Sustainability – a prerequisite for long-term profitability

Corporate governance and sustainable value creation

In Ratos’s decentralised ownership model, management teams and boards carry the ultimate responsibility for sustainability work, but sustainability permeates all work in the company. Sustainability issues are integrated into Ratos’s processes for corporate governance. Ratos does not differentiate between sustainability risks and business risks, but rather regards them interconnected.

Sustainable value creation is about understanding how the major societal challenges affect business in the short and longer term. It is also about investing in the transition towards a more sustainable society in general and working to reduce one's climate footprint in particular.

Read more about Ratos focus areas of technology and infrastructure solutions HERE, page 8-11.

Mutually beneficial value

Ratos’s greatest contribution to society is serving as an active and responsible owner that builds long-term successful and sustainable companies that create mutually beneficial value. We create jobs, respect humanity and the environment, and deliver high-quality products and services. Ratos also makes a difference in that our principal owners are foundations that promote research and thus long-term positive community development.

Ratos has a long tradition of social commitment, primarily through support for research and education. Ratos’s principal owners are the Ragnar Söderberg and the Torsten Söderberg Foundations, two of the country’s largest private investors in scientific research within economics, medicine and law. In 2023, 17% (SEK 47m) of Ratos’s dividend went to these research foundations.

Ratos’s community involvement focuses on three themes: research, education and social inclusion. In 2023, in addition to the dividend to the foundations, Ratos provided support to selected partners, including Inkludera Invest and the Stockholm School of Economics. This support was both financial and through engagement in boards.

Ratos sustainability effords is based on the UN's global goals for sustainable development in Agenda 2030.

A double materiality analysis and stakeholder dialogue were used to identify which sustainability areas Ratos needs to focus and report on. The double materiality analysis forms the basis for how Ratos prioritises its most important sustainability issues.

Ratos uses double materiality, which entails evaluating different sustainability topics from two perspectives: Ratos’s impact on the world and the world’s impact on Ratos.

Ratos’s double materiality analysis includes:

• Surveying and analysing relevant sustainability issues for Ratos and its portfolio companies.
• Surveying typical risks and external factors, such as relevant regulations.
• Dialogue with key stakeholders.

Ratos defines its most significant sustainability issues based on the issues deemed most material. For each of these issues, Ratos develops targets and action plans to carry out and develop its sustainability and to strengthen its long-term value creation.

Policy framework and risk management

Ratos has a structured approach to managing and addressing relevant risks. An important tool is Ratos’s policy framework, consisting of:

• the Code of Conduct
• the Policy for Sustainability and Responsible Investments
• the Environmental Policy

The above policies are published on Ratos website. The policy framework is based on the UN Global Compact’s ten principles for responsible business. Sustainability at Ratos is based on the UN SDGs and Principles for Responsible Investment, which are based on the established concept of ESG.

Significant sustainability issues

Ratos’s double materiality assessment, which underwent an annual review in autumn 2023, identified the following sustainability issues as the most material for the Group. Each company is responsible for identifying any additional sustainability areas that are relevant for its operations.

ENVIRONMENT

• Buildings
• Climate change and energy
• Ecosystems
• Water

SOCIAL

• Migrant workers
• Occupational health and safety
• Quality & safety of products & services
• Working conditions
• Talent attraction & retention

GOVERNANCE

• Compliance with (new) legislation and policies
• Corruption and bribery
• Data security and integrity