Statement of corporate social responsibility, cf. the Danish Financial Statements Act §99a 2022/2023

Menschenrechte

JPS Marselis is active in a large number of countries around the world. Regardless of where we have our operations, we always strive to observe human rights, value our employees and treat them with respect. We support and respect the UN’s international Universal Declaration of Human Rights, protecting human rights internationally, and observe ILO conventions and recommendations.

JPS Marselis has conducted an overall risk assessment with regard to human rights. The Group operates in different countries. However, there are no special risks associated with human rights in these countries.

The management of all activities is familiar with our policies and positions on human rights – regardless of geographical affiliation. The latter is thought to be a contributing factor to reducing the risk of human rights violations. There were no human rights violations during the year. With the measures described, there is not expected to be a particular risk in the future.

Social conditions and employee working conditions

At JPS Marselis, we believe that it is the people who achieve the results. We strive to be a responsible employer that ensures proper terms of employment, safe and healthy working conditions and a motivating working environment for our employees. We are a diverse workplace that contributes to the communities in which we have a presence by creating jobs and employing unskilled workers and people struggling to break into the job market.

JPS Marselis has conducted an overall risk assessment with regard to social conditions and employee working conditions. Given that JPS Marselis regards its employees as the Group’s most important resource, CR risks are thought to be an area of particular significance in the context of social conditions and employee working conditions.

The activities undertaken by the Group require employees to be dedicated and highly competent, with significant demands placed on their skills. For the most part, the company has an educated labour force or employees who have acquired the necessary skills after an induction and further training, making it possible to meet the company quality and safety standards. This is also a contributing factor in ensuring that a high level can be maintained in terms of working environment standard.

With regard specifically to social conditions and employee working conditions, activities taking place outside of the former ‘Western Europe’ (Latvia) are thought to be particular risks, because management culture and motivating working environments do not have the same prevalence and historic integrity as we know it in Denmark. For this reason, we place a particular focus on these areas in our day-to-day management and controlling of the subsidiaries. The outcome of this specific focus is thought to reduce the outlined risks. Continual improvements are being made to minimise the risks in this area. There have been no concrete cases in 2022/23 in those regards.

In terms of the policies in this area, no non-compliant activities/decisions were confirmed (in this area) for the financial year in question. The actions taken are considered sufficient to address the risks of infringements in this area going forward.

Anti-corruption measures and business ethics

Over the years, JPS Marselis has built up a reputation as a company that maintains a high level of integrity and ethical conduct. We counteract all forms of corruption, including bribery.

JPS Marselis has conducted an overall risk assessment with regard to anti-corruption measures and business ethics. The JPS Marselis vision is to be one of the best at creating value in a proper and credible manner, done by committing ourselves and our companies to assuming responsibility and acting in the interest of sustainability, regardless of the country of our business operations. This vision is firmly anchored in the manner in which JPS Marselis runs its business, which has helped to build up the Group’s good reputation. As such, it is not thought that this area poses a major risk for CR; even so, a firm focus is placed on it to ensure that a high standard is maintained.

With regard specifically to anti-corruption measures and business ethics, activities taking place outside of the former ‘Western Europe’ (Latvia) are thought to be particular risks. To provide some background, the business environment there typically is, or has been, susceptible to bribery and corruption, as these are considered important ingredients historically when it comes to meeting business targets. For this reason, we place a particular focus on these areas in our day-to-day management and controlling of the subsidiaries. The outcome of this specific focus is thought to reduce the outlined risks.

In terms of the policies in this area, no non-compliant activities/decisions were confirmed (in this area) for the financial year in question.

The Group has introduced a whistleblower scheme that complies with general practice for sound company management. The Group has introduced a whistleblower scheme that complies with general practice for sound company management. Under the whistleblower scheme, employees, customers, suppliers, partners or other stakeholders with a connection to JPS Marselis Group are able, in good faith, to report (anonymously or publicly) any serious circumstances potentially of significance to the company as a whole, or which may have significant meaning for the lives or health of individuals. Details of the whistleblower scheme are available in three different languages – English, Danish and German – at www.jpsmarselis.dk. In 2022/23, there has been no reporting via the scheme.

It is expected that the activities undertaken in this area will be sufficient to address risks in this area.

Climate and environment

JPS Marselis Group companies use raw materials in their work that are predominantly produced in a way that is positive for the environment. This applies both to the primary raw material, wood, which comes from forests in northern Europe, and to purchased plants. We recognise that transportation of raw materials, plus the production/processing that takes place subsequently, has an impact on the environment. Our CR policy for climate and environment requires us to take responsibility in relation to the environment and impact on the climate, doing so via proactive efforts to protect the environment, which includes reducing our consumption.

JPS Marselis has conducted an overall risk assessment with regard to climate and environment. As a result of continually reducing consumption of resources as a consequence of a desire for environmental responsibility and sound business practice, this area is not thought to pose a CR risk for the Group. When purchasing raw materials, certification tends to be a central requirement (e.g. FSC®), which means that we are ensuring that the raw materials fulfil a number of CR requirements.

JPS Marselis became part of the UN Global Compact Network in March 2023. This is official confirmation of the Group’s dedication to complying with internationally agreed principles for responsible business management and making a contribution to the global community meeting the UN’s global targets. In addition to the Group, Tropica, Hornbaek and Vahle have also become part of the Global Compact, as it makes good sense to involve the individual production companies, as they already focus on sustainable production. As part of the Global Compact Network, we get a unique opportunity to gain experience from other companies‘ experiences and get inspiration on how we can become even better and where to focus our efforts when.

At the end of 2022, Vahle was one of the first companies in Denmark to obtain a certificate of being a Climate Ready Production Company through the Confederation of Danish Industry.

In terms of the policies in this area, no non-compliant activities/decisions were confirmed (in this area) for the financial year in question. In relation to the policies described in this area, no unacceptable actions/decisions in this area were recorded during the financial year.

Description of action taken and outcomes

CR initiatives at the JPS Marselis Group are undertaken primarily at individual company level, with these ongoing efforts prioritised based on the areas with the greatest CR risk. This often links with the points of focus which are also business-related in perspective, i.e. social conditions and employee working conditions, as well as climate and environment.

2022/23 is the sixth year for the preparation of reporting on social responsibility (§99a).

Below is a brief status of the individual business areas.

Based on the course in lean and sustainable production, which all employees in Hornbaek, Tropica and Vahle as well as foreign subsidiaries completed in 2021/2022, all employees in 2022/2023 have played an active role in the companies‘ daily work to lift lean and sustainability to new levels. In addition, the employees have refreshed their knowledge of lean and sustainability in small sessions, and the companies‘ ‘board chairpersons’ have been trained in conducting board meetings.

Our employees regularly conduct courses aimed at taking on new areas of work, upskilling and personal development.

Instead of investing in new computers for the companies, the Group buys refurbished recycled computers. The computer is so well refurbished that employees can neither see nor feel that the computers have been used.

The Group’s CR policy provides a framework for a common approach to be taken by all our employees in relation to our values and our targets, i.e. to be sustainable and responsible in our actions. The policy outlines a series of guidelines and our expectations of one another, summarising how we should conduct ourselves as employees and as an employer. The policy is based on the UN Global Compact, and to strengthen the work within the four selected areas, JPS Marselis and its subsidiaries Tropica, Hornbaek and Vahle have joined the UN Global Compact.

Tropica and Dennerle Plants

Tropica has taken significant sustainable initiatives in two areas during the year:

• The conversion of HPS (high pressure sodium) lamps to LED lighting. It is a project costing app. DKK 1.6 million, where all the 750 W grow light lamps have been converted to the less energy-consuming LED light. Previously, around 750,000 kWh was used annually for grow lights alone, but preliminary figures suggest that we can reduce our consumption to around half or about 375,000 kWh/year. The lower heat release from the LED lighting requires slightly increased heating costs, which is clearly offset by the savings on the electricity part.
• Targeted work with resource-saving initiatives around their packaging and handling functions. It has primarily been the employees working in either the purchasing or dispatch group who, with the help of just ten different improvement proposals regarding the packaging of Tropica’s products and/or the individual work processes in the work area, have found solutions that can result in annual savings of almost half a million DKK! An impressive amount of creativity has been shown to „look into“ the various processes and find both large and small proposals that benefit the environment and save money on the bottom line.

At Dennerle Plants, significant savings in electricity consumption have been implemented through behavioural changes, which means a saving of 19% of the normal estimated power consumption in the 2022-23 season. This has been achieved without investments, but simply on changed behaviour and attention to consumption from all employees in the company.

Vahle

In December 2022, Vahle was one of the first companies in Denmark to be certified as a Climate-ready Production Company through the Confederation of Danish Industry. A plan has been developed to be climate neutral by 2025 (CO2).

Vahle expects to have EPDs ready on their interior doors by the end of 2023 (CO2 calculation on the individual products).

Vahle has established in-house surface treatment, which saves weekly transport to and from external painter. The new painting system reduces the overall climate footprint and reduces the amount of paint consumed per unit. In addition, a more energy-efficient drying process is achieved.

JPS Agro

Untouched forest promotes biodiversity and contributes to the UN’s Sustainable Development Goals. JPS has converted an area of 17,000 m² to untouched forest, which is part of a total forest area of 220,000 m² located less than a kilometre from Denmark’s highest „mountain“ Yding Skovhøj at 172 meters. In practice, this means that no wood may be removed in the area and that no new trees may be actively planted. The forest must live its own life.

Untouched forest plays a vital role in preserving and promoting biodiversity. When forests remain untouched by human activity, they allow a broad spectrum of plant and animal species to thrive and sustain natural ecosystems.

Untouched forest serves as habitat for a multitude of species. The diversity of trees, shrubs, plants, and undergrowth creates varied habitats and ecological niches for different organisms. It allows for a complex food network where different species interact and depend on each other for survival and reproduction.

Untouched forest contributes directly and indirectly to several of the UN’s Sustainable Development Goals, which are a collection of 17 Sustainable Development Goals. For example, untouched forest is linked to these objectives:

SDG 6: Clean water and sanitation – Untouched Forest plays a crucial role in conserving water resources and water quality. Forest areas function as natural water collection areas and help regulate water flows, reduce flooding, and improve water filtration.

SDG 11: Sustainable cities and communities – Preserving untouched forest can have positive effects on nearby communities. Forests can function as recreational areas, support ecotourism, and create economic opportunities for local communities through sustainable forest management practices.

SDG 13: Climate action – Untouched Forest plays a crucial role in combating climate change. Forests function as carbon dioxide absorbers and help reduce greenhouse gas emissions. Preserving virgin forest helps preserve the forest’s carbon stock and minimize CO2 emissions, which is essential to limit global warming.

SDG 15: Life on land – Untouched Forest is important for the preservation of biodiversity and habitat conservation for many plant species, animals, and microorganisms. By preserving virgin forest, we contribute to the conservation of endangered species, the preservation of ecosystem services and the maintenance of ecosystem health.

SDG 17: Partnerships for the goals – Preserving and protecting virgin forest requires cooperation across sectors, including governments, civil society, businesses, and local communities. Partnerships can promote conservation efforts, strengthen forest management, and create synergies with other objectives.

Support for charitable projects

In 2022/23, the Group has supported the following projects, which are described in more detail on jpsmarselis.com:

Kirkens Korshær work in Aarhus, which is home to the city’s homeless and odd existences.

Three-year climate agreement with DanChurchAid. The agreement focuses both on making a difference to the climate and on helping communities facing adversity due to climate change. The climate agreement will see more than 2,000 trees planted in Uganda, which, thanks to the absorption of CO2 this will achieve, is going to have a positive effect on the climate as well as a positive direct impact on the local community.

Donation of €25.000 to DanChurchAid’s efforts to help families fleeing war-torn Ukraine.

„SheWORKS“, which is a project under Made in Hope, which collaborates with trafficked women and their children in Manilla, Philippines. The project includes support and assistance for training that enables women to support themselves and have a better life.

In the areas of human rights, anti-corruption, and business ethics, we have in 2022/23 conducted overall assessments of the primary risks as a basis for further work. The work with the assessments is, like the development of the policies for social responsibility in general, carried out across the organization with representation from the group’s companies. This ensures a great awareness of the risk picture throughout the group. No other areas or actions have been found that require special handling.

In 2023/24, we will maintain the Group’s CR efforts in the areas described above.