Workers in the upstream value chain

Material impacts, risks, and opportunities and their interaction with strategy and business model (SBM-3)

Due to the often limited transparency in the upstream value chain, there is a risk that labor and human rights could be violated. This can not only entail financial risks, but also have a real negative impact on the workforce in the value chain. Therefore, their interests, views, and rights have a significant influence on NORMA Group’s business model, which is reflected in the implementation of Group-wide guidelines such as the Supplier Code of Conduct and the Code of Conduct.

The identified negative impacts and risks related to labor and human rights in the upstream value chain are directly related to NORMA Group’s strategy and business model. As part of the materiality assessment, NORMA Group has identified potential violations in the context of child labor or forced labor involving workers in the upstream value chain as both a material negative impact and a material risk. As a manufacturing company, NORMA Group depends on a reliable and responsible supply chain to ensure its own value creation. Accordingly, NORMA Group strives to reduce negative impacts on workers in the upstream value chain through purchasing regulations and continuous risk evaluation and review. One example is the decision not to source resources from conflict regions, known as conflict minerals. Compliance with the necessary sourcing standards is also taken into account for suppliers. This includes all persons who are active in this value chain, regardless of a direct contractual relationship with the Company. It covers all workers who are or could be significantly affected by NORMA Group’s activities. This includes both the impacts that the Company causes or contributes to directly and those that result from its business relationships in connection with its own activities, products, or services. Workers are involved in the upstream value chain.

The impacts identified as material in the materiality assessment are widespread/systemic. These impacts are not limited to individual incidents or specific business relationships.

As part of the materiality assessment, NORMA Group has identified workers in the upstream supply chain who could potentially or actually be negatively affected. An understanding of why certain workers may be at greater danger was developed. Supplier risks are monitored by NORMA Group’s purchasing department. The process supports the purchasing organization in continuously keeping an eye on resilience in the supply chain and initiating the necessary measures in good time.

Policies related to value chain workers (S2-1)

NORMA Group wants to take responsibility along the entire value chain and is aware of the actual negative impact on workers in the value chain. Since NORMA Group has also identified a material risk in this context in addition to the negative impacts, the central task with regard to the workforce in the value chain is to identify, assess, and actively manage negative impacts on workers in the value chain as well as risks.

Further details on the materiality assessment process can be found in the section IDENTIFICATION OF MATERIAL IMPACTS, RISKS, AND OPPORTUNITIES (IRO-2). NORMA Group has introduced the Supplier Code of Conduct to address negative impacts on workers in the upstream value chain and the resulting risks, and with regard to working conditions, equal treatment, and equal opportunities as well as human rights. Suppliers who sign the Supplier Code of Conduct, i.e., in particular the preferred suppliers, undertake to respect and comply with human rights. This Code of Conduct is intended to ensure that both laws and ethical standards are complied with throughout NORMA Group’s supply chain. The globally applicable Supplier Code of Conduct defines NORMA Group’s expectations for the sustainable management of its suppliers in the areas of human rights, occupational safety, health, environment, and business integrity. With regard to human rights, the Code is based on the regulations of the International Labor Organization, the Universal Declaration of Human Rights, the UN Global Compact, and the SA8000 standard. The Supplier Code of Conduct was introduced in financial year 2014 and was last updated in financial year 2023 to take into account the requirements contained in the German Supply Chain Due Diligence Act (LkSG). Furthermore, the Code of Conduct is applied as described in the section CORPORATE CULTURE AND VALUES (G1). Compliance with the Human Rights Commitment Statements is also taken into account accordingly. Further information on this can be found in the section OWN WORKFORCE (S1). As a rule, workers in the upstream value chain are also taken into account where applicable. Overall responsibility lies with the Management Board, while monitoring is carried out by the Human Resources, Corporate Responsibility, Integrity, Legal, and Purchasing departments.

Due to the size and complexity of the value chain, human rights violations cannot be completely ruled out. NORMA Group has only limited influence on compliance with the minimum standards beyond its direct business partners. If the Company learns that business partners are committing or tolerating human rights violations, NORMA Group gives its business partners the opportunity to remedy this as quickly as possible. The business relationship is then reassessed and termination of the contract is considered. Indications of potential human rights violations are investigated. To this end, potential violations must be reported to NORMA Group Compliance as part of a defined reporting process. These are submitted to the Human Rights Committee for further analysis and evaluation. Further information on this process can be found in the section CORPORATE CULTURE AND VALUES (G1). NORMA Group expects its suppliers to conduct their business in compliance with applicable laws, ethical principles, human rights, and standards for occupational safety and environmental protection. The Purchasing department has therefore integrated social and environmental sustainability aspects into its processes and organization, including in the Purchasing Manual, which describes the key processes and procedures that serve as a framework for the global organization. The Supplier Code of Conduct reflects this self-conception and is guided by the standards of the International Labor Organization, the Universal Declaration of Human Rights, the UN Global Compact, and the SA8000 standard with regard to human rights. Approval of the Supplier Code of Conduct is a binding criterion in the catalog of requirements for the selection of new suppliers and is monitored by the Purchasing department. The Supplier Code of Conduct, the Code of Conduct and the Human Rights Commitment Statement are NORMA Group policies that include declarations on human rights and clarify the Company’s position in this regard. NORMA Group positions itself against human trafficking, forced labor, and child labor in the value chain, among other things.

In regulations with workers in the value chain, NORMA Group is committed to complying with the ten principles of the UN Global Compact, the United Nations Guiding Principles on Business and Human Rights, and the Declaration on Fundamental Principles and Rights at Work of the International Labor Organization. In financial year 2025, zero incidents of non-compliance with the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises concerning employees in the value chain were reported in the upstream value chain.

Processes for engaging with value chain workers about impacts (S2-2)

In financial year 2025, NORMA Group has not implemented any comprehensive processes for engaging with workers in the value chain.

Processes to remediate negative impacts and channels for value chain workers to raise concerns (S2-3)

NORMA Group is aware of its actual negative impact on workers in the upstream value chain. The complexity of global supply chains and inadequate implementation of guidelines and controls in the supply chain may compromise the equal treatment of workers and human rights in the value chain. Suppliers who sign the Supplier Code of Conduct undertake to comply with the requirements set out in the Supplier Code of Conduct. NORMA Group has a whistleblower system that serves as a reporting mechanism and offers employees in the value chain the opportunity to report specific incidents and violations. For NORMA Group, the use of channels and structures is an indicator that they are known and trusted. However, NORMA Group does not systematically survey relevant stakeholders on effectiveness and awareness. These reports are followed up and appropriate measures are taken if necessary. Further information on the whistleblower system can be found in the section CORPORATE CULTURE AND VALUES (G1).

Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions (S2-4)

NORMA Group uses the actions described below to identify potential human rights violations in the upstream value chain at an early stage and to effectively manage their negative impacts and the resulting risks. The aim of the listed actions is to systematically fulfill due diligence obligations along the supply chain and to minimize negative impacts for affected workers in the upstream value chain as well as risks for NORMA Group.

One measure the Company uses is the supply chain risk management software “Sphera.” This solution continuously monitors publicly accessible sources and analyzes information on direct and indirect suppliers. Suspected or actual cases of human rights violations, including violations or suspected cases in the area of working conditions, are automatically recorded and reported as alerts. In the event of such a report, NORMA Group carefully examines the relevance and severity of the case and then initiates situation-specific actions, for example by contacting the supplier concerned or carrying out additional checks.

With regard to conflict minerals – tin, tantalum, tungsten, and gold (3TG), which may be associated with human rights violations – NORMA Group strives to exclude them from its supply chains as far as possible. NORMA Group does not purchase these minerals directly. However, some of them are contained in components from suppliers. For example, small amounts of gold are used in urea lines or some components are coated with tin. Accordingly, NORMA Group is committed to the principles of the Responsible Minerals Initiative (RMI), including the use of the due diligence processes provided by the initiative. The processes are based on the “Conflict Minerals Reporting Template” (CMRT) and the “Extended Minerals Reporting Template” (EMRT) of the Responsible Minerals Initiative, which all relevant suppliers must provide. The use of the CMRT and EMRT forms the framework for creating transparency in the supply chain and obliging companies to disclose the origin of conflict minerals and the smelters and refineries involved.

In addition, the initial sanctions list check for new suppliers has been established in the purchasing processes. The sanctions list check is carried out in the DESCARTES Visual Compliance Tool, for which NORMA Group’s Trade Compliance Team is responsible. If risks relating to conflict minerals are discovered, corrective measures are initiated immediately. In addition to the initial check, the existing supplier base is also regularly checked by means of batch screening. The sanctions list check is automated. Suppliers that have already been checked remain in the system and are reported to those responsible as soon as they are classified as risky by the system. Those responsible cross-check the alerts to rule out any false friends.

NORMA Group is also supported by an external material compliance team that covers regulations such as REACH, RoHS, conflict minerals, Prop65, and Cobalt/Mica.

Both the use of the risk management tools mentioned and the sanctions list tool are anchored in the purchasing processes and are mandatory.

NORMA Group assumes the effectiveness of the listed actions and concepts for managing their impacts and risks, as the Company is not aware of any supplier risks in the context of human rights violations in financial year 2025; however, NORMA Group does not apply a procedure to assess the effectiveness of this.

NORMA Group continued the ongoing implementation of these actions in the reporting period and assesses the aforementioned actions to manage their impact and risks in the upstream value chain as appropriate and sufficient. Based on this assessment, no additional actions are currently planned.

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities (S2-5)

NORMA Group has not yet defined any measurable, results-oriented targets with regard to workers in the value chain. Due to the high complexity and limited transparency within global supply chains, NORMA Group currently has no reliable basis for defining measurable and result-oriented targets. If conditions change, the Company will review whether a suitable target definition is possible in future.

Metrics related to workers in the value chain

Preferred suppliers who have signed the Supplier Code of Conduct

NORMA Group has defined a Company-specific metric to address the impacts and risks related to workers in the upstream value chain. This shows the proportion of preferred suppliers who have signed the Supplier Code of Conduct. In financial year 2025, this proportion was 100%.

To determine a preferred supplier, NORMA Group has developed a catalog of criteria that includes aspects such as competitiveness, transparent cost structures, and delivery conditions. NORMA Group’s fundamental endeavor is to ensure that its suppliers understand the Supplier Code of Conduct and confirm compliance with the Supplier Code of Conduct by signing it in order to enter into long-term contractual relationships. NORMA Group not only accepts the signing of its own Supplier Code of Conduct, but also the submitted Code of Conduct guidelines of potential suppliers, provided they are equivalent or superior in their requirements.