Assets
| Type | Time | Amount | Unit |
|---|---|---|---|
| ifrs-full:Assets | 2024-12-31 | 6108000000 | dkk |
| ifrs-full:Assets | 2023-12-31 | 6112000000 | dkk |
Revenue
| Type | Start date | End date | Amount | Unit |
|---|---|---|---|---|
| ifrs-full:Revenue | 2024-01-01 | 2024-12-31 | 12223000000 | dkk |
| ifrs-full:Revenue | 2023-01-01 | 2023-12-31 | 13031000000 | dkk |
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<mrv:CorporateGovernanceReport contextRef="ctx-1" id="s10__7__11" xml:lang="en">The administrative, management and supervisory bodiesSolarâs governance system consists of two tiers. The Board of Directors is tier one and the Executive Board is tier two. Together they are our administrative, management and supervisory bodies.Composition and diversity ESRS2 GOV-1 21The Board of Directors comprises six members elected by the Annual General Meeting and three members elected by the employees. The nine members of the Board of Directors are the non-executive members of the administrative, management and supervisory bodies. All board members elected at the Annual General Meeting stand for election each year, whereas employee representatives are elected by the companyâs employees for four-year terms.The Executive Board comprises the CEO and CFO, who are the two executive members of the administrative, management and supervisory bodies. The relevant experience of the nine members of the Board of Directors is described on page 35.The Board of Directors strives for equal gender representation while ensuring that it has a broad portfolio of skills and experience. Our aim is to ensure that women are not underrepresented. According to ERSR2 GOV-1, Solar has three (27.3%) female members and eight (72.7%) male members on the administrative, management and supervisory bodies, which corresponds to an average gender ratio of 0.38. Female board members constitute two of the six board members elected at the Annual General Meeting which, according to Danish law, is considered an even distribution.Peter Bang, Morten Chrone, Louise Knauer and Michael Troensegaard Andersen are independent board members pursuant to the definition in ESRS and corporate governance. Jesper Dalsgaard and Katrine Borum are affiliated to Fonden af 20. December, Solarâs majority shareholder, while the three employee-elected members have a contractual commitment to Solar. Independent board members count for 44.4% of the total board members and 66.7% of members are elected by the Annual General Meeting.Roles and responsibilitiesESRS2 GOV-1 22The Board of Directors and the Executive Board are jointly responsible for the overall and strategic management of the Solar Group. The Board of Directors has established three committees. The Nomination Committee includes a representative from Solarâs majority shareholder, Fonden af 20. December, and Corporate governance structureShareholder/ general External auditormeetingBoard of DirectorsAuditRemunerationNominationCommitteeCommitteeCommittee(establ. 2007)(establ. 2017)(establ. 2019)Internal Executive BoardAuditSee Charters for:Audit Remuneration Nomination CommitteeCommitteeCommitteethree members of the Board of Directors, including the Chair. Members of the Remuneration Committee and the Audit Committees are appointed by, and from among, the members of the Board of Directors. In 2024, the Board of Directors re-elected Peter Bang, Michael Troensegaard Andersen and Louise Knauer as members of the Audit Committee. Peter Bang chairs the Audit Committee. He and Michael Troensegaard Andersen have special accountancy qualifications.The Board of Directors re-elected Morten Chrone and Louise Knauer as members of the Remuneration Committee, together with the Chair of the Board of Directors Michael Troensegaard Andersen. Michael Troensegaard Andersen chairs the Remuneration Committee.The Board of Directors lays down the companyâs strategy and decides on major investments and divestments, the capital base, key policies, control and audit matters, risk management, and significant operational issues.The duties of the Board of Directors are set out in the Rules of Procedure, which include the handling of sustainability and other non-financial matters. The Board of Directors monitors and approves sustainability reporting in accordance with CSRD and ESRS, the sustainability policies and targets, and the management of material impacts, risks and opportunities (IRO). The Audit Committee undertakes the preparatory work for the above-mentioned sustainability matters and recommends proposals to the Board of Directors. As regards sustainability matters, the Executive Board is responsible for the preparation of Solarâs sustainability reporting in accordance with CSRD and ESRS, proposals for sustainability targets, Solarâs sustainability policies, and the management of materiality of IRO. Solarâs risk management, sustainability processes, procedures and controls are organised according to the three lines of defence model which demonstrates and structures roles, responsibilities for managing IRO, decision-making and control to achieve effective governance, see section below on risk management and internal controls for sustainability reporting.Skills and ExpertiseESRS2 GOV-1 23To perform its management duties, the Board of Directors annually determines the expertise needed for the strategic management of Solar A/S. This also covers knowledge and experience of sustainability matters and the green transition. As a whole, the Board of Directors and the Executive Board possess in-depth knowledge of Solarâs markets, segments, products, value chain, strategy and business model and related IRO. In addition, Vice Chair of the Board of Directors Jesper Dalsgaard, CEO in Combineering Group and previously Managing Director of Environment & Health at Rambøll Group, has in-depth knowledge and experience of sustainability. Chair of the Board of Directors Michael Troensegaard Andersen, previously CEO of H+H, and Chair of the Audit Committee Peter Bang, previously CFO at Velux and currently CFO of Salling Group, possess a high level of knowledge and experience of sustainability from their current and previous positions. In addition, employee-elected board member Denise Goldby, Head of Sustainability, Solar Danmark, completed her Executive MBA focused on corporate governance and sustainability in 2024.On the Executive Board, CFO Michael H. Jeppesen is a State Authorised Public Accountant and qualified as a Sustainability Accountant in 2024.Information provided to and sustainability matters addressed by our administrative, management and supervisory bodiesESRS2 GOV-2 26In 2023-24, Solar prepared for CSRD and ESRS requirements, with the implementation of due diligence processes having double materiality assessment (DMA) and IRO as key elements. The objective of the due diligence process is to ensure that Solar identifies, assesses, and manages material sustainability IRO effectively. This process is integral to the governance framework and supports informed decision-making. Solar conducted a materiality assessment to identify and prioritise sustainability IRO. This involves engaging with stakeholders and considering both internal and external factors. A comprehensive risk assessment is performed to evaluate the likelihood and potential impact of identified risks. This includes both qualitative and quantitative analyses.As part of the preparation for CSRD reporting and the duties of the Board of Directors and the Executive Board, our external advisor, Nordic Sustainability, and Solarâs Head of Sustainability presented the methodology, process, progress and performance for CSRD, ESRS, DMA, IRO and targets at audit committee meetings, the Board of Directorsâ conference and board meetings. Our DMA and IRO are included on page 44-46 and have all been presented and addressed by the Audit Committee and the Board of Directors.Sustainability matters and IRO are an integral part of Solarâs Solve strategy. When undertaking major investments or projects, assessment of impact, risk and opportunities is a standard part of the decision making process.From 2025, the annual cycle for the Board of Directors and for the Audit Committee will include addressing material sustainability matters at every ordinary meeting while the due diligence process will be evaluated annually to reflect changes in the operating environment, stakeholder expectations, and regulatory requirements. In 2024, eight board meetings and one conference for the Board of Directors were held. The Audit Committee held five meetings.The Sustainability Steering Committee, which monitors the progress of Solarâs sustainability targets, meets at least quarterly. See matrix on sustainability due dilligence statement in appendix page 90.Meeting attendance in 2024Board Board Audit Remuneration Board membermeetingsconferenceCommitteeCommitteeMichael Troensegaard Andersen 8 1 5 2Jesper Dalsgaard 8 1 - -Peter Bang 7 1 5 -Katrine Borum 8 1 - -Morten Chrone 8 1 - 2Denise Goldby 8 1 - -Louise Knauer 8 1 5 2Rune Jesper Nielsen 7 1 - -Michael Kærsgaard Ravn 8 1 - -Integration of sustainability-related performance in incentive schemesESRS2 GOV-3 29Members of the Executive Board are entitled to an annual remuneration in accordance with the remuneration policy, which may consist of the following fixed and variable remuneration components: â fixed remuneration âemployee benefits âvariable remuneration, including non-share-based incentives to optimise the Executive Boardâs incentive in the short and/or long term âshare-based incentives to optimise the Executive Boardâs incentive in the long term, and âextraordinary incentives that can be both share-based and non-share-based.The remuneration policy was amended at the Annual General Meeting in 2024. ESG targets were included in variable remuneration, and long-term targets were introduced for share-based incentives by replacing restricted shares with performance share units.Under the current remuneration policy, the Board of Directors may allocate share-based incentives to the Executive Board, such as Solar A/S performance share units, where vesting is dependent on an assessment of the degree of achievement of the long-term targets. The objective of the allocation is to safeguard value creation and to achieve Solarâs long-term objectives. The value of share-based remuneration at the time of granting equals 50% of the annual fixed remuneration for each member. Allocation takes place annually following publication of the Annual Report.In 2024, the Board of Directors granted performance share units for 2024, in line with the remuneration policy for long-term incentives. Performance share units are granted for no consideration and provide the holder with the right and obligation to receive Solar B shares, dependent on the achievement of certain forward-looking performance targets proportionally based on Solution Sales, the EBITDA margin, and 7-15% based on CO2 reduction within scope 1 and 2 targets on 65% reduction by 2026 compared to baseline 2020. The share of total variable expense for the year is 1.4% and share of total expensed for the year is 0.5%.Negotiations regarding changes to the Executive Boardâs remuneration are conducted by the Remuneration Committee with a mandate from the Board of Directors.There are no incentive schemes for the members of the Board of Directors.Risk management and internal controls over sustainability reportingESRS2 GOV-5 36Solarâs risk management, sustainability processes, procedures and controls are organised according to the three lines of defence model which demonstrates and structures roles, responsibilities for managing IRO, decision-making and control to achieve effective governance.The first line of defence are those responsible for implementing the sustainability targets, policies, procedures and processes in their area. The second line of defence is the Sustainability Steering Committee established by the Executive Board. The Sustainability Steering Committee is chaired by CFO Michael H. Jeppesen and comprises four members of senior management and the Head of Sustainability. It is the Sustainability Steering Committeeâs duty to advise the Executive Board on overall sustainability ambitions and direction, to facilitate IRO identification, to establish policies and framework, and monitor progress towards Solarâs sustainability targets. The Sustainability Steering Committee is obliged to meet at least quarterly. Three lines of defenceBoard of Directors / Audit CommitteeSolarâs sustainability processes are organised according to the three lines of defence model which demonstrates and Approve sustainability statement, structures roles, responsibilities for handling policies and targetsrisks, decision-making and control to achieve effective governance.Executive BoardMonitor policies and performanceFirst line of defence Second line of defence Third line of defenceSustainability Steering Topic ownersCommittee and Group Internal AuditSustainabilityResponsible for Establish policies andTest, validate and implementing the frameworks, facilitate IRO assess efficiency in the sustainability actions identificationsustainability processesin their areaThe third line of defence is Solarâs Internal Audit team who test, validate and assess the efficiency of our sustainability processes. We have implemented internal control systems to identify and mitigate risks related to both financial and sustainability reporting. This includes setting targets, policies, manuals, procedures, and internal controls. We continuously monitor and optimise our financial and sustainability reporting processes and controls as needed.Each year, we conduct a risk assessment to identify potential material misstatements in financial and sustainability reporting, considering factors such as materiality, process complexity, and the likelihood of errors and omissions.In relation to our sustainability reporting, it is our plan in 2025 to evaluate processes in all material areas, reassessing existing controls, and identifying additional controls as necessary. Internal Audit continuously monitor and test these internal controls to ensure the efficiency of our sustainability processes.We have established consistent governance for both financial and sustainability reporting. The Audit Committee oversees our reporting processes, including reviewing risk assessments, internal controls, and their effectiveness.Our financial reports are audited by an independent audit firm elected at the annual general meeting, while our sustainability data undergoes limited assurance by the same auditor. Any observations from both Internal Audit and the external auditorâs reports and management letter are addressed through action plans with assigned responsibilities and deadlines, which we regularly review and follow up on.In addition, see page 44, double materiality assessment (DMA) for our DMA methodology and processes, including IRO assessment.ESRS2 GOV-1 Composition and diversity metricsUnit 2024Executive members Headcount 2Non-executive members Headcount 9Female members of administrative, management and supervisory bodies % 27.3Boardâs gender diversity ratio Times 0.38Independent board members % 44.4ESRS2 GOV-Integration of sustainability-realted performance in incentive schemes metricsUnit 2024Variable remuneration dependent on sustainability-related targets and (or) impacts % 7-15Accounting policiesExecutive membersESRS2 GOV-1 21aThe executive members of the administrative, management and supervisory bodies are the members of The Executive Board in Solar A/S. Non-executive membersESRS2 GOV-1 21aThe nine members of the Board of Directors are the non-executive members of the administrative, management and supervisory bodies. Gender diversity, administrative, management and supervisory bodiesESRS2 GOV-1 21dGender diversity in administrative, management and supervisory bodies is expressed as a percentage and as an average ratio.The gender diversity in percentage is the total number of female members of the Board of Directors and the Executive Board to the total number of all members of the Board of Directors and the Executive Board.The gender diversity average ratio is calculated as total number of female members of the Board of Directors and the Executive Board to total number of male members of the Board of Directors and the Executive Board.Independent board memberESRS2 GOV-1 21eBoard members that exercise independent judgment free from any external influence or conflicts of interest. Independence generally means the exercise of objective, unfettered judgement. When used as the measure by which to judge the appearance of independ-ence, or to categorise a non-executive member of the administrative, management and supervisory bodies or their committees as independent, it means the absence of an interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.Percentage of independent board membersESRS2 GOV-1 21eAs Solar has a two tiers governance system, the percentage of independent board members are the independent board members in the Board of Directors to the total number of members of the Board of Directors.Proportion of variable remuneration dependent on sustainability-related targets and (or) impacts. ESRS2 GOV-3 29dProportion of variable remuneration dependent on sustainability-related targets and (or) impacts is the annual variable remuneration dependent on sustainability-related targets and (or) impacts for the Executive Board to the total annual variable remuneration for the Executive Board.Corporate governanceThe Danish Financial Statements Act 107bAs a listed company, Solar must provide a statement on how the Corporate Governance recommendations issued by the Danish Committee on Corporate Governance are addressed. Solar complies with 39 of the 40 recommendations but deviates from recommendation 4.1.3. Recommendation on the variable part of remuneration. As Solar applies a simple model for the allocation of variable remuneration, the Board of Directors does not deem it relevant to assess the value of this under different scenarios.EvaluationDuring Q4 2024, the Chair initiated a board evaluation that included cooperation between the Board of Directors and the Executive Board, the Chairâs role, the work of the Board and Board Committees and an assessment of the Board capabilities relative to those that best support Solarâs strategy.All members of the Board of Directors participated in the evaluation and provided input via questionnaires, which formed the basis of an evaluation report. The 2024 evaluation was shared with the Nomination Committee and did not give rise to any additional measures.See our:Full description of Statutory reportcorporate governancewww.solar.eu/legal/www.solar.eu/investor/shareholders/corporate-governance/Board of DirectorsMichael Troensegaard Andersen Born 1961 Joined 2021 Chair âMaster of Science in Mechanical Engineering from Denmarkâs Technical University (1987) and a Graduate Diploma in Business Administration (Financial and Management Accounting) from Copenhagen Business School (1988). âChair of the Board of Directors of Shark Solutions A/S and BE Shark Holding ApS and member of the board of directors of HusCompagniet A/S. âPossesses experience as CEO in listed companies and of strategic, structural and organizational transformation, sustainability and green transition, together with in-depth knowledge of the European Building and Building Material Industry. âRemuneration 2024: DKK 855,000. âHolds 2,174 Solar B shares of which 1,400 shares were acquired in 2024.Jesper Dalsgaard JensenBorn 1968 Joined 2017Vice Chair âCEO, Combineering Group A/S âM.Sc. in Law and Business Administration 1993. âMember of the board of directors of Fonden af 20. December, Mannaz A/S and other Danish and international companies in Combineering Group. âPossesses executive management experience of companies managed by foundations and companies within the construction and the logistics industries, and has experience within strategy, business development, mergers & acquisitions together with in-depth knowledge and experience within sustainability, circular economy and the green transition. âRemuneration 2024: DKK 450,000. âHolds 1,550 Solar B shares. Did not trade Solar shares in 2024.Peter BangBorn 1969 Joined 2018 âCFO, Salling Group âCand.oecon. 1994 from Aarhus University, specialising in business economics and financing. âBoard Member Skagenfood A/S âManaging Director, Netto Supermarkt GmbH âChair of the board of directors of Dansk Netto Deutschland ApS âExperience within construction, climate/ energy, sustainability and green transition, digitalisation, organisational development, as well as finance and performance management. âRemuneration 2024: DKK 495,000. âHolds 1,200 Solar B shares. Did not trade Solar shares in 2024.Katrine BorumBorn 1981 Joined 2022 âChief Physician and Head of Education at Nordsjællands Hospital. âCand.med., University of Copenhagen 2010, Orthopedic specialist, 2021. âBoard member and Head of Education in the Danish Orthopedic Society. âExperience with managing many professions and developing an educational environment. âRemuneration 2024: DKK 350,000. âHolds 42,723 Solar B shares. Did not trade Solar shares in 2024.Morten ChroneBorn 1966 Joined 2019 âGroup CEO, Unisport Saltex Oy. âMBA 2001 and B.Eng. in Civil and Constructional Engineering 1994. âChair of the board of Unisport Scandinavia ApS and CEO of Mads ApS. âHas held management positions within the construction industry/wholesale business in Denmark and abroad for the past 25 years and has significant knowledge of Solarâs core business and the markets we operate in. âRemuneration 2024: DKK 380,000 âHolds 712 Solar B shares. Did not trade Solar shares in 2024.Denise Goldby Born 1987 Joined 2022 Employee-elected member âHead of Sustainability, Solar Danmark â Executive MBA with focus on corporate governance and sustainability, CBS (2024). Graduate Diploma in Business Administration (Organisation and Management), CBS (2018). âExperience in the operations of a sourcing and services company as previously Head of Solarâs Copenhagen and Amager customer centres. Knowledge and experience in the green transition, stakeholder engagement, and implementing innovative solutions to drive business growth and operational efficiency. âRemuneration 2024: DKK 335,000. âHolds 25 Solar B shares. Did not trade Solar shares in 2024.Louise KnauerBorn 1983 Joined 2017 âCED of Lady Invest ApS and Itâs a club ApS. âBSc in business administration and commercial law, 2006, and MSc in finance and strategic management, 2008. âMember of the boards of directors of Rekom Group Holding ApS, Rekom Group A/S, CC Mist NEW Holding II ApS, CC Fly Holding II A/S, CC Globe Holding I ApS, CC Globe Holding II A/S, FERM LIV- ING ApS, NTG Nordic Transport Group A/S, Skako A/S and two subsidiaries hereof. âPossesses experience as CEO and member of executive committees of listed and family-owned companies. Has experience within strategy, M&A, organisational development, and company turnarounds. In addition, expertise within tech, innovation, digitisation, data/AI/ML and cyber security. âRemuneration 2024: DKK 417,500. âHolds 381 Solar B shares. Did not trade Solar shares in 2024.Rune Jesper NielsenBorn 1971 Joined 2022Employee-elected member âWarehouse employee. âPossesses experience within daily operation of a sourcing and services company and managing teams from being employed at Warehouse Vejen for many years. âRemuneration 2024: DKK 320,000. âHolds no Solar shares. Did not trade shares in 2024.Michael Kærgaard RavnBorn 1971 Joined 2022Employee-elected member âAccount Manager, Industry OEM. âPossesses knowledge and experience of the industry segment and the operation of a sourcing and services company from being Account Manager, Industry OEM at Solar Danmark for many years. âRemuneration 2024: DKK 335,000. âHolds 123 Solar B shares. Did not trade Solar shares in 2024.Executive BoardJens E. Andersen Born 1968 CEO âGraduate Diploma in Business Administration (Financial and Management Accounting), MBA. âExperience as CEO in International and Danish companies together with experience within strategy, leadership, and transformation of organisations. In-depth knowledge of the European Wholesale industry. âChair of the boards of directors of 7 Solar Group subsidiaries. âMember of the boards of directors of VELTEK, DI Byggeri, and HF Christiansen Holding A/S and two subsidiaries hereof. âHolds 10,664 Solar B shares. Did not trade Solar shares in 2024. âHolds 6,654 restricted share units and 9,937 performance share units. 9,937 performance share units were granted in 2024. 285 restricted share units were granted and 4,795 were settled in 2024. âRemuneration 2024: DKK 11.1mMichael H. JeppesenBorn 1966CFO âMaster of science in Business Economics and Auditing (1990), State Authorised Public Accountant, E-MBA, certified sustainability accountant. âExperience within strategy, financing, digitalization, mergers & acquisitions, and investor relations together with in-depth knowledge on reporting (IFRS/CSRD) for listed companies. âMember of the boards of directors of all Solar Group subsidiaries. âMember of the boards of directors of Aktieselskabet Sønder Omme Plantage. âHolds 4,080 Solar B shares. Did not trade Solar shares in 2024. âHolds 3,720 restricted share units and 5,639 performance share units. 5,639 performance share units were granted in 2024. 159 restricted share units were granted and 2,398 were settled in 2024. âRemuneration 2024: DKK 6.7m.Shareholder informationIn 2024, we had close to 13,000 shareholders. This is a testimony for our ability to include the private investors in our quarterly calls and investor visits.Dividends The Board of Directors proposes that the Annual General Meeting approves a dividend of DKK 15.00 per share for a total payout of DKK 110 million for the 2024 financial year. The proposed dividend corresponds to a payout ratio of 72%. The proposal is in line with the previously stated plan to have a payout ratio of at least 35% of profits after tax. If approved, the 2024 dividend will be disbursed on March 19, 2025, with March 14, 2025 as the last trading day with dividend.Dividend paymentsDKK million 2024 2023 2022 2021 2020Ordinary, dividend 219 329 329 204 102Extraordinary, dividend - - 329 110 -Total dividend 219 329 658 314 102Payout ratio in % 63 50 124 141 159The Solar share price developmentOn 31 December 2024, the price of Solarâs B share was DKK 299.50, down from the 2023 starting price of DKK 465.The Solar shareA share B shareShares 900,000 6,460,000Nominel value (DKK) 100 100Votes per share 10 11Treasury shares- 56,813Stock Exchange - Nasdaq Copenhagen Stock ExchangeTicker symbol Solar BShare price year-end (DKK) 299.50 299.50Market Cap year-end (DKK) 270 1,9351) See note 4.2, treasury sharesInvestor relations policy We strive to maintain an open dialogue with investors and to provide them with accurate and adequate information for making reasoned investment decisions about Solarâs shares. We ensure all investors are given fair and equal access to information by publishing relevant information via Nasdaq Copenhagen. We participate in conferences, arrange roadshows and organise meetings with investors and financial analysts following the publication of quarterly and annual reports. Investor meetings and similar events cannot be held during our quiet periods, which start on 1 January, 1 April, 1 July and 1 October and end with the publication of a quarterly or annual report.Shareholder with more than 5% of share or votesShareholders according to section 55 of the Danish Companies Act Share Capital VotesFonden af 20. December, Vejen, Denmark 17.0% 60.5%Nordea Funds Ltd., Helsinki, Finland 10.4% 5.0%Annual General MeetingSolarâs Annual General Meeting will be held on Friday 14 March 2025 at 11.00.Shareholders can register for the Annual General www.solar.euMeeting at the investor portal accessible via:The Board of Directors will submit the following items for approval by the Annual General Meeting: âPayment of DKK 15.00 in return per share outstanding of DKK 100. âAuthority to potentially pass a resolution to distribute extraordinary dividends of up to DKK 50.00 per share. âAuthority to acquire treasury shares valued at up to 10% of share capital. âApproval of Remuneration Report 2024. âApproval of the Board of Directorsâ remuneration of unchanged DKK 200,000 in 2025 and meeting attendance fees of DKK 15,000 for physical meetings and DKK 7,500 for digital meetings in 2025.A presentation of our Board of Directors can be found on pages 35-36.Financial calendar 2025Annual Report 20246FebAnnual General Meeting14MarQuarterly Report Q1 20259MayQuarterly Report Q2 202514AugQuarterly Report Q3 20256NovAnalysts The following financial institutions cover the Solar share: âCarnegie Bank âSEBInvestor contactDennis CallesenInvestor Relations DirectorTel.: +45 29 92 18 11E-mail: deca@solar.dk</mrv:CorporateGovernanceReport>
<mrv:StatementOfCorporateSocialResponsibility contextRef="ctx-1" id="s10__7__8" xml:lang="en">General basis for preparationBP-1 General basis for preparation of the sustainability statementFrameworks and data selection The sustainability statement is prepared with reference to the Corporate Sustainability Reporting Directive (hereafter CSRD) and the underlying European Sustainability Reporting Standards (hereafter ESRS) requirements. All the data points included in the E, S, and G sections have been assessed as material according to our double materiality assessment (DMA). ConsolidationOur annual report is a consolidated report.The data in the sustainability statement covers the Solar Group and all our subsidiaries and has been prepared on the same consolidated basis as the Solar Groupâs 2024 financial statements. Value chainThe sustainability statement covers Solarâs upstream and downstream value chain activities. Please see page 47.Omitting informationNo options for omitting information regarding intellectual property, know-how, or the results of innovation, disclosure of impending developments, or matters in the course of negotiation have been used.Specific circumstancesBP-2 Disclosures in relation to specific circumstancesMeasurement basisThe accounting policies have been applied consistently in the financial year and for comparative figures. All greenhouse gas data points (GHG scope 1-3) are reported based on the Greenhouse Gas Protocol. Accounting estimates and judgementsWe use assessments and estimates for the reporting of some data points, e.g. our taxonomy KPIs and scope 3 emissions. We regularly reassess our use of estimates and judgements based on experience, the development of ESG reporting, and several other factors. Changes in estimates are recognised in the period in which the estimate in question is revised.Threshold for restatementsFor adjustments to financial numbers, we follow the financial statements. For adjustments to ESG data, we make a judgement as to whether we should restate numbers. We clearly indicate where we have restated data.External reviewAll quantitative data points in the tables in sections E, S, G, has undergone limited assurance unless otherwise stated.Changes in the preparationFor the 2024 reporting period, we have changed the structure of our sustainability disclosure to comply with the CSRD.The changes include:The inclusion of a sustainability statement in Solarâs annual report.An update of the preliminary double materiality assessment conducted in 2023 to also contain material impacts, risks, and opportunities across our value chain.New disclosures and metrics as required by the ESRS.How to read the Sustainability statementOur Sustainability statement addresses specific disclosure requirements from the ESRS and is organized into four main sections: General, Environment, Social, and Governance. Each chapter follows the structure of the ESRS requirements and includes direct references to the sections and paragraphs in the ESRS standard.In the first section, we take you through our general preparation for the sustainability report and value chain, our stakeholder engagement, and an introduction to our DMA and the outcome of this, including methodology and listed material matters. Our strategy, business model, and corporate governance disclosures from the cross-cutting standard ESRS 2 are placed in the Management review, as we believe this information is best understood in conjunction with the Management review and an overview of our activities. See Management review pages 11-15 and 30-37.Hereafter, we deep dive into the environmental information, including the EU taxonomy, climate change, pollution, biodiversity and ecosystems, and resource use and circular economy.The third section covers the social information, including our own workforce and workers in the value chain.Creating value through sustainabilitySBM-1 Strategy, business model, and value chainSustainability is embedded in our Group strategy and business model (please see Management Review) and is considered a strategic enabler for how we operate as a business. We want to partner with our customers in the green transition and create value for both business and society.We have three strategic sustainability focus areas â climate impact, sustainable supply chain, and diversity, equity, and inclusion â each with underlying actions and targets. The three areas correspond to our material sustainability impacts, risks, and opportunities.They support our ambition to deliver climate and energy solutions, such as heat pumps and solar panels, thereby advancing the green transition in our industry and creating a resilient value chain that respects both planet and people.In the sustainability statement section, we set out the impacts, risks, and opportunities identified through our double materiality assessment. Information on policies, actions, targets, and ESG performance data can be seen under the relevant sections.Environment Climate impact Approach In alignment with the standards of the Science Based Target initiative, we aim to become carbon neutral in our own operation and to enable our customers to decarbonize in their part of the value chain.Priorities Net-zero in our own operations by 203025% reduction in emissions from our supply chain by 2030 (scope 3)Deployment of renewable energy solutions by installing heat pumps and solar panelsConversion to an EV fleet by 2030Transition to circular resource useContinuation of our afforestation projectsRead moreEU Taxonomy, page 56-60ESRS E1 Climate change, page 61-68ESRS E2 Pollution, page 69ESRS E4 Biodiversity and ecosystems, page 70-71ESRS E5 Resource use and circular economy, page 72-74SocialDiversity, equity, and inclusionApproachWe foster a workplace and culture that promotes diversity, equity, and inclusion to attract, develop, and retain employees, while respecting human rights in a fast changing environment.PrioritiesRespect human rights and labour across the value chainFocus on recruiting and developing a diverse workforceRetention and development as well as focus on employee satisfactionEnsure a healthy and safe working environment25% women in senior management by 2026Read moreESRS S1 Own workforce, page 76-80ESRS S2 Workers in the value chain, page 81-82GovernanceSustainable supply chainApproachWe are committed to deliver on our sustainability goals and continue to work to integrate our sustainability Supplier Engagement Programme into our daily business.PrioritiesEnable our employees to perform according to responsible business conduct Conduct supplier risk management due diligence of 82% of our spend by 2026Demand that 95% of our spend be covered by asigned Supplier Code of Conduct by 2026Embed sustainability compliance in our businessRead moreESRS G1 Business conduct, page 84-85Stakeholder engagementSMB-2 - Interests and views of stakeholdersEngaging with affected stakeholders helps us to understand their expectations and to respond accordingly. Regular dialogue with our employees - either directly or as a team - promotes open and credible communication.Guided by our Employee Code of Conduct and the UN Global Compact ten principles, we uphold open and trustworthy communication to help us understand our external stakeholdersâ priorities and to respond accordingly. External stakeholders regularly engage with Solarâs employees, either directly or in a team setting.The insight gained from these regular engagements serve to ensure general due diligence and serve as a source of information for our double materiality assessment.We strive to ensure that the views and interests of affected stakeholders as regards sustainability are communicated to the Sustainability Steering Committee.Stakeholder How we engage Purpose of engagement Outcome examplesEmployees âSurveys and workplace assessments âContribution to an inclusive work culture âEmployee handbook and guidelines âPersonal development dialogues âOpen and honest dialogue across organisation levels âCommunication from management âDialogue and contact meetings with management â âCompliance with our Employee Code of ConductEmployee and management development â âSocial gatheringsInclusion of employee perception and experience programmes âEmployee elected board members â âEmployee retention âFair treatment and payInput on strategy and business modelCustomers âCustomer support and guidance âCreation of customer loyalty âOur assortment and documentation kept up to date â âCompetence training at Solar School âDelivery on our promisesDevelopment of new logistics services â âPartnership programmes âTo make our customers productive and successfulA âdaptation to market expectations âEvents and seminars â âTo provide sustainable products and solutionsContribution to Solar's strategic direction âTo enable customers to run responsible business Improve market sharepractices with a reduced carbon footprintSuppliers âDialogue and guidance âCompliance with our Supplier Code of Conduct â âStreamlining of supplier expectations âContract negotiations âRisk assessment due dilligence âSupplier improvement plans âSupplier due dilligence â âEngagement with our Supplier Engagement ProgrammeGreater focus on compliance and documention â âBusiness development meetings âProtection of labour and human rightsSupplier days and events âTo decarbonise our supplier chainSecurity of supplies âInvestors âInvestor calls and dialogue âUnderstanding the sustainability agenda related to our â âESG ratings and improvements âPeriodic investor updatesindustryF âinancial and ESG disclosure and reports â âCapital market days âRetain and attract investorsAdaptive response to investors âAnnual General Meeting âEnhanced transparencyFair valuation âFinancial and ESG ratingsIndustry associations â âKnowledge sharing âTo enable the green transition of our industry âDirect representation on boards and networks âInput into strategic directions âIndustry alignment and developmentJoint initiatives and programmes âCollaboration and representationo enable industry representatives to engage with policymakersCivic and non-profit âPartnerships with NGOs âContribution to local initiatives âSite specific initiatives e.g. afforestation programmesorganisations â âCollaboration and representation âDecarbonisation programmes âDirect representation on boards and networksLocal communities âDialogue with local authorities âCollaboration and dialogue âSupport for local projects âParticipation and support in local initiativesHosting events at our premisesDouble materiality assessment introductionSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelThe purpose of the DMA is to assess the materiality of sustainability-related matters that may pose a potential significant risk or opportunity for Solar.The DMA has been instrumental in identifying the material topics where we are compliant and topics where optimisation and improvement are needed to secure overall compliance with the ESRS.As a key element in preparing for the Corporate Sustainability Reporting Directive (CSRD) and the underlying European Sustainability Reporting Standards (ESRS) requirements, a preliminary double materiality assessment was drawn up in 2023 with reference to the draft ESRS.Although the DMA has been slightly refined in 2024, it is still based on the approach and tools applied in 2023 and the following ESRS. The learnings captured in 2023 helped us to refine our methodology and processes in 2024.All data has been captured in our DMA and gap assessment tools where the effects have been quantified and supplemented by qualitative assessments.We are convinced that the outcome presented offers a fair picture of our impacts, risks, and opportunities, but we also acknowledge that the picture will probably change as we move forward. Consequently, we will conduct a review of the DMA and the gap analysis following our strategy periods, provided no major changes to our strategy and business model occur.DMA outcomeSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelWe have identified our impacts on the environment and society (impact materiality) as well as the sustainability-related risks that we are exposed to (financial materiality) and their interaction with the strategy and business model.Seven out of the ten ESRS topical standards are material to Solar. 22 sustainability sub-topics have been identified and found material.The outcome is displayed per sub-topic and shows that the sub-topic E1 Energy is our most material sustainability topic.The environmental impacts and risks we have as regards E1 are closely linked to our sustainability focus areas Climate impact and Sustainability supply, focusing on longevity and end-of-life, as well as delivering according to scientific targets in our own operations.S1-1 sub-topics related to our own operation are topics with which we are familiar.Due to the nature of our business as a sourcing and services company, the suppliers and the products we source are reflected under the topics S2, E5, and G1. We focus on responsible sourcing and respect the labour and human rights of people in our value chain. We endeavour to minimise our impact on the environment to the extent possible.One entity specific topic has been identified: E1 Sales of products and solutions enhancing the shift to renewable energy (electricity). This is in line with our strategic focus area, Climate and energy.All activities and ESRS topics and entity specific topics have been screened as part of the DMA. The topical standards E3 Water and Marine Resources, S3 Affected Communities, and S4 Consumers and end-users have been omitted due to the nature of our business as a local sourcing and services company servicing the business-to-business market.Overall DMA approachAll assessed impacts and financially materialtopics have been mapped to their relevant topical ESRS standard.In total, Solar reports on 22 sustainability topics,with material impacts, risks, and opportunities.Impacts, risks, and opportunities that are materialhave been assessed.Both sustainability-related risks and opportunitieshave been assessed.Impacts and risks have been assessed for our ownoperations (OO) and those of the value chain.Impacts have been identified as potential or actual.Most impacts assessed were actual.One entity topic in E1 has been identified asfinancially material.The impacts, risks, and opportunities are eitherimpact-material (bottom right), financially material(top left) or double-material (top right).The identified material sustainability topics andimpacts, risks, and opportunities form the basis ofSolarâs CSRD reporting.The classification and numbering of the sub-topicsare listed in chronological order.Material impacts, risks, and opportunities (IRO)SBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelFinancially materialDouble materialE1E1REPSENGYImmaterialImpact materialAll remaining sustainability topicsE1E2E2E4E4E4E4CCMIPOWAPOSOBICCBILUBIPOIDESSustainability topics for which no impacts, risks, or opportunities have been identifiedE5E5E5S1S1S2S2Impacts, risks, and opportunities REINREOUWASTWCHSETGEWCWTWCAWfalling below the defined impact and financial materiality thresholdsS2S2S2S2S2G1WCWBWCHSETGEWRCLWRFLCBICImpact materialitySeven out of the ten ESRS topical standards are material to Solar. 22 sustainability sub-topics have been identified and found material and are displayed in the DMA matrix. The classification and numbering of the sub-topics are listed in chronological order.EnvironmentE1: REPS Sales of renewable energy products and solutions (entity specific)E1: CCMI Climate change mitigationE1: ENGY EnergyE2: POWA Pollution of waterE2: POSO Pollution of soilE4: BICC Direct impact drivers of biodiversity loss, climate changeE4: BILU Direct impact drivers of biodiversity loss, land-useE4: BIPO Direct impact drivers of biodiversity loss, pollutionE4: IDES Impacts and dependencies on ecosystem servicesE5: REIN Resource inflows/useE5: REOU Resource outflows (products and services)E5: WAST WasteSocialS1: WCHS Working conditions, health and safetyS1: ETGE Equal treatment and opportunities, gender equalityS2: WCWT Working conditions, working timeS2: WCAW Working conditions, adequate wagesS2: WCWB Working conditions, work-life balanceS2: WCHS Working conditions, health and safetyS2: ETGE Equal treatment and opportunities,gender equalityS2: WRCL Other work-related rights, child labourS2: WRFL Other work-related rights, forced labourGovernanceG1: CBIC Corruption and bribery, incidentsValue chainSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business model Impacts and risksUpstreamWe source our products from tier one suppliers who distribute the products to our warehouses. Identified material negative impacts on the environment and people are primarily driven by our upstream activities and are related to raw-material extraction and manufacturing. Geographically, impacts are largely concentrated outside Europe, while tier one is largely concentrated inside Europe.Own operationsWe source from tier one suppliers, stock, pack, and distribute products and support our customersâ day-to-day business by ensuring their access to products. Identified material negative impacts on the environment and people are primarily driven by our energy consumption and matters related to own workforce. Geographically, the negative impacts are concentrated in the markets in which we operate.DownstreamProviding products and solutions that enhance the green transition gives us an opportunity to support our customers in their efforts to decarbonise. This is identified as a positive impact. Resource use and circularity are upcoming topics in our industry. Geographically, the negative and positive impacts are concentrated on the markets in which we operate.For an overview of our strategy and business model, see page 11-15 of the Management review. An overview of our cost structure can be found in the financial statement.Material sustainability-related impacts, risks, and opportunitiesSBM-3 Material impacts, risks, and opportunities and their interaction with the strategy and business modelAs a result of our double materiality assessment, several impacts, risks, and opportunities have been identified and assessed as material.As stated in the DMA matrix on page 46, seven out of the ten ESRS topical standards are material to Solar along with 22 sub-topics. Several sub-topics have been identified for each material topic.The adjacent tables show whether the impacts are positive or negative as well as whether they are related to our own operations (OO) or the value chain (VC). Impacts are actual impacts unless stated as potential. Brief descriptions of the material risks or opportunities are included in the table.Our scoring of risks and opportunities may include mitigation actions that are already part of our daily operations. Actions addressed as material impacts, risks, and opportunities (IROs) have not impacted our strategy and business model, and we do not foresee an impact during the strategy period 2024-2026.Sustainability risks are prioritized like other risks, meaning both Enterprise Risk Management (ERM) and DMA tools are used. In general, focus is always directed towards the upper right corner in the risk matrix for all risks. All risks, including mitigating activities, are presented by the Executive Board to the Audit Committee/Board of Directors for approval. The Board of Directors approves the risk appetite and tolerance per risk category and the used methodology. It is the responsibility of the Executive Board to implement the decisions made by the Board of Directors.All risks follow a three-line defense model which structures roles, responsibilities for risks, structure roles, decision-making, and control to achieve effective governance. Quarterly reports are prepared for the Executive Board to ensure progress and in parallel, internal audit reports are sent directly to the Board of Directors on the progress.Information on how we respond to the effects of our impacts, risks, and opportunities is included in the topical sections.Value chain TimeE1 Climate changeimpacthorizonTopic Description IRO description How we respondSales of renewable energy products Products and solutions advancing the Heat pumps and solar panels are some of the key technologies needed in the transition Through our strategic focus area, Climate and energy, we sell products and solutions and solutions (entity specific)green transition.to renewable energy.necessary to the widespread adoption of renewable energy as a key solution to mitigate climate change.Supporting the green transition Solar distributes and sells products necessary to the widespread adoption of renewable Via our product portfolio, we contribute to customers adopting products and solutions energy as a key solution to mitigate climate change.necessary to facilitate the renewable energy transition, hence creating a positive impact. Climate and energy is a strategic focus area with growth potential.Climate change mitigation GHG emission from the energy supply Supply chain emissions from extracting raw materials, manufacturing and We respond to this impact through our Supplier Engagement Programme, our own chain and downstream GHG emissions transportation from the products we bring to the market consuming energy in its use-climate reduction targets for scope 1, 2, and 3 and own controlled afforestation deriving from products consuming phase.projects. We actively work with our suppliers towards managing our value chain energy in its use phase. impacts.Energy Energy consumption deriving primarily Energy used in our own operations and energy including energy deriving from fossil We respond to this impact by having a climate mitigation plan and a target to be net-from the value chain but also from our fuels leading to GHG emissions.zero by 2030. Through our Supplier Engagement Programme, we ask our suppliers to own operationstart decarbonising their operations, implementing renewable energy and documenting progress that benefits the value chain.Risks related to potential lack of energy Risks of energy failure is decreased by continously increasing the share of self-Through our Supplier Engagement Programme, we ask our suppliers to start and potential regulatory risks and generated energy making up approx. 30% of our total electricity consumption in 2024. decarbonising their operations, implementing renewable energy and documenting environmental compliance.Customers continue to pay more attention to sustainability due to regulation and progress. We actively work with our suppliers towards managing our value chain market demands. Together with rising energy prices and/or heavy reliance on fossil impacts.fuels in our upstream value chain, Solar's financial performance and reputation might be impacted by not focusing on renewable energy.Value chain TimeE2 PollutionimpacthorizonTopic Description IRO description How we respondPollution of water Impacts resulting from pollution of water Excavating materials and minerals as well as in in the production phase can cause We respond to this impact through our Supplier Engagement Programme and our through indirect or direct contamination significant harm to ecosystems, particularly e.g. if hazardous wastewater is not treated Code of Conduct by encouraging our suppliers to implement a water management and leakage. properly and leaks into the natural environment.programme and report on wastewater. We actively work with our suppliers towards managing our value chain impacts.Pollution of soil Impacts resulting from soil pollution Many products in our supply chain contain metals and minerals excavated from mines Through our Supplier Engagement Programme we demand our suppliersat the site of or surrounding areas and leading to potential soil pollution at various stages of the mining.to sign our Code of Conduct and encourage them to minimise and/or eliminate any operations.sources of pollutants and document progress. We actively work with our suppliers towards managing our value chain impacts.E4 Biodiversity and ecosystemsDrivers of biodiversity loss: Material impacts related to biodiversity Although relatively small, carbon footprint in our own operations contributes to do some We actively work with our suppliers towards managing our value chain impacts and Climate changeand ecosystems change arising from harm of the environment. Many of the materials used in our supply chain are mined take appropriate actions via our Supplier Engagement Programme. Our Environment climate change. and subject to energy intensity , in the form of GHG, of manufacturing which may cause Policy guide us in our daily operation to minimise potetial negative impact to nature.signficant harm and impact biodiversity loss as a result of climate change.Drivers of biodiversity loss: Disruption of ecosystems and habitat Extractive activities can result in clearing large areas of land, the creation of open pits We actively work with our suppliers towards managing our value chain impacts and Land-use change, freshwater use, loss caused by extraction of metal and or mountain top removal, and disruption of local ecosystems, which may result in an take appropriate actions via our Supplier Engagement Programme.and sea-use changeminerals. indirect or direct impact on biodiversity loss, causing potentialdecrease in species and introduction of invasive species. Ecosystem/land that is converted could be restored, however it would take a significant amount of years until it would be restored back to its original state.Drivers of biodiversity loss: Biodiversity loss as a result of pollution Impacts resulting from suppliersâ direct effect on changes in nature, anthropogenic We actively work with our suppliers towards managing our value chain impacts and Pollution in areas where the value chain operates.assets, and nature's contributions to people and pollution, whether these be from take appropriate actions via our Supplier Engagement Programme.mechanical, chemical, noise, or light contributions. In case the event occurs, soil and water would be polluted close to the manufacturing sites. However, air pollution stemming from e.g. transportation by diesel/gas powered trucks would be present throughout all logistics routes.Impacts and dependencies Biodiversity-sensitive areas with Significant harm caused to ecosystem by upstream value chain activities located in We actively work with our suppliers towards managing our value chain impacts and on ecosystem servicesactivities negatively affecting the biodiversity sensitive areas may result in partial destruction of ecosystems. It can be take appropriate actions via our Supplier Engagement Programme.provision of ecosystem services. assumed that isolated or widespread ecosystem collapse due to biodiversity loss where Solar's value chain potentially operates.Value chain TimeE5 Resource use and circular economyimpacthorizonTopic Description IRO description How we respondResourceUse of virgin resources. Although relatively small, we have a dependency on virgin resources in our packaging We encouraging our business partners to reuse and recycle through appropriate inflows/useand distribution materials. Moreover products in our supply chain are likely to be circularity levers.produced using virgin materials that are extracted from mines or natural areas. Extraction of these materials can pose significant environmental threats.Resource outflows Waste generation and end-of-life Electronic waste is one of the fastest growing global waste stream. The products We encourage our business partners to sort their waste. We are committed to (products and services)handling.we sell have various expected lifetime with many products still not designed with collective end-of-life programmes complying to EU directives inclusive WEEE standard circularity (durability, repair, reuse, dissasembly, recycling) in mind generating general (waste electrical and electronic equipment).waste and e-waste that potentially cause indirect or direct harm to nature.Waste Risks resulting from harmful or Waste in our operations and downstream is mainly consisting of packaging waste We sort our own waste and encourage our business partners to do the same. We are inadequate disposal of waste, in from inbound product supply. There is a slight risk of inadequate waste management committed to collective end-of-life programmes complying to EU directives inclusive accordance with laws in operational results from behavioral patterns at Solars premises or downstream, or from leakage WEEE standard (waste electrical and electronic equipment).regions.and/or inadequate waste management in Solars upstream value chain, in relation to product manufacturing.S1 Own workforceWorking conditionsProviding an attractive and safe We have initiated several measures to increase safety at Solar. A set of cardinal rules, Through a continuous dialogue with our internal stakeholders we monitor and track Health and safetyworkplacelaying out core safety rules, a safety standard for visitors and a Health, safety and work work-related accidents. Our Health, safety and work environment policy is our guidance environment policy are all measures taken to prevent work incidents.to help secure a safe work environment.Equal treatment and Secure equal treatment and We commit to provide equal opportunities. We have an open and inclusive culture Our Employee Handbook, Code of Conduct and policies on diversity, equity and opportunities for allopportunitieswhere all employees have regulary development appraisals. inclusion and non-bias in recruitment is our foundation to secure a just and inclusive work environment.Value chain TimeS2 Workers in the supply chainimpacthorizonTopic Description IRO description How we respondWorking conditionsWorking time Excessive working hours. Excessive working hours for workers in the supply chain may cause physical and Through our Supplier Code of Conduct we ask our suppliers to take measures to mental health issues and their safety and work-life balance.secure a healthy work environment.Adequate wages Waste generation and A wage that provides for the satisfaction of the needs of the worker and his / her Through our Supplier Code of Conduct we ask our suppliers to respect national and end-of-life handling.family in the light of national economic and social conditions.international working condition regulations.Work-life balance Balance between Satisfactory state of equilibrium between an individualâs work and private life to Through our Supplier Code of Conduct we ask our suppliers to take measures to work and private life.secure time allocation between time spent at work and in private life beyond family secure a safe work environment.responsibilities.Health and safety Suppliers' commitment to secure health Healthy and safe work conditions involve both prevention of physical and mental harm Through our Supplier Code of Conduct we ask our suppliers to take measures to and safety.and the promotion of workersâ health by the undertaking.secure a safe work environment.Equal treatment and opportunities for allGender equality and equal pay Secure equal treatment and Workersâ access to equal opportunities, pay, and treatment, including freedom from Through our Supplier Engagement Programme we monitor and set a minimum for work of equal valueopportunities.discrimination.threshold score on labour and human rights.Other work-related rightsChild labour Deprive children of their childhood. Work that deprives children of their childhood, their potential, and their dignity, and that Through our Supplier Engagement Programme we monitor and set a minimum is harmful to physical and mental development. threshold score on labour and human rights.Forced labour Deprive workers from freely accepting All work or service which is extracted from any person under the threat of penalty and Through our Supplier Engagement Programme we monitor and set a minimum working conditions.for which the person has not offered himself or herself voluntarily.threshold score on labour and human rights.G1 Business ConductCorruption and briberyIncidents Whistleblower protection through Corruption and bribery incidents may have significant risks for our business and cause Through our whistleblower portal, we take a proactive approach to mitigating risks and procedures and policiesreputational damage. Our protection of whistle-blowers encourages and enables all negative impacts throughout the value chain.stakeholders to speak up if they experience any irregularities or illegalities on the part of Solar.Methodology and processIRO-1 - Description of the process to identify and assess material impacts, risks, and opportunitiesWe developed the methodology with reference to the draft principles of the ESRS and available guidelines from 2023. Learnings and outcomes from the 2023 process have been instrumental in this yearâs process to comply with the final guidelines of ESRS.MethodologyScopeThe ten ESRS topics were analysed and relevant documentation prepared in line with our strategy and business model. As regards to our own operations, we identified and assessed impacts on people and the environment as well as the potential risks to our business.As regards our value chain impacts and risk assessment, both upstream tier one suppliers and downstream activities were assessed. The value chain assessments were based on internal stakeholder interviews and knowledge and documentation collected. These were assessed and validated by the Executive Management.We considered both positive and negative impacts as well as actual and potential impacts in relation to sustainability matters and potential financial risks and opportunities.All activities and ESRS topics and entity specific topics have been screened as part of the DMA. The topical standards E3 Water and Marine Resources, S3 Affected Communities and S4 Consumers and end-users have been omitted due the nature of our business as a local sourcing and services company servicing the business-to-business market.Stakeholder engagementAs required, a stakeholder engagement analysis was conducted with the purpose of analysing material impacts across the value chain. We engaged with stakeholders of Solarâs sustainability reporting and other affected stakeholders.In 2023, we identified four stakeholder groups and interviews were conducted among 18 external stakeholders and more than 25 employees.Given the nature of Solarâs business and the fact that we do not operate in high impact zones, only B2B customers and tier one suppliers were engaged. For future stakeholder engagement, we will consider engaging other tier suppliers and âsilentâ stakeholders such as selected NGOs, industry associations, authorities, etc.This year, new stakeholders were not included. However, we have remained in continuous dialogue with our colleagues and have obtained an insight into the views and interests of our stakeholders across the value chain.ScoringAs per the ESRS guidelines, we followed the predefined scoring parameters.ImpactsImpact materiality is identified according to the following two scenarios:Actual: For each sustainability topic, actual impacts are identified based on primary data. Potential: For each sustainability topic, potential impacts are identified based on secondary data when no primary data is available.The impact materiality is scored based on four parameters.Scale Scope Irremediable character Likelihood (only applies to potential impact) To score and assess impact materiality, the score is from 0-3 and the materiality threshold is set at 3, which equates to approx. one-third of the maximum score (maximum possible score: 3 for severity x 3 for likelihood = 9).Financial risks and opportunitiesFinancial materiality is identified according to whether: An impact is identified that could trigger a risk/opportunity, or A dependency on natural, social, and human resources exists For financial materiality, Solarâs Enterprise Risk Management Board approved the methodology used to assess the magnitude of potential financial risks or opportunities. The score ranged between 0 and 5.Scoring of the IRO is assessed based on a three-step output:Value chain mappingSee value chain processGathering of primary and secondary data (where primary data is not available).All findings are collected in a DMA data tool, wherein the consolidated data is collected and uploaded.ThresholdsOur Executive Management, in collaboration with our DMA core team, has set the materiality at 3. This means that impacts and risks scored at 3 or above are deemed material.If a sustainability matter is above the threshold, either as an impact or financial risk or opportunity for our own operation, supply chain or both (cross-cutting occurrence), it is included as a material topic in the DMA analysis. The reporting requirement in accordance with the ESRS will be different whatever sustainability topic is deemed material in either Solarâs own operation or value chain.Materiality governance Going forward, the Sustainability Steering Committee will have decision-making responsibilities and will ensure effective execution and coordination for the installation of several working tracks designed to address specific targets and topics within the CSRD.ProcessWe have defined four core process steps for conducting the DMA for both impact and financial materiality.Our starting point was the impact assessment (inside-out) of Solarâs impact on the environment and society. Secondly, we conducted a financial assessment (outside-in) of the sustainability-related risks to which we as a business are exposed.All data has been captured in our DMA tool where the effects have been quantified and supplemented with qualitative assessments.To prepare and conduct the DMA, a âSolar DMA core teamâ was established, consisting of the Sustainability Director and three subject-matter experts.The assessment, scoring process, keys, structure, and the logic behind the assessment are aligned with the ESRS 2 requirements.The following steps have been conducted:1. Scoping of impacts2. Stakeholder engagement3. Materiality scoring and findings4. Management review and conclusionProcess stepsImpact materialityThe mapping of our sustainability-related impacts builds on the approach from 2023 as well as recent documentation and knowledge.The following steps were conducted:1. Scoping of impactsAs preparation for the workshops and as part of the value chain process, a thorough desk research was conducted to guide us in pre-defining relevant sub and sub sub-topics.2. Stakeholder engagementThe internal stakeholders engaged were subject-matter experts from the business lines, group functions, and management - all with a broad insight into our business and our value chain. All stakeholders were invited to a collective workshop, where they were engaged via a digital dialogue tool.3. Materiality scoring and findingsImpact and scoring rationales from the workshops were documented and all input transferred to our DMA tool to calculate the degree of materiality. Results were discussed and evaluated between the management and the core team and selected workshop participants were consulted for validation.4. Management review and conclusionThe consolidated overview was presented and discussed between Executive Management and the DMA core team. The scoring and the respective materiality threshold generated a final list of material impacts.Process stepsFinancial materialityAs part of the preparation for the financial materiality assessment, we also consulted the enterprise risk management section as well as recent documentation and the processes related to the subject.1. Scoping of risksResults from the impact materiality assessment formed the basis for scoping the sustainability risks related to financial risks and opportunities.2. Stakeholder engagementIn line with ESRS, external stakeholder groups were selected from among users of Solarâs sustainability report and affected stakeholders. Customers and tier one suppliers were selected based on spend/revenue while investors were selected randomly. Prior to a one-to-one interview, all stakeholders received a pre-read to provide an understanding of the purpose of the interview.3. Materiality scoring and findingsImpact and scoring rationales from the interviews were documented and all input transferred to our DMA tool to calculate and assess the degree of materiality in relation to risks and opportunities. Results were discussed and evaluated between the management and the core team.4. Management review and conclusionThe consolidated overview was presented and discussed between Executive Management and the DMA core team. The scoring and the respective materiality threshold generated a final list of financial material risks and entity specific opportunities.Environmentalinformation56Taxonomy reporting61ESRS E1 Climate change69ESRS E2 Pollution70ESRS E4 Biodiversity and ecosystems72ESRS E5 Resource use and circular economyEU Taxonomy ReportingEU taxonomyThe EU taxonomy is the classification system identifying environmentally sustainable economic activities.The EU taxonomy framework (EU Taxonomy Regulation 2020/852) is part of the EU Green Deal and serves as a core enabler to deliver on the EUâs ambitious climate goals about carbon neutrality in 2050. The goal is to redirect investments towards sustainable projects. Our assessment below is in compliance with Regulation EU 2020/852 and the associated amendments to the annexes of the Disclosure Delegated Act as issued on 27 June 2023.Eligibility screeningSolar performed a screening of the technical annexes of the Climate Delegated Act to identify any potentially eligible economic activities for the Revenue KPI and for the CapEx and OpEx KPIs. Identified areas, where there were any eligible economic activities in the reporting period, were subject to further assessment for alignment. Solar does not claim alignment for 2024, because there is not sufficient documentation within the relevant areas.For the calculation of the denominator of the Revenue, CapEx, and OpEx KPIs, we have extracted the figures directly from the ERP system and therefore ensure that the figures are only counted once in each KPI. For the allocation of the numerator for CapEx, we have first identified the relevant figures and then we have allocated the primary related economic activity in the Climate Delegated Act. In this way, we ensure that no CapEx is considered more than once.See EU taxonomy tables for the full overview on page 58-60.Solar activitiesSolar has reviewed all six taxonomy-eligible economic activities listed in the Climate Delegated Act. Based on the current interpretation of the eligible economic activities, we have concluded that sourcing of electrical and heating and plumbing equipment is not included in the list of eligible sectors. Consequently, our economic activities are not yet in scope for assessment.However, it is our understanding that sourcing of electrical and heating and plumbing equipment plays a pivotal role in climate change mitigations. By providing our customers with product documentation containing environmental data, it enables them to reduce their environmental strain and carbon footprint. We closely monitor the development.Thermonova, a 51% owned subsidiary, has eligible economic activities listed in the Climate Delegated Act with activities within manufacture of energy efficiency equipment for buildings (NACE 43.22) (activity code 3.5).Solar Polaris, a fully owned subsidiary, has eligible economic activities listed in the Climate Delegated Act with activities within installation, maintenance, and repair of renewable energy technologies (NACE 43.21) (activity code 7.6).Eligible OpEx activitiesEligible OpEx include any of the following types of spend:Related to assets or processes that are associated with Taxonomy-eligible economic activities7.3 Installation, maintenance, and repair of energy efficiency equipment7.4 Installation, maintenance, and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)Eligible CapEx activitiesEligible CapEx are investments related to the following EU taxonomy activities:1.1 Afforestation, establishment of forest through planting, deliberate seeding or natural regeneration on and that, until then, was under a different land use or not used7.3 Installation, maintenance, and repair of energy efficiency equipment7.6 Installation, maintenance, and repair of renewable energy technologiesTurnoverThe activity of Solar as a sourcing and services company within electrical and heating and plumbing equipment is not included in the list of eligible sectors. However, Solar owns two companies that are on the list of eligible sectors. Thermonova: Manufacture heat pumps and the products 1disclosed in activity 3.5 kSolar Polaris: Design solar photovoltaic solutions disclosed in activity 7.6 The share of taxonomy-eligible economic activities in the two companies are not significant. For 2024, it amounts to DKK 191m. and represents 1.6% of Solar Groupâs total turnover.Operating costs (OpEx)OpEx consists of direct non-capitalized costs that relate to research and development, building renovation, short-term lease, maintenance and repair and any other direct expenditures relating to the day-to-day servicing of PPE, right-of-use assets as well as intangible assets. The OpEx KPI is defined as Taxonomy eligible OpEx (numerator) divided by total OpEx (denominator).The denominator of the OpEx KPI is a subset of DIRECT non-capitalised costs relating to:Individual measures enabling Solarâs activities to become low-carbon or lead to greenhouse gas reductions as well as building renovation measuresMaintenance and repair and other day-to-day costs relating to servicing property, plant, and equipmentSolar has assessed that the numerator and denominator of the KPI related to the OpEx as disclosed in section 1.1.3.2 of annex 1 to the Disclosures Delegated Act cover the amount of non-capitalised costs related to:Activities or processes associated with taxonomy eligible economic activities is nilResearch and development are nilIndividual measures enabling Solarâs activities to become low-carbon or lead to greenhouse gas reductions, which is DKK 0m (2023: 5m), as well as building renovation measures (7.3, 7.4)Maintenance and repair and other day-to-day costs relating to servicing property, plant, and equipment amounting to DKK 34m (2023: 43m)The above DKK 34m is included in the denominator, but no spend related to the eligible activities has occurred for 2024 and consequently, the KPI related to OpEx is 0% (2023: 12%).Capital expenditure (CapEx)We included the numerator of the eligible CapEx investments in non-revenue generating activities described above. The denominator of the CapEx KPI includes total additions to intangibles and tangibles (notes 3.1, 3.2, 3.3 in the consolidated notes of the Annual Report 2024). See page 118-125.CapEx consists of additions to tangible assets covering property, plant, and equipment (PPE) and intangible assets during the financial year. It includes additions to PPE (IAS 16), intangible assets (IAS 38) and right-of-use assets (IFRS 16). The CapEx KPI is defined as taxonomy-eligible CapEx (numerator) divided by total CapEx (denominator).When assessing the numerator of the KPI related to the CapEx as disclosed in section 1.1.2.2 of annex 1 to the Disclosures Delegated Act, we have assessed:The amount of CapEx that is referred to taxonomy aligned activities is nilThe amount of CapEx related to become low-carbon or to lead to greenhouse gas reduction is DKK 10m (2023: 31m) (1.1, 7.3, 7.6)When assessing the denominator of the KPI related to the CapEx as disclosed in section 1.1.2.1 of annex 1 to the Disclosures Delegated Act, we have assessed that it covers:Additions during the year; intangible assets excluding goodwill as reported in note 3.1, page 118-120 in Annual Report 2024Additions during the year; property, plant, and equipment in note 3.2, page 121-122 in Annual Report 2024As regards leased assets, the new contracts, renewals, remeasurements and extensions are included as reported in note 3.3, page 123-125 in Annual Report 2024.In total, the above amounts to DKK 438m (2023: 497m). Consequently, the KPI related to CapEx can be calculated to 2% (2023: 6%).Nuclear and fossil gas related activitiesNuclear energy related activities1 The undertaking carries out, funds or has expo-Nosures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear pro-cesses with minimal waste from the fuel cycle.2 The undertaking carries out, funds or has expo-Nosures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.3 The undertaking carries out, funds or has Noexposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen produc-tion from nuclear energy, as well as their safety upgrades.Fossil gas related activities4 The undertaking carries out, funds or has expo-Nosures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.5 The undertaking carries out, funds or has expo-Nosures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.6 The undertaking carries out, funds or has expo-Nosures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.2024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)EU TaxonomyTaxonomy- aligned proportion Category Category Turnoverof turnover, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute turnover (3)Proportion of turnover (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned)Turnover of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N N 0Of which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities 0 0 N/EL N/EL N/EL N/EL N/EL N/EL 0(not taxonomy-aligned activities)Total (A.1+A.2) 0 0 0 0 0 0 0 0 0B. Taxonomy â non-eligible activitiesTurnover of taxonomy â non-eligible activities (B) 12,223 100Total (A+B) 12,223 1002024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)Taxonomy- aligned proportion Category Category OpExof OpEx, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute OpEx (3)Proportion of OpEx (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned)OpEx of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N N 0Of which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities (not taxonomy-aligned activities)7.3 Installation, maintenance, and repair of energy efficiency equipment CCA 7.3 0 0 N/EL EL N/EL N/EL N/EL N/EL 12OpEx of taxonomy-eligible not environmentally sustainable activities (not taxonomy-aligned activities) (A.2) 0 0 0 0 0 0 0 0 12OpEx of taxonomy eligible activities (A.1+A.2) 0 0 0 0 0 0 0 0 12B. Taxonomy-non-eligible activitiesOpEx of taxonomy-non-eligible activities (B) 34 100Total 34 1002024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)Taxonomy- aligned proportion Category Category CapExof CapEx, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute CapEx (3)Proportion of CapEx (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned) 0Capex of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N NOf which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities (not taxonomy-aligned activities)1.1 Afforestation CCA 1.1 3 1 N/EL EL N/EL N/EL N/EL N/EL 57.3 Installation, maintenance, and repair of energy efficiency equipment CCA 7.3 1 0 N/EL EL N/EL N/EL N/EL N/EL 07.6 Installation, maintenance, and repair of renewable energy technologies CCA 7.6 6 1 N/EL EL N/EL N/EL N/EL N/EL 1CapEx of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (A.2) 10 2 0 100 0 0 0 0 6CapEx of taxonomy-eligible activities (A.1+A.2) 10 2 0 100 0 0 0 0 6B. Taxonomy â non-eligible activitiesCapEx of taxonomy-non-eligible activities (B) 428 98Total (A+B) 438 100Climate changePerformance incentive schemesGOV-3 Integration of sustainability-related performance in incentive schemesThe Remuneration Policy, which outlines the principles and guidelines for the Executive Board was amended at the Annual General Meeting in 2024. ESG targets were included in variable remuneration. Please see the Management review page 32.Transition planE1-1 Transition plan for climate change mitigationWe acknowledge the importance of reducing our climate footprint across the value chain. We follow a science-based approach in line with the Paris Agreement limiting global warming to 1.5°C.Our approach for our own operations includes a climate mitigation plan and a mid-term reduction target. We are proud to report a 50% reduction in CO2e emissions for scope 1 and scope 2 compared to our 2020 baseline.To address potential negative impacts in our value chain, we encourage our suppliers to source raw materials with a lower negative impact on the environment. We assist our customers in decarbonising their own operations and offer renewable energy products and solutions, further advancing the green transition.Decarbonisation leversAlthough less than 1% of our CO2e emissions derives from our own operations (scope 1 and 2), we continue to invest in renewable energy assets, such as high-capacity heat pumps and solar panels at our own premises. We aim to phase out gas as a heating source and increase the share of self-generated energy. No further climate scenarios have been considered as we consider our current scenario and transition plan to be on track with the Paris Agreement.Our ambition is to use 100% renewable energy (electricity) by 2026, either procured or self-generated, and increase the share of self-generated electricity.In addition to tracking reductions in our own operations, we also use climate targets to shape other initiatives and investments. A key method for achieving our climate mitigation targets, for example, is our switch to renewable energy, including replacing gas boilers with heat pumps and shifting to a 100% EV fleet.Due to the nature of our business, over 99% of Solarâs total emissions derive from the value chain. Most of our emissions derive from the products we source, and the energy consumed in the use-phase of the products we sell. The category âUse of sold productsâ alone accounts for more than 90%. We are in the process of identifying and deploying several initiatives to reduce our supply chain emissions.Financial resourcesThe operational and capital funding to execute our transmission plan is allocated annually. Please see page 56-60 in the section EU Taxonomy.Embedded in our strategy and business modelOur transition plan is an integral part of our overall strategy and business model and is aligned with our sustainability focus areas and targets. It is financed through our annual business and financial planning process. As chair of the Sustainability Steering Committee, our CFO oversees the implementation of our ESG strategy, including the transition plan. The transition plan is approved by the Executive Board and the Board of Directors. Please see page 11-15 in the Management Review for further information.Science-based emissions targetsWe have committed ourselves to the Science Based Target initiative (SBTi), which also serves as our guiding star to improve our climate footprint. Through this, we have committed to a 42% reduction by 2030 in scope 1 and 2. However, our ambitious target for scope 1 and 2 is net-zero by 2030. This target is supported by a mid-term target in 2026 of 65% reduction in scope 1 and 2, and the overall target of decarbonising our value chain on a long term.Transition plan towards 2030 for scope 1, 2, and 3 GHG emissionsE1-4 Targets related to climate change mitigation and adaptationReductions planned Reductions expected in own operationsin value chainTransition Renewable Phase out Change in tCO2eqto EVelectricityfossil fuelsproduct mix100% reduction in scope 1&225% reduction in scope 3Current GHG emissionsGHG emissionsBaselineScope 1-2 reduction Scope 3 reductionTarget year20202030Impact, risks, and opportunitiesSBM-3 â Material impacts, risks, and opportunities and their interaction with strategy and business modelThrough our double materiality assessment, three sub-topics have been identified, of which our entity-specific sub-topic presents a positive impact and an opportunity. Sales of renewable energy products and solutions (entity specific) Climate change mitigation EnergyRisks related to the topics identified are all considered to be climate-related transition risks.We believe that our strategy and business model support our transition plan and our ambition to work with climate change to reduce our carbon emissions in line with our SBTi targets. The impact, risks, and opportunities (IROs) and how they interact with our strategy and business model are described in the section General information.Entity specific opportunityThe sale of products and solutions that enhance the transition to renewable energy has been identified as an opportunity under the topic E1: Climate Change. This alignswith our strategic focus area on Climate and Energy (see Management review, page 11-12).Solar aims to contribute to the green transition by selling products such as heat pumps and removing gas and oil boilers from the market, thereby achieving avoided emissions.Policies related to this area are covered by existing policiespresented in this report, and actions and targets are integrated into our strategic actions and targets. Data points related to this entity-specific topic are company-specific and outside CSRD requirements.The expected outcomes of this entity-specific opportunity include improved financial gains and an enhanced reputation for Solars as a company supporting the green transition, while also contributing to a better world.IRO processESRS 2 IRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesThe full process and methodology applied to identify climate-related impact, risks, and opportunities in relation to climate-related physical risks and climate-related transition risks, can be found in the section General information page 53-54.Climate change impacts are identified across Solarâs value chain. The main risks stem from energy consumption in the upstream supply chain and the energy supply connected to Solarâs assets and business model. These risks are reflected in the negative impacts identified and assessed as material in the DMA. No climate-related hazards have been identified.Given the nature of our business, our geographical presence, and our primarily European-based suppliers, we have not identified any significant physical risks. Additionally, we do not foresee any substantial transition risks that could affect our business model, financial performance, or reputation in the short and medium term. Sales of products and solutions for renewable energy have been identified as an opportunity in the transition to a low-carbon economy.Policies E1-2 Policies related to climate change mitigation and adaptationSolarâs Sustainability Policy and Environmental Policy define and communicate how we work with climate change mitigation and sustainability, including our commitment to reducing scope 1, 2, and 3 emissions by 2030 including our ambition of 100% renewable energy (electricity) and energy optimisation. By covering all emission scopes, the Sustainability Policy applies to the emissions from our own operations as well as from our upstream and downstream value chain.Our Sustainable Procurement Policy outlines our demands for our suppliers and requests them to disclose their emissions.We actively engage with our strategic/preferred suppliers via our Supplier Engagement Programme and through ongoing dialogue, meetings, and events. We request that our suppliers report to EcoVadis and sign our Supplier Code of Conduct. Decarbonisation and environmental protection are central to the relationship with our suppliers, and we encourage them to use renewable energy in their own operations. These goals are outlined in our Sustainable Procurement Policy and in our Supplier Code of Conduct.Both policies, which apply to all employees and suppliers, aim to minimise our impact on the environment. The policies are available on Solarâs employee intranet and on our website.Accountability lies with the Executive Board. Group Sustainability has overall responsibility for our policies and ensures that they remain aligned with legislation. The policies are reviewed annually.Actions E1-3 Actions and resources in relation to climate change policiesWe are addressing emissions through the following actions. Many actions have already been implemented, and more are in the pipeline. Primary decarbonisation levers, as well as achieved and expected GHG emission reductions, are detailed in our transition plan. We believe to be on track and have the necessary resources and financial support to continue working with our climate change mitigation plan. For more information on our financial resources (OpEx and CapEx), please see the EU Taxonomy section.Own operationsWe have initiated the following actions:We continue to take steps to reduce our CO2e emissions in scope 1 in line with our reduction targets by:Phasing out fossil fuel-based energy sources such as gas with renewable alternatives like heat pumps.Continuing to transition our fleet towards a 100% EV fleet by 2030.We continue to take steps to reduce our CO2e emissions in scope 2 in line with our reduction targets by:Switching to renewable electricity, either purchased or generated, by installing solar panels at our premises. In 2025, we will establish a solar panel field at our head office in Vejen, Denmark. Our target is 100% renewable energy (electricity) by 2026.Upgrade to energy-efficient lighting, such as LED, install sensors and building management systems.Construction of our warehouse in Sweden accords to Breeam Excellent. The new facilities will replace our two existing warehouses and are expected to be taken into use in 2026. This will have a positive impact on both scope 1 and 2.We have created emission reduction scenarios at company level to ensure that we reach our mid-term reduction target.We have trained employees in direct contact with suppliers in our Sustainability Policy and Supplier Code of Conduct.We have strengthened the Group Sustainability function with three local Sustainability Managers and a Sustainable Procurement Manager.Supply chainDecarbonising the supply chain is a joint effort and to support our scope 3 reductions, we have initiated the following actions:We began the establishment of Solar Industrial Solutions, focusing on turnkey climate and energy solutions. By installing a heat pump, solar panels, and other energy-efficient products and solutions, our customers can decarbonise their own operation.Through our Code of Conduct, we require our suppliers to commit to renewable energy. We have met our 2024 target of 93% of our spend to be covered by our Supplier Code of Conduct.We follow our suppliersâ commitment to renewable energy via our risk assessment due diligence. By the end of 2024, 80% of our spend have undergone risk assessment.This year, we have begun performing on-site audits in collaboration with accredited third parties. A risk-based approach has been applied, reviewing risk by country, market, commodities, processes, and/or work areas.We will strive to provide the relevant environmental documentation containing relevant scope 1 and 2 data. We will continue to move away from spend-based CO2e emissions data in scope 3 towards actual data. This will provide us with more accurate calculations and increase transparency for our stakeholders and help our customers to adapt CO2e data into their own business activities.We will continue to seek out partnerships with key suppliers to incentivise low carbon products.Targets E1-4 Targets related to climate change mitigation and adaptationDue to the nature of our business, more than 99% of our emissions are indirect emissions from scope 3 activities.Scope 1 and 2As of today, we have superseded the official commitment of 42% reduction in scope 1 and 2 and are on track to meet our mid-term target of 65% reduction by 2026 compared to baseline year 2020. Our own target is net-zero/0 emissions by 2030.The main levers to reduce emissions in scope 1 and 2 are phasing out gas as a heating source, phasing out fossil fuel cars, and shifting to renewable electricity.Scope 3This year, we have recalculated our scope 3 emissions, including our 2020 baseline, using a new calculation methodology that provides us with more accurate results. We now have a clearer view on which efforts to prioritise. Our target of total 25% emission reductions in scope 3 by 2030 in category 1: Purchased products and services and category 11: Use of sold products remains unchanged, however.The increase in absolute figures is mainly linked to category 11 âUse of sold productsâ, with gas boilers being the main product group that releases carbon during its use phase. As such, it is classed as the main lever to reduce emissions in this category.Renewable energy (electricity)We are committed to our target of 100% renewable energy (electricity). This year, we increased the share of renewable energy to 88%. For sites owned by Solar, we reached 100%. As most of our sites are leased, it is challenging to convert all sites to renewable energy, but we will continue to make efforts in this regard.Over time, we aim to transition from procured renewable energy to self-generated renewable energy by installing solar panels at our premises.It is expected that the carbon intensity of the used energy in a productâs lifetime will decrease over time, thereby having a positive effect on scope 3 emissions. However, it is also a well-known Science Based Targets dilemma that when companies bring products with longer lifetimes to market, they may âpayâ for that in their CO2e accounting, as when lifetimes increase, scope 3 emissions also increase (assuming everything else is constant). However, we will continue to develop ways of bringing energy-efficient and low carbon products with long lifetimes to market.Moreover, we are moving away from spend-based data to actual data, and we are in close contact with our suppliers to increase the share of product specific actual data. This, together with a new calculation methodology, will continuously improve our emissions data.SBTiWe have notified SBTi that we have re-calculated our scope 3 and changed the base line. As the re-calculation does not affect our existing SBTi targets, no resubmission is required.To measure our annual progress in emissions reductions in all three scopes, we use the methodology guidelines from SBTi. To enhance transparency for our stakeholders, we provide emissions data upon request.E1-5 â Energy consumption and mixUnit 20241 Fuel consumption from coal and coal products MWh 02 Fuel consumption from crude oil and petroleum products MWh 03 Fuel consumption from natural gas MWh 2,8984 Fuel consumption from other fossil sources MWh 10,279Consumption of purchased or acquired electricity, heat, steam and cooling from fossil 5MWh 1,682sources6 Total fossil energy consumption (calculated as the sum of line 1 to 5) MWh 14,859Share of fossil sources in total energy consumption % 517 Consumption from nuclear sources MWh 0Share of consumption from nuclear sources in total energy consumption % 0Fuel consumption for renewable sources, including biomass (also comprising 8MWh 0industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.)Consumption of purchased or acquired electricity, heat, steam and cooling from 9MWh 12,858renewable sources10 The consumption of self-generated non-fuel renewable energy MWh 1,53311 Total renewable energy consumption (calculated as the sum of lines 8 to 10) MWh 14,391Share of renewable sources in total energy consumption % 49Total energy consumption (calculated as sum of line 6 and 11) MWh 29,250Accounting policiesE1-5 â Energy consumption and mixRenewable electricity The total amount of renewable and non-renewable electricity purchased and generated at locations owned or leased by Solar as a percentage of total electricity consumption in MWh in the reporting year. Procured renewable energy (electricity) is documented through guarantees of origin (GO). Other fuels The total amount of fuel oil consumed in MWh. Emissions are calculated based on the actual used fuel oil in the reporting period. Yearly used fuel oil is multiplied by the emission factor communicated by DEFRA. Natural gas The total amount of natural gas consumed in MWh. Emissions are calculated based on the actual used gas in the reporting period. Yearly used gas is multiplied by the emission factor communicated by DEFRA.E1-6 â Gross scopes 1, 2, 3 and total GHG emissionsUnit 2024 2023 ÎNet revenue DKKm 12,223 13,031 -808Net revenue used to calculate GHG emissions intensity DKKm 12,223 13,031 -808GHG emissions intensity, location-based (total GHG emissions per net revenue) tCO2e 286.761GHG emissions intensity, market-based (total GHG emissions per net revenue) tCO2e 286.605Overview by country 2024Data point Unit DK SE NO NL PL MAG45 Others1TotalFleet tCO2e 625 31 6 150 294 27 56 1,189Natural gas tCO2e 80 0 0 272 94 72 12 530Fuel oil tCO2e 14 0 0 0 12 0 0 26Total gross GHG emissions, scope 1 tCO2e 719 31 6 422 400 99 68 1,745Fleet tCO2e 38 34 4 54 0 0 1 131Electricity, market-based tCO2e 360 5 152 25 107 109 201 959District heating, market-based tCO2e 102 313 156 57 39 0 58 725Total gross GHG emissions scope 2, market-based tCO2e 500 352 312 136 146 109 260 1,815Electricy, location-based tCO2e 403 40 22 506 308 131 193 1,603District heating, location-based tCO2e 324 791 499 279 39 0 56 1,988Total gross GHG emissions scope 2, location-based tCO2e 765 865 525 839 347 131 250 3,722Total GHG emissions scope 1 and 2 tCO2e 1,219 383 318 558 546 208 328 3,560Total gross GHG emissions scope 3 tCO2e 201,075 75,894 63,933 3,084,698 17,907 42,555 13,553 3,499,615Total GHG emissions scope 1, 2 and 3 market-based tCO2e 202,294 76,277 64,251 3,085,256 18,453 42,763 13,881 3,503,175Total GHG emissions scope 1, 2 and 3, location-based tCO2e 202,559 76,790 64,464 3,085,959 18,654 42,785 13,871 3,505,082GHG emissions scope 3 calculated using primary data, share % 0.14%1) Solar Polaris, Højager Belysning, Thermonova.Accounting policiesE1-6 â Gross Scopes 1, 2, 3 and Total GHG emissionsFleet GHG emissions from fleet cover GHG emissions from cars owned and leased by Solar. Emissions are calculated based on the actual used fuel in the reporting period for both diesel and petroleum cars. For December where Solar do not have the actual used fuel, the data is estimated based on data on total used fuel for a comparable month or as an average for the previous months of the years. Yearly used fuel is multiplied by the vehicleâs emission factor per liters as communicated by DEFRA (updated 2024). Electricity The total amount of electricity consumed in MWh. Emissions are calculated based on the actual used electricity in the reporting period. Yearly used electricity is multiplied by the emission factor communicated by DEFRA. Electricity is calculated for both a marked-based and location based. District heating The total amount of district heating consumed MWh. Emissions are calculated based on the actual used district heating in the reporting period. Yearly used district heating is multiplied by the emission factor communicated by DEFRA or where the actual emissions factors are available, this is used. District heating is calculated for both a marked-based and location based. In 2023 we only calculated the emissions for district heating based on the emissions factor communicated by DEFRA.E1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3Retrospective Milestones and target years2020Î 2023 vs Unit(base year) 2021 2022 2023 20242024 Target 20266Target 2030Scope 1 GHG emissions Net-zero4Scope 1 GHG emissions tCO2e 2,814 3,583 3,033 2,150 1,745 -19% 65% reduction Net-zeroScope 1 GHG emissions reduction % 127% 108% 76% 62%Scope 2 GHG emissions -Location-based GHG emissions tCO2e 4,326 4,107 3,491 3,876 3,722 -4%Location-based GHG emissions reduction % 95% 81% 90% 86% -4Market-based GHG emissions tCO2e 4,326 4,107 2,887 3,241 1,815 -44% 65% reduction Net-zeroMarket-based GHG emissions reduction % 95% 67% 75% 42% -Significant scope 3 GHG emissions -Total gross indirect (scope 3) GHG emissions tCO2e 3,275,651 3,309,423 3,499,615 6%2C1: Purchased products and services tCO2e 354,454 - - 325,148 312,588 -4% 25% reduction1C2: Capital goodstCO2e 0 - - 0 05C3: Fuel and energy-related activitiestCO2e 2,212 1,889 794 -58%1,3C4: Upstream transportation and distributiontCO2e 0 - - 0 01C5: Waste generated in operationstCO2e 0 - - 0 0C6: Business traveling tCO2e 1,658 - - 1,577 1,415 -10%C7: Employee commuting tCO2e 3,381 - - 3,498 3,659 5%1C8: Upstream leased assetstCO2e 0 - - 0 0C9: Downstream transportation tCO2e 59,148 - - 34,423 60,730 76%1C10: Processing of sold productstCO2e 0 - - 0 02C11: Use of sold products tCO2e 2,850,894 - - 2,939,110 3,116,332 6% 25% reductionC12: End-life-treatment of sold produts tCO2e 3,904 - - 3,778 4,097 8%1C13: Downstream leased assetstCO2e 0 - - 0 01C14: FranchisestCO2e 0 - - 0 01C15: InvestmentstCO2e 0 - - 0 0Total GHG emissionsTotal GHG emissions, location-based tCO2e 3,282,791 - - 3,315,449 3,505,082Total GHG emissions, market-based tCO2e 3,282,791 - - 3,314,814 3,503,175Accounting policiesE1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3Scope 1 Scope 1 emissions are reported in tonnes and the sum of all CO2equivalents in accordance with ESRS E1 requirements and the GHG protocol. The emissions are calculated based on the direct energy consumption for operations (natural gas, oil, diesel, petrol) and fuel from people transport (company owned/ leased cars). For all scope 1 data, Decemberâs figures are estimated based on the total usage for a comparable month or as an average of the previous months of the year. Scope 2 Scope 2 GHG emissions are reported in tonnes of CO2 equivalent in accordance with ESRS E1 requirements and the GHG protocol. Scope 2 emissions are reported as location and market-based in accordance with the GHG protocol. For all scope 2 data, December is estimated based on data on total used for a comparable month or as an average for the previous months of the years. Scope 3 Scope 3 emissions are reported in tonnes of CO2 equivalent in accordance with ESRS E1 requirements and the GHG protocol. Scope 3 emissions are a combination of activity and spend based calculations and are calculated annually. Data are pulled from Solarâs ERP system and calculated annually. Where actual data is not available, data are calculated based on economic spend allocation and weight-based calculations method. This accounts for C1: Purchased products and services and C11: Use of sold products, as well as for the categories under âOtherâ; C3: Fuel- and energy-related activities, C4: Upstream transport is embedded in C1, C9: Downstream transport and distribution and C12: End-of-life treatment of sold products. The categories C5: Waste, C6: Business travel and C7: Employee commuting are 100% activity based. GHG intensity (scope 1 and 2) Calculated as total scope 1 and scope 2 (location- and market-based) emissions divided by total revenue. GHG intensity (scope 3) Calculated as total scope 3 divided by total revenue.E1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3 â continuedRetrospective Milestones and target years2020Î 2023 vs Unit(base year) 2021 2022 2023 20242024 Target 20266Target 2030GHG intensity Net-zeroGHG intensity value, scope 1 tCO2e 0.25 0.29 0.22 0.16 0.14 -GHG intensity value, scope 2 location-based tCO2e 0.38 0.33 0.25 0.30 0.30 -GHG intensity value, scope 2 market-based tCO2e 0.38 0.33 0.21 0.25 0.15 -GHG intensity value, scope 3 tCO2e 285.71 - - 253.97 286.31 -Total GHG intensity value, scope 1, 2 and 3 tCO2e 286.33 - - 254.43 286.76 -Total GHG emissions, scope 1, 2 and 3 reductions tCO2e - - 57,161 219,992 -Total GHG emissions, scope 1, 2 and 3 reductions % - - 2% 7%1) The following categories have been excluded from the calculation: C2: Capital goods, C10: Processing of sold products, C8/13: Leased assets, C14 Franchises, C15: Investments2) Scope 3 target is 25% reduction in total in category 1: Purchased products and services and category 11: Use of sold products3) C4: Upstream transportation is embedded in category C1: Purchased products and services4) Our own target is net-zero/0 emissions by 2030. Our SBTi commitment in scope 1 and 2 is 42% reduction by 2030.5) Not included in scope 1 and 26) Calculated from baseline 2020PollutionIRO processESRS 2 IRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesWe have identified pollution of water and soil to have a negative impact in the upstream value chain and own operation. The full process and methodology applied to identifying pollution related material impact can be found in the section General information. We comply with national and internal regulations, and through our ISO 14001 process monitor, we screen for potential negative impacts. In case a severe incident occur, we will engage local authorities and affected communities.Policies E2-1 Policies related to pollutionSolarâs Environmental Policy communicates our environmental performance. Solar undertakes all work related to the handling of pollution and is committed to complying with applicable laws and regulations. The policy states that we want to improve our processes to prevent pollution, but it does not contain any information on mitigating actions regarding water and soil - in case an incident occurs - to limit the negative impact on people and the environment. It does not address substituting and minimising use of substances of concern and phasing out substances of very high concern. The policy applies to all employees and is available on Solarâs intranet and website.No environmental issues or incidents were reported in 2024 or previous years. For our own operations, a future action plan will be grounded in our Environmental Management System (EMS). In our upstream value chain, we conduct monitoring through our risk assessment due diligence process.Please see section E1 Climate Change for information on climate and environmental mitigation in our own operation and across the value chain.Accountability for the implementation of the policy lies with the Executive Board and ultimately the CEO.Please see E1 Climate Change regarding how we work with climate and environmental mitigation in our own operations and across the value chain.Actions and resources E2-2 Actions and resources related to pollutionPollution can take place through indirect or direct water contamination and leakage, soil pollution in surrounding areas, operations in our upstream value chain, and in our own operation. We strive to enhance our environmental performance by implementing effective pollution mitigation and adaptation strategies to support creating a positive impact where it is possible. The actions apply to all operations within Solar and its upstream value chain. Due to our history of not have identified any incidents, water and soil pollution is considered low risk.In our own operation, pollution-related matters come under our Environmental Management System which is frequently audited by third party consultants. Incidents must be reported to a management team member and reported to the EMS team.For the upstream value chain, pollution is addressed in our Supplier Code of Conduct and our Sustainable Procurement Policy. Current and future actions:Through our daily operation, we track potential pollution incidents related to water and soil in own operations. We will continue to address water and soil pollution on the topic environment with our suppliers as part of our Supplier Engagement Programme where we monitor and track on several parameters include parameters within environment.In 2025, we will align our Environmental Policy to also cover water and soil pollution.In 2025, we will align our Environmental Management System framework according to the standards of ESRS E2.Targets E2-3 Targets related to pollutionDue to the nature of our business and our history, no targets have been set. We will conduct an assessment to better understand the full scope of our pollution-related impacts, risks, and opportunities to identify potential future targets and resources required. Pollution related targets that are mandatory by law will be implemented during 2025.For this reporting year, we did not identify any incidents in our own operations, nor do we possess methodology and data on the amounts of pollutants or the changes over time.Pollution E2-4 Pollution of air, water, and soilAt this time, we do not have data on emissions and pollutants related to the two negative impacts identified through our IRO analysis: water and soil. Anticipated financial effects E2-6 Anticipated financial effects from pollution-related impacts, risks, and opportunitiesNo financial implications of pollution-related risks and opportunities have been identified. We will allocate potential additional resources/funds to the extend needed.Biodiversity and ecosystemsTransition planE4-1 â Transition plan and consideration of biodiversity and ecosystems in strategy and business modelContinuously assessing and enhancing the resilience of our business model and strategy to biodiversity and ecosystems-related risks is essential for long-term sustainability. We depend on diverse and healthy ecosystems to support climate change reductions.Due to our business model, we believe that we have integrated the necessary resilience to physical, transition and systemic risks within this topic both in our own operations and in the upstream value chain, and therefore have no separate transition plan.However, we acknowledge that the raw material extraction for manufacturing the products that we sell, as well as energy resources and transportation, may cause significant harm and negative impact on people and the environment.We engage with our suppliers through our Supplier Engagement Programme and by performing regular risk assessments, we understand their policies and practices on this subject. As we primarily operate with suppliers from European markets with legislative requirements, we believe that our current strategy and business model hold the necessary resilience to limit the negative impact within biodiversity and ecosystems. Hence we have not performed any further resilience analysis.We have engaged with relevant stakeholders from our own operations and upstream value chain to assess our impact on biodiversity in our own operation and in our upstream supply chain.As required by SBTi, our focus is primarily on reducing our emissions as much as possible by taking proactive actions across the value chain. However, we also want to give back to nature and have invested in two afforestation projects and expect to afforest approx. 470 hectares by the end of 2026.To ensure responsible forest operations, we will begin certifying our projects through a third-party certification system in the coming year.Please see the section General information page 50 for more detailed information related to the IROs identified.IRO processIRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesWe have identified Drivers of biodiversity loss: Climate change, Drivers of biodiversity loss: Land-use change, freshwater use, and sea-use change, Drivers of biodiversity loss: Pollution, Impacts and dependencies on ecosystem services to have a negative impact primarily in the upstream value chain but also in our own operation. The full process and methodology applied to identifying biodiversity and ecosystem related material impact can be found in the section General information.All our sites are located in industrial zones, designated for industrial operations, and we have no records indicating proximity to biodiversity-sensitive areas. Hence we do not have any activities related to sites located in or near biodiversity-sensitive areas negatively affect these areas and thereby concluded that it is not necessary to implement biodiversity mitigation measures.We adhere to national and local regulations and procedures for the protection of biodiversity and ecosystems, which are supervised by authorities. Therefore, the material impact is considered to be limited.The full process and methodology applied to identify material impact, risks, and opportunities in relation to biodiversity and ecosystems can be found in the section General information.Policies E4-2 â Policies related to biodiversity and ecosystemsWe do not have a biodiversity and ecosystem policy relating to the material impacts and risks identified. Our related policies such as Environment Policy, Sustainability Policy, Sustainable Procurement Policy, and Environmental Policy define our commitment to biodiversity and ecosystems. Our Sustainable Procurement Policy address responsible sourcing throughout the value chain and protecting people and nature. Traceability in the form of country of origin is identified in the product documentation.We seek to inspire our suppliers by demanding them to sign our Supplier Code of Conduct which emphasizes the protection of people and the environment.ActionsE4-3 â Actions and resources related to biodiversity and ecosystemsIn our own operation, biodiversity and eco-systems is anchored in our operations. Any incidents shall be reported to a management team member and reported to the EMS team.For the upstream value chain, pollution is addressed in our Supplier Code of Conduct under the chapter Environment, Pollution Prevention, and Resource Conservation as well as in our Sustainable Procurement Policy. Please see G1 Business Conduct on how we work with our suppliers to increase transparency, also covering environmental matters.On-going and future actions include:We will further align our policies towards the demands of the ESRS standards and other applicable international standards.We will continue to mitigate negative impacts and risks through our SBTi targets.We will continue the development of our afforestation projects and will make more details available in the coming reporting period.We will continue to monitor and follow up on our suppliers via our targets for risk assessment and signing of Supplier Code of Conduct.TargetsE4-4 â Targets related to biodiversity and ecosystemsWe have no direct targets in relation to biodiversity and ecosystems. For our own operations, we track and follow the progress of our afforestation projects. Signing our Supplier Code of Conduct, which contains several environmental elements, is an indirect target showing our suppliers commitment to this subject.Anticipated financial effects E4-6 â Anticipated financial effects from biodiversity and ecosystem-related risks and opportunitiesNo financial implications from biodiversity and ecosystems risks and opportunities have been identified. We will allocate potential additional resources/funds to the extend needed. For further information, please see the Taxonomy section.Solar locationsSBM-3 â Material impacts, risks, and opportunities and their interaction with strategy and business modelCountry CityCH NeuchatelCN JiangsuCZ BrnoDE NeusäÃDK Vejen, Brøndby, Svenstrup, Ã
rhus, Odense SV, Aalborg, Ã
byhøj, Torshavn, København NV, Rødby, Kastrup, Glostrup, Køge, Sønderborg, Vejle, Holstebro, Vedbæk, Nibe, HÃ¥rlevFR PontarlierGB CheshireIT CeccanoNL Alkmaar, RG Duiven, Amsterdam, DV Apeldoorn, AB Assen, Capelle, Den Haag, Ede, Eindhoven, Heerlen, Hengelo, Meppel, Oosterhout, Schiedam, Utrecht, Zwolle, Heerenveen, AmersfoortNO Gardermoen, Haugesund, Trondheim, Aalesund, Bodø, Mo, Harstad, Tromsø, Kirkenes, Kristiansand S, Sogndal, Oslo, Skien, Drammen, Tønsberg, Hamar, Bergen, StavangerPL Lodz, Warszawa, Gdansk, Poznan, Bielsko_Biala, Pila, Zielona Gora, Torun, Bialystok, Gliwice, Siedlce, Zory, Wroclaw, Krakow, Szczecin, Tarnow, Walbrzych, LublinSE Göteborg, Värnamo, Växjö, Jönköping, BorÃ¥s, Kista, Sköndal, Visby, Uppsala, Norrtälje, Norrköping, Ãrebro, VästerÃ¥s, Avesta, Gävle, Sundsvall, Karlstad, UmeÃ¥, Hägersten, Helsingborg, Högsbo, Gällivare, Kalmar, Linköping, Malmö, Halmstad, LuleÃ¥, Nacka, Stockholm, Osby, Varberg, UddevallaUSA Madison, PortlandResource use and circular economyIRO processIRO-1 â Description of the processes to identify and assess material resource use and circular economy-related impacts, risks, and opportunitiesAs a sourcing and services company, we are reliant on a significant number of products manufactured from both critical raw materials and virgin materials, leaving a waste track behind. Our double materiality assessment identified three negative impacts on our workforce: resource inflows/use (products and services), resource outflows (waste). We believe that circular economy practices will become increasingly important not just within our own production, but across our industry as well. We want to become part of the long-term solution. However, several challenges regarding reuse and waste sorting in our industry must be resolved to obtain a fully implemented circular economy culture.Most of our scope 3 emissions comes from the products we sell. We are reliant on significant amounts of critical raw materials used to manufacture the products we sell. By incorporating circularity practices across our value chain, we can reduce our carbon emissions while applying responsible waste management.Waste in our operations and value chain mainly consists of packaging waste from inbound product supply and outbound distribution.We comply with national and internal regulations and continuously evaluate our methods to improve waste sorting for optimised recycling, and we collect data on all relevant waste fractions. This is undertaken by Solar, with help from our waste management providers and through external audits.Policies E5-1 Policies related to resource use and circular economySolarâs Environmental Policy covers areas, such as waste management and environmentally friendly packaging. As we are ISO 14001 certified, we are committed to ensuring that guidelines in relation to the management of waste as well as hazardous waste and materials are strictly followed. As outlined in our Supplier Code of Conduct, we also engage with our suppliers to ensure that âthe use of natural resources, including water, fossil fuels, minerals, and virgin forest products are conserved by practices, such as modifying production, maintenance and facility processes, materials substitution, reuse, conservation, recycling, or other means.âActions and resources E5-2 Actions and resources related to resource use and circular economyIn our own operation, waste is anchored in our Operations department, which monitors our waste and recycling processes. Historically, and during the year under review, we focused on the following activities:We report monthly on all waste fractions relevant to Solarâs business model.We are currently running several pilot projects with the objective of recycling products used across our value chain.We strive to source 100% certified recycled cardboard packaging materials for use with our customers.We are constantly on the outlook for new processes and projects to create a positive impact on the resource and circular economy within our value chain.Targets E5-3 Targets related to resource use and circular economyIn relation to resource inflows, specifically in relation to cardboard packaging, we have a target of 100% recycled cardboard but without any timeline.We do not have targets for waste management. However, we manage waste according to national standards and requirements and closely monitor any updates in this regard. We endeavour to manage waste in a manner so as not to harm the environment by continuously improving our waste management programmes in collaboration with our waste managers. We will work towards setting targets in 2025.Resource inflows E5-4 Resource inflowsCompanies that manufacture electrical equipment rely heavily on resources such as metals, which require mining. These pose significant environmental threats as they must be sourced from different parts of the world.Almost all resources used in our supply chain derive from the extraction of raw materials, including the energy resources and transport involved. Moreover, it is likely that the products in our supply chain have been produced from virgin materials extracted from mines or natural areas. Extraction of these materials can have a significant negative impact on people and the environment. Through our Supplier Engagement Programme, we have a dialogue with our suppliers to reuse and recycle through circularity levers. Although relatively small, we depend on virgin resources in our packaging and distribution materials in our own operation, such as paper, pulp, and natural gas/crude oil for plastics. Dependence on virgin resources can be reduced, for example, by switching to recycled packaging materials and optimising packing methods. However, it is not possible to reduce dependency completely at this stage. We engage with our business partners in the value chain on recycling and circularity.Resource outflowsE5-5 Resource outflowsDue to the nature of our business, waste streams in Solar mainly consist of packaging waste (paper, cardboard, plastics, wood etc.) and electronic waste (minerals from batteries and other electronic devices as well as metal and plastics from cables etc.) that derive from damaged or returned products. We comply with the Waste Electrical and Electronic directive.Electronic waste is a significant waste stream in our industry. The products we sell have various expected lifetimes, with many products still not designed with circularity in mind (durability, repair, reuse, disassembly, and recycling). This generates general waste and e-waste that potentially causes indirect or direct harm to nature. Waste data is actual data collected and reported monthly by those responsible for collecting data. Accountability lies with Operations. Waste data is provided for most locations and subdivided according to material type, equivalent waste management type and weight.E5-5 Resource use and circular economyE5-5 â Resource outflows - waste Unit 2024Total waste generated kg 3,961,694Total hazardous waste diverted from disposal kg 26,226Hazardous waste diverted from disposal due to preparation for reuse kg 0Hazardous waste diverted from disposal due to recycling kg 26,226Hazardous waste diverted from disposal due to other recovery operations kg 0Total non-hazardous waste diverted from disposal kg 3,020,955Non-hazardous waste diverted from disposal due to preparation for reuse kg 0Non-hazardous waste diverted from disposal due to recycling kg 2,911,297Non-hazardous waste diverted from disposal due to other recovery operations kg 109,658Total hazardous waste directed to disposal kg 6,505Hazardous waste directed to disposal by incineration kg 6,505Hazardous waste directed to disposal by landfilling kg 0Hazardous waste directed to disposal by other disposal operations kg 0Total non-hazardous waste directed to disposal kg 908,008Non-hazardous waste directed to disposal by incineration kg 881,067Non-hazardous waste directed to disposal by landfilling kg 26,941Non-hazardous waste directed to disposal by other disposal operations kg 0Total weight of non-recycled waste kg 914,513Total percentage of non-recycled waste % 23Accounting policiesE5-5 â Resource outflows - wasteWaste Waste treatment volumes per final treatment are reported in absolute tonnage (in kg) of waste collected from Solarâs locations.All data is third-party data. The first three quarters of 2024 consist of actual data, whereas for Q4, data is estimated based on the average actual data from the previous three quarters. For Solar Poland, data is estimated based on the actual data for the two major locations, where approx. 66% of all full time equivalents are based.Socialinformation76ESRS S1 Our workforce81ESRS S2 Workers in the value chainOur workforceWe have a fundamental respect for the value of human life and dignity and want to foster a culture of respect, equality, and inclusion. This means providing favourable employment conditions for our employees and respecting labour and human rights. Our double materiality assessment has identified two negative impacts on our workforce: working conditions and equal treatment and opportunities for all.StrategySMB-2 Interests and views of stakeholdersWe listen to and incorporate our employeesâ opinions and concerns through our daily interaction and channels of communication. We view human rights as essential principles that safeguard peopleâs dignity and ensure freedom and respect within our own operations. The insights gained from understanding our workforceâs interests, views, and rights are integrated into our strategy and business model, ensuring alignment with the rights of our entire workforce. No special impacts or dependencies have been identified. Please see Stakeholder Engagement page 43.Our approach and policies S1-1 Policies related to own workforceWe will continue to focus on fostering a workplace and culture that promotes diversity, equity, and inclusion. We respect human rights and do not accept any form of discrimination or harassment.Human rights and labourOur Human Rights Policy covers the right to freedom of association, works councils, fair working conditions, trafficking, forced or compulsory labour, child labour and the elimination of discrimination in employment and occupation.The policy is in line with the UN Guiding Principles on Business and Human Rights and the International Labour Organisationâs (ILO) Declaration on Fundamental Principles and Rights at Work. It applies to Solar and constitutes the framework for how we work and look after employees. Our ethical requirements for our employees are set out in Solarâs Employee Code of Conduct.Should we identify adverse impacts that are directly linked to our operations, products, or services through our suppliers or other business partners, we call on the entity causing the adverse impact to cease, prevent or mitigate the impact, whether they are related to our own workforce, value chain workers, or affected communities.We are in constant dialogue with our works councils and employee representatives to ensure that the impact of labour and human rights in our own operations accords with our policies and regulations.Moreover our Supplier Code of Conduct is fully in line the with applicable ILO standards and address safety of workers, precautious work, human trafficking and forced or child labour.Health, safety, and well-beingPhysical and mental safety and well-being at the workplace are our top priorities, and we believe that they are fundamental drivers of a work-life balance. We foster a culture that promotes our employeesâ health and safety and strive to prevent any accidents.We are also dedicated to safeguarding the labour conditions of our employees, such as sickness, work-related injuries, parental leave, and retirement.We have implemented a Health, Safety, and Work Environment Policy, which sets the standards for how we protect and ensure the well-being of our employees. We have also implemented a set of cardinal rules that address core safety rules. Both cover all our employees. Accountability for health and safety lies with our VP Operations in Sweden.Moreover, we also comply with ISO 9001 (quality management system) and 14001 (environmental management system) to maintain a robust management system.Additionally, we have a range of support systems, and offer our employeesâ health insurance, including access to psychologists and other mental health professionals, and to crisis management. We have zero-tolerance towards harassment and have implemented our Sexual Harassment Policy. The purpose of this policy is to contribute to a work environment that is sound in terms of safety and health, where all employees in Solar thrive and feel safe. Accountability for well-being and the mitigation of negative impacts lies with Group HR.Diversity, equity, and inclusionOur ambition is to foster a diverse, equal, and inclusive culture and workplace. We respect human rights and do not accept any form of discrimination or harassment. Together with works councils and employee representatives, we focus on creating a diverse workforce and support for our managers. This also covers a commitment to equal pay and to ensuring equal pay for equal positions and competences when hiring or promoting employees.We are committed to diversity at senior management level and to continuing to raise the entry level of women among all employees. Our Recruitment Policy ensures an unbiased process when recruiting new employees. To support this, we have also introduced an Inclusion and Diversity Policy and the objective of this policy is to ensure that all employees in Solar are treated equally, irrespective of racial and ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national extraction or social origin, or other forms of discrimination covered by union regulation and national law.All policies cover all employees and have been implemented through the same procedures as other policies in Solar and any deviations from the policies are not allowed and will be reported back to either the Board of Directors or the Executive Board. Accountability lies with Group HR. The objective of the Inclusion and Diversity Policy is to ensure that all employees are treated equally and to help advance diversity and inclusion in general.Engaging with our workforce S1-2 Processes for engaging with own workers and workersâ representatives about impactsOur approachOverall accountability for engagement lies with the Executive Board. We conduct engagement surveys to provide insight into our employeesâ well-being, commitment, perception of influence, opportunities for development, work-life balance, collaboration with colleagues, and how Solarâs leaders are perceived. The survey runs every 2-3 years and the accountability lies within HR. In 2024, the survey also included questions on diversity, inclusion, and equality.The results from our employee engagement survey are presented to all managers who have employee responsibility for them to engage with their employees and take appropriate action. The results are published on Solarâs intranet. Group HR monitors and tracks the effectiveness of our managersâ engagement with their employees through our HR system (People Portal). The feedback from the survey and the open comments serves as a valuable basis for initiating dialogue and identifying actions to further improve our workplace.Our employees can also voice their opinions via the whistleblower portal, works councils, employee representatives, and employee performance appraisals.If employees and their families face a challenging situation, we encourage them to apply to our Solar Family grant programme for financial support. We engage with our employees daily and with employee representatives and works councils on a regular basis to ensure that we are operating in accordance with our policies and relevant regulations. Through a structured approach, elected employee representatives host various meetings, including the safety committee and report back to management. Moreover, we have three employee-elected members on our Board of Directors.Please see Stakeholder engagement on page 43 for further information.Remediation and channels for raising concerns S1-3 Processes to remediate negative impacts and channels for own workers to raise concernsOur approach and policiesOur employees are encouraged to speak up if they experience any irregularities or illegalities on Solarâs part. Access to remediation, by which our employees can make their concerns and needs known, helps to ensure a just and fair workplace and protects our employees. It also underpins our ambition for a diverse, equal, and inclusive work culture.Employees with a grievance or complaint can report the incident via our whistleblower portal, which is accessible on Solarâs intranet or our websites. They can also seek support from their line manager or HR.Should these channels be unsuitable, all stakeholders - both internal and external â can also raise a complaint directly with the Executive Board.Our Internal Audit team tracks and monitors all issues raised through whatever means. We take proactive steps to ensure awareness of acceptable standards of behaviour by:Regularly running information campaigns on Solarâs intranet.Having all our employees sign our Code of Conduct and making it available on Solarâs intranet.Making our Employee Handbook available on Solarâs intranet.Please see our Whistleblower Policy encouraging our employees to report unethical practices or non-compliance without fear of retaliation and information about our whistleblower portal in section G1, Business Conduct.Actions S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actionsTaking our starting point from two negative impacts identified in our double materiality assessment, we are particularly focused on the actions relating to the two areas set out below.By following our policies and through regular and structured engagement with our employees, we believe that our practices and actions contribute to creating a positive impact. Currently, we have no other actions planned other than those mentioned below.The effectiveness of our actions and initiatives is tracked through our employee engagement surveys, KPIs related to retention, employee turnover, sick leave, and number of accidents.Members of the senior management team are assigned the appropriate resources to manage material impact and are responsible for engaging with their teams. Any actions identified and what response is required to mitigate a potential negative impact are done in the respective management teams in collaboration with relevant employees and workersâ representatives.Health, safety, and well-beingActions We remain focused on health and safety and have introduced a Safety Flash tool to register serious incidents and accidents, analysing the root cause and setting out actions and solutions. The aim is to share learnings and avoid repetition.We frequently organise prevention and mitigating campaigns, such as emergency drills and safety training.We offer regular seminars on topics such as dynamic psychological safety and work satisfaction. The objective is to provide techniques that promote an inclusive and safe culture.To support a good work-life balance, we continue to offer our employees flexible working conditions and where possible giving them the opportunity to work remotely and on a part-time basis.We continue to conduct employee performance appraisals to identify any potential negative or positive impacts that affect our employeesâ well-being.We run frequent employee engagement surveys with employee and management participation. This is a safe and anonymous channel, through which views and observations can be expressed.Diversity, equity, and inclusionActions We will continue to increase the proportion of women at senior management level and increase the number of women in entry-level positions.We have several communities supporting diversity with the aim of guiding and giving feedback to management. We will continue to provide equal opportunities for all our employees.We maintain focus on diversity and inclusion as a driver in the execution of our strategy.We follow the requirements of the General Data Protection Regulation (GDPR) to manage any potential negative impact regarding data protection and privacy. We take full responsibility for the data we process. The purpose is to mitigate potential cyber-attacks by making our employees aware of common pitfalls. Demonstrating good security practice, we have embarked on the implementation of ISO 27001 (information security).Targets S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunitiesTargets for diversity is set and tracked by the Executive Board in collaboration with HR and the Danish Management Team who also engage with our employees and workforce representatives about this topic. It is communicated in our Annual Report and formerly in the Sustainability Report.We acknowledge that reaching our target may be challenging for several reasons. Due to our legacy and the fact that there traditionally have not been many women in our industry, the majority of our employees and managers are currently male.At the same time, we have a track record of long service among employees who have been with us for between 25 to 40 years. This poses a dilemma, seeing that although we have many highly skilled and committed employees who are greatly valued, we acknowledge that a more diverse workforce and management team would provide fresh input and new ways of working.We are committed to promoting gender diversity and have set a target of 25% women at senior management level and aim to raise womenâs representation at entry level to 40% by 2026. The targets are tracked on an annual basis. To succeed, we conduct training in unbiased recruitment and have updated our recruitment processes and job advertisements. We have also implemented a Recruitment Policy. The targets have been set by the Executive Management.Targets by 2026Unit Target 2024 20231Women in senior management% 25 21 15Entry level, all employees, women % 40 34 311) Calculated according to the Danish Financial Act § 99b.S1-6 â Characteristics of the undertakingâs employees(see consolidated financial statements, note 2.3 Staff costs, page 111)Employees Unit 2024 2023 2024 2023Average AverageDenmark Headcount 926 - 930 -Sweden Headcount 583 - 583 -Norway Headcount 387 - 387 -The Netherlands Headcount 637 - 672 -Poland Headcount 369 - 377 -Others Headcount 107 - 110 -Total Headcount 3,009 - 3,059 -Total FTE 2,895 2,990 2,899 3,036Gender diversity Unit 2024Men Headcount 2,107Women Headcount 902Others Headcount 0Not reported Headcount 0Total employees Headcount 3,009Characteristic of employees: contract type by gender Unit Men Women Others Not disclosed TotalTotal employees Headcount 2,107 902 0 0 3,009Permanent employees Headcount 1,985 845 0 0 2,830Temporary employees Headcount 84 39 0 0 123Non-guaranteed hours employees Headcount 38 18 0 0 56Characteristic of employees: contract type by region Unit DK SE NO NL PL Others TotalTotal employees Headcount 926 583 387 637 369 107 3,009Permanent employees Headcount 888 553 380 570 340 99 2,830Temporary employees Headcount 15 2 3 67 28 8 123Non-guaranteed hours employees Headcount 23 28 4 0 1 0 56Employee turnover Unit 2024Employee turnover Headcount 513Employee turnover rate % 17.8Accounting policiesS1-6 â Characteristics of the undertakingâs employeesApplied data on own workforceThe applied data on own work force is based on extracts from our local payroll systems.Number of employees, headcountNumber of employees, headcount, is the number of employees at the end of the reporting period measured as headcount.Average number of employees, headcountAverage number of employees, headcount, is the number of employees across the reporting period measured as headcount.Gender categoriesGender is categorised as male, female, or other. Other includes legally registered gender not recognised as male or female.Breakdown by country / geographical areaBreakdown by country includes countries in which Solar has 50 or more employees representing at least 10% of our total number of employees.Full time equivalentFTEs are calculated based on the total number of compensable hours (days) in a work year to the number of hours (days) in a ânormâ work year.Average number of employees, FTEAverage number of employees is the number of employees across the reporting period measured as full time equivalent (FTE).Number of employees, FTENumber of employees is the number of employees at the end of the reporting period measured as full time equivalent (FTE).Employees and contract typesEmployees include permanent, temporary, and non-guaranteed hours employees.Non-guaranteed hours employees are employed by Solar without a guarantee of a minimum or fixed number of working hours.Solar has employees in more countries and use the definitions of contract type as per the national laws of the countries where the employees are based to calculate country-level data.The country-level data are then added up to calculate total numbers, disregarding differences in national legal definitions.Employee turnoverThe rate of employee turnover is calculated as the aggregate of the number of employees who left voluntarily or due to dismissal, retirement, or death in service during the reporting period to the average FTEs for the reporting period.S1-9 â Diversity metricsGender distribution, top management Unit 2024 2023Number of employees in top management (men/women) Headcount 11/3 11/2Gender distribution in top management (men/women) Headcount 11/3 11/2Gender distribution in top management (men/women) % 79/21 85/15Age distribution, employees Unit 2024Under 30 years Headcount 373Between 30 and 50 years Headcount 1,482Over 50 years Headcount 1,154Total Headcount 3,009S1-14 â Health and safety metricsHealth and safety Unit 2024Employees covered by health and safety management system by legal requirements % 0Fatalities in own workforce as result of work-related injuries and work-related ill health Number 0Fatalities as result of work-related injuries and work-related ill health of other workers working on undertaking's sites Number 0Recordable work-related accidents Number 33Recordable work-related accidents, rate % 5.75Cases of recordable work-related ill health of employees Number 0Days lost to work-related injuries and fatalities from work-related accidents, work-related ill health and fatalities from ill health related to employees Number 417S1-16 â Remuneration metricsPay Unit 2024 2023Gender pay gap % 23.9 -Annual total remuneration ratio Times 22.8 25.4Accounting policiesS1-9 â Diversity metricsTop managementTop management includes management level 1 and 2 of the organisation. Level 1 is the executive board and managers at the same organisational level as the executive board. Level 2 includes managers with staff responsibility and reporting directly to level 1 management for the Solar Group and the parent company Solar A/S (Ã
RL §99b) respectively.Gender distribution, top managementThe aggregate number of respectively female, male, and other employees in top management to the aggregate number of all employees in top management for the Solar Group and the parent company Solar A/S (Ã
RL §99b) respectively.S1-14 â Health and safety metricsPeople covered by health and safety management systemNumber of headcounts in Solarâs own workforce who are covered by a health and safety management system based on legal requirements and (or) recognised standards or guidelines to total number of headcounts.Work-related accidents for own workforceWork-related accidents arise from exposure to hazards at work including when travelling for work-related purposes and engaged in work activities in the interest of the employer. When working from home, accidents directly related to the performance of work are included. Total hours worked by own workforceThe total hours worked by people in own workforce is estimated based on normal hours of work, taking into account entitlements to periods of paid leave of absence from work i.e. paid vacations, paid sick leave, or public holidays.S1-16 â Remuneration metricsPayThe ordinary basic or minimum wage or salary and any other remuneration, whether in cash or in kind, which the worker receives directly or indirectly (âcomplementary or variable componentsâ), in respect of his/her employment from his/her employer. âPay levelâ means gross annual pay and the corresponding gross hourly pay. âMedian pay levelâ means the pay of the employee that would have half of the employees earn more and half less than they do.Gender pay gapBased on data for all employees, the gender pay gap is the difference of average gross hourly pay levels between male and female employees, expressed as percentage of the average gross hourly pay level of male employees.Annual total remuneration ratioThe annual total remuneration ratio is the annual total remuneration of highest paid individual (CEO) to the median annual total remuneration for all employees excluding the highest-paid individual (CEO).Annual total remuneration to own workforceAnnual total remuneration to own workforce includes salary, bonus, stock awards, option awards, non-equity incentive plan compensation, change in pension value, and non-qualified deferred compensation earnings provided over the course of a year.Workers in the value chainThe nature of our business means that we rely on our business partners and suppliers across our value chain to supply us with products and transport. We expect our business partners to support the green transition, to adhere to the same ethical standards, and to respect international human and labour rights standards and national legislation. We have identified three sub-topics through our double materiality assessment: Working conditions, equal treatment and opportunities for all, and other work-related rights.StrategySBM-2 Interests and views of stakeholdersTo support a just and green transition, we expect our business partners to operate their businesses and supply chains in compliance with national laws and international labor and human rights standards. The insights gained from understanding our value chain workersâ interests, views, and rights are used as input into our strategy and business model.We aim to support a just transition by demanding decent jobs in our value chain. This includes providing fair wages, secure employment, safe working conditions, and a work environment where workers can freely express their concerns and have their right to organize.Our commitment to human rights and labor rights is outlined in our Sustainable Procurement Policy and our Supplier Code of Conduct. No actual or potential impacts on value chain workers have been identified that would impact our strategy and business model. Please see Stakeholder Engagement page 43. Our approachThe workforce across our value chain may be subject to excessive working hours, forced labour, non-regulated working conditions, and health and safety risks. Such work is defined by manual work, such as heavy lifting and the operation of machinery, driving vehicles, and working unsocial hours.Although we operate in low-risk markets, with more than 99% of our tier one suppliers based in Europe, we acknowledge that it is still crucial to ensure that we reduce the risk of negative impact on workers across our value chain.Solar has over 4,000 direct material suppliers, of which 2,500 are strategic/preferred suppliers. Data from 2024 shows that 98.5% of Solarâs spend is within the EU/EES/GB region and 91% is from countries where Solar is present.Policies S2-1 Policies related to value chain workersAt Solar, we aim to ensure decent jobs in our industry and provide employees with adequate wages, decent working conditions, freedom of association, no child or forced labour, secure employment, health and safety, and a working environment where workers are free to express their views and concerns. Our commitment to uphold human and labour rights is outlined in our Human Rights Policy (with the objective to ensure the protection and respect of human rights within our own operations and in interactions with our stakeholders), Sustainable Procurement Policy, and Supplier Code of Conduct. Our Human Rights Policy explicitly states that trafficking and forced and child labour are not accepted under any circumstances. The policy is aligned with the UN Guiding Principles on Business and Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work. For more information on our policies and Code of Conduct and how they address human and labour rights impact in our own operations and value chain, see section S1 Own workforce and G1 Business conduct. As Solar operates in a low-risk market and based on our history, we regard it as a low risk that our direct suppliers (tier one) will breach labour and human rights.Engaging with value chain workers S2-2 Processes for engaging with value chain workers about impactsSimilar to S1, Solar is required to disclose whether severe human rights issues and incidents connected to its upstream and downstream value chain have been reported (and if applicable, to disclose these).In our frequent dealings with our business partners and through the people with whom we are in direct contact, we engage indirectly with the workforce across our value chain, thereby gaining insight into general labour conditions. Through our Supplier Engagement Programme, we assess our supplier commitment to human rights and labour. Overall accountability for supplier engagement lies with our Senior Vice President Commercial Sourcing and Services.We perform risk assessments of our suppliers to prevent or mitigate negative impacts, and we monitor and follow up on the results in collaboration with a third-party risk assessment due diligence provider. The objective is to help our suppliers improve their sustainability measures. This may be through corrective actions or through traditional supplier relationship management. Solar can report that our assessed supplier base shows an overall average increase of 5.1% year on year, measured on four parameters: the environment, labour and human rights, ethics, and sustainable procurement. Our results are verified by a third-party specialist in supplier assessment and risk management due diligence.This year, we also conducted on-site audits in collaboration with a third-party provider. These audits are conducted for selected high-risk suppliers. In the event that a supplier fails to comply with the set thresholds defined in our Sustainable Procurement Policy, a corrective action plan will be initiated, and a reassessment will be conducted. Moreover, a training programme will be assigned to suppliers that score below our human rights and labour threshold. Should a supplier fail to comply with our policies and Supplier Code of Conduct, collaboration will ultimately be terminated. Signing our Supplier Code of Conduct is mandatory.Accountability for tracking the targets set and maintaining a dialogue with our suppliers lies with our Commercial Market and Sourcing department. Remediation channels to raise concerns S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concernsDue to the nature of our business and to Solar operating in a low-risk zone, we have not been made aware of any incidents that have caused or contributed to a negative impact.Employees and external stakeholders are encouraged to speak up if they experience any concerns, irregularities, or illegalities on Solarâs part or within the value chain.Our whistleblower portal is hosted by an external partner and is accessible from our website. It ensures that value chain stakeholders can anonymously report any breaches without risk of retaliation, which ensures confidential access to Solarâs Executive Board. We register all submitted cases, and all cases are presented to the Board of Directors and the Executive Board for resolution under the Whistleblower Policy.We are committed to engaging with the workforce across our value chain. Through our Supplier Engagement Programme and engagement with our suppliers, we will maintain focus on their own grievance mechanism for workers and stakeholders and Solarâs whistleblower portal. See more about our Whistleblower Policy and whistleblower portal in section G1 Business Conduct.ActionsS2-4 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 actionsBy following our policies and Code of Conduct and through regular and structured engagement with our contact persons in the value chain, we monitor potential risks.Working conditions, equal treatment and opportunities, and child and forced labour are integrated into our supplier risk assessment due diligence. This also applies to the selection of new suppliers.In case an incident occurs, this will be handled and tracked via our Supplier Engagement Programme. We have no record of any material risks.We will continue to promote awareness of our grievance mechanism to the supply chain workforce. We will continue to provide our suppliers with the capacity to make a positive impact on human rights issues.We will continue to track and measure on our targets and our engagement and look at new ways of doing so. We will maintain collaboration with industry and trade organisations in the countries we operate in, aiming to influence a just and inclusive workforce throughout our value chain.We have no record of any severe human rights issues and incidents connected to upstream and downstream value chain.Members of Solarsâ Senior Management Team are assigned the appropriate resources to manage and operationalise material impacts through daily management.TargetsS2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunitiesTwo entity specific targets have been set based on the outcome of the DMA. The targets help us gain a better understanding of how our suppliers operate and what to be aware of to contribute to a positive work-related human rights and labour impact for the supply chain workers. Two targets have been set in 2024 and supports ourSustainable Procurement Policy. Please see section S2-4 for which actions are implemented.Targets are set and defined by the Executive Board in collaboration with Commercial Market and Sourcing Management, who is also operationally responsible. The targets are tracked quarterly using data from our contract system and risk assessment platform. The progress is overseen by the Executive Board.The targets help us better understand how our suppliers operate and what to be aware of to contribute to a positive work-related human rights and labor impact for supply chain workers. Two targets have been set for 2024, supporting our Sustainable Procurement Policy. Please see section S2-4 for details on the implemented actions.The targets are set and defined by the Executive Board in collaboration with Commercial Market and Sourcing Management, who are also operationally responsible. They are tracked quarterly using data from our contract system and risk assessment platform. Progress is overseen by the Executive Board.Supplier Code of Conduct In 2024, 93% of Solars total spend is covered by a signed Supplier Code of Conduct. Our target is 95% by 2026.Risk assessment due diligence80% of Solars total spend was covered by our Supplier Code of Conduct in 2024. In absolute figures, more than 1,300 documents were signed, covering 93% of the strategic/ preferred supplier spend. By 2026, our target is 82% spend coverage at group level. We expect to reach the same level locally.Targets by 2026Unit Target 2024 2023 2022Spend undergoing risk assessement % 82 80 68 50Spend covered by Supplier Code of Conduct % 95 93 91 85GovernanceinformationESRS G1 Business conduct84Business ConductIRO processIRO-1 â Description of the processes to identify and assess material impacts, risks and opportunitiesWe have identified Confirmed incidents of corruption or bribery to have a negative impact in the value chain and our own operation. The full process and methodology applied to identifying confirmed incidents can be found in the section General information.GovernanceESRS 2 GOV-1 â The role of the administrative, management and supervisory bodies For information about the role of the administrative, management and supervisory bodies see the Management review page 30-37.IRO processESRS 2 IRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesWe have identified Confirmed incidents of corruption or bribery to have a negative impact primarily in the value chain but also in our own operation. The full process and methodology applied to identifying confirmed incidents can be found in the section General information.PoliciesESRS-2 MDR-POur business conduct policies include the following: Whistleblower Policy: Encouraging stakeholder in the value chain and own operation to report unethical breaches and practices without fear of retaliation. Fraud Policy: Facilitating controls for detecting and preventing fraud in the value chain and own operation, while promoting consistent behavior through guidelines and assigned responsibilities. Data Ethics Policy: Outlining our data ethics principles and processing methods and ensuring that Solar is committed to protecting our data with the highest ethical standards. Tax Policy: Managing Solars tax efficiently, ensuring compliance with laws, and conducting all business activities ethically and socially responsibly.Accountability for the implementation of the policies lies with the Executive Board and ultimately the CEO.G1-4 â Confirmed incidents of corruption or briberyUnit 2024 2023Number of convictions for violation of anti-corruption and anti-bribery laws Number 0 0Amount of fines for violation of anti-corruption and anti-bribery laws Amount 0 0ActionsUpon identifying a breach, an investigation is conducted to understand the scope and nature of the violation. Based on the findings, appropriate corrective actions are taken to prevent future breaches. Employees and external stakeholders are encouraged to speak up if they experience any irregularities or illegalities on Solarâs part.We take proactive steps to ensure awareness by providing internal information on our intranet and making our whistleblower portal available on our websites. We have also implemented a Whistleblower Policy to address grievances and complaints. Additionally, we have released several other policies related to good business conduct.Our whistleblower portal is hosted by an external partner and is accessible from our website. It ensures that employees and external stakeholders can anonymously report breaches without risk of retaliation and offers confidential access to the Executive Board. If necessary, we will collaborate with regulatory bodies during investigations.All actions are actions already implemented and ongoing.Appendix87ESRS 2 Disclosure requirements and incorporation by reference90ESRS 2 Sustainability due dilligence statement91ESRS 2 Data points that derive from other EU legislationDisclosure requirements and incorporation by referenceDisclosure requirementsIRO-2 Disclosure requirements in ESRS covered by the undertakingâs sustainability statementThe following tables list the ESRS 2 disclosure requirements and the seven topical standards that are material to Solar. They also provide an overview of relevant data points below the DMA threshold or additional data points otherwise considered relevant. We have omitted the disclosure requirements in the topical standards E3, S3 and S4 due to the nature of our business.The tables can be used to navigate to information relating to a specific disclosure requirement in the sustainability statements such as:data disclosure requirements that are incorporated by reference to either the management review or financial statement in this annual report.the Remuneration Policy, aiming to align the interests of the Solarâs shareholders with those of the Board of Directors and the Executive Board, and Statutory Report on Corporate Governance published as separate documents.Where we do not yet have any information related to a specific disclosure requirement, no reference is made.Disclosure requirements Section PageBP-1 General basis for preparation of the sustainability statement Sustainability statement 41BP-2 Disclosures in relation to specific circumstances Sustainability statement 41Data points that derive from other EU legislation Sustainability statement 91-93GOV-1 The role of the administrative, management and supervisory bodies Management review 30-37GOV-2 Information provided to and sustainability matters addressed by the Management review 31undertakingâs administrative, management and supervisory bodiesGOV-3 Integration of sustainability-related performance in incentive schemes Management review 32GOV-4 Statement on sustainability due diligence Sustainability statement 90GOV-5 Risk management and internal controls over sustainability reporting Management review 32-33SBM-1 Strategy, business model and value chain (products, markets, customers) Management review 11-15 Sustainability statement47SBM-1 Strategy, business model and value chain (headcount by country) Financial statement 79SBM-1 Strategy, business model and value chain (breakdown of revenue) Financial statement 108-110SBM-2 Interests and views of stakeholders Sustainability statement 43SBM-3 Material impacts, risks and opportunities and their interaction Sustainability statement 44-48with strategy and business modelIRO-1 Description of the process to identify and assess material impacts, risks and Sustainability statement 53-54opportunitiesIRO-2 Disclosure requirements in ESRS covered by the undertakingâs sustainability Sustainability statement 87-89statementEnvironmental standardsE1 Climate change Disclosure requirements Section PageESRS2, GOV-3 Integration of sustainability-related performance in incentive schemes Management review 32E1-1 Transition plan for climate change Sustainability statement 61-63ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and Sustainability statement 49, business model61-63ESRS 2, IRO-1 Description of the processes to identify and assess material climate-related Sustainability statement 53-54impacts, risks and opportunitiesE1-2 Policies related to climate change mitigation and adaptation Sustainability statement 62E1-3 Actions and resources in relation to climate change policies Sustainability statement 62-63E1-4 Targets related to climate change mitigation and adaptation Sustainability statement 63-44E1-5 Energy consumption and mix Sustainability statement 65E1-6 Gross scopes 1, 2, 3 and total GHG emissions Sustainability statement 66E1-7 GHG removals and GHG mitigation projects financed through carbon credits - -E1-8 Internal carbon pricing - -E1-9 Anticipated financial effects from material physical and transition risks and - -potential climate-related opportunitiesE2 PollutionDisclosure requirements Section PageESRS 2, IRO-1 Description of the processes to identify and assess material pollution-related Sustainability statement 53-54, impacts, risks and opportunities69E2-1 Policies related to pollution Sustainability statement 69E2-2 Actions and resources related to pollution Sustainability statement 69E2-3 Targets related to pollution Sustainability statement 69E2-4 Pollution of air, water and soil Sustainability statement 69E2-5 Substances of concern and substances of very high concern - -E2-6 Anticipated financial effects from pollution-related impacts, risks and - 69opportunitiesE4 Biodiversity and ecosystemsDisclosure requirements Section PageE4-1 Transition plan and consideration of biodiversity and ecosystems in strategy Sustainability statement 70and business modelESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and Sustainability statement 50, business model70-71ESRS 2, IRO-1 Description of processes to identify and assess material biodiversity and Sustainability statement 70ecosystem-related impacts, risks and opportunitiesE4-2 Policies related to biodiversity and ecosystems Sustainability statement 70E4-3 Actions and resources related to biodiversity and ecosystems Sustainability statement 70E4-4 Targets related to biodiversity and ecosystems Sustainability statement 70E4-5 Impact metrics related to biodiversity and ecosystems change - -E4-6 Anticipated financial effects from biodiversity and ecosystem-related risks and - 71opportunitiesE5 Resource use and circular economyDisclosure requirements Section PageESRS 2, IRO-1 Description of the processes to identify and assess material resource use and Sustainability statement 53-54, circular economy-related impacts, risks and opportunities72E5-1 Policies related to resource use and circular economy Sustainability statement 72E5-2 Actions and resources related to resource use and circular economy Sustainability statement 72E5-3 Targets related to resource use and circular economy Sustainability statement 72E5-4 Resource inflows Sustainability statement 72E5-5 Resource outflows Sustainability statement 73E5-6 Anticipated financial effects from resource use and circular economy-related - -impacts, risks and opportunitiesSustainability standardsS1 Own workforce Disclosure requirements Section PageESRS 2, SBM-2 Interests and views of stakeholders Sustainability statement 43, 76ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and Sustainability statement 51, business model76-78S1-1 Policies related to own workforce Sustainability statement 76S1-2 Processes for engaging with own workers and workersâ representatives about Sustainability statement 76-77impactsS1-3 Processes to remediate negative impacts and channels for own workers to raise Sustainability statement 77concernsS1-4 Taking action on material impacts on own workforce, and approaches to mitigat-Sustainability statement 77ing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actionsS1-5 Targets related to managing material negative impacts, advancing positive Sustainability statement 78impacts, and managing material risks and opportunitiesS1-6 Characteristics of the undertakingâs employees Sustainability statement 79S1-7 Characteristics of non-employee workers in the undertakingâs own operation - -S1-8 Collective bargaining coverage and social dialogue - -S1-9 Diversity metrics Sustainability statement 80S1-10 Adequate wages -S1-11 Social protection - -S1-12 Persons with disabilities - -S1-13 Training and skills development metrics - -S1-14 Health and safety metrics - 80S1-15 Work-life balance metrics - -S1-16 Compensation metrics (pay gap and total compensation) Sustainability statement 80S1-17 Incidents, complaints and severe human rights impacts - -S2 Workers in the value chainDisclosure requirements Section PageESRS 2, SBM-2 Interests and views of stakeholders Sustainability statement 43, 81ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and Sustainability statement 52, business model81-82S2-1 Policies related to value chain workers Sustainability statement 81S2-2 Processes for engaging with value chain workers about impacts Sustainability statement 81S2-3 Processes to remediate negative impacts and channels for value chain workers Sustainability statement 82to raise concernsS2-4 Taking action on material impacts on value chain workers, and approaches to Sustainability statement 82managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actionsS2-5 Targets related to managing material negative impacts, advancing positive Sustainability statement 82impacts, and managing material risks and opportunitiesG1 Business conductDisclosure requirements Section PageESRS 2, GOV-1 The role of the administrative, supervisory and management bodies Management review 30-37ESRS 2, IRO-1 Description of the processes to identify and assess material impacts, risks and Sustainability statement 53-54opportunitiesG1-1 Corporate culture and business conduct policies and corporate culture - -G1-2 Management of relationships with suppliers - -G1-3 Prevention and detection of corruption and bribery - -G1-4 Confirmed incidents of corruption or bribery Sustainability statement 84-85G1-5 Political influence and lobbying activities - -G1-6 Payment practices - -Sustainability due dilligence statementGOV-4 Statement on due diligenceSections in the Core elements of due dilligencesustainability statement Pagea) Embedding due diligence in governance, strategy and business model Governance information 84-85b) Engaging with affected stakeholders in all key steps of the due diligence process General information 43 Social information76-77 84-85c) Identifying and assessing adverse impacts Social information 76-78, 81-82 Governance information84-85d) Taking actions to address those adverse impacts Social information 77, 82 Governance information84-85e) Tracking the effectiveness of these efforts and communicating to stakeholders Social information 77, 82 Governance information84-85The table above outlines where in our Sustainability statement you can find information about our due diligence process, detailing how we implement the main aspects and steps of this process.Data points that derive from other EU legislationIRO-2 Disclosure requirements in ESRS covered by the undertakingâs sustainability statementBenchmark Disclosure Pillar 3 regulation EU Climate requirements Data point SFDRreferencereferencelaw reference Section PageESRS2 GOV-1 21 (d) Board gender diversity Management review 33ESRS2 GOV-1 21 (e) Percentage of board members who are independent Management review 33ESRS2 GOV-4 30 Statement on due dilligence Sustainability statement 90ESRS2 SBM-1 40 (d) i Involvement of activities related to fossil fuel activities Not material -ESRS2 SBM-1 40 (d) ii Involvement in activities related to chemical production Not material -ESRS2 SBM-1 40 (d) iii Involvement in activities related to controversial weapons paragraph Not material -ESRS2 SBM-1 40 (d) iv Involvement in activities related to cultivation and production of tobacco Not material -ESRS E1-1 14 Transition plan to reach climate neutrality by 2050 Not material -ESRS E1-1 16 (g) Undertakings excluded from Paris-aligned benchmarks Not material -ESRS E1-4 34 GHG emission reduction targets Sustainability statement 67-68ESRS E1-5 38 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) Not material -ESRS E1-5 37 Energy consumption and mix Sustainability statement 65ESRS E1-5 40-43 Energy intensity associated with activities in high climate impact sectors paragraphs Not material -ESRS E1-6 44 Gross scope 1, 2, 3 and total GHG emissions paragraph Sustainability statement 66ESRS E1-6 53-55 Gross GHG emissions intensity Sustainability statement 66ESRS E1-7 56 GHG removals and carbon credits Not material -ESRS E1-9 66 Exposure of the benchmark portfolio to climate-related physical risks Not material -ESRS E1-9 66 a Disaggregation of monetary amounts by acute and chronic physical risk Not material -ESRS E1-9 66 c Location of significant assets at material physical risk Not material -ESRS E1-9 67 c Breakdown of the carrying value of its real estate assets by energy-efficiency classes Not material -ESRS E1-9 69 Degree of exposure of the portfolio to climate related opportunities Not material -ESRS E2-4 28 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, Not material -water and soilBenchmark Disclosure Pillar 3 regulation EU Climate requirements Data point SFDRreferencereferencelaw reference Section PageESRS E3-1 9 Water and marine resources Not material -ESRS E3-1 13 Dedicated policy Not material -ESRS E3-1 14 Sustainable oceans and seas Not material -ESRS E3-4 28 (c) Total water recycled and reused Not material -3ESRS E3-4 29 Total water consumption in m per net revenue on own operations Not material -ESRS 2- IRO 1 - E4 16 (a) i - Not material -ESRS 2- IRO 1 - E4 16 (b) - Not material -ESRS 2- IRO 1 - E4 16 (c) - Not material -ESRS E4-2 24 (b) Sustainable land/agriculture practices or policies Not material -ESRS E4-2 24 (c) Sustainable oceans/seas practices or policies Not material -ESRS E4-2 24 (d) Policies to address deforestation Not material -ESRS E5-5 37 (d) Non-recycled waste Sustainability statement 74ESRS E5-5 39 Hazardous waste and radioactive waste Sustainability statement 74ESRS 2- SBM3 - S1 14 (f) Risk of incidents of forced labour Not material -ESRS 2- SBM3 - S1 14 (g) Risk of incidents of child labour Not material -ESRS S1-1 20 Human rights policy commitments Sustainability statement 76ESRS S1-1 21 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Sustainability statement 76ESRS S1-1 22 Processes and measures for preventing trafficking of human beings Sustainability statement 76ESRS S1-1 23 Workplace accident prevention policy or management system Sustainability statement 76ESRS S1-3 32 (c) Grievance/complaints handling mechanisms Sustainability statement 77ESRS S1-14 88 (b) Number of fatalities Sustainability statement 80ESRS S1-14 88 (c) Number and rate of work-related accidents Sustainability statement 80ESRS S1-14 88 (e) Number of days lost to injuries, accidents, fatalities or illness Sustainability statement 80ESRS S1-16 97 (a) Unadjusted gender pay gap Sustainability statement 80ESRS S1-16 97 (b) Excessive CEO pay ratio Sustainability statement 80ESRS S1-17 103 (a) Incidents of discrimination Not material -Benchmark Disclosure Pillar 3 regulation EU Climate requirements Data point SFDRreferencereferencelaw reference Section PageESRS S1-17 104 (a) Non-respect of UNGPs on Business and Human Rights and OECD Not material -ESRS 2- SBM3 â S2 11 (b) Significant risk of child labour or forced labour in the value chain Sustainability statement 81ESRS S2-1 17 Human rights policy commitments Sustainability statement 81ESRS S2-1 18 Policies related to value chain workers Sustainability statement 81ESRS S2-1 19 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines Sustainability statement 81ESRS S2-1 19 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8 Sustainability statement 81ESRS S2-4 36 Human rights issues and incidents connected to its upstream and downstream value chain Sustainability statement 81ESRS S3-1 16 Human rights policy commitments Not material -ESRS S3-1 17 Non-respect of UNGPs on Business and Human Rights, ILO principles or/and OECD guidelines Not material -ESRS S3-4 36 Human rights issues and incidents Not material -ESRS S3-4 16 Policies related to consumers and end-users Not material -ESRS S4-1 17 Non-respect of UNGPs on Business and Human Rights and OECD guidelines Not material -ESRS S4-4 35 Human rights issues and incidents Not material -ESRS G1-1 10 (b) United Nations Convention against Corruption Not material -ESRS G1-1 10 (d) Protection of whistleblowers Not material -ESRS G1-4 24 (a) Fines for violation of anti-corruption and anti-bribery Sustainability statement 84ESRS G1-4 24 (b) Standards of anti-corruption and anti-bribery Sustainability statement 84</mrv:StatementOfCorporateSocialResponsibility>
<mrv:SustainabilityReport contextRef="ctx-1" id="s10__7__7-1" xml:lang="en">General basis for preparationBP-1 General basis for preparation of the sustainability statementFrameworks and data selection The sustainability statement is prepared with reference to the Corporate Sustainability Reporting Directive (hereafter CSRD) and the underlying European Sustainability Reporting Standards (hereafter ESRS) requirements. All the data points included in the E, S, and G sections have been assessed as material according to our double materiality assessment (DMA). ConsolidationOur annual report is a consolidated report.The data in the sustainability statement covers the Solar Group and all our subsidiaries and has been prepared on the same consolidated basis as the Solar Groupâs 2024 financial statements. Value chainThe sustainability statement covers Solarâs upstream and downstream value chain activities. Please see page 47.Omitting informationNo options for omitting information regarding intellectual property, know-how, or the results of innovation, disclosure of impending developments, or matters in the course of negotiation have been used.Specific circumstancesBP-2 Disclosures in relation to specific circumstancesMeasurement basisThe accounting policies have been applied consistently in the financial year and for comparative figures. All greenhouse gas data points (GHG scope 1-3) are reported based on the Greenhouse Gas Protocol. Accounting estimates and judgementsWe use assessments and estimates for the reporting of some data points, e.g. our taxonomy KPIs and scope 3 emissions. We regularly reassess our use of estimates and judgements based on experience, the development of ESG reporting, and several other factors. Changes in estimates are recognised in the period in which the estimate in question is revised.Threshold for restatementsFor adjustments to financial numbers, we follow the financial statements. For adjustments to ESG data, we make a judgement as to whether we should restate numbers. We clearly indicate where we have restated data.External reviewAll quantitative data points in the tables in sections E, S, G, has undergone limited assurance unless otherwise stated.Changes in the preparationFor the 2024 reporting period, we have changed the structure of our sustainability disclosure to comply with the CSRD.The changes include:The inclusion of a sustainability statement in Solarâs annual report.An update of the preliminary double materiality assessment conducted in 2023 to also contain material impacts, risks, and opportunities across our value chain.New disclosures and metrics as required by the ESRS.How to read the Sustainability statementOur Sustainability statement addresses specific disclosure requirements from the ESRS and is organized into four main sections: General, Environment, Social, and Governance. Each chapter follows the structure of the ESRS requirements and includes direct references to the sections and paragraphs in the ESRS standard.In the first section, we take you through our general preparation for the sustainability report and value chain, our stakeholder engagement, and an introduction to our DMA and the outcome of this, including methodology and listed material matters. Our strategy, business model, and corporate governance disclosures from the cross-cutting standard ESRS 2 are placed in the Management review, as we believe this information is best understood in conjunction with the Management review and an overview of our activities. See Management review pages 11-15 and 30-37.Hereafter, we deep dive into the environmental information, including the EU taxonomy, climate change, pollution, biodiversity and ecosystems, and resource use and circular economy.The third section covers the social information, including our own workforce and workers in the value chain.Creating value through sustainabilitySBM-1 Strategy, business model, and value chainSustainability is embedded in our Group strategy and business model (please see Management Review) and is considered a strategic enabler for how we operate as a business. We want to partner with our customers in the green transition and create value for both business and society.We have three strategic sustainability focus areas â climate impact, sustainable supply chain, and diversity, equity, and inclusion â each with underlying actions and targets. The three areas correspond to our material sustainability impacts, risks, and opportunities.They support our ambition to deliver climate and energy solutions, such as heat pumps and solar panels, thereby advancing the green transition in our industry and creating a resilient value chain that respects both planet and people.In the sustainability statement section, we set out the impacts, risks, and opportunities identified through our double materiality assessment. Information on policies, actions, targets, and ESG performance data can be seen under the relevant sections.Environment Climate impact Approach In alignment with the standards of the Science Based Target initiative, we aim to become carbon neutral in our own operation and to enable our customers to decarbonize in their part of the value chain.Priorities Net-zero in our own operations by 203025% reduction in emissions from our supply chain by 2030 (scope 3)Deployment of renewable energy solutions by installing heat pumps and solar panelsConversion to an EV fleet by 2030Transition to circular resource useContinuation of our afforestation projectsRead moreEU Taxonomy, page 56-60ESRS E1 Climate change, page 61-68ESRS E2 Pollution, page 69ESRS E4 Biodiversity and ecosystems, page 70-71ESRS E5 Resource use and circular economy, page 72-74SocialDiversity, equity, and inclusionApproachWe foster a workplace and culture that promotes diversity, equity, and inclusion to attract, develop, and retain employees, while respecting human rights in a fast changing environment.PrioritiesRespect human rights and labour across the value chainFocus on recruiting and developing a diverse workforceRetention and development as well as focus on employee satisfactionEnsure a healthy and safe working environment25% women in senior management by 2026Read moreESRS S1 Own workforce, page 76-80ESRS S2 Workers in the value chain, page 81-82GovernanceSustainable supply chainApproachWe are committed to deliver on our sustainability goals and continue to work to integrate our sustainability Supplier Engagement Programme into our daily business.PrioritiesEnable our employees to perform according to responsible business conduct Conduct supplier risk management due diligence of 82% of our spend by 2026Demand that 95% of our spend be covered by asigned Supplier Code of Conduct by 2026Embed sustainability compliance in our businessRead moreESRS G1 Business conduct, page 84-85Stakeholder engagementSMB-2 - Interests and views of stakeholdersEngaging with affected stakeholders helps us to understand their expectations and to respond accordingly. Regular dialogue with our employees - either directly or as a team - promotes open and credible communication.Guided by our Employee Code of Conduct and the UN Global Compact ten principles, we uphold open and trustworthy communication to help us understand our external stakeholdersâ priorities and to respond accordingly. External stakeholders regularly engage with Solarâs employees, either directly or in a team setting.The insight gained from these regular engagements serve to ensure general due diligence and serve as a source of information for our double materiality assessment.We strive to ensure that the views and interests of affected stakeholders as regards sustainability are communicated to the Sustainability Steering Committee.Stakeholder How we engage Purpose of engagement Outcome examplesEmployees âSurveys and workplace assessments âContribution to an inclusive work culture âEmployee handbook and guidelines âPersonal development dialogues âOpen and honest dialogue across organisation levels âCommunication from management âDialogue and contact meetings with management â âCompliance with our Employee Code of ConductEmployee and management development â âSocial gatheringsInclusion of employee perception and experience programmes âEmployee elected board members â âEmployee retention âFair treatment and payInput on strategy and business modelCustomers âCustomer support and guidance âCreation of customer loyalty âOur assortment and documentation kept up to date â âCompetence training at Solar School âDelivery on our promisesDevelopment of new logistics services â âPartnership programmes âTo make our customers productive and successfulA âdaptation to market expectations âEvents and seminars â âTo provide sustainable products and solutionsContribution to Solar's strategic direction âTo enable customers to run responsible business Improve market sharepractices with a reduced carbon footprintSuppliers âDialogue and guidance âCompliance with our Supplier Code of Conduct â âStreamlining of supplier expectations âContract negotiations âRisk assessment due dilligence âSupplier improvement plans âSupplier due dilligence â âEngagement with our Supplier Engagement ProgrammeGreater focus on compliance and documention â âBusiness development meetings âProtection of labour and human rightsSupplier days and events âTo decarbonise our supplier chainSecurity of supplies âInvestors âInvestor calls and dialogue âUnderstanding the sustainability agenda related to our â âESG ratings and improvements âPeriodic investor updatesindustryF âinancial and ESG disclosure and reports â âCapital market days âRetain and attract investorsAdaptive response to investors âAnnual General Meeting âEnhanced transparencyFair valuation âFinancial and ESG ratingsIndustry associations â âKnowledge sharing âTo enable the green transition of our industry âDirect representation on boards and networks âInput into strategic directions âIndustry alignment and developmentJoint initiatives and programmes âCollaboration and representationo enable industry representatives to engage with policymakersCivic and non-profit âPartnerships with NGOs âContribution to local initiatives âSite specific initiatives e.g. afforestation programmesorganisations â âCollaboration and representation âDecarbonisation programmes âDirect representation on boards and networksLocal communities âDialogue with local authorities âCollaboration and dialogue âSupport for local projects âParticipation and support in local initiativesHosting events at our premisesDouble materiality assessment introductionSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelThe purpose of the DMA is to assess the materiality of sustainability-related matters that may pose a potential significant risk or opportunity for Solar.The DMA has been instrumental in identifying the material topics where we are compliant and topics where optimisation and improvement are needed to secure overall compliance with the ESRS.As a key element in preparing for the Corporate Sustainability Reporting Directive (CSRD) and the underlying European Sustainability Reporting Standards (ESRS) requirements, a preliminary double materiality assessment was drawn up in 2023 with reference to the draft ESRS.Although the DMA has been slightly refined in 2024, it is still based on the approach and tools applied in 2023 and the following ESRS. The learnings captured in 2023 helped us to refine our methodology and processes in 2024.All data has been captured in our DMA and gap assessment tools where the effects have been quantified and supplemented by qualitative assessments.We are convinced that the outcome presented offers a fair picture of our impacts, risks, and opportunities, but we also acknowledge that the picture will probably change as we move forward. Consequently, we will conduct a review of the DMA and the gap analysis following our strategy periods, provided no major changes to our strategy and business model occur.DMA outcomeSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelWe have identified our impacts on the environment and society (impact materiality) as well as the sustainability-related risks that we are exposed to (financial materiality) and their interaction with the strategy and business model.Seven out of the ten ESRS topical standards are material to Solar. 22 sustainability sub-topics have been identified and found material.The outcome is displayed per sub-topic and shows that the sub-topic E1 Energy is our most material sustainability topic.The environmental impacts and risks we have as regards E1 are closely linked to our sustainability focus areas Climate impact and Sustainability supply, focusing on longevity and end-of-life, as well as delivering according to scientific targets in our own operations.S1-1 sub-topics related to our own operation are topics with which we are familiar.Due to the nature of our business as a sourcing and services company, the suppliers and the products we source are reflected under the topics S2, E5, and G1. We focus on responsible sourcing and respect the labour and human rights of people in our value chain. We endeavour to minimise our impact on the environment to the extent possible.One entity specific topic has been identified: E1 Sales of products and solutions enhancing the shift to renewable energy (electricity). This is in line with our strategic focus area, Climate and energy.All activities and ESRS topics and entity specific topics have been screened as part of the DMA. The topical standards E3 Water and Marine Resources, S3 Affected Communities, and S4 Consumers and end-users have been omitted due to the nature of our business as a local sourcing and services company servicing the business-to-business market.Overall DMA approachAll assessed impacts and financially materialtopics have been mapped to their relevant topical ESRS standard.In total, Solar reports on 22 sustainability topics,with material impacts, risks, and opportunities.Impacts, risks, and opportunities that are materialhave been assessed.Both sustainability-related risks and opportunitieshave been assessed.Impacts and risks have been assessed for our ownoperations (OO) and those of the value chain.Impacts have been identified as potential or actual.Most impacts assessed were actual.One entity topic in E1 has been identified asfinancially material.The impacts, risks, and opportunities are eitherimpact-material (bottom right), financially material(top left) or double-material (top right).The identified material sustainability topics andimpacts, risks, and opportunities form the basis ofSolarâs CSRD reporting.The classification and numbering of the sub-topicsare listed in chronological order.Material impacts, risks, and opportunities (IRO)SBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business modelFinancially materialDouble materialE1E1REPSENGYImmaterialImpact materialAll remaining sustainability topicsE1E2E2E4E4E4E4CCMIPOWAPOSOBICCBILUBIPOIDESSustainability topics for which no impacts, risks, or opportunities have been identifiedE5E5E5S1S1S2S2Impacts, risks, and opportunities REINREOUWASTWCHSETGEWCWTWCAWfalling below the defined impact and financial materiality thresholdsS2S2S2S2S2G1WCWBWCHSETGEWRCLWRFLCBICImpact materialitySeven out of the ten ESRS topical standards are material to Solar. 22 sustainability sub-topics have been identified and found material and are displayed in the DMA matrix. The classification and numbering of the sub-topics are listed in chronological order.EnvironmentE1: REPS Sales of renewable energy products and solutions (entity specific)E1: CCMI Climate change mitigationE1: ENGY EnergyE2: POWA Pollution of waterE2: POSO Pollution of soilE4: BICC Direct impact drivers of biodiversity loss, climate changeE4: BILU Direct impact drivers of biodiversity loss, land-useE4: BIPO Direct impact drivers of biodiversity loss, pollutionE4: IDES Impacts and dependencies on ecosystem servicesE5: REIN Resource inflows/useE5: REOU Resource outflows (products and services)E5: WAST WasteSocialS1: WCHS Working conditions, health and safetyS1: ETGE Equal treatment and opportunities, gender equalityS2: WCWT Working conditions, working timeS2: WCAW Working conditions, adequate wagesS2: WCWB Working conditions, work-life balanceS2: WCHS Working conditions, health and safetyS2: ETGE Equal treatment and opportunities,gender equalityS2: WRCL Other work-related rights, child labourS2: WRFL Other work-related rights, forced labourGovernanceG1: CBIC Corruption and bribery, incidentsValue chainSBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business model Impacts and risksUpstreamWe source our products from tier one suppliers who distribute the products to our warehouses. Identified material negative impacts on the environment and people are primarily driven by our upstream activities and are related to raw-material extraction and manufacturing. Geographically, impacts are largely concentrated outside Europe, while tier one is largely concentrated inside Europe.Own operationsWe source from tier one suppliers, stock, pack, and distribute products and support our customersâ day-to-day business by ensuring their access to products. Identified material negative impacts on the environment and people are primarily driven by our energy consumption and matters related to own workforce. Geographically, the negative impacts are concentrated in the markets in which we operate.DownstreamProviding products and solutions that enhance the green transition gives us an opportunity to support our customers in their efforts to decarbonise. This is identified as a positive impact. Resource use and circularity are upcoming topics in our industry. Geographically, the negative and positive impacts are concentrated on the markets in which we operate.For an overview of our strategy and business model, see page 11-15 of the Management review. An overview of our cost structure can be found in the financial statement.Material sustainability-related impacts, risks, and opportunitiesSBM-3 Material impacts, risks, and opportunities and their interaction with the strategy and business modelAs a result of our double materiality assessment, several impacts, risks, and opportunities have been identified and assessed as material.As stated in the DMA matrix on page 46, seven out of the ten ESRS topical standards are material to Solar along with 22 sub-topics. Several sub-topics have been identified for each material topic.The adjacent tables show whether the impacts are positive or negative as well as whether they are related to our own operations (OO) or the value chain (VC). Impacts are actual impacts unless stated as potential. Brief descriptions of the material risks or opportunities are included in the table.Our scoring of risks and opportunities may include mitigation actions that are already part of our daily operations. Actions addressed as material impacts, risks, and opportunities (IROs) have not impacted our strategy and business model, and we do not foresee an impact during the strategy period 2024-2026.Sustainability risks are prioritized like other risks, meaning both Enterprise Risk Management (ERM) and DMA tools are used. In general, focus is always directed towards the upper right corner in the risk matrix for all risks. All risks, including mitigating activities, are presented by the Executive Board to the Audit Committee/Board of Directors for approval. The Board of Directors approves the risk appetite and tolerance per risk category and the used methodology. It is the responsibility of the Executive Board to implement the decisions made by the Board of Directors.All risks follow a three-line defense model which structures roles, responsibilities for risks, structure roles, decision-making, and control to achieve effective governance. Quarterly reports are prepared for the Executive Board to ensure progress and in parallel, internal audit reports are sent directly to the Board of Directors on the progress.Information on how we respond to the effects of our impacts, risks, and opportunities is included in the topical sections.Value chain TimeE1 Climate changeimpacthorizonTopic Description IRO description How we respondSales of renewable energy products Products and solutions advancing the Heat pumps and solar panels are some of the key technologies needed in the transition Through our strategic focus area, Climate and energy, we sell products and solutions and solutions (entity specific)green transition.to renewable energy.necessary to the widespread adoption of renewable energy as a key solution to mitigate climate change.Supporting the green transition Solar distributes and sells products necessary to the widespread adoption of renewable Via our product portfolio, we contribute to customers adopting products and solutions energy as a key solution to mitigate climate change.necessary to facilitate the renewable energy transition, hence creating a positive impact. Climate and energy is a strategic focus area with growth potential.Climate change mitigation GHG emission from the energy supply Supply chain emissions from extracting raw materials, manufacturing and We respond to this impact through our Supplier Engagement Programme, our own chain and downstream GHG emissions transportation from the products we bring to the market consuming energy in its use-climate reduction targets for scope 1, 2, and 3 and own controlled afforestation deriving from products consuming phase.projects. We actively work with our suppliers towards managing our value chain energy in its use phase. impacts.Energy Energy consumption deriving primarily Energy used in our own operations and energy including energy deriving from fossil We respond to this impact by having a climate mitigation plan and a target to be net-from the value chain but also from our fuels leading to GHG emissions.zero by 2030. Through our Supplier Engagement Programme, we ask our suppliers to own operationstart decarbonising their operations, implementing renewable energy and documenting progress that benefits the value chain.Risks related to potential lack of energy Risks of energy failure is decreased by continously increasing the share of self-Through our Supplier Engagement Programme, we ask our suppliers to start and potential regulatory risks and generated energy making up approx. 30% of our total electricity consumption in 2024. decarbonising their operations, implementing renewable energy and documenting environmental compliance.Customers continue to pay more attention to sustainability due to regulation and progress. We actively work with our suppliers towards managing our value chain market demands. Together with rising energy prices and/or heavy reliance on fossil impacts.fuels in our upstream value chain, Solar's financial performance and reputation might be impacted by not focusing on renewable energy.Value chain TimeE2 PollutionimpacthorizonTopic Description IRO description How we respondPollution of water Impacts resulting from pollution of water Excavating materials and minerals as well as in in the production phase can cause We respond to this impact through our Supplier Engagement Programme and our through indirect or direct contamination significant harm to ecosystems, particularly e.g. if hazardous wastewater is not treated Code of Conduct by encouraging our suppliers to implement a water management and leakage. properly and leaks into the natural environment.programme and report on wastewater. We actively work with our suppliers towards managing our value chain impacts.Pollution of soil Impacts resulting from soil pollution Many products in our supply chain contain metals and minerals excavated from mines Through our Supplier Engagement Programme we demand our suppliersat the site of or surrounding areas and leading to potential soil pollution at various stages of the mining.to sign our Code of Conduct and encourage them to minimise and/or eliminate any operations.sources of pollutants and document progress. We actively work with our suppliers towards managing our value chain impacts.E4 Biodiversity and ecosystemsDrivers of biodiversity loss: Material impacts related to biodiversity Although relatively small, carbon footprint in our own operations contributes to do some We actively work with our suppliers towards managing our value chain impacts and Climate changeand ecosystems change arising from harm of the environment. Many of the materials used in our supply chain are mined take appropriate actions via our Supplier Engagement Programme. Our Environment climate change. and subject to energy intensity , in the form of GHG, of manufacturing which may cause Policy guide us in our daily operation to minimise potetial negative impact to nature.signficant harm and impact biodiversity loss as a result of climate change.Drivers of biodiversity loss: Disruption of ecosystems and habitat Extractive activities can result in clearing large areas of land, the creation of open pits We actively work with our suppliers towards managing our value chain impacts and Land-use change, freshwater use, loss caused by extraction of metal and or mountain top removal, and disruption of local ecosystems, which may result in an take appropriate actions via our Supplier Engagement Programme.and sea-use changeminerals. indirect or direct impact on biodiversity loss, causing potentialdecrease in species and introduction of invasive species. Ecosystem/land that is converted could be restored, however it would take a significant amount of years until it would be restored back to its original state.Drivers of biodiversity loss: Biodiversity loss as a result of pollution Impacts resulting from suppliersâ direct effect on changes in nature, anthropogenic We actively work with our suppliers towards managing our value chain impacts and Pollution in areas where the value chain operates.assets, and nature's contributions to people and pollution, whether these be from take appropriate actions via our Supplier Engagement Programme.mechanical, chemical, noise, or light contributions. In case the event occurs, soil and water would be polluted close to the manufacturing sites. However, air pollution stemming from e.g. transportation by diesel/gas powered trucks would be present throughout all logistics routes.Impacts and dependencies Biodiversity-sensitive areas with Significant harm caused to ecosystem by upstream value chain activities located in We actively work with our suppliers towards managing our value chain impacts and on ecosystem servicesactivities negatively affecting the biodiversity sensitive areas may result in partial destruction of ecosystems. It can be take appropriate actions via our Supplier Engagement Programme.provision of ecosystem services. assumed that isolated or widespread ecosystem collapse due to biodiversity loss where Solar's value chain potentially operates.Value chain TimeE5 Resource use and circular economyimpacthorizonTopic Description IRO description How we respondResourceUse of virgin resources. Although relatively small, we have a dependency on virgin resources in our packaging We encouraging our business partners to reuse and recycle through appropriate inflows/useand distribution materials. Moreover products in our supply chain are likely to be circularity levers.produced using virgin materials that are extracted from mines or natural areas. Extraction of these materials can pose significant environmental threats.Resource outflows Waste generation and end-of-life Electronic waste is one of the fastest growing global waste stream. The products We encourage our business partners to sort their waste. We are committed to (products and services)handling.we sell have various expected lifetime with many products still not designed with collective end-of-life programmes complying to EU directives inclusive WEEE standard circularity (durability, repair, reuse, dissasembly, recycling) in mind generating general (waste electrical and electronic equipment).waste and e-waste that potentially cause indirect or direct harm to nature.Waste Risks resulting from harmful or Waste in our operations and downstream is mainly consisting of packaging waste We sort our own waste and encourage our business partners to do the same. We are inadequate disposal of waste, in from inbound product supply. There is a slight risk of inadequate waste management committed to collective end-of-life programmes complying to EU directives inclusive accordance with laws in operational results from behavioral patterns at Solars premises or downstream, or from leakage WEEE standard (waste electrical and electronic equipment).regions.and/or inadequate waste management in Solars upstream value chain, in relation to product manufacturing.S1 Own workforceWorking conditionsProviding an attractive and safe We have initiated several measures to increase safety at Solar. A set of cardinal rules, Through a continuous dialogue with our internal stakeholders we monitor and track Health and safetyworkplacelaying out core safety rules, a safety standard for visitors and a Health, safety and work work-related accidents. Our Health, safety and work environment policy is our guidance environment policy are all measures taken to prevent work incidents.to help secure a safe work environment.Equal treatment and Secure equal treatment and We commit to provide equal opportunities. We have an open and inclusive culture Our Employee Handbook, Code of Conduct and policies on diversity, equity and opportunities for allopportunitieswhere all employees have regulary development appraisals. inclusion and non-bias in recruitment is our foundation to secure a just and inclusive work environment.Value chain TimeS2 Workers in the supply chainimpacthorizonTopic Description IRO description How we respondWorking conditionsWorking time Excessive working hours. Excessive working hours for workers in the supply chain may cause physical and Through our Supplier Code of Conduct we ask our suppliers to take measures to mental health issues and their safety and work-life balance.secure a healthy work environment.Adequate wages Waste generation and A wage that provides for the satisfaction of the needs of the worker and his / her Through our Supplier Code of Conduct we ask our suppliers to respect national and end-of-life handling.family in the light of national economic and social conditions.international working condition regulations.Work-life balance Balance between Satisfactory state of equilibrium between an individualâs work and private life to Through our Supplier Code of Conduct we ask our suppliers to take measures to work and private life.secure time allocation between time spent at work and in private life beyond family secure a safe work environment.responsibilities.Health and safety Suppliers' commitment to secure health Healthy and safe work conditions involve both prevention of physical and mental harm Through our Supplier Code of Conduct we ask our suppliers to take measures to and safety.and the promotion of workersâ health by the undertaking.secure a safe work environment.Equal treatment and opportunities for allGender equality and equal pay Secure equal treatment and Workersâ access to equal opportunities, pay, and treatment, including freedom from Through our Supplier Engagement Programme we monitor and set a minimum for work of equal valueopportunities.discrimination.threshold score on labour and human rights.Other work-related rightsChild labour Deprive children of their childhood. Work that deprives children of their childhood, their potential, and their dignity, and that Through our Supplier Engagement Programme we monitor and set a minimum is harmful to physical and mental development. threshold score on labour and human rights.Forced labour Deprive workers from freely accepting All work or service which is extracted from any person under the threat of penalty and Through our Supplier Engagement Programme we monitor and set a minimum working conditions.for which the person has not offered himself or herself voluntarily.threshold score on labour and human rights.G1 Business ConductCorruption and briberyIncidents Whistleblower protection through Corruption and bribery incidents may have significant risks for our business and cause Through our whistleblower portal, we take a proactive approach to mitigating risks and procedures and policiesreputational damage. Our protection of whistle-blowers encourages and enables all negative impacts throughout the value chain.stakeholders to speak up if they experience any irregularities or illegalities on the part of Solar.Methodology and processIRO-1 - Description of the process to identify and assess material impacts, risks, and opportunitiesWe developed the methodology with reference to the draft principles of the ESRS and available guidelines from 2023. Learnings and outcomes from the 2023 process have been instrumental in this yearâs process to comply with the final guidelines of ESRS.MethodologyScopeThe ten ESRS topics were analysed and relevant documentation prepared in line with our strategy and business model. As regards to our own operations, we identified and assessed impacts on people and the environment as well as the potential risks to our business.As regards our value chain impacts and risk assessment, both upstream tier one suppliers and downstream activities were assessed. The value chain assessments were based on internal stakeholder interviews and knowledge and documentation collected. These were assessed and validated by the Executive Management.We considered both positive and negative impacts as well as actual and potential impacts in relation to sustainability matters and potential financial risks and opportunities.All activities and ESRS topics and entity specific topics have been screened as part of the DMA. The topical standards E3 Water and Marine Resources, S3 Affected Communities and S4 Consumers and end-users have been omitted due the nature of our business as a local sourcing and services company servicing the business-to-business market.Stakeholder engagementAs required, a stakeholder engagement analysis was conducted with the purpose of analysing material impacts across the value chain. We engaged with stakeholders of Solarâs sustainability reporting and other affected stakeholders.In 2023, we identified four stakeholder groups and interviews were conducted among 18 external stakeholders and more than 25 employees.Given the nature of Solarâs business and the fact that we do not operate in high impact zones, only B2B customers and tier one suppliers were engaged. For future stakeholder engagement, we will consider engaging other tier suppliers and âsilentâ stakeholders such as selected NGOs, industry associations, authorities, etc.This year, new stakeholders were not included. However, we have remained in continuous dialogue with our colleagues and have obtained an insight into the views and interests of our stakeholders across the value chain.ScoringAs per the ESRS guidelines, we followed the predefined scoring parameters.ImpactsImpact materiality is identified according to the following two scenarios:Actual: For each sustainability topic, actual impacts are identified based on primary data. Potential: For each sustainability topic, potential impacts are identified based on secondary data when no primary data is available.The impact materiality is scored based on four parameters.Scale Scope Irremediable character Likelihood (only applies to potential impact) To score and assess impact materiality, the score is from 0-3 and the materiality threshold is set at 3, which equates to approx. one-third of the maximum score (maximum possible score: 3 for severity x 3 for likelihood = 9).Financial risks and opportunitiesFinancial materiality is identified according to whether: An impact is identified that could trigger a risk/opportunity, or A dependency on natural, social, and human resources exists For financial materiality, Solarâs Enterprise Risk Management Board approved the methodology used to assess the magnitude of potential financial risks or opportunities. The score ranged between 0 and 5.Scoring of the IRO is assessed based on a three-step output:Value chain mappingSee value chain processGathering of primary and secondary data (where primary data is not available).All findings are collected in a DMA data tool, wherein the consolidated data is collected and uploaded.ThresholdsOur Executive Management, in collaboration with our DMA core team, has set the materiality at 3. This means that impacts and risks scored at 3 or above are deemed material.If a sustainability matter is above the threshold, either as an impact or financial risk or opportunity for our own operation, supply chain or both (cross-cutting occurrence), it is included as a material topic in the DMA analysis. The reporting requirement in accordance with the ESRS will be different whatever sustainability topic is deemed material in either Solarâs own operation or value chain.Materiality governance Going forward, the Sustainability Steering Committee will have decision-making responsibilities and will ensure effective execution and coordination for the installation of several working tracks designed to address specific targets and topics within the CSRD.ProcessWe have defined four core process steps for conducting the DMA for both impact and financial materiality.Our starting point was the impact assessment (inside-out) of Solarâs impact on the environment and society. Secondly, we conducted a financial assessment (outside-in) of the sustainability-related risks to which we as a business are exposed.All data has been captured in our DMA tool where the effects have been quantified and supplemented with qualitative assessments.To prepare and conduct the DMA, a âSolar DMA core teamâ was established, consisting of the Sustainability Director and three subject-matter experts.The assessment, scoring process, keys, structure, and the logic behind the assessment are aligned with the ESRS 2 requirements.The following steps have been conducted:1. Scoping of impacts2. Stakeholder engagement3. Materiality scoring and findings4. Management review and conclusionProcess stepsImpact materialityThe mapping of our sustainability-related impacts builds on the approach from 2023 as well as recent documentation and knowledge.The following steps were conducted:1. Scoping of impactsAs preparation for the workshops and as part of the value chain process, a thorough desk research was conducted to guide us in pre-defining relevant sub and sub sub-topics.2. Stakeholder engagementThe internal stakeholders engaged were subject-matter experts from the business lines, group functions, and management - all with a broad insight into our business and our value chain. All stakeholders were invited to a collective workshop, where they were engaged via a digital dialogue tool.3. Materiality scoring and findingsImpact and scoring rationales from the workshops were documented and all input transferred to our DMA tool to calculate the degree of materiality. Results were discussed and evaluated between the management and the core team and selected workshop participants were consulted for validation.4. Management review and conclusionThe consolidated overview was presented and discussed between Executive Management and the DMA core team. The scoring and the respective materiality threshold generated a final list of material impacts.Process stepsFinancial materialityAs part of the preparation for the financial materiality assessment, we also consulted the enterprise risk management section as well as recent documentation and the processes related to the subject.1. Scoping of risksResults from the impact materiality assessment formed the basis for scoping the sustainability risks related to financial risks and opportunities.2. Stakeholder engagementIn line with ESRS, external stakeholder groups were selected from among users of Solarâs sustainability report and affected stakeholders. Customers and tier one suppliers were selected based on spend/revenue while investors were selected randomly. Prior to a one-to-one interview, all stakeholders received a pre-read to provide an understanding of the purpose of the interview.3. Materiality scoring and findingsImpact and scoring rationales from the interviews were documented and all input transferred to our DMA tool to calculate and assess the degree of materiality in relation to risks and opportunities. Results were discussed and evaluated between the management and the core team.4. Management review and conclusionThe consolidated overview was presented and discussed between Executive Management and the DMA core team. The scoring and the respective materiality threshold generated a final list of financial material risks and entity specific opportunities.Environmentalinformation56Taxonomy reporting61ESRS E1 Climate change69ESRS E2 Pollution70ESRS E4 Biodiversity and ecosystems72ESRS E5 Resource use and circular economyEU Taxonomy ReportingEU taxonomyThe EU taxonomy is the classification system identifying environmentally sustainable economic activities.The EU taxonomy framework (EU Taxonomy Regulation 2020/852) is part of the EU Green Deal and serves as a core enabler to deliver on the EUâs ambitious climate goals about carbon neutrality in 2050. The goal is to redirect investments towards sustainable projects. Our assessment below is in compliance with Regulation EU 2020/852 and the associated amendments to the annexes of the Disclosure Delegated Act as issued on 27 June 2023.Eligibility screeningSolar performed a screening of the technical annexes of the Climate Delegated Act to identify any potentially eligible economic activities for the Revenue KPI and for the CapEx and OpEx KPIs. Identified areas, where there were any eligible economic activities in the reporting period, were subject to further assessment for alignment. Solar does not claim alignment for 2024, because there is not sufficient documentation within the relevant areas.For the calculation of the denominator of the Revenue, CapEx, and OpEx KPIs, we have extracted the figures directly from the ERP system and therefore ensure that the figures are only counted once in each KPI. For the allocation of the numerator for CapEx, we have first identified the relevant figures and then we have allocated the primary related economic activity in the Climate Delegated Act. In this way, we ensure that no CapEx is considered more than once.See EU taxonomy tables for the full overview on page 58-60.Solar activitiesSolar has reviewed all six taxonomy-eligible economic activities listed in the Climate Delegated Act. Based on the current interpretation of the eligible economic activities, we have concluded that sourcing of electrical and heating and plumbing equipment is not included in the list of eligible sectors. Consequently, our economic activities are not yet in scope for assessment.However, it is our understanding that sourcing of electrical and heating and plumbing equipment plays a pivotal role in climate change mitigations. By providing our customers with product documentation containing environmental data, it enables them to reduce their environmental strain and carbon footprint. We closely monitor the development.Thermonova, a 51% owned subsidiary, has eligible economic activities listed in the Climate Delegated Act with activities within manufacture of energy efficiency equipment for buildings (NACE 43.22) (activity code 3.5).Solar Polaris, a fully owned subsidiary, has eligible economic activities listed in the Climate Delegated Act with activities within installation, maintenance, and repair of renewable energy technologies (NACE 43.21) (activity code 7.6).Eligible OpEx activitiesEligible OpEx include any of the following types of spend:Related to assets or processes that are associated with Taxonomy-eligible economic activities7.3 Installation, maintenance, and repair of energy efficiency equipment7.4 Installation, maintenance, and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)Eligible CapEx activitiesEligible CapEx are investments related to the following EU taxonomy activities:1.1 Afforestation, establishment of forest through planting, deliberate seeding or natural regeneration on and that, until then, was under a different land use or not used7.3 Installation, maintenance, and repair of energy efficiency equipment7.6 Installation, maintenance, and repair of renewable energy technologiesTurnoverThe activity of Solar as a sourcing and services company within electrical and heating and plumbing equipment is not included in the list of eligible sectors. However, Solar owns two companies that are on the list of eligible sectors. Thermonova: Manufacture heat pumps and the products 1disclosed in activity 3.5 kSolar Polaris: Design solar photovoltaic solutions disclosed in activity 7.6 The share of taxonomy-eligible economic activities in the two companies are not significant. For 2024, it amounts to DKK 191m. and represents 1.6% of Solar Groupâs total turnover.Operating costs (OpEx)OpEx consists of direct non-capitalized costs that relate to research and development, building renovation, short-term lease, maintenance and repair and any other direct expenditures relating to the day-to-day servicing of PPE, right-of-use assets as well as intangible assets. The OpEx KPI is defined as Taxonomy eligible OpEx (numerator) divided by total OpEx (denominator).The denominator of the OpEx KPI is a subset of DIRECT non-capitalised costs relating to:Individual measures enabling Solarâs activities to become low-carbon or lead to greenhouse gas reductions as well as building renovation measuresMaintenance and repair and other day-to-day costs relating to servicing property, plant, and equipmentSolar has assessed that the numerator and denominator of the KPI related to the OpEx as disclosed in section 1.1.3.2 of annex 1 to the Disclosures Delegated Act cover the amount of non-capitalised costs related to:Activities or processes associated with taxonomy eligible economic activities is nilResearch and development are nilIndividual measures enabling Solarâs activities to become low-carbon or lead to greenhouse gas reductions, which is DKK 0m (2023: 5m), as well as building renovation measures (7.3, 7.4)Maintenance and repair and other day-to-day costs relating to servicing property, plant, and equipment amounting to DKK 34m (2023: 43m)The above DKK 34m is included in the denominator, but no spend related to the eligible activities has occurred for 2024 and consequently, the KPI related to OpEx is 0% (2023: 12%).Capital expenditure (CapEx)We included the numerator of the eligible CapEx investments in non-revenue generating activities described above. The denominator of the CapEx KPI includes total additions to intangibles and tangibles (notes 3.1, 3.2, 3.3 in the consolidated notes of the Annual Report 2024). See page 118-125.CapEx consists of additions to tangible assets covering property, plant, and equipment (PPE) and intangible assets during the financial year. It includes additions to PPE (IAS 16), intangible assets (IAS 38) and right-of-use assets (IFRS 16). The CapEx KPI is defined as taxonomy-eligible CapEx (numerator) divided by total CapEx (denominator).When assessing the numerator of the KPI related to the CapEx as disclosed in section 1.1.2.2 of annex 1 to the Disclosures Delegated Act, we have assessed:The amount of CapEx that is referred to taxonomy aligned activities is nilThe amount of CapEx related to become low-carbon or to lead to greenhouse gas reduction is DKK 10m (2023: 31m) (1.1, 7.3, 7.6)When assessing the denominator of the KPI related to the CapEx as disclosed in section 1.1.2.1 of annex 1 to the Disclosures Delegated Act, we have assessed that it covers:Additions during the year; intangible assets excluding goodwill as reported in note 3.1, page 118-120 in Annual Report 2024Additions during the year; property, plant, and equipment in note 3.2, page 121-122 in Annual Report 2024As regards leased assets, the new contracts, renewals, remeasurements and extensions are included as reported in note 3.3, page 123-125 in Annual Report 2024.In total, the above amounts to DKK 438m (2023: 497m). Consequently, the KPI related to CapEx can be calculated to 2% (2023: 6%).Nuclear and fossil gas related activitiesNuclear energy related activities1 The undertaking carries out, funds or has expo-Nosures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear pro-cesses with minimal waste from the fuel cycle.2 The undertaking carries out, funds or has expo-Nosures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.3 The undertaking carries out, funds or has Noexposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen produc-tion from nuclear energy, as well as their safety upgrades.Fossil gas related activities4 The undertaking carries out, funds or has expo-Nosures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.5 The undertaking carries out, funds or has expo-Nosures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.6 The undertaking carries out, funds or has expo-Nosures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.2024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)EU TaxonomyTaxonomy- aligned proportion Category Category Turnoverof turnover, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute turnover (3)Proportion of turnover (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned)Turnover of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N N 0Of which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities 0 0 N/EL N/EL N/EL N/EL N/EL N/EL 0(not taxonomy-aligned activities)Total (A.1+A.2) 0 0 0 0 0 0 0 0 0B. Taxonomy â non-eligible activitiesTurnover of taxonomy â non-eligible activities (B) 12,223 100Total (A+B) 12,223 1002024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)Taxonomy- aligned proportion Category Category OpExof OpEx, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute OpEx (3)Proportion of OpEx (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned)OpEx of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N N 0Of which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities (not taxonomy-aligned activities)7.3 Installation, maintenance, and repair of energy efficiency equipment CCA 7.3 0 0 N/EL EL N/EL N/EL N/EL N/EL 12OpEx of taxonomy-eligible not environmentally sustainable activities (not taxonomy-aligned activities) (A.2) 0 0 0 0 0 0 0 0 12OpEx of taxonomy eligible activities (A.1+A.2) 0 0 0 0 0 0 0 0 12B. Taxonomy-non-eligible activitiesOpEx of taxonomy-non-eligible activities (B) 34 100Total 34 1002024Substantial contribution criteria DNSH criteria (âDoes Not Significantly Harmâ)Taxonomy- aligned proportion Category Category CapExof CapEx, (enabling (transitional 2023 activity or) activity) Economic activites (1)Code(s) (2)Absolute CapEx (3)Proportion of CapEx (4)Climate change mitigation (5)Climate change adaptation (6)Water and marine resources (7)Circular economy (8)Pollution (9)Biodiversity and ecosystems (10)Climate change mitigation (11)Climate change adaptation (12)Water and marine resources (13)Circular economy (14)Pollution (15)Biodiversity and ecosystems (16)Minimum safeguards (17)(18)(20)(21)Currency (DKKm)% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E TA. Taxonomy eligible activitiesA.1 Environmentally sustainable activities (taxonomy â aligned) 0Capex of environmentally sustainable activities (taxonomy aligned) (A.1) 0 0 0 0 0 0 0 0 N N N N N N NOf which enabling 0 0 0 0 0 0 0 0 N N N N N N N 0 EOf which transitional 0 0 0 N N N N N N N 0 TA.2 Taxonomy â eligible but not environmentally sustainable activities (not taxonomy-aligned activities)1.1 Afforestation CCA 1.1 3 1 N/EL EL N/EL N/EL N/EL N/EL 57.3 Installation, maintenance, and repair of energy efficiency equipment CCA 7.3 1 0 N/EL EL N/EL N/EL N/EL N/EL 07.6 Installation, maintenance, and repair of renewable energy technologies CCA 7.6 6 1 N/EL EL N/EL N/EL N/EL N/EL 1CapEx of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (A.2) 10 2 0 100 0 0 0 0 6CapEx of taxonomy-eligible activities (A.1+A.2) 10 2 0 100 0 0 0 0 6B. Taxonomy â non-eligible activitiesCapEx of taxonomy-non-eligible activities (B) 428 98Total (A+B) 438 100Climate changePerformance incentive schemesGOV-3 Integration of sustainability-related performance in incentive schemesThe Remuneration Policy, which outlines the principles and guidelines for the Executive Board was amended at the Annual General Meeting in 2024. ESG targets were included in variable remuneration. Please see the Management review page 32.Transition planE1-1 Transition plan for climate change mitigationWe acknowledge the importance of reducing our climate footprint across the value chain. We follow a science-based approach in line with the Paris Agreement limiting global warming to 1.5°C.Our approach for our own operations includes a climate mitigation plan and a mid-term reduction target. We are proud to report a 50% reduction in CO2e emissions for scope 1 and scope 2 compared to our 2020 baseline.To address potential negative impacts in our value chain, we encourage our suppliers to source raw materials with a lower negative impact on the environment. We assist our customers in decarbonising their own operations and offer renewable energy products and solutions, further advancing the green transition.Decarbonisation leversAlthough less than 1% of our CO2e emissions derives from our own operations (scope 1 and 2), we continue to invest in renewable energy assets, such as high-capacity heat pumps and solar panels at our own premises. We aim to phase out gas as a heating source and increase the share of self-generated energy. No further climate scenarios have been considered as we consider our current scenario and transition plan to be on track with the Paris Agreement.Our ambition is to use 100% renewable energy (electricity) by 2026, either procured or self-generated, and increase the share of self-generated electricity.In addition to tracking reductions in our own operations, we also use climate targets to shape other initiatives and investments. A key method for achieving our climate mitigation targets, for example, is our switch to renewable energy, including replacing gas boilers with heat pumps and shifting to a 100% EV fleet.Due to the nature of our business, over 99% of Solarâs total emissions derive from the value chain. Most of our emissions derive from the products we source, and the energy consumed in the use-phase of the products we sell. The category âUse of sold productsâ alone accounts for more than 90%. We are in the process of identifying and deploying several initiatives to reduce our supply chain emissions.Financial resourcesThe operational and capital funding to execute our transmission plan is allocated annually. Please see page 56-60 in the section EU Taxonomy.Embedded in our strategy and business modelOur transition plan is an integral part of our overall strategy and business model and is aligned with our sustainability focus areas and targets. It is financed through our annual business and financial planning process. As chair of the Sustainability Steering Committee, our CFO oversees the implementation of our ESG strategy, including the transition plan. The transition plan is approved by the Executive Board and the Board of Directors. Please see page 11-15 in the Management Review for further information.Science-based emissions targetsWe have committed ourselves to the Science Based Target initiative (SBTi), which also serves as our guiding star to improve our climate footprint. Through this, we have committed to a 42% reduction by 2030 in scope 1 and 2. However, our ambitious target for scope 1 and 2 is net-zero by 2030. This target is supported by a mid-term target in 2026 of 65% reduction in scope 1 and 2, and the overall target of decarbonising our value chain on a long term.Transition plan towards 2030 for scope 1, 2, and 3 GHG emissionsE1-4 Targets related to climate change mitigation and adaptationReductions planned Reductions expected in own operationsin value chainTransition Renewable Phase out Change in tCO2eqto EVelectricityfossil fuelsproduct mix100% reduction in scope 1&225% reduction in scope 3Current GHG emissionsGHG emissionsBaselineScope 1-2 reduction Scope 3 reductionTarget year20202030Impact, risks, and opportunitiesSBM-3 â Material impacts, risks, and opportunities and their interaction with strategy and business modelThrough our double materiality assessment, three sub-topics have been identified, of which our entity-specific sub-topic presents a positive impact and an opportunity. Sales of renewable energy products and solutions (entity specific) Climate change mitigation EnergyRisks related to the topics identified are all considered to be climate-related transition risks.We believe that our strategy and business model support our transition plan and our ambition to work with climate change to reduce our carbon emissions in line with our SBTi targets. The impact, risks, and opportunities (IROs) and how they interact with our strategy and business model are described in the section General information.Entity specific opportunityThe sale of products and solutions that enhance the transition to renewable energy has been identified as an opportunity under the topic E1: Climate Change. This alignswith our strategic focus area on Climate and Energy (see Management review, page 11-12).Solar aims to contribute to the green transition by selling products such as heat pumps and removing gas and oil boilers from the market, thereby achieving avoided emissions.Policies related to this area are covered by existing policiespresented in this report, and actions and targets are integrated into our strategic actions and targets. Data points related to this entity-specific topic are company-specific and outside CSRD requirements.The expected outcomes of this entity-specific opportunity include improved financial gains and an enhanced reputation for Solars as a company supporting the green transition, while also contributing to a better world.IRO processESRS 2 IRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesThe full process and methodology applied to identify climate-related impact, risks, and opportunities in relation to climate-related physical risks and climate-related transition risks, can be found in the section General information page 53-54.Climate change impacts are identified across Solarâs value chain. The main risks stem from energy consumption in the upstream supply chain and the energy supply connected to Solarâs assets and business model. These risks are reflected in the negative impacts identified and assessed as material in the DMA. No climate-related hazards have been identified.Given the nature of our business, our geographical presence, and our primarily European-based suppliers, we have not identified any significant physical risks. Additionally, we do not foresee any substantial transition risks that could affect our business model, financial performance, or reputation in the short and medium term. Sales of products and solutions for renewable energy have been identified as an opportunity in the transition to a low-carbon economy.Policies E1-2 Policies related to climate change mitigation and adaptationSolarâs Sustainability Policy and Environmental Policy define and communicate how we work with climate change mitigation and sustainability, including our commitment to reducing scope 1, 2, and 3 emissions by 2030 including our ambition of 100% renewable energy (electricity) and energy optimisation. By covering all emission scopes, the Sustainability Policy applies to the emissions from our own operations as well as from our upstream and downstream value chain.Our Sustainable Procurement Policy outlines our demands for our suppliers and requests them to disclose their emissions.We actively engage with our strategic/preferred suppliers via our Supplier Engagement Programme and through ongoing dialogue, meetings, and events. We request that our suppliers report to EcoVadis and sign our Supplier Code of Conduct. Decarbonisation and environmental protection are central to the relationship with our suppliers, and we encourage them to use renewable energy in their own operations. These goals are outlined in our Sustainable Procurement Policy and in our Supplier Code of Conduct.Both policies, which apply to all employees and suppliers, aim to minimise our impact on the environment. The policies are available on Solarâs employee intranet and on our website.Accountability lies with the Executive Board. Group Sustainability has overall responsibility for our policies and ensures that they remain aligned with legislation. The policies are reviewed annually.Actions E1-3 Actions and resources in relation to climate change policiesWe are addressing emissions through the following actions. Many actions have already been implemented, and more are in the pipeline. Primary decarbonisation levers, as well as achieved and expected GHG emission reductions, are detailed in our transition plan. We believe to be on track and have the necessary resources and financial support to continue working with our climate change mitigation plan. For more information on our financial resources (OpEx and CapEx), please see the EU Taxonomy section.Own operationsWe have initiated the following actions:We continue to take steps to reduce our CO2e emissions in scope 1 in line with our reduction targets by:Phasing out fossil fuel-based energy sources such as gas with renewable alternatives like heat pumps.Continuing to transition our fleet towards a 100% EV fleet by 2030.We continue to take steps to reduce our CO2e emissions in scope 2 in line with our reduction targets by:Switching to renewable electricity, either purchased or generated, by installing solar panels at our premises. In 2025, we will establish a solar panel field at our head office in Vejen, Denmark. Our target is 100% renewable energy (electricity) by 2026.Upgrade to energy-efficient lighting, such as LED, install sensors and building management systems.Construction of our warehouse in Sweden accords to Breeam Excellent. The new facilities will replace our two existing warehouses and are expected to be taken into use in 2026. This will have a positive impact on both scope 1 and 2.We have created emission reduction scenarios at company level to ensure that we reach our mid-term reduction target.We have trained employees in direct contact with suppliers in our Sustainability Policy and Supplier Code of Conduct.We have strengthened the Group Sustainability function with three local Sustainability Managers and a Sustainable Procurement Manager.Supply chainDecarbonising the supply chain is a joint effort and to support our scope 3 reductions, we have initiated the following actions:We began the establishment of Solar Industrial Solutions, focusing on turnkey climate and energy solutions. By installing a heat pump, solar panels, and other energy-efficient products and solutions, our customers can decarbonise their own operation.Through our Code of Conduct, we require our suppliers to commit to renewable energy. We have met our 2024 target of 93% of our spend to be covered by our Supplier Code of Conduct.We follow our suppliersâ commitment to renewable energy via our risk assessment due diligence. By the end of 2024, 80% of our spend have undergone risk assessment.This year, we have begun performing on-site audits in collaboration with accredited third parties. A risk-based approach has been applied, reviewing risk by country, market, commodities, processes, and/or work areas.We will strive to provide the relevant environmental documentation containing relevant scope 1 and 2 data. We will continue to move away from spend-based CO2e emissions data in scope 3 towards actual data. This will provide us with more accurate calculations and increase transparency for our stakeholders and help our customers to adapt CO2e data into their own business activities.We will continue to seek out partnerships with key suppliers to incentivise low carbon products.Targets E1-4 Targets related to climate change mitigation and adaptationDue to the nature of our business, more than 99% of our emissions are indirect emissions from scope 3 activities.Scope 1 and 2As of today, we have superseded the official commitment of 42% reduction in scope 1 and 2 and are on track to meet our mid-term target of 65% reduction by 2026 compared to baseline year 2020. Our own target is net-zero/0 emissions by 2030.The main levers to reduce emissions in scope 1 and 2 are phasing out gas as a heating source, phasing out fossil fuel cars, and shifting to renewable electricity.Scope 3This year, we have recalculated our scope 3 emissions, including our 2020 baseline, using a new calculation methodology that provides us with more accurate results. We now have a clearer view on which efforts to prioritise. Our target of total 25% emission reductions in scope 3 by 2030 in category 1: Purchased products and services and category 11: Use of sold products remains unchanged, however.The increase in absolute figures is mainly linked to category 11 âUse of sold productsâ, with gas boilers being the main product group that releases carbon during its use phase. As such, it is classed as the main lever to reduce emissions in this category.Renewable energy (electricity)We are committed to our target of 100% renewable energy (electricity). This year, we increased the share of renewable energy to 88%. For sites owned by Solar, we reached 100%. As most of our sites are leased, it is challenging to convert all sites to renewable energy, but we will continue to make efforts in this regard.Over time, we aim to transition from procured renewable energy to self-generated renewable energy by installing solar panels at our premises.It is expected that the carbon intensity of the used energy in a productâs lifetime will decrease over time, thereby having a positive effect on scope 3 emissions. However, it is also a well-known Science Based Targets dilemma that when companies bring products with longer lifetimes to market, they may âpayâ for that in their CO2e accounting, as when lifetimes increase, scope 3 emissions also increase (assuming everything else is constant). However, we will continue to develop ways of bringing energy-efficient and low carbon products with long lifetimes to market.Moreover, we are moving away from spend-based data to actual data, and we are in close contact with our suppliers to increase the share of product specific actual data. This, together with a new calculation methodology, will continuously improve our emissions data.SBTiWe have notified SBTi that we have re-calculated our scope 3 and changed the base line. As the re-calculation does not affect our existing SBTi targets, no resubmission is required.To measure our annual progress in emissions reductions in all three scopes, we use the methodology guidelines from SBTi. To enhance transparency for our stakeholders, we provide emissions data upon request.E1-5 â Energy consumption and mixUnit 20241 Fuel consumption from coal and coal products MWh 02 Fuel consumption from crude oil and petroleum products MWh 03 Fuel consumption from natural gas MWh 2,8984 Fuel consumption from other fossil sources MWh 10,279Consumption of purchased or acquired electricity, heat, steam and cooling from fossil 5MWh 1,682sources6 Total fossil energy consumption (calculated as the sum of line 1 to 5) MWh 14,859Share of fossil sources in total energy consumption % 517 Consumption from nuclear sources MWh 0Share of consumption from nuclear sources in total energy consumption % 0Fuel consumption for renewable sources, including biomass (also comprising 8MWh 0industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.)Consumption of purchased or acquired electricity, heat, steam and cooling from 9MWh 12,858renewable sources10 The consumption of self-generated non-fuel renewable energy MWh 1,53311 Total renewable energy consumption (calculated as the sum of lines 8 to 10) MWh 14,391Share of renewable sources in total energy consumption % 49Total energy consumption (calculated as sum of line 6 and 11) MWh 29,250Accounting policiesE1-5 â Energy consumption and mixRenewable electricity The total amount of renewable and non-renewable electricity purchased and generated at locations owned or leased by Solar as a percentage of total electricity consumption in MWh in the reporting year. Procured renewable energy (electricity) is documented through guarantees of origin (GO). Other fuels The total amount of fuel oil consumed in MWh. Emissions are calculated based on the actual used fuel oil in the reporting period. Yearly used fuel oil is multiplied by the emission factor communicated by DEFRA. Natural gas The total amount of natural gas consumed in MWh. Emissions are calculated based on the actual used gas in the reporting period. Yearly used gas is multiplied by the emission factor communicated by DEFRA.E1-6 â Gross scopes 1, 2, 3 and total GHG emissionsUnit 2024 2023 ÎNet revenue DKKm 12,223 13,031 -808Net revenue used to calculate GHG emissions intensity DKKm 12,223 13,031 -808GHG emissions intensity, location-based (total GHG emissions per net revenue) tCO2e 286.761GHG emissions intensity, market-based (total GHG emissions per net revenue) tCO2e 286.605Overview by country 2024Data point Unit DK SE NO NL PL MAG45 Others1TotalFleet tCO2e 625 31 6 150 294 27 56 1,189Natural gas tCO2e 80 0 0 272 94 72 12 530Fuel oil tCO2e 14 0 0 0 12 0 0 26Total gross GHG emissions, scope 1 tCO2e 719 31 6 422 400 99 68 1,745Fleet tCO2e 38 34 4 54 0 0 1 131Electricity, market-based tCO2e 360 5 152 25 107 109 201 959District heating, market-based tCO2e 102 313 156 57 39 0 58 725Total gross GHG emissions scope 2, market-based tCO2e 500 352 312 136 146 109 260 1,815Electricy, location-based tCO2e 403 40 22 506 308 131 193 1,603District heating, location-based tCO2e 324 791 499 279 39 0 56 1,988Total gross GHG emissions scope 2, location-based tCO2e 765 865 525 839 347 131 250 3,722Total GHG emissions scope 1 and 2 tCO2e 1,219 383 318 558 546 208 328 3,560Total gross GHG emissions scope 3 tCO2e 201,075 75,894 63,933 3,084,698 17,907 42,555 13,553 3,499,615Total GHG emissions scope 1, 2 and 3 market-based tCO2e 202,294 76,277 64,251 3,085,256 18,453 42,763 13,881 3,503,175Total GHG emissions scope 1, 2 and 3, location-based tCO2e 202,559 76,790 64,464 3,085,959 18,654 42,785 13,871 3,505,082GHG emissions scope 3 calculated using primary data, share % 0.14%1) Solar Polaris, Højager Belysning, Thermonova.Accounting policiesE1-6 â Gross Scopes 1, 2, 3 and Total GHG emissionsFleet GHG emissions from fleet cover GHG emissions from cars owned and leased by Solar. Emissions are calculated based on the actual used fuel in the reporting period for both diesel and petroleum cars. For December where Solar do not have the actual used fuel, the data is estimated based on data on total used fuel for a comparable month or as an average for the previous months of the years. Yearly used fuel is multiplied by the vehicleâs emission factor per liters as communicated by DEFRA (updated 2024). Electricity The total amount of electricity consumed in MWh. Emissions are calculated based on the actual used electricity in the reporting period. Yearly used electricity is multiplied by the emission factor communicated by DEFRA. Electricity is calculated for both a marked-based and location based. District heating The total amount of district heating consumed MWh. Emissions are calculated based on the actual used district heating in the reporting period. Yearly used district heating is multiplied by the emission factor communicated by DEFRA or where the actual emissions factors are available, this is used. District heating is calculated for both a marked-based and location based. In 2023 we only calculated the emissions for district heating based on the emissions factor communicated by DEFRA.E1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3Retrospective Milestones and target years2020Î 2023 vs Unit(base year) 2021 2022 2023 20242024 Target 20266Target 2030Scope 1 GHG emissions Net-zero4Scope 1 GHG emissions tCO2e 2,814 3,583 3,033 2,150 1,745 -19% 65% reduction Net-zeroScope 1 GHG emissions reduction % 127% 108% 76% 62%Scope 2 GHG emissions -Location-based GHG emissions tCO2e 4,326 4,107 3,491 3,876 3,722 -4%Location-based GHG emissions reduction % 95% 81% 90% 86% -4Market-based GHG emissions tCO2e 4,326 4,107 2,887 3,241 1,815 -44% 65% reduction Net-zeroMarket-based GHG emissions reduction % 95% 67% 75% 42% -Significant scope 3 GHG emissions -Total gross indirect (scope 3) GHG emissions tCO2e 3,275,651 3,309,423 3,499,615 6%2C1: Purchased products and services tCO2e 354,454 - - 325,148 312,588 -4% 25% reduction1C2: Capital goodstCO2e 0 - - 0 05C3: Fuel and energy-related activitiestCO2e 2,212 1,889 794 -58%1,3C4: Upstream transportation and distributiontCO2e 0 - - 0 01C5: Waste generated in operationstCO2e 0 - - 0 0C6: Business traveling tCO2e 1,658 - - 1,577 1,415 -10%C7: Employee commuting tCO2e 3,381 - - 3,498 3,659 5%1C8: Upstream leased assetstCO2e 0 - - 0 0C9: Downstream transportation tCO2e 59,148 - - 34,423 60,730 76%1C10: Processing of sold productstCO2e 0 - - 0 02C11: Use of sold products tCO2e 2,850,894 - - 2,939,110 3,116,332 6% 25% reductionC12: End-life-treatment of sold produts tCO2e 3,904 - - 3,778 4,097 8%1C13: Downstream leased assetstCO2e 0 - - 0 01C14: FranchisestCO2e 0 - - 0 01C15: InvestmentstCO2e 0 - - 0 0Total GHG emissionsTotal GHG emissions, location-based tCO2e 3,282,791 - - 3,315,449 3,505,082Total GHG emissions, market-based tCO2e 3,282,791 - - 3,314,814 3,503,175Accounting policiesE1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3Scope 1 Scope 1 emissions are reported in tonnes and the sum of all CO2equivalents in accordance with ESRS E1 requirements and the GHG protocol. The emissions are calculated based on the direct energy consumption for operations (natural gas, oil, diesel, petrol) and fuel from people transport (company owned/ leased cars). For all scope 1 data, Decemberâs figures are estimated based on the total usage for a comparable month or as an average of the previous months of the year. Scope 2 Scope 2 GHG emissions are reported in tonnes of CO2 equivalent in accordance with ESRS E1 requirements and the GHG protocol. Scope 2 emissions are reported as location and market-based in accordance with the GHG protocol. For all scope 2 data, December is estimated based on data on total used for a comparable month or as an average for the previous months of the years. Scope 3 Scope 3 emissions are reported in tonnes of CO2 equivalent in accordance with ESRS E1 requirements and the GHG protocol. Scope 3 emissions are a combination of activity and spend based calculations and are calculated annually. Data are pulled from Solarâs ERP system and calculated annually. Where actual data is not available, data are calculated based on economic spend allocation and weight-based calculations method. This accounts for C1: Purchased products and services and C11: Use of sold products, as well as for the categories under âOtherâ; C3: Fuel- and energy-related activities, C4: Upstream transport is embedded in C1, C9: Downstream transport and distribution and C12: End-of-life treatment of sold products. The categories C5: Waste, C6: Business travel and C7: Employee commuting are 100% activity based. GHG intensity (scope 1 and 2) Calculated as total scope 1 and scope 2 (location- and market-based) emissions divided by total revenue. GHG intensity (scope 3) Calculated as total scope 3 divided by total revenue.E1-6 â Total GHG emissions disaggregated by scopes 1 and 2 and significant scope 3 â continuedRetrospective Milestones and target years2020Î 2023 vs Unit(base year) 2021 2022 2023 20242024 Target 20266Target 2030GHG intensity Net-zeroGHG intensity value, scope 1 tCO2e 0.25 0.29 0.22 0.16 0.14 -GHG intensity value, scope 2 location-based tCO2e 0.38 0.33 0.25 0.30 0.30 -GHG intensity value, scope 2 market-based tCO2e 0.38 0.33 0.21 0.25 0.15 -GHG intensity value, scope 3 tCO2e 285.71 - - 253.97 286.31 -Total GHG intensity value, scope 1, 2 and 3 tCO2e 286.33 - - 254.43 286.76 -Total GHG emissions, scope 1, 2 and 3 reductions tCO2e - - 57,161 219,992 -Total GHG emissions, scope 1, 2 and 3 reductions % - - 2% 7%1) The following categories have been excluded from the calculation: C2: Capital goods, C10: Processing of sold products, C8/13: Leased assets, C14 Franchises, C15: Investments2) Scope 3 target is 25% reduction in total in category 1: Purchased products and services and category 11: Use of sold products3) C4: Upstream transportation is embedded in category C1: Purchased products and services4) Our own target is net-zero/0 emissions by 2030. Our SBTi commitment in scope 1 and 2 is 42% reduction by 2030.5) Not included in scope 1 and 26) Calculated from baseline 2020PollutionIRO processESRS 2 IRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesWe have identified pollution of water and soil to have a negative impact in the upstream value chain and own operation. The full process and methodology applied to identifying pollution related material impact can be found in the section General information. We comply with national and internal regulations, and through our ISO 14001 process monitor, we screen for potential negative impacts. In case a severe incident occur, we will engage local authorities and affected communities.Policies E2-1 Policies related to pollutionSolarâs Environmental Policy communicates our environmental performance. Solar undertakes all work related to the handling of pollution and is committed to complying with applicable laws and regulations. The policy states that we want to improve our processes to prevent pollution, but it does not contain any information on mitigating actions regarding water and soil - in case an incident occurs - to limit the negative impact on people and the environment. It does not address substituting and minimising use of substances of concern and phasing out substances of very high concern. The policy applies to all employees and is available on Solarâs intranet and website.No environmental issues or incidents were reported in 2024 or previous years. For our own operations, a future action plan will be grounded in our Environmental Management System (EMS). In our upstream value chain, we conduct monitoring through our risk assessment due diligence process.Please see section E1 Climate Change for information on climate and environmental mitigation in our own operation and across the value chain.Accountability for the implementation of the policy lies with the Executive Board and ultimately the CEO.Please see E1 Climate Change regarding how we work with climate and environmental mitigation in our own operations and across the value chain.Actions and resources E2-2 Actions and resources related to pollutionPollution can take place through indirect or direct water contamination and leakage, soil pollution in surrounding areas, operations in our upstream value chain, and in our own operation. We strive to enhance our environmental performance by implementing effective pollution mitigation and adaptation strategies to support creating a positive impact where it is possible. The actions apply to all operations within Solar and its upstream value chain. Due to our history of not have identified any incidents, water and soil pollution is considered low risk.In our own operation, pollution-related matters come under our Environmental Management System which is frequently audited by third party consultants. Incidents must be reported to a management team member and reported to the EMS team.For the upstream value chain, pollution is addressed in our Supplier Code of Conduct and our Sustainable Procurement Policy. Current and future actions:Through our daily operation, we track potential pollution incidents related to water and soil in own operations. We will continue to address water and soil pollution on the topic environment with our suppliers as part of our Supplier Engagement Programme where we monitor and track on several parameters include parameters within environment.In 2025, we will align our Environmental Policy to also cover water and soil pollution.In 2025, we will align our Environmental Management System framework according to the standards of ESRS E2.Targets E2-3 Targets related to pollutionDue to the nature of our business and our history, no targets have been set. We will conduct an assessment to better understand the full scope of our pollution-related impacts, risks, and opportunities to identify potential future targets and resources required. Pollution related targets that are mandatory by law will be implemented during 2025.For this reporting year, we did not identify any incidents in our own operations, nor do we possess methodology and data on the amounts of pollutants or the changes over time.Pollution E2-4 Pollution of air, water, and soilAt this time, we do not have data on emissions and pollutants related to the two negative impacts identified through our IRO analysis: water and soil. Anticipated financial effects E2-6 Anticipated financial effects from pollution-related impacts, risks, and opportunitiesNo financial implications of pollution-related risks and opportunities have been identified. We will allocate potential additional resources/funds to the extend needed.Biodiversity and ecosystemsTransition planE4-1 â Transition plan and consideration of biodiversity and ecosystems in strategy and business modelContinuously assessing and enhancing the resilience of our business model and strategy to biodiversity and ecosystems-related risks is essential for long-term sustainability. We depend on diverse and healthy ecosystems to support climate change reductions.Due to our business model, we believe that we have integrated the necessary resilience to physical, transition and systemic risks within this topic both in our own operations and in the upstream value chain, and therefore have no separate transition plan.However, we acknowledge that the raw material extraction for manufacturing the products that we sell, as well as energy resources and transportation, may cause significant harm and negative impact on people and the environment.We engage with our suppliers through our Supplier Engagement Programme and by performing regular risk assessments, we understand their policies and practices on this subject. As we primarily operate with suppliers from European markets with legislative requirements, we believe that our current strategy and business model hold the necessary resilience to limit the negative impact within biodiversity and ecosystems. Hence we have not performed any further resilience analysis.We have engaged with relevant stakeholders from our own operations and upstream value chain to assess our impact on biodiversity in our own operation and in our upstream supply chain.As required by SBTi, our focus is primarily on reducing our emissions as much as possible by taking proactive actions across the value chain. However, we also want to give back to nature and have invested in two afforestation projects and expect to afforest approx. 470 hectares by the end of 2026.To ensure responsible forest operations, we will begin certifying our projects through a third-party certification system in the coming year.Please see the section General information page 50 for more detailed information related to the IROs identified.IRO processIRO-1 â Description of the processes to identify and assess material climate-related impacts, risks, and opportunitiesWe have identified Drivers of biodiversity loss: Climate change, Drivers of biodiversity loss: Land-use change, freshwater use, and sea-use change, Drivers of biodiversity loss: Pollution, Impacts and dependencies on ecosystem services to have a negative impact primarily in the upstream value chain but also in our own operation. The full process and methodology applied to identifying biodiversity and ecosystem related material impact can be found in the section General information.All our sites are located in industrial zones, designated for industrial operations, and we have no records indicating proximity to biodiversity-sensitive areas. Hence we do not have any activities related to sites located in or near biodiversity-sensitive areas negatively affect these areas and thereby concluded that it is not necessary to implement biodiversity mitigation measures.We adhere to national and local regulations and procedures for the protection of biodiversity and ecosystems, which are supervised by authorities. Therefore, the material impact is considered to be limited.The full process and methodology applied to identify material impact, risks, and opportunities in relation to biodiversity and ecosystems can be found in the section General information.Policies E4-2 â Policies related to biodiversity and ecosystemsWe do not have a biodiversity and ecosystem policy relating to the material impacts and risks identified. Our related policies such as Environment Policy, Sustainability Policy, Sustainable Procurement Policy, and Environmental Policy define our commitment to biodiversity and ecosystems. Our Sustainable Procurement Policy address responsible sourcing throughout the value chain and protecting people and nature. Traceability in the form of country of origin is identified in the product documentation.We seek to inspire our suppliers by demanding them to sign our Supplier Code of Conduct which emphasizes the protection of people and the environment.ActionsE4-3 â Actions and resources related to biodiversity and ecosystemsIn our own operation, biodiversity and eco-systems is anchored in our operations. Any incidents shall be reported to a management team member and reported to the EMS team.For the upstream value chain, pollution is addressed in our Supplier Code of Conduct under the chapter Environment, Pollution Prevention, and Resource Conservation as well as in our Sustainable Procurement Policy. Please see G1 Business Conduct on how we work with our suppliers to increase transparency, also covering environmental matters.On-going and future actions include:We will further align our policies towards the demands of the ESRS standards and other applicable international standards.We will continue to mitigate negative impacts and risks through our SBTi targets.We will continue the development of our afforestation projects and will make more details available in the coming reporting period.We will continue to monitor and follow up on our suppliers via our targets for risk assessment and signing of Supplier Code of Conduct.TargetsE4-4 â Targets related to biodiversity and ecosystemsWe have no direct targets in relation to biodiversity and ecosystems. For our own operations, we track and follow the progress of our afforestation projects. Signing our Supplier Code of Conduct, which contains several environmental elements, is an indirect target showing our suppliers commitment to this subject.Anticipated financial effects E4-6 â Anticipated financial effects from biodiversity and ecosystem-related risks and opportunitiesNo financial implications from biodiversity and ecosystems risks and opportunities have been identified. We will allocate potential additional resources/funds to the extend needed. For further information, please see the Taxonomy section.Solar locationsSBM-3 â Material impacts, risks, and opportunities and their interaction with strategy and business modelCountry CityCH NeuchatelCN JiangsuCZ BrnoDE NeusäÃDK Vejen, Brøndby, Svenstrup, Ã
rhus, Odense SV, Aalborg, Ã
byhøj, Torshavn, København NV, Rødby, Kastrup, Glostrup, Køge, Sønderborg, Vejle, Holstebro, Vedbæk, Nibe, HÃ¥rlevFR PontarlierGB CheshireIT CeccanoNL Alkmaar, RG Duiven, Amsterdam, DV Apeldoorn, AB Assen, Capelle, Den Haag, Ede, Eindhoven, Heerlen, Hengelo, Meppel, Oosterhout, Schiedam, Utrecht, Zwolle, Heerenveen, AmersfoortNO Gardermoen, Haugesund, Trondheim, Aalesund, Bodø, Mo, Harstad, Tromsø, Kirkenes, Kristiansand S, Sogndal, Oslo, Skien, Drammen, Tønsberg, Hamar, Bergen, StavangerPL Lodz, Warszawa, Gdansk, Poznan, Bielsko_Biala, Pila, Zielona Gora, Torun, Bialystok, Gliwice, Siedlce, Zory, Wroclaw, Krakow, Szczecin, Tarnow, Walbrzych, LublinSE Göteborg, Värnamo, Växjö, Jönköping, BorÃ¥s, Kista, Sköndal, Visby, Uppsala, Norrtälje, Norrköping, Ãrebro, VästerÃ¥s, Avesta, Gävle, Sundsvall, Karlstad, UmeÃ¥, Hägersten, Helsingborg, Högsbo, Gällivare, Kalmar, Linköping, Malmö, Halmstad, LuleÃ¥, Nacka, Stockholm, Osby, Varberg, UddevallaUSA Madison, PortlandResource use and circular economyIRO processIRO-1 â Description of the processes to identify and assess material resource use and circular economy-related impacts, risks, and opportunitiesAs a sourcing and services company, we are reliant on a significant number of products manufactured from both critical raw materials and virgin materials, leaving a waste track behind. Our double materiality assessment identified three negative impacts on our workforce: resource inflows/use (products and services), resource outflows (waste). We believe that circular economy practices will become increasingly important not just within our own production, but across our industry as well. We want to become part of the long-term solution. However, several challenges regarding reuse and waste sorting in our industry must be resolved to obtain a fully implemented circular economy culture.Most of our scope 3 emissions comes from the products we sell. We are reliant on significant amounts of critical raw materials used to manufacture the products we sell. By incorporating circularity practices across our value chain, we can reduce our carbon emissions while applying responsible waste management.Waste in our operations and value chain mainly consists of packaging waste from inbound product supply and outbound distribution.We comply with national and internal regulations and continuously evaluate our methods to improve waste sorting for optimised recycling, and we collect data on all relevant waste fractions. This is undertaken by Solar, with help from our waste management providers and through external audits.Policies E5-1 Policies related to resource use and circular economySolarâs Environmental Policy covers areas, such as waste management and environmentally friendly packaging. As we are ISO 14001 certified, we are committed to ensuring that guidelines in relation to the management of waste as well as hazardous waste and materials are strictly followed. As outlined in our Supplier Code of Conduct, we also engage with our suppliers to ensure that âthe use of natural resources, including water, fossil fuels, minerals, and virgin forest products are conserved by practices, such as modifying production, maintenance and facility processes, materials substitution, reuse, conservation, recycling, or other means.âActions and resources E5-2 Actions and resources related to resource use and circular economyIn our own operation, waste is anchored in our Operations department, which monitors our waste and recycling processes. Historically, and during the year under review, we focused on the following activities:We report monthly on all waste fractions relevant to Solarâs business model.We are currently running several pilot projects with the objective of recycling products used across our value chain.We strive to source 100% certified recycled cardboard packaging materials for use with our customers.We are constantly on the outlook for new processes and projects to create a positive impact on the resource and circular economy within our value chain.Targets E5-3 Targets related to resource use and circular economyIn relation to resource inflows, specifically in relation to cardboard packaging, we have a target of 100% recycled cardboard but without any timeline.We do not have targets for waste management. However, we manage waste according to national standards and requirements and closely monitor any updates in this regard. We endeavour to manage waste in a manner so as not to harm the environment by continuously improving our waste management programmes in collaboration with our waste managers. We will work towards setting targets in 2025.Resource inflows E5-4 Resource inflowsCompanies that manufacture electrical equipment rely heavily on resources such as metals, which require mining. These pose significant environmental threats as they must be sourced from different parts of the world.Almost all resources used in our supply chain derive from the extraction of raw materials, including the energy resources and transport involved. Moreover, it is likely that the products in our supply chain have been produced from virgin materials extracted from mines or natural areas. Extraction of these materials can have a significant negative impact on people and the environment. Through our Supplier Engagement Programme, we have a dialogue with our suppliers to reuse and recycle through circularity levers. Although relatively small, we depend on virgin resources in our packaging and distribution materials in our own operation, such as paper, pulp, and natural gas/crude oil for plastics. Dependence on virgin resources can be reduced, for example, by switching to recycled packaging materials and optimising packing methods. However, it is not possible to reduce dependency completely at this stage. We engage with our business partners in the value chain on recycling and circularity.Resource outflowsE5-5 Resource outflowsDue to the nature of our business, waste streams in Solar mainly consist of packaging waste (paper, cardboard, plastics, wood etc.) and electronic waste (minerals from batteries and other electronic devices as well as metal and plastics from cables etc.) that derive from damaged or returned products. We comply with the Waste Electrical and Electronic directive.Electronic waste is a significant waste stream in our industry. The products we sell have various expected lifetimes, with many products still not designed with circularity in mind (durability, repair, reuse, disassembly, and recycling). This generates general waste and e-waste that potentially causes indirect or direct harm to nature. Waste data is actual data collected and reported monthly by those responsible for collecting data. Accountability lies with Operations. Waste data is provided for most locations and subdivided according to material type, equivalent waste management type and weight.E5-5 Resource use and circular economyE5-5 â Resource outflows - waste Unit 2024Total waste generated kg 3,961,694Total hazardous waste diverted from disposal kg 26,226Hazardous waste diverted from disposal due to preparation for reuse kg 0Hazardous waste diverted from disposal due to recycling kg 26,226Hazardous waste diverted from disposal due to other recovery operations kg 0Total non-hazardous waste diverted from disposal kg 3,020,955Non-hazardous waste diverted from disposal due to preparation for reuse kg 0Non-hazardous waste diverted from disposal due to recycling kg 2,911,297Non-hazardous waste diverted from disposal due to other recovery operations kg 109,658Total hazardous waste directed to disposal kg 6,505Hazardous waste directed to disposal by incineration kg 6,505Hazardous waste directed to disposal by landfilling kg 0Hazardous waste directed to disposal by other disposal operations kg 0Total non-hazardous waste directed to disposal kg 908,008Non-hazardous waste directed to disposal by incineration kg 881,067Non-hazardous waste directed to disposal by landfilling kg 26,941Non-hazardous waste directed to disposal by other disposal operations kg 0Total weight of non-recycled waste kg 914,513Total percentage of non-recycled waste % 23Accounting policiesE5-5 â Resource outflows - wasteWaste Waste treatment volumes per final treatment are reported in absolute tonnage (in kg) of waste collected from Solarâs locations.All data is third-party data. The first three quarters of 2024 consist of actual data, whereas for Q4, data is estimated based on the average actual data from the previous three quarters. For Solar Poland, data is estimated based on the actual data for the two major locations, where approx. 66% of all full time equivalents are based.Socialinformation76ESRS S1 Our workforce81ESRS S2 Workers in the value chainOur workforceWe have a fundamental respect for the value of human life and dignity and want to foster a culture of respect, equality, and inclusion. This means providing favourable employment conditions for our employees and respecting labour and human rights. Our double materiality assessment has identified two negative impacts on our workforce: working conditions and equal treatment and opportunities for all.StrategySMB-2 Interests and views of stakeholdersWe listen to and incorporate our employeesâ opinions and concerns through our daily interaction and channels of communication. We view human rights as essential principles that safeguard peopleâs dignity and ensure freedom and respect within our own operations. The insights gained from understanding our workforceâs interests, views, and rights are integrated into our strategy and business model, ensuring alignment with the rights of our entire workforce. No special impacts or dependencies have been identified. Please see Stakeholder Engagement page 43.Our approach and policies S1-1 Policies related to own workforceWe will continue to focus on fostering a workplace and culture that promotes diversity, equity, and inclusion. We respect human rights and do not accept any form of discrimination or harassment.Human rights and labourOur Human Rights Policy covers the right to freedom of association, works councils, fair working conditions, trafficking, forced or compulsory labour, child labour and the elimination of discrimination in employment and occupation.The policy is in line with the UN Guiding Principles on Business and Human Rights and the International Labour Organisationâs (ILO) Declaration on Fundamental Principles and Rights at Work. It applies to Solar and constitutes the framework for how we work and look after employees. Our ethical requirements for our employees are set out in Solarâs Employee Code of Conduct.Should we identify adverse impacts that are directly linked to our operations, products, or services through our suppliers or other business partners, we call on the entity causing the adverse impact to cease, prevent or mitigate the impact, whether they are related to our own workforce, value chain workers, or affected communities.We are in constant dialogue with our works councils and employee representatives to ensure that the impact of labour and human rights in our own operations accords with our policies and regulations.Moreover our Supplier Code of Conduct is fully in line the with applicable ILO standards and address safety of workers, precautious work, human trafficking and forced or child labour.Health, safety, and well-beingPhysical and mental safety and well-being at the workplace are our top priorities, and we believe that they are fundamental drivers of a work-life balance. We foster a culture that promotes our employeesâ health and safety and strive to prevent any accidents.We are also dedicated to safeguarding the labour conditions of our employees, such as sickness, work-related injuries, parental leave, and retirement.We have implemented a Health, Safety, and Work Environment Policy, which sets the standards for how we protect and ensure the well-being of our employees. We have also implemented a set of cardinal rules that address core safety rules. Both cover all our employees. Accountability for health and safety lies with our VP Operations in Sweden.Moreover, we also comply with ISO 9001 (quality management system) and 14001 (environmental management system) to maintain a robust management system.Additionally, we have a range of support systems, and offer our employeesâ health insurance, including access to psychologists and other mental health professionals, and to crisis management. We have zero-tolerance towards harassment and have implemented our Sexual Harassment Policy. The purpose of this policy is to contribute to a work environment that is sound in terms of safety and health, where all employees in Solar thrive and feel safe. Accountability for well-being and the mitigation of negative impacts lies with Group HR.Diversity, equity, and inclusionOur ambition is to foster a diverse, equal, and inclusive culture and workplace. We respect human rights and do not accept any form of discrimination or harassment. Together with works councils and employee representatives, we focus on creating a diverse workforce and support for our managers. This also covers a commitment to equal pay and to ensuring equal pay for equal positions and competences when hiring or promoting employees.We are committed to diversity at senior management level and to continuing to raise the entry level of women among all employees. Our Recruitment Policy ensures an unbiased process when recruiting new employees. To support this, we have also introduced an Inclusion and Diversity Policy and the objective of this policy is to ensure that all employees in Solar are treated equally, irrespective of racial and ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national extraction or social origin, or other forms of discrimination covered by union regulation and national law.All policies cover all employees and have been implemented through the same procedures as other policies in Solar and any deviations from the policies are not allowed and will be reported back to ei