Akastor : ESG Report 2023

Akastor ASA ("Akastor") is an oil-services investment company with a global portfolio of industrial and financial holdings. The Akastor headquarters are located at Fornebu, outside Oslo, Norway, and the business has a global presence. The corporate organization, employed by Akastor AS, consists of a team of 11 employees. The company has a flexible mandate for active ownership and value creation. Akastor's holdings are organized as independent standalone companies responsible for all aspects of their own operations.

The Akastor shares are traded on the Oslo Stock Exchange under the ticker AKAST. Aker Holding AS, which is owned by Aker ASA, is the largest shareholder of Akastor, with a shareholding of 36.7%. Akastor ASA's board of directors is chaired by Frank Ove Reite.

Akastor's total net capital employed per 31.12.2023 was NOK 4 645 million.

As Akastor this year will reach the milestone where it has been 10 years since it was established, it is appropriate to look back at the journey that has taken place from when we first started trading in September 2014.

Since its origin, Akastor has benefitted from many years of managing a variety of different businesses primarily within the oil service segment following first class industry standards on governance, compliance and HSE. Despite market downturns and global instability, Akastor has successfully executed a flexible strategy where we have developed and realised our portfolio companies above book values. This continued in 2023, where we completed the sale of Cool Sorption and AGR above book values to strategic buyers enabling further growth of these businesses.

Following these latest transactions, Akastor has now nearly completed its transition from an operational holding company into becoming a pure investment company with the majority of our holdings today compromised of JV's or minority positions. With this transition follows certain changes in focus as well as changes in how Akastor properly follows up and manages our investments as an active owner. Although we now have increased focus on the strategic investment decisions we take together with our co-owners, the backbone of our investment strategy remains firm. Shareholder values are best preserved by ensuring that all of our companies operate consistent with first-class quality in all respects. This commitment extends beyond operational and financial performance, and is equally applicable to ESG performance.

I am very pleased to note the results and positive development in 2023 from our two industrial holdings, HMH and AKOFS Offshore. HMH successfully completed a large integration exercise as well as a USD 200m refinancing, both of which provide it with a solid basis for further growth. AKOFS Offshore continues to be a reliable partner for Equinor in

Norway and Petrobras in Brazil, with all three vessels committed to these clients under long term charter contracts providing advanced and safe subsea services.

With our key investments within the oil service industry, we recognice that we are "part of the problem" when it comes to global climate change and challenges imposed from GHG emissions. This is why we aim to ensure that our portfolio companies continuously seek to develop state-of-the-art technology and methods that help their clients to reduce their carbon footprint as much as possible. Moreover, the recent years of global instability have unfortunately illustrated too well the importance of securing energy from stable and reliable partners, which will remain critical for as long as oil and gas are a part of the global energy mix.

Akastor's almost 10-year long journey of responsible and active ownership will continue in 2024. Although our portfolio companies already have taken large steps in developing and implementing ESG strategies. Akastor will continue to challenge and monitor their ESG performance similar to other performance to continuously improve all aspects of their operations.

Karl Erik Kjelstad, CEO

AKASTOR AND ITS INDUSTRIAL HOLDINGS

In this report Akastor presents its ESG activities and results in the capacity of being an investment company and active owner. The purpose of the report is to support Akastor's key stakeholders-shareholders (existing and potential), customers of its portfolio companies and employees of the Akastor group-in gaining insight into activities related to ESG at Akastor. The report aims to provide a balanced picture of the opportunities and challenges Akastor encounters in this area and how the group seeks to manage them.

This ESG report focuses on Akastor's performance as a company and employer, with the aim to provide value adding information and to be consistent with the financial information provided in Akastor's annual report. Specifically, this means that we focus on Akastor ASA on a consolidated basis and in the capacity of being an investment company. However, we also include certain key information about our main industrial holdings and how they work with ESG matters (see section 8). Akastor's ownership interests in HMH, AKOFS Offshore and DDW Offshore jointly contribute about 80% of Akastor's total net capital employed.

ESG PERFORMANCE METRICS

Akastor has a continuous improvement approach and a focus on disclosing the most relevant performance metrics while embracing the principles and guidance of prevailing non- financial reporting standards. This ESG report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards. The GRI Standards are the world's most widely used ESG reporting standard. Details on the GRI content index is included as an appendix to this ESG report.

Akastor reports emissions as per the Greenhouse Gas Protocol (GHG Protocol), which is the most widely used international accounting methodology to quantify and manage businesses' greenhouse gas emissions. Akastor's carbon footprint reporting on direct and indirect GHG emissions is done according to the three scopes of the GHG Protocol corporate standard. Details on Akastor's emission reporting is found on pages 12-14 below.

Identification of material risks and opportunities relating to climate forms part of the annual risk assessment exercise, in which we also review similar exercises performed in our industrial portfolio companies. These exercises are performed consistent with the method and principles set out in the Task Force on Climate-Related Financial Disclosures (TCFD), see appendix for further details.

In 2023, Akastor reported its ESG results to the CDP (formerly known as the Carbon Disclosure Project) and received a C score, see appendix.

Notwithstanding the abovementioned, while Akastor's 2023 ESG report seeks to cover a substantial part of the ESG performance on a significant part of its investments, data collection, accounting and reporting on several metrics are not complete and do not represent 100 percent of Akastor's investments.

Based on its current size and activities, Akastor will not be subject to the CSRD (Corporate Sustainability Reporting Directive) reporting requirements until 2027 (for the FY 2026). Furthermore, Akastor is neither subject to the Taxonomy reporting requirements that came into force 1 January 2023. This ESG report is consistent with the sustainability reporting requirements set out in section 3-3 (c) of the Norwegian Accounting Act.

ESG VISION

Akastor considers sustainability a target in everything we do and view ESG as important indicators for sustainability. Specifically, this means the following;

• Environmental: that our portfolio companies endeavour to reduce the environmental impact of their operations as much as possible.
• Social: that Akastor and all its portfolio companies provide safe and prosperous workplaces for all its employees and that the companies contribute and provide benefits to the communities where they are located;
• Governance: that Akastor and its portfolio companies implement a sound and prudent governance model, which is monitored and followed, and which balances the need for efficiency and agility with the need for accountability and transparency.

Akastor's Sustainability Policy reflects the ESG Vision and governs environmental, social and governance (ESG) aspects

of Akastor's framework for sustainability and describes how we integrate sustainability in our investment process, our operations, and in the governance of our organization. The sustainability policy is supplemented by our Code of Conduct, Governance Policy and annual risk assessment. It forms part of the mandate for the Akastor Audit Committee's regular review and it is approved by the Board of Directors.

Within Akastor's corporate responsibility efforts, Akastor is focused on the ESG activities and processes that build financial and non-financial value in its portfolio. Akastor focuses on anit-corruption. Managing health and safety, respecting human rights and minimizing adverse impacts on the environment. These focus areas were established to strengthen the companies' long-term and continuous focus on ESG and to follow its stakeholders' expectations. Akastor expects all industrial holdings to implement an ESG strategy based on the main priorities of the group. Further, adhering to the Code of Conduct is mandatory for and applicable to all employees, contractors and other representatives of Akastor. The Code of Conduct is available for download from the company website: www.akastor.com.

SUSTAINABLE DEVELOPMENT GOALS

Akastor recognizes the importance of the UN's 17 Sustainable Development Goals (SDGs) and has identified four SDGs that Akastor significantly impacts. Akastor encourages its portfolio companies to identify and work towards relevant SDGs in their work and strategies.

Akastor has identified the following priority SDGs:

Goal 7: Ensure access to affordable, reliable, sustainable and modern energy for all

Until renewable energy sources have been sufficiently developed and matured to meet the energy need of the increasing global

population, the world is dependant on affordable and reliable provision of fossil fuels. The war in Ukraine and global economic uncertainty continue to cause significant volatility in energy prices, leading some countries to raise investments in renewables but others to increase reliance on coal, putting the green transition at risk.

Akastor promotes the development of new technology that increases efficiency and reduces emissions from conventional energy production, for example through use of digitalisation, hybrid technology or development of next generation vessels with zero GHG emissions.

Goal 8: Promote sustained, inclusive and

­sustainable economic growth, full and productive employment, and decent work for all Akastor has an international portfolio and a widespread local presence. Its goal is to ensure

that the value derived from its operations also benefits the societies in which the company operates. Protecting labour rights and ensuring safe and secure working environments for all workers are important issues for Akastor.

Goal 12: Ensure sustainable consumption and production patterns.

Akastor will continue to take responsibility for seeking to reduce consumption of materials and addressing challenges related to air, soil

and water pollution.

Goal 13: Take urgent action to combat climate change and its impacts

Akastor and its industrial holdings both impact and are impacted by climate change. They are inherently exposed to a range of physical and

transition risks. Akastor and each portfolio company are assessing their risks and opportunities concerning climate change.

FOUNDATION FOR SOUND INVESTMENTS

Effective corporate governance provides the foundation for value creation. Akastor's corporate culture is based on best business practices, openness, honesty and respect for other people. These principles form the basis for sound equity investments.

Robust corporate governance is therefore a key concern for Akastor's board of directors, management and employees, as well as in the exercise of ownership of Akastor's portfolio companies.

Akastor's board of directors determines the overall principles for its management and control functions. Akastor ASA is a Norwegian public limited liability company (ASA), listed on the Oslo Stock Exchange and established under Norwegian laws.

Akastor's governance principles are based on the Norwegian Corporate Governance Board (Norwegian: NUES) recommendations. Akastor's board of directors defines expectations for responsible and ethical business operations and has the overall responsibility for ESG in the company.

See more information in the Board of Director's Report for 2023 and the Corporate Governance Report for 2023, which is included in the Akastor Annual Report 2023.

ACTIVE OWNERSHIP

Akastor takes pride in exercising active ownership. Akastor's approach is that active ownership means to consciously and actively use all tools available to Akastor as an owner, something which includes broadly the following;

• Identify and pursue transactional and structural opportunities: a key task for Akastor's investment team is to constantly consider whether there are transactional and/or structural opportunities for our portfolio companies that will bring or add value to the company;
• Ensure collaboration with co-owners in compliance with appropriate governing documents such as shareholder agreements. In all of our portfolio companies with co-ownership, we appreciate that the cooperation is based on a collaborative approach with transparency, trust and predictability.
• Ensure that a proper and prudent governance model established and implemented for each portfolio company, as well as continuously consider potential improvements or developments.

• Exercise company management through directorships: in each of our portfolio companies we appoint directors who are mandated to supervise the management of the company's operations and to guide and collaborate with management to ensure value enhancement;
• Monitor and support key functional disciplines: Akastor's corporate team closely liaise with the relevant disciplines in the industrial holdings on certain key functions such as finance, treasury, tax, legal, compliance and ESG. Through regular reporting and meetings, Akastor monitors that these functions are performed prudently and may provide guidance and support to ensure quality performance and to avoid negative surprises.

Stakeholder management is an important part of being an active owner and is particularly important with respect to how we approach our co-owners and management in both industrial and financial holdings. We firmly believe that the key to success and developing shareholder value is by building trust with such stakeholders through collaboration and openness. In turn, this collaborative approach will best identify joint and common opportunities as well as how to best pursue them.

KEY GOVERNANCE TOOLS & INDICATORS

Akastor is closely involved in the monitoring and follow up of companies of which Akastor has a shareholding.

Akastor's commitment to prudent governance extends to its role as an active owner. Akastor sets its expectations for its industrial holdings in the Akastor governing documents, including the Code of Conduct. Akastor actively encourages cooperation and dialogue based on effective corporate governance processes. Below is a summary listing of some of the key governance tools and indicators that Akastor applies and monitors.

Board representation

Akastor is represented on the boards of all industrial holdings as well as on the board of some of its financial investments, which is a key function to monitor the performance of the companies and to preserve the interests of the shareholders.

Risk assessment

Risk management is an integral part of a well-functioning system for internal controls and contributes to both securing and developing shareholders' investment in Akastor and securing its assets. Akastor's objective for risk management and internal control is to be aware of potential risks and implement risk-mitigation practices, rather than eliminating exposure to risk.

Diversity and impartiality

Akastor supports diversity and impartiality - not just in order to meet statutory requirements, but also because we believe it is good for business.

• Share of women on Akastor ASA's board of directors: 25%
• Independent shareholder-elected directors on the board: 60% (3 out of 5)

An important task for 2024 will be to ensure that all companies in the Akastor group meet the gender balance requirements recently introduced for Norwegian registered medium and large enterprises.

Code of Conduct and Integrity Programme

Akastor's Code of Conduct constitutes the key guidelines for corporate responsibility and integrity at Akastor and expectations for industrial holdings. It describes the group's commitment to ESG and requirements for business practices and personal conduct. Working against corruption in all its forms is a fundamental part of Akastor's Integrity Programme, which supports the Code of Conduct by outlining procedural requirements and control functions that must be met, ensuring compliance.

The Akastor Integrity Programme is outlined in the Akastor Integrity Policy and describes the processes and internal controls that must be in place to ensure that the principles set out in the Code of Conduct are implemented. The board of directors of each industrial holding is responsible for implementing policies adapted to their companies.

Integrity training and awareness

High integrity is a valuable safeguard against corruption and unethical conduct, and is a key pillar in a sustainable, value- based business. Training and awareness campaigns are important to ensure that all representatives of Akastor recognize potential integrity risks and know when to raise a concern and how to respond appropriately to unacceptable practices. Dilemma-based classroom training and e-learning courses are implemented throughout the group-some broadly target all employees while others are more tailored towards specialized employee functions, such as employees in workshop and supply chain functions. In 2023, Akastor continued to use current training material, ensuring that all new employees in the target group received dilemma-based classroom training.

Whistleblower channel

Whistleblowing is an important channel for receiving informa­ tion about negative conditions in the company so that they can be properly corrected and followed up. All employees of Akastor and its industrial holdings are required to report breaches of the Code of Conduct, and Akastor encourages everyone to report any concerns pertaining to possible breaches of laws, ethical standards or expected conduct/ behaviour. Employees can report concerns to their line manager, compliance officer or top management, or via the anonymous whistleblowing channel.

The whistleblowing channel is available for reports relating to all Akastor owned companies. Although the whistleblowing channel is provided via en external service provider, all notifications reported will be forwarded to Akastor's General Counsel and investigated in accordance with the Whistle­ blowing Investigation Procedure. The process ensures full anonymity and no risks of retaliation. Additionally, all individuals affected by a whistleblowing notification shall have protective rights, including anyone accused under such a notification. The whistleblowing process is monitored by Akastor's board of directors and its audit committee.

Third-party risk

Working with third parties constitutes a potential integrity risk. Akastor implements risk-based evaluations and moni­toring of suppliers, service providers and joint venture partners.

Akastor has had a stringent approach to third-party representa­ tives (agents) for several years and continued this focus in 2023. Industrial holdings that require the use of sales agents or other third-party representatives are required to report on implementation of control activities, such as in-depth due diligence, integrity training and monitoring of services and payments.

Country risk evaluations

To enable prudent operations in high-risk countries, Akastor maintains a "Country Watch List", which prescribes different risk assessment and approval procedures for countries according to their risk level.

Through these due diligence procedures, the Akastor industrial holdings build increased awareness of potential risks, such as corruption risk, risk of sanctions and trade embargoes, labour risks, impacts on human rights and environmental risks. The due diligence is mainly done through the use of screening tools and media reports and, in some situations, with help from external service providers. With this, the industrial holdings are better positioned to address such risks at an early stage or withdraw from the business if necessary.