2022 Sustainability Report

The power ofscience &sustainability
Better science to solve the world’s
toughest preservation challenges

Sustainability
We live in uncertain times, facing an
unprecedented combination of economic, socialand geopolitical challenges. These are also times
that offer incredible opportunities for companies
with the courage, vision and determination to seek
meaningful change.
Marc Doyle, CEO

Dear stakeholders,
We live in uncertain times, facing an unprecedented combination of economic, social and geopolitical challenges.
These are also times that offer incredible opportunities for companies with the courage, vision and determination toseek meaningful change. Driven by our purpose of using better science to solve the world’s toughest preservation
challenges, Arxada is targeting such change in three key areas: protecting and maintaining the health and wellbeing ofpeople, extending the life of vital infrastructure and improving the health of our planet.
In our first sustainability report as a standalone company, we are proud to report on our progress in 2022. This includes
establishing our sustainability team, designing our strategy and framework, and setting bold and ambitious goals, withthe aim of embedding sustainability into everything we do across our three pillars of Planet, Preservation and People.
We have demonstrated our proactive focus on sustainability from day one as a company. Thanks to support from ourowners, Bain Capital and Cinven, the carve-out of Arxada was partially financed through Sustainability-Linked Financial
Instruments, a first of its kind for a private equity transaction. This commitment to reducing our environmental impact
during our early growth stage was just the beginning. We have subsequently made several notable sustainable
investments and sharpened our sustainability strategy. The aim is to help our customers adapt to long-term
environmental and social change and develop more sustainable solutions while we actively decrease ourenvironmental footprint.

PlanetIn 2022, we completed our inventory of all Scope 1, Scope 2 and Scope 3 emissions. We also submitted our sciencebased targets to the Science-Based Targets initiative (SBTi) for validation in 2023, establishing a net zero goal by
2050. Moreover, we are leveraging our manufacturing process technology expertise to deliver more efficientmanufacturing processes for some of our key chemistries, focusing on lower carbon dioxide (CO2) and greenhouse gas(GHG) emissions.

Arxada 2022 Sustainability Report2Preservation
We are helping drive the preservation industry’s transition to more sustainable and cleaner solutions through ourpartnerships and investments in boosters, potentiators and controlled release technologies. We continue to develop
and launch innovative technologies and products that address our customers’ toughest challenges, meet increased
regulatory pressures and improve the wellbeing of society.

PeopleWe are working to create a culture of inclusivity for all through modern programs, benefits and structures that not only
support employees to thrive and grow but enable Arxada and its people to have a positive impact in the communities
where they work and live.
Thank you for your interest in our sustainability journey.

Marc Doyle, CEO

Arxada 2022 Sustainability Report3Our business &sustainability
Arxada is a global specialty chemicals
company, headquartered in Switzerland thatwas created in 2021 following the carve-out
and sale of Lonza Specialty Ingredients to
private equity firms Bain Capital and Cinven.
With a long-standing history as a global
leader in specialty chemicals, Arxada
develops and manufactures a broad range ofinnovative products that address the growing
need for more sustainable protection ofhuman health and wellbeing, infrastructure
and our planet. By doing so, the company
aims to solve the world’s toughest
preservation challenges.

Our business, purpose & values
Arxada focuses on four core end-markets: Human Health and Nutrition, Home and Personal Care, Paints and Coatingsand Wood Protection, and provides a broad portfolio of differentiated products and solutions. This is supported byscience and innovation capabilities, in-depth regulatory know-how and a proven record in manufacturing and processdevelopment.
Arxada has a global footprint spanning 26 production sites and 16 research and development centers; we have aworld-leading team of 3,600 employees, serving customers across a wide range of industries.
We innovate to solve, challenge and remove barriers to peak performance. We are passionate about empowering highperformance and realizing potential both internally and for our partners and customers. We work together every day toachieve our purpose:

Better science to solve the world’s toughest preservation challenges

3,600

26

16

Employees

Production
sites

R&D centers

Arxada 2022 Sustainability Report4Operating locations

HQ and maincommercial sites

Manufacturing sites

Research anddevelopment centers

Auckland (New Zealand)

Alpharetta (GA, US)

Conley (GA, US)

Bangkok (Thailand)

Helena (AR, US)

Blackley (UK)

Horhausen (Germany)

Castleford (UK)

Huddersfield (UK)

Conley (GA, US)

Kabinburi (Thailand)

Florham Park (NJ, US)

Bangkok (Thailand)

Kalama (WA, US)

Hannover (Germany)

Delft (Netherlands)

Kourim (Czech Republic)

Kourim (Czech Republic)

Florham Park (NJ, US)

Lake Charles (LA, US)

Melbourne (Australia)

Shanghai (China)

Levelland (TX, US)

Modesto (CA, US)

Tokyo (Japan)

Mapleton (IL, US)

Morristown (NJ, US)

Modesto (CA, US)

New Plymouth (New Zealand)

Moerdijk (Netherlands)

Salto (Brazil)

Nanjing (China)

Shanghai (China)

New Plymouth (New Zealand)Tokyo (Japan)

Newark (NJ, US)

Visp (Switzerland)

Global HQ
Basel (Switzerland)

Main commercial sites

Hide list

Penang (Malaysia)
Phoenix (AZ, US)

Hide list

Port Shepstone (South Africa)
Rochester (NY, US)
Salto (Brazil)
Suzhou (China)
Trentham (Australia)
Valparaiso (IN, US)
Williamsport (PA, US)
Visp (Switzerland)
Hide list

Arxada 2022 Sustainability Report5Our purpose centers around the importance of preservation for society and the environment. Preservation can protect
and maintain the health and wellbeing of people, improve the longevity and efficacy of vital infrastructure, while
supporting the health of our planet.
To help us achieve our purpose, we follow a set of core values that reflect the longstanding commitments of ourheritage companies, demonstrate our steadfast commitment to our people and the planet, and exemplify the way wework. These values are timeless and form the foundation of everything we do.

Safety &healthEthicalbehavior

Committing to safety andWe behave as respected

health is a top priority for all ofcorporate citizens, inus. This encompasses ouraccordance with the highest

employees, our contractors,

ethical standards and in

our customers and the people

compliance with all applicablein the communities where we

regulations and laws.

do business.

Respect forpeople &planetWe treat all people withprofessionalism, dignity andrespect, fostering anenvironment of collaboration,
innovation, excellence andinclusion. We provide scienceled solutions for our customers
helping them to adapt to longterm environmental and socialchange and develop moresustainable solutions while weactively reduce ourenvironmental footprint.

Our products
Preservation is about protecting and maintaining the health and wellbeing of people and improving the longevity andefficacy of vital infrastructure, while supporting the health of our planet. Our broad portfolio of products and services
helps our customers to be more efficient, effective and sustainable.
Consumer Microbial
Control
PeopleIndustrial Microbial
Control

Professional Hygiene

Nutrition, Care &Environmental
Vitamin Ingredients

Home & Personal
Care
Infrastructure

Wood Protection

Paints & Coating

Composite Materials

Material Protection

Arxada 2022 Sustainability Report6Consumer Microbial
Control
PlanetCrop Protection

Industrial Microbial
Control
EnergyWater Treatment

Nutrition, Care &Environmental
Custom Development& Manufacturing
Organization (CDMO)

Developing our sustainability strategy
In 2022, our first full year of operations as Arxada, we set the ambition of formalizing a sustainability strategy that canhelp us ensure we deliver on our purpose in a way that supports the UN Sustainable Development Goals (SDGs).
Through our products, we want to subscribe to more sustainable solutions for the world’s toughest preservation
challenges. Within our operations, we want to ensure that we are contributing to a low-carbon specialty chemicals
industry and are creating healthy and safe environments for our employees.
Our sustainability strategy enables us to do this by combining forward-thinking ambitions for our products with targets
to reduce the environmental and social impact of our operations. In 2022, as part of our strategy development process,we conducted in-depth desktop research and engaged internal and external stakeholders across the globe through aseries of interactive workshops and meetings. In addition, we engaged employees and investors, conducting a global
customer survey to help inform and guide our strategy and priorities.
The inputs from our research and stakeholder engagements were instrumental in identifying and prioritizing thesustainability issues most important to our business and our key stakeholders. The outcome of this work is refinement
and focus on key issues that will drive our sustainability performance forward. We evaluated and synthesized our
engagement findings, additional industry research and know-how from senior colleagues to develop a sustainability
strategy for 2030, resting on the three pillars of Planet, Preservation and People.
Going forward as a best practice, we will routinely seek input from all stakeholders and continue updating and refining
our sustainability approach to reflect stakeholder priorities.

Arxada’s sustainability strategy

PlanetPreservation

PeopleOperating eco-efficiently andwith respect for natural
resources on our path towards
net zeroProtecting and maintaining thehealth and wellbeing ofpeople, improving thelongevity and efficacy of vital
infrastructure while supporting
the health of our planet

Caring for people andcommunities, creating healthy
inclusive and safe workplaces
where everyone can thrive andgrow

Arxada 2022 Sustainability Report7

Net zero by 2050
Reducing our Scope 1, 2, and 3
emissions to zero or to aresidual level and neutralizing
any residual emissions[1]50% reduction of scope 1 and2 emissions by 2030[1]As we are already ahead of our2030 goal, we will revisit andreset our 2030 goal in 2023

Water
Goal to be set in 2023

Advancing the UN SDGs
through sustainable
preservation

Towards world-class healthand safety throughout ouroperations​

Our 2023 goal is to launch
Portfolio Sustainability
Assessments and set a goal forsustainable solutions byrevenue for 2030[2]Achieve by 2030:

Advocacy leadership for
science-based decisionmaking for a sustainable
futureCreating an inclusive culture
where all employees thriveand grow

Collaborate, drive and sponsor>50 scientific advocacy eventsby 2030[3]TRIR (Total Recordable
Injury Rate) < 0.3​
LTIFR (Lost Time Injury
Frequency Rate) < 0.1[5]Increase female representationin senior leadership to 40% by2030[6]

Responsible sourcing:addressing sustainability in
our supply chain

Community engagement andpositive impact throughvolunteering

100% of key suppliers tocomplete an ESG assessment
by 2030[4]Employees share or contribute
46,000 volunteer hours by
2030[1] From our 2021 baseline.
[2] As per the WBSCD PSA or another 3rd party validated methodology.
[3] Rates are calculated as the number of injuries or incidents in the reporting period x 200,000 / Total hours worked in the reporting period.
[4] Our key suppliers make up approximately 20% of our supplier base and account for approximately 80% of our spend.
[5] Advocacy to advance external science-based decision making that drives sustainable preservation.
[6] Our senior leadership includes the following job roles: Associate Director; Director; Senior Director; Vice President; Senior Vice President; President; and CEO.

Sustainability-Linked Financial Instruments
In a first of its kind for a private equity transaction, the carve-out of Arxada was partially financed throughsustainability-linked loan facilities and sustainability-linked bonds (Sustainability-Linked Financial Instruments), withsupport from our sponsors Bain Capital and Cinven. A Sustainability-Linked Financial Instrument has financial and/or
structural characteristics that can vary depending on whether the issuer achieves material, ambitious, pre-determined,
regularly monitored and externally verified sustainability objectives. Therefore, Sustainability-Linked Financial
Instruments present an additional incentive for the issuer to meet future commitments to improve sustainability in areas
considered material to overall business operations.
This is particularly relevant for Arxada as by embedding targets against its Key Performance Indicators (KPIs) into
Sustainability-Linked Financial Instruments, Arxada has committed to reducing its environmental impact during its early
growth stage. Arxada is also ensuring continuous and transparent disclosure of performance on these KPIs, as thecompany develops.

Arxada 2022 Sustainability Report8The adopted KPIs tied to the Sustainability-Linked Financial Instruments are (i) our greenhouse gas (‘‘GHG’’) emissions
intensity and (ii) waste intensity with target reductions set from a 2018 baseline.
By intensely focusing our resources to meet the reduction goals, as of the first interim target date of 2022, we haveexceeded the goals set on both targets.
A Sustainability-Linked Financing Report will be provided to Investors by Arxada on the progress made against the
KPIs of each Sustainability-Linked Financing Instrument.
External verification of our assessment of performance against the KPIs of each Sustainability-Linked Financing
Instrument will be conducted on at least an annual basis beginning the fiscal year end 2022. See our assurance
statement for our 2022 KPI observation data here.
More information on how we are working to improve our GHG and waste impact and meet our targets can be found in
the Planet Pillar content.

Arxada 2022 Sustainability Report9Sustainability
governanceGood corporate governance is important forthe success of our business. In 2022, weformalized the governance structure for the
successful delivery of our sustainability
strategy. This included oversight and due
diligence at the highest level of the business,
establishing the right policies andmechanisms to guide ethical businesspractices and ensuring adherence torecognized sustainability frameworks andcertifications.
Our 2022 site certifications and publicly
available policies supporting our sustainability
efforts are available on our Resources &downloads page.

Our board & ELT sustainability responsibility
Our board of directors is responsible for overseeing Arxada’s strategy, risk management and corporate reporting. The
board is comprised of ten members, including three independent members (two of whom joined our board in January2022), four members from Bain Capital and three from Cinven. The board does not include members of our Executive
Leadership Team (ELT) responsible for the daily management of our business.
Forming part of our wider governance and reporting to the board, we have three committees in place: an audit
committee, a people committee and a sustainability committee. In 2022, the sustainability committee focused on
developing our sustainability strategy and associated targets; in 2023, the focus will be on the strategy’s
institutionalization and execution. To support our sustainability committee and progress on our sustainability strategy,
we also have a two-person sustainability team which reports to our Chief Technology and Sustainability Officer.
Demonstrating our commitment to driving positive impact, we linked the remuneration of our ELT members to oursafety performance. As we were still defining our sustainability strategy in 2022, we included Arxada’s safety
performance as part of our short-term incentive program. With our strategy now finalized, in 2023 we will consider
how to further integrate sustainability-related metrics into our remuneration and incentive program.

Board of directors
Our board of directors consists of ten members and is responsible for overseeing Arxada’s strategy, risk management and corporate
reporting. The board is also responsible for approving our overall sustainability strategy.

Arxada 2022 Sustainability Report10

Sustainability committee
Composed of eight members, including our Chief Executive Officer (CEO) and Chief Technology and Sustainability Officer and four
representatives from Bain Capital and Cinven, the sustainability committee is responsible for the measurement, improvement, andreporting of our environmental and employee safety impact plans, and works to develop and execute plans for our environmentally
related remedial actions for existing sites.[1] [2] The sustainability committee also works closely with other members of our business toensure sustainability data is thoroughly understood and reported, and that sustainability topics are effectively communicated andmanaged throughout the organization.

Audit committee
Composed of three members from Bain Capital and Cinven, with participants including our CEO and Chief Financial Officer, our audit
committee assists the board with its oversight responsibilities to the members, potential members, the investment community andothers (as appropriate) relating to (i) the integrity of the Company’s financial statements; (ii) the effectiveness of the Company’s
internal control over financial reporting; (iii) selection of the independent auditor and assessment of the independent auditor’squalifications and independence; (iv) the performance of the Company’s internal audit functionality and independent auditors; and (v)the performance of the other committee functions.

People committee
Composed of seven members, including our CEO and Chief People Officer, and four representatives from Bain Capital and Cinven,our people committee is responsible for providing strategic input to advance a transformational people agenda focusing on building
a strong employer brand.

Executive Leadership Team
Our ten-person ELT is responsible for managing our day-to-day business and defining our overall strategy, including our purpose,
vision, and sustainability strategy.

Sustainability team
The two-person sustainability team reports to our Chief Technology and Sustainability Officer. They play a key role in facilitating
ongoing communication and driving the implementation of our sustainability strategy.

[1] GHG, waste and water.
[2] Total Recordable Injury Rate and Lost Time Injury Frequency Rate.

Business ethics
Our policies form the foundation of our ethical business conduct by setting standards for our employees and suppliers,
who are expected to adhere to our policies and act with integrity. The foundations of our principles and values for
ethical behavior are set out in our Code of Conduct.
In 2022 we introduced several new ethics and compliance policies, including a Code of Conduct, Anti-Bribery Policy,
Business Gift Policy, Antitrust Policy and Whistleblower and Non-Retaliation Policy. We initiated a new complianceprogram that requires our employees to undergo an annual training on the Code of Conduct. They will also be trained in

Arxada 2022 Sustainability Report

11

two to three rotating topics. We have customized our training programs, ensuring that employees receive content thatis relevant and thorough. Training provided in 2022 included Code of Conduct, Anti-Bribery and Conflicts of Interest. In
2023, we are training on Antitrust, Harassment, Confidential Information and Computer Security.
Expanding on our global training and policies, we will provide training that is targeted and region-specific. This may bebased on potential compliance risks identified for a region or the need to adhere to specific local laws and regulations.
For example, we created and implemented region-specific policies for our Chinese sites that are available in the local
language.
We regularly communicate the importance of compliance and business ethics through training, written materials andour Arxada intranet. All employees have access to our whistleblower program, which includes a hotline and an online
portal. The program is available 24/7, in all our operating languages, to allow employees to flag compliance issues they
may observe. Employees who raise concerns and compliance issues are protected through our Whistleblower and
Non-Retaliation Policy, ensuring anonymity.

HIGHLIGHT

Navigating business in a complex & interconnectedworld
We have suspended all business operations in Russia since 1 April 2022.
Our business in Russia represented an exceedingly small proportion of our operations, consisting of four employees
working in our sales group.
We have no manufacturing facilities in either Russia or Ukraine, nor do we receive any strategic raw materials fromthese countries. So far, the conflict has had only an extremely limited business impact on markets outside thisregion.
As part of the global humanitarian effort that has been mobilized in response to the crisis, Arxada donated USD
100,000 to the International Medical Corps — an independent, not-for-profit organization that operates worldwide
to provide emergency relief and long-term support to those affected by war, disaster and disease.

Arxada 2022 Sustainability Report12About the 2022
sustainability report

Herens Midco S.à r.l. is a private limited liability company incorporated under the laws of Luxembourg on January 28,
2021. Arxada AG and Troy Corporation are indirect subsidiaries of Herens Midco S.à r.l. and operate under the name
Arxada. Arxada’s operational headquarters is in Basel, Switzerland.
This inaugural annual sustainability report, available for download on arxada.com, covers the activities of the Group
from January 1, 2022, through December 31, 2022, unless otherwise noted. To determine the KPIs and disclosures inthis report, we referenced the Global Reporting Initiative (GRI) Standards (2021) and the Sustainability AccountingStandards Board (SASB) Resource Transformation - Chemicals (RT-CH) Standard.
This report and the data included is intended to help our stakeholders understand our sustainability performance.
Sustainability performance data on GHG intensity and waste intensity for our sustainability-linked loan requirements
have been assured by an external third party. Arxada is committed to increasing the scope of our sustainability datacollection and data assurance in future years.
For questions, comments, and suggestions about our report or this website, please email us at
sustainability@arxada.com. For investor inquiries about our sustainability practices please email us at
investors@arxada.com. For media enquiries please email us at media.enquiries@arxada.com.

Forward-looking statements
This annual report contains forward-looking statements. Forward-looking statements provide our current expectations,
intentions, or forecasts of future events. Forward-looking statements include statements about expectations, beliefs,
plans, objectives, intentions, assumptions and other statements that are not statements of historical fact. Words orphrases, or the negatives of those words or phrases, may identify forward-looking statements. Still, the absence of
these words does not necessarily mean that a statement is not forward-looking.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors. They are basedon potentially inaccurate assumptions that could cause actual results to differ materially from those expected or
implied by the forward-looking statements. Given these risks and uncertainties, you should not rely on forward-looking
statements as a prediction of actual results. We urge you to read this entire annual report, including the sections on
factors that could affect our future performance and the industry in which we operate.
Any forward-looking statements are only made as of the date of this annual report. We do not intend nor assume any
obligation to update forward-looking statements set out in this report. You should interpret all subsequent written ororal forward-looking statements attributable to us or to persons acting on our behalf as being qualified by thecautionary statements in this annual report. As a result, you should not place undue reliance on these forward-looking
statements.

Arxada 2022 Sustainability Report13PlanetAs we come to realize our responsibility forenvironmental stewardship, we see a magnificent
opportunity for innovation focusing on theenvironmental impact of everything we do. Thisjourney will ultimately result in preserving ourenvironment and achieving net zero.
Mike Burness, Head of Global Quality and Sustainability

Our environmental efforts are focused on operating eco-efficiently and respecting the planet’s natural resources on ourpath toward net zero. This includes working to reduce our greenhouse gas (GHG) emissions, as well as improving ourwater and waste management.
In 2022, our first full year operating as Arxada, we have worked to align the management of our environmental topics
across our global operations network. To ensure a continued and globally aligned approach, we have set three global
priorities that our business will work towards over the coming years. Please read more about the current and future
management of our environmental topics and progress made in 2022 on the following pages.

Arxada 2022 Sustainability Report14

Goals
NET
ZERO

50%

Water
Goal to be set in2023

By 2050

Reduction of Scope 1
and 2 emissions by
2030

Reducing our Scope 1, 2, and 3

As we are already ahead of ouremissions to zero or to a residual

2030 goal, we will revisit andlevel and neutralizing any residual

reset our 2030 goal in 2023.

[1]

emissions[1] From our 2021 baseline.

Arxada 2022 Sustainability Report15

Air quality &GHG emissions
To help preserve our planet and limit global
warming, reducing the emissions ofgreenhouse gases (GHG) and other air
pollutants is a key priority for Arxada. While
we believe our products can have anenormous positive impact, we are looking to
improve the efficiency of our facilities andsupply chain, contributing towards a
reduction in our environmental footprint. Our
ambition is to become a low-carbon
chemicals company with a net zero carbon
footprint.
GHG intensity reduction targets were integrated into the Sustainability-Linked Financial Instruments issued as part ofour carve-out as Arxada. In 2022, we went even further by submitting science-based targets to be validated by the
Science Based Targets initiative (SBTi), establishing the following goals:

NET ZERO50%

By 2050

Reduction of Scope 1 and 2
emissions by 2030

[1]

[1]

Reducing our Scope 1, 2, and 3 emissions tozero or to a residual level and neutralizing any
residual emissions.

As we are already ahead of our 2030 goal,
we will revisit and reset our 2030 goal in
2023.

[1] From our 2021 baseline.

Our Scope 1 & 2 emissions
In 2022, we completed a GHG inventory for our Scope 1 and 2 emissions. Scope 1, which is responsible for most of our
combined Scope 1 and 2 emissions, includes emissions from fuel combustion, as well as natural gas and refrigerants
used in our manufacturing processes and facilities. Scope 2 is a smaller portion of our emissions and is split between
the electricity and steam used in our manufacturing processes and facilities. As we are already ahead of our 2030 goal,
we will revisit and reset our 2030 goal in 2023.

Arxada 2022 Sustainability Report16

To meet our net zero by 2050 target, we will be working to reduce our emissions in line with our SBTi submitted
targets. We continue to analyze various emission sources for reduction opportunities across our facilities globally. At
the end of 2021, the installation of a catalytic converter in Visp, our largest production site, led to a significant reduction
in nitrous oxide (N2O), which forms a significant portion of our global Scope 1 emissions. In its first year of use, theconverter has allowed us to reduce our N2O emissions in Visp by over 98%, the equivalent of 520,000 tCO2e. Find out
more about the catalytic converter project in the case study.
Reducing our Scope 2 footprint, which is driven by our purchased steam and electricity, is another priority. Theseenergy sources are used to run our daily operations.
Throughout the business, we are setting reduction targets and building decarbonization and sustainability plans. As aresult, we are working to identify opportunities to replace equipment with newer and more efficient models. This isparticularly impactful as we are seeking to increase the use of renewable energy across the business.

Scope 1 & 2 distribution
1.25 Million tCO2e

Scope 1

1 Million tCO2e

Scope 2 (market-based)

750,000 tCO2e
500,000 tCO2e
250,000 tCO2e
0

2021

2022

Our Scope 3 emissions
As part of our SBTi target submission in 2022, we evaluated our Scope 3 footprint from 2021, which makes up nearly
two-thirds of our GHG emissions. Upon validation of our SBTi targets, we will set specific Scope 3 goals. The largest
category of our Scope 3 emissions is purchased goods and services which includes raw materials used in production.
Alongside efforts to reduce our consumption of raw materials, we work to advance responsible sourcing and waste
management efforts, thus helping to reduce our Scope 3 footprint.
Examining our Scope 3 footprint in more detail, we have identified raw materials with the most significant impacts on
our emissions by examining their GHG intensity. One of our approaches to reduce our Scope 3 emissions is to explore
the feasibility of recovering, recycling and reusing raw materials.
In 2023, we will continue to work to better understand our Scope 3 footprint and reduce our emissions, focusing on our
raw materials.

Air pollutants
In addition to the commonly reported GHG emissions, Arxada regularly monitors our emissions for sulfur oxides (SOx),
nitrogen oxides (NOx) and volatile organic compounds (VOCs). We ensure these emissions are regularly measured andreported to local authorities in line with the regulations of the various operating regions.

Arxada 2022 Sustainability Report17

Arxada’s air pollutants
250 t

VOCs

200 t
150 t

NOx

100 t

SOx

50 t
0

2021

2022

Looking forward to 2023
In 2023, we will formalize our science-based targets, continue to advance our emission reduction initiatives and work
to identify additional opportunities to decrease our footprint. To support our goal of reducing emissions, we will develop
decarbonization plans throughout the company. We will continue to monitor, track and examine our energy
consumption and look to increase efficiency and use of renewable energy. This is important as we consider ways toelectrify processes that currently rely on natural gas. We will closely analyze our raw material usage, supply chain andwaste management to identify chances to reduce our Scope 3 emissions.

HIGHLIGHTN O reduction in Visp, Switzerland
2

In 2019, we detected that as part of our Vitamin B3 production process at our Visp (Switzerland) manufacturing
facility, we emitted N2O. While nitrous oxide does not present a risk to health, it is a potent GHG contributing to our
Scope 1 emissions. We saw an opportunity to improve our process efficiency and environmental impact.

Arxada 2022 Sustainability Report18

Following a detailed investigation into the production process and a feasibility study, including the localization oftechnology to help us reduce our N2O emissions, we installed a new catalytic converter at our facility and began
operating it in October 2021. The converter decomposes the N2O into N2 and O2, which can be released into theatmosphere without concern. After the converter’s installation, measurements showed that the conversion of N2O
were carried out to almost 100%.
In 2022, its first full year of operation, the converter allowed us to reduce approximately 1,750 tons of N2Oemissions, the equivalent of 520,000 tCO2e. This has led to a reduction of more than 70% of our global Scope 1
emissions.

Arxada 2022 Sustainability Report19Waste management
Waste is a by-product of many
manufacturing processes, including ours.
Managing different waste streams andfinding ways to reduce it is a large part of ourprocess optimization and key for protecting
our planet. Local communities have a vested
interest in wanting to be reassured aboutproper waste disposal. We recognize thebroader role we play in reducing ourenvironmental impact and conserving natural
resources to support a more circular
economy.
Responsible waste management and decreased waste generation is an important component to our environmental
objectives. Our waste minimization guidelines prioritize best practices and clarify responsibilities for sites to manage
and reduce waste. Additionally, it is important for us to take a site-specific approach to waste reduction, as waste
classification and regulatory requirements vary by location and must be localized to ensure compliance.
Reducing our waste has many direct and indirect benefits, such as increasing material efficiency, diminishing raw
material purchases and reducing our Scope 3 footprint. In Visp, for example, a waste reduction project led to a smaller
amount of waste treated externally through a high-intensity energy treatment, thus avoiding emissions and reducing
our water consumption.

Our waste minimization plan
We are building waste management plans throughout the company.
We use a centralized global data system and process to capture and manage environmental data from ourmanufacturing sites. This data reviews the links between activities, materials, products, supplies used and the waste
generated. We then apply Arxada’s prioritization scheme that considers regulatory requirements, risk reduction, andenvironmental benefit (amongst other factors).
Once suitable waste streams for reduction have been identified, our sites turn to our waste minimization hierarchy toidentify and achieve sustainable waste reduction.

Arxada 2022 Sustainability Report20

Prevent

ReduceReuse

Preventing waste from being
produced

Reducing the quantity of waste
being produced

Using a product, material, or
substance again for the same
purposeRecycleEnergyrecovery

Disposal[1]

Recovering waste andreprocessing it into products,
materials, or substances

Converting waste materials into
usable heat, electricity, or fuelDirecting waste towards
landfilling and other final solutions[1] Recycling includes composting but does not include incineration.

To ensure our waste management is aligned with regional regulation and industry best practices, while considering
newly available technological solutions, our site teams periodically review the performance of waste management
practices to implement updates and changes. Waste data is collected quarterly and reported annually through thisreport.

Waste management in action
The classification of waste as hazardous or non-hazardous at our facilities depends on the applicable regional
regulations. We frequently look to implement industry best practices to minimize our total waste footprint and turnhazardous waste into non-hazardous waste.

Arxada’s waste footprint
75,000 t

Hazardous waste

60,000 t

Non-hazardous waste

45,000 t
30,000 t
15,000 t
0

2021

2022

In 2022, as part of our ongoing process optimization work, we discovered some of the hazardous waste we produced
in Visp (Switzerland) can be sent to an external waste treatment plant for further purification. By using separation
technologies like distillation, we can extract some of the often expensive and GHG intense solvents from the waste torecycle and reuse in our processes. This allows us to keep materials in the system longer, reducing raw materialpurchasing costs, reducing our carbon footprint and supporting circularity in our processes. Equally, the separation

Arxada 2022 Sustainability Report21

technology allows us to extract water from the waste, which is sent to a treatment plant and released back into the
local water body. We now send significantly less material to the external waste treatment plant, allowing us to reduce
our hazardous waste in Visp by 13,900 t and reduce water consumption.

Looking forward to 2023
To continue driving sustainable waste reduction in 2023 and beyond, all our sites will work to develop waste reductionplans following our guidelines on waste minimization. Where further prevention and reduction of waste is not possible,
we will continue our path towards circularity, as we look to explore alternatives for the by-products created in our
processes. This includes reusing them in our own operations or selling them to other companies who use thesematerials in their processes. Equally, we will continue to reuse and recycle materials where possible, minimizing
resource consumption and working towards a more circular way of operating.

HIGHLIGHT

Implementing safe working conditions in new sites
As part of our merger with Troy Corporation in 2021, we added a manufacturing facility in Newark (NJ, USA) to oursite portfolio. Following an evaluation of the site, we established that almost 2,000 containers of material werecongesting the operational flow and impacting its safe operation.
In 2022, we extracted approximately 2,500 pallets of material from the site. This has allowed us to create more
onsite storage space and safer working conditions for our employees. They can now pass through the facilities
without obstruction, allowing the safe passage of forklifts and individuals through the facilities. This is particularly
important as there is a potential for flooding, which could cause additional health and safety concerns in the eventof improperly stored and secured material. For 2023, we plan to remove the remaining 500 pallets of material fromthe site.

Arxada 2022 Sustainability Report

22

HIGHLIGHT

Implementing wastewater treatment to improve
efficiency & reduce costs
In 2022, our facility based in Rochester (NY, USA) began working to implement manufacturing process upgradesfor ongoing compliance with wastewater regulations for the local county’s pre-treatment facilities.
In 2019, the New York State Department of Environmental Conservation (NYSDEC) announced a new limit for
wastewater discharge. Since then, we have been working with the state and county to ensure our Rochester site's
safe and lawful operation. In 2023, to adhere to the new limit, we are rolling out a program that allows us to
improve the monitoring of key wastewater parameters, reduce the generation of hazardous waste and streamline
operational tasks.
To reduce the generation of hazardous waste, we are installing new equipment that acts as a waste concentrator,
allowing us to extract organics from our wastewater. This reduces the process’ hazardous waste by 115 metric tons
annually and recycles the water back into the process.
Additionally, by installing a new online analyzer for process control, we will be able to reduce organics inwastewater, improve the yield of our process, and reduce the use of materials in order to decrease our annualmaterial costs.

Arxada 2022 Sustainability Report23

Water management
An essential resource for our operations,water is used in a variety of ways across ourfacilities: we use water not only to cool our
processes and to produce steam, but also to
mix with other materials, such as solvents, aspart of our manufacturing processes.
Carefully managing our consumption is apriority for us in an increasingly water scarceworld.

Considering our diverse use cases for water, in 2022, we determined that we needed to update our water datacollection approach and further embed our data collection processes into the operations. While we are continuously
working to reduce our water consumption, we will set water reduction targets in 2023.
Similar to our waste management approach, local site management is responsible for water use and discharge, as wellas collecting accurate data for our global data management system.

Water withdrawal, use & release
We typically draw water from our own groundwater wells, or nearby rivers and lakes, when available. Otherwise, werely on water supplied by municipalities.
After we withdraw water, we use it for various purposes within our facilities:
1. To cool down our processes
2. To produce steam
3. For cleaning processes
4. To combine it with our raw material to generate our products
5. For sanitary purposes within our facilities
We use and dispose of water in ways that respect and adhere to the local requirements, regulations and industry bestpractices. This includes releasing water back into water bodies or municipal water streams, discharging it into
wastewater treatment plants.

Cooling water in Visp
Visp in Switzerland, our largest production site, is located near the river Rhône. Due to its close proximity to the Swiss
Alps, the river is naturally cold, holding a temperature between approximately 4°C–8°C year-round. This natural sourceof cooling water allows us to operate our facilities in Visp without energy-intensive cooling towers.
To ensure we are respecting and optimizing the use of this natural resource, we are currently conducting an analysis todetermine our use efficiency. After identifying potential areas for optimization, we seek to actively lessen use byimplementing a closed-meshed monitoring concept. With deeper understanding, we will start developing strategies tomaximize reduced consumption.

Arxada 2022 Sustainability Report24

Looking forward to 2023
In 2023, we will set water reduction targets companywide and will work closely with our manufacturing sites topreserve this important and critical resource.

HIGHLIGHT

Stormwater collection & water recycling in Auckland,
New Zealand
Our manufacturing facility in Auckland (New Zealand), uses water to produce our Tanalith C Oxide product. In
2022, we increased the amount of stormwater and recycled water to decrease our use of industrial water from thelocal town supply.
Stormwater within our site is captured and led through an underground sand filtration system before beingtransferred to two storage tanks within our facility grounds. Equally, water used in our onsite laboratory and forwashing up, for example, is captured and diverted to a wastewater tank to be recycled for use in our Tanalith C
Oxide production process.
While these systems have been in place for a few years, we increased our focus on using stormwater and recycledwater in 2022, using in total, 581,509 liters with a record amount of 79,764 liters of stormwater in August 2022.
Our stormwater and recycled water contributed 34% of our water needs for the Tanalith C Oxide production
process, which is more than double the amount used only two years ago in 2020.

Arxada 2022 Sustainability Report25

Preservation
We are committed to being the industry leader insustainable preservation — protecting andmaintaining the health and wellbeing of people,
and extending the life of vital infrastructure whileworking to reduce both our own and ourcustomers’ ecological footprint.
Rick Strittmatter, Chief Technology and Sustainability Officer

Our vision is to tackle the most pressing preservation challenges for people and the planet, we recognise the crucialrole that our products play in achieving this goal. Through our products and solutions, we are working to protect thehealth and wellbeing of people and improve the longevity of infrastructure and materials to preserve the health of ourplanet. We are dedicated to continuously upgrading the sustainability of our products throughout their lifecycle anddeveloping newer, more environmentally friendly technologies in line with global regulatory requirements. This includes
being mindful of the materials we use, how we source them and using science to advance sustainability.
To achieve our goal of sustainable preservation, we have established three targets for 2030. Learn more about ourtargets and progress on the following pages.

Arxada 2022 Sustainability Report26

GoalsProtecting and maintaining the health and wellbeing of people, improving the longevity and efficacy of vital
infrastructure while supporting the health of our planet.

Advancing the UN
SDGs throughsustainable
preservation

Advocacy leadershipfor science-based
decision making for asustainable future

Responsible
sourcing: addressing
sustainability in our
supply chain

Our 2023 goal is tolaunch Portfolio
Sustainability
Assessments and set a
goal for sustainable
solutions by revenue,
for 2030

Collaborate, drive andsponsor >50 scientificadvocacy events by
2030

100% of key suppliers
to complete an ESG
assessment by 2030

[3]

[2]

[1]

[1] As per the World Business Council for Sustainable Development (WBSCD) Portfolio Sustainability Assessment (PSA) or another 3rd party-validated methodology.
[2] Advocacy to advance external science-based decision-making that drives sustainable preservation.
[3] Our key suppliers make up approximately 20% of our supplier base and account for approximately 80% of our spend.

Arxada 2022 Sustainability Report27Advancing the UN
SDGs throughsustainable
preservation
At Arxada, we understand that preservationand sustainability go hand-in-hand. By
increasing the longevity of something,whether it be a physical material or the healthand wellbeing of people and the planet, weare helping to build a more sustainable future.
Some of our products act directly aspreservatives, through material protection.
Other products work to combat harmful
microorganisms and improve hygiene,
helping to support healthier societies.
To ensure we are aligned with the needs of society, we will begin the assessment of our product portfolio in 2023 andset a sustainable solutions revenue goal for 2030. This will be evaluated using the World Business Council for
Sustainable Development (WBCSD) Portfolio Sustainability Assessment (PSA) or another 3rd party-validated
methodology.

Improving the impact of our products
Our commitment to sustainability is closely tied to our focus on innovation and technology. Considering the recent
pandemic, we recognize the critical importance of keeping people, places and the planet healthy. Our efforts toachieve sustainability encompass a range of initiatives, including preserving current technologies that protect publichealth and developing new, greener and more sustainable chemistries and products.
One of our key areas of focus is preventing microbial contamination in consumer products. Such contamination canhave significant financial and reputational implications for manufacturers and marketers. Our preservatives aredesigned to inhibit the growth of harmful bacteria, yeast and fungi, thereby extending the shelf life of personal care andcleaning products. As microbes continue to evolve due to increasing population density and climate change, the threat
they pose to people, places and the planet are constantly evolving. We remain committed to staying at the forefront oftechnology and innovation to protect public health while promoting sustainability.
We have created and instituted a product development process that goes beyond basic regulatory compliance andfocuses on performance, environmental and safety goals for the benefit of customers, employees and end-users alike.
In developing our products, our research and development (R&D) and operational teams work together to ensure our
products support preservation in their end uses. For example, products that form a component in paints and coatings
can be used to protect and preserve the material of the surface it is used on. Coatings used on wind turbines that
produce renewable energy must withstand harsh weather conditions, while coatings used on appliances mustwithstand everyday use. Our teams work closely to ensure that our products meet all current and anticipated regulatory
requirements.

Arxada 2022 Sustainability Report28

In 2022, we conducted research to identify reliable and accepted approaches to evaluate and measure the impact ofour products throughout the lifecycle and alignment with the United Nations Sustainable Development Goals (UNSDGs). In 2023, we will begin testing these methodologies on key products and new product innovations within eachof our business units. This includes working with external frameworks, tools and experts, including the WBCSD PSA,
and tools for Product Carbon Footprinting (PCF).

Innovating sustainable products
Arxada’s purpose is to advance better science to solve the world’s toughest preservation challenges.
Preservation is about protecting and maintaining the health and wellbeing of people and improving the longevity ofvital infrastructure, while improving the health of the planet. Our ambition is to innovate and be part of efforts toaddress the UN SDGs.
Effective preservation enhances the durability of water-based products which significantly reduces waste throughout
global supply chains. Preservation solutions are essential to ensure minimization of waste and safety of products.
Without effective preservation, not only will significant amounts of energy and natural resources go to waste, thedevelopment of sustainable products such as paints and coatings will also be limited. This has impacts on the UN
SDGs including climate change (SDG 13) and responsible consumption and production (SDG 12).
Around the globe effective preservation solutions are under threat due to increasing regulatory constraints. An
increasing number of suitable active biocidal substances are cancelled, not supported, non-approved, or restricted foruse. New innovative technologies are needed that make use of the currently effective biocidal actives combined withnew delivery mechanisms and optimization of solutions. In addition, sustainable innovations such as bio-based
technologies, adjuvants and potentiators will need to be developed.
Innovations for microbial control will require major investment and a focused effort, with long timelines to success.
Partnerships and coordination with customers, NGOs, and regulatory authorities are needed to reduce the uncertaintyof the ever-changing regulatory requirements.
Arxada will provide insight into the most exciting developments as a responsible innovation leader and showcase newtechnologies that push the boundaries of what is possible for achieving more sustainable preservation solutions.

Looking forward to 2023
In 2023, we will begin deploying the WBCSD PSA to proactively identify and address improved sustainability
outcomes of new product innovation, ranging from the product chemistry to the SDG impacts of our products.
Implementing a common methodology built on industry best practices provides a robust, pragmatic and integrated
approach to steer our product portfolio sustainable innovation efforts. As sustainable design definitions andmethodologies evolve, we will adapt to ensure we are holistic in our approach to sustainable innovation.

Arxada 2022 Sustainability Report

29

HIGHLIGHT

Expanding our hygiene portfolio using sustainablechemistry
For several years, we have been working to expand our hygiene product portfolio to include disinfectant cleaners
based on sustainable chemistry. The efforts of our North American hygiene product team have led to thedevelopment and launch of several products that utilize active and inert ingredients included on the U.S.
Environmental Protection Agency’s (EPA) Safer Choice Ingredient List (SCIL).
We began by expanding our portfolio with disinfectant wipes and liquids based on Hydrogen Peroxide, which
breaks down into oxygen and water. These products include our NUGEN® enhanced hydrogen peroxide (EHP),
ready to use (RTU) wipes for industrial and institutional markets (I and I), and consumer applications, the former ofwhich is also approved by the EPA’s Design for the Environment, a certification for pesticides administered by
EPA’s Safer Choice Program. For our work, we earned a Safer Choice Partner of the Year award in 2021.
This year, we continued expanding our sustainable product portfolio through the launch of our NUGEN® Citric
Guard Disinfectant wipes (CG Wipes). We partnered with a substrate producer to develop the CG Wipes, enabling
us to develop a wipe substrate based on cellulose fibers approved on the SCIL. While we are awaiting approval for
EPA’s Design for Environment certification, the CG Wipes have already been approved for a United States
Department of Agriculture (USDA) Bio Preferred certification that calculated a 94% biobased content of our wipes.
The CG Wipes were developed for the North American market; it is undergoing registration with the U.S. EPA and
Health Canada, and we are currently testing and exploring the regulatory requirements for other regions like
Australia.

Arxada 2022 Sustainability Report30

HIGHLIGHT

Tanasote – helping keep wood in the game®

Industrial timber still has many applications in today’s world, including railway sleepers, utility poles, as well as inheavy-duty agricultural applications. Traditionally, Creosote (a wood preservative pesticide) has been used toprotect the timber and increase its longevity. Notably, the safety and environmental credentials of Creosote havebeen under review in Europe for years, and its use has been restricted under the EU’s Biocidal Products Regulation(BPR).
Over the past decade, our wood protection R&D team has worked to develop a BPR authorized alternative; in April
2021, we introduced Tanasote®. The oil-based copper wood preservative is designed to deliver a long service life
(typically beyond 40 years depending on timber species and end-use application), while minimizing the risk of early
failures. It is the only oil-based wood preservative approved under the BPR, and all its active ingredients areapproved for wood preservative use in Europe. Tanasote® has passed the BPR’s risk assessments to be used for thetreatment of timbers in industrial heavy-duty applications both above ground and in-ground contact.
During our extensive R&D process, we tested the performance of the product beyond the required industry
standards to ensure that a longer service life for industrial-use timber can be achieved. This included testing in highhumidity, aggressive field test sites and laboratory fungal studies. In addition, to provide confidence in our test
performance data, it was reviewed by a third party and we engaged in full scale trials with commercial partners
across Europe, including railway sleepers, utility poles, equestrian and agricultural fencing.

Arxada 2022 Sustainability Report31Advocacy leadershipfor science‑based
decision‑making for asustainable future
Evolving our approach and staying up to datewith new regulations are essential todeveloping products that serve the needs ofthe planet, communities and our customers.
Our long history in the specialty chemicals
sector has allowed us to develop deepindustry expertise and understanding of the
global regulatory landscape.
To continue providing industry leadership and supporting the use of good science to advance sustainability, we have astrong presence in national, regional and global industry associations. We maintain direct contact with decision
makers, authorities and regulatory agencies. For 2030, we have set the target to collaborate with customers andindustry and to drive and/or sponsor more than 50 events advancing scientific advocacy. To us, this means advocating
to advance external science-based decision-making that drives sustainable preservation.

Our global regulatory & advocacy approach
The Arxada global regulatory and advocacy approach is aimed at providing leadership and stewardship to placecompliant and sustainable products and services on the market, meet the needs of our customers and keep people
and the environment safe.
We are striving to enhance the value we provide to our customers. International experience, combined with knowledgeof local markets and regulations, are essential in the changing global business climate. Regulatory and advocacy
practices are one of the key differentiating factors helping to achieve strategic and sustainability objectives, and we arecommitted to lead on these efforts.
Our regulatory and advocacy strategy is supported by a team of over 70 regulatory affairs experts around the world,
offering a global, yet market-specific approach.
Some of the key organizations we engage with and are active members of include:

ACC CBC

ACI

AISE

CEFIC

American ChemistryCouncil Centre forBiocide Chemistries

The American Cleaning
InstituteInternational Associationfor Soaps, Detergents andMaintenance
Products

European Chemical
Industry Council

Arxada 2022 Sustainability Report32

EFfCI

HCPA

MCEC

VCI

European Federation for
Cosmetic Ingredients

Household andCommercial Products
Association

Microbial Control
Executive Council

German Chemicals
Industry Association

Driven by science, legislation, regulation and communication, we are working bilaterally, through customer and industry
partnerships, to meet our objectives whilst engaging in government and public relations. Our regulatory and advocacy
strategy is designed to support innovation by delivering a portfolio of new products, integrated solutions and nonchemical alternatives. This enables us to achieve the following: deliver a globally differentiated customer-focusedservice that demonstrates the benefits of our products and services; attract and retain the best people with the rightcompetencies, knowledge and talents; ensure our systems and processes, including new digital methods, create asmooth-running and efficient delivery.

Arxada’s regulatory advocacy approach

Actively managing our chemical substance portfolio
We prioritize the safety of our employees and customers by manufacturing products that are safe to handle and use.
We have implemented robust processes that include monitoring regulatory changes and implementing best practices
for the safe use, handling, storage, transportation and disposal of hazardous chemicals.
To ensure our commitment to safety, we proactively monitor and track our use of substances classified as category 1
and 2 under the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) for Health andEnvironmental Hazardous Substances. We have established clear safety protocols for all chemicals used in ouroperations, regardless of whether they are classified as hazardous.
Furthermore, we are dedicated to sustainability and are continuously exploring and implementing safer alternatives tohazardous chemicals in our operations where feasible and appropriate.

Arxada 2022 Sustainability Report33Responsible sourcing
It is important to us that the materials we use
to manufacture our products are procured ina socially and environmentally responsible
manner. Sourcing these materials responsibly
will allow us to positively impact stakeholders
in our supply chain. Ensuring that we have a
deep understanding of these issues also
helps us identify and mitigate potential risks.

We manage our supply chain through our three business units: Consumer Microbial Control (CMC), Industrial Microbial
Control (IMC), and Nutrition, Care & Environmental (NCE). Many of the materials we procure are specific to a particular
product and site. However, common approaches are used across all business units. We prioritize procuring goods fromrenewable resources that are grown and produced under environmentally and socially responsible conditions. To
ensure our suppliers are aligned with our values and ambitions, we conduct supplier screenings and assessments, andwe have updated our global Supplier Code of Conduct in 2022. In addition, we comply with regionally specificrequirements, such as the UK Modern Slavery Act Statement, the Swiss Ordinance on Due Diligence and Transparency
in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour and the California Transparency inSupply Chains Act Statement.
The materials we procure contribute to our greenhouse gas (GHG) emissions footprint that we are aiming to reduce.
We can achieve this by selecting more environmentally friendly transportation methods and materials. We alsoprioritize that workers at our supplier sites are treated safely, ethically and with respect in line with our corporate valuesof Safety and Health, Ethical Behavior, and Respect for People and Planet.
To create more sustainable supply chains across the business, we have set a goal for 100% of our key suppliers tocomplete an environmental, social and governance (ESG) assessment by 2030.

Supplier screening & assessment
Prior to entering into a contractual agreement with a supplier, we conduct supplier screening and assessments thatconsider risk factors such as financial, geopolitical and environmental risk.
We are committed to making sustainability improvements within our and our suppliers’ operations. We rolled out oursustainable sourcing strategy in late 2022, designed to comprehensively manage and reduce our Scope 3 emissions
by working collaboratively throughout our supply chain. In the future, we plan to join the Together for Sustainability (TfS)
initiative and begin ESG assessments of our suppliers using the EcoVadis platform. TfS was founded by chemical
sector companies in 2011 and aims to support chemical companies in assessing, auditing and improving thesustainability practices of their supply chains. As a TfS member, we will have access to a database of TfS supplierassessments, audits and be able to develop and improve in all areas of our sustainability sourcing practices.
TfS audits can be requested by members and are an on-site examination of a supplier’s business sites and practices
according to a specific set of sustainability criteria. Audit results are accessible to every TfS member, facilitating indepth insights into the performance of a supplier.

Arxada 2022 Sustainability Report34

TfS assessments are conducted online and are supported by EcoVadis questionnaires. Sustainable development
experts analyze all supplied data, including third-party certifications and publicly available information, to assign a
supplier score from 0 to 100. This score can be broken down by scoring category to identify a supplier’s strengths andweaknesses. As a TfS member, we can request the supplier to put in place a Corrective Action Plan (CAP) to address
shortcomings. The CAP includes a roadmap containing corrective actions, deadlines and responsibilities for the
supplier to fulfil. To help suppliers implement the roadmap and address identified shortcomings, TfS provides supplierswith access to its academy training hub.
By joining TfS, we will be able to make use of the supplier audit and assessment database. We will also be able tocalculate an average score across all our suppliers. The initiative also takes considerable burden off our suppliers whoneed to complete only one assessment to be used by many customers, showing a joint effort across the chemicalindustry to build more sustainable and responsible supply chains for the sector. As part of our efforts to drive
improvements in the supply chain, we will improve sustainability performance through EcoVadis and as a member of
TfS, learning from and working with the state of the art sustainability supply chain initiative in our industry.

Supplier Code of Conduct
In 2022, we refreshed our Supplier Code of Conduct, setting forth our principles for labor, environment, health andsafety that we expect all suppliers to observe and comply with. This year, we began the roll out of the code, consistingof nine sections:
1. Principles

4. Health and safety

7. Information

2. Ethics

5. Environment

8. Report to Arxada

3. Labor

6. Internal measuring procedures

9. Termination of agreement

The code emphasizes our commitment to following the Principles of the United Nations Global Compact and theInternational Labour Organization’s (ILO) Forced Labor Standards, the Foreign Corrupt Practices Act, the UK Bribery
Act, and all anti-bribery and anti-trust laws of other countries. Through our audits and in the future through ourmembership in TfS, we will be monitoring our suppliers’ adherence to our Supplier Code of Conduct. If we becomeaware of a non-compliance with our Supplier Code of Conduct, we have the right to request that our supplier takecorrective action and we reserve the right to terminate our agreement with that supplier.

Looking forward to 2023
In 2023, we plan to continue the rollout of our sustainable sourcing strategy. This includes having all key suppliersconfirm that they are following the principles mentioned in our Supplier Code of Conduct and beginning our
engagement with the TfS initiative and ESG supplier assessments, to gain a deeper understanding of our supply chain
and help our suppliers progress on their sustainability journey.

Arxada 2022 Sustainability Report

35

HIGHLIGHT

Supply chain sustainability helps reduce CO emissions
2

In Visp (Switzerland), one of our biggest sources of CO2 emissions is our AGU (Acetylene Generator Unit). We havescreened the market for renewable and not crude-based AGU-Feedstock and have had several meetings withpotential partners. By replacing 1 t of fossil-based AGU Feedstock with renewable AGU Feedstock, we can reduce
our fossil-based CO2e emissions output by 1 t of CO2.

Arxada 2022 Sustainability Report36PeopleWe are committed to fostering a diverse andinclusive culture where our employees can thriveand grow. We believe in engaging with ourcommunities and stakeholders to create positive
impact. The focus on diversity, inclusion andcommunity engagement is key to achieving ourambitious innovation and sustainability goals.
Sandra Collier, Chief People Officer

Our vision for solving the world’s toughest preservation challenges can only be achieved through the hard work anddedication of our people. We want to help our colleagues unlock their talent by providing an inclusive, safe andengaging work environment. Open and respectful communication and engagement with each other, as well as thecommunities in which we operate, is a fundamental aspect of our business.
Empowering every colleague to learn, grow and bring their best skills and abilities to work every day has allowed us tothrive. To continue building a strong business and culture, we have set ourselves three goals. Learn more about how wework to engage our people and communities to create an inclusive and safe culture on the following pages.

Arxada 2022 Sustainability Report37

GoalsCaring for people and our communities, creating safe healthy and inclusive workplaces where everyone can thrive andgrow.

Towards world-classhealth and safety
throughout ouroperations​

Creating an inclusive
culture where all
employees thrive andgrow

Community
engagement andpositive impact
through volunteering

Achieve by 2030:

Increase female
representation insenior leadership to
40% by 2030

Employees share orcontribute 46,000
volunteer hours by
2030

TRIR (Total
Recordable Injury
Rate) < 0.3​

[2]

LTIFR (Lost Time
Injury FrequencyRate) < 0.1[1][1] Rates are calculated as the number of injuries or incidents in the reporting period x 200,000 / Total hours worked in the reporting period.
[2] Our senior leadership includes the following job roles: Associate Director; Director; Senior Director; Vice President; Senior Vice President; President; and CEO.

Arxada 2022 Sustainability Report38

Health & safety
Our employees are our greatest asset and wewant to ensure we not only respect andnurture them, but keep them safe. Health andsafety (H&S) has been defined as one of ourthree corporate values, and strong H&S
processes are essential to maintain ourlicense to operate as a chemical
manufacturing business.

Our environmental, health and safety (EHS) team oversee our EHS strategy by conducting audits of our operations,addressing remediation issues at our sites and assuring overall compliance. Our EHS efforts are further divided among
our business units: Consumer Microbial Control (CMC), Industrial Microbial Control (IMC), and Nutrition, Care andEnvironmental (NCE). Our CMC and IMC units have a shared EHS approach with their own segment staff, while ourNCE segment has a separate EHS team. These teams report into our group operations function and are primarily
responsible for managing the day-to-day H&S activities at our sites and facilities. By establishing clear lines of
responsibility and oversight at both the corporate and business unit levels, we are effectively managing and promotinga H&S culture throughout our organization, poising us to achieve our global H&S goals.
By 2030, we aim to achieve:

Below 0.3
Total Recordable Injury Rate
(TRIR)

Below 0.1
[1]

Lost Time Injury Frequency Rate
(LTIFR)[1] An injury or illness is considered a recordable incident if it results in any of the following: death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness.
Additionally, a significant injury or illness diagnosed by a physician or other licensed healthcare professional is considered a recordable incident, even if it does not result in death, days away from work, restricted work or job
transfer, medical treatment beyond first aid, or loss of consciousness.

Our health & safety performance
At the end of 2021 and into 2022, we launched the Safer Together at Arxada initiative to improve the safety of ouroperations. The initiative comprises eight themes and focuses on safety culture and reporting discipline. The
anticipated result of the increased knowledge and awareness around H&S incidents and reporting was an increase in
the number of incidents reported by our facilities. In 2022, we continue to focus on both reporting and managing our
TRIR, TRFR and LTIFR. Read more about our Safer Together at Arxada program and our efforts to identify root causes of
H&S incidents to prevent reoccurrence below.

Arxada 2022 Sustainability Report39

Arxada’s 2022 health & safety performance
1.25

Total Recordable Incident
Rates (TRIR)

1

Total Recordable Fatality
Rates (TRFR).75.5

Lost Time Injury Frequency
Rate (LTIFR)

.25
0

TRIR

TRFR

LTIFR

Safer Together at Arxada
As stated above, our Safer Together at Arxada initiative reaffirms and further integrates the H&S culture at
Arxada. Launched by our corporate EHS team, the Safer Together at Arxada program focuses on our values of safety
and health, ethical behavior, and respect for people and planet. The program aims to engage all employees to work
collaboratively and foster new leadership behaviors in safety; it also acts as a key driver for our 2030 H&S goal. Safer
Together at Arxada emphasizes the importance of bringing people together locally and globally, encouraging
collaboration and the sharing of learnings and best practices.
The program was rolled out globally with the support of our units and all operating regions. It is built around eightthemes related to safety management.

1.

EHS aspirations and purpose

2.

Organizational philosophy and principles

3.

Serious injuries and fatalities (SIF)
foundations

4.

Operating discipline

5.

Infrastructure and mechanical integrity

6. Management of change – people

7.

Employee engagement

8. Leadership behaviors

In 2022, we engaged a wide range of employees in the rollout of our program through various digital and in-person
channels, including targeted webinars, workshops, and discussions involving team members at all levels of thebusiness. We also hosted more than 20 seminars on safety leadership behaviors, which were attended by over 200
leaders ranging from senior executives to front-line supervisors.
In November 2022, we conducted a survey that showed 80% of all our employees were already familiar with theprogram and 68% were already seeing a positive impact. Additionally, our survey showed that 92% of all employees
see themselves committed to the new EHS aspiration and purpose statement that was developed and communicatedby a global team as part of this roll out effort.

Arxada 2022 Sustainability Report40

Arxada will advance the safety of every employee, every task, every day, andprotect the environment we touch.
As part of efforts to implement Safer Together across Arxada, we also revised and updated 21 internal safety-related
policies and procedures to ensure strong support for our new purpose of using better science to solve the world’s
toughest preservation challenges. In 2023, we will continue rolling out the program across our global operations,focusing on office-based employees.

Creating a health & safety culture
Our strategy aims to embed an awareness of H&S measures in our corporate culture. We want our employees tounderstand the importance of H&S and live our safety and health value in their everyday actions to ensure they are kept
safe.
To enable this, each employee has an annual performance goal related to H&S. Together with the employee’s manager,
this goal is tailored to take into consideration the employee’s job responsibilities, working environment, and theircontribution to Arxada’s broader regional and global H&S goals.
In addition to the annual performance goal, every employee completes H&S related training on an annual basis. All our
employees are required to complete basic H&S training, including all relevant standard operating procedures for theprocesses performed by the individual. For example, some office-based and sales employees may be required toreceive training on topics such as our policy on using phones when driving, while those who work with chemicals
receive training on the safe and lawful handling of chemicals. Additionally, some employees complete theoretical andpractical exams over longer time intervals. By providing tailored training to our employees, we are ensuring that they
are equipped with the knowledge and skills needed to work safely and effectively in their roles. Employees also
regularly participate in emergency response drills specific to each site.

Management & auditing of sites
The corporate group EHS team is responsible for regularly auditing all our sites, ensuring that site-level EHS practices
comply with regional laws and our own policies. This also allows us to mitigate EHS-related risks and implement
measures to standardize practices globally.
In addition to following regulatory auditing requirements, we follow a risk-based auditing system, grouping our sites
into risk categories that determine the frequency of their auditing. At a minimum, every site is audited every three years.
Depending on the outcome of an audit, a site may be classified as higher-risk and be audited more frequently.
During audits, we assess our sites based on their risk management systems and performance (S&P), and compliancewith a range of EHS-related issues, including H&S measures, emergency preparedness and response, and thehandling, storage, and disposal of waste. In the US, for example, our sites must ensure compliance with Occupational
Safety and Health Administration (OSHA) standards. In addition to these broader topics, we also conduct assessments
for industrial hygiene and personal protective equipment to ensure the safety of our employees.
When new facilities become part of Arxada, we conduct a separate EHS gap assessment in addition to our regular
auditing process. This assessment is designed to identify areas where current practices may need to be improved or
established to meet our standards. After completing the assessment, our EHS teams work with the evaluated sites todiscuss the findings and develop an action roadmap for the next 12 to 18 months to address any identified weaknesses.
By proactively identifying and addressing potential EHS issues, we are ensuring that all our sites operate in a safe,
compliant, and sustainable manner.
In 2022, we carried out 19 audits and assessments across the 28 sites included in our global audit program.

Arxada 2022 Sustainability Report41

Arxada site audits 2022

x5

x8

x6

Risk management
plans and process
safety management
auditsEnvironmental,
health and safety
S&P audits

EHS gap
assessments

Events & incidents
While we are working hard to maintain a rigorous and comprehensive H&S culture in our business and at all our sites,
incidents can happen. When an incident does occur, we learn from it and put measures in place to prevent it fromreoccurring through two specific approaches:
1. Root cause analysis: Using the definitions of the Center for Chemical Process Safety (CCPS) for leading andlagging process safety metrics, we request a root cause analysis for every registered Tier 1 and 2 incident.[1] [2]Using root cause analysis, we can understand why an accident occurred and implement measures to prevent itfrom occurring again. In 2022, we have been working to align this methodology across all our global operations.
To broaden the reach and effectiveness of our root cause analysis, the analysis itself, including the cause
mapping, is shared with all EHS and site managers during a global monthly call. This allows us to implement ourlearnings from one incident on a global scale.
2. Serious Injuries and Fatalities (SIF) program: As part of our Safer Together at Arxada program, we
implemented a SIF program and integrated this into our corporate H&S processes. As part of this, SIF training
was carried out at manufacturing sites globally, and we are committed to thoroughly investigating all registered
incidents and examining their potential to cause acute injury or fatalities. By actively engaging our employees
and managers in this process, we aim to identify and eliminate any potential sources of serious harm at ouroperations.
[1] Leading metrics are a forward-looking set of metrics that indicate the performance of the key work processes, operating discipline, or protection layers that help prevent potential incidents. Lagging metrics are a
retrospective set of metrics based on incidents that meet an established threshold of severity.
[2] Tier 1 incidents are described as catastrophic and exceed a defined threshold level, whereas a Tier 2 incident is used to normalize the industry metrics and provide a minimum and upper limit threshold range.

Looking forward to 2023
In addition to continuing the roll-out of our Safer Together at Arxada program and auditing new and existing sites in
2023, we plan to integrate wellbeing and mental health more formally into our overall H&S approach. This will be
intricately connected to our employee engagement and community involvement efforts. By addressing both physicaland mental health, we will create a comprehensive approach to H&S that promotes the overall wellbeing of ourworkforce.

Arxada 2022 Sustainability Report

42

HIGHLIGHT

Promoting a strong safety culture at Lake Charles, USA
Our Lake Charles facility in Westlake (LA, USA), is a flagship example of Arxada’s H&S culture. The site produces
hydrazine products for our Nutrition, Care and Environmental business segment and has been recognized for its
outstanding H&S performance.
Over the last 26 years, there has been no Lost Time Injury incident at the site and the previous OSHA recordable
injury occurred in early 2011, demonstrating an exceptional safety record. This is especially important to us as
hydrazine needs to be handled with care to avoid negative health consequences.
The team at Lake Charles understands the importance of handling hydrazine carefully and fostering a safety cultureof looking after each other. Employees at the site regularly review and adapt their own and their colleagues’ work
procedures to make processes safer. New hires at Lake Charles complete intensive training focused on H&S toensure a good understanding of the safety procedures and risks associated with handling hydrazine and othermaterials.

Arxada 2022 Sustainability Report

43Attracting, enabling &engaging a diverse
workforceWith a rich legacy more than a century
strong, our shared passion and purpose
motivates us to innovate and find solutions to
the world’s toughest preservation challenges.
We believe that attracting, enabling andengaging a diverse workforce is crucial to our
success. By fostering an inclusive culture andhiring team members from a range ofbackgrounds and experiences, we are better
able to tackle the complex and varied
challenges facing the world today.

Attracting & developing talent
As a young and dynamic business operating in a competitive industry, it is essential to prioritize the attraction andretention of top talent. By creating a unique and distinct business culture led by recognized leaders in the chemicals
industry, we can offer our employees the opportunity to shape and grow with the company. This makes us an attractive
employer for new hires and emphasizes the importance of engaging with and developing our current team members.
By valuing our workforce and providing meaningful work, we are building a strong and sustainable business.
For our new hires and established workforce, we have both employee training and individual employee development
plans. On an annual basis, all staff is required to complete compliance training that includes instruction on our Code of
Conduct. Additionally, all employees have access to LinkedIn Learning to develop specific skills based on their jobs andinterests.
Our talent attraction efforts in 2022 were primarily led by individual sites and regions. This included regional
partnerships with organizations focusing on women in science, technology, engineering and math (STEM) and early
careers apprenticeship programs. In 2023, we will focus on ensuring that our talent attraction processes are designed
to include diverse slate hiring pools and target specific communities in line with our goal to build a workforce that ismore diverse in gender, race, background and skillsets.

Diversity, equity & inclusion
Having a more diverse, equitable and inclusive workforce is a critical component of our global employee strategy.
Diversity is important for better decision-making, higher quality ideas and innovation. We are committed to creating aworkplace where all employees can bring their full selves to work every day, participate authentically and are valued fortheir unique talents and perspectives.

Arxada 2022 Sustainability Report44

As a global company with a global customer base, we understand that diversity looks different in every part of theworld, and we want our business to be reflective of all the markets in which we operate. We recognize that thechemicals industry has historically had a skewed gender ratio, and we are committed to playing a role in promoting
greater diversity within the industry. One way we are working towards this goal is by setting a target for our leadershipteam to achieve 40% female representation by 2030. This year, female representation in our senior leadership teamwas 23%.[1]
To demonstrate our commitment to diversity, equity and inclusion (DEI) at the leadership level, in 2022 we began
actively communicating our diversity statistics and measures to our Executive Leadership Team (ELT). While DEI issponsored at the executive level by our Chief People Officer, Sandra Collier, our CEO Marc Doyle is actively involved inand passionate about driving forward awareness and progress of this important work. Equally, DEI is being
championed at the operational level by a group of passionate employees who established a DEI steering committee in2022, aiming to foster a diverse, equitable and inclusive culture at Arxada.
To attract top talent, we are developing a talent engine roadmap with specific workstreams focused on aligning job
levels and performance measures globally, standardizing our approach to early careers, and creating a plan for
employee learning and development that includes training for line managers. Our talent engine roadmap will link to our
DEI ambitions, creating a more diverse talent pipeline. This will include targeted partnerships and job descriptions
containing gender-neutral and inclusive language. By implementing these strategies, we strengthen our position as an
attractive and supportive employer for top talent.
While DEI representation and commitment at the leadership level is important, we are working on creating a morediverse talent pipeline for all career levels by ingraining DEI into our talent attraction processes.

Arxada workforce diversity 2022
Arxada senior leadership[1]Arxada global workforce[2]Female(23%)

Female(25%)

Male (77%)

Male (75%)[1] This data excludes senior leadership from our recent Troy and Enviro Tech transactions. Our senior leadership includes the following job roles: Associate Director; Director; Senior Director; Vice President; Senior Vice President;
President; and CEO.
[2] Please note the data provided is only for Arxada (legacy LSI), which represents 74% of the company.

Engaging employees
Employee engagement is the key to retention, and our fast-evolving business makes it important to listen to ouremployees while providing them with a strong understanding of our purpose and values. To do so, we are providing our
employees with regional guidance and are engaging them through awards and a specialized engagement survey.

Arxada 2022 Sustainability Report45All employees have access to an employee handbook that contains guidelines on policies and practices that are
specifically applicable to their region. The handbook helps employees better understand their job expectations, as well
as Arxada and the company culture. It contains practical information on employee benefits, and outlines how
misconduct, such as harassment and discrimination, is handled. Our employee handbooks reflect our company values
and reinforces our Code of Conduct. Learn more about our Code of Conduct, values and approach to business ethics.
To ensure we are effectively promoting areas such as diversity and inclusion, and health and wellbeing within ourorganization, we value and rely on feedback from our employees. To gather this feedback, we use Peakon, theemployee engagement platform for our Insights2Action survey. This initiative is deployed across our organization tomeasure our drivers of employee engagement including role rewards, recognition, workload and other items that
contribute to an overall engagement score. We work with local teams to develop and agree on action plans to improvetheir scores and engage employees more effectively.
The survey also provides an employee Net Promoter Score (eNPS). The eNPS tells us how likely our employees are to
recommend Arxada as a place to work to family and friends, thus providing an additional measure of employee
engagement and satisfaction. In 2022, our eNPS was 7.2 and we aim to achieve a score of 7.5 by 2024. We will work to
improve our engagement with eNPS by providing enhanced training for line managers to enable them to have moremeaningful development conversations and offer better support for their teams.
Insight2Action survey results are shared at the individual team level. Both the team results, as well as global results,
help us identify areas across the business that need more support and attention in 2023.

Arxada’s 2022 Insight2Action scores

73%

7.2

Of our employees responded to ouremployee survey in 2022

Our 2022 eNPS score

Looking forward to 2023
In 2023, we will expand and grow our DEI efforts. The DEI steering team will work to build a more comprehensive
strategy to drive progress toward our goals and build a foundation for nurturing a culture of inclusion and belonging.
Our DEI efforts will be further supported by the launch of our employee resource groups (ERGs). Through our ERGs, wewill aim to hear the authentic voices of our employees and understand their motivations and needs. This input will help
us build the supporting policies, frameworks and practices required to reach our targets and goals, and create a true
culture of belonging. We aspire to maintain this continuous feedback loop to ensure our employees feel heard andincluded.

Arxada 2022 Sustainability Report

46

HIGHLIGHT

Izzy Colon technology & innovation award
This year, we launched the Izzy Colon technology and innovation award to engage and incentivize our employees tocontinue innovating and developing high-quality products. This award is named in honor of Izzy Colon, a respectedleader and industry icon in research and development, innovation, new product technology and technical services
who retired in 2022.
Izzy, who is part of the award committee, believes that innovation needs to:Provide a sustainable competitive advantage
Solve an important problem that the company is facing
Show real creativity
By recognizing the importance of innovation through this award, we aim to keep Izzy’s legacy alive and encourage
our workforce to continue pushing the boundaries of what is possible. By engaging our employees in productinnovation and valuing their contributions, we are fostering a culture of innovation that helps to drive the success ofour business. We look forward to announcing our first award winners in early 2023.

Arxada 2022 Sustainability Report47

Community
involvement
Engaging with the communities around thesites where we operate allows us tocommunicate with, learn from, and contributeto our local communities, building positive
relationships and having meaningful impact.

Our sustainability strategy solidifies our global commitment to create positive impact in our communities. By providing
our team members with the opportunity to give back to their communities, we hope to foster a sense of purpose andconnection amongst our employees.
In 2022, our sites largely organized their own community engagement efforts. For example, our employees inAlpharetta (GA, USA) donated time for important community initiatives including the Urban Tree Planting Plan in
downtown Atlanta (GA, USA). In Huddersfield (UK), employees coordinated a community food drive in support of local
food banks. In Salto (Brazil), we partnered with local schools and municipalities to develop a tree preservation program.
The goal of this individualized approach is for each program to personally connect with our employees in a meaningful
way, while uplifting the communities where we live and operate.
To increase our engagement and impact, our goal is to share 46,000 hours of paid volunteer time by 2030. The hours
correspond to a day of volunteering every year for 20% of our current employee census. We expect this activity to
expand over time as sites and employees detect needs, find ways to contribute and time allotment is increased.
The communications department will steer the efforts to build a robust community engagement policy and multiyear
plan in 2023, in collaboration with the EHS team and our sites. It will rely on local employee resource groups to start
implementing activities that matter to Arxada and to our communities.

Looking forward to 2023
In 2023, we will enhance these efforts as we launch our engagement and volunteering program. The program will
empower employees to make a meaningful impact through hands on community involvement by volunteering withorganizations in our respective communities where we live and work. The intent is to create and facilitate opportunities
to have a meaningful influence in our communities locally, while aligning and supporting our purpose, values andstrategy globally.

Arxada 2022 Sustainability Report

48

HIGHLIGHT

Downtown Atlanta urban tree planting – One Million
Trees initiative
In 2020, the One Million Trees Initiative — a collaboration of ten metro Atlanta cities and ten local non-profits waslaunched to plant and conserve 1,000,000 trees in ten years. The initiative is seeking to address local climate
effects and environmental stresses from urban growth, as well as improve the cities’ sustainability and better
protect the health and wellbeing of people living and working in metro Atlanta (GA, USA).
As part of our corporate volunteering work, employees from three of our Atlanta based wood sites volunteered withthe local non-profit Trees Atlanta which is part of the initiative. Our employees from the Conley Plant, Conley
Technical Center and Alpharetta R&D site volunteered to plant trees at South Bend Park located close to theConley facility in February 2022. Their efforts with Trees Atlanta contributed to the wider One Million Trees
Initiative and the sites are looking forward to continue volunteering with Trees Atlanta and the One Million Trees
Initiative on a regular basis.

Arxada 2022 Sustainability Report49Resources & downloads
2022 Sustainability Report
2022 Sustainability Report (PDF)
Arxada Certificates2022 Sustainability Report Data Indices

Assurance of Environmental Data
Independent Limited Assurance Statement to Arxada
AG

Policies

Planet Pillar Data

Code of Conduct

Preservation Pillar Data

Supplier Code of Conduct

People Pillar Data

Arxada Sustainability Policy

Complete Sustainability Report Data

Arxada UK Modern Slavery Statement Act 2022
Arxada California Transparency in Supply Chains Act
Statement

Arxada 2022 Sustainability Report50Data index
Notes on data completeness
Financial Year 2022 is Arxada’s inaugural year of ESG reporting. Due to this, some data in the report is incomplete. We
are committed to increasing the scope of our sustainability data collection and data assurance in future years.

General disclosures
Performance indicator

FY22

Framework

Organization name

Herens Midco S.a.r.l.

GRI 2-1

Ownership status

Private equity, owned by Bain and Cinven funds, holding
company

GRI 2-1

Headquarters location

Basel, Switzerland

GRI 2-1

Countries of operation

See Our business & sustainability

GRI 2-1

Entities in sustainability reporting

Troy AG and Arxada AG

GRI 2-2

Differences between entity list in
financial reporting andsustainability reporting

N/A Audited Financials on Herens Midco S.a.r.l. are nonpublic information

GRI 2-2

Reporting period (sustainability
and financial reporting)

01.01.2022 – 31.12.2022

GRI 2-3

Report cycle

AnnualGRI 2-3

Report publication date

23.05.2023

GRI 2-3

Report contact point

General inquiries on sustainability report:sustainability@arxada.com
Investor inquiries: investors@arxada.com

GRI 2-3

Restatement of information

N/A inaugural report

GRI 2-4

External assurance

External assurance was sought for the assessment ofembedded KPIs in our Sustainability-Linked Financial
Instruments, covering Scope 1 and Scope 2 (locationbased and market-based) as well as total waste
generated for our Sustainability Report for the reporting
year 2022.

GRI 2-5

See Our 2022 Assurance Letter from ERM-CVS and Our
business & sustainability
SectorChemicals sector

GRI 2-6

Value chain and activities

See About Arxada

GRI 2-6

Arxada 2022 Sustainability Report51Performance indicator

FY22

Framework

Governance structure andcomposition

See Our Executive Leadership Team and Sustainability
governance

GRI 2-9

Nomination and selection of thehighest governance bodySee Sustainability governance

GRI 2-10

Chair of the highest governancebody

Arxada does not have a formal Chairman of the Board

GRI 2-11

Role of the highest governancebody in overseeing themanagement of impacts

See Sustainability governance

GRI 2-12

Remuneration policies

See Sustainability governance

GRI 2-19

Statement on sustainable
development strategy

See Sustainability at Arxada and Our business &sustainability

GRI 2-22

Policy commitments

See Sustainability governance and Resources &downloads

GRI 2-23

Arxada’s policies are approved by the relevant ELT
members and boards of the relevant legal entities.
The policies mentioned above are communicatedthrough the Arxada internet, intranet, and periodic ethics& compliance training programs, such as its True Officetraining platform, and periodic Legal Department training
programs.
Embedding policy commitments

See Sustainability governance and Attracting, enabling &engaging a diverse workforce

GRI 2-24

Processes to remediate negative
impacts

See Our business & sustainability

GRI 2-25

Several of the company’s manufacturing sites, including
Visp, Newark, Mapleton, Willamsport, Conley andSuzhou, have labor unions, which have Collective
Bargaining Agreements (CBAs) under relevant local laws
containing grievance mechanisms.
In the event the company receives claims or complaints
from employees or third parties, the Legal Department
thoroughly investigates them with the appropriate
internal stakeholders and business/functional partners,
supported by outside counsel where necessary, andworks with internal stakeholders to determine
appropriate actions.
Processes involving the Legal Department areperiodically reviewed and evaluated as needed,
depending on a variety of factors.

Mechanisms for seeking advice
and raising concerns

Arxada 2022 Sustainability Report

The HR and Legal Departments typically support
GRI 2-26
grievance processes. Guidance regarding reporting
concerns is included in several company policies (such as
some mentioned above), during training programs andduring everyday business counselling.

52

Performance indicator

FY22

Framework

Approach to stakeholder
engagement

See Our business & sustainability and Advocacy
leadership for science-based decision-making for asustainable future

GRI 2-29

Planet pillar disclosures
Performance indicator

FY21

FY22

Framework

Scope 1*

658,222 tCO2e

181,138 tCO2e

Scope 2 location-based*

173,871 tCO2e

155,514 tCO2e

GRI 305-1, 305-2,
305-5

Scope 2 market-based*

168,216 tCO2e

163,052 tCO2e

Base year

2021

Consolidation approach

Operational control

Operational control

Standards, methodologies,
assumptions, and/or calculation
tools

GHG Emissions are definedas Scope 1 and 2
greenhouse gas emissionsof the Group, determined inaccordance with the Scope
1 and 2 guidance of the
GHG Protocol Corporate
Accounting and ReportingStandard.

GHG Emissions are definedas Scope 1 and 2
greenhouse gas emissionsof the Group, determined inaccordance with the Scope
1 and 2 guidance of the
GHG Protocol Corporate
Accounting and ReportingStandard.

NOX

75.0 t68.6 t

SOX

3.8 t

3.8 t

VOCs

166.3 t168.8 tTotal energy consumed

5,616,650 GJ

5,043,030 GJ% grid electricity

30%

32%

% renewable5%

1%

See Supplier Code of
Conduct. Additionally,legislative compliance isadministrated locally basedon local legislation.

See Supplier Code of
Conduct. Additionally,legislative compliance isadministrated locally basedon local legislation.

Greenhouse gas emissions[1] [2]

Air quality management[1]SASB RT-CH-120a.1

Energy management[1]SASB RT-CH-130a.1

Waste management
Third-party waste management

Arxada 2022 Sustainability Report

GRI 306-2, 306-3,
306-4, 306-5

53

Performance indicator

FY21

FY22

Total waste generated*

70,717 t

53,881 t

Hazardous waste generated

57,670 t

41,203 t

Non-hazardous waste generated

13,047 t

12,678 t

Hazardous waste recycled

6,899 t5,109 tNon-hazardous waste recycled

2,522 t2,585 tHazardous waste incinerated

34,671 t

31,583 t

Hazardous waste sent to landfill

3,034 t1,240 tHazardous waste disposed (otheroptions)

13,064 t

3,269 tNon-hazardous waste
incinerated

1,573 t2,483 tNon-hazardous waste sent tolandfill

8,951 t7,610 tLocation of disposal

100% of waste captured is
directed to offsite disposal.

100% of waste captured is
directed to offsite disposal.

Framework[1] The scope of this report includes all manufacturing sites with FTE >10 (note, Auckland New Zealand and Trentham Australia manufacturing sites are included even though they have less than 10 FTEs) and Pilot Manufacturing sites with
FTE >45. The scope excludes emissions and waste from offices, as emissions and waste from these locations are not material to Arxada’s overall emissions and waste.
[2] Our Scope 1 includes fuels (i.e. LPG, Fuel Oil, etc.) direct emission to air from our operations including CO2, N2O, CH4. Arxada does not have emissions from PCF, HFCs and SF6. Our Scope 2 emissions are market-based and composedof purchased electricity and steam.
*

Metrics have been assured by ERM CVS. For more information, please see the “External Assurance Statement” which details the scope, activities and conclusion of their engagement.

Preservation pillar disclosures
Performance indicator

FY22

Framework

Safety & environmental stewardship for chemicals% of products containing GHS
category 1 and 2 health andenvironmental hazardous
substances77%% of products containing GHS
category 1 and 2 health andenvironmental hazardous
substances with a hazard
assessment

100%

Management of the legal &regulatory environment

See Advocacy leadership for science-based decisionmaking for a sustainable future

SASB RT-CH-530a.1

Child labor and forced orcompulsory labour

See Supplier Code of Conduct

GRI 408-1, 409-1

Arxada 2022 Sustainability Report

SASB RT-CH-410b.1,
RT-CH-410b.2

54

People pillar disclosures[1]Performance indicator

FY22

Framework

Total Recordable Incident Rate
(TRIR)

1.21

SASB RT-CH-320a.1,
RT-CH-320a.2

Total Recordable Fatality Rate
(TRFR)

0

Lost Time Injury Frequency Rate
(LTIFR)

0.41

Workforce health & safety

Operational safety, emergency preparedness & response
Process Safety Incidents Count(PSIC)

38

Process Safety Total Incident
Rate (PSTIR).98

Number of transport incidents

0

SASB RT-CH-540a.1,
RT-CH-540a.2

Diversity & equal opportunity
Senior leadership gender
diversity

Gender diversity

Male

158

77%

Female46

23%

Female

934

25%

Male

2,866

75%

Not declared
Non-discrimination

GRI 405-1

0.15%

See our Code of Conduct

GRI 406-1

Total employees

3,600

New hire gender diversity

157 Hires in 2022

GRI 401-1, 401-2,
401-3

Employment

Female

23%

Male

53%

Not declared

24%

Turnover gender diversity

The total turnover rate for 2022 is 17.25%. We are unable
to provide a turnover rate by gender for 2022.

Full-time employee benefits

For US FTEs:
MedicalDentalVisionArxada 2022 Sustainability Report55Performance indicator

FY22

Framework

Life Insurance
Disability Coverage
401k participation
Significant locations of operation

See Our business & sustainability

Parental leave entitlement female

variable by region and location

Parental leave entitlement malevariable by region and location

Parental leave female

1 (based on last 6 months of 2022 only)

Parental leave male

1 (based on last 6 months of 2022 only)

Community relations

See Community involvement

SASB RT-CH-210a.1

Training & education

See Attracting, enabling & engaging a diverse
workforce and Health & safety

GRI 404-2[1] People pillar data is only available for 2022. Please also note that the data provided is only for Arxada (legacy LSI), which represents 74% of the company. The total headcount for 2022 includes 100% of the workforce for 2022, including
legacy Arxada, TROY and Envirotech.

Arxada 2022 Sustainability Report56