Norwegian Transparency Statement

1. Background

Stokke AS (hereinafter “Stokke”) as a Norwegian company in obligated to report and provide a statement in accordance with the Norwegian Transparency Act section 5 on its account of due diligence carried out in accordance with the OECD Guidelines for Multinational Enterprises.

As Stokke is reporting its financial statements in accordance with the Norwegian Accounting Act and is permitted to do so in the English language, this statement is also published in the English language.

This statement is provided on behalf of Stokke and all its subsidiaries.

2. About Stokke

Stokke, a renowned Norwegian company, is recognized worldwide for best-in-class solutions for children. It is combining Scandinavian design with the ability to challenge the ordinary and make beautiful products that nurture family bonding. Stokke’s mission is to give children the best possible start in life, nurturing their self-reliance and confidence. With a history dating back over nine decades, Stokke remains committed to its Scandinavian heritage, craftsmanship and quality. The first product for children was launched in 1972 - the iconic Tripp Trapp® chair designed by Peter Opsvik. The chair is made in Europe and Stokke has sold more than 15 million chairs globally. Since 2014, Stokke has been owned by NXMH, a Belgian investment company. NXMH itself is owned by NXC, a South Korean holding company.

3. Stokke’s value chain

Stokke’s products are produced by independent manufacturing partners in 13 different countries worldwide. In total, Stokke has direct business relationships (first tier) with 36 suppliers and about 70 percent of these have been a Stokke supplier for more than three years. With all its suppliers, Stokke targets long-term partnership with mutual transparency and predictability. Stokke conducts frequent visits to the suppliers focusing on continuous improvement benefiting both parties. There is transparency from the suppliers to the next tier-levels and actions related to social responsibility as well as continuous improvement is frequently discussed. The manufacturing of Stokke’s main wooden products is limited to Europe, while the production of textiles is carried out in China and India. Plastic injection and assembly are situated in Europe, China and Taiwan.

4. Stokke’s work with the act

In the following, further details about how Stokke is working to fulfil the obligations of the Norwegian Transparency Act are described.

Stokke Member of Ethical Trade Norway (ETN)

Stokke places great value on fair practices throughout its supply chain and upholds a strong commitment to transparency and ethical business conduct. Social, environmental, ethical and human rights are incorporated in business strategy, following OECD Due Diligence Guidelines for Responsible Business Conduct. Policies, including the Stokke Responsible Business Conduct and Supplier Code of Conduct, guide actions and are integrated in the management system and sourcing strategy. The Stokke Supplier Code of Conduct is signed early in the sourcing process with new suppliers, and Stokke actively communicates the sustainability strategy to them, emphasizing the increased focus on responsible business conduct throughout the supply chain. Since 2006, Stokke has been an active member of Ethical Trade Norway (ETN) and fulfilling the requirements for membership. Stokke has been reporting on an annual basis on actions and targets related to responsible business conduct to ETN for a period of 18 years. This partnership enables Stokke to continuously enhance its business practices in line with international standards.

Stokke Supplier Code of Conduct

Stokke adopted the Supplier Code of Conduct in 2009, which outlines the company’s core principles for responsible business conduct. It is rooted in the UN and ILO conventions and provides the minimum criteria expected by all of the company’s suppliers. The foundation for this conduct is that the applicable legal framework in the region and site of production must be observed. Also in 2023, Stokke has continued to improve policy and practice that support business partners in adhering to the principles set in the Supplier Code of Conduct. 100% of Stokke’s first tier suppliers have received and accepted the company’s Supplier Code of Conduct, including the 7 new added suppliers in 2023.

Stokke Policy for Responsible Business Conduct

Through the implementation of the Stokke Responsible Business Conduct policy, Stokke aims to assure all customers and business partners acknowledge and address any negative impact on society and the environment. The policy was formulated, presented, and approved by the Board of Directors in January 2022. It is also accessible to all employees.

Anti-corruption

Stokke has an anti-corruption policy that is outlined in both the Stokke Responsible Business Conduct and the Stokke Supplier Code of Conduct. All employees and suppliers are expected to comply with this policy. A mandatory e-learning module that all employees must pass has been implemented since 2021.

5. Stokke’s work with due diligence

In line with the OECD guidelines, the company strives to proactively identify and assess any risks or potential adverse impact on people, society, and the environment. This evaluation encompasses not only the supply chain but also the company’s business relationships. Stokke’s objective is to effectively manage and mitigate these risks to ensure responsible and sustainable practices throughout its operations. Stokke performs risk assessments on an annual basis to identify and assess any impact within the supply chain, ensuring active monitoring and evaluation of potential adverse effects on individuals, society, and the environment.

Embedding responsible business conduct involves the company having strategies, plans, and relevant policies and guidelines for due diligence that are embraced and implemented by management. At the heart of Stokke's commitment to ethical business practices are the policies and principles outlined in the Stokke Responsible Business Conduct and the Stokke Supplier Code of Conduct.

These foundational documents are integrated into the management systems and sourcing strategy, shaping the way Stokke conducts business both internally and throughout the supply chain.

Upon initiating partnerships with new suppliers, Stokke ensures early adherence to the Stokke Supplier Code of Conduct. Additionally, Stokke actively communicates its Sustainability strategy to suppliers, emphasizing the commitment to responsible business practices throughout its supply chain.

The next phase involves identifying and evaluating the company's risk of, as well as actual negative impact on individuals, society and the environment. This assessment encompasses the supply chain and business relationships. Stokke conducts annual risk assessments to identify and evaluate impacts within the supply chain, and continuously strives to monitor and assess potential negative impacts on people, society, and the environment. Stokke integrates inherent and site-specific risk factors to assess potential vulnerabilities across the supply chain. The Company’s comprehensive methodology empowers proactive risk management, ensuring responsible business practices companywide. Stokke collects and analyse data from audits and supplier visits to enhance the company’s risk assessment processes.

Stokke's products are manufactured by independent contractors across 13 countries globally, and the company maintains business relationships with a total of 36 tier 1 suppliers.

Stokke considers its tier 1 suppliers as system suppliers responsible for overseeing sub-suppliers on behalf of Stokke. The company maintains a close relationship with all tier 1 suppliers, involving frequent visits and collaborative efforts for continuous improvement across various aspects of their joint business.

Stokke's risk assessment considers geographic factors, including country or region. For each region, Stokke evaluates potential risks based on specific topics. Findings from audits are being addressed to the suppliers and followed up with improvement plans.

The risk evaluation assigns a score to each supplier and highlights the most important issues that need to be addressed across the supplier portfolio.

By conducting risk assessments and actively monitoring potential risks, Stokke strives to ensure responsible and ethical practices throughout its supply chain, promoting the well-being and safety of workers involved in the production of its products. From the 2023 annual risk assessments, Stokke identified Romania, Bulgaria, Slovenia, China, Vietnam and Taiwan, as countries with a higher risk profile for its supply chain. Stokke is assessing the inherent risk in the supply chain using SEDEX, that is based on third-party data across 14 issue areas associated with the specific countries and industries.

Out of these areas, 10 main areas have been considered relevant for Stokke:

1. Child labor: Child labor is recognized as a potential risk in Romania, Vietnam and China. particularly due to country and sector-specific risks. Stokke's tier 1 suppliers did not employ any child workers during the last three years, as confirmed by audit reports within the reporting period.

2. Forced and compulsory labor: Forced and compulsory labour risk is prominent among Chinese suppliers, especially those working with textiles. Stokke considers the risk of forced and compulsory labor as non-salient, as no issues were identified in third-party audits and dialogue with the company’s tier 1 supplier on origin of materials and tier 2 suppliers.

3. Freedom of association: Stokke recognizes challenges in countries like China, Vietnam, and Romania, with limited influence on workers' rights. Despite low ITUC Global Rights Index scores for these countries, Stokke aims to engage in dialogues with supplier management to emphasize the benefits of worker involvement for long-term commitment and workforce stability.

4. Discrimination: Stokke has limited influence in addressing discrimination issues, particularly in employment decisions made by factories. However, the company can influence certain aspects of how workers are treated within those factories. Stokke's audits in this area have found limited information.

5. Health and safety: Stokke's audit on “Health & Safety” identified some findings, with the majority being minor issues mainly related to missing safety information or missed used of defined DPI. These issues have been addressed to the suppliers and action plans have been set in place.

6. Working Hours: The primary concern in the Stokke supplier base is centred on working hours, with deviations related to overtime ranking among the top 3 issues, particularly within Chinese textile production.

7. Regular employment: In the Chinese textile and plastic industry, Stokke's social audits typically reveal that workers in these factories commonly have contracts and work under regulated conditions.

8. Environment: Stokke acknowledges a high environmental risk in the countries of operation, particularly concerning water use and scarcity. While tier 1 suppliers have low water consumption, Stokke focuses on addressing water-intensive processes at the tier 2 level, particularly in textile material production, as part of its Sustainability Strategy.

9. Corruption: 17 of the company’s 36 suppliers operate in countries with an elevated risk of corruption. These 36 operation sites account for 100% of sites in Stokke’s supply chain. There were no confirmed incidents of corruption in Stokke’s own operations or supply chain in 2023.

10. Wages: Chinese supplier audits found wage-related issues, such as missing compulsory insurance and insufficient leave payment, while audits in Romania and the Czech Republic, conducted over three years ago, require a more recent assessment for current risk verification.

6. Stokke’s mitigation actions and plans during 2023

The outcomes of the risk assessment are addressed through implementing measures to cease, prevent, and mitigate any identified issues. The primary focus is on tackling the most significant negative impacts on people, society, and the environment as a priority. For the prioritized risks, actions are being set, both internally at Stokke, as well as with suppliers.

Based on the due diligence process, Stokke continued during 2023 to focus on the most significant risks in its supply chain, namely A) wood supply and B) climate footprint. In the following, this is described in more detail.

A) ASSESSMENT OF LOCAL RISKS IN WOOD SUPPLY CHAIN

Risks addressed: Environment – Deforestation, Corruption, Health, and Safety

Stokke acknowledges the substantial responsibility associated with wood product manufacturing and understands the significance of responsible forest management across the supply chain. Therefore, Stokke is prioritizing the protection of this valuable resource and ensuring that production practices do not contribute to deforestation, to support the health and safety of the workers in the supply chain and have measures in place to prevent corruption.

Goal:

Objective for 2030: Map wooden supply chain to achieve full traceability back to forest and certification of all wooden products by 2030.

Objectives in 2023: Achieve FSC® certification for the Tripp Trapp® chair.

Stokke has achieved the FSC certification for the Sleepi ™ portfolio, Stokke® Clikk™ and Stokke ® Steps™ high chairs.

Status 2023:

In 2023, Stokke has achieved to only use FSC® -certified or controlled materials in the supply chain for the Tripp Trapp® chair. This result was made possible thanks to the collaboration of the whole supply chain. Stokke is the first company to have a FSC® controlled wood supplier in North Macedonia thanks to the great investment done to guarantee that the wood would be respecting the standards of FSC controlled origin. Mapping and certification process will be extended to other products in the coming years, with the goal of all wooden products being certified by 2030.

B) CLIMATE FOOTPRINT OF STOKKE PRODUCTION

Risks addressed: Environment – Climate

Measuring carbon emissions is essential for Stokke as it provides the company with an understanding of its environmental impact and enables the company to identify areas that require improvement. To achieve meaningful progress towards reducing the environmental impact it is crucial for Stokke to reduce greenhouse gas emissions resulting from its business and collaborate with suppliers, and partners to drive systemic change across the value chain.

Goal:

Objective for 2030/2050: Following the requirements of the Science Based Targets Initiative (SBTi)[1], Stokke has committed to:

1. Reduce absolute Scope 1 and 2 GHG[2] emissions by 42% by 2030.

2. Reduce Scope 3 emissions by 25% from a 2020 baseline within the same time period.

3. Further, Stokke is committed to reducing absolute Scope 1 and 2 GHG emissions by 90% by 2050 from a 2020 base year.

4. Stokke also aims to reduce absolute scope 3 GHG emissions by 90% within the same time period.

Objectives 2023: Stokke will continue to reduce its carbon footprint in line with requirements set by SBTi. The goal is also to establish extensive action plans to secure the 2030-targets.

7. Tracking implementation and results

Tracking the implementation of actions and results is essential to measure the effectiveness of the systematic approach and individual efforts in each stage of the due diligence process. This tracking provides insights into the company’s commitment to conducting thorough due diligence work.

The tracking and implementation of actions related to the most salient issues described above, is tracked by the Stokke Sustainability Manager, and reported to the Stokke Leadership Team and Stokke Board of Directors on a frequent basis.

This statement is approved and signed by the Board of Directors and the CEO of Stokke in June 2024.

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[1] Further information on Science Based Targets can by found – https://sciencebasedtargets.org/

[2] GHG – Greenhouse Gas Protocol: Further explanation to Emission 1, 2 and 3 and the GHG Protocol can be found in the Stokke Sustainability Report 2023