Policy for fresh water withdrawal and waste water discharge

Owner/approver: Head of ESG & Quality

Valid from: 2022-04-27

PURPOSE

Lerøy Seafood Group (LSG) will work to limit as much as possible the impact on our local water sources and surrounding environment that are directly and indirectly affected by our operations. Sustainable management of these water sources is important to maintain our operations and business model.

The world’s dependency on access to clean, high-quality freshwater has never been greater. Freshwater is a renewable resource. In some areas of the world, however, the use of freshwater may exceed the natural processes that refill the water magazines. Water stress or water depletion in individual areas may have a negative impact on our  operations and business and on society in general. Access to freshwater for our operations is essential for the following reasons:

• We rely on freshwater for our smolt production operations.
• Our processing operations are dependent on clean freshwater to uphold hygienic standards.
• Our processing operations are dependent on freshwater for Ice production to cool our products, both during transport to customers and intermediate storage on location.
• Our workers and local communities need access to, and must have access to clean drinking water and sanitation.
• Raw materials for salmon feed are sourced from agriculture

Leroy will continue to invest in solutions in accordance with our Policy and Guidelines to ensure a reduction in water withdrawal, and increase water quality of waste water. For more information see the Green Finance Framework on our website (www.leroyseafood.com).

Risk

LSG has carried out a risk assessment relating to water stress and water depletion in our downstream units. Of our 22 factories in 10 countries, 11 are located in areas that have a medium to very high risk of Water Stress or Water depletion (https://www.wri.org/aqueduct). Based on the risk assessment, it has been decided that LSG will focus on these units in the work to reduce water withdrawal, improve the quality of the discharge water (effluents) and reduce our consumption of freshwater. The companies in exposed geographical areas must, in collaboration with the management group in LSG prepare a plan to reduce their impact on the local water sources in 2023.

There are no areas in Norway, which are categorized as being at risk of water stress or water shortage All water-intensive (98% of water withdrawal) activities (smolt production) is located in Norway.

Strategy and KPI

In 2023, the group will adjust its strategy and KPI focusing on areas with medium to high tisk of waterstress. Part of the strategy is, through dialogue with authorities and interest organisations, to develop a progression plan for water-reducing measures and to improve the quality of the discharge water for units located in areas with a medium to high risk of water stress. Our consumed water for the downstream units (see our sustainability library) is mostly related to ice production to cool our products. The measures that appear in the action plan will therefore not significantly affect our consumed water. We have therefore chosen to keep consumed water outside our KPI.

A number of actions have already been carried out which are available in the Sustainability Library

Water withdrawal, Water discharge and Consumed water in LSG:

Smolt production is the largest contributor to the withdrawal and discharge of water in LSG. The facilities that produce smolt are exclusively located in Norway and are the only operation that uses surface water as a water source. These are linked to specific agreements for water withdrawal and waste water discharge per facility. The water that is withdrawn from source into the flow-through system or RAS system returns in its entirety to the surroundings and results in this part of our operations having no consumption of water. We must comply with all the criteria in our discharged permits.

Overview of all focus areas where LSG will reduce fresh water withdrawals and increase the water quality of the waste water:

• Implementation of RAS technology in smolt production. RAS technology can reduce water consumption by 99% per facility.
• Investment in, and use of, water-saving equipment and technology at processing plants.
• Dialogue and collaboration with local authorities to ensure good water management. Units located in areas with medium to high water stress are the main focus.
• No business must prevent local communities from gaining access to fresh water.
• Training of internal employees who manage risk, water withdrawal and waste water treatment at water-intensive facilities and water stressed areas.
• Improvement of systems for reporting water withdrawal and waste water in the group
• Withdrawal and discharge of seawater for operations where it is applicable will be included from 2023 reporting
• Ensure that wastewater discharge treatment at the facilities is in line with current laws and regulations
• Using the market's best solutions and technology to ensure that habitats, wildlife and ecosystems where we operate are not negatively affected
• Invest in water purification technology that reduces pollution of fresh water sources

Suppliers

LSG makes demands through group agreements to suppliers. These satisfy internal and external requirements for water reduction, water purification and consumption of water in the value chain. Together with our suppliers, we establish plans and frameworks for how the suppliers can meet these requirements.

Example of requirements for suppliers

• The suppliers must carry out a Risk analysis of their suppliers to identify whether the areas where there is operation are located in areas with a risk of water stress or water depletion.
• Based on the risk analysis, the suppliers must come up with an action plan to reduce water withdrawal, purify waste water (in accordance with local regulations) and reduce the water consumed by their suppliers.

VALID FOR

This policy is applicable to all employees at Lerøy.

DEFINITIONS

Water stress: Baseline water stress measures the ratio of total water withdrawals to available renewable surface and groundwater supplies.

Source: WRI Aqueduct 2019

Water depletion: Baseline water depletion measures the ratio of total water consumption to available renewable water supplies.

Source: WRI Aqueduct 2019

WRI, Aqueduct Water Risk Atlas; https://www.wri.org/aqueduct

FRAMEWORK AND PRINCIPLES

• Regulation concerning water supply and water intended for human consumption [Drinking water regulations]
• Act relating to river systems and groundwater [Water Resources Act]
• Regulations relating to pollution control [Pollution regulations]

ROLES AND RESPONSIBILITIES

• All employees are responsible for complying with this policy.
• The top management in each company is responsible for ensuring that the company has personnel with the competencies required to ensure compliance with local regulations.

POLICY OWNERSHIP AND IMPLEMENTATION

• The Head of ESG & Quality is the owner of this document and is also responsible for updating the document.
• The policy has been approved by the Corporate Management Group, presented to the Audit Committee and approved by the Board of Directors
• The CEO of Lerøy Seafood Group has overall responsibility for the policy.