Saab AB

The Audit Committee's assignment is set forth in the Board's rules of procedure. The Audit Committee shall, among other things, monitor the company's financial and sustainability reporting and submit proposals to ensure the integrity of the reporting, monitor the efficiency of the company's internal control, internal audit and risk management in respect of the financial and sustainability reporting, keep itself informed of the audit of the Annual and Sustainability Report and consolidated accounts, inform the Board of the results of the audit and the assurance of the sustainability reporting, review and monitor the auditor's impartiality and independence, assist the Nomination Committee in preparing the proposal for the shareholders' meeting's election of the auditor and in certain cases procure auditing services, in addition to establishing guidelines for services other than auditing that may be provided by the company's auditor. Moreover, the Audit Committee shall annually monitor and evaluate the efficiency and adequacy of the company's anti-bribery and corruption programme including the Code of Conduct, and keep itself informed of material deviations or non-compliance with the company's anti-bribery and corruption programme, including whistle-blower reports, through regular reporting from the Ethics and Compliance Board. The company's external auditor normally participates in the meetings of the Audit Committee. In 2024, the Audit Committee focused especially on current issues relating to the company's financial position, the financial reporting, execution of major projects, procurement, budget, risk management, internal control, investment grade credit rating, sustainability reporting, the company's business ethical rules as well as assisted the Nomination Committee with proposal for election of auditor."
"Saab's Senior Vice President & Head of Communication and Sustainability, and Saab's Chief Sustainability Officer present an update and progress on Saab's sustainability impacts, risks and opportunities, implementation of due diligence and performance against related targets to the Audit Committee and Board of Directors on a yearly basis. The material impacts, risks and opportunities were presented to the Board in 2024. For further information, see table Material Impacts, Risks and Opportunities on page 80. [...] Saab's Sustainability Board handles and resolves sustainability issues that affect the company and prepare certain issues for decision by the Group Management. The Group-wide Sustainability Council consists of representatives from the business areas and selected group functions. Thereby the Sustainability Council has expertise within all of Saab's identified material sustainability topics to support the Sustainability Board, Group Management and the Board of Directors in sustainability-related decisions. For further information, see section [GOV-2] Information and sustainability matters, page 73. [...] External parties, including workers in the value chain, who become aware of or suspect a violation of the Code of Conduct are expected to report it. Reporting can be done through Saab's confidential whistleblowing hotline. The Whistleblowing Hotline is hosted by an external party and allows for anonymous reporting on all issues relating to any aspect of the Code of Conduct, including Working Conditions and Human Rights. Grievances can be filed online or by phone. The principles and procedures for grievance management are publicly available on the online reporting portal. The instruction clarifies, inter alia, that the reporter shall be kept informed on the progress and expected time frames of the investigation, that the reporter shall be protected from any form of retaliation, and specifies how the investigation should be carried out. Recommended remedial actions will be directed to the relevant internal organisation and reported to the relevant local management team as well as the Ethics and Compliance Board. Reports and investigations are treated confidentially."
"Group Government Affairs is a business-driven organisation that engages with key stakeholders, including government officials, regulators, industry associations, the EU, NATO and other strategic partners, to proactively promote and advocate Saab's positions and business conditions. The Senior Vice President & Head of Group Government Affairs leads and oversees the organisation. All activities are conducted in accordance with Saab's Code of Conduct. Group Government Affairs primarily operates in Sweden and within the EU and NATO organisations through its Brussels office, with additional presence in Saab's strategic markets. Saab's advocacy work always complies with applicable laws and regulations in every country where it operates. Saab's Code of Conduct is globally applicable and supported by policies, instructions, and processes that may incorporate country-specific variations to ensure alignment with local legislation. The Code also encompasses cooperation with governments. Interacting with decision-makers on matters related to national security and defence is an integral part of Saab's mission and must always be conducted responsibly. [...] Saab is registered in the EU transparency register with registration number: 86477889163-49. Saab does not use company funds to sponsor political parties or candidates, in accordance with its Code of Conduct. However, in the United States, employees may make personal political donations, exact amount is not available, in compliance with local regulations.

During 2023, Saab implemented and launched training for all employees in its new Code of Conduct to ensure that Saab behaves responsibly and ethically in carrying out its mission. For a growing company with thousands of new employees, this is even more important. Saab's Responsible Sales Policy and its related framework are now integrated parts of our sales and marketing processes. The Board has also approved an updated sustainability strategy in order to make sure the company meets its sustainability targets. [...] Saab's Responsible Sales Policy clarifies and strengthens the commitment to human rights due diligence, relating to the end-use of Saab's products. The responsible sales risk identification, risk mitigation and informed decision-making. A business and human rights-function at Group Sustainability is responsible for the implementation of the Responsible Sales Policy and supporting the sales process with expertise. This includes producing responsible sales risk assessments for flagged business opportunities. Due diligence activities relating to responsible sales have been reported to the Sustainability Board during 2023 and will be reported to the Board of Directors from 2024. The Responsible Sales Policy complements existing national export control and serves to strengthen Saab's global sustainability commitment. [...] Saab ensures compliance with the Responsible Sales Policy in the sales process through implementation in the Customer Relationship Management (CRM) tool. A responsible sales screening is carried out for all new business opportunities in an early stage of the sales process, when business opportunities are identified. Business opportunities that are considered high-risk according to Saab's screening model are flagged and must go through an extended due diligence process, where potential adverse human rights impacts of the business opportunities are identified. It is also evaluated if the risks can be mitigated or avoided. Based on the due diligence process, an informed decision is taken by the business area. It is also possible to escalate decisions to the Ethics and Compliance Board at corporate level. Saab annually reports the number of responsible sales risk assessments that have been carried out for flagged opportunities during the year, which enables stakeholders to evaluate the extent of Saab's work with human rights risk management. [...] Saab's Responsible Sales process is illustrated on the next page [...] Saab's Responsible Sales Policy The development, production and sale of security and military equipment comes with great responsibility, in many dimensions. To address risks associated with the potential misuse of Saab's products, Saab has adopted a Responsible Sales Policy. The global policy clarifies Saab's responsibility regarding due diligence and management of risks. The policy complements existing national export control and serves to bridge the gap between different international legislations applicable to Saab. Through responsible sales, Saab ensures our commitment to both international sustainability frameworks and national security interests. Saab's Responsible Sales risk assessment process [...] Responsible Sales: screening [...] Responsible Sales: risk assessment [...] Informed decision by business area [...] Saab Responsible Identification Recommendations Sales Index Process of risks risk management for flagged opportunities [...] Input to sales process [...] Continued sales process and risk management [...] Identification of risks [...] Input to risk assessment: • Country risk • Product risk [...] Output of risk assessment: • Responsible sales risk report [...] Escalation for decision and guidance: • Ethics and Compliance Board [...] A responsible sales screening is required for all new sales opportunities during 2023, and any high-risk opportunities are flagged and must undergo an additional due diligence process. An opportunity is flagged when: • Customer has a Saab Responsible Sales Index score below certain threshold, and • Product is classified as military equipment, and • Not a follow-on delivery (for example spare parts) [...] Saab's view is that actively addressing sustainability in the supply chain is not only positive for people and the environment, it also promotes quality and profitability. Saab manages risks and opportunities in the supply chain through Saab's common procurement processes. Saab has a decentralised model for procurement, however all Saab entities follow a common process and applicable national legislation. Procurement practices are developed through the Group Procurement Council, and reported to Group Management through Saab's Operational Excellence Board and Sustainability Board. [...] Saab uses a questionnaire as part of the qualification process for new suppliers, which includes assessment on sustainability performance. A responsible sourcing team, composed of representatives from each business area and led by Group Procurement, supports the procurement process with expertise regarding sustainability, to ensure sustainability risks are managed in accordance with Saab's processes. Saab expects suppliers to follow Saab's Supplier Code of Conduct and to implement the sustainability requirements on their own suppliers. Suppliers who do not meet Saab's expectations relating to sustainability will be encouraged to improve their sustainability performance. [...] To ensure that strategic suppliers are evaluated in the same way throughout all entities, Saab works with the third-party supplier Ecovadis. Ecovadis is a widely used tool that evaluates suppliers based on sustainability performance including how suppliers flow sustainability requirements to the next tier in the supply chain. The tool enables Saab to evaluate suppliers' sustainability performance, both through a sustainability screening tool and through a desktop sustainability auditing tool. Topics included in the evaluation are environmental management, human rights, business ethics and sustainable procurement practices. The Ecovadis assessments contribute to the overall assessment of the supplier and has an impact on the downselect of suppliers. Based on the sustainability assessment, selected suppliers [...] sustainability performance in order to meet Saab's requirements. [...] Responsible sourcing - targets and progress during 2023 In 2023, Saab reached and exceeded the target that at least 70% of Saab's strategic suppliers should be assessed through a desktop audit, or be committed to be assessed, by Ecovadis. During the year, Saab also increased the engagement with suppliers concerning sustainability performance. Suppliers with a sustainability result below a certain threshold are contacted by Saab in order to initiate a supplier dialogue, and draw attention to the need of increased sustainability performance. [...] Saab has a goal to conduct supplier dialogues about science-based targets with those of our large suppliers who are not already connected to the Science Based Targets initiative. In 2023 Saab engaged with 17% of the suppliers. Saab will continue to work together with our suppliers to ensure that at least 50% (based on spend) by the end of 2027 adhere to the Science Based Targets initiative or decide to work in accordance with the targets. [...] Saab has continuously monitored legislative development and is preparing for future legislation concerning sustainability due diligence. Saab is currently developing and updating ways of working to be able to improve management of sustainability risks throughout the value chain, including further integration of sustainability due diligence practices. During the year, a decision was made to create a team with special responsibility to provide support for Saab's purchasing organisations to manage and evaluate suppliers' risk profiles. The team will be formed in 2024. Risks that will be highlighted [...] sustainability. [...] Anti-Corruption Saab does not tolerate corruption in any form. It goes against our Code of Conduct, our values and the principles and standards we hold ourselves accountable to. Saab works systematically to identify, assess and manage corruption risks. Everyone who enters into business with Saab should do so knowing that the relationship is built on solid ground. [...] Governance of topic The Board of Directors adopts the Code of Conduct. The Audit Committee monitors the development of the Code of Conduct and evaluates the design of Saab's Anti-Bribery and Corruption (ABC) programme including the company's ABC Policy. Group Ethics and Compliance manages and develops the ABC programme, conducts business partner due diligence investigations and operates the business intermediary onboarding process. The work is performed under the supervision [...] chaired by the General Counsel and convenes at least eight times per year. Local Ethics and Compliance Officers work with the implementation of the ABC programme in business areas and provide first-line guidance and advice. [...] Corruption risk assessment Saab seeks to identify and assess corruption risks and programme improvements in multiple ways. The business corruption risk module of the enterprise risk management (ERM) process serves to rate the corruption risk in Saab's business dealings. This is done using a method that measures the corruption risk in all business prospects above 50 MSEK against a set of weighted risk indicators and a country risk multiplier. All of Saab's four business areas performed the business corruption risk assessment in 2023. [...] In addition, Group Ethics and Compliance performs an annual programme risk assessment to identify and manage corruption risks and gaps in Saab's anti-bribery and corruption programme. Data for the programme risk assessment is collected from several sources including stakeholder workshops, regulatory requirements, external benchmarking, ERM output and other metrics. The most significant programme risks/gaps according to the latest programme risk assessment were: • The engagement and monitoring of business intermediaries. • The management and governance of joint ventures. • Customer requirements to deliver offset. • Need to clarify the strategic countries (U.S., U.K., Germany and Australia) responsibilities under the ABC programme. [...] The result of all assessments and activities are converted into actions in annual activity plans or road maps. [...] Scrutiny of business partners Business partners may pose a legal and reputational risk as part of the corruption risk if not managed correctly This is particularly true [...] Ethics and Compliance Organisation, reporting and governance structure [...] Audit Committe • Evaluate ABC programme [...] Ethics and Compliance Board • Monitor and approve ABC programme • Follow-up speak up • Decide on: • Business partner engagements • Sponsorships (>0.2 MSEK) • Responsible sales [...] Management and Operations Business area Ethics and Compliance - Implement policies and instructions - Conduct ABC training - Corruption Risk Assessment (CRA) and business partner management - Guidance and advice [...] Ethics and Compliance - Manage and lead ABC Program - Group-wide CRA - Business Intermediary onboarding - Business Partner due diligences - ABC training - Track and report metrics [...] Justification Due diligence Assessment Contracting Monitoring Marketing & Sales (M&S) Market Network Management M&S/Internal Audit [...] Business justification - Red flag check [...] Due diligence questionnaire - Database screening - External investigation [...] On-site visit - Face-to-face interview - Anti-Bribery and Corruption training (ABC) - Case assessment & approval [...] Fixed-term contract - ABC clauses - Reporting requirements - Audit rights - Remuneration model - Specific signing rules - Referrals to Ethics and Compliance Board [...] Agreement monitor - Reporting requirements - Payment approval process - Audit programme - Ongoing screening [...] Number of business intermediaries as of December 2023 and their distribution based on Transparency International's Corruption Perception Index Transparency International's Corruption Perception Index (CPI) Type of business intermediary Total 0-30 31-40 41-60 61-80 81-100 Market consultants 99 1 22 21 42 13 Resellers 54 1 10 18 22 3 [...] Training and assessment of business intermediaries Number of business intermediaries audits resulting in material remarks in 2023 Number and % of business intermediaries that have taken recurring ABC e-learning in 2023 [...] in promoting or assisting Saab's marketing and sales efforts, business development or strategic planning ("business intermediaries") and the company has dedicated resources and processes in place to manage and mitigate business partner risk in general, and business intermediary risk specifically. Business intermediary engagements are governed by a centralised process serving to (i) assess the business intermediary's credentials and suitability for the assignment through due diligence and background controls, (ii) train and bind the business intermediary to Saab's anti-bribery and compliance expectations through appropriate contractual commitments, and (iii) follow-up and control the business intermediary's performance and conduct. The Ethics and Compliance Board approves individual engagements above certain thresholds and reviews statistics. Saab's internal auditors conduct reviews each year of a number of selected business intermediaries to verify compliance and ensure that the intermediary is acting in line with Saab's values and contractual terms. Each engagement has a dedicated agreement monitor responsible to follow-up performance of services, activity reporting and payment process. Similar corruption risk management processes are applied for other high-risk business partners, such as prime contractors, offset suppliers and joint ventures. [...] Gifts and hospitality Saab's rules on gifts and hospitality provide clear guidance and set requirements of approval depending on the value of the benefit. A tool is in place to document and identify red flags. Sponsorships and donations are also subject to a structured decision-making process and requirements regarding documentation and recording in accordance with our Sponsorship and Donation Policy. [...] Training Digital Code of Conduct training is mandated for all employees. Senior executives, business leaders and those in high-risk functions [...] development, project management and sourcing also receive customised anti-corruption training through e-learnings and classroom sessions. The Board of Directors and the Group Management receive more extensive anti-corruption training every three years with the latest training taking place in 2023. [...] Whistleblowing Employees who become aware of, or suspect, a violation of Saab's Code of Conduct are expected to speak up and report it, either through the normal line reporting or through Saab's whistleblowing hotline. The whistleblowing hotline is hosted by an external party and allows employees and external parties to report anonymously online or by phone. The hotline can also be used for questions and feedback on the possibilities to report suspected violations and complaints. Reports and investigations are treated confidentially, and Saab does not tolerate any form of retaliation. [...] Targets and progress during 2023 In 2023, Saab: • Launched a new Code of Conduct and developed an accompanying e-learning. • Merged the two groups Ethics and Compliance and Market Network Management to strengthen and become more efficient in the ABC work. • Expanded the whistleblowing channel to include an additional five countries according to the EU directive. • Updated the training strategy for the ABC area and launched the first in-depth training module. • Improved the digital system support for the onboarding of business intermediaries.

Importance of compliance and anti-corruption as Saab grows its international business The market for security and defence equipment is highly regulated. Saab is committed to complying with all export control regulations applicable to its business. In addition to regular training for key personnel, compliance is enabled through the employment of a competent organisation, stringent processes, internal audits and adapted IT tools. [...] Saab has zero tolerance for corruption and is guided by the company's fundamental values, code of conduct, current laws, industry codes of conduct and clearly defined internal processes to prevent risks of corruption. Saab's management of anti-corruption risks is an important aspect of Saab's wider sustainability efforts. [...] Saab handles information of vital importance to its customers and in many cases to Sweden's and other nations' security. The world is becoming increasingly uncertain while cyber security challenges keep growing, making continuous and systematic security management and development critical. Saab is also committed to protecting the personal data of employees and customers. The company has established a global privacy organisation and governance structure to this end.

During 2022, Saab established a Group Sustainability Council to further strengthen the governance of sustainability topics. The Group Sustainability Council consist of representatives from each Business Area and Group Functions within Human Resources, Environment, Ethics and Compliance, Procurement, Finance, Government Relations and Marketing and Sales and is chaired by the Chief Sustainability Officer and Head of Group Sustainability. The Sustainability Council provides the Sustainability Board with background material, analyses, and recommendations for decisions. [...] Saab's global Responsible Sales Policy clarifies and strengthens the commitment to human rights risk management. The framework connected to the policy was implemented in Saab's marketing and sales process at the end of 2022. Group Sustainability will support internal sales processes with expertise relating to the policy. The framework includes a process for identification of risks, mitigation activities and decision-making. It complements existing export control and serves to strengthen Saab's sustainability commitment. See page 58 for information about Saab's work with export compliance. [...] Saab's internal auditors conduct reviews each year of a number of selected business intermediaries to verify compliance and ensure that the intermediary is acting in line with Saab's values and contractual terms. Each engagement has a dedicated agreement monitor responsible to follow-up performance of services, activity reporting and payment process. Similar corruption risk management processes are applied for other high-risk business partners, such as prime contractors, offset suppliers and joint ventures.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Fossilfritt Sverige (translated: Fossil Free Sweden) is a governmental organisation that collaborates with companies who are committed to contributing to the Swedish Parliaments goal of becoming fossil free by 2045 at the latest. This is one public commitment that Saab has made and ensures that company decisions and strategy are in line with this ambition. This is done through our governance processes and policies, stating among other that we should minimize our environmental impact.

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]Fossilfritt Sverige (translated: Fossil Free Sweden) is a governmental organisation that collaborates with companies who are committed to contributing to the Swedish Parliament's goal of becoming fossil free by 2045 at the latest. This is one public commitment that Saab has made and ensures that company decisions and strategy are in line with this ambition. This is done through our governance processes and policies, stating among other that we should minimize our environmental impact.