Due diligence report June 2025

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 Østland region as our geographical catchment area. Seltor Gruppen AS is a group with a turnover in 2024 of 811 million NOK and 110 employees divided between Seltor AS and Seltor Bolig AS.

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.

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 account for our due diligence assessments.

1. General information, our policies and procedures

Our suppliers vary in size, from large 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 anchored all aspects of the Transparency Act in Group management and the Board of Directors. Seltor shall be a driving force for compliance with human rights. This includes the Discrimination and Harassment Policy and our Code of Conduct, 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, as well as developing measures in collaboration with suppliers and partners. All to ensure respect for basic human rights and decent working conditions.
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.

In our work with the Transparency Act and the 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 operations annually collect information from suppliers 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 follow-up practices, as well as their assessment of the risk associated with breaches of ethical guidelines in the relevant production countries. Seltor is eligible 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, deviations may result in the creation of improvement projects 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 Factlines software. 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:

• Anchoring of social responsibility : Whether the business has a formal CSR strategy and ethical guidelines in line with the UN Global Compact and ILO standards.
• Environmental impact : Compliance with environmental legislation, any environmental certifications, measures to reduce emissions/waste, and consideration for local communities and vulnerable groups and conflict minerals.
• Supplier follow-up: Whether the supplier itself has systems for following up its supply chain, such as risk analyses (including country risk), self-reporting from subcontractors and non-conformance follow-up.
• Management systems: The existence of a quality system (e.g. ISO), HSE system, and environmental management system, as well as descriptions of these2
• Labor conditions and rights : Compliance with laws on working hours, minimum wage, overtime pay, prohibition of child labor/forced labor, non-discrimination, and freedom of association.
• Anti-corruption: Anti-corruption/bribery policy and any historical cases of corruption.

Source of illustration: Transparency International, CORRUPTION PERCEPTIONS INDEX 2024

The data collection provides a basis for assessing whether good practice has been established to comply with the Transparency Act, Section 5 of the Public Procurement Act and the company's own contract provisions. The survey applies to direct suppliers and manufacturers/production sites, and collects information about their routines and procedures to follow up on 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, issues surrounding labor rights, anti-corruption and whether the suppliers have carried out self-reporting, improvement projects and/or inspections at the production site are surveyed. It is also surveyed whether the suppliers have established routines for, among other things, quality, health and safety, the environment and social responsibility.

Our suppliers are made aware of our ethical guidelines and are required to deliver goods and services that are produced in accordance with them. They are also required to communicate and follow up on the guidelines 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.

This year's assessment is based on all suppliers who have delivered goods and services to the group for more than NOK 100,000 in the 2024 financial year. In addition, suppliers with lower turnover are included if they belong to a defined risk group.

A total of 455 suppliers have been assessed. Of these, over 95.5% are classified as low or moderate risk, while 4.5% are categorized as high risk.

2.findings from due diligence and risk of negative consequences

Main findings in Human Rights

Compliance with fundamental rights : None of the assessed high-risk suppliers have reported or uncovered violations of fundamental human rights in their operations. All operate exclusively in Norway, which means that strict national laws against child labor, forced labor and discrimination apply. All suppliers confirm that they comply with all relevant laws and regulations related to employment and social rights, including the prohibition of forced labor and human trafficking. This indicates that the immediate risk of gross human rights violations by these actors is low.

Lack of formalized policies: Although factual circumstances indicate respect for human rights, most lack a written anchoring of this responsibility. None of the suppliers have currently adopted their own strategy for social responsibility or ethical guidelines that explicitly include human rights. This is understandable as many of them are small businesses (0–9 employees), but the absence of formal policies and Code of Conduct means that the commitment to human rights is not as clearly communicated internally or to their own partners. In several cases, suppliers answered “No” or “Don’t know” when asked whether they have ethical guidelines based on the UN Global Compact, and whether these are distributed to employees and partners. Such answers triggered a medium to high risk in the assessment.

Assessment : In the short term, we consider the risk of direct human rights violations to be low, given the size of the companies and the Norwegian framework conditions. At the same time, the lack of formalized guidelines is considered a potential risk factor over time. Without clear internal guidelines and training, it can be challenging for these companies to address more complex human rights issues (e.g. in the event that they expand into new markets or use subcontractors in higher-risk countries). It is therefore recommended that suppliers, in dialogue with Seltor, gradually integrate human rights and labor considerations into their governance documents . This could include the preparation of a simple Code of Conduct that all employees and partners are made aware of, based on international standards.

Main findings within Employment

Compliance with working conditions: All suppliers confirm that they comply with applicable working environment legislation regarding working hours, wages and other employment conditions. No one works more than 48 hours per week, and everyone receives at least the statutory minimum wage and overtime paid in line with the requirements. This demonstrates that basic working conditions are met. There were also no cases of violations of labor rights in the past year – none of the suppliers reported any sanctions or violations in this area.

Health, Environment and Safety (HES): When it comes to working environment and safety, several of the small suppliers have established good HSE routines, adapted to their business. All have responded that they have an HSE management system in place . Some have simple systems such as an “HSE book” available to employees, while others have detailed digital HSE systems. An example is a supplier that describes a comprehensive HSE program with regular training, a deviation system to notify of dangerous conditions, fire safety routines, and annual reviews for continuous improvement. Such measures, even in small companies, indicate an awareness of safe and healthy working conditions.

Freedom of association and equal treatment: Indirectly, through the confirmation of legal compliance, it is also clear that suppliers respect employees' right to organize and that they oppose discrimination. Norwegian laws guarantee the right to organize and equality, and there is no evidence that these rights are restricted by suppliers. Although the questionnaire did not explicitly ask about unions, we assume by law that this is the case.

Lack of formal guidelines for employment conditions : As with human rights, there is a lack of formal documents at suppliers that clearly express policies for employment conditions beyond the legal minimum. None of the high-risk suppliers currently have their own written personnel manual or ethical guidelines that cover employee rights beyond what is enshrined in the law. This means that there is a high degree of confidence that the legal requirements are sufficient. In the assessment, for example, the lack of distribution of ethical guidelines to all employees gave a medium risk. For Seltor, this means that in some cases we must communicate our expectations more clearly: we require suppliers not only to passively comply with the law, but also to actively work for good working conditions (e.g. through training, internal control, etc.).

Assessment: The working conditions at our suppliers are considered satisfactory and in line with recommended standards. The risk associated with working conditions in this supplier group is low, primarily due to Norwegian legal requirements that already safeguard employee rights. The challenge lies in maintaining these standards over time and ensuring that they remain good even if the suppliers grow or change operations. We see potential for improvement in encouraging more proactive internal control – for example, suppliers developing simple guidelines or manuals that clarify policies for the working environment, equality and reporting of objectionable conditions. Seltor will assist by sharing best practices and templates for such guidelines. In the long term, this may also include requirements for documented training of employees in important topics (e.g. anti-discrimination, safety).

Main findings in Environmental Impact

Compliance with environmental legislation: All suppliers declare that they comply with applicable environmental laws and regulations relevant to their operations. This includes, among other things, that they handle waste, emissions and any environmental hazards in line with Norwegian requirements. None have reported any serious environmental incidents or violations of environmental regulations. For most suppliers, who mainly provide services (e.g. architecture, consulting, minor crafts), the direct environmental impact is relatively limited.

Environmental management systems and certifications : There is some variation in how far suppliers have come with formal environmental management:

Some suppliers have implemented environmental management systems. For example, one company is Miljøfyrtårn certified and has a structured system for sustainable choices, resource use and emission reduction. This supplier reports annual climate data (such as travel emissions, energy consumption, waste volumes) and has specific targets such as reduced travel, increased reuse of materials and 0% work-related sick leave. Such measures show that even smaller companies can work systematically to continuously improve their environmental performance.

Others have simpler approaches: Many of the other suppliers have HSE routines that include the external environment , but perhaps without a separate certification. For example, several state that they have an environmental management system via their HSE portal or quality system, but the details vary. What they have in common is that they focus on limiting daily environmental impact (e.g. correct waste management, energy-efficient operation).

Climate and resource use : One finding is that suppliers consider certain environmental themes to be not relevant to their business. This particularly applied to the question of whether the business has a requirement that production and resource use should not destroy the livelihoods of marginalized population groups . Several answered “No, not relevant to us” to this. The reason is that they operate in Norway and do not have production that directly affects such groups. Nevertheless, the lack of requirements here was flagged as medium risk in the assessment, because it indicates a gap in awareness of indirect consequences (for example, through the supply chain further out, or the use of materials that may have been mined in vulnerable areas). Furthermore, greenhouse gas emissions from travel activities have been identified as a significant environmental impact for some service-related suppliers. The positive thing is that these have already implemented measures, such as measuring the number of trips and facilitating video meetings, electric cars or public transport, to reduce emissions.

Lack of common requirements in the value chain : None of the suppliers had specific environmental requirements down their own supply chain . In other words, they currently have few requirements for their subcontractors regarding sustainability (many have very limited supplier networks, admittedly). This represents an area for improvement: In order for Seltor's entire value chain to become more sustainable, greater environmental considerations should also be communicated to all levels.

Assessment : The environmental risk in our supplier portfolio is assessed as moderate. On the one hand, strict Norwegian legislation ensures that everyone complies with basic environmental requirements (low risk of direct environmental violations). On the other hand, there is room for improvement in proactive environmental management : Only a minority have certified systems or clear environmental goals. We recommend that more suppliers are motivated to introduce simple environmental management measures , such as: energy and waste reduction programs, environmental policies that also apply to purchasing, and assessment of their own climate impact. Seltor will consider sharing our own environmental requirements and guidelines with suppliers, so that they can more easily prepare customized plans. Over time, we may also emphasize environmental performance as a criterion in supplier selection, to stimulate green transition in the value chain.

Other Risk Aspects (Governance and Anti-Corruption)

Governance and internal control : A common feature of the high-risk suppliers is the lack of management systems for corporate social responsibility . As mentioned, none of them has a complete CSR strategy or a formalized ethical framework that covers all ESG themes (Environmental, Social, Governance). This means that the governance risk was assessed as high for all of them (category Governance: High risk). In practice, this means that even if day-to-day operations are carried out in a responsible manner, the companies do not take a systematic top-level approach to identifying and managing risks within human rights, labor conditions and the environment. In addition, most of them answered that they do not have routines for following up their own suppliers (no supply chain control), which in the assessment gave a very high risk for several. This point is critical as the Transparency Act expects larger companies such as Seltor to also look at the subcontractor chain of their suppliers. When our suppliers in turn purchase services or goods (e.g. IT equipment, subcontracts), they should ideally have some control over whether these actors also follow basic ethical requirements. As of today, such systems are absent in this group.

Anti-corruption : The risk of corruption is considered low in this supplier group. All have confirmed that no management or employees have been involved in corruption cases in the last five years. Most emphasize that they follow Norwegian law, which already strictly criminalizes corruption. However, some lack a formal anti-corruption policy in the company. For small players, this may seem redundant, but we recommend that they have a simple zero-tolerance statement against corruption and bribery. This can, for example, be incorporated into ethics documents when they are drafted.

Assessment : Good corporate governance and anti-corruption are the foundation for successful work on human rights, labor conditions and the environment. Our findings indicate that suppliers need guidance to strengthen internal controls around ethics and sustainability . Seltor plans to follow up on this through clearer contractual requirements and dialogue. We will ask high-risk suppliers to reconsider their answers where they have answered “no” or “don’t know” to important questions. The goal is that they will next develop or improve governance documents – e.g. adopt ethical guidelines in line with the UN Global Compact principles – and implement a simple routine for regular risk analysis in their supply chain. When it comes to anti-corruption, we will share our own anti-corruption program and suggest that they commit in writing to the same standard.

Measures and the Way Forward

Based on these findings, Seltor has identified a number of follow-up measures to reduce risk and improve practices at our suppliers:

1. Dialogue and capacity building : We will initiate meetings with each of the relevant suppliers to discuss the results. In these meetings, we will communicate why certain answers triggered high risk and what can be done. For example, we will explain the value of having a simple CSR strategy or ethical guidelines – even for a company with few employees – and how this can be implemented without a large burden. We will also share information on best practices, such as internal work environment procedures and environmental measures that are already used by some in the group (so that they can learn from each other).
2. Improvement plan requirement : As part of fulfilling the Transparency Act, it is expected that identified negative impacts are either stopped or prevented. We will therefore ask our high-risk suppliers to prepare a simple improvement plan. This may include2. Drafting an ethical guideline document (Code of Conduct) that addresses human rights, working conditions, environment and anti-corruption. The document should be made known to all employees and relevant subcontractors. Seltor can provide a template based on the UN/ILO principles.

• Introduction of a supplier due diligence routine : For those suppliers who have their own subcontractors (e.g. equipment purchases, hiring of labor), we encourage them to start small by obtaining documentation or self-declarations from them that they follow basic ethical requirements. This can be as simple as a section on social responsibility in the contracts they enter into.
• Formalized HSE and quality procedures : Those who do not already have them should describe their HSE routines in writing and ensure that all employees are familiar with them. A few suppliers already have good descriptions2; these can serve as examples for the others.
• Environmental initiatives: Although few suppliers have a large environmental impact, everyone can contribute. We will ask that each supplier set at least one environmental improvement goal for 2025–2026, e.g. reduce paper consumption, increase sorting rate, or cut X% of car driving. Small goals can build a culture of environmental responsibility.
• Anti-corruption statement: Include a statement on zero tolerance for corruption in the updated guidelines, so that it is formally in place.
• Timetable and follow-up: We propose a reasonable deadline (for example, by the end of 2025) to put the above elements in place. Seltor will follow up on the status through new questionnaires or follow-up interviews in early 2026. We will also consider integrating follow-up points into our contracts – new agreements may include a requirement that the supplier has conducted a due diligence assessment of itself and its supply chain, in line with the Norwegian Transparency Act.
• Continuous improvement : Due diligence is not a one-time exercise. Seltor is committed to updating the risk assessment annually. The findings from 2025 will thus form the basis for improvement both internally and externally. We will use the experience to improve our questionnaires and approach. For example, if many suppliers find certain questions irrelevant, we can better explain why they are asked or adjust them so that they are more relevant across industries.

Ultimately, this is about collaboration with suppliers . High risk here does not mean that unacceptable conditions are actually taking place now, but that there are weaknesses in the systems that could pose a risk. Through open dialogue, knowledge sharing and clear expectations, we will together reduce these risks over time. Seltor wants to be a supportive partner for suppliers in their improvement efforts, while fulfilling our own responsibility to safeguard people, society and the environment at all levels.

Conclusion

The 2025 due diligence assessment has provided valuable insight into Seltor's supply chain. The overall situation is positive in that no specific violations of human rights, labor standards or environmental legislation have been identified among our suppliers. Fortunately, this reflects the fact that most of them operate in a Norwegian group with strong laws and that they generally have sound practices. At the same time, the analysis has identified several areas for improvement, particularly related to the formalization of ethical guidelines and systematic follow-up. We take these areas very seriously, as they represent potential vulnerabilities if the framework conditions change or the businesses grow.

In line with the purpose of the Transparency Act, Seltor will use these findings to prevent negative consequences. Our approach going forward will be characterized by transparency and action: We have already communicated to the relevant suppliers about their classification and will collaborate on improvements. At the next assessment, we expect to see progress – for example, that more people can answer “Yes” to questions about whether they have implemented ethical guidelines and supplier monitoring. We recognize that this is a learning process for many small players, and Seltor wants to be a driver for positive change.

In conclusion, by publishing this summary, Seltor fulfills the information obligation in Section 5 of the Norwegian Transparency Act. We have explained how we work with due diligence assessments and what findings have been made. Going forward, we will continue to report openly on an annual basis. We believe that openness about both strengths and weaknesses is the key to trust among customers, employees and society. Seltor remains committed to promoting human rights, decent working conditions and sustainable development – in its own operations as well as through close monitoring of our partners.

Seltor will publish a "Report on due diligence assessments" in accordance with the Transparency Act by June 30, 2025.

Inquiries related to Seltor's work with due diligence assessments, cf. the Norwegian Transparency Act, can be sent to endre.christiansen@seltor.no Please mark the email with the Norwegian Transparency Act.