Table of Contents
About ESG and This Report ................................................................................................................. 3
1

A Message from Our CEO ................................................................................................................... 42

ESG at Novanta .................................................................................................................................... 6
2.1 About Novanta............................................................................................................................... 6
2.2 ESG Strategy ................................................................................................................................ 7

3

Governance ........................................................................................................................................ 12
3.1 ESG Oversight ............................................................................................................................ 12
3.2 Ethics and Compliance ............................................................................................................... 14
3.3 Responsible Procurement ........................................................................................................... 17
3.4 Safety Standards ......................................................................................................................... 18
3.5 Risks and Opportunities .............................................................................................................. 19

4

Social .................................................................................................................................................. 22
4.1 Our People .................................................................................................................................. 22
4.2 Environmental, Health, and Safety.............................................................................................. 22
4.3 Diversity, Equity, and Inclusion ................................................................................................... 23
4.4 Training and Leadership Development ....................................................................................... 26
4.5 NovantaCARES .......................................................................................................................... 26

5

Environment ....................................................................................................................................... 28
5.1 Our Environmental Goals ............................................................................................................ 28
5.2 Climate and Energy ..................................................................................................................... 29
5.3 Environmental Management ....................................................................................................... 32
5.4 NovantaSUSTAIN ....................................................................................................................... 33

6

ESG Metrics and Targets .................................................................................................................. 35
SASB Index ......................................................................................................................................... 35
TCFD Framework ............................................................................................................................... 42

Appendix A ................................................................................................................................................ 43
ESG Data Tables ................................................................................................................................ 43
Appendix B ................................................................................................................................................ 45
Energy and GHG Emissions ............................................................................................................... 45
Appendix C ................................................................................................................................................ 46
Boundaries and Methodology ............................................................................................................. 46
Appendix D ................................................................................................................................................ 47
LRQA Independent Assurance Statement .......................................................................................... 47

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About ESG and This Report
At Novanta Inc. (“Novanta”, the “Company”, “we” or “our”), we deliver innovations that matter. From lifesaving surgical technologies to advanced industrial technology solutions for electric vehicle production,
Novanta products enhance people’s lives, increase safety, and improve productivity of our customers andend-users. As our world changes and our business grows, we are working hard to advance ourEnvironmental, Social, and Governance (ESG) initiatives. This is Novanta’s third annual ESG Report,
covering the period from January 1, 2022 to December 31, 2022.
Novanta’s 2022 ESG Report discloses our ESG progress and priorities, aligned with leading reporting
frameworks, including the Sustainability Accounting Standards Board (SASB) and the Task Force on
Climate-Related Financial Disclosures (TCFD).
Novanta’s strategic priorities revolve around both organic growth and inorganic growth, throughinvestments in both existing businesses and complimentary business acquisitions. Future acquisitions are
expected to have a significant impact on our reported Greenhouse Gas (GHG) emissions and other ESG
goals, as well as our progress towards the short-, medium- and long-term goals that we set for ourselves.
We plan to adopt the following reporting approach that will help enhance both the transparency and theusefulness of our ESG reports.
•••

For the year during which a business acquisition is consummated, we will exclude the new acquisition
from our ESG reporting scope. We will begin to include the newly acquired business in our scope
starting with the first full fiscal year following the acquisition date.
For the first full fiscal year following the acquisition date, we will present our GHG inventory both on
an “Organic” basis, i.e., excluding the emissions from the acquired business, and on a “Reported”
basis, i.e., including the emissions from the prior year acquisition for the full year.
In addition, we will reset our base year for both our GHG inventory reporting and our GHG emissions
reduction goals based on the Reported GHG emissions for this first full fiscal year following theacquisition date.

This report contains certain forward-looking statements based on Novanta management’s current assumptions andexpectations, including statements regarding our sustainability targets, goals, commitments, programs, acquisitions
and their impact on our sustainability goals and targets, and other business plans, initiatives, and objectives. Thesestatements are typically accompanied by the words “will,” “could,” “would,” “should,” “intend,” “hope,” “believe,”“expect,” “estimate,” “plan,” “aspire,” “aim,” “goal,” “pledge,” “potential,” or similar words and expressions. The
Company makes such forward-looking statements under the provision of the “Safe Harbor” section of the Private
Securities Litigation Reform Act of 1995. Actual future results, including the achievement of our targets, goals, orcommitments, may vary materially from those projected, anticipated, or indicated in any forward-looking statements
as a result of changes in circumstances, assumptions not being realized, or other risks, uncertainties and factors.
Such risks, uncertainties and factors include the risk factors discussed in Item 1A of our most recent Annual Reporton Form 10-K filed with the Securities and Exchange Commission (SEC), as well as, with respect to our sustainability
targets, goals and commitments outlined in this report or elsewhere, the challenges and assumptions, risks,
uncertainties, and factors identified in this report. You should consider the forward-looking statements in this report inconjunction with our Annual Report on Form 10-K for the year ended December 31, 2022, and our subsequent
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K filed with the SEC. Novanta urges you to
consider all of the risks, uncertainties, and factors identified above or discussed in such reports carefully in evaluating
the forward-looking statements in this report. Novanta cannot assure you that the results reflected or implied by any
forward-looking statement will be realized or, even if substantially realized, that those results will have the forecasted
or expected consequences and effects. The forward-looking statements in this report are made as of the date of thisreport, unless otherwise indicated, and we undertake no obligation to update these forward-looking statements toreflect subsequent events or circumstances, except as required under applicable law.

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1

A Message from Our CEO

Novanta’s mission is to deliver innovations that matter. As a global organization with a wide-reachingcustomer and supplier base, our products touch lives up and down our value chain. We believe that beinga responsible organization benefits all of our stakeholders—our customers, suppliers, business partners,
employees, shareholders, and the communities of which we are a part. ESG is important to us because
we have the opportunity, and the responsibility, to not only deliver mission critical innovations but to do soin a way that positively impacts people, communities, and the planet.
Our ESG program, therefore, must balance several priorities concurrently: being the trusted technology
partner to our customers, developing and deploying safe medical and advanced industrial technologies
while limiting the harm to the planet, and uplifting the wellbeing of our employees and neighbors. We
believe this balancing act starts from the inside out. This is what our Novanta Way culture stands for—ahigh performing culture consisting of employees who feel empowered to contribute to cohesive teams thatare engaged and aligned around our vision and strategy, and who live our values and drive performance,
utilizing a common set of tools and techniques. It is who we are, and what we expect from our leadersand our employees. In 2022, we saw the results of this approach in revenue growth, new productdevelopment, customer and employee satisfaction, and community engagement.
We began integrating ESG into our operations several years ago, but this started to get real traction in
2022. Across our organization, we have committed to making ESG a priority—a Novanta with a unified
culture and spirit, regardless of geography or business unit.
Our focus on Diversity, Equity, and Inclusion (DEI) was central to developing this commitment.
An inclusive and attractive workplace, with a diverse and engaged workforce and equitable growth
opportunities, is essential in driving sustainable performance and innovation. Launched in 2021, our DEI
efforts made significant strides in 2022 with diverse interview slates, enhanced Employee Resource
Groups, new company-wide voluntary training on inclusive leadership and unconscious bias, and deeper
engagement with our local communities. This was spearheaded by our DEI Committee and our Culture
Councils, both of which I met with regularly to review progress towards our DEI objectives.
Our environmental sustainability work also matured further this year. We are making progress toward ourgoal of sourcing renewable energy to cover 90% of our electricity consumption. We also officiallylaunched NovantaSUSTAIN, our program to embed environmental criteria into product development at
the design stage. I’m particularly proud of the initiative our research and development leaders took todevelop and disseminate our New Product Innovation (NPI) Toolbox. The NPI toolbox provides productdevelopment teams with templates and checklists to ensure environmental aspects are consideredthroughout the product design and development phases before new products are launched. On the
supply chain side, we achieved our foundational goal of gathering information on and evaluating theenvironmental practices of our key suppliers.
These achievements couldn’t happen without our dedicated teams. I’m continually impressed by the
dedication and initiative shown by our teams across the world who have rolled up their sleeves, not just to
do the work they were hired to do but to truly live the Novanta values and go above and beyond. In 2022.
Novanta employees thought of new ways to reduce waste and natural resource use at work, got out andvolunteered in their local communities, and confronted their own unconscious bias. We work every day tomake sure employees feel engaged and welcome but it’s truly special when I see our employees do thisfor each other as well.

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I’m so proud of all we have accomplished this year. Here are a few additional highlights worth noting:
•
•
•
•
•
•
•

We improved our methods for calculating our carbon footprint and expanded the scope andboundaries of our data collection to include all sites, regardless of size.
Our GHG inventory was successfully verified by a professional firm for the first time.
We continue to make progress on achieving ISO 14001 and ISO 45001 certifications
for all relevant facilities.
We completed 314 community service days, surpassing our goal of 250 days for the year.
We launched a new Employee Resource Group (ERG), the Novanta Professionals Network, andgrew the membership in our two other existing ERGs.
We rolled out voluntary unconscious bias training to over 1,400 employees across Novanta.
We launched internal websites on DEI for employees in addition to our external ESG microsite.

We are excited to share these results with our stakeholders in this report and its supplementary
appendices. We acknowledge the impact of our carbon footprint and the role we play in facilitating
meaningful change to benefit the people and the places affected by our operations. As we mature on our
ESG journey, we look forward to setting and meeting increasingly ambitious targets and sharing ourprogress with you. We hope you’ll join us for the journey.

Matthijs Glastra
Chair of the Board of Directors and Chief Executive Officer

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2

ESG at Novanta

2.1 About Novanta
Novanta is a leading global supplier of core technology solutions that give medical and advanced
industrial original equipment manufacturers (OEMs) a competitive advantage. We combine deep
proprietary technology expertise and competencies in photonics, vision, and precision motion with aproven ability to solve complex technical challenges. This enables Novanta to engineer core components
and subsystems that deliver extreme precision and performance, tailored to our customers’ demanding
applications. The driving force behind our growth is the team of innovative professionals who share acommitment to innovation and customer success. Novanta’s common shares are quoted on Nasdaq
under the ticker symbol “NOVT”.

Our Business
Novanta develops and builds critical components and devices for our partner OEMs in the medical andadvanced industrial markets. We do this through three reportable segments.
Photonics
The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser
scanning, laser beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine
products to customers worldwide. The segment serves highly demanding photonics-based applications
for advanced industrial processes, metrology, medical and life science imaging, DNA sequencing, andmedical laser procedures, particularly ophthalmology applications. Products are sold under various brandnames, including Cambridge Technology, Laser Quantum, and Synrad.
Precision Motion
The Precision Motion segment designs, manufactures, and markets optical and inductive encoders,
precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic
end-of-arm technology solutions, air bearings, and air bearing spindles to customers worldwide. Products
are sold under various brand names, including Celera Motion, MicroE, Zettlex, Ingenia, Applimotion, IMS,
ATI, and Westwind.
VisionThe Vision segment designs, manufactures, and markets a range of medical grade technologies,
including medical insufflators, pumps, and related disposables; visualization solutions; wirelesstechnologies, video recorders, and video integration technologies for operating room integrations; optical
data collection and machine vision technologies; radio frequency identification (RFID) technologies;
thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. Products are
sold under various brand names, including WOM, JADAK, NDS, Med X Change, Reach Technology, andPhoto Research.

Our Mission
To serve as a trusted technology partner to medical and advanced industrial OEMs delivering intelligent,mission critical solutions in the most demanding applications.

Our Vision
Our vision is to deliver innovations that matter to our customers and enhance people’s lives.

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Our Values
•
•
•

•

•

Win with our customers – Customers are why Novanta exists. We deliver winning solutions to ourcustomers that help them differentiate.
Keep your promises – We do what we say and walk our talk with no excuses. We execute withexcellence.
Stretch for the limit – Delivering innovations that matter is core to our success. We build anenvironment where people have the courage to take calculated risks above our promises in the
pursuit of extraordinary results. We utilize stretch objectives in the pursuit of excellence.
Be real – We embrace a respectful, open, and honest environment without politics and personal
agendas. Humility, transparency, and genuineness are consistently evident, fostering trust in all
interactions.
Be a great team – When we work together, we win together. We believe people working together in acollaborative approach can achieve extraordinary results while having fun.

The Novanta Way
We believe a healthy culture supports long-term growth and success. It helps us attract and retain thebest talent, consistently deliver results to our customers, and remain resilient to shocks. The NovantaWay, a term that we use to refer to our culture, defines the fabric of our culture and how we work together
and relate to each other.
The Novanta Way provides the building blocks for welcoming, adaptable, high-performance teams
through four pillars:
1.
2.
3.
4.

Cohesive Teams that are diverse, inclusive, collaborative, and committed to win.
Engaged Employees who feel a sense of belonging and inspired by our shared vision and purpose.
Novanta Values that guide what we stand for and how we behave.
Novanta Growth System that helps drive results consistently.

With Novanta’s diverse set of business units and global locations, we work hard to ensure that our culture
is absorbed by each and every one of our employees. Leaders across Novanta reiterate the importanceof our culture through our communications and we recognize employees who consistently embody theculture as “Value Champions”.

The Novanta Growth System
The Novanta Growth System (NGS) is an important part of bringing our culture to life. NGS is a platformthat connects our business units together to collaborate and share best practices. It provides a set oftools, techniques, and processes to develop innovative products and build commercial and operational
excellence. Company-wide councils in specialized areas, such as operations, R&D, supply chain, andsales & marketing, work together to further develop process excellence.
To learn more, visit our website.

2.2 ESG Strategy
We link technology and economic progress with environmental, social, and governance responsibilities
for the well-being of future generations and for achieving our business goals now and in the future. We
take to heart our responsibilities to our shareholders, employees, customers, suppliers, business partner
and the communities in which we do business. We are committed to creating a brighter future throughNovanta ESG Report 2022 | Page 7 | Be mindful of our environment, don’t print if you don’t need to.

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environmental sustainability initiatives, building a diverse, equitable, and inclusive workforce, andmaintaining a robust governance system.
We leverage Novanta’s capabilities and resources to advance company-wide ESG initiatives by enabling
our businesses to develop environmental and social aspects on-site that best meet the needs of our
stakeholders. An inclusive and attractive workplace, with a diverse and engaged workforce and equitable
growth opportunities, is essential for us in driving sustainable performance and innovation.
Based on ESG materiality assessments and the Novanta Way as the framework, we initially set five ESG
targets and launched the program in 2020. Since then, we have been tracking progress against thesetargets.
From a holistic perspective, ESG for Novanta is a shared commitment and focus on (E) environmental
sustainability, (S) diversity, equity, and inclusion, and (G) governance transparency. We are concentrating
on:
•
•
•
•

reducing greenhouse gas (GHG) emissions from our operations;
reducing environmental impact of our products and supply chain;creating an inclusive and attractive workplace, with a diverse and engaged workforce and strong
community involvement; andconducting our business in an ethical and lawful manner toward shareholders, employees,
customers, suppliers, business partners, and the communities in which we do business.

We measure our progress, improve continuously and set further ambitious targets. We discuss andanalyze with internal and external stakeholders our ESG roadmap and our position in the value chain withregard to environmental aspects for our products and reducing Novanta’s environmental footprint.

Our Approach to ESG
We have refined our methodology for measuring, reporting, and managing our impact to include all of ourglobal facilities. We currently track:
•
•
•
•
•
•

Scope 1 and Scope 2 GHG emissions
Waste generation
Water consumption
Gender diversity
Ethnic diversity in the U.S.
Health and safety outcomes

We prepared our 2022 ESG Report in line with two leading global standards—SASB and TCFD. We
recognize the impact of our footprint and the role we play in facilitating meaningful change to benefit thepeople and the places affected by our operations. We are developing action plans to achieve net zero
GHG emissions by 2050. We are building the Novanta Way culture that is diverse, equitable, andinclusive across our business units and global sites. And we are expanding our governance reach throughour value chain. Please refer to Section (6), “ESG Metrics and Targets,” for our full list of SASB and
TCFD disclosures.

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Topics We Are Focusing On
Based on our ESG materiality assessment that involved a survey and interview of senior leaders within
Novanta and cross-referencing with key industry indicators, we identified a number of ESG topics that we
believe are the most relevant to both Novanta and our stakeholders. In the near and medium term, weplan to focus on the following:
•
•
•
•
•
•
•

GHG emission reduction through improved energy mix
Waste management
Diversity, equity, and inclusion
Business ethics
Product safety and quality
Supply chain traceability
Financial performance

Updates on ESG Targets
In 2020, we set five ESG targets that we aim to achieve by the end of 2023, excluding the impact of new
business acquisitions. Below is a summary of our progress to date:Category

Our Short-term Targets

Environmental

To achieve our long-term goal of
net zero GHG emissions by 2050,
we set the following short-term
objectives:••

SocialPhase 1: By the end of 2021,
determine current energy and
GHG emissions status.
Phase 2: By the end of 2022,
set goals for GHG emissions
reductions.

Provide employees with one dayof paid time-off (PTO) to volunteer
at an approved non-profit
organization:•

Current Status as of End of 2022
We have achieved both objectives:• We have determined our current energy
and GHG emissions status and havedisclosed Scope 1 and Scope 2 GHG
emissions in this report.
• Our Scope 1 and Scope 2 GHG emissionsfor 2022 have been successfully audited bya third-party verification firm.
• 36% of our total energy sources are now
renewable for 2022. That is an increase of+8 percentage points compared to 2021.
• For phase 2, we developed a five-step
Energy Efficiency Program focused onclean and reduced energy consumption at
our major production sites.
• We set a Novanta-wide goal of sponsoring
250 community service days by the end of2022. As of December 31, 2022, weachieved 314 community service days.

Complete 500 days ofcommunity service Novantawide by the end of 2023.

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CategorySocialOur Short-term Targets

Current Status as of End of 2022

Expand our diversity, equity, andinclusion efforts:

Achieved all targets:• During 2022, we developed our DEI
roadmap to include a series of strategic
initiatives designed to diversify our
workforce, create an inclusive culture, andpromote lifelong learning as a part of ourculture transformation.
• As a result of these initiatives, we
increased our representation of women
within the organization. Additionally, we
increased the percentage of employees
from underrepresented groups including
both individual contributors and leadershiproles.
• Our Culture Council activated an additional
Employee Resource Group (ERG) to
increase employees’ sense of inclusion andbelonging. Presently we have three ERGs:
̶ Multicultural & International ERG
̶ Women’s ERG
̶ Novanta Professionals Network ERG• As of December 31, 2022, our Board of
Directors was comprised of 50% men and
50% women. Women representation on our
Board of Directors increased 17 percentage
points in 2022 from 2021.

•••

GovernancePhase 1: By April 2021,
determine existing status of
DEI at Novanta.
Phase 2: By January 2022,
develop roadmap.
Increase diversity of Board of
Directors.

Integrate ESG criteria inpurchasing

In 2022,• We surveyed all of our key suppliers tobetter understand their environmental
practices, including ISO certification,
external ESG reporting, and internal ESG
policies. Based on the suppliers’ responses
and other evidence provided to Novanta,
we developed an environmental risk rating
for each supplier. We continue to monitor
our suppliers based on the risk ratings andwill work with them to extend our
expectation for environmental sustainability
practices through our supply chain.

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Category
Governance

Our Short-term Targets

Current Status as of End of 2022

Expand relevant ISO certification
to all applicable facilities, including
ISO 14001

In 2022, we completed:• EHS audits at all major Novanta facilities;• 7 certification / surveillance / recertification
audits for ISO 14001; and• 3 certification audits for ISO 45001.
In February 2023, one additional site has
been successfully certified to ISO 14001
standard.

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3

Governance

As a leading global provider of key technology solutions to the medical and advanced industrial end
markets, we link technical and economic progress with environmental, social, and governanceresponsibilities for the well-being of future generations and for achieving our business goals now and in
the future.
This is not just because it is the right thing to do, but we also view ESG as essential to our continued
growth. Therefore, the responsibility for managing and making decisions on these topics has been placedwith our senior-most leaders, the Novanta Leadership Team, under the oversight of our Board of
Directors (the “Board”). It extends throughout our organization to department heads and others. In fact,
individuals throughout Novanta are encouraged and empowered to institute new ESG initiatives andspeak out when they see room for improvement.
As we mature on our ESG journey, we are deepening the role of ESG considerations throughout ouroperations. As part of our Novanta Way approach, we are harmonizing and consolidating our approaches
in key areas such as supply chain management, product development, talent acquisition and employee
engagement. At the same time, we are taking that opportunity to integrate ESG into our policies andprocedures at the global company level and cascading them down across the organization. Read on tolearn more about how we believe that a bias for responsible behavior is embedded throughout Novanta.

3.1 ESG OversightThe oversight of our ESG topics rests with our highest governance body, our Board of Directors. As of
December 31, 2022, our Board of Directors consisted of eight members, including our Chair and CEO,
Matthijs Glastra. Our Board of Directors monitors and oversees the Company’s ESG program through its
Environmental, Social and Governance Committee (the “ESG Committee").

ESG Committee
Novanta’s Board of Directors, through its ESG Committee, overseas, reviews, and assesses theCompany’s ESG strategy, program, policies, and risk management. The ESG committee, which meets atleast three times a year, regularly reports to the Board of Directors on these matters. In addition, the full
Board of Directors also reviews the Company’s ESG program and initiatives once a year.
The Environmental, Social and Governance Committee Charter is available on our website with our othergovernance documents. It states the full responsibilities of the ESG Committee, the highlights of which
are summarized in the table below.

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ESG Committee Responsibilities
Environmental

SocialGovernance

•

•

•

•

•

Oversees ESG strategy,
initiatives, policies, andrisk management
Oversees our corporate
approach to climatechange and environmental
stewardship
Reports to the Board on
environmental policies••

Oversees our corporate
approach to social issues
Oversees programs andpolicies regarding diversity,
equity, and inclusion
Reports to the Board onsocial policies•••

Identifies potential Board
members
Oversees corporate
governance policies andpractices
Assesses Board member
committee qualification
Regularly assesses theperformance of the Boardand its committees

Novanta Leadership TeamThe Novanta Leadership Team, including the Chief Executive Officers (CEO), Chief Financial Officer(CFO), Chief Human Resources Officer (CHRO), General Counsel and Corporate Secretary, Executive
Vice President of Supply Chain & NGS and two other business Group Presidents, is responsible forNovanta’s ESG strategy, goals, and compliance programs, as well as the management of risks andopportunities. The Novanta Leadership Team manages day-to-day assessment and decision-making
around Novanta’s risks and opportunities with a focus on our most significant risks. Our Board of
Directors and Board committees oversee and guide these efforts. These risks include, but are not limited
to, cybersecurity, product quality and safety, effect of economic and political environment and government
regulations on our businesses, data privacy, protection of intellectual property, supply chain disruptions,business acquisitions, anti-bribery and anti-corruption, natural resources, waste and toxicity, climaterelated risks and opportunities, labor, health and safety, and human rights.
The Novanta Leadership Team relies on both the Environmental Sustainability Committee and the DEI
Committee for information and status updates as well as to cascade its vision and strategic decisions
around ESG goals and initiatives.

Environmental Sustainability Committee
Novanta’s Environmental Sustainability Committee is composed of key business leaders, who meet atleast quarterly. The committee is responsible for the development and definition of environmental strategy
and goals, establishing the tone, importance, and prioritization for quality, environmental sustainability,and employee health and safety programs, and creating a unified response to sustainability andenvironmental requirements and audits. The committee recognizes and takes into consideration theimportance of engaging with key stakeholders.

DEI Committee
Novanta’s DEI Committee is a committee of the Company’s executive Leadership Team, chaired by ourVice President of Leadership Development and Diversity, Equity, and Inclusion, with an annual agenda
focused on executing our DEI Strategy and Initiatives. The committee provides strategy and governancefor Novanta’s DEI initiatives and organizes teams to help execute the DEI initiatives. The committee’s
goals and strategy are governed by the ‘Novanta Way,’ which is a structure that defines how Novanta
employees work and collaborate and builds cohesive teams all based on diverse and inclusive principles

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anchored in trust, commitment, and accountability. Our Vice President of Leadership Development andDiversity, Equity & Inclusion is also responsible for organizing and leading the Company’s Culture
Councils, coordinating activities amongst the three Employee Resource Groups (ERG), and organizing a
multitude of working teams. This governance structure helps to institutionalize Novanta’s DEI commitment
and aspirational goals – forming Novanta’s “True North” for DEI.

3.2 Ethics and Compliance
Our business depends on maintaining high standards of professional ethics among our team members
and remaining compliant with all relevant laws and regulations. The Novanta Leadership Team strives topromote business practices and operating procedures that can withstand the highest levels of scrutiny.
Novanta’s independent Internal Audit function monitors and assesses the Company’s practices andreports directly to the Audit Committee of our Board of Directors. We also conduct risk assessments
annually and modify any policies or controls as needed.

Ethics
Ethical decision-making requires an understanding of personal and company values and principles,
coupled with good personal judgment. We expect all Novanta team members—from the Board of
Directors and the Novanta Leadership Team to all employees—to understand and embrace ourNovanta Values. We are committed to these principles in everything we do, so our activities reflect
positively on our stockholders, our marketplace, our community, and ourselves.

Code of Ethics & Business Conduct
The Novanta Code of Ethics & Business Conduct (the “Code of Conduct”) identifies the ethics, values,
and principles that guide our business relationships. We are dedicated to doing business with a strong
sense of ethics, honesty, and integrity. The Code of Conduct was written by management and approvedby the Board of Directors. The Code of Conduct provides guidelines on relationships between employees
and internal and external stakeholders, conflicts of interest, anti-corruption, protection of assets, andmore. All employees and directors are responsible for upholding the Code of Conduct, which is translated
into seven languages besides English.

Anti-bribery and Anti-corruption
Under our Anti-Bribery and Anti-Corruption (ABAC) Policy, Novanta conducts an annual risk assessment
and screening of customers, suppliers, distributors, and resellers to identify and replace any third parties
that may have violated anti-corruption or anti-bribery laws in recent years and do not have the necessarycontrols and procedures in place to prevent and prohibit bribery and corruption behaviors. If a third party
is identified as high risk based on an adverse data search, further due diligence is conducted, and thebusiness relationship is reviewed by the Chief Financial Officer, the General Counsel, or the Chief
Accounting Officer. Proper safeguards are put in place to protect our business if it is deemed acceptable
to continue doing business with the third-party.

Human Rights
We are committed to reflecting our company’s values in our business practices, including treating people
with respect and dignity. Our Human Rights Policy outlines our commitment to protecting and promoting
human rights in all aspects of our operations, including those of our suppliers, contractors, and business
partners. Our policy aligns with the U.N. Universal Declaration of Human Rights, the U.K. Modern Slavery
Act, and the California Transparency in Supply Chains Act. Novanta does not tolerate harassment,

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discrimination, or retaliation in its supply chain. Our Human Rights Policy includes these and otherexpectations, including safe working conditions, the prohibition of child or forced labor and more.

Ethics Training
New and existing employees are required to regularly pass training courses on ethics, anti-bribery andanti-corruption, harassment, and data privacy policies. Additionally, all employees are required toannually certify that they understand and uphold the Code of Conduct, anti-bribery and anti-corruption,and harassment policies.

Confidential Reporting of Suspected Violations
As an alternative channel of communication for anyone who does not wish to report directly to a manager,business unit and corporate leader, or a human resources representative under our open-door reporting
policy, we maintain an external compliance hotline for the confidential reporting of any suspected policy
violations or unethical business conduct on the part of our businesses, employees, officers, directors,
suppliers, or customers, and provide training and education to our global workforce with respect to our
Code of Conduct, anti-bribery and anti-corruption policies, data privacy regulations, and workplaceharassment. To file a complaint, individuals can visit http://novanta.ethicspoint.com or call the hotline. The
Code of Conduct and posters displayed at our facilities list local numbers for each country. Internal Audit
reports on hotline activities to the Audit Committee on a quarterly basis. The Chair of the Audit Committee
also has direct access to all fraud, anti-bribery and anti-corruption, internal control, and financial matterrelated reports on the compliance hotline.

Compliance
We require all of our employees and facilities to comply with all relevant laws and regulations in the
countries in which they work or operate. We closely govern the activities of our employees, facilities, andsupply chain partners through a host of Novanta policies, including our:
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Code of Ethics & Business Conduct (the “Code of Conduct”)
Supplier Code of Conduct
Anti-Bribery and Anti-Corruption (ABAC) Policy
Anti-Harassment Policy
Antitrust Law Compliance Statement
California Proposition 65 Compliance Policy
China Restriction of Hazardous Substances (China RoHS) Policy
Conflict Minerals Responsible Sourcing Policy
Corporate Sustainability Policy
Equal Employment Opportunity Policy
Human Rights Policy
Political Activity Policy
Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) Compliance Policy
Related Party Transaction Policy
Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment
Directive (WEEE) Compliance Policy

Full policies are available on our website.

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Manufacturing
Our production facilities are subject to federal, state, local and, in some cases, foreign environmental
regulations related to the use, storage, handling, and disposal of regulated materials, chemicals, andcertain waste from production processes.
In 2022, we did not receive any notices of violation or record any spills, fines, or sanctions for noncompliance with manufacturing or production laws or regulations. We experienced one non-material
permit breach and immediately implemented countermeasures to prevent future issues.

Data Privacy
We are subject to many privacy and data protection laws and regulations around the world, some ofwhich place restrictions on our ability to process personal data across our business. In particular, theGeneral Data Protection Regulation (GDPR) became effective in the European Union (EU) and theEuropean Economic Area (EEA) in 2018 and the California Consumer Privacy Act (CCPA) and California
Privacy Rights Act (CPRA) will take effect in 2023. These regulations create individual privacy rights for
consumers, increase the privacy and security obligations of entities handling certain personal data, andrequire transparency and disclosure to data subjects on how their data is being used. Novanta currently
complies with all relevant data privacy and security laws and regulations in the jurisdictions in which we
operate. We keep abreast of new and developing legislations related to cybersecurity and data privacy
and make plans to comply before new laws take effect.

Cybersecurity
In the normal course of business, we may collect and store confidential and other sensitive information,
including proprietary and confidential business information, trade secrets, intellectual property, sensitive
third-party information, and employee information. To protect this information, we have developed andimplemented continuous monitoring and detection programs, multi-layer defense architecture, encryptionof critical data, and comprehensive security assessments protocols. Our cybersecurity program enables
us to assess and mitigate cybersecurity risks (threats, vulnerabilities, and impacts) with customized
measures and controls to protect and preserve the confidentiality, integrity and availability of our data andsystems. We have established policies and procedures leveraging widely accepted industry standard
cyber security frameworks like National Institute of Standards and Technology (NIST) to safeguard
against cyber-attacks.
Furthermore, we perform penetration testing and engage third parties to assess the effectiveness of our
security program. Additionally, we perform organization-wide cybersecurity awareness training multiple
times a year and have established a multi-layer recovery plan of our information technology ecosystem toprotect against business interruption. Our dedicated team of cybersecurity professionals utilize a variety
of cyber protection tools and methods to monitor and enforce our cybersecurity controls and procedures.
We also monitor current developments in the cybersecurity industry and adopt new tools andtechnologies deemed suitable to our environment in order to continuously enhance our cybersecurity
profile. However, despite all of our efforts to strengthen our cybersecurity program, there is no guaranteethat a significant cyber-attack will not occur in the future.
The Audit Committee and the ESG Committee of our Board of Directors are jointly responsible for theoversight of cybersecurity risks. The Audit Committee reviews and oversees quarterly the Company’s
cybersecurity risk management, associated control environment, policies, procedures, incident responseplans, and external disclosures. The ESG Committee reviews and oversees quarterly the Company’s

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cybersecurity program strategy, including NIST cybersecurity frameworks implementation, management,
and related investment matters. Finally, once per year, our Board of Directors reviews the Company’s
overall cybersecurity program and associated risk management.
We have experienced cybersecurity incidents in the past; however, to date, these incidents have notrepresented a material breach, nor have they had a material impact on our operations or financial results.
Future cybersecurity incidents could have a material adverse effect on our business, reputation, financial
condition, or operating results. Expenses incurred in connection with information security incidents havebeen immaterial for the years ended December 31, 2022, 2021, and 2020, respectively.

3.3 Responsible Procurement
We purchase manufactured components, raw materials, equipment, and services from a wide range ofglobal suppliers for all of our businesses around the world. Our supply chain includes inputs to our
medical and advanced industrial technology products, manufacturing equipment, logistics, packaging,
information technology and much more. We are committed to purchasing from ethical suppliers and holdour supply base to the same ethical standards as we hold ourselves. In conjunction with our efforts todrive Novanta Way deeper into our daily activities, we consolidated the oversight of responsible
procurement across Novanta businesses in 2022 along with tracking and measuring our performancebased on a consistent set of internal ESG metrics. In addition, we incorporated “Environmental
Management” and “Labor Rights” topics into our supplier on-boarding and re-certification audit process
checklist.
We created a “Sustainable Supply Chain Roadmap” to harmonize our approach to responsible
procurement and to ensure that we are working with suppliers with high environmental and social
standards. As part of our roadmap, we require our key suppliers—defined as the top 80% of directmaterial suppliers by spend and critical material suppliers—to sign and adhere to our Supplier Code of
Conduct, which outlines our expectations of policies and procedures that they are expected to comply
with. As a baseline, all suppliers must comply with all the relevant laws and regulations in the countries inwhich they operate. Our Supplier Code of Conduct provides additional guidelines on:
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Labor rights, including child and forced labor, wages, and discrimination;
Occupational health and safety, including emergency management, injury, and illness;
Environmental impact, including pollution and hazardous materials;
Ethics, including anti-corruption and non-retaliation;
Conflict minerals due diligence; andRegulatory compliance, including self-assessments and training.

Key suppliers are required to accept our Supplier Code of Conduct. As such, all key suppliers haveagreed to our most recent version of the Supplier Code of Conduct from 2021. In addition, we surveyed
all our key suppliers in 2022 to better understand their environmental practices, including ISO
certification, external ESG reporting, and internal ESG policies. Based on these responses and evidence
provided to Novanta, we developed an environmental risk rating for each supplier. We will continue tomonitor our suppliers based on the risk ratings and will work with them to extend our expectation forenvironmental sustainability practices through our supply chain.

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Looking ahead to 2023 and beyond, we plan to survey key suppliers for health and safety, ethics, andhuman rights practices on a regular basis and evaluate them on an ESG scorecard with risk ratings foreach category.

3.4 Safety Standards
ISO Efforts
Novanta products are used in highly sensitive and technical contexts, including medical devices andindustrial lasers. It is imperative, therefore, that our products meet the highest standards of safety andquality to meet our customers’ needs. We pursue industry-standard ISO certifications, or their respective
national versions, such as EN, DIN, and BS, for our facilities and systems across business units.
Novanta manufacturing facilities are ISO certified to ISO 9001 and/or ISO 13485. The majority of the ten
major manufacturing facilities are certified under the ISO 14001 standard. Additionally, in 2022, threemajor facilities completed ISO 45001 certification, with the remaining facilities in process.

Standards we pursue
For all products•••

ISO 9001
ISO 14001
ISO 45001

For medical products
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ISO 13485
CE Marking in the EU
FDA Approval in the U.S.
CFDA in China
PMDA in JapanANVISA in Brazil

Product Quality and Safety
The quality and safety of our products is of utmost importance to us. We comply with all laws andregulations relating to product safety in each of the countries where we operate, including Code ofFederal Regulations Title 21, Part 820 (QSR – Quality System Regulation) in the U.S. and the Medical
Device Directive (MDD) and Medical Device Regulation (MDR) in Europe for medical devices. Our
facilities strive to meet the highest global standards—we have already achieved ISO 9001, and half of ourmanufacturing sites have achieved ISO 13485 certification. The Novanta Growth System provides acommon set of best practices and tools that enable us to meet high standards.
In 2022, we continued to design guidelines and processes to incorporate environmental sustainability
aspects into product requirement documents during the design stages of new product development.
Environmental considerations start there and are embedded in all phases of our product life cycles.

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3.5 Risks and Opportunities
Effective Management of Risks and Opportunities
Risks and opportunities are inherent in all aspects of our business activities and embedded in our routine
management decision-making. Effective management of these risks and opportunities is critical to our
success as a strategic supplier to our customers, a key customer to our suppliers, a trusted employer toour employees, and a good investment to our investors.
The Novanta Leadership Team leads the overall risk management program at Novanta. Business unit
General Managers and their leadership teams and corporate functional leaders are responsible for the
execution of the respective components of the risk management program.
Our risk assessment is updated annually based on changes in the overall economic environment andspecific trends affecting Novanta businesses and our strategic goals. Material risks are disclosed underPart I, Item 1A. Risk Factors, of our annual report on Form 10-K filed with the Securities Exchange
Commission (SEC). Short-term market dynamics are analyzed and discussed as part our quarterly
business operating reviews to address any new or emerging risks and opportunities that need to be taken
into account to deliver on our annual and strategic goals. Key Performance Indicators (KPIs) aredeveloped, agreed to, and monitored in response to any significant adjustments made to the originalaction plans. If any new material risk is identified in our quarterly review processes, we will add
appropriate disclosures in our quarterly report on Form 10-Q filed with the SEC.

Enterprise Risk Assessment
Our independent Internal Audit function performs an annual update to Novanta’s enterprise risk
assessment by conducting interviews of various senior leaders within the Company. The risk
management program is designed to engage Novanta leaders, including both corporate leadership andbusiness unit leadership, in identifying, monitoring, and managing key risks and opportunities that affectour business and the execution of our strategic initiatives. All risks are ranked based on both thelikelihood of occurrence and the severity of the potential impact. The results of the risk assessment aresummarized and reviewed by the Novanta Leadership Team. Based on the updated risk assessment,internal audit plans are developed to evaluate and monitor management’s processes and controls aroundthe higher ranked risk areas. Internal audit plans and risk assessments are then reviewed and approvedby the Audit Committee of the Board of Directors.
Beginning in 2021, we expanded the existing risk management program to incorporate a broader ESG
assessment and a specific climate-related risks and opportunities assessment, utilizing therecommendations of the TCFD and SASB’s Sustainability Accounting Standards for Electrical &Electronic Equipment industry and Medical Equipment & Supplies industry as key inputs to this processwith respect to our identification, assessment, and monitoring of climate-related risks. We evaluate boththe likelihood and the potential impact of risks and opportunities relevant to our business over the short-,
medium- and long-term time horizons to help guide us in setting priorities to manage identified risks. The
results of these assessments are reviewed with the ESG Committee of the Board.

Climate Risks and Opportunities
The complex and quickly evolving regulatory landscape around environmental, social and governancereporting and the governmental laws and regulations to reduce greenhouse gas emissions worldwide
present significant challenges and risks. We will need to commit resources to navigate through thecomplex and evolving reporting requirements across different regions of the world. For example, theNovanta ESG Report 2022 | Page 19 | Be mindful of our environment, don’t print if you don’t need to.

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proposed climate-disclosure rules from the SEC and the Corporate Sustainability Reporting Directive(CSRD) promulgated by the EU impose significant additional reporting obligations, which are expected toincrease our compliance costs. Additionally, we anticipate that various governments around the world will
impose various levies on carbon emissions and that we will incur significant additional costs to achieve
our net-zero emissions goal over the long term.
One of the highest-ranked climate-related risks stems from certain medical products that we produce andsell to our medical OEMs. Our medical insufflators require the use of CO2 gas by hospitals in order tocreate the space within patients’ body cavities for surgeons to perform minimally invasive surgery
procedures. CO2 is the only gas safe for use in the human body due to the high physiological compatibilityof this gas type. As a result, hospitals cannot avoid the release of CO2 gas into the atmosphere from theuse of our insufflator technology. Further, single-use medical consumable products for our medical
insufflators and pumps play a significant role in patient safety because of the vital hygiene considerations
and outcomes. However, at the end of their use, even when disposed of properly by end users, they havea negative impact on the environment. In collaboration with a reputable sustainability research institution
in Berlin, we previously analyzed reusable tube sets as an alternative to single-use plastic tube sets thatcan be used with our medical pump technology. Since the production of heat resistant materials for the
tube set (autoclavation at 273°F/134°C), the hygienic preparation after surgery and the autoclaving of areusable tube set in the hospital are so energy-intensive, coupled with the environmental harm from therequired cleaning chemicals, that it was concluded that it is not only safer for the patient, but also moreenvironmentally friendly, to use a disposable tube set during surgery.
We plan to develop strategies to continuously improve how we manufacture and distribute our products,
aiming to reduce the negative environmental impact from such medical consumables in their productlifetime. For example, we acquired a medical consumable manufacturing business in Europe during 2022.
One of the strategic benefits from this acquisition is the shortening of our distribution channel for our
medical consumables to key customers as well as the optimization of the supply chain from raw materials
subcomponent production, assembly, packaging to sterilization, leading to future reduction in greenhousegas emissions from our downstream product distribution. Additionally, we have also launched ourNovantaSUSTAIN new-product development model to embed environmental requirements into our newproduct development processes.
Another of the highest-ranked climate-related risks is the potential disruptions to the business operationsof our facilities and our suppliers and customers as a consequence of energy supply shortages ordamages from extreme weather conditions and natural disasters caused by global warming. While therisk is inherent and unavoidable in nature, we are developing strategies to mitigate the risk to the extent
possible by identifying alternative suppliers and distributors, sourcing raw materials from different supplierand distributor locations, modifying our product designs to allow for alternative components to be usedwithout compromising quality, performance, or other requirements, in-sourcing production of parts, andinstalling power generation equipment where feasible.
With the heightened focus on climate change, we also identified growth opportunities in product offeringsin green technology applications, such as electric vehicles, robotics, solar, and energy storage, such asbatteries. Several of our existing businesses are already supplying components to OEMs in this space,
and we continue to invest in new product development targeting and expanding our presence in theseapplications.

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Insurance Program
We maintain comprehensive insurance programs to best protect the Company from various identified
enterprise risks through careful evaluations of the risks and the related cost and benefit of third-party
insurance policies. Our insurance programs currently include, among others, general liability, workers
compensation, business interruption, professional liabilities, employment practices, cybersecurity, global
cargo, property and casualty, global pollution, and directors’ and officers’ insurance.

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4

Social4.1 Our People
We believe that our employees are our most important asset. The CHRO is responsible for developing
and executing our human capital strategy. This includes the acquisition, development, and retention oftalent to deliver on our strategy as well as the design of employee compensation and benefits, anddiversity, equity, and inclusion initiatives. The CEO and the CHRO regularly update our board of directors
on the operation and status of these human capital activities, including, but not limited to, talentmanagement, talent development, and succession planning. As of December 31, 2022, we employedapproximately 3,000 people, of which approximately 44% were in the United States, 46% in Europe, and
10% in Asia. We win with our customers by delivering new technology innovations through ourengineering teams of approximately 600 employees.
Safety is paramount and one of the many ways we support our teams. At the height of COVID-19
pandemic from 2020 to early part of 2022, in addition to providing enhanced access to our employees fortheir health and safety needs, including on-site medical offices in our major facilities and visiting
healthcare practitioners, our on-site COVID-19 steering committees were responsible for establishinghealth and safety protocols at each significant facility. These committees created locally appropriate
guidelines for employees based on national regulations, advisories, and circumstances.
In 2022, we encouraged employees to return to on-site working to promote in-person collaboration. Thisapproach helps us promote a sense of trust among our teams, which is underpinned by our values andsupported by our culture. We also strive to promote a culture where employees feel a sense of belonging
and community through our diversity, equity, and inclusion work. Equally important, we strive to keep our
people stimulated and engaged by setting high standards and providing ongoing learning anddevelopment opportunities.
In 2022, we launched an internal assessment of our own operations to ensure we are adhering to humanrights standards set forth in our Code of Business Conduct and Human Rights Policy. We assessed all
Novanta business units and sites for compliance with these policies including:
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Human Rights Reporting
Employee Health & Safety
Working Conditions
Social Dialogue
Career Management & Training
Child Labor, Forced Labor & Human Trafficking
Diversity, Discrimination & Harassment

We plan to conduct annual assessments of Human and Labor Rights in our own operations.

4.2 Environmental, Health, and Safety
Health and Safety
The health and safety of our employees is our top priority. We utilize an Environmental, Health and Safety(EH&S) system that is customized to each production location based on local conditions. Three of our
production locations have been certified to ISO 45001 and eight production locations have been certified

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to ISO 14001. Novanta manufacturing sites have EH&S representatives, who are charged with the
responsibility of maintaining the Company’s EH&S standards. The EH&S program is responsible forcarrying out regular health and safety risk assessments, addressing any incidents that occur, and making
process improvements to reduce hazards. In 2022, we formed a global EH&S council withrepresentatives from various business units to share best practices, knowledge, and management tools.

NovantaWELL
NovantaWELL, our global health and wellness resource center on our intranet site, provides a central
information hub for all employees, with country-specific information on physical and mental health, as wellas financial wellness. The portal offers education, such as tips on stress management, employee
assistance programs, tools for mindfulness reminders, and coaching on subjects like exercise routinesand nutrition. It also provides the latest guidance on salient health topics like COVID-19 and the flu.
Through NovantaWELL, to support our employees through the ongoing challenges caused by the
pandemic, we conducted anonymous surveys and solicited employee feedback from Novanta locations in
the U.S., Germany, and the Czech Republic in 2021 and 2022 to help provide suggestions to seniorleadership on measures to reduce stress and enhance mental health.

4.3 Diversity, Equity, and Inclusion
Research shows that diverse, equitable, and inclusive organizations outperform other companies.
Novanta has firsthand experience with this. Diversity, equity, and inclusion are embedded into ourstrategic framework and The Novanta Way. We are developing a corporate culture where diversity,
equity, and inclusion are intrinsic to our ways of working and where our leaders lead by example. To
mainstream DEI across our business units, each business unit’s General Manager and Human
Resources Business Partner are accountable for integrating DEI into their culture. We carry out aquarterly review with business unit leaders to assess progress on our DEI goals.
In 2021, we hired a Vice President of Leadership Development and Diversity, Equity, and Inclusion andcodified our DEI True North framework articulating our long-term DEI aspirations. Our True North
framework consists of four aspirations that will guide our journey and actions for the next several years.
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We are Diverse
We are Equitable
We are Inclusive
We are Lifelong Learners

These aspirations guide how we act with each other, our suppliers, and customers, and in thecommunities where we work and live. They serve as a reminder that our success is interdependent on theworld and people around us.
Our DEI goals are to:•

Cultivate a welcoming, diverse, equitable, and inclusive culture where all employees experience asense of belonging and are lifelong learners.

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••

Increase the representation of women and people from underrepresented groups at all levels of theorganization so our workforce reflects the demographics of the local communities where we arebased.
Actively engage with and support community organizations and business enterprises owned bypeople from underrepresented groups.

DEI Targets
Our internal DEI targets are to:
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Advance our maturity level on the Global Diversity Equity Inclusion Benchmark maturity model;
Enhance engagement by increasing Inclusion and Belonging scores on employee surveys;
Increase the number of women, people of color (POC), and underrepresented ethnicities inleadership positions;
Increase the representation of historically excluded talent at all levels through the hiring, retention,and promotion of employees from underrepresented groups; andIncrease the number of employees utilizing PTO to volunteer and provide community service.

In 2022, we made significant progress towards our DEI targets. We increased the representation of
women globally, underrepresented groups in the U.S., and underrepresented groups in U.S. leadershiproles. We also nearly doubled the number of women who were promoted over the previous year.

Culture Council
Our Culture Council is comprised of employees with diverse identities, backgrounds, and job positions
from our various business units. The Council provides governance on our Employee Resource Group(ERGs) and Working Teams, advises the Novanta Leadership Team, and helps execute DEI initiatives. In
2022, Novanta launched one new ERG and scaled our two existing ERGs. Unconscious bias training wasrolled out to 1,400 employees across our global sites with the help of our Culture Council's Localization &Deployment and Learning & Development Working Teams. These teams also played a critical role inensuring our DEI education was customized and contextualized for employees across cultures andlearning styles. Council members also collaborated with business units to achieve our community
outreach goal (see below for more).

Diverse Recruitment
We are actively taking steps to improve the diversity of our workforce beginning at the recruitment stage.
In 2021, we launched a new six-step diverse recruitment strategy to widen our pool of potential
applicants. This included the creation of gender-neutral job postings, using recruiting platforms that
include more diverse candidates, partnering with academic programs to build a diverse recruiting pipeline,
and more. In 2022, we attended job fairs for women and minority professionals hosted by organizations
like the National Society of Black Engineers (NSBE) and the Society of Women Engineers (SWE). We
partnered with NSBE to sponsor an internship program and hired 24 young professionals as college
interns and full-time employees. In 2022, we achieved our goal of over 50% representation from womenand underrepresented candidates in the final interview slates.

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Employee Resource Groups
Novanta hosts three ERGs:•••

Women’s ERG
Multicultural and International ERG
Novanta Professionals Network

ERGs provide support to employees in the areas of both personal and career development. They also
help create a safe space where employees can bring their whole selves to work. In 2022, our ERGs
brought employees together for educational and informational activities, including lunch and learn events,
recruitment sessions, wellness events, and celebratory activities. Our ERGs have grown rapidly sincelaunching in 2021 with regional chapters at all significant Novanta sites.

Employee Engagement
We believe that our employees should have a meaningful role in helping us to develop our culture. We
utilize survey feedback mechanisms for employee engagement and organizational health to measure ourcurrent situation and gain insight into areas where we can improve. We have conducted surveys of ourentire employee population in the last five years, and we compare our employee engagement andorganizational health scores against benchmark populations with our survey vendors. Our employee
satisfaction score in 2022 was 90% of the benchmark score. This is an improvement of 3 percentage
points compared with 2021. Following each survey cycle, we review the results with our teams anddevelop specific action plans across the Company based on the direct feedback we receive from thesurvey. We are executing on our action plans with the expectation to improve our overall organizational
health and employee engagement.

Benefits
We strive to recruit and retain the best talent by creating a welcoming working environment and attractive
benefits package commensurate with the local employment market. For example, full-time employees in
the U.S. are offered a multitude of benefits, including:
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Comprehensive medical, dental, and vision coverages for employees and qualified dependents;
Health Savings Account with an annual employer contribution and Flexible Spending Account;
24-hour telemedicine services for all employees and their dependents for acute and behavioral healthservices;
Access to an on-site health clinic at our Bedford, Massachusetts and Mukilteo, Washington sites andvirtual health coaches;
Employee Assistance Program and an online mental health support app;
Company-provided life, accidental death or dismemberment, and long-term disability insurance;
Up to 16 weeks of paid parental or family leave;
Up to 20 weeks of paid medical leave;
Optional voluntary and supplemental insurance plans;
401(k) retirement savings plan with a competitive matching program;Competitive paid time-off program for non-exempt employees;
Flexible paid time-off program for exempt employees which offers unlimited paid time-off based on
employees’ needs and their manager’s approval;
Back-up care support for child, adult, and elderly care; andTuition reimbursement for job related studies.

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Similarly, our full-time employees located outside of the U.S. are offered competitive benefits that areconsistent with market practices and local regulations.

4.4 Training and Leadership Development
We provide a suite of both mandatory safety and regulatory compliance training courses, designed toempower our employees with the knowledge and tools they need to make safe choices and to mitigate
risks. We also offer both mandatory and optional leadership development training courses to help ourteam to continuously grow.
In 2022, we conducted global training courses on our culture and business tools, occupational health andsafety, compliance, and cybersecurity. Through our internal learning platform, Novanta University, we
conducted our second Digital Learning Week in 2022, welcoming more than 4,200 participants andoffering approximately 30 different training session in multiple languages.
In addition to Novanta University, we utilize our Novanta Growth System, which provides processes,
tools, and trainings with a focus on continuous improvement.
In 2022, we made further investments in leadership development and diversity, equity, and inclusion.
Approximately 90% of our top leaders successfully completed our global coaching and leadershipdevelopment program which included the completion of Individual Development Plans (IDPs).
Additionally, we launched a Leadership Development program targeting front-line and mid-level leaders.
Numerous DEI educational events were delivered throughout the year. This included providing voluntary
Unconscious Bias training to over 80% of our professional employees, Inclusive Leadership
Masterclasses for our people leaders, and Culture Mapping training for our employees around the globe.
We also launched Leading for the Future—an educational program designed to help leaders better
communicate with their teams. Leaders across Novanta were provided with a toolkit with interactive
material to lead their teams in workshops covering strategy, working across cultures, and transformational
leadership.

4.5 NovantaCARESIn 2022, we formalized our company-sponsored volunteering program, NovantaCARES. We provide
every employee with one paid day-off per year to volunteer at non-profit organizations supporting social
charities or the environment. We set a Novanta-wide goal of completing 250 community service days by
the end of 2022 and 500 by the end of 2023. In 2022, we surpassed our goal, completing 314 community
service days. Our NovantaCARES team partnered closely with the Culture Council to encourage
employees to participate around the world, in support of communities in need and the environment.
At many of our sites, local leaders and Culture Council members organized volunteering events.
Employees could volunteer for non-profit organizations or environmental cleanup activities in their local
community, provided that they meet our criteria for a legitimate charitable organization or environmental
cleanup activities. These criteria are published on our intranet site, along with a list of vetted non-profit
organizations in each of the eight countries where we operate.

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Examples of some successful events held by our sites in 2022 included:•••

A volunteering event held at our Bedford, Massachusetts location on Earth Day, April 22nd. Over 60
volunteers participated in a litter clean-up near our Bedford facility. The team collected over 1,600
pounds of trash from around the property and the neighboring wetland area and highway. Waste
collected included plastic, metals, lumber, tires, and more.
A team of employees from Laser Quantum in Stockport UK participated in an 8 mile walk for charity
around Carsington Water—a reservoir near the Peak District National Park in England in a fundraising event for Alzheimer's Research UK. The group set a target of raising £200 sponsorship per
walker. They exceeded their target sponsorship by over 100%, raising a total of £2,028 for the charity,
a sum which Novanta matched in addition.
From October to December 2022, the Women’s ERG in Germany invited colleagues from Berlin to
support the Spendenbrücke (donation bridge) Ukraine at the former airport at Berlin-Tempelhof. Overfour days, 37 volunteers sorted countless baby socks, folded an almost inexhaustible mountain of
donated clothes for both children and adults. The volunteers also checked, categorized, andpackaged a variety of donated food items.

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5

Environment

We establish and maintain our Environmental Management System at all our locations based on theleading best-practice ISO 14001 standard.
Our products benefit society by streamlining existing processes, saving time, and saving lives. At thesame time, we recognize that our operations directly impact the environment by consuming energy andgenerating waste. We are working diligently to reduce our impact across our facilities through process
improvements, efficiency programs, and supplier partnerships with the aim of being carbon neutral by2050.
To this end, we have challenged each of our manufacturing sites to reduce their environmental impact in
the categories below. As part of our Novanta Way culture of trust and ownership, how they approach thechallenge is left up to the local leadership at each site.

5.1 Our Environmental Goals
In order to meet our ambitious goal of being carbon neutral by 2050, we have set the following short-,
medium-, and long-term environmental goals. We plan to reset our goals to include future acquisitions in
the fiscal year following the year in which the acquisition(s) are consummated. Each business unit or site
commits to these goals but decides for itself what measures need to be taken to achieve them.

Emissions
We are committed to establishing initiatives that contribute to global efforts to limit planetary warming to
1.5 °C above pre-industrial levels. Our short-, medium-, and long-term plans are as follows:•

Short-term (next 5 years): Novanta published its Scope 1 and Scope 2 GHG emissions for the firsttime in our 2021 ESG Report and pledged an aggregate 15% reduction in our Scope 1 and Scope 2
GHG emission intensity from our 2021 baseline by the year 2026 (both normalized to annual revenue
and excluding future acquisitions).
In 2022, we achieved 14% reduction in GHG emission intensity (measured as metric ton of CO2e per
million dollar of revenue) from our 2021 baseline on an Organic basis, including all the same sites as
those within our 2021 reporting scope, i.e., all facilities with more than 10 people and without any
sites from the two business acquisitions consummated in August 2021.
As a result of the inclusion of our 2021 acquisitions in our 2022 GHG emissions inventory, we areresetting our base year to 2022, which included both ATI Industrial Automation, Inc. (ATI) andNovanta Motion that we acquired in August 2021 as well as all small sites that had 10 people or less.
Our new goal is to pledge an aggregate 15% reduction in our Scope 1 and Scope 2 GHG emission
intensity from our new 2022 baseline by the year 2027 (both normalized to annual revenue andexcluding future acquisitions).

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•Medium-term (5 to 15 years): We plan to reduce our Scope 1 and Scope 2 GHG emissions by anaverage of 5% annually, on a rolling base year basis in case of any future business acquisitions ordivestitures.

•

Long-term (+15 years): Our goal is to achieve a target of net zero GHG emissions by 2050.

Renewable Electricity Procurement Initiative
The quickest and most impactful way that Novanta can reduce our Scope 2 emissions is to switch fromfossil fuel-based electricity sources to clean and renewable electricity sources.
•

In 2021, we set the goal of sourcing at least 90% of our electricity consumption from clean orrenewable sources at our manufacturing facilities. As we continue to work on this goal, we are facing
availability limitations for renewable electricity at our international facilities in the current volatileenergy market. At some locations, there are no quality and reliable opportunities available for us toprocure renewable electricity. We will continue to seek and evaluate opportunities to purchaserenewable electricity that meet our quality standards. Although we have not experienced material
adverse financial impact from our renewable energy procurement to date, there is no assurance thatthe cost of renewable electricity will not become more significant in the future.

Waste Reduction Initiative
Our goal is to conserve natural resources by avoiding waste in the long term, thus promoting theprotection of people and the environment.
•••

We will raise awareness of waste prevention and reduction with our customers, vendors, employees,
and other stakeholders.
We will establish Avoid, Reduce, Reuse, and Recycle programs at all sites.
We intend to reduce waste sent to landfill by 2% per year.

Paper Reduction Initiative
Our goal is to track and reduce our paper consumption at our facilities. As we believe paper production
and consumption have an impact on global warming, we have established paper use reduction programs.
••

We will purchase recycled or eco-friendly paper where available. We intend to reduce the use of nonrenewable and non-eco-friendly paper by 10% per year.
We will expand our adoption of digital solutions as part of our initiative to reduce paper consumption.

5.2 Climate and Energy
GHG Emissions
In our 2021 ESG report, we defined our reporting boundary to include all active sites with 10+ people andexclude businesses acquired in 2021. In our 2022 ESG report, we expanded our reporting boundary toinclude all Novanta sites, regardless of size, and included the full-year 2022 GHG inventory from thebusinesses acquired in 2021. However, as explained at the beginning of this report, we excluded thepartial-year GHG inventory from our 2022 acquisition.

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To allow for meaningful comparisons and show progress towards our goals, please read the following
definitions for the terms we have used in the quantitative presentation of ESG data in this report and refer
to Appendix C for a more detailed description of the scope, boundaries, and methodology of our GHG
inventory.
•

2021 Inventory – The term “2021 Inventory” refers to the GHG data reported in our 2021 ESG report.
As disclosed in Appendix C, “Boundaries and Methodology,” to our 2021 ESG Report, we excluded
both Novanta facilities with fewer than 10 employees on site and the businesses acquired during2021. Additionally, our 2021 data presented below has been restated from the prior-year presentation
for consistency with our 2022 presentation herein, which excludes biogenic CO2 and HCFCs fromScope 1 GHG inventory as they are required to be reported separately in accordance with the GHG
Protocol.

•2022 Organic GHG Inventory – We use the term “Organic GHG Inventory” to refer to data gathered
and calculated for all sites that were included in our reporting boundaries in the preceding year.
Specifically, our 2022 Organic GHG Inventory represents our 2022 GHG inventory from all sites with
10+ people and excludes the emissions from the businesses acquired in 2021. This presentation
aims to show the “organic” changes in our GHG inventory from 2021 to 2022 and the effect of our
GHG reduction efforts.

•

2022 Reported GHG Inventory – We use the term “Reported GHG Inventory” to refer to data
gathered and calculated for all Novanta sites including all businesses acquired in the prior year but
excluding businesses acquired in the current year. As such, our 2022 Reported GHG Inventory
includes the full-year impact from our 2021 acquisitions as well as the smaller Novanta locations
previously excluded from our 2021 reporting boundary.

Our GHG emissions profile for the full year 2021 and 2022 is summarized in the table below:

2021
GHG Inventory2022
Organic GHG Inventory2022
Reported GHG Inventory2021
mt CO2e2022
mt CO2e

mt CO2echange*Percentchange*2022
mt CO2e

mt CO2echange*Percentchange*Scope One

1,292

1,195

(97)

-8%

1,360

68

+5%

Scope two

4,196

4,096

(100)

-2%

4,854

658

+16%

Total
(market-based)

5,488

5,291

(197)

-4%

6,214

726

+13%

* mt CO2e change and percent change for both the Organic and Reported 2022 GHG Inventory are in comparison to the 2021 GHG Inventory.

The following table illustrates the impact of our 2021 business acquisitions and smaller sites with 10
people or less on our total Scope 1 and Scope 2 emissions for the full year 2022:
2022
Organic GHG Inventory2022
mt CO2e2022
mt CO2e

Scope 1

1,195

1,360

165

+14%

Scope 2

4,096

4,854

758

+19%

Total
(market-based)

5,291

6,214

923

+17%

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2022
Reported GHG Inventory
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The GHG inventory presented above are shown in metric tons of carbon dioxide equivalence (mt CO2e).
We do not have any Scope 1 or Scope 2 emissions from either perfluorochemicals (PFCs) or sulfur
hexafluoride (SF6). Without the global warming potential (GWP) applied, total emissions from methane(CH4) amounted to 1.6 metric tons and emissions from nitrous oxide (N2O) and hydrofluorocarbons(HFCs), respectively, totaled less than one metric ton each. Emissions from hydrochlorofluorocarbons(HCFCs) and biogenic carbon dioxide (CO2) are excluded from the GHG inventory presented above butamounted to less than one metric ton and 72 metric tons, respectively, without the global warming
potential (GWP) applied.
In 2022, Novanta engaged LRQA Inc., an independent ISO and GHG emissions inventory audit firm, toverify our Scope 1 and Scope 2 GHG emissions data for the full year 2022. Please refer to Appendix D
for LRQA’s limited-assurance verification report.

Future of Novanta’s GHG Inventory
As business acquisitions are a critical component of Novanta’s growth strategy, we have decided to adopt
a rolling base year methodology for our GHG emissions reporting in order to maintain the integrity andtransparency in our reporting of the progress towards our short-, medium-, and long-term emissions
reduction goals. When we have a business acquisition in any calendar year, we do not include GHG
emissions from the newly acquired business in our GHG inventory in that year because it is often
impracticable to collect all the required information for accurate and reliable reporting. Instead, we will
start including the newly acquired business in our GHG inventory starting in the first full year immediately
following the acquisition date and will use that year as our new rolling base year for future reporting.
For example, we acquired two businesses during the third quarter of 2021 and excluded the GHG
emissions from both businesses from our 2021 GHG inventory. The full-year 2022 GHG inventory fromboth of these acquisitions have been included in our 2022 Reported GHG Inventory. Therefore, we willuse 2022 as our new rolling base year for setting our future GHG emissions reduction goals.
At Novanta, we recognize the impact of our footprint on the environment and the importance of tracking
and reducing our GHG emissions. Today, our reporting and progress is largely measured based on
Scope 1 and Scope 2 GHG emissions. We recognize that our full carbon footprint would also include
Scope 3 GHG emissions, which is why we have specific initiatives around product development, productstrategy, and manufacturing process improvement. We are currently developing plans to define thescope, tools, and methodologies for measuring our relevant Scope 3 GHG emissions. We plan to begin to
include relevant Scope 3 GHG emissions in our ESG report by 2026.

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Energy Sourcing
In 2021, Novanta set a long-term goal to source 90% of our electricity consumption from renewablesources. In 2022, we began our efforts by engaging with the utility providers already in place andswitching to a renewable supply in each location where it was available. This effort enabled us to increase
our renewable energy supply to 46% of consumed grid electricity and 36% of total consumed energy.
Similar to the GHG emissions data, progress in this area is diluted by the expanded scope ofenvironmental data collected.

MWh | % change*
Electricity Consumption% Renewable | % change*
Electricity Consumption
MWh | % change*
Total Energy Consumption**% Renewable | % change*
Total Energy Consumption**

2021

2022
Organic

2022
Reported

18,856

18,907 | +<1%

21,210 | +12%

36%

52% | +16%

46% | +10%

23,961

24,307 | + 1%

27,569 | +15%

28%

40% | +12%

36% | + 8%

* % change shown in both “Organic” and “Reported” columns is in comparison to 2021.
** Total energy includes electricity, purchased heat, and stationary combustion.

In 2022, we started a global energy reduction initiative with a focus on sharing best practices,collaboration and knowledge sharing across the business units to help achieve our energy reduction
goals at each location.

5.3 Environmental Management
Waste
As part of the ISO 14001 environmental management standard, we follow the “reduce, reuse, andrecycle” hierarchy to guide our waste management practices. All of our sites have been challenged toreduce waste in their operations, including reducing single-use items in their breakrooms, printing of
paper documents, as well as reducing other types of process waste such as metals and chemicals in our
production facilities. As a minimum, all of our sites follow local regulations on waste disposal andrecycling, but many of our sites have gone the extra mile to offer employees additional opportunities torecycle, including providing drop-off points for textile and shoe recycling, battery recycling, and paper
shredding. On electronic waste, we comply with the European Waste Electrical and Electronic Equipment
Directive (WEEE), which mandates the collection and recycling of electric and electronic equipment at oursites in Europe.
•

Examples:̶
In 2022, in an effort to be more efficient with our resources, we have migrated our phoneservice to Voice-over-Internet (VOIP) calling. This helped the Company eliminate physicalphones, reducing the purchase of electronics, reducing the purchase of supporting server
infrastructure, reducing our electricity usage, and reducing our costs.
̶
In 2022, across all sites, our teams recycled hundreds of desktops, laptops, printers,
servers, and monitors.

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Hazardous Waste
We have detailed procedures for managing hazardous waste at our facilities, aligned with guidelines fromthe Globally Harmonized System. We also follow local guidelines where relevant, such as the Toxic
Substances Control Act in the U.S. and the Inventory of Existing Chemical Substances in China. We
recycle hazardous waste through third-party waste management partners.

Water Usage
Through Novanta’s initial ESG assessment in 2021, we have determined that water usage, intensity, andsource are not items requiring detailed tracking for Novanta at this time as a result of the low water usage
levels from our operations. In the years to come, Novanta will continue to monitor water usage, water
intensity, and water source.

Land Cover & Land Use Practices
Through Novanta’s initial ESG materiality assessment and risk analysis in 2021, we determined that Land
Cover and Land Use Practices are not items requiring detailed tracking for Novanta at this time. In theyears to come, Novanta will continue to monitor land use practices.

Physical Risks1
Novanta has worked with our insurance carriers to evaluate the physical risks that may affect ourfacilities, taking coastal and flood risk areas into special consideration. Through these evaluations,
Novanta has maintained appropriate levels of insurance coverage to help minimize the financial
consequences of catastrophic events that might occur. In 2022, we have not had any catastrophic
physical events that have caused major business disruptions to our facilities. However, there is no
assurance that such catastrophic physical events will not occur in the future. Novanta will continuously
monitor our physical risks and enhance our risk response action plans as part of our ISO 14001
certification and compliance initiative.

5.4 NovantaSUSTAIN
Customers are increasingly seeking sustainable products. We believe that developing sustainableproducts must begin at the design stage where product materials and lifecycle considerations can be built
in from the start. We also seek solutions to reduce our impact during manufacturing and expand theuseable lifespan of products, often in partnership with customers. Sustainable product lifecycle
management activities are undertaken by our new NovantaSUSTAIN program.
In regard to ‘green’ industry segments, our robotic tool changer technologies are presently used in robotic
manufacturing processes in electric vehicle production; our beam steering technologies are used in laser
scan heads for eMobility product manufacturing processes for batteries and fuel cells for electric vehicles
as well as solar cells for renewable energy products; and our digital scanners are used in additive
manufacturing processes.

1 Risks associated with extreme weather, climate change and other physical impacts.

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Product Design
NovantaSUSTAIN is part of our New Product Innovation Toolbox (the “NPI Toolbox”) which is integrated
into our Novanta Growth System. The NPI Toolbox was launched in 2021 to take environmental
sustainability into account from the requirements definition stage of a new product to its commercial
launch. NovantaSUSTAIN provides an in-depth overview of best practices for environmentally
responsible product design, as well as internal resources engineers can access throughout the design
process. All new projects begin with templates for systematically capturing stakeholder and system
requirements. This set of templates includes a mandatory environmental requirements checklist. Focus
areas include, for example, energy efficiency, transport efficiency, material use, product lifecycle
management, packaging design, distribution, service, and repair. Given the breadth of Novanta’s productportfolio, rather than setting blanket environmental standards, products are required to make
improvement on their previous versions. That said, requirements remain flexible for product development
teams so they can prioritize product quality, safety, and environmental sustainability. During the design
validation stage, product prototypes must be checked against those initial requirements to confirm thatthey meet all listed needs.
For some products in our laser and medical businesses, we have reduced the number of components ormarked relevant components of the product to indicate the type of material used for easy recycling at theend of the product life cycle. In one example, we collaborated with a customer in our Vision segment to
reduce the environmental impact from our product. We were able to eliminate the entire physical productincluding the housing, power supply, and all electronic parts and just deliver the software to meet thecustomer’s needs.
Looking ahead, we plan to continue to develop NovantaSUSTAIN with webinars, internal and external
subject matter experts (SME), and trainings, and to build company-wide awareness of the NPI toolbox.
We are also engaging with customers and suppliers to better understand how they measure their own
carbon footprints to help inform our future Scope 3 emissions measurement.
Manufacturing
Our manufacturing teams also look for ways to make processes more sustainable. We do this proactively
and also in direct response to customer requests. For example, we worked with one customer to eliminate
the use of etched glass and replaced it with laser-marked metal, which is easier to recycle. We now offer
the metal component to other customers as a more sustainable option as well.
Packaging
We seek opportunities to reduce the carbon footprint of our packaging wherever possible, without
impacting the protection of products during shipping. We conduct packaging reduction and reuse pilot
projects internally and with our suppliers and customers.
For example, our Laser Quantum business unit reduced its reliance on single-use plastic tape for packing
and shipping boxes by using paper-based tape on some of its shipments. The new tape is strengthened
with natural fibers and uses a water-based adhesive, making it easier to recycle downstream. The
business unit has installed two machines that can apply the new tape.

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6

ESG Metrics and Targets
SASB Index
Electrical & Electronic Equipment and Medical Equipment & Supplies

SASB Metric2022 Disclosure

RT-EE-130a.1(1) 99,240 Gigajoules (Gj) of total energy* consumed(1) Total energy consumed(2) 77% of total energy consumption sourced from grid electricity(2) Percentage grid electricity (3) 36% of total energy consumption sourced from renewable sources(3) Percentage renewable* Total energy includes electricity, purchased heat, and stationary combustion.

RT-EE-150a.1(1) Amount of hazardous
waste generated (2)Percentage recycled(1) 226 metric tons of hazardous waste were generated in 2022. The
overall decrease from 2021 to 2022 is a result of a partial closure of
one of our manufacturing facilities.
(2) We have not been able to collect evidence of recycling practices
from all of our sites. However, through the sites at which thisinformation is available, we have been able to confirm thatapproximately 18% of the 226 metric tons of hazardous waste
generated in 2022 was recycled.

RT-EE-150a.2(1) Number and aggregate
quantity of reportable spills(2) Quantity recovered

In 2022, Novanta had no reportable spills as defined by the U.S.
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA).

HC-MS-240a.1
Ratio of weighted averagerate of net price increases(for all products) to theannual increase in the U.S.
Consumer Price Index

As this reporting metric is included in the U.S. Consumer Price Index
and Novanta’s business is business-to-business (B2B), we do notconsider this disclosure to be relevant to our business.

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HC-MS-240a.2
Description of how priceinformation for each productis disclosed to customers or
to their agents

Novanta sells a large variety of components and subsystems to
medical and advanced industrial OEM customers, including medical
insufflators, pumps, light sources and video couplers, gamma probes,
related accessories and disposable products, and visualization
solutions for minimally invasive and robotic surgery; barcode scanning,
RFID readers and machine vision cameras; components andsubsystems for laser-based diagnostic, analytical, micromachining, andfine material processing applications; miniature precision opticalencoders, robust inductive encoders, energy-efficient motors, highperformance servo drives, high-speed air bearing spindles andintegrated mechatronic solutions; and robotic end-of-arm technologies(end-effectors), robotic and automated solutions for automatic toolchanging, force-torque sensing, and material removal (for more details,
visit Novanta.com). Novanta is a trusted technology partner to medical
and advanced industrial OEMs. Business units negotiate price, volume,delivery times, incoterms, payment terms, limitations of liability, andlead times with OEMs. Price negotiations may be based upon a variety
of factors, such as level and cost of customization, nature of theapplication, cost of manufacturing, volume, terms and conditions, longterm commitments, and duration of product life cycle, and are generally
documented in executed contracts, purchase orders, supply
agreements, and term sheets.

RT-EE-250a.1 |HC-MS-250a.1(1) Number of recalls issued(2) Total units recalled

1) Zero2) ZeroRT-EE-250a.2
Total amount of monetarylosses as a result of legal
proceedings associated withproduct safety

Zero

HC-MS-250a.2
List of products listed in the
FDA’s MedWatch Safety
Alerts for Human Medical
Products database

None

HC-MS-250a.3
Number of fatalities related to See the FDA’s Manufacturer and User Facility Device Experience
products as reported in the
Database (MAUDE).
FDA Manufacturer and User
Facility Device Experience

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HC-MS-250a.4
Number of FDA enforcement
actions taken in response toviolations of current Good
Manufacturing Practices(cGMP), by typeZero

HC-MS-270a.1
Total amount of monetarylosses as a result of legal
proceedings associated withfalse marketing claims

Zero

HC-MS-270a.2
Description of code of ethics
governing promotion of offlabel use of products

Novanta registered medical devices (FDA, CE, etc.) have an ‘indication
for use’ described in the product's instruction for use (IFU). “Off-labeluse” is legally not permitted. No indication of potential ‘off-label use’ isprovided. Other Novanta products that are not medical devices but arepart of or supplement of medical devices of Novanta customers cannot
be used without them and therefore the customer products are subject
to the legal requirements regarding the adequate labeling or use inaccordance with the ‘indication for use’.

RT-EE-410a.1
Percentage of products byrevenue that contain IEC
62474 declarable substances

Novanta does not specifically track products containing IEC 62474
declarable substances. However, we strive to comply with local laws
and regulations for potentially hazardous substances, including
REACH, RoHS, TSCA, and California Proposition 65.
More information on our specific key compliance policies can be foundon the Corporate Citizenship page of our website.

RT-EE-410a.2
Percentage of eligible
products, by revenue, thatmeet ENERGY STAR®
criteria

Not applicable. At this time, ENERGY STAR criteria have limited
applicability to Novanta products given our B2B business model.

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RT-EE-410a.3
Revenue from renewableenergy-related and energy
efficiency-related products

Due to the nature of our B2B relationship with our customers and themultiple end-user applications in which many of our products may be
used, we do not have verifiable tracking of our sales from renewableenergy-related and energy efficiency-related products.

HC-MS-410a.1
Discussion of process toassess and manage
environmental and humanhealth considerations
associated with chemicals in
products, and meet demand
for sustainable products

Novanta’s Corporate Sustainability Policy requires that we act in anenvironmentally responsible manner in the development andmanufacture of our products and services. Our employees andmanagers are expected to support the implementation of this policy inaccordance with their duties and responsibilities. Based on applicable
environmental regulations, customer requirements, and otherspecifications, our goal is to protect the environment, reduce
hazardous and non-hazardous waste, reduce energy usage, maximize
the use of renewable energy, minimize environmental pollution, andcontinuously improve our environmental performance.
At Novanta, new product development will focus on material reduction,energy efficiency, distribution and shipping methods, packaging
concepts, and recycling to make our products more sustainable.
Novanta strives to comply, in all material respects, with applicablestandards, such as RoHS, including DEHP-free insufflators, REACH,
Conflict Minerals, and California Proposition 65 regulatory compliancefor all products. Refer to our Corporate Citizenship Downloads.

HC-MS-410a.2
Total amount of products
accepted for takeback andreused, recycled, or donated,broken down by (1) devices
and equipment and (2)supplies(1) 7.1 mt recycled(2) ZeroNovanta ESG Report 2022 | Page 38 | Be mindful of our environment, don’t print if you don’t need to.

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HC-MS-430a.1
Percentage of (1) entity's
facilities and (2) Tier 1
suppliers’ facilities
participating in third-party
audit programs for
manufacturing and productquality(1) 100% of manufacturing sites. In addition, the majority of our
products are produced in manufacturing facilities certified under ISO
9001 certification, while most of our products manufactured for the
medical market are produced in factories under ISO 13485
certification. Eight out of ten of our manufacturing facilities have beensuccessfully certified, recertified, or completed surveillance audits for
ISO 14001. Three production facilities successfully completed ISO
45001 audit for the first time.
Certain visualization solutions, thermal chart recorders, imaging
informatics, and medical insufflators, pumps, cameras, andaccessories products are manufactured under current good
manufacturing practices (cGMPs), which is a requirement of their
medical device classification by the United States Food and Drug
Administration (the “FDA”).
(2) Novanta does not currently track the percentage of supplierfacilities participating in third-party audit programs for manufacturing
and product quality.

HC-MS-430a.2
Description of efforts tomaintain traceability within
the distribution chain

Novanta maintains traceability throughout all stages of manufacturing
and distribution through our ERP systems.

RT-EE-440a.1 |HC-MS-430a.3
Description of the
management of risks
associated with the use ofcritical materials

Novanta recognizes that there are serious human rights abuses
associated with the extraction, transport, and trade of conflict minerals
from the Democratic Republic of Congo and the adjacent countries(collectively, the “DRC Region”) and is committed to the responsible
sourcing of minerals throughout its global supply chain. We conduct
annual Reasonable Country of Origin Inquiries (RCOI) that seek to
identify and eliminate from our supply chain any conflict minerals thathave originated from the DRC Region that may have, directly or
indirectly, financed or benefited the armed groups in the region. For
2021 reporting cycle, we surveyed 728 Tier-1 suppliers and received
responses from approximately 93% of these suppliers. As of the dateof this report, we are still in the process of conducting the RCOI for our
2022 conflict minerals reporting cycle. We will continue to work with our
suppliers to increase the response rate and improve the quality of theirand our conflict minerals due diligence efforts.
In 2022, we expanded our responsible sourcing program to encompass
high-risk locations outside of the DRC Region. We are asking suppliers
to remove from their supply chain smelters and refiners that are notapproved by Responsible Minerals Initiative (RMI) and Organization for
Economic Cooperation and Development (OECD) guidelines. We

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internally track the frequency of all non-approved suppliers andperform risk assessments based on locations and geopoliticalconcerns.
Novanta is committed to ensuring that our products comply with the EU
Chemicals Regulation (Registration, Evaluation, Authorization, andRestriction of Chemicals, also known as “REACH”). With regard to the
EU Directive on the Restriction of Hazardous Substances (RoHS), ourPhotonics and Precision Motion businesses comply with RoHS 3. Our
MIS businesses comply with RoHS 2 and are working to implement the
new requirements in accordance with RoHS 3, which became effective
for medical systems in July 2022. Novanta is also committed tocompliance with China RoHS.
We use an internal chemical classification and labeling system withreference to the Globally Harmonized System (GHS) and/or references
to regional classifications (e.g., TSCA, IESCS).
Novanta strives to comply with applicable standards, such as RoHS,
including DEHP-free tube sets, REACH, Conflict Minerals, and CAProp 65 regulatory compliance for all products.
Refer to our Corporate Citizenship Downloads.
RT-EE-510a.1
Description of policies andpractices for prevention of:(1) corruption and bribery and(2) anti-competitive behavior

Refer to our Code of Ethics and Business Conduct (pages 11 and 14)
and our Anti-Bribery and Anti-Corruption Policy. Novanta conducts
adverse data search and monitoring of significant customers andsuppliers using an online third-party monitoring tool so that we dobusiness only with companies with proper policies, procedures, andcontrols in place to prevent corruption, bribery, and anticompetitive
behaviors.

RT-EE-510a.2
Total amount of monetarylosses as a result of legal
proceedings associated withbribery or corruption

Zero

RT-EE-510a.3
Total amount of monetarylosses as a result of legal
proceedings associated with
anticompetitive behavior
regulations

Zero

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HC-MS-510a.1
Total amount ofmonetary losses as aresult of legal
proceedings
associated withbribery or corruption

Zero

HC-MS-510a.2
Description of codeof ethics governinginteractions withhealth care
professionals

The Novanta Code of Ethics and Business Conduct requires all of our activities
to be conducted in accordance with all applicable laws and regulations. The
Novanta Code of Ethics and Business Conduct states that “bribes andkickbacks are criminal acts, strictly prohibited by law.” This includes health care
professionals. Given our OEM business model, Novanta does not typicallyinteract directly with health care professionals.

RT-EE-000.A |HC-MS-000.A
Number of units (EE)
produced and (MS)sold by productcategory

Given the wide range of components produced and sold by Novanta,
disclosure of the number of units produced and sold by product category is notconsidered meaningful or practicable.

RT-EE-000.B
Number of
employees

Approximately 3,000 full-time and part-time employees as of December 31,
2022

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TCFD Framework
Governance

Disclose the Company’s governancearound climate-related risks andopportunities.

Refer to section:
3.1 ESG Oversight
3.5 Risks and Opportunities

Strategy

Disclose the actual and potential
impacts of climate-related risks andopportunities on the Company’sbusinesses, strategy, and financial
planning where such information ismaterial.

Refer to sections:
3.5 Risks and Opportunities
5.1 Environmental Goals

Risk
Management

Disclose how the Company identifies,
assesses, and manages climaterelated risks.

Metrics andTargets

Disclose the metrics and targets used
to assess and manage relevant
climate-related risks and opportunities
where such information is material.

Refer to section:
3.5 Risks and Opportunities
2022 Form 10-K
Item 1A “Risk Factors”(starting on page 17)
Refer to sections:
3.5 Risks and Opportunities
5.1 Environmental Goals
5.2 Climate and Energy
Appendix B

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Appendix A
ESG Data Tables
Innovation
2021

2022

R&D spending

$73 m

$86 m

Year-over-Year
Changes+$13 m

R&D spending as a % of revenue

10.3%

10.0%

30 bps

Revenue$707 m$861 m+$154 m52% | 48%49% | 51%

-3 | +3

29%

25%

-4%

End market mix
Medical | Advanced Industrial
Vitality index(Revenue from products introduced in the last
4 years as % of total consolidated revenue,
excluding current-year acquisitions)

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People2021

2022

Year-overYear Changes

Gender diversity (f | m)

33% | 67%

50% | 50%

+17 | -17

Underrepresented groups** |Non-underrepresented groups

11% | 89%13% | 87%

+2 | -2

Total headcount (f | m)

36% | 64%40% | 60%

+4 | -4

Individual contributor positions (f | m)

39% | 61%44% | 56%

+5 | -5

Leadership positions (f | m)

25% | 75%

25% | 75%

0|0

U.S. workforce: Total headcountUnderrepresented groups** |Non-underrepresented groups

42% | 58%45% | 55%

+3 | -3

U.S. workforce: Individual contributor positions
Underrepresented groups** |Non-underrepresented groups

48% | 52%52% | 48%

+4 | -4

U.S. workforce: Leadership positions
Underrepresented groups** |Non-underrepresented groups

23% | 77%26% | 74%

+3 | -3

36% | 64%38% | 62%

+2 | -2

Individual contributor positions (f | m)

39% | 61%

41% | 59%

+2 | -2

Leadership positions (f | m)

25% | 75%

25% | 75%

0|0

Employees trained on Compliance

97%

98%

+1

Board of Directors*

Women | Men ratio

Underrepresented groups** |Non-underrepresented groups

Women | Men ratio
Excluding new acquisition in 2022

Total headcount (f | m)

Excluding direct-labor production employees* As of December 31, 2021 and December 31, 2022, respectively.
** An underrepresented group in the U.S. is anyone who self-identifies as Black, African American, Hispanic or Latinx, Asian,
Native American or Alaskan Native, Native Hawaiian or Pacific Islander, or two or more races or ethnicities, as defined by
Nasdaq.

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Appendix B
Energy and GHG Emissions
Emission Source

mt CO2eStationary Combustion

SCOPE ONESCOPE TWO**

Mobile Sources

227

Fugitive Emissions

88

Scope One Total

1,360

Purchased Heat101

Market-Based Electricity

4,753

Location-Based Electricity

6,657

Market-Based Scope Two Total

4,854

Location-Based Scope Two Total

6,758

2021 Intensity

2022 Intensity(Reported)(units / million
dollar revenue*)
2.2(units / million
dollar revenue*)
1.6

mt CO2e6.3

5.7(0.6) | -10%

6,214

mt CO2e

8.5

7.3(1.2) | -14%2022 Reported
Emissions/
Consumption

Unit ofMeasureScope one

1,360

mt CO2e

Scope two**

4,854

Total emissions**

Year-over-Year
Changes(0.6) | -27%

Electricity

76,349

Gj

102.3

89.2

(13.1) | -13%

Total Energy

99,240

Gj

130.0

116.0

(14.0) | -11%

Electricity

21,210

MWh

28.4

24.8

(3.6) | -13%

Total Energy

27,569

MWh

36.1

32.2

(3.9) | -11%

65,714

M3

89.6

76.8

(12.8) | -14%

Water use*

1,044“Million dollar revenue” represents reported consolidated revenues minus revenues from business acquisitions consummatedduring the current fiscal year for which GHG emissions are excluded from the scope of the reported data in the table above.
Scope 2 and Total emissions shown are based on market-based method.

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Appendix C
Boundaries and Methodology
Environmental Data Boundaries
Novanta management determined that the Company will define its organizational boundaries for GHG
emissions disclosures in accordance with the Financial Control model required under the SEC’s proposed
rule on climate-related disclosures. Therefore, beginning in 2022, all consolidated subsidiaries included in
the consolidated financial statements of the Company are included in the scope of our GHG emissions
reporting.
As part of our continuous improvement efforts, the reporting boundaries of Novanta’s GHG inventory
have been expanded since our first report in 2021. Because of this expansion and for transparency ofreporting, Novanta’s GHG data have been presented in this report on both an “Organic” basis, reflecting
comparable sites in 2022 as in our 2021 report, and on a “Reported” basis, including all sites regardlessof size and all businesses acquired in the prior year but excluding businesses acquired in the current
year.
Due to the impracticality of collecting partial year environmental data for new acquisitions in any given
year, we have adopted a policy of excluding from our ESG reporting any environmental data related to
new acquisitions in the year in which the acquisition is consummated. We will begin to include the newacquisitions in the scope of our ESG report beginning in the first full year following the acquisition date.
We believe this methodology will enhance the transparency and comparability of GHG emissions datafrom one year to the next when the data is presented both on an Organic basis and on a Reported basis.
Additionally, we have adopted a rolling base year methodology under which the first full year following theyear of acquisition(s) or divestiture(s) will be set as the new base year for future GHG emission reduction
goals and reporting. We believe this rolling base year methodology will help guide the Company to stayon course for working towards our long-term goal of Net Zero carbon emissions.
Novanta uses a centralized approach to gathering data. Individual facilities report all activity data in its
raw form to the corporate level where all unit conversions and emissions calculations are completed by
the Global ESG Coordinator. The data collected and included in our GHG inventory represent the full yearof 2022.
For environmental data normalized by revenue, revenue amounts represent reported consolidated
revenues minus revenues from business acquisitions consummated during the current fiscal year forwhich GHG emissions are excluded from the scope of the reported data in this report.

GHG Inventory Methodology
Novanta’s GHG inventory calculations are made in line with the GHG Protocol’s Corporate Standard andScope 2 Guidance. The best available emission factors were chosen following GHG Protocol’s marketbased hierarchy and quality criteria. All global warming potentials (GWP) used are 100-year GWPs as
published in the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5).
Uncertainties are inevitable in GHG emissions inventories and related calculations. While it is necessary
to acknowledge such uncertainties in our model, we believe the information presented in this report can
provide us with a reasonable baseline as our ESG program continues to develop and mature.

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Appendix D
LRQA Independent Assurance Statement(see next page)

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LRQA Independent Assurance Statement
Relating to Novanta’s GHG Assertion for the Calendar Year 2022
This Assurance Statement has been prepared for Novanta in accordance with our contract.

Terms of Engagement
LRQA was commissioned by Novanta, Inc. (Novanta) to provide independent assurance of its greenhouse gas (GHG) emissions
inventory for the calendar year 2022 (CY22) against the assurance criteria below to a limited level of assurance and materialityof the professional judgement of the verifier using LRQA’s verification procedure and ISO 14064 - Part 3 for greenhouse gas
emissions. LRQA’s verification procedure is based on current best practise and is in accordance with ISAE 3000 and ISAE 3410.
Our assurance engagement covered Novanta’s global operations and activities under its financial control, and specifically thefollowing requirements:•
Verifying conformance with:•
Novanta’s reporting methodologies for the selected datasets;•
World Resources Institute / World Business Council for Sustainable Development Greenhouse Gas Protocol: A
corporate accounting and reporting standard, revised edition (otherwise referred to as the WRI/WBCSD GHG
Protocol) for the GHG data2.
•
Evaluating the accuracy and reliability of data and information for only the selected indicators listed below:•
Direct (Scope 1) and Energy Indirect (Scope 2) emissions.
LRQA’s responsibility is only to Novanta. LRQA disclaims any liability or responsibility to others as explained in the end
footnote. Novanta’s responsibility is for collecting, aggregating, analysing and presenting all the data and information within
the Inventory and for maintaining effective internal controls over the systems from which the Inventory is derived. Ultimately,
the Inventory has been approved by, and remains the responsibility of Novanta.

LRQA’s Opinion
Based on LRQA’s approach nothing has come to our attention that would cause us to believe that Novanta has not, in allmaterial respects:•
Met the requirements of the criteria listed above; and•Disclosed accurate and reliable performance data and information as summarized in Tables 1 and 2 below.
The opinion expressed is formed on the basis of a limited level of assurance 3 and at the materiality of the professional
judgement of the verifier.

Table 1. Summary of Novanta’s Key Data for CY22:
Scope of GHG Emissions
Scope 1
Scope 2
Other

Category

Quantity

Unit

1,360

MT CO2e

6,758

MT CO2eMarket-Based1

4,854

MT CO2e

Biogenic Emissions

72

MT CO2

DirectLocation-Based

1

Note 1: Scope 2, Location-based and Scope 2 Market-based are defined in the WRI/WBCSD GHG Protocol, 20152.

http://www.ghgprotocol.org/
The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited
assurance engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance
obtained in a limited assurance engagement is lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed.
3.

Table 2. Novanta’s GHG Emissions for CY22:
GHG
Emissions1

CO22

CH4

N2O

HFCs

PFCs

SF6

NF3

Unit

Marketbased

6,025

1.62

0.24

0.04

0

0

0

MT

Locationbased

7,999

0.48

0.10

0.04

0

0

0

MT

Note 1: Greenhouse gases covered by the Kyoto Protocol; these volumes do not include Global Warming Potentials.
Note 2: CO2 emissions exclude biogenic CO2 emissions (stated in Table 1).

LRQA’s Approach
LRQA’s assurance engagements are carried out in accordance with our verification procedure. The following tasks were
undertaken as part of the evidence gathering process for this assurance engagement:•interviewing relevant employees of the organization responsible for managing GHG emissions data and records;•
assessing Novanta’s data management systems to confirm they are designed to prevent significant errors, omissions or
mis-statements in the Inventory;•
reviewing estimation methodologies and recalculating emissions; and•verifying historical GHG emissions data and records at an aggregated level for the calendar year 2022.

LRQA’s Standards, Competence, and Independence
LRQA implements and maintains a comprehensive management system that meets accreditation requirements for ISO 14065
Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms ofrecognition and ISO/IEC 17021 Conformity assessment – Requirements for bodies providing audit and certification ofmanagement systems that are at least as demanding as the requirements of the International Standard on Quality Control 1and comply with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants.
LRQA ensures the selection of appropriately qualified individuals based on their qualifications, training and experience. The
outcome of all verification and certification assessments is then internally reviewed by senior management to ensure that theapproach applied is rigorous and transparent.

SignedDated: 14 March 2023

Kate Pagan
LRQA Lead Verifier
On behalf of LRQA, 1330 Enclave Parkway, Suite 200 Houston, TX 77077
LRQA reference: UQA00002264 / 5786790
LRQA Group Limited, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in this clause as'LRQA'. LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice inthis document or howsoever provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice andin that case any responsibility or liability is exclusively on the terms and conditions set out in that contract.
The English version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages. This
Assurance Statement is only valid when published with the Inventory to which it refers. It may only be reproduced in its entirety.
Copyright © LRQA, 2023.
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