Due diligence report June 2023

Introduction

Seltor Gruppen AS is one of Norway's oldest construction companies and is located in Porsgrunn, Tønsberg, Drammen and Oslo. We have the entire Eastern Norway region as our geographical catchment area. Seltor Gruppen AS is a group with a turnover in 2022 of approximately NOK 1.4 billion and 160 employees divided between Seltor AS and Seltor Bolig AS.

1. Seltor AS is a contractor within building and construction, and has assignments within renovation and new construction across central Eastern Norway. This results in a large and varied supplier portfolio within several industries. These include consultancy, technical assistance, subcontractors in building-related trades, recruitment, cleaning, operation and maintenance.
2. Seltor Bolig AS was established in 2011. Seltor Bolig AS is engaged in housing development in the central parts of Eastern Norway. The company manages all phases of housing development projects, from plot purchase to handover of the new home to the home buyer.

Seltor Gruppen AS is covered by the Transparency Act and we are obliged to report on our due diligence assessments.

1.General information, our policies and procedures 

Our suppliers vary in size, from medium-sized national companies to smaller local suppliers.

Seltor is aware of the responsibility that comes with purchasing goods and services, and strives to be a serious and responsible player. We take a clear role and make demands on everyone involved in a procurement process. Seltor respects and supports fundamental human rights, as described in international conventions and Norwegian laws.

Seltor has embedded all aspects of the Transparency Act in the Group management and Board of Directors. Seltor shall be a driving force for compliance with human rights. This includes the Discrimination and Harassment Policy and our Ethical Guidelines, with an associated internal whistleblowing system. We work continuously to quality assure and anchor this in Seltor.

We take our obligations seriously and want to contribute to accountability within our industry, building and construction. We do this by having good routines for procurement and contract reviews, and by developing measures in collaboration with suppliers and partners. All to ensure respect for fundamental human rights and decent working conditions. We also work against social dumping, and the industry has procedures in place to ensure that this does not happen.

Seltor has some focus areas where we believe we can have an impact:

• No discrimination against different groups of job seekers.
• Zero tolerance for any form of racism and discrimination.
• Discrimination is prohibited in all areas, including employment.
• There is a ban on child labor, forced labor and slavery.

Description of Factlines as a system and support for due diligence assessments 

In our work with the Transparency Act and due diligence process, we use Factlines' digital solution and services. Factlines specializes in monitoring ethical, social and environmental requirements in the supply chain.

Seltor's business collects information from suppliers annually in the form of self-reporting. The questions in the self-reporting cover the requirements of the UN Global Compact, the suppliers' chain insight and monitoring practices, as well as their assessment of risks related to breaches of ethical guidelines in the relevant production countries. Seltor is qualified for the Factlines Transparency Act Verification Mark and has used Factlines software and methodology to monitor suppliers, conduct risk assessments and document follow-up activities.

https://verified.factlines.com/no/915617344

If self-reporting or other indicators indicate deviations, these are followed up by contacting the supplier. Depending on the scope and risk, nonconformities may result in the establishment of an improvement project to create changes in collaboration with the supplier and other players in the chain.

Read more about Factlines here.

Mapping of suppliers

Every year, we collect information from our suppliers through Factline's software. Suppliers are selected based on Seltor's turnover with each supplier, as well as an assessment of risk in relation to product and industry. The self-reporting is based on the UN Global Compact and the OECD Guidelines for Responsible Business Conduct and is in line with the due diligence process required by the Transparency Act.

The self-reporting includes the following topics:

• Corporate social responsibility, strategy and policies
• Supply chain: monitoring, insight and control
• Risk and due diligence assessments
• Land risk
• Management systems in the business
• Working conditions and rights
• Ethnic groups and the environment
• Conflict minerals
• Anti-corruption

The data collection provides a basis for assessing whether good practices have been established to comply with the Transparency Act, Section 5 of the Public Procurement Act and the company's own contractual provisions. The survey applies to direct suppliers and manufacturers/production sites, and collects information about their routines and procedures for following up the entire supply chain.

Information related to risks in production countries is based on several sources, including ITUC (The International Trade Union Confederation) on labor rights and Transparency International (corruption index).

Furthermore, conditions relating to labor rights, anti-corruption and whether the suppliers themselves have carried out self-reporting, improvement projects and/or inspections at the production site are mapped. We also assess whether suppliers have established routines for quality, health and safety, the environment and corporate social responsibility.

Our suppliers must deliver goods and services that are produced in accordance with our Code of Conduct. They are also required to communicate and follow up on the policy with their subcontractors.

If self-reporting or other indicators indicate deviations, these are followed up with the supplier in question. The purpose is to be able to prevent and reduce negative consequences in collaboration with the supplier and other actors in the supply chain.

2.findings from due diligence and risk of negative consequences

The Transparency Act states that all businesses covered by the Act must carry out business assessments. Seltor has defined who we consider to be our business partners, and is in the final phase of the process of conducting business assessments of business partners, where risk is assessed. In the future, these assessments will become part of the annual risk assessment.

The initial focus is on areas where we are a major customer and where the supplier is in a traditionally vulnerable industry. Our largest suppliers are in fields such as plumbing, electrical, ventilation and prefabricated concrete. Suppliers in technical disciplines, IT and technology, raw materials such as steel and wood, and in clothing production are considered particularly vulnerable. These suppliers are considered particularly vulnerable due to an assumed high proportion of production in countries defined as high-risk countries in terms of human rights and working environment. Information is requested on how these suppliers handle actual and potential negative consequences in relation to the Transparency Act.

Source of illustration: Transparency International, CORRUPTION PERCEPTIONS INDEX 2022.

Risk profile of our suppliers as of May 24. 2023.

3.further work and measures 

Actual negative consequences and risk of negative consequences are identified through the reporting in the due diligence assessments. As of June 2, we have a response rate of 65%, in addition to 10% that are in ongoing processes.

Initiated measures:

In connection with our mapping in Factlines, reminders of measures are sent out to our suppliers based on the submitted self-assessment; e.g. establishment of internal ethical guidelines, ethical guidelines for suppliers, environmental systems, routines for supplier follow-up, system for risk assessment of new suppliers, notification procedures, overview of producer countries. Suppliers and partners can submit responses and document measures at any time, so that the due diligence assessments are not a static document, but a "living document" and a status in the present.

Planned measures:

Measures are coordinated with the reporting from the survey conducted by Seltor. It is specifically in the areas of Sustainability goals and Quality systems that we see that suppliers score lowest. Through the survey, Seltor has access to set up routines to alert the suppliers at risk to work in the individual areas that are not satisfactory. This is carried out regularly to ensure improvement.

We have 4 suppliers that stand out in particular and are at the bottom of the risk score. However, they are still within medium risk.

These 4 will be followed up separately and included in a continuous process.

These suppliers score lowest in the areas of CSP and Ethics, as well as Country Risk.

These 4 are in the fields of carpeting/flooring, furnishings/office fronts and steel.

Their annual turnover to Seltor varies from NOK 6 million to NOK 11 million.

Seltor's Code of Conduct is implemented in the agreements with our suppliers and subcontractors to ensure that our obligations are respected throughout the contractual chain.

The Code of Ethics and the Equality and Harassment Policy shall be made available on our website.

As of June 20, 23% of suppliers have not responded or rejected the survey. These are followed up with regular reminders.

Inquiries related to Seltor's work with business assessments, cf. the Openness Act, can be sent to hilde.roren@seltor.no or endre.christiansen@seltor.no

Feel free to mark the email with the Transparency Act.