way. One of the largest risk groups is new employees and work was done to further improving introductory training during the year.

The basic idea is that every accident can be prevented and safety must come first at all times

BE Group’s core values

BE Group’s corporate culture is based on what is defined as the Group’s core values. These values shall permeate the entire organization and create security and understanding, provide guidance in how we should relate to one another and to our surroundings, and form the basis for clear communication, both internally and externally. BE Group has focused on three key words for this work :

• Dynamic
• Transparent
• Sustainable

Read more about the values at www.begroup.com.

Average number of employees and diversity

The average number of employees in BE Group in 2023 was 678 (654), of whom 10 percent (11) were women. The percentage of women in the organization is still low and work is ongoing to map how to create conditions to attract more female employees and managers. However, there are considerable differences between the percentage of women on the white-collar side and in production. The reduction in the average number of women in the organization during the year is mainly attributable to an increase in employees in production, which is a male-dominated role.

On december 31 2023, the percentage of women among white-collar workers was about 27 percent (27) and for production it was about 2 percent (1). Work is continuing to increase the diversity of workplaces and to create balanced teams with individuals with different genders, ethnic backgrounds and ages.

Environmental issues are an integrated part of BE Group’s operations and the foundation of the environmental work is a Group-wide environmental policy. The units work locally with the environmental issues linked to the operations and focus is on continuously improving their facilities’ energy consumption, emissions and waste management. All operations are certified in accordance with the international environmental standard ISO 14001. BE Group is engaged in operations at one site in Sweden and one in Finland where environmental permits are required.

Investments to enhance efficiency

During the year, the company implemented a number of measures to improve the environmental impact of the facilities. Among other things, BE Group in Sweden has worked on the energy efficiency enhancement of selected buildings in Norrköping by improving insulation, changing fan units and expanding the use of LED lighting. In the preceding year, tests were conducted using water-based paint, instead of solvent-based in production, and during the year, operations shifted to water-based paint. This results in reduced emissions of volatile organic compounds, increased recycling of process heat and an improved working environment for the employees.

BE Group in Finland continued to expand the use of LED lighting and upgraded some of the machinery, thereby improving energy efficiency.

At the end of 2023, modernization of the forklift fleet began in Sweden and Finland, which will continue in 2024. There will then be a switch to electric forklifts, which improves the work environment and reduces emissions.

In recent years, the company has taken a series of measures to reduce the operation’s energy dependence and reduce emissions of carbon dioxide.

Outcome for the year

As an independent steel distributor, BE Group works with the leading steel producers around Europe and is already able to offer low carbon steel to customers. The ambition is to increase the share purchased from ISO 14001 certified suppliers and, in 2023, 83 percent (85) of purchases were made from certified suppliers. Target figures will be set in the coming years.

BE Group has made calculations of carbon dioxide emissions according to the recommendations in the Greenhouse Gas Protocol, GHG Scope 1-2. BE Group’s combined climate impact expressed in CO₂-equivalents was about 2,900 tons in 2023. This is an increase of around 500 tons compared with 2022. The CO₂ emissions then amount to 11.2 kg per ton sold (8.6) from the Group’s operations, excluding transports. Including transports, CO₂ emissions are 21.6 kg per ton sold (16.4). In general, the operations in Poland are the most carbon-intensive, largely due to Poland’s electricity market being highly fossil-dependent.

The increase is mainly attributable to two factors. The first is that the Swedish unit made two acquisitions in 2022, the emissions of which were only calculated for the period after being included in BE Group. If the effects of the acquisitions had been calculated for the entire year of 2022, the result would have only differed approximately 60 tons from the 2023 emissions. The other is that Lahti temporarily had to use oil combustion instead of natural gas, since there was a risk of lack of natural gas in Europe. This solution is not intended to be permanent and alternatives are being investigated.

As part of its work on the Corporate Sustainability Reporting Directive, the company will review internal processes for how it works with the GHG Protocol. Plans are under way for how Scope 3 will be included in the reporting in the next few years.

BE Group’s total energy consumption amounted to around 89 kWh/ton sold (84) during the year. The increase is mainly attributable to increased sales of more energy-intensive types of production services during the year. Carbon dioxide emissions from in-house operations are reduced through greater use of fossil-free energy carriers, such as electricity, biogas and district heating, and by the streamlining of energy consumption. Currently, about 61 percent of the energy consumption comes from renewable sources (60). Energy consumption is affected by the delivery volumes and it is primarily production activities (material processing and service), which are energy intensive. Warehousing in itself is less energy intensive.

BE Group works to be a financially, socially and ethically responsible actor and complies with the laws and rules applicable in the respective market where the company operates. The company works with internal processes and reporting tools to be able to detect irregularities in the organization. BE Group’s Code of Conduct forms the foundation of this work.

BE Group strives for good working conditions and fair pay for its employees and to be a reliable employer. The work for many employees is conducted in a heavy industrial environment where focus on well-being and safety are key issues. Non-compliance with regulations and directives constitutes a dangerous work environment. The company has a zero vision for workplace accidents and every incident is reported, evaluated, corrected and followed up.

Combating corruption

Corruption occurs when individuals abuse their power or position for personal gain. This is not just illegal but can have serious consequences for the company and society at large. BE Group applies sound business principles and works to combat all forms of corruption.

An anti-corruption policy has been developed in which it is established that the company’s employees are not to pay, offer or accept bribes or other wrongful advantages, such as gifts or representation that are considered extravagant, with the purpose of influencing business decisions or securing undue benefits. In addition, BE Group shall not work with suppliers, sellers or partners that offer bribes or are involved in corrupt activities.

Social responsibility

BE Group has units in several countries in northern Europe and is an important player and employer in the locations where the company operates and strives to be an active part of the community around the units.

This is achieved through various activities such as sponsorship of local sports clubs, internships and summer jobs and working together on degree projects. Together with other companies in the Naantali and Turku regions, BE Group in Finland donated money to the University of Turku to establish a professorship for the circular economy. The University of Turku has a lot of expertise related to sustainable development and the circular economy. At the Turku School of Economics, for example, the circular economy is studied based on strategic management of companies. The professorship will complement the University’s competence by studying the phenomenon from a technical and financial perspective.

Respect for human rights is an important factor in achieving the UN’s sustainable development goals. Internally, the company’s Code of Conduct governs the rights of its employees, such as the right to be represented by a trade union in negotiations, reasonable terms of employment and pay, a workplace free of discrimination and harassment and zero tolerance of child labor.

With a geographically spread supplier base, transparency can be limited and there is a risk that BE Group will involuntarily contribute to human rights violations. The company’s Code of Conduct for Suppliers addresses its minimum requirements and ambitions in areas such as human rights, health and safety, discrimination, working conditions, child labor, corruption and environmental liability issues. Follow-up is conducted via the whistleblower function where employees are able to report serious irregularities within the Group.