SUSTAINABILITYREPORT 2023
FORBO GROUP

flooring. movement.

SUSTAINABILITYREPORT
Introduction52
Foundation55
Description of the business models
58
Environment61
Social68
Governance78

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTINTRODUCTION
Consistently sustainable

The sustainable production of environmentallyfriendly products has long been an integral part ofour strategy. In the coming years, we will continue to
implement further optimizations in this regard along
the entire value chain and expand our productportfolio with additional environmentally friendly
products.

‘Committed to sustainability
for almost 100 years’

Sustainability has a long tradition at Forbo. We havebeen producing linoleum, a biodegradable floor covering made almost exclusively from renewable raw­materials, since 1928. Our linoleum has a negative CO2balance (cradle to gate) and is, therefore, climate-positive without purchasing compensation certificates.
Over the past 20 years, we have reduced our CO2
emissions (Scope 1 and 2) per square meter of flooringproduced by 53%. We have continuously increased the
proportion of recycled raw materials in our floor coverings. We are now also developing belts with recycled
PET content. With a specially coated conveyor belt, we
enable our customers to save up to 50% of energy intheir applications.
With our environmentally friendly and durable products, we can offer our customers a wide range of solutions and actively support them in their sustainability
ambitions.
The preservation of the environment and the­generation of ecological added value are essential­decision-making factors in our developments and investments. We continuously optimize our production
processes to reduce emissions, water, and energy­consumption, reuse heat generated in the production
process, and reduce or recycle waste material. In thisway, we actively contribute to minimizing the impactof our business activities on the environment.
Acting in an economically sustainable and responsible manner is of central importance to us. Our fundamental business principles and values, based on the‘Forbo Way to Win’ and the Code of Conduct, support
our ambition to create long-term added value for all
stakeholders.
We will resolutely pursue our efforts and continue
to invest in optimization projects that will enable us
and our society to have a more sustainable future.
The Board of Directors of Forbo Holding Ltd approved the 2023 Sustainability Report.

This E. Schneider
Chairman of theBoard of Directors

Jens Fankhänel
Chief Executive Officer

KEY ACHIEVEMENTS/
HIGHLIGHTS 2023
94%
TÜV Rheinland has certified that
the AmpMiser conveyor belt canachieve energy savings of up to 50%

36%

Flooring Systems has reduced
its Scope 1 and 2 CO₂ emissions
by 36% since 2019

Flooring Systems’ ‘back to the floor
program’ (take-back and recyclingof floor coverings) i­ntroduced in
13 countries

50%

The average proportion of natural,
recycled, or abundant materials in
our floor coverings is 50%

In Flooring Systems, 94%of the electricity used comesfrom sustainable sources

Our linoleum is no longer
just climate-neutral, but now
climate-positive (cradle to gate)

The newly developed Transilon
conveyor belt ‘ecofiber’ uses
a tension member material
made of recycled PET

Movement Systems has­installed numerous photo­voltaic installations at several
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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Environmentally friendly
products

Specialized production
know-how

As a leading producer of floor coverings, building andconstruction adhesives, as well as belts for powertransmission and lightweight conveyor belt technology,
with an international network of 25 production sites
and 6 fabrication centers, we offer exceptionally environmentally friendly and durable products in both divisions. This means we can offer our customers a wide
range of solutions in all regions and actively support
them in their sustainability ambitions:

As a leading manufacturer, we develop and produce alarge part of our entire product portfolio ourselves. We
have an in-depth understanding of a wide range ofcustomer needs. This enables us to continually develop innovations with corresponding added value. We
have highly specific expertise in development andproduction, which enables us to offer environmentallyfriendly products with unique selling propositions. In
our production processes we focus on reducing emissions as well as water and energy consumption,­reusing heat generated, and reducing or recycling
waste material. In this way, we actively contribute to
reducing the impact of our business activities on theenvironment.

Flooring Systems– Forbo has been producing linoleum, a floor
covering that consists of more than 97%
renewable raw materials and is biodegradable,
since 1928. Today, our linoleum not only
combines ecological values with modern
design, but is also carbon negative (cradle togate), without offsetting. With a market share ofaround 70%, Flooring Systems is the global
market leader in linoleum.
– Vinyl floor coverings acquire their elasticity,
pliability, and flexibility from plasticizers. We use
phthalate-free plasticizers of the latest generation. In 2023, the recycled content across ourentire vinyl product portfolio increased to 18%.
The Colorex Plus collection even contains 69%
recycled content. Our homogeneous vinyl floor
coverings are also particularly suitable forrecycling at the end of their life cycle and thus
contribute to the circular economy.
– The fibers used for Tessera Create Space 1 carpet
tiles are produced using ECONYL® yarn, which ismade from 100% recycled materials. In 2023, therecycled content across our entire textile
product portfolio was 45%.
– The raw materials used to produce our floor
coverings consist of 50% natural, recycled, orabundant materials.
Movement Systems– With our Sustainable Performance belts, we
actively support customers in reducing energy
consumption when operating their systems. Thesebelts also allow for reduced-noise operation,
which benefits their employees.
– Our BioBelt is the world’s first conveyor belt thatconsists of at least 20% renewable raw materials
and is comparable to standard belts in terms of its
physical and dynamic properties.
– The AmpMiser conveyor belt significantly reduces
the friction that occurs when operating thesystems, which allows customers to achieve up to
50% savings in operating energy.
– We have developed conveyor and process belts
with tension members made of recycled PET.

>97%

of our linoleum is made fromrenewable raw materials

45%

is the average recycled content
in our textile floor coverings

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FOUNDATIONGroup Sustainability Report
This is the first Sustainability Report Forbo has publishedthat covers the activities of the Group as a whole. Our two
divisions have been publishing independent Sustainability
Reports for several years, with Flooring Systems doing sosince 2005. The content of the reports has been continually
expanded over time.

The divisions, with their various products and services,
operate in different business areas and their respective
stakeholders have different requirements. Therefore,
they will continue to publish separate, detailed Sustainability Reports in addition to the Group Sustainability Report. In this way, we can address the transparency demands of all stakeholders.
The present sustainability report meets the legal
requirements of general reporting on non-financial
matters (Article 964a-c of the Swiss Code of Obligations) as well as due diligence and reporting (Article
964j-l of the Swiss Code of Obligations). At the sametime, the report reflects our concepts and ambitions inrelation to ESG – Environmental, Social, and Governance. The latter aspect is dealt with in the separate
Corporate Governance report (starting on page 81 of
this Annual Report).
We aim to anticipate new reporting requirements
at an early stage. In addition, we are continually working to expand our reporting to communicate our sustainability efforts, successes, and ambitions to all stakeholders.

Sustainability Reportsof our two divisions
This standalone report does not address all of the sustainability aspects discussed by our two divisions intheir Sustainability Reports. Both reports containing
detailed information can be found on our website at
the following link:
Click here to get to the Sustainability Reportsof the divisions

Sustainability
Reports

Code of Conduct
Likewise, this standalone report does not address all
aspects of our Code of Conduct. The full Code of Conduct can be found on our website at the following link:
Click here to get to the Code of Conduct

Code of Conduct

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Organization

Report scope

The Strategy and Sustainability Committee of theBoard of Directors (SSC) advises and supports theBoard of Directors in the strategic development of thecompany on the one hand and, on the other hand, the
SSC suggests to the Board of Directors priorities for­relevant sustainability issues in the areas of Environmental, Social, and Governance (ESG).
The SSC meets at least twice a year. The Chairmanof the SSC reports at the meetings of the Board of Directors on the activities of the committee and theopinions and recommendations of the SSC.
The Executive Board implements the priorities defined by the Board of Directors. It addresses relevant
sustainability issues at its regular Executive Board
meetings, including the respective sustainability­strategies, ambitions, and activities proposed by thedivisions.
The Corporate Sustainability Officer actively leads
and manages the various sustainability initiatives andactivities of the divisions and the Group. He reports directly to the Chief Executive Officer.
In each of the two divisions, divisional management forms the steering committee for sustainability
issues. Both divisions each have a Sustainability Officer.

Unless otherwise stated, the environmental data published in this report applies to all Flooring Systems’ production sites for floor coverings and building and construction adhesives and the production sites ofMovement Systems, which together account for approximately 95% of the production volume, as well as
the fabrication centers. The sales offices and warehouses of our two divisions were not included. The units included in the scope of the report are considered to be
the most significant in terms of the environmental impact of our business.
Unless otherwise stated, the data published in the Social section of this report covers all our locations, including sales offices and warehouses.
Movement Systems’ joint venture companies in Brazil
and Chile were not included.

Materiality analysis
To align our ambitions in the area of sustainability withthe expectations of our stakeholders, both divisions
regularly conduct materiality analyses.
The key topic areas are identified as part of an evaluation of the significance of individual sustainability
issues from the perspective of various stakeholders
and in the course of an assessment of the impact ofour business activities on the environment and society.
The materiality analyses of the two divisions are assessed and consolidated at Group level. The most important substantive focus topics are:
– Responsible sourcing of sustainable raw
materials for sustainable products and services– Resource and energy efficiency– Quality of products and services– Transparency in environmental matters– Health and safety of employees
This report shows how we address these and othertopic areas.

Standards used and­memberships/partnerships
This report was prepared in reference to the guidelinesof the internationally established standard of the Global Reporting Initiative (GRI).
CO2 emissions are calculated in accordance withthe standards of the Greenhouse Gas Protocol, theglobal standard for calculating greenhouse gas emissions.
The Life Cycle Assessments (LCA) of Flooring Systems were developed in the year 2000 in cooperation
with Leiden University in the Netherlands. Today’s LCA
calculations comply with international standards.
Flooring Systems’ Environmental Product Declarations(EPD) conform to the internationally standardized format and are verified by UL Environment. The EPDs are
based on so-called Product Category Rules (PCR) defined in EN 15804, EN 16810, and ISO 14025 standards.
The LCA calculations and EPDs guarantee full transparency regarding the life cycle of the products.
Our quality management system according to ISO
9001 is certified at all of Flooring Systems’ major production sites. The main production sites of Flooring
Systems and numerous sites of Movement Systems
have ISO 14001 environmental management certification. Several sites of Movement Systems have EN ISO
50001 certification (energy management). Flooring
Systems has implemented SA8000 (Social Responsibility Management System) in its production facilities.
Both divisions maintain various memberships andpartnerships. They each report on this in detail in theirrespective sustainability reports.

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Flooring Systems and Movement Systems contribute to the following Sustainable Development Goals of
the United Nations (The 17 Global Goals): 3 Good
Health and Well-Being; 5 Gender Equality; 8 Decent
Work and Economic Growth; 9 Industry, Innovation
and Infrastructure; 10 Reduced Inequalities; 11 Sustainable Cities and Communities; 12 Responsible Consumption and Production; 13 Climate Action; 15 Lifeon Land; 17 Partnerships for the Goals.

Data collection
We have been collecting various environmental andsocial data for many years. The collection of relevant
data has been gradually expanded in recent years. For
example, in 2023, Scope 3 emissions data from thebuilding and construction adhesives business and theMovement Systems division were collected for the firsttime.
When preparing this report, we take the greatest
possible care with regard to data quality. Despite all
efforts to ensure accuracy and completeness, inaccuracies cannot be completely ruled out.

58

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTDESCRIPTION OF THE
BUSINESS MODELS
Two well-positioned divisions
Forbo is a leading producer of floor coverings, building andconstruction adhesives, as well as power transmission and conveyor belt solutions. Flooring Systems and Movement Systems
occupy leading market positions. They operate in various business areas with their products and services and serve customers in different segments.

Global reach

Products, markets,
Forbo operates worldwide. The Group’s global reach and sales channels
means that it is close to attractive markets, making Forbo the first choice as a local partner for customers thathave similar global requirements.
Flooring Systems has 15 production facilities in 7
countries and sales companies in 27 countries – withsales organizations in Europe, North, Central, andSouth America, as well as Asia/Pacific.
Movement Systems has 10 production facilities and6 fabrication centers in 9 countries as well as sales organizations in 32 countries – with over 300 sales andservice points worldwide.

Both divisions maintain direct relationships with theircustomers. The relationships are often long term in­nature.
Flooring Systems
In the direct business of Flooring Systems, we can position our range of floor coverings for commercial use
directly to the relevant decision-makers (architects,
project planners, general contractors, builders, etc.).
There is also an international network of specialized
distributors.
The product portfolio includes environmentallyfriendly and natural linoleum, high-quality homogeneous and heterogeneous vinyl floor coverings, ESD
flooring solutions, entrance flooring systems, carpet
tiles, needle felt, and Flotex, the washable high-tech
textile flooring. We offer our floor coverings in different
formats and with a wide range of installation options.
Under the brand name Eurocol we also produce
ready-made adhesives for flooring installations, parquet, and ceramic tiles, as well as leveling compounds
for the construction industry and liquid floors, sold primarily through a network of distributors.

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Two
divisions

Movement
Systems

Flooring
Systems

Movement Systems
Movement Systems has direct contact with OEMs andend customers around the globe.
Movement Systems holds a leading position worldwide as a provider of high-quality conveyor and processing belts, plastic modular belts, first-class powertransmission belts, as well as timing and flat belts
made from synthetic materials. These products are
known under the brand name Siegling.
They are used in a wide range of applications in industry, trade, and logistics, including conveyor andprocessing belts in the food industry and in various
logistics applications, as treadmill belts in fitness studios, and flat belts in mail distribution centers.

Differentiating factors
Positioning of Flooring Systems
With our distribution model and the associated accessto decision-makers, we can optimally position our offering. We maintain long-term customer relationships.
Our in-depth market knowledge and close customer
relationships mean that we understand the needs ofboth customers and the market. We develop innovative, design-oriented, high-quality, and sustainableproducts with unique selling propositions. We have adiversified customer base in various industries, segments, and regions.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Positioning of Movement Systems
We have distinctive and broad application expertise as
well as an in-depth understanding of a wide range ofcustomer needs. This enables us to regularly develop
innovations with corresponding added value. Our direct access to OEMs and end customers enables us todevelop tailored solutions and promote repeat replacement business. We serve our customers globallyand locally through over 300 sales and service points
around the globe. We have a broadly diversified customer base in all regions, covering a wide variety ofindustries and segments.
Sustainability – a crucial success factor
An ever-increasing number of our customers at Flooring Systems have engaged us in an intensive dialog
about sustainable solutions for many years. In Movement Systems we are also noticing increasing demand
for topics related to sustainability. The dialog with ourcustomers allows us to align our offering not only tocurrent but also to anticipated demand.
We can also rely on our specialized production
know-how.

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ENVIRONMENT
The responsible use of resources is very important tous. We are committed to protecting the environment
and investing in optimization projects that contributeto a more sustainable future for us and society at large.

Both divisions offer a series of environmentally friendly
products. This enables our customers to operate moresustainably in their activities. Together we are contributing to a more sustainable use of resources.
Protection of the environment and the generationof environmental added value are important factors inour development and investment decisions. We work
constantly on optimizing our production processes toreduce emissions as well as water and energy consumption, reuse heat generated in the production process, and reduce or recycle waste material. In this way,
we actively contribute to reducing the impact of ourbusiness activities on the environment.

Environmental concepts ofour divisions
Raw materials used in production companies have amajor influence on the environmental pollution emitted. We are constantly developing new products andoptimizing existing products to improve properties andminimize the ecological footprint. We also work closelywith our suppliers.

The use of natural resources that are renewable andregenerative is our preferred solution. We also attach
great importance to the use of recycled raw materials,
which means we actively contribute to the circular
economy.
We want to consistently reduce the proportion of
non-renewable raw materials and virgin raw materials.
In addition, we have already set up systems in various countries for taking back end-of-life products.
Where possible, we separate and reuse the materials
we take back.
The development and manufacture of high-quality
products is one of our key success factors. The production technologies deployed at our 25 production sites
have a decisive impact on the environment.
We reuse resources wherever possible, for example
heat generated in the production process, water consumed, and scrap material.
When purchasing energy, we rely largely on renewable resources, but we also produce renewable energy
ourselves at various locations.
We will systematically pursue these efforts and continue to invest in optimization projects that contributeto a more sustainable future for us and for society atlarge.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

We measure and document our progress and act
transparently in publishing the data. Our past progressin the field of sustainability confirms the effectivenessof our concepts and associated actions.

Greenhouse gas emissions
The CO₂ emissions recorded below were calculated in accordance with the criteria of the Greenhouse Gas Protocol, the global standard for calculating greenhouse gas emissions.
Scopes 1, 2, and 3
Scope 1 includes emissions generated directly within the company. Scope 2 records indirectly generated emissions that arise from purchased energy. Scope 3 covers all other indirect emissions in the upstream and downstream value chain (e.g., emissions occurring from the production of raw materials we purchase, from the use of
our products during their service life, from the disposal of our products at the end of their service life, etc.).
Greenhouse gas emissions are expressed in tonnes of carbon dioxide equivalents (CO2e), i.e. the amount in
tonnes of CO2 emissions with the same warming potential as one tonne of another greenhouse gas.
Greenhouse gas emission intensity
Greenhouse gas emission intensity measures Scope 1 and 2 CO2 emissions (in kilograms) per square meter offlooring produced or per square meter of belt produced.
Greenhouse gas emission intensity, Scope 1 and 2
Kilograms
Emissions per square meter of flooring produced
Emissions per square meter of belt produced

2023

2022

0.77
6.91

0.79
not
­comparable

Change overprevious year
– 3%

Flooring Systems was able to further reduce greenhouse gas emission intensity in 2023 (–3%). Over the last
20 years, there has been a 53% decrease. The greenhouse gas emission intensity of the production of building and construction adhesives is not taken into account because it is relatively low, owing to the manufacturing process. In 2023, Movement Systems adapted data collection for Scope 1 and 2 emissions to international standards, which is why no comparison with the previous year is available.

Consolidated greenhouse gas emissions
Scope 1 and 2 emissions
TonnesFlooring Systems
Movement Systems

2023

2022

34,46333,840Total

68,30341,368not­comparable
not­comparable

Flooring Systems further reduced its Scope 1 and 2 emissions (–17%). In 2023, Movement Systems adapted
data collection for Scope 1 and 2 emissions to international standards, which is why no comparison with theprevious year is available.

Change overprevious year
– 17%

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Scope 3 emissions
TonnesFlooring Systems

2023

2022

388,173

Movement Systems

81,157

not­comparable
not­comparable
not­comparable

Total

469,330

Change overprevious year

The methods for calculating Scope 3 emissions were adjusted by Flooring Systems in 2023. In addition,
Scope 3 emissions resulting from the building and construction adhesives business were recorded for the
first time by Flooring Systems. Movement Systems calculated Scope 3 emissions for the first time in 2023.
Accordingly, no comparison with the previous year is available.

EnergyEnergy intensity
Energy intensity measures the energy required (in megajoules) per square meter of flooring produced or per
square meter of belt produced.
Energy intensity
Megajoules
Energy requirement per square meter of flooring produced
Energy requirement per square meter of belt produced

2023

2022

19.7
75.4

20.0
not
­comparable

Change overprevious year
– 2%

Flooring Systems was able to further reduce energy intensity in 2023 (–2%). The energy intensity of the production of building and construction adhesives is not taken into account because it is relatively low, owing
to the manufacturing process. Movement Systems adjusted the calculation in 2023, which is why no comparison with the previous year is available.

Energy consumption and energy mix
Energy consumption and energy mix
Gigajoules
Flooring Systems
Electricity from renewable sources
Electricity from non-renewable sources
Gas
BiogasDiesel and oil
District heating and self-generated electricity
Total
Movement Systems
Electricity from renewable sources
Electricity from non-renewable sources
Gas
BiogasDiesel and oil
District heating and self-generated electricity
Total

2023

2022

Change overprevious year

303,608
19,044554,375
10,4379,860
5,477
902,801

350,294
19,303
674,456
10,221
11,7934,356
1,070,423

– 13%
– 1%
– 18%
2%
– 16%
26%
– 16%

31,412
107,406
208,139–
23,262–
370,219

26,137
120,978
236,305–
18,541–
401,961

20%
– 11%
– 12%
–
25%
–
– 8%

Around 94% of the electricity used at Flooring Systems production sites comes from renewable sources.
Movement Systems slightly increased the comparatively low share of electricity from renewable sources in
2023.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTWater
The manufacturing processes for our products in bothdivisions are not water-intensive. An exception is thebuilding and construction adhesives business, wherewater is a component of many products. We are continually working to reduce our water consumption.

Many locations have closed-circuit water systems. Individual raw materials that we purchase from our suppliers require water for manufacture, for example during
the growth of natural raw materials.
Movement Systems develops belts that require lesswater to clean during use. In this way, we actively support our customers in their ambitions to use less water.

Scrap material
Scrap material and waste
Scrap material and waste
TonnesFlooring Systems
Recycled
Disposed
Total
Movement Systems
Recycled
Disposed
Total

2023

2022

Change overprevious year

23,3087,215
30,523

23,4106,853
30,263

– 0%
5%
1%

828
3,769
4,597

106
5,201
5,307

> 100%– 28%– 14%

An important goal of all of our production facilities is the reduction of scrap material and waste. We have also
developed processes to reuse such materials to some extent and thus minimize consumption. At Flooring
Systems, around 76% of scrap material and waste is recycled. At Movement Systems the figure is around 18%.
We are also actively committed to the circular economy system. For further information, see the section‘Circular economy’ on page 65 of this report.

Raw materials
Raw materials used in production companies have amajor influence on the environmental pollution emitted. The use of natural resources that are renewable
and can be harvested annually is therefore our pre-ferred solution. The use of recycled raw materials is also
becoming increasingly important, however. We areconstantly developing new products and optimizing
existing products to improve properties and minimize
the environmental footprint. We also work closely with
our suppliers.

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Circular economy
Product development
and design

Raw materials

Recycling
Production

Consumption,
reuse, repair

A circular economy can be defined as a system that
focuses on the reusability of products and raw materials and the use of renewable resources, thus minimizing the loss of value in the overall system. In order tomake this happen, the circular economy requires focus
on the design of the product to allow better reuse, repair in the reuse phase, and the recycling of installation
waste and end-of-life products. In the circular economy model there are two loops, each operating in its
own area – one with technical materials and the otherwith bio-based materials. Bio-based materials are materials based on renewable raw materials. They often
follow the strategies of the technical material loop,
considering that bio-based products can also be redesigned, reused, and recycled.

Distribution

With the natural raw materials we use and the recycled raw materials we employ, we actively contributeto the circular economy. We want to consistently reduce the proportion of non-renewable raw materials
and virgin raw materials. Also important are homogeneous products (such as our homogeneous flooring,
our plastic modular belts, and our homogeneous
belts) because they are easier to recycle.
In addition, Flooring Systems has already established processes for taking back end-of-life products invarious countries as part of the Back to the Floor recycling program. In 2023, we took back 250 tonnes ofmaterial. Where possible, we separate and reuse thematerials we take back. ‘going round, moving forward’is the guiding principle of Flooring Systems’ sustainability approach. This is linked to the determination toalign our activities even more closely with a circular
economy.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Significant
environmental risks
The most significant environmental risks arise in the
production of our raw materials, to a much lesser degree during the processing of raw materials in the
manufacture of our products, and to a significant degree again when our products reach the end of theirlife cycle.
As detailed in this report, we reduce associated risks
through many initiatives across the value chain.

Ambitions
Our ambitions in the area of sustainability concern improvements in all relevant areas of our company, in the
upstream value chain, during usage, and at the end of
the life cycle of our products. We constantly face up to
the changing challenges in all areas.

67

Goals
We are committed to pursuing our efforts with the same resolve thathas already seen both divisions achieve considerable success. We have set
ourselves the following goals:

To continue building on our track record in
reducing CO2 emissions

Over the last 20 years, we have reduced our CO2
emissions (Scope 1 and 2) per square meter of flooring produced by 53%.

To significantly increase the take-back of
end-of-life products
We have already established processes in a numberof countries for taking back end-of-life products.

To be a promoter of the circular economy
To make our contribution to achieving asociety with net-zero greenhouse gas
emissions
We aim to achieve this goal through our own efforts and, as much as possible, avoid purchasing
offset certificates.

To further increase the proportion of recycled materials
The average proportion of natural, recycled, or abundant materials in our floor coverings is already 50%.

We want to consistently reduce the proportion of
non-renewable and non-recycled raw materials.

68

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTSOCIALAs a global company, social responsibility and acting
morally and within the law are fundamental principles
for Forbo. Our corporate culture with the Code of­Conduct and the Forbo values, together with our commitment to our employees and the community, are­important components of this aspect of sustainability.

Employees
Our employees are Forbo’s most important ambassadors. They represent Forbo in daily contact with customers and many other stakeholders. It is therefore
important at all levels of the organization to understand what the company stands for, what it wants toachieve and how employees can contribute to this in
their respective areas of work. Accordingly, we communicate regularly both globally and locally using different formats, presentations, and meetings. Together
with our employees, we create a working environmentthat motivates, opens up perspectives, and encourages
and challenges employees according to their skills andinterests.

Corporate culture
Forbo’s corporate culture is based on our strategic principles, our Code of Conduct, and our corporate values.
It represents our ambitions, what makes us successful,and how we work together. It promotes a company-wide, success-oriented culture of ideas and solutions that is based on shared values and leads to verifiable success. The Forbo brand stands for our values, ourstandards, and our performance and creates identification among all stakeholders. The quality, longevity, andperformance of our sustainable products and services
reflect the quality and stability of our relationships with
our employees and our business partners.

Our Code of Conduct
Forbo aims to be a role model for ethical, sustainable,
and socially responsible business practices. The Codeof Conduct achieves this goal with specific content
and offers definitive and binding guidance. It contains
our most important business principles and values. It iscentral to how we protect and develop our reputation.
It is based on the principles of integrity, transparency,
and fairness and describes the way we act. It demonstrates our committment to acting ethically and withintegrity in every situation while respecting the rightsof the individual. We expect this from every employee
as well as from our business partners. High standards
in our business relationships are the foundation for­ongoing success.
In order to fully live up to these business principles
and values, Forbo offers the opportunity to report any
compliance issues to the Corporate Compliance Officer via Forbo’s Integrity Line.

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Corporate values
Forbo maintains a high-performance culture thatmeets the exacting demands of our customers andbusiness partners as well as our own expectations.
We therefore promote appropriate skills and compe-

tencies at all organizational levels. To identify a strong
and comprehensive value culture and to promote a
sense of community across the entire Group, we havedefined three core values under the ‘Forbo Way toWin’ as guiding principles:

Caring

Inspiring

DaringChallenging and encouraging
oneself and others

Developing ideas
and seizing opportunities

Taking bold anddecisive action

Taking responsibility andmaking a difference

Knowing what mattersand focusing on it

Giving our allwith power and passion

Leading by example toshared success

Raising enthusiasm andconvincing others

Achieving goals withdetermination and stamina

These values serve as a reference system for employees, helping them make decisions, guiding their
behavior and actions, and building trust and mutual
appreciation. They foster a sense of community that
promotes loyalty, taking on responsibility, and thus
contributes to long-term cooperation. Our employees
are convincing ambassadors for our company and theForbo brand.
Our values are integrated into the feedback and annual review processes and, in addition to introductory
training, play a significant role in employee and management training.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Attractive employer
Employees with specific know-how, good training,
motivation, and commitment are crucial to our success. Physical and psychological well-being at work is afundamental requirement in this regard. All employees
should feel equally valued and supported in their diversity and be able to develop their potential in thecompany without any discrimination. Forbo offers local and international career opportunities where craft
skills, engineering, design, and sales find common
ground. The company offers hybrid and part-timeworking models, invests in numerous training and education programs, and promotes health in the workplace.
Forbo works closely with local universities in many
countries; at Flooring Systems often with aspiring designers and architects, at Movement Systems with
graduates of technical or chemical faculties or applica-

tion-specific vocational courses. Forbo cares about thetraining of young, motivated school leavers. A basic
principle applying to the recruitment and promotionof trainees is that the apprenticeships offered by Forbo
are open to all applicants, irrespective of gender, andthe same requirements are placed on everybody. We
offer trainees the foundation for a professional careerin mostly commercial, industrial, or technical areas. Another important task is to ensure continuity throughthe transfer of know-how and experience assimilated
over the years by the older generation for the benefitof younger recruits.
Potential employees are primarily addressed
through the various digital channels. It is important to
us to maintain a healthy balance between long-standing, highly experienced, valued, and motivated employees and new team members who inspire otherswith new ideas, challenge existing procedures andprocesses, and thus contribute to the continued development of our company.

Employees

354

4,981
number of full-time employees
number of part-time employees

Continuous developmentof our employees
Sustainable growth is closely linked to highly trained
staff and utilization of employee potential. A cooperative leadership style, targeted development, and individual functional training programs as well as management and leadership programs promote commitment
and support the continued development of the company.

We therefore promote appropriate skills and competencies at all organizational levels and support thisinternally through training and educational activities.
We do this in different ways, through e-learning, internal and external webinars, and face-to-face events. The
divisions provide internal training in a wide range ofareas covering products and applications, sustainability, sales and marketing, finance, operations, software
application programs, project management, strategy
content and implementation, as well as instruction in
Forbo’s values. Continuous, intensive training in healthand safety includes measures relating to accident prevention, risk awareness, and occupational health andsafety.

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Regular training on the Code of Conduct, competition law, the fight against corruption, respectful behavior, and various topics relating to IT security anddata protection is provided across the entire Group. A
module on respectful behavior addresses and raises
awareness of subjects including discrimination, bullying, and sexual harassment in the workplace.
Alongside these diverse activities, we support andcoordinate regular feedback and development discussions, actively promoting the personal and professional development of employees across all fields of activity, functions, and age groups.
At Group level, Forbo offers an internal management training program in collaboration with the University of St. Gallen as well as other external partners,
and internal experts. This practice-oriented further
training program for various management levels andpeople in key positions comprises different weekly
training sessions with modules from the areas of leadership, management, sales and marketing, as well as
operations. They focus on areas of strategy implementation and leadership in combination with appropriate
tools to facilitate communication and collaboration ininternational, culturally diverse teams.
In addition, we offer external training courses tailored to the individual needs of selected employees.
In 2023, we invested CHF 1.5 million in third-party
costs for the training and continuing education of ouremployees.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Number of positions filled internally at senior management level
Number7

Versatile career prospects for Occupational health andspecialists and managers
safety a high priority
Forbo offers new recruits a wide range of career prospects and development opportunities. In addition, we
aim to fill the majority of vacancies requiring specialist
knowledge as well as management positions internally. The basis is provided by well-established succession
planning processes, which we continue to develop,
not only at management level. The continued development of production and manufacturing employees
for a wide range of areas of application and the corresponding know-how is essential for us as a manufacturing company.
At management level, possible development steps
and directions are discussed based on our feedback
and annual reviews, and selective engagement in international, strategic, or larger local projects with specific tasks is facilitated. This supports employees inpursuing a specialist or more management-oriented
career path within the company and at the same time
promotes intercultural exchange and understandingof global aspects.

Forbo has established high standards of occupational
health and safety to offer our employees a safe working environment. The health and safety of our employees in the workplace is also the focus of various local
training programs with the aim of reducing the number of accidents or preventing them altogether. Occupational health and safety is an important management and role model function that requires continuous
teamwork in order to raise lasting awareness. We
therefore encourage all employees to use their knowledge and experience to make a contribution to responsible and preventive action. Ongoing dialog in
relation to best practices and accident analyses contributes to the development of safety standards and atargeted improvement in safety levels.
Forbo regularly engages with authorities, professional associations, and trade unions. Together withthe local works councils, agreements are made in ourcompanies on issues such as personal protective
equipment, conduct, mandatory work processes, reporting processes, regular inspections, as well as training and education.

LTIFR
Number of lost time injuries multipliedby 1,000,000, divided by the total
hours worked. 12-month moving average.

Days lost due to accidents
Absence longer than
one working day

24.9

1,292

LTIFR

Number of days lost due to accidents

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Developments relating to these issues are regularlypresented at divisional management meetings, where
they are then analyzed, and appropriate measures
drawn up and implemented. In addition, results andtrends are discussed and decisions on further activities
are made at Executive Board level.
Forbo is committed to protecting, preserving, andstrengthening the physical, mental, and social well-being of our employees. We achieve this through measures and activities in areas such as occupational safety
and hygiene, workplace ergonomics, as well as
health-related topics such as exercise, sport, and nutrition to promote well-being.
Throughout the reporting year, a large number ofactivities were carried out with the aim of improving
the health of employees or reducing risks to health.
Regular optimizations are carried out as part of themodernization of work processes and systems, including the reduction of noise emissions and the use ofrobots and lifting aids. Issues relating to workplace ergonomics and fitness were also discussed and related
activities were promoted, as was access to free medical check-ups.

Diversity, inclusion, andequal treatment as part ofsocial responsibility
At Forbo, diversity in the workplace includes a varietyof people with different backgrounds and personalities. Mutual respect is a given in our international andmulticultural environment. In addition, different experiences, training, skills, and beliefs ensure diversity inthe workplace. We want to continually provide a diverse and inclusive working environment that is characterized by appreciative collaboration among motivated employees.
Our products are manufactured and processed using
technically complex production processes and physically demanding fabrication processes. The lived experience of diversity and flexibility in team-based working
models also reinforces the attractiveness of our company, which offers a good work-life balance for employees
and specialists. Forbo ensures fair treatment of all employees and is committed to the highest internationallyrecognized standards of fairness, honesty, and integrity.
As a future-oriented company, Forbo draws on andconsciously leverages the diversity of the population asa resource. This means employees have equal opportunities and feel welcome to get involved and actively participate.
It is also important to us that work of equal value isrewarded with equal pay. The criteria for salaries comprise personal elements such as training, diplomas, language skills, relevant professional experience, as well as
employer-related factors such as requirements profile,level of responsibility, and specific specialized knowhow.
Female employees at Forbo mostly work in the areasof finance, administration, human resources, marketing
as well as manufacturing, supply chain, or purchasing. In
Flooring Systems, positions in design and sales are often
filled by women.
The professional instruction of trainees is important
to us. Especially at larger locations with diverse and demanding work areas, we have motivated teams withappropriate professional experience, qualified trainers,
and suitable workplaces. We use engaging teaching
methods to impart the appropriate skills for professional,
independent, and responsible performance of tasks. We
also offer technical and business students the opportunity to complete an internship with us.
Forbo is committed to the inclusion of people withdisabilities and works with relevant companies and institutions in various countries to promote their integration
into the world of work and business. We therefore fulfill
our social responsibility in a variety of ways.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Percentage of women/men

Age structure
In percent
40

25.7%

30

20

74.3%

10

0
< 30
Men
Women

30–50

> 51

Men
Women

Apprentices and trainees
Number

Persons with disabilities
Number50

84

Respectful behavior

Reporting compliance issues

Mutual respect is a given in our multicultural environment.
Forbo does not tolerate discrimination or bullying
and strives to offer its employees a safe working environment free from all forms of violence, including
threats, threatening gestures, intimidation, attacks, andsimilar conduct, at all times.

We encourage our employees to report incidents that
violate applicable law, ethical standards, or the Code of
Conduct. By raising concerns, they contribute to theirown protection, that of their colleagues, and the protection of Forbo’s rights and interests.
If an incident occurs, employees can speak to theirsupervisor in person. Alternatively, the Forbo Integrity
Line is available in the respective national language. Employees can use this to draw attention to any compliance issues, anonymously if they wish.

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Human rights

Combatting child labor

We assume responsibility for respecting human rights
as part of our business activities. Respecting and enforcing human rights can only be successful if all stakeholders involved make their contribution. We are therefore
committed to taking appropriate measures to prevent
human rights violations in connection with our business activities.
If, in exceptional cases, we do not meet our own
standards, affected employees and third parties havethe opportunity to report violations. Valid concerns­related to human rights violations within the Group orin the supply chain can be reported via the Forbo­Integrity Line, which can be accessed on the ForboGroup website. Reports can be submitted anonymously. Reports may also be sent to the widely communicated email address compliance@forbo.com,
which is intended specifically for this purpose.

Child labor is harmful to children’s physical and social
development and affects their education. Forbo respects the rights of children and has implemented
processes to combat child labor. As part of these processes, due diligence checks are also carried out and,if necessary, corrective measures are taken. The Codeof Conduct sets out the most important businessprinciples and values of the Forbo Group. It emphasizes that Forbo refrains from any form of child labor.
Forbo also requires its business partners to comply
with our or equivalent standards, including the entire
supply chain.

Forced labor, freedom of
association, and the right tocollective bargaining
Our Code of Conduct expressly states that Forbo rejects any form of forced or compulsory labor. We also
respect our employees’ freedom of association andcollective bargaining rights. They are essential for social dialog on an equal footing. We use internal audits
to ensure compliance with our global labor and social
standards. We also expect fair and ethical employee
management from our business partners.

Responsible sourcing
Our commitment
For Forbo, responsible sourcing not only means complying with the legal framework, but also setting standards together and overcoming challenges within the
supply chain. We are convinced that by implementing
the principles of responsible sourcing, we not only
have a positive impact on society and the environment, but also contribute significantly to the resilienceand reliability of our own supply chain.
Fair and ethical supplier management is the basis ofcooperation with our suppliers. Our supplier requirements are part of our contracts. They include requirements relating to quality, environmental impact, anti-corruption, human rights, health and safety, social
responsibility, and financial risks.
We expect our partners in the supply chain, their upstream suppliers, subcontractors, and service providers
to comply with the minimum social standards applicable in their country and also have a valid sustainability
strategy. Because only together can we achieve the goalof a completely sustainable supply chain. Compliancewith these principles is checked through regular risk assessments and, if necessary, through on-site supplieraudits.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Report on child labor in the
supply chain in accordancewith Article 964j CO
According to Article 964j CO, Forbo is obliged to reportannually on compliance with due diligence obligations in the supply chain with regard to child labor. The
supply chain audit initially involves categorizing thecountries in which Forbo operates, with reference tothe UNICEF Children’s Rights in the Workplace Index,
which establishes a child labor risk assessment foreach country. The categories of the index are ‘basic’,‘enhanced’, and ‘heightened’. Forbo sometimes also
operates in countries whose ‘due diligence response’ isnot classified as ‘basic’ by UNICEF. For these countries,
further checks are carried out for all suppliers u­ sing adetailed, risk-based approach. Our buyers a­ ssess therisk of child labor associated with each procurement
category in the respective supply chain. These checks
have shown that there is no reasonable suspicion of
the use of child labor. Forbo is therefore exempt fromdue diligence and reporting obligations in accordancewith Article 5 Paragraph 2 of the Ordinance on Due
Diligence and Transparency in relation to Minerals andMetals from Conflict-Affected Areas and Child Labor(DDTrO). This assessment is continually reviewed.
In order to keep the risk of child labor in our supply
chain low in the future, we have taken preventive measures. As part of the supply chain policy, the issue of childlabor has been integrated into the current supplier andprocurement guidelines of the divisions as well as into
the contracts and agreements with suppliers. The regulations are based on the ILO Convention No. 138 on theminimum age and No. 182 on the worst forms of childlabor, the ILO-IOE Child Labor Guidance Tool for Businessand the OECD Guidelines for Multinational Enterprises,
respectively the UN Guiding Principles for Business andHuman Rights. If we deem it appropriate based on therisk assessment, we also require self-disclosures and certifications from our suppliers and carry out on-site supplier audits. The results and respectively effectiveness ofthese measures are regularly analyzed in order to identify
potential for improvement.

Report on conflict minerals
in accordance with Article
964j COForbo does not exceed the quantities of minerals andmetals specified in Annex 1 DDTrO and is therefore exempt from the due diligence and reporting obligations with regard to conflict minerals and metals. The
evaluation took place involving all Group companies
and is continually reviewed.

Prevention of corruption
Our commitment
Corruption distorts competition, leads to higher costs,
destroys the trust of customers and suppliers, and ultimately endangers jobs. For these reasons, Forbo rejects any impairment or distortion of competition
through corruption in the spirit of zero tolerance.

Concepts andprocesses
In our Code of Conduct, the chapter ‘Business integrity:
no tolerance of any form of corruption’ forms the basis forour efforts in the field of combating corruption. Forboprohibits the offering, giving, or taking of bribes in whatever form. This includes improper commission payments
or other means of providing improper benefits to customers, agents, suppliers, officials, or business partners.
Gifts received by Forbo employees must be brought tothe attention of their superiors. Donations to politicalparties, political organizations, or holders of political­office are strictly prohibited at Forbo.
The careful review of business partners is part of thestandard process, which includes desktop analyses aswell as consultation of global databases, risk analysis using sources such as Transparency International’s ‘Corruption Perceptions Index’, and self-declarations by business
partners.
Furthermore, Forbo strives to ensure that the applicability of the Code of Conduct or an equivalent code of
conduct of the business partner is contractually secured.
As part of the internal compliance reviews regularly
carried out under the leadership of the Corporate Compliance Officer, the adherence to and effectiveness ofthese processes are checked on a sample basis.

Risk management
From both a geographical and industry-specific perspective, Forbo operates in markets where corruption
risks exist. We therefore take our responsibility to prevent corruption seriously wherever we operate.
Forbo’s compliance management system in the areaof anti-corruption includes regular online training specifically on anti-corruption and annual online training
on the Code of Conduct in general. All employees inareas susceptible to corruption receive specific training.

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Socialcommitment
Commitment to thecommunity
For almost 100 years, Forbo, as an employer, has beencommitted to creating attractive workplaces and,thanks to profitable growth, continually provides added
value for regional economies, suppliers, and business
partners. In doing so, Forbo assumes social responsibility in a comprehensive sense.
Forbo attaches particular importance to soundtraining and education as well as equal opportunities
for all employees. We employ trainees in a variety ofdemanding roles with the aim of imparting all the relevant skills that are required for the professional andresponsible practice of their chosen profession.
We conserve resources through our sustainableproducts and the partial use of green energy.
We work with external institutions to outsource
simple work to workshops for disadvantaged people
and thus also promote external, inclusive jobs.
Forbo strives to make a positive contribution to thewell-being of society and the local communities inwhich we are active. Forbo is aware of its social responsibility and takes it seriously. Communication and cooperation with local authorities, institutions, interest
groups, and educational institutions, especially in thevicinity of larger manufacturing companies, is basedon proactive dialog. This creates trustful ways of working together on creative, social, and sustainability­topics.

Social commitment/charitable activities
Forbo also contributes to the common good by making individual contributions to support social and environmental projects at both Group and local level.
With product donations and support for flooring installations, we enable institutions in need to gain additional benefit for their commitment.
Social commitment is based on long-term partnerships with social institutions and programs with partners. At global level, selectively targeted funds are directed to social and charitable institutions or to relief
organizations to alleviate acute suffering or local disasters. Local companies and employees around theworld do charitable work and support social andhealth promotion projects through team events.

Ambitions
Our ambition when it comes to social responsibility is
to be a role model for ethical, environmentally friendly,and socially responsible conduct. We achieve this byencouraging and challenging our employees, offering
an appreciative, safe, and progressive working environment, and promoting innovation and a high level ofservice orientation for our stakeholders. We engage
actively for the common good by making individual
contributions globally to support social and environmental projects.

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FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTGOVERNANCE
The separate Corporate Governance report starting on
page 81 of this Annual Report deals with the topic of­governance in detail.