NORTEK GROUP 2022

Due-diligence statement for
Responsible Business Conduct

Document information
Company Nortek AS
Prepared by Therese Baas, Karoline Wang Maarud
Reviewed by Finn-Ivar MarumApproved by Nortek board
Date 28.06.23

nortekgroup.com

Preamble
The actions of companies have significant impact, both positive and negative, on the lives ofcitizens around the world. Not only in terms of the products and services they offer, or the jobs
and opportunities created, but also in terms of working conditions, human rights, health, theenvironment, innovation, education and training.
For this reason, it’s expected that companies understand their positive and negative impacts onsociety and the environment by doing due-diligence exercises. This enables companies to,
identify, prevent, manage and mitigate any negative impact that they may cause, including within
their global supply chain. Living up to this duty is commonly known as 'corporate social
responsibility’ or ‘responsible business conduct' 1.

UN’s 17 Sustainable Development Goals, the foundation for responsible business conduct.
This report summarises Nortek’s due diligence work to promote and ensure fundamental humanrights and decent working conditions in the Nortek supply chain, among our business partners andrelationships, Ref. LOV-2021-06-18-99.
It’s a never-ending journey to advocate on topics such as workers and human rights, theenvironment, anti-bribery & corruption, and corporate governance. Nevertheless, it’s important!
We have gained a lot of knowledge during this process and our findings have been turned into
actions which in time will push forward incremental steps for more sustainable practices andimprove working conditions within our global supply chain.
Report contact person:

Therese Baas, Quality and Digital Director

Contact e-mail address:

gdpr@nortekgroup.com

www.nortekgroup.com

2

The Nortek board signature
The Nortek Board and CEO of the Nortek Group confirm to have received and read the report“Due-diligence Statement for a Responsible Business Conduct – Nortek Group 2022”.
This report is Nortek’s public statement to document the OECD due-diligence work undertaken in
2022.
Nortek Group
28 June 2023, Rud-------------------------------------------Atle Lohrmann
Chair of the board-------------------------------------------Finn-Ivar MarumCEO and board member

www.nortekgroup.com

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Table of Contents
1.

DUE-DILIGENCEPROCESS ................................................................................................. 62.

COMPANY OVERVIEW AND KEY INFORMATION............................................................... 7
2.1
2.2

3.

OVERVIEW ....................................................................................................................... 7
KEY INFORMATION ............................................................................................................ 7

SUPPLY CHAIN OVERVIEW .............................................................................................. 10
3.1
3.2
3.3

DESCRIPTION OF PURCHASING MODEL AND SUPPLY CHAIN ................................................... 10
KEY INFORMATION .......................................................................................................... 10
PARTS AND MATERIALS SOURCED GLOBALLY ...................................................................... 11

3.3.1

4.

Key global supply chains used by Nortek .............................................................................12

DUE-DILIGENCE PLANS ................................................................................................... 13
4.1
4.2

GOALS AND PROGRESS 2022 ........................................................................................... 13
PLANS FOR THE COMING YEARS ........................................................................................ 13

5. STEP 1: EMBED RESPONSIBLE BUSINESS CONDUCT INTO POLICIES AND
MANAGEMENT SYSTEM .......................................................................................................... 14
5.1
5.2

POLICY .......................................................................................................................... 14
MANAGEMENT SYSTEM .................................................................................................... 15

5.2.1
5.2.2
5.2.3
5.2.4

5.3

Oversight and responsibility ................................................................................................15
Embed responsible business conduct ..................................................................................15
Sustainability ......................................................................................................................16
Organisation and internal communication ............................................................................16

ENGAGEMENT WITH SUPPLIERS AND OTHER BUSINESS RELATIONSHIPS ................................. 17

6. STEP 2: IDENTIFY AND ASSESS ACTUAL AND POTENTIAL ADVERSE IMPACTS
ASSOCIATED WITH THE ENTERPRISE’S OPERATIONS, PRODUCTS AND SERVICES ........ 17
6.1
6.2

SCOPING EXERCISE TO MAP AND PRIORITISE ...................................................................... 17
IDENTIFY AND ASSESS SPECIFIC ACTUAL AND POTENTIAL ADVERSE RBC IMPACTS .................. 19

6.2.1
6.2.2

6.3

RISK EVALUATION AND PRIORITISATION ............................................................................. 20

6.3.1

7.

RBC risk assessment based on supplier geographical location ............................................19
RBC risk assessment based on sourced parts/materials and industry .................................. 19
Adverse impacts not prioritised ...........................................................................................21

STEP 3: CEASE, PREVENT AND MITIGATE ADVERSE IMPACTS ................................... 21
7.1
7.2

MITIGATION PLAN ............................................................................................................ 21
OTHER ACTIONS INITIATED TO MITIGATE ADVERSE IMPACTS ................................................. 22

7.2.1
7.2.2
7.2.3

8.

Sustainability and climate action .........................................................................................22
Combating corruption and bribery in own business and the supply chain .............................. 22
Procurement of products and services .................................................................................22

STEP 4: TRACK IMPLEMENTATION AND RESULTS ........................................................ 23
8.1

RESPONSIBILITIES AND WHO DOES WHAT ........................................................................... 23

8.1.1
8.1.2
8.1.3
8.1.4

9.

Senior management............................................................................................................23
Purchasing department .......................................................................................................23
Quality department .............................................................................................................23
HR department ...................................................................................................................23

STEP 5: COMMUNICATE HOW IMPACTS ARE ADDRESSED........................................... 24
9.1
9.2

PUBLIC INFORMATION ...................................................................................................... 24
STAKEHOLDER INFORMATION ........................................................................................... 24

10.

STEP 6: PROVIDE FOR OR COOPERATE IN REMEDIATION WHEN APPROPRIATE... 24

11.

REFERENCES ................................................................................................................ 25

www.nortekgroup.com

4LIST OF ABBREVIATIONS

Abbreviation

Full description

ISO

International Organization For Standardization

CSR

Corporate Social Responsibility

ESG

Environmental Social Governance

GDPR

General Data Protection Regulation

GHG

Greenhouse Gas

GRI

Global Reporting Initiative

HQ

HeadquartersHR

Human Resources

HSE

Health, Safety and Environment

ICT

Information and Communications Technology

KPI

Key Performance IndicatorOECD

Organisation for Economic Co-operation and Development

RBC

Responsible Business Conduct

SDG

Sustainable Development Goals

T&C

Terms and Conditions

UN

United Nations

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1. Due-diligence processThis report summarises Nortek Group’s work on transparency and due diligence to promote andensure fundamental human rights and decent working conditions in the Nortek supply chain, Ref.
LOV-2021-06-18-99. The report is based upon the UN’s Guiding Principles on Business andHuman Rights 2 and the OECD Due-diligence Guideline for Responsible Business Conduct 3.
The due-diligence process has six steps which describes how companies can implement a more
responsible and sustainable practice into their business model, Ref. Figure 1 below.

Figure 1: OECD Guideline due-diligence process and supporting measures 3. The process shouldbe aligned with the risks and company’s context, such as size, operations, markets and influential
power.
Performing a due-diligence process does not necessarily mean the business does not have any
negative impact on humans, the society, or the environment. The process both acknowledges the
positive contributions businesses make to economic, environmental, and social progress, but also
encourages businesses to be open and transparent about their challenges while working to
identify and mitigate the adverse effects of their business operations in collaboration withstakeholders.
The report structure is according to the OECD model, featuring individual chapters for each step.
Step 1: Embed responsible business conduct into policies & management systems
Step 2: Identify & assess adverse impacts in operations, supply chains & business relationships
Step 3: Cease, prevent or mitigate adverse impacts
Step 4: Track implementation and results
Step 5: Communicate how impacts are addressed
Step 6: Provide for of cooperate in remediation when appropriate

2. Company overview and key information
2.1 Overview
The Nortek Group, hereafter called Nortek, is an ocean technology company providing oceanographic
instruments for currents and waves measurements and underwater navigation systems. In addition to
the headquarter and manufacturing site in Norway, the company has a global presence with offices inseven countries and a network of distributors around the world.

Figure 2: Nortek global footprint and presence. 2/3 of all employees are located in Norway.
Nortek is committed to conducting its business in a responsible and sustainable manner and has astrong focus on environmental stewardship and social responsibility. Nortek commits to sustainable
operations to benefit people, nature, and the climate, and has established science-based targets foremission reduction. The company's operations are guided by a set of core values, including acommitment to innovation, collaboration, and ethical behavior for employees and the supply chain.

2.2 Key information
The key information is from the Nortek GRI Report 2022 4, following the GRI 102: General disclosures,
Organizational profile section.

102-1 Name of the organization
Nortek AS, org.no. 996 707 415 | Web: www.nortekgroup.com
102-2 Activities, brands, products, and services
Development, production, distribution and service of oceanographic instruments and underwaternavigation systems

www.nortekgroup.com

7102-3 Location of headquarters
Vangkroken 2, 1351 Rud, Norway
102-4 Location of operation
Nortek maintains operations/office locations in the following countries: Norway, UK, The
Netherlands, France, USA, Brazil, Japan, China and Australia. The manufacturing site is at HQ in
Norway. Visit www.nortekgroup.com/about/contact for office locations and agents.
In 2022 Nortek had 11 agents, business partners re-selling Nortek products. Africa (1), Asia (5),Europe (3), Central America (1) and Middle east (1)102-5 Ownership and legal form
Nortek is a privately held company owned 100% by General Oceans AS, org. no 927 002 264
102-6 Markets served
Nortek products are sold to customers world-wide through our own sales offices and agents.
102-7 Scale of the organization
Nortek had 156 employees in 9 different countries. The annual revenue for 2022 was 450 mill.
NOK.
102-8 Information on employees and other workers
As of December 2022, the number of Nortek’s full-time employees was 133, 15 part-time
employees, 5 contractors and 3 trainees. A small proportion of the Company’s employees havevoluntarily chosen to work part-time, and their terms and conditions are otherwise the same as forfull-time staff.
Employee distribution: Norway (92), UK (8), The Netherlands (15), France (11), USA (13), Brazil(3), Japan (2), China (9) and Australia (3)102-9 Supply chain
Nortek has rigorous policies and procedures in place in our certified Management System toselect, manage and follow-up suppliers.
Supplier Code of Conduct
Sets out the corporate social and ethical responsibility requirements which applies to all Nortek
suppliers. The code includes requirements related to environmental management, governanceand fundamental human rights and decent working conditions. These requirements are
implemented through Nortek’s supplier contracts and followed up on a regular basis throughmeetings and audits. In 2022 Nortek started to issue updated contracts to all major suppliers
including the new Supplier Code of Conduct.
Climate action and the environment
Nortek encourage its suppliers to disclose their carbon footprint, implement environmental
management system and set science-based targets to achieve emission reductions. The
Suppliers shall also establish own systems for waste management and recycling.
Local suppliers
Nortek supports local communities and local suppliers. Nortek performed an ESG assessment of
its 15 largest suppliers which make up more than 70% of supplied goods and services to thecompany. 80% are local suppliers based in Europe, while 20% are in the USA. Of the suppliers
based in Europe, 67% are in Scandinavia (Norway, Sweden and Denmark).
Due diligence
Nortek’s suppliers are held to the standards set forth in our Supplier Code of Conduct. In 2022 westarted to address the topics in supplier meetings and audits as part of the OECD due-diligenceprocess. The plan is to continue this process and monitor ESG risks with key suppliers.

www.nortekgroup.com

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102-10 Significant changes to the organisation and its supply chain (since last update)
In 2021, Nortek AS became part of the General Oceans Group. The General Oceans Groupconsists of four operating companies as of December 2022, Nortek, Reach Robotics, Strategic
Robotic Systems and Tritech.
Nortek continues the long-term relationships and open dialogue with our key suppliers.
102-11 Precautionary Principle or approach
In 2021, Nortek established the Sustainability Task Force to map, assess and act on thesustainability areas and activities most important to Nortek. In June 2022 we launched our climate
strategy at the Sales Summit and began the implementation. Nortek’s ambitious climate strategy
is based on three pillars:
1) Reduce own emissions with 1/3 by 2030.
2) Deliver carbon neutral products to our customers.
3) Enable healthier oceans through our technology and costal community support.
Throughout the year, ESG risks have been assessed on a regular basis and processes, such as
the Supplier Code of Conduct, have been implemented to ensure a responsible supply chain. The
work to implement an environmental management system in Nortek has begun, and the plan is tobecome ISO 14001 certified in 2023.
102-12 External initiatives
Nortek has adopted or endorsed external sustainability principles, standards and regulations
including, but not limited to:
E=Environment | S=Social | G= Governance
Description
ISO 9001 Quality Management
System

Type
E,S,G

ISO 14001 Environmental
Management
Paris Agreement

E

Greenhouse Gas Protocol

E

GRI Standards
Norwegian Transparency Act

E,S,G
S,G

Norwegian Accounting Act, § 3-3c –Corporate social responsibility

E,S,G

United Nations Sustainability
Development Goals

E,S,GInternational Labour Organization(ILO) standards
United Nations Universal Declarationof Human Rights
Report waste consumption to SSB(Norway)
GRI standards

S,G

E

S,G
E
E,S,G

Implementation
Nortek’s overall management system to ensure
quality and customer satisfaction.
New environmental management system integrated
with the Management System.
Our climate goals and plans are based on the Paris
agreement 5
The climate reporting/ CO2 accounting and statistics
are based on this framework.
Nortek’s ESG reporting follows the GRI framework.
New law enforced 01.07.22 to ensure human rights
and decent working conditions in the supply chain.
Covered by the Supplier Code of Conduct, duediligence process and management system.
Covered by several company policies and the newsustainability processes embedded in the
management system.
Even though we contribute to several SDG’s, Nortek
has selected 5 to concentrate on.
Supplier Code of Conduct is based upon ILO
principals.
The Code of Conduct and Supplier Code of Conduct
are based upon these principals.
Nortek has a waste handling system with tracking of
the amount in all waste categories produced.
Nortek has decided to report according to the GRI
standards and will issue a yearly GRI report.

www.nortekgroup.com

93. Supply chain overview
3.1 Description of purchasing model and supply chain
The central purchasing department at HQ in Norway handles all material and parts purchases for the
manufacturing site. The department uses the company standardised procurement process managing a
global supply chain.

Figure 3. Overview of top-level procurement process
•
•
•
•
•

The process documents the requirements and qualification of new suppliers incl. ESG risks
and documentation.
Management of the supplier contractual framework and Supplier Code of Conduct
Supplier risk management
Purchasing and managing competitive bids
Management and follow-up of key material and parts suppliers incl. forecasting

The Group Management Team at HQ is responsible to manage and follow-up local service suppliers.
Local management at each office location follow-up local service suppliers and business partners, incollaboration with the HQ.
Procurement of goods, services and parts are for the most part exposed to competition.
NOTE: Service suppliers have been exempted from the 2022 assessment as they pose less risk to thebusiness. These suppliers are mostly local, and the purchase value is minor compared to thematerial/parts suppliers.

3.2 Key information
Nortek’s suppliers provide materials, parts, and services to the company. While the services aremainly provided by local partners where our offices reside, the materials and parts are sourced worldwide following global supply chain patterns.
Table 1: Overview of supplier relationships
CategoryType

Comment

Number of suppliers the company
had a commercial relationship with in2022 (> 100k NOK)

426

Subsidiaries notincluded

Type of supplier

60% Material and parts suppliers
40% Service suppliers

www.nortekgroup.com

10Table 2: Overview of what is purchased.
Category

Material andparts

Supply chain

Global supply chain

Local supply chain
Services

What we buy
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

POM parts (plastic)
Electronics
Metal parts (titanium, aluminium, steel)
Cables and connectors
Batteries
Industrial ceramics
Chemicals
Machines and tools
OfficeElectricity
Cleaning
Banking
Groceries
Furniture
Consulting
Cloud services
IT equipment
Software applications

3.3 Parts and materials sourced globally
The global supply chains for extraction of raw materials, Ref. Table 2, are not unique to Nortek. Plastic
is made from oil & gas, precious metals and minerals are mined and electronics manufactured in large
factories supplying companies across the globe. The global supply chains are the same for most raw
materials and their processing. The materials are harvested/extracted/produced in the same way andfrom the same countries with equal challenges concerning human- and workers’ rights orenvironmental impacts.

Fossil feedstock

Steam cracking

Polymerization

Processing into
plastic type/granulate

Processing into
final parts

NortekFigure 4. Overview of plastic supply chain

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3.3.1

Key global supply chains used by Nortek

Table 3: Supply chain examples#

Material/
part

Supply chain

Processing
1.
2.

A

Metals andminerals

Mining, extraction ofminerals/metals andsmelting to puremetal/mineral bars.

3.
4.

1.
2.

B

Plastic

Oil/natural gas
extraction, refining forpolymerization toplastics.

1.
2.

1.

C

D

Electronics

Batteries

A + B + Manufacturingof electronic
components

A + B + Manufacturingof batteries

2.

Mining and crushing mineral/metal ore into smaller pieces
Chemicals, additives and high heat are used to extract thepure, raw materials which are melted at the foundry intobars.
Raw materials are purchased as bars or granulate.
Is milled into final parts or treads for further use in e.g.
electronics

Fossil feedstock, extractions from oil/gas reservoirs (wells).
Raw materials mixed and refined into Ethane and Propane at
the refinery. Then treated with heat and chemicals in aprocess called “cracking” which turns them into ethylene andpropylene.
Ethylene and propylene are combined with a catalyst to
create a polymer which are fed into an extruder to create
plastic tubes. Sold as tubes or granulate.
Milled or further processed into final parts

The raw materials are purchased and made into circuit board
components (micro chips, resistance etc.). Circuit board
components are purchased and printed into electronicboards.
The electronic boards are sold as final parts.

1. The raw materials, plastic, chemicals and electricalcomponents are purchased by sub-suppliers to manufacture
the batteries.
2. The batteries are sold typically through distributors to theend users.

Adverse impacts and industry risks•

A1) Mineral extraction and processing are associated with a broad range ofhuman rights risks, including forced displacement, land grabbing,environmental destruction, dangerous working conditions and child labour
violations. Conflict minerals incl. tin, tantalum, tungsten and gold have been
linked with funding killings, violence and other human rights abuses inconflict zones of the world.

•

A2) Risk and concerns within the chemical industry include, among other,
dangerous materials such as explosives, gases, inflammable liquids, toxic
and oxidizing substances.
B1) Oil & gas are a non-renewable resource, which contributes to high carbon
emissions and adverse climate impacts. Waste mismanagement and pollution ofplastic in the sea and land.

••

B2) The exploration and development are associated with several risks such as
land grabbing, geopolitical unstableness over the fight for energy, disruption ofanimal habitats and oil spills which affects animals/nature/humans who dependon these ecosystems.

•

B3) Workers face dangerous working conditions (risk of fire and explosion) andtoxication due to high use of chemicals (see A2) and additives.

•

See A1, A2, B1, B2, B3•

C1) The electronics industry is exposed to excessive working hours, poverty
wages, forced labour, and dangerous working conditions. The sector also
drives mineral mining expansion. The industry consumes an estimated 35%
of global copper production and 9% of total gold production.

•

C2) Chemicals can be found in almost every aspect of the production
process of electronic products manufacturing.

•See A1, A2, B1, B2, B3, C1

The supply chains for materials and parts may consist of a combination of the above and with several distribution channels before reaching Nortek.

4. Due-diligence plans
The 3-year plan to assess the different areas of our supply chain are based on an overall risk
assessment considering:•••

Suppliers which we purchase in volume from on a regular basis.
Suppliers and business partners we may influence the most based on revenue.
Area of the world where the supplier or business partner is located.

The risk and influential powers increase with the amount purchased. Suppliers and business
partners with a revenue below 1 mill. NOK are not included in the assessment at this stage as
their contribution to the total supply chain risk picture is considered low.
Nortek has the most influence over the suppliers whom we purchase in volume from on a regularbasis and with the highest revenues.
The focus in this report has been the top tier suppliers > 1 mill. NOK.

4.1 Goals and progress 2022
Table 4: Goals and progress 2022
Year 1
1
2
3

Goal

StatusPerform due-diligence of top 15 material and parts
suppliers > 1 mill. NOK
Establish templates and framework for the OECDdue-diligence process within Nortek
Include ESG topics in the supplier risk assessment
process

Completed
Completed
In progress

4.2 Plans for the coming years
Table 5: Due-diligenceplans
Timeline

Supply chain area

Comment

Year 2:2023•

Perform due-diligence of all material and parts
suppliers > 1 mill. NOK
Perform due-diligence of top tier services
suppliers > 1 mill. NOK
Integrate ESG into supplier audits

The top tier service suppliers
are primarily in Norway or
Scandinavia and as suchconsidered low risk suppliersin terms of ESG aspects.

Perform due-diligence of top business partners(agents/re-sellers) > 1 mill. NOKBusiness partners areprimarily considered to be the
network of re-sellers selling
Nortek’s products in areas of
the world where we are notpresent.

••
Year 3:2024•

Continue the OECD due-diligence process and the supplier/business partner risk assessment for
all suppliers and partners above the 1 mill. NOK threshold.

5. Step 1: Embed responsible businessconduct into policies and management
system
5.1 Policy
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 1.13.

A Responsible business conduct has been an integrated part of Nortek’s Group Policies for several
years. Currently, we operate seven policies and one whistleblowing procedure:
•
•
•
•
•
•
•
•

Code of conduct
Supplier code of conduct
Health, safety & working environment.
Quality
Privacy & GDPR
External environment & sustainability
Communication
Whistleblowing procedure

Social responsibility and governance topics are part of all the policies. The policies are available from
Nortek’s website, www.nortekgroup.com and to all employees in the Management system.
The Supplier Code of Conduct is based on the UN declarations, core ILO conventions, UN Global
Compact’s 10 principles for sustainable development and the OECD Anti-Bribery Convention. It
addresses the following topics:
•
•
•
•
•
•
•
•
•
•
•
•
•
•

Laws and regulations
Labor rights and working conditions
Child labor
Forced labor
Freedom of association and the right to organize
Corruption, business integrity and reporting
Environment, environment permits and reporting
Resource efficiency, recycling, and clean energy
Hazardous and restricted substances
Responsible materials sourcing and conflict minerals
Information disclosure
Cooperation
Non-compliance
Supplier’s declaration

Nortek’s major suppliers must sign the Nortek Supplier Code of Conduct or document they have theappropriate systems in place to meet the requirements of the Nortek Supplier Code of Conduct.

www.nortekgroup.com

14

5.2 Management system
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 1.23.

5.2.1

Oversight and responsibility

Nortek Board:

The Transparency act 6 and due-diligence process are anchored with theNortek board, and the report has been signed by the board members. The
Quality department is responsible for the due-diligence process and topresent the results to the board.

Group Management
Team:

The Group Senior Management has been involved in shaping the process
and implement it within the company in their respective departments.

5.2.2

Embed responsible business conduct

Nortek recognizes that our company may potentially contribute to adverse effects on people and theenvironment through our business model and supply chain. We are committed to embed sustainability
and responsible business conduct into our strategy and all business areas in the company throughNortek’s ESG framework.
Nortek’s ESG framework, Ref. Figure 5, is guided by our policies. The corresponding businessprocesses ensuring daily activities and the OECD due-diligence process can be found in thecompany’s Management System.

Figure 5: Nortek’s ESG framework is based on the company policies
Nortek operates a Management System for the administration of its activities at all levels of theorganization. The system is certified in compliance with international standards ISO 9001:2015 and by
end of 2023 ISO 14001:2015. It meets requirements set out by public authorities, in the statutory
regulations governing internal control systems for systematic health, safety and working-environment
related activities as well as requirements from our customers and business partners.

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15

Specific ESG KPI’s have been established and are followed-up by the Group Management Team andrespective departments.
Risk management is handled by the Group Management Team and mitigating actions are initiatedwhen potentially adverse effects are detected. It’s the Group Management Team’s responsibility toestablish plans, stop or mitigate activities which are not in line with Nortek’s ESG framework, company
policies, laws or local regulations.
5.2.3 Sustainability
Nortek is committed to sustainable operations and to manage the business and activities to promotesustainability. Nortek conducts a materiality assessment every other year to prioritize the issues thathave the biggest impact on the business, communities, and the environment. To achieve long-termsustainability for the business, a responsible supply chain is essential. A responsible supply chain
ensures ethical and sustainable sourcing of materials and components, thereby minimizing thenegative impact on the environment. By adhering to responsible practices, such as reducing carbon
emissions, conserving natural resources, and promoting eco-friendly manufacturing processes, Nortek
can contribute to mitigating climate change.
A responsible supply chain also involves social and governance topics promoting social responsibility
by upholding fair labour practices and ensuring welfare of workers. The business strives to work with
suppliers and partners to provide safe and healthy working conditions, fair wages, and respect forworkers rights through Nortek’s Supplier Code of Conduct, external ESG audits, supplier follow-up
meetings and supplier qualification process.
Thirdly, a responsible supply chain enhances our resilience and reduces supply-chain risks. By
holding suppliers accountable for compliance with quality standards, ethical conduct, and legal
requirements, Nortek can minimize the potential risks associated with poor supplier practices, such as
product defects, legal liabilities, and reputational damage. Nortek therefore values a responsible
supply chain as extremely important in terms of both internal and external relations.
5.2.4

Organisation and internal communication

Functions, departments and roles involved with the due-diligence assessments.
Quality department:

Responsible for the company’s policies and due-diligence process,overarching ESG strategies, plans and risk management process.

Central purchasing
department:

Responsible for implementing sustainability and due-diligence into the
procurement framework. Actively perform due-diligence when exercisingprocurement activities.

Marketingdepartment:

Responsible for ensuring that Nortek is compliant with the communication
requirements set forward by the Transparency Act through the company
website.
Monitor and follow-up own service suppliers and business partners on aregular basis and, where necessary, perform due-diligence assessments.

Management andsubsidiaries:

A key group consisting of the Group Management Team, the Quality Department and thePurchasing Department has been established. The group has received information and training on
the Transparency Act and due-diligence process and will further provide support to theorganization.

www.nortekgroup.com

16

5.3 Engagement with suppliers and other business relationships
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 1.33.

The company’s supplier qualification process considers several parameters concerning quality, costs,
and supply chain risks incl. ESG topics. The ESG topics are addressed in the Supplier Code of
Conduct 7 and in the supplier audit program.
The procurement department has regular supplier meetings with its key suppliers to mitigate risks inthe supply chain to sustain a responsible production. These operational meetings are also used to
discuss ESG topics with Nortek’s suppliers when found relevant.
Nortek’s business relationships will be addressed at a later stage, see section 4 for the due-diligenceplan.

6. Step 2: Identify and assess actual andpotential adverse impacts associated withthe enterprise’s operations, products andservices
6.1 Scoping exercise to map and prioritise
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 2.13.

The exercise is performed in Nortek’s due-diligence tool based upon the requirements of theOECD due-diligence guidelines 3. The overall risk mapping as shown in the dashboard on the next
page, cover risks related to the geographical location of the supplier, exposure by industry sector,
purchasing volumes and certifications/policies. Publicly available information sources and supplier
feedback have been used in the assessment.
The primary focus has been on the top 15 material and parts suppliers > 1 mill. NOK, Ref. section
4.
The risk is further broken down and presented in the following sections:••

RBC risks concerning primary suppliers based on geographical location
RBC risks concerning primary suppliers based on industry. Also addressing thecomplexity of the supply chain and parts/materials used.

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Figure 6: Nortek’s Supplier due-diligence dashboard 2022

6.2 Identify and assess specific actual and potential adverse RBC impacts
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 2.2 and 2.33.

6.2.1

RBC risk assessment based on supplier geographical location

In 2022, Nortek’s top 15, primary suppliers were from countries in Europe and the USA. 73% of
the suppliers came from very low-risk countries such as Norway, Denmark, Sweden and
Switzerland, while 27% came from medium risk countries such as the UK and the USA according
to the Global Rights Index 8.
On a general basis, human rights violations in the USA may include limitations on certain working
groups in terms of union organisation, collective bargaining and the right to strike.
Nortek’s primary suppliers have several sub-suppliers and business partners of their own. 1/3 ofall purchased materials and parts came from Norwegian, primary suppliers.
6.2.2 RBC risk assessment based on sourced parts/materials and industry
Table 6: RBC risk assessment
Industry
Electronics

Risk assessment
The complex supply chain of electronics is one of the fastest growing
industries globally. Lack of effective regulations means that assembly
workers’ human rights are not effectively protected further down in the
supply chain. The sector also drives mining expansion for minerals such asgold and copper. Mineral extraction comes with a broad range of humanrights risks including forced displacement, land grabbing, environmental
destruction, dangerous working conditions and child labour violations9.

Adverseimpacts
Ref. Table
3, #C

Additionally, chemicals can be found in almost every aspect of theelectronics production process that involves mining. Many workers are thus
exposed to significant health risks, such as miscarriages and cancer.
Several of the chemicals still used in Asia are banned from the electronics
industry in Europe and the USA.
Lately, the dramatic growth of e-waste has turned into a growing
environmental concern.
Milled parts(minerals,
metals)

The supply chain for milled metal parts is less complex and can often
easily be traced back to the raw material extraction from the metal bars.
Metal extraction drives mining with the same challenges as previously
described.

Ref. Table
3, #A

Milled parts(plastic)

Plastic is made from hydrocarbons such as oil and gas in different
polymerisation processes. It’s often difficult to trace the full supply chain
back to the origin country as the raw oil/gas are sold on the stock
exchange, and different qualities from different fields are mixed at theterminal prior to arriving at the refinery. Oil and gas are in many cases
extracted from wells in non-democratic countries with risks for humanrights breaches, land exploration, extensive use of chemicals, andassociated health risks and environmental concerns regarding fossil fuels.

Ref. Table
3, #B

Chemicals

Nortek uses very small amounts of chemicals. However, there will always
be health risk and environmental concerns with the production ofchemicals.

Ref. Table
3, #A-A2

Consist of metals, plastic and chemical coatings. See risk assessment
above.

Ref. Table
3, #A, #B

CablesIndustry

Risk assessment

Adverseimpacts
Ref. Table
3, #A

Ceramics

Industrial ceramics contain led oxide, which in a free form is a toxic
compound. About 50% of all led is mined in Asia. See risk assessment ofmining.

Battery

Batteries contain chemicals and rare metals such as e.g. lithium. Non rechargeable batteries contribute to the growth of EE-waste which in turn is a
growing environmental concern, while rechargeable batteries are an
important source for storage of renewable energy.

Ref. Table
3, #D

Packaging

Packaging materials used are mainly paper/ cardboard, plastic and reusable wood boxes. Wood is a renewable resource and trees are important
to absorb the carbon dioxide. See risk assessment of plastic.

Ref. Table
3, #B

6.3 Risk evaluation and prioritisation
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 2.43.

Based on the risk evaluation of adverse impacts we have taken into consideration thegeographical location, parts/materials industry, supply chain complexity and ESG. In addition, we
have prioritised based on:•••

Purchased volume
What we can influence
What we think our external stakeholders are concerned about when it comes to products
and services we provide

The suppliers have been plotted in the diagram in Figure 7 to identify where to prioritise ourefforts and to single out suppliers or industries which are found to be material with respect to
RBC.

INDUSTRY RISK BASED ON MATERIAL

Electronics

Batteries
Milled parts A
Ceramics A

Sensors

Ceramics B
Cables &Connectors
Milled parts B

Chemicals
Packaging

GEOGRAPHICAL RISK

Figure 7: Material risk plot. A and B is used when the same material/part is supplied from different
geographical locations of the world.
The outcome of the evaluation is what we will focus on going forward. In the 2023/2024 timeframe we plan to complete an assessment of working conditions in the USA, where several of ourprimary suppliers are located.

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6.3.1 Adverse impacts not prioritised
There are several ethical and human rights dilemmas connected to the extraction of raw materials
used in the production of Nortek instruments. Raw materials such as oil/gas (plastic), titanium,
lithium, copper, tin, gold, tantalum, cobalt, are all in general mined or extracted from countries
with increased risk profiles. Some raw materials are sourced from a diverse group of countries,
while others are only found in specific geographical locations. Child labour and forced labour are
two serious risks associated with raw material extraction. In addition, loss of lives as a result ofpoor HSE, serious pollution affecting human health and deterioration of the natural environment
are all known risks.
Nortek’s suppliers are required to follow the Nortek Supplier Code of Conduct when sourcing raw
materials and to obtain sourcing certificates.
Given the limited possibility of influence and access to information, the risks associated with theextraction of raw materials are not further prioritised in Nortek’s further work.

7. Step 3: Cease, prevent and mitigate adverse
impacts
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 3.13.

7.1 Mitigation plan
Table 7: Mitigation plan
What
Supplier
Code of
Conduct

ESG audits

Conflict
Minerals

Cease, prevent, mitigate - Goals

StatusThe Code of Conduct is created for the purpose of
ensuring that Nortek’s suppliers adhere to high
RBC standards including safe working conditions,workers rights, human rights, anti-corruption, andother ethical practices.

2022
All top 15 tier primary
suppliers have signed
the document.

An ESG audit evaluates the environmental, socialand governance risks from a supplier or business
partner’s operations. It’s a tool used to provide
assurance that the information reported is correct.

Nortek has established a process for handling ofConflict Minerals 9. Raw minerals are only indirectly
sourced as part of other components.
The process is used to provide assurance that theminerals indirectly sourced do not come from conflict2022
One ESG audit
performed
2023/2024
Start to perform ESG
audits as a tool toassess working
conditions with key
suppliers in NorthAmerica.
2022
Top primary electronics
suppliers address
Conflict Minerals
2023/2024

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What

Training andimproveprocurement

Cease, prevent, mitigate - Goals

Statusareas, where armed groups often use forced labourto mine minerals, they then sell those minerals tofund armed activities.

We will re-assess theprocess.

Training of the central Procurement Department toenhance due-diligence and RBC understanding,
improve procurement process and establish goodpractices.

2023/2024
Update procurement
process based on duediligence assessment

See also the due-diligence plan in section 4.

Other actions initiated to mitigate adverse impacts

7.2

Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 3.23.

Other cross-cutting measures to stop, prevent, or reduce negative impact on people, society andthe environment in the supply chain.
7.2.1
•
•
•

•
•

7.2.2
•
•
•
•

7.2.3
•
•

Sustainability and climate action
Nortek is currently formalizing our environmental commitment with the environmental
certification of ISO 14001.
We are committed to developing durable and repairable instruments of high quality with along life expectancy.
The ocean is the world’s largest eco system. Nortek’s technology is used to measureadverse climate impacts from currents and waves, erosion, ice melting, water
management and increased temperatures. Helping scientists and nations know more
about the ocean and how ocean systems influence humans, livelihoods, species andclimate.
Nortek has set science-based climate targets following the Paris agreement’s goal of
limiting global warming to 1.5 degrees.
The climate accounting satisfies the requirements of the GHG Protocol for the entire
company's operation and was first published for the years 2019-2022 last year.
Combating corruption and bribery in own business and the supply chain
Nortek has zero tolerance for corruption and bribery. This is clearly stated in the Group's
policy.
The Code of Conduct applies to all employees. Yearly training and signing the code is
mandatory.
Violations are notified in the Group's Integrity Line channel and followed up.
The Central Purchasing Department works to ensure that our suppliers sign and comply
with the Supplier Code of Conduct.
Procurement of products and services
The Purchasing Department sets the requirements for relevant certifications and productrequirements in the purchasing processes based on input from other departments.
Sustainable products and services are preferred.

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8. Step 4: Track implementation and results
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 4.13.

The OECD due-diligence process has been implemented into Nortek’s certified Management
System. Implementation and results are followed up through the Plan, Do, Check, Act cycle in thesame way as other management processes.
Nortek expects that the sum of the measures described in this report will continuously reduce therisk for violation of human rights and poor working conditions in our value chains. We believe
active assessments and approval schemes linked to risk suppliers will give greater effect andimproved control, than sending out "general questionnaires" to all.
The Group also expects to gain increased knowledge and thus increased opportunities toimplement appropriate measures through:•••Dialogue with stakeholders (e.g. suppliers, customers, partners and employees)
Regular reviews against the Group’s KPI’s
Audits and third party assessments

8.1 Responsibilities and who does what
8.1.1 Senior management
The ESG strategy, due-diligence KPI’s and results are reviewed by the Group’s Senior
Management annually. Based on the review, plans are made and adjusted accordingly. The
results and future plans are presented to the Nortek board.
Training in the Group’s Code of Conduct is placed with the Senior management.
8.1.2 Purchasing department
The central purchasing department monitors risks associated with the purchasing process andsupplier T&Cs incl. the Supplier Code of Conduct. Both Central Procurement, local procurement
and procurement contract owners must follow up on measures concerning supplier risks
according to the due-diligence and supplier qualifications processes.
8.1.3 Quality department
The Quality Department is the central department for governance, compliance, risk management
and internal control. Responsible for the Nortek Group’s Sustainability and ESG work incl. thedue-diligence process. The department looks after the Group's Management System, ESG audits,climate accounting and HSE, in addition to the quality assurance. It’s responsible to drive theimplementation, compliance, reporting and follow-up. The department also follows up projects andinitiatives to ensure that the Group achieves its targets in collaboration with other departments.
The department monitors risks and work preventively according to regulations such as theWorking Environment Act 10, the Internal Control Regulations 11, Fire and Explosion Protection 12,
Transparency Act6, environmental regulations and several more.
The department presents the due-diligence report and risk assessment to the Nortek Board.
8.1.4

HR department

The function operates an internal whistleblowing channel for the Nortek Group, the Nortek
Integrity Line in collaboration with an external partner. The department is also responsible for theannual Working environment survey within the company.

9. Step 5: Communicate how impacts are
addressed
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 5.13.

9.1 Public information
Sustainability has its own area/tab on the group's website www.nortekgroup.com, with a link to
information about the Group’s work with the Transparency Act and the due-diligence report.
The due-diligence report will be updated and published annually. Nortek has chosen to betransparent and to follow the OECD due-diligence process when reporting externally.
A separate e-mail address gdpr@nortekgroup.com should be used for handling and responding toexternal inquiries regarding the Transparency Act. Inquiries will be followed-up by the Quality
department.

9.2 Stakeholder information••

Suppliers: Meetings, follow-up and audits
Business partners: Meetings and follow-up

10. Step 6: Provide for or cooperate inremediation when appropriate
Ref. OECD Due Diligence Guidance for Responsible Business Conduct section 6.13.

The Nortek Group will be guided by the following principles when it has caused or contributed toadverse impacts within the primary supply chain:•

Attempt to restore the situation the affected person or persons would have been in without
the damage (if possible), and arrange for restoration that is in proportion to the nature of
the damage.

•Comply with the local law and search for international guidelines for recovery whereavailable.

•

Which type of recovery or combination of recovery measures is appropriate will depend on
the type of damage and the extent of the damage. It can be apologies, compensation or
restitution, financial or non-financial compensation, sanctions or taking measures toprevent future damage.

•

Where human rights are affected, affected rights holders and their representatives must
be consulted and involved in order to decide how the possible human rights violation is tobe rectified.

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2411. References
1 European Commission, “Corporate social responsibility & Responsible business conduct”,
Internal Market, Industry, Entrepreneurship and SMEs https://single-marketeconomy.ec.europa.eu/industry/sustainability/corporate-social-responsibility-responsiblebusiness-conduct_en
2 UN. Office of the High Commissioner for Human Rights (2011), Guiding Principles on Businessand Human Rights: Implementing the United Nations "Protect, Respect and Remedy” Framework.
New York; Geneva.
3 OECD (2018), OECD Due Diligence Guidance For Responsible Business Conduct.
4 Nortek Group (2022), Nortek GRI Report 2022.
5 UN (2015), Paris Agreement.
6 Act 18. June 2021 nr. 99 relating to enterprises' transparency and work on fundamental humanrights and decent working conditions (Transparency Act)
https://lovdata.no/dokument/NLE/lov/2021-06-18-99
7 Nortek Group. Nortek Group Policy: Code Of Conduct.
8 ITUC (2022), 2022 ITUC Global Rights Index.
9 Make ICT Fair (2021), Human rights risks in the ICT supply chain.
10 Act. 17. June 2005 nr. 62 relating to the working environment, working hours and employment
protection, etc. (Working Environment Act) https://lovdata.no/dokument/NLE/lov/2005-06-17-62
11 Regulation 6. December 1996 relating to systematic health, environmental and safety work inbusinesses (Internal Control Regulation) https://lovdata.no/dokument/SF/forskrift/1996-12-061127
12 Act 14. June 2002 relating to protection against fire, explosion and accidents involving
dangerous substances and about the fire service's rescue tasks (Fire and Explosion ProtectionAct) https://lovdata.no/dokument/NL/lov/2002-06-14-20

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Public information about Sustainibility and the Transparency
Act is available on www.nortekgroup.com.
External inquries can be sent to: gdpr@nortekgroup.com

nortekgroup.com