Andfjord Salmon ESG Report 2021

ANNUAL REPORT !"!#

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ESG REPORT 2021

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CEO LETTER: SWIMMING INTHE RIGHT DIRECTION

The world needs more food. We also need healthier food. Sustainable food in general, and fish farming in particular, are topics that have received increased attention from several stakeholder groups in recent years. This is an interest which And ! ord Salmon welcome.

CEO letter

33 34 35

About this report

This is Andfjord Salmon

Corporate governance and sustainability approach Certifications UN Sustainable Development goals Stakeholders

Policy development and new regulations such as the UN Sustainable Development Goals and the EU Farm to Fork strategy are guiding us in a more sustainable direction where food systems that provide healthy food to people, while also taking care of our planet, are in focus. In Andfjord Salmon, our ambition remains the same: we will build the world’s most fish-friendly and sustainable salmon farming facility of its kind. I am pleased to say that we in 2021 have taken big steps towards realising this ambition. The laminar water flow, which is the heart of Andfjord Salmon’s flow-through technology, is therefore the key to unlocking a number of sustainability and fish health benefits. The most important step towards this goal was the success- ful verification of our laminar water flow at our first pool at Kvalnes, Andøya. In practice, this verified that we have been able to recreate wild salmon’s natural habitat on land. In the wild, salmon swim in laminar water flows in the ocean, similar to what we now have in our pool at Andøya. But why is our flow-through system important from a sustainability perspective? Firstly, a flow-through system with laminar water flow reduces energy consumption and associated costs significantly as there is no need to lift, filter or heat the seawater. This allows us to produce fish with a

small energy and environmental footprint. Secondly, the seawater we use is clean and holds a perfect temperature as it is sourced directly from the nearby Andfjorden below the level where lice and algae live. This helps us to avoid some of the most common fish health problems. Further, our fish cannot escape, and we control our biological waste, which is subsequently utilised as a resource. In 2020, we identified four main sustainability topics that we believed were central to manage the most important social, societal and environmental challenges that Andfjord Salmon face: Environment, occupational health and safety, supply chain transparency and control, and local value creation. Based on systematic stakeholder dialogue and an updated materiality assessment conducted in 2021, we have this year also included working environment as a new topic in this year’s sustainability report, which is delivered in accordance with the Global Reporting Initiative (GRI) Standard. All of these topics are important to us, and I am glad to say that we have made significant forward strides – or swimming strokes, if you like – within these fields in 2021. I am convinced that our ESG e ! orts go hand-in-hand with the future profitability of Andfjord Salmon. I hope you will read on to find out how we approach these vital topics. Martin Rasmussen CEO of Andfjord Salmon

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Stakeholder dialogue Materiality assessment

43 44

Reporting themes and topics Environment and climate impact Biodiversity Fish health and welfare Energy use Working environment Employee survey Equality and diversity Occupational health and safety

53

58

Training and informing employees about health and safety risks Risk assessments Reporting

Supply chain transparency and control

61

Screening of suppliers

Local value creation

63

Local employment Goods and services Appendix: Summary goals and targets 2022

65 66

Appendix: GRI content index

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THIS IS ANDFJORD SALMON: THEHOME OF ATLANTIC SALMON

ABOUT THIS REPORT

Andfjord Salmon AS (Andfjord Salmon) is a Norwegian company established in 2014 by founders with extensive salmon farming, financial and business development ex- perience. The company is built on a foundation of innova- tion and a sustainable aquaculture concept for land-based farming of Atlantic salmon. Andfjord Salmon’s farming facility is patented, consumes a minimal amount of energy and carries low operating costs. The farming facility is designed to avoid problems with lice and poisonous algae, with robust barriers to pre- vent escapes and minimise pollution of the marine environ- ment. The flow through farming method is very similar to

a flow through net-pen in the ocean, which gives a healthy robust environment for the salmon. Andfjord Salmon is headquartered at Kvalnes on the northern part of Andøya, in the Arctic Archipelago of Vesterålen. The company’s first farming facility is currently under final testing and will, according to plan, be in oper- ation from the first half of 2022. The company is listed on Euronext Growth under the ticker ANDF. At the end of 2021, Andfjord Salmon had 18 employees, all of which were located in Norway.

For information about this report and its content, please contact Andfjord Salmon and CFO Bjarne Martinsen: bjarne.martinsen@andfjord.no. This is Andfjord Salmon’s second sustainability report and applies to the reporting period 1 January 2021 to 31 December 2021. The company prepares sustainability reports on an annual basis and the last report was published in March 2020. The report is prepared in accordance with the GRI Standards (Core option) and the Euronext guidelines for sustainability reporting. The report has been reviewed and approved by Andfjord Salmon’s Board of Directors. It has not been audited by a third party.

2020

2021

2022

Figure 1: Value chain of traditional and land-based salmon farming

Andfjord Salmon publishes its first sustainability report

Sustainability report prepared in accordance with the GRI Standards

Andfjord Salmon implemented selected UN SDGs

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OUR JOURNEY

CORPORATE GOVERNANCE AND SUSTAINABILITY APPROACH

The annual general meeting (“AGM”) is Andfjord Salm- on’s highest governing body, in which shareholders can influence the company’s strategic development. Andfjord Salmon’s Board of Directors (the Board) is responsible for ensuring satisfactory corporate governance and bears the ultimate responsibility for the company’s sustainability approach. Corporate Executive Management are responsible for Andfjord Salmon’s strategy and operations as well as

making sure that the company adheres to relevant laws, regulations and industry specific standards. Andfjord Salmon has prepared a report on corporate governance that is included in the annual report, which is available on the company’s website. Although the company is not subject to the Norwegian Code of Practice for Corporate Governance, it aims to comply with the principles of the recommendations as the business transitions into an operational phase.

2014

2019

2020

2021

2022

CERTIFICATIONS

Andfjord Salmon was founded

Listed on Euronext Growth

Construction start

First pool completed

Release of first smolt

CERTIFICATION

DESCRIPTION

STATUS ! GOAL

Global G.A.P.

Global Good Agricultural Practices is a standard for both agriculture and aquaculture. The standard covers food safety, animal welfare, sustainability, employment, and traceability. Global G.A.P is particularly important for customers in Europe. Aquaculture Stewardship Council (ASC) was founded in 2010 by World Wide Fund for Nature (WWF) and IDH Sustainable Trade Initiative to establish global standards for sustain- able seafood production.

Andfjord Salmon shall comply with the require- ments set out by Global G.A.P Aquaculture Standards. The company aims to obtain Global G.A.P. certification in Q1 2023

ASC

The company aims for ASC certification in 2023

OUR VISION: Building the world’s most fish-friendly and sustainable salmon farming facility of its kind.

OURMISSION: Farming salmon on nature’s terms – with consideration for the fish, the people and the society we live in.

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UN SUSTAINABLE DEVELOPMENT GOALS

The Sustainable Development Goals described below are those that are considered most material to Andfjord Salmon.

GOAL

OUR CONTRIBUTION

In Andfjord Salmon, the health and safety of our employees and suppliers is the highest priority everywhere and in all our activities. The goal is zero work-related injuries. To achieve this goal, we work systematically to establish an open safety culture.

Andfjord Salmon aims to create great value for the region we are a part of. We contribute strongly to innovation, research and competence enhancement in a broad perspective. Research and development is a key part of Andfjord Salmon’s innovative power.

Our employees are required to conduct business in accordance with the company’s ethical guidelines. These ethical guidelines describe expectations for our employees, but also for our business partners. Andfjord practises an open and trustworthy corporate governance. We have established professional systems of accountability, oversight and control within the company. We produce premium food and are committed to ensuring high quality in all parts of the company’s production. The company therefore prefers to trade with suppliers that have established known quality management systems. Andfjord Salmon aims to have the highest biosecurity to prevent contagious fish diseases and sea lice. The Andfjord farming process also prevents the e ! ect of toxic algae. The flow-through technology and the low density in the tanks, provides the best possible fish welfare. Andfjord provides the cleanest seawater in the Arctic. The water is kept crystal clear in the farming facility, due to our innovative flow-through farming solution. All of these benefits produce salmon that thrives. The farming facility is tightly secured, to prevent any harm to the local stocks of salmon in the rivers. There are several salmon rivers on Andøya, and our farming facility will not have any negative impact on the wild stocks. Our goal is to write aquaculture history in the field of sustainable production. Our suppliers are required to document that they are actively working to reduce the e ! ects of their operations on the external environment.

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STAKEHOLDERS

EMPLOYEES: Direct impact on Andfjord Salmon. The company is dependent on their expertise. Employees can also directly impact the company. Andfjord Salmon has a direct impact on and is also directly impacted by its employees as well as the access to competent labour. SHAREHOLDERS AND BOARD OF DIRECTORS: Key stakeholder group driving the company’s priorities and strategy, including the company’s ESG approach. CIVIL SOCIETY: The company has both a social and environmental impact on the community it operates within, and on local value creation. GOVERNMENTS: Government and local authorities have a direct impact on Andfjord Salmon through legislation and regulations. CUSTOMERS: Driving the company’s priorities and strategy, also when it comes to ESG topics. The company can also indirectly impact customers through providing information about fish health and sustainable fish farming. SUPPLIERS: The company is dependent on its suppliers for distribution and can also directly and indirectly impact suppliers through transport requirements and Health, Safety and Environment recommendations.

Figure 2: Andfjord Salmon’s shareholders

The island Bleiksøya is a nature reserve in Andøya, Vesterålen, with one of Norways largest populations of pu " ns.

STAKEHOLDER DIALOGUE Having an ongoing dialogue with its most relevant stakeholders strengthens Andfjord’s relationship with the society in which it operates, and allows the company to detect, investigate and manage potential risks arising in its immediate surroundings. To ensure a strategic approach to sustainability reporting and the GRI Standards Manage- ment Approach specifically, Andfjord Salmon has con- ducted systematic stakeholder dialogue in November and December 2021. The company spoke to key stakeholder groups, including employees, shareholders/Board of Directors, members of the civil society and suppliers / business partners, who

were all invited to give their opinion on how they perceive Andfjord Salmon and relevant sustainability topics. The interviews were conducted by phone or via Teams by an interdisciplinary working group (the ‘task force group’), representing Finance, Sustainability, Sales and HR. The company has also held public meetings with key stakehold- er groups during 2021 and conducted employee surveys. As of today, Andfjord Salmon does not have any custom- ers, but the company plans on undertaking stakeholder dialogue with this group as well when in operation. For governmental organisations, the company has not conduct- ed interviews but has carried out desktop research. The company is planning to undertake systematic stakeholder dialogue with suppliers and business partners in 2022.

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MATERIALITY ASSESSMENT

STAKEHOLDER GROUP

TOPICS MENTIONED

ARENA FOR DIALOGUE

Employees

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Sustainable food production Fish health and welfare Water use / emissions

• • • • •

Meetings

Annual report

Website

Circular economy

Newsletter

Biodiversity

Direct dialogue

Equality and diversity Working environment

The findings from the stakeholder dialogue were gathered and structured for discussion with Andfjord Salmon’s task force group for sustainability reporting in January 2022. In a workshop, the company reviewed each topic and the importance to di ! erent stakeholder groups, as well as Andfjord’s ability to impact the topic. The results from the materiality assessment are present- ed in the below materiality matrix, with topics considered material in the upper right section. In 2021 the company reported on the following sustainability topics:

• Environment, including fish health and welfare, e # uents and energy use • Occupational health and safety • Supply chain transparency • Local value creation Based on the stakeholder dialogue and the materiality analysis conducted in 2021, Andfjord Salmon has included the following topic in this year’s report: • Working environment, including gender equality and diversity

Compensation Recruitment Work-life balance

Transparency and openness

Shareholders / Board of Directors

Climate

• • • • • • • • • • • • •

Website

Biodiversity

Company presentation Quarterly presentations General meetings Information meetings Reporting

Feed

Fish health and welfare

Mortality Antibiotics

Water use / emissions

Meetings

Waste

Public channels

Equality and diversity

Media

Compensation

Annual report Newsletters Direct dialogue Public meetings

Working environment

HSE

Recruitment

Transparency and openness

Human rights Data security Corruption

Civil society

Innovation Emissions Land use

• • • • • • •

Meetings

Public channels

HSE (risk)

Media

Salmon lice Fish welfare: Antibiotics

Escape

Annual report Newsletters Direct dialogue Public meetings

Feed (soy)

Job creation

Biodiversity Circular economy

Land use

Transparency Quality documentation

Human resources Compensation Equality and diversity

Discharge to water: Escaped fish Waste (biological/recycling) Equality and diversity Control of value chain/subcontractors

Recruitment/job creation

Corruption

HSE

Human rights

Quality documentation

Working environment

Greenhouse gas emission

Energy use and e " ciency

Innovation

Water use

Wages

Governments

Job creation

Fish health and welfare

Data security

Low

Moderate

High

Business impact

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REPORTING THEMES AND TOPICS

ENVIRONMENT AND CLIMATE IMPACT

In the next chapter, each of the suggested overarching sustainability topics and their relevance to Andfjord are described in detail. This includes an explanation of why the topic is considered material to the company, the direct and indirect impact on the company and its stakeholders as well as the significance of its business impact. This chapter includes reporting according to GRI 401 (Employment) and GRI 405 (Diversity and equal opportunity).

Careful management of the ocean is a key feature of a sustainable future. As a seafood company, dependent on a healthy environment for its business operation, it is impor- tant for Andfjord Salmon to minimise its environmental footprint. Andfjord Salmon started the processes of carrying out an Environmental Risk Assessment (ERA) and an Environ- mental Impact Assessment (EIA) in 2020, as required by Norwegian law and to comply with the requirement set out by Global G.A.P Aquaculture Standards. The EIA provides the basis for further risk assessment on the various environmental impacts of the company’s future business operations. Andfjord Salmon has continued its work with the EIA and ERA in 2021. Andfjord Salmon’s business operations have the poten- tial to impact the environment through emissions to air and sea, through waste generation stemming from pro- duction, as well as energy use from farming facilities and o " ce buildings. The company’s business activities have the potential to impact wildlife, specifically birds and fish species, the seabed, flora and fauna. Andfjord Salmon is continuously working to mitigate and minimise such risks. As marine biodiversity is critical to the health of people and the planet, the ocean needs to be e ! ectively managed. Andfjord Salmon should at all times abide by relevant laws and regulations in the areas in which it operates, including

the Regulation on the Establishment and Expansion of Aquaculture Facilities, the Aquaculture Operations Reg- ulations, the Aquaculture Act, the Nature Diversity Act, the Water Regulation Act, the Pollution Control Act, and Internal Control Regulations and municipal zoning plans. Additionally, the aquaculture legislation (IK-Akva) sets out requirements for environmental sustainability, animal health and welfare. Together with the Norwegian Institute of Bioeconomic Research (NIBIO), Andfjord Salmon has assessed possi- bilities for utilising fish sludge from the company’s future production as a component in sustainable and high-quality products (including plant growth media, soil improvers and fertilisers) for use in agriculture, gardening and other related applications. The assessment concluded that the drying of fish sludge from Andfjord Salmon is the most pertinent treatment method. An important tool in the company’s environmental e ! orts is to obtain certification according to international standards. Andfjord Salmon will purposefully work with sustainability certification bodies in both Europe and the Americas, such as Aquaculture Stewardship Council (ASC), which certi- fies farmed salmon according to strict and clearly defined environmental criteria. Additionally, the company aims to be certified according to Global G.A.P, which sets out standards for food safety.

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BIODIVERSITY The company is committed to both ethical and statutory obligations governed by Norwegian legislation. All fish farming facilities operating in Norway have e # uent permits distributed by the Norwegian environmental authorities, which control the amount of nutrients and organic materials that can be discharged from the facilities. This also applies to Andfjord Salmon. Samples from the seabed are taken regularly below and near the farms in order to monitor the environmental conditions, according to the Norwegian standard for environmental monitoring of benthic impact from marine fish farms (NS 9410). Environmental surveys carried out by the Norwegian Directorate of Fisheries shows that e # uents of nutrients and organic materials from aquaculture are minor environmental problems in Norway. One of our goals for 2021 was to develop a biodiversity plan as a summary document of Andfjord Salmon positive and negative impact on the external environment. During the year, Andfjord Salmon has established the foundation of environmental reporting, including which environmen- tal aspects to include, and how they should be measured. This process is also a part of the completion of the start-up

pool, including a modelling of the spread of the discharge water in Kvalnes based on an optimal production plan with estimated emissions of nutrients. The modelling of dilution and dispersion of discharge water (Åkerblå AS) in full-scale production shows that the concentration of total nitrogen and total phosphorus will give the condition “Very good” in surface layers both in the summer and in the winter. Andfjord Salmon’s technology provides robust barriers to limit escapes, and continuous water flow from deep waters will ensure that the salmon live in an environment where the presence of salmon lice and poisonous algae is close to non-existent. Also, reducing the amount of discharged biological waste and subsequently the risk of exposure to marine life from pollutants and other undesir- able substances is important, as well as ensuring that the salmon have access to nutritious and healthy food optimal for growth and with benefits for the immune system, heart, intestines and gills. Regarding fish escape specifically, Andfjord Salmon has in 2021 started working together with Norconsult and DNV to meet the requirements for escape safety in NS 9416 Landbased aquaculture farms for fish.

PROJECT “HAVTRYKK”

Together with SINTEF Ocean and Action for Oceans, Andfjord Salmon has in 2021 participated in “Havtrykk”, a project which overall objective is to make Andøya the knowledge hub for business development in coastal zones. Other objectives include ensuring sustainable development, develop decision making tools for businesses and govern- ments, provide insight, knowledge and communications locally and nationally about marine businesses. During the project, Andfjord Salmon will together with other contributors for example identify and document which local species require special care, help perform life cycle analysis,

gain insight when it comes to biodiversity in general and local key species in particular and help find alternative solutions. The Whale – a pioneering project for sustainable aquaculture on land Part of project Havtrykk is “The Whale”: A display project which will demonstrate how marine knowledge is commu- nicated, innovated and how we can achieve sustainable sea-based tourism. Andfjord Salmon will be a key contributor to this project specifically. The project is still in its initial phase and will be further developed in 2022.

Andøya, Vesterålen.

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FISH HEALTH AND WELFARE Fish health and welfare, such as protecting the fish from unnecessary stress and impact, are at the core of the com- pany’s innovation. Ensuring good health and welfare is both an ethical responsibility and the most important factor in achieving good growth, higher quality and lower costs. Although Andfjord Salmon’s farming facilities are not yet in operation, the company has in 2021 continued to carry out extensive planning and testing to ensure optimal fish health and welfare for future production. Andfjord Salmon’s fish welfare measures are comprehensive and focus on all aspects of the farming value chain, including feed and nutrition, respiration, thermal regulation, water quality, hygiene, disease management, behaviour control and social contact and rest, and the company’s overall aim is to mimic the salmon’s living conditions in the sea as much as possible. Once in production, Andfjord Salmon plans to develop sustainable feed with the right properties for our plant and concept. In 2021, the company has researched part- ners that meet our requirements and can help us realise our feed ambitions. In Q1 2022, Andfjord will enter into an agreement with Nutreco, a global leader in animal nutrition and aquafeed, and an operational feed supply agreement with Nutreco’s aquaculture business line, Skretting. Under the agreement, Skretting will supply a feed that is specifically tailored to Andfjord Salmon’s flow-through technology to ensure optimal water quality,

fish welfare and growth conditions in the land-based pool. This will also ensure the production of a premium quality salmon. To ensure continuous and optimal fish welfare, Andfjord Salmon will monitor the water quality, including monitor- ing the presence of pathogens. An external supplier will conduct monthly sampling and screening for a range of fish pathogens. Andfjord Salmon is by law required to carry out such sampling six times a year but will do so every month to ensure the best possible living conditions for the salmon. In addition, once we start operations and we experience situations with increased mortality or suspected disease, we will carry out additional health check-ups, autopsies and analysis. In 2021, Andfjord Salmon has verified the laminar water flow technology at the first pool at Kvalnes. This confirms that the company is able to recreate wild salmon’s natural habit on land and o ! er the salmon the best living environ- ment. An optimised living environment with the best water qual- ity is a base for good fish health and a high survival rate. Furthermore, the company is also in the process of setting up a complete sensor system based on fish welfare indi- cators made by Fishwell to monitor, control and optimise the water quality and living environment of the fish in the pool. This means that Andfjord is well prepared for the first fish transfer in Q2. Contracts with analysis laboratories for fish pathogen screening is made.

EUGREENDEAL: FROMFARMTO FORK

The Farm to Fork Strategy from the European Commission is at the heart of the European Green Deal aiming to make food systems fair, healthy and environmentally-friendly. The strategy underlines the key role of farmers, fishers and fish farmers plays in the green transition. The Farm to Fork Strategy aims to accelerate our transition to a sustainable food system that should: • have a neutral or positive environmental impact • help to mitigate climate change and adapt to its impacts • reverse the loss of biodiversity • ensure food security, nutrition and public health, making sure that everyone has access to su " cient, safe, nutritious, sustainable food • preserve a ! ordability of food while generating fairer economic returns, fostering competitiveness of the EU supply sector and promoting fair trade Andfjord Salmon closely monitors the developments in the Farm to Fork strategy and aims to contribute to the strategy through reporting on climate action, fish welfare and food safety requirements. As an example, farmed fish has a lower carbon footprint than land-based animal husbandry, and Andfjord Salmon actively works to improve fish health and welfare, such as protecting the fish from unnecessary stress.

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EMISSIONS Andfjord started climate accounting in 2021 using Fjordkraft’s software solution Klimahub. The company reports on Scope 1: direct energy use, Scope 2: electricity purchased, and a limited Scope 3 including business travel, material use and waste from the company.

The main sources of energy use, and thus climate emissions are the use of diesel, purchased electricity from the grid used for construction activities at the Kvalnes site, and pur- chased materials. The current climate accounting reflects that the company is in a construction stage, which means these numbers are not likely to serve as a benchmark for the company once operations are started. The company’s total energy use from electricity in 2021 was 1563.929 MWh, compared to 43.59 MWh in 2020. The increase in energy use is due to construction work at on Andfjord’s Kvalnes site. E " cient energy use is a top priority for Andfjord Salmon and is an important step in terms of lowering the compa- ny’s environmental footprint. Energy consumption occurs throughout the value chain and is primarily linked to the use of o " ce buildings and the provision of energy to the fish pools. Andfjord Salmon relies on a waterborne heating system and a heat exchanger. Many of the current land-based facilities for fish farming rely on water recycling as the standard technology (Re- circulating Aquaculture Systems – RAS). Such systems require significant amounts of energy in order to remove ammonia, particulate matter and CO2. Andfjord Salmon’s

technology is based on flow-through technology, which does not require energy to lift, clean, cool or heat up the water, and thus, there is no need for an energy intensive water treatment plant. As a result, the fish farming facility has low energy consumption and subsequently low emis- sions. In 2020, SINTEF (a Norwegian independent research company focused on technology and innovation) carried out a review of the energy consumption at Andfjord Salmon’s facilities. The analysis shows that energy con- sumption for the company’s start-up pool is estimated to be 1962.81 MWh/year. This figure applies to production in one pool. Expected energy consumption at full operation is 1 kwh per kg of salmon produced, based on SINTEF’s calculations. The start-up pool has a production capacity of 1000 tonnes biomass per year and a water flow of 18,300 m3/hr. The table below gives an overview of the estimated energy use for our start-up pool with annual production capacity of 1,000 tonnes. Energy consumption associated with feeding systems is not included as it usually makes up a small part of energy consumption (<1%). In the future, Andfjord Salmon aims to generate its own energi at its facilities in the future, by utilizing solar, wind or biogas.

2021

Scope 1 (production, Diesel, Gasoline)

56.6

t CO2

Scope 2 (energy consumption)

579.8

t CO2

MWH ! YEAR

‘TRADITIONAL’ RAS TECHNOLOGY SYSTEM

Start-up pool pump Start-up pool lights O2 production Bandfilter secondary 0.2-20%

1 138.8 306.6 155.93 70.08 253.44 30.66 7.3 1962.81

Scope 3 (business travel, material use and waste)

84.5

t CO2

Drying of fish waste Project o " ce energy

Cleaning robots Total energy use

approx. 7 500

Table 2: Estimated energy use for Andfjord Salmon’s start-up pool with annual production capacity of 1000t

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Goals and targets for environment and climate impact PROJECT “HAVTRYKK”

WORKING ENVIRONMENT

TOPIC

#$#% GOALS

STATUS

#$## GOALS

BIODIVERSITY

In progress: A biodiversity plan has been developed in 2021.

Develop a biodiversity plan as a summary document of Andfjord Salmon positive and negative impact on the exter- nal environment Start climate accounting on direct and indirect emissions Start reporting on fish survival rate, incidences of disease and observations of sea lice. The company has a zero vision for fish escape.

Implement the established biodiversity plan. Develop action list for prioritised biodiversity topics. Expand Scope 3 reporting and establish long-term reduction target. Establish KPIs for fish welfare and set actions list to ensure numbers are improving.

EMPLOYEE SURVEY To better understand the employees’ perception of their working environment, Andfjord Salmon has recently con- ducted an employee survey measuring the level of individual satisfaction in the workplace. The results help Andfjord to identify the main areas for improvement. The survey was conducted on 16 (89%) respondents in January 2021. Respondents were asked to rank a number of statements on a scale from 1 to 5 belonging to the following categories: Management and communication, information exchange, social support, employee investments, task moti- vation, job autonomy, extra role performance (the behaviours of employees beyond what is stated in their job descriptions), turnover intention, role clarity and involvement. The average score on all questions was 4.08, of a maximum score of 5. This is considered a very good score and reflects a healty working environment. The category with the lowest score (3.17) on average was information exchange, indicating that this is something Andfjord should aim to improve. The company is today communicating with employees using Teams, Sharepoint and email. Job autonomy (meaning the degree to which employees feel that they have the oppor- tunity to make decisions or personal initiatives) was ranked relatively high (average score 4.44) compared to the other categories, although there were some variations between the groups. The working environment in Andfjord Salmon is generally perceived to be good, as demonstrated by the findings in the 2021 employee survey.

Andfjord Salmon’s employees are at the core of our value creation and essential to the company’s operations and business success. The ability to attract and retain skilled workers as well as maintaining a safe and healthy working environment is critical to both the company and its stake- holders. Based in Norway, the company operates in accordance with the Norwegian Working Environment Act. The company has not established a separate Employee Handbook yet but has in 2021 researched suppliers that can help us implement this in Q1 2022. Guidelines for employees are rendered in the company’s Code of Conduct, which will also be approved in Q1 2022. Due to the company’s size and number of employees, Andfjord Salmon has not yet established a Working Environment Committee (WEC) but has appointed one safety representative who safeguards the interests of employees in matters relating to the working envi- ronment. Employees are also involved in the design and development of their own working environment and regularly participates in conversations with the Manage- ment Group. A majority of Andfjord Salmon’s employees are members of trade unions.

ENERGY USE

In progress: Climate accounting started in 2021.

FISH HEALTH AND SAFETY

Not started: The company is not yet in production but will start reporting once the facility is in operation.

Fiskenes, which is one of three locations held by Andfjord Salmon, with the island Senja in the horizon.

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Based on the Norwegian Activity Duty for employers (Aktivitets- og redegjørelsesplikten, ARP), the company is reporting the following employee data:

LOCATION

NO. OF EMPLOYEES #$#$

PAYROLL & MNOK ' #$#$

NO. OF EMPLOYEES #$#%

PAYROLL & MNOK ' #$#%

Norway

15

7,81 MNOK

18

12,97 MNOK

Women

3 (20%)

-

3 (16.7%)

-

Men

12 (80%)

-

15 (83.3%)

-

Table 3: Permanent employees by gender, and payroll Less than 5 women hired in the company

#$#$

#$#%

ORGANISATION

MEN

WOMEN

TOTAL

MEN 15 (94%) 1 (100%) 0 (0%)

WOMEN

TOTAL

Number of permanent employees Temporarily hired Part time employees Newly hired Total number of newly hired employees Employee turnover Number of employees who have left the company Parental leave Number of employees on parental leave

12 (80%) 0 (0%) 0 (0%)

3 (20%) 0 (0%) 2 (100%)

15 (100%) 0 (0%) 2 (100%)

1 (6%) 0 (0%) 2 (100%)

16 (100%) 1 (100%) 2 (100%)

6 (67%)

3 (33%)

9 (100%)

5 (100%)

0 (0%)

5 (100%)

Andfjord Salmon’s employees are at the core of our value creation and essential to the company’s operations and business success.

0 (0%)

0 (0%)

0 (0%)

2 (100%)

0 (0%)

2 (0%)

EQUALITY AND DIVERSITY Diversity and equal employment opportunities are topics for which there are increasing expectations for corporate action and transparency. Andfjord Salmon has a direct ability and responsibility to ensure that the company has a diverse workforce and that equal opportunities are o ! ered to all employees, regardless of their background. Today, the company’s workforce comprises 83.3% men and 16.7% women. Andfjord Salmon always strives towards a better gender balance, and women are encour- aged to apply for all open positions. The company is

currently in the process of hiring two more operators, where one of the candidates are female. Andfjord Salmon is not part of any external initiatives regarding equality and diversity as of today, but will review such initiatives in 2022. The company prohibits discrimination in any form, whether it is based on political views, membership in work- ers’ organisations, sexual orientation, disability and/or age. In addition to following the Norwegian Working Environ- ment Act, Andfjord Salmon also operates in accordance with the Gender Equality Act, which aims to protect against discrimination based on gender, as well as the Anti-Discrimination Act, which protects against discrimi- nation on the grounds of ethnicity, religion, or the like.

0 (0%)

0 (0%)

0 (0%)

0 (0%)

0 (0%)

0 (0%)

Table 4: Part-time employees, turnover, and parental leave as of 31 December

#$#$

#$#%

MEN

WOMEN

TOTAL

MEN

WOMEN

TOTAL

Organisation total

17 (81%)

4 (19%)

21 (100%)

21 (81%)

5 (19%)

26 (100%)

Board of Directors

5 (83%)

1 (17%)

6 (100%)

5 (71%)

2 (29%)

7 (100%)

Executive level management

2 (100%)

0 (0%)

2 (100%)

4 (100%)

0 (0%)

4 (100%)

Non-executive level management

10 (77%)

3 (23%)

13 (100%)

12 (80%)

3 (20%)

15 (100%)

Table 5: Breakdown of employees and board members by gender

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PROJECT “HAVTRYKK”

Goals and targets for the working environment

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UNDER ($

($)*+

,$-

UNDER ($

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TOPIC

#$#% GOALS

STATUS

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Organisation total

1 (5 %)

13 (62%)

7 (33%)

2 (8%)

12 (46%)

12 (46%)

GUIDELINES

In progress: The company has started researching suppliers that can help us implement the employee handbook. New.

Complete Employee Handbook

Implement and communicate the Employee Handbook to all employees.

Board of Directors

0 (0%)

2 (33%)

4 (67%)

0 (0%)

2 (29%)

5 (71%)

Executive level management

0 (0%)

1 (50%)

1 (50%)

0 (0%)

3 (75%)

1 (25%)

Non-executive level management

1 (8%)

7 (54%)

5 (38%)

2 (13%)

7 (47%)

6 (40%)

EMPLOYEE SURVEYS

Conduct employee surveys on an annual basis. 100% response rate on employee surveys. Establish working environment KPI. Research diversity and equality initiatives. Increase the number of women working in the company.

Table 6: Breakdown of employees and board members by age

EQUALITY AND DIVERSITY

New.

Bleik on the west side of Andøya is one of the villages along the entire Norwegian coast that is closest to the Gulf Stream.

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PROJECT “HAVTRYKK”

OCCUPATIONAL HEALTHAND SAFETY

Decent and safe working conditions are crucial for all em- ployees to thrive at Andfjord Salmon, and it is therefore a key priority area for both the company and its stakeholders. Andfjord Salmon can directly and indirectly a ! ect occu- pational health and safety through its policies, agreements and employee dialogue and engagement. Andfjord Salmon’s CEO and Operations Manager bear the ultimate responsibility for health and safety. The company has implemented a quality system for internal control regarding health and safety which is done through a web-based Environmental Quality System (EQS), developed by Extend. Andfjord Salmon is currently in the process of establishing relevant health and safety docu- ments, including safety brochures. TRAINING AND INFORMING EMPLOYEES ABOUT HEALTH AND SAFETY RISKS Employees’ health and safety is the company’s highest priority in all its activities. Andfjord Salmon’s goal is to have zero work-related injuries, and to achieve this goal, the company works systematically to promote an open safety culture and informing employees of possible risks relating to their tasks. The Operations Manager is responsible for assessing competence, training in the facility’s operating routines and ensuring that internal communications regarding health and safety is functioning well. Andfjord Salmon has established training procedures for all employees, which aim to ensure the safety of employees and that all employees have the necessary up-to-date knowledge of the tasks that they will perform. The trainings cover a wide range of topics in line with the requirements set out in the Norwegian Working Environment Act, regulations and requirements from the Norwegian Food Safety Authority and requirements in the Global G.A.P standard. Safety trainings are carried out with the assistance of external course providers and internal courses and gatherings. Both

internal and external training is documented in the quality system and any course certificates are also uploaded here. Safety training has been postponed in 2021 due to the delay in activating the pools but will take place as part of the preparations for operation through Q1 2022 and until the release of smolts in Q2 2022. All company procedures regarding HSE are available in the EQS. The software has a ‘read and understood’ function for any procedures and instructions, and if necessary, control questions can be asked before the Operations Manager can approve the training for the operators. RISK ASSESSMENTS As for any production environment, working at Andfjord Salmon could involve health and safety risks to employ- ees, primarily related to the production facilities. Andfjord Salmon has previously carried out risk assessment to determine possible hazards related to the company’s business operations, and risk assessments are document- ed through the EQS. Main risks include fall injuries, fall into pool or moat, drowning, and pinch points hazards. To mitigate such risks, the company has established preventive HSE measures, such as walkways around the entire pool and solid fencing of embankments. Protective equipment, safety equipment and rescue equipment are being planned and purchased and will be ready for when the company is in operation. Andfjord Salmon has also established strict working procedures together with the operators, which are described in the EQS. In 2021, the company has reviewed all HSE risk assess- ments, conducted safety inspections and identified needs for updating procedures, instructions and plans to ensure a safe workplace. The review will be completed and up- dated routines launched in Q2 2022. Health and safety are and will always be important to Andfjord Salmon but has received increased attention in 2020 and 2021 due to the on-going Covid-19 pandemic.

The company is continuously monitoring to the latest development and follows all relevant laws, regulations and advise from national and local authorities regarding infection control and risk mitigation. To minimise the risk of infection, most of our employees have been working from home throughout the year. REPORTING To ensure a healthy and safe working environment, it is important to have a full overview of any work-related incident or injuries that may arise. Although the company did not have any production in 2021, Andfjord Salmon has developed a system for employees to report irregularities or incidents, which will be implemented when the facilities are up and running. Reporting can be done through the

EQS system, or to the employee’s nearest line manager. Equally important to provide a healthy and safe working environment for employees, it is to make sure that the health and safety of Andfjord Salmon’s suppliers are con- sidered when working on assignments for the company. Andfjord Salmon has an indirect opportunity to a ! ect suppliers’ working environment through our working de- scriptions and requirements outlined in our contracts with business partners. Suppliers that are currently involved in construction at the Kvalnes site have implemented a system for reporting incidents to the company. One work- related incident was reported in 2021. The incident related to a supplier that fell down while dismantling sca ! olding at the site. All safety procedures were being followed and the incident did not lead to any permanent injuries.

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SUPPLY CHAINTRANSPARENCY AND CONTROL

Goals and targets for occupational health and safety

TOPIC

#$#% GOALS

STATUS

#$## GOALS

GUIDELINES

In progress: Safety documents has been completed and distributed to all employees.

Complete relevant safety documents. Distribute relevant safety documents to all employees. KPI: percentage of employees who have read and signed the documents. Conduct safety trainings / safety drills with all employees.

100% of employees having signed (‘read and confirmed’) the safety documents.

Andfjord Salmon relies on third-party suppliers for production and distribution and is thereby directly and indirectly exposed to risks and opportunities in its sup- ply chain. Delays, interruptions, quality issues, improper transport, handling and/or delivery, in addition to corrup- tion or other unethical business conduct may have serious implications on the quality and perception of Andfjord Salmon and the company’s products. The company has already chosen its smolt distributor and is also in the process of choosing a feed supplier. Supplier agreements regarding equipment needed for operations have already been made. SCREENING OF SUPPLIERS Thorough risk assessments are being done when choosing suppliers and business partners. Andfjord Salmon has its own process for risk assessment, which draws upon the Norwegian Standard NS 5814 – Requirements for Risk Assessment, and regularly carry out meetings with all operators to identify potential risks in operations. All suppliers and business partners receive information on the company’s policies and guidelines related to environ- mental, social and governance issues and all suppliers and business partners are screened for potential risks related to environmental, social and governance issues. Screening is based on the NS 9416, Global G.A.P and Aquaculture Stewardship Council (ASC). Andfjord Salmon relies upon similar guidelines and regulations from Nor- wegian Standards and Global G.A.P in all contracts with suppliers. NS 9416, a Norwegian Standard for fish escape prevention, is used for the farming facilities, as required by Norwegian law.

The company operates in Norway and thus adhered to the Norwegian Penal Code. Norway is usually perceived as a low-risk country in terms of corruption, however, it is vital for Andfjord Salmon to have overview of any potential ethical breaches that may arise in its supply chain. The company’s internal procedures for reporting irregularities builds on the Global G.A.P. framework, and includes notification non-confirmative behaviour, critical conditions or breach of laws and regulations and/or Andfjord Salmon’s Code of Conduct. Employees are encouraged and expected to report irregularities. According to the latest risk assessment that was carried out in December 2020, the biggest risks in Andfjord Salmon’s supply chain are mainly related to transportation, including improper transport of the company’s products or delays. To reduce such risks to an acceptable level, the company has established detailed guidelines for this which are outlined in contracts with suppliers and business partners. Annual measuring and analysis of potential risks in the supply chain will start in 2022 when the company is in operations. The company has in 2021 drafted a new Code of Conduct which will be presented to the Board of Directors in Q1 2022. Once approved, the Code of Conduct will also be communicated to suppliers and business partners, as well as employees. Andfjord Salmon has not experienced any breaches of its policies or guidelines related to environmental, social or governance for suppliers in 2021, and the company has not terminated or discontinued any contracts with suppliers or business partners due to sustainability breaches in the reporting period.

TRAININGS

In progress: Training has been postponed due to the update/review of safety documents. In progress: Safety inspections conducted although operations have not yet started. New.

Conduct annual safety trainings / safety drills with all employees.

SAFETY INSPECTIONS

Conduct quarterly workplace safety inspections once opera- tions have started.

Continue with quarterly safety inspections.

INCIDENTS

Zero-vision for incidents, accidents and work-related fatalities.

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