To Our Stakeholders:

Last year, Kolmar Group AG signed and became a participant of the United Nations Global Compact (UNGC), also joining the Swiss local network of the UNGC. I am pleased to share with you that Kolmar reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of human rights, labour standards, the environment and anti-corruption, and is committed to aligning its operations accordingly.

In our first annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with you using our primary channels of communication.

Among the many challenges Kolmar has faced and overcome this year, it also brought many opportunities to work on our strategy to manufacture renewable fuels. A highlight has been our investment in Synpet S.A., a company which will process difficult-to-recycle plastics into synthetic oil, an alternative to crude oil. This investment underpins and supports Kolmar’s strategic ambition to invest in renewable, bio and low carbon technologies. The chemicals industry is transitioning from fossil to renewable and circular feeds, and has the potential to grow significantly, especially in the EU, where the European Green Deal requires chemical producers to decarbonize and recycle.

I would like to express my warm thanks to all our employees and business partners for participating in our sustainability journey to date. We have integrated environmental sustainability as one of the foundations of our business, we are making solid progress and the work we are doing does have a positive impact.

We are confident and optimistic for 2023 and we will continue to grow, thrive and achieve great results for a more sustainable future in the years to come.

Yours sincerely,
Ruth Sandelowsky
CEO

Kolmar promotes and maintains a culture of compliance and recognizes the importance of integrity and responsibility in its business. We are a responsible company with established values and refrain from engaging in business with any partners who do not meet our high ethical standards.

During the past several years Kolmar has been actively working on enhancing its business processes in terms of sustainability. We believe that no business can be effective without considering its impact on environment, human rights, labour, and anti-corruption. While we have been operating in such a manner consciously from the date of our establishment, we decided to make our approach to sustainability more structured and accountable. Joining the UNGC was one of such actions to clearly express and share our view. ESG Policy introduced by Kolmar became a core document determining on what principles our business should operate. All of our internal policies and regulations, including our newly updated Code of Conduct, are developed or updated with reliance on the fundamental principles of Kolmar outlined in our ESG Policy. We strive not only to declare our adherence to sustainability but to act accordingly. Kolmar’s ESG Committee monitors the performance of the company and determines our new goals. For example, Kolmar is developing its new Sustainability Code of Conduct for business partners, Anti-Money Laundering, Anti-Bribery & Corruption and Gift Policies, internal training for employees regarding compliance related issues. In addition, Kolmar aims to increase its trading portfolio and participation in projects for recycling and producing sustainable products.

Kolmar recognizes that human rights are an integral part of corporate citizenship and conducts its business activities with respect for human rights wherever the company operates. We uphold and support the Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights.

The health, safety and well-being of all our employees, agents, suppliers, contractors, business partners and the communities within which we operate is Kolmar’s number one priority. We recognize and uphold all relevant international and local laws and regulations. We ensure that our employees respect the protection of internationally proclaimed human rights within our area of influence.

Our commitment to achieving the Principles of the Global Compact is expressed in our Code of Conduct.

Kolmar:
• Has updated and expanded its Code of Conduct to include its dedication to respecting and protecting human rights and to reaffirm its commitment to labour rights, protection of the environment and anti-corruption. Kolmar expects all employees to implement its high standards in their day-to-day dealings on behalf of the company;
• Has created an ESG policy to declare its strategy in the areas of human rights, labour standards, the environment and anti-corruption;
• Has set up an ESG Committee to monitor and control ESG performance;
• Is working on implementing a Sustainability Code of Conduct to which business partners will be required to adhere;
• Adds a sustainability clause to all new contracts, imposing an express obligation on business partners to comply with all applicable rules and regulations, in particular those related to human rights, labour standards, the environment and anti-corruption. This clause also provides Kolmar with the right to audit its business partners’ compliance with sustainability obligations;
• Ensures that business partners are checked for compliance with all applicable rules and regulations during our comprehensive KYC procedure;
• Has introduced a reporting system that allows employees and business partners to report any concerns or violations regarding human rights, labour, environmental or anti-corruption in confidence;
• Has completed an independent ESG assessment and ranking to ensure that Kolmar is in line with best practices for all ESG matters. Kolmar holds the EcoVadis Bronze Sustainability Rating and is continuously working on improving its business practices;
• Has arranged attendance of training on human rights provided by SECO, UNGC and others by legal personnel;
• Has joined and is actively participating in the Human Rights Due Diligence Peer Learning & Networking Group;
• Sponsors charity programs, particularly those based on education, around the world, including the ASJ Scholarship (Gaza), St Mary Goreti School (Tanzania) and Il Papavero (Italy) to give disadvantaged children a brighter future.

Kolmar’s Legal Department monitors the content of all newly concluded contracts and ensures that they include the required sustainability and compliance provisions. Our Client Relations Department also ensures that our business partners provide the required sustainability information during the onboarding and KYC procedures. All contracts and onboarding documents are stored for the purpose of internal and external audits.

We expect our employees and business partners to inform the Legal Department of possible human rights violations or similar concerns for review and evaluation. Employees can submit their reports anonymously. No reports have been received this year up to the date of this Communication on Progress.

Kolmar’s ESG Committee is responsible for identifying, reviewing and considering ESG impacts on Kolmar’s business and meets every three months, with the active involvement of senior management. All relevant departments report to the ESG Committee for guidance and evaluation.

Kolmar uses a third-party assessment (EcoVadis Rating) of its business practices to maintain sustained progress in ESG matters.

We confirm our commitment towards labour rights expressed in our ESG Policy. In particular, we recognize and uphold the laws and regulations regarding diversity and equal opportunities, fair recruitment, freedom of association and of political activities, right to collective bargaining, human rights and labour due diligence, a safe and healthy workplace, personal and professional development, human resources procedure and reporting mechanisms.

We conduct our business activities with respect for labour rights and comply with the IFC Performance Standard 2 Labour and Working Conditions and the eight International Labour Organization Fundamental Conventions, as well as the relevant international laws and regulations on freedom of association, forced or child labour, fair recruitment and labour due diligence wherever the company operates. Kolmar adheres to zero tolerance of forced and compulsory labour, and zero tolerance of child labour. Kolmar’s labour rights principles are described in its Code of Conduct.

Kolmar provides a safe and healthy working environment for all employees, agents, suppliers, contractors and business partners. We proudly maintain our statistics of zero accidents and injuries in the workplace.

Kolmar promotes integrity, equal opportunity and mutual respect. We welcome diversity in our workforce and do not tolerate any form of discrimination due to race, religion, sex or sexual orientation, age, social or ethnic origin, physical ability or political opinion, or any form of harassment or abuse. It is in our interest to attract, develop and maintain the best people. We encourage the personal and professional development of all our employees. Annual personal development assessments and specific training create a working environment where our employees feel empowered.

We have a culture of open communication and a well-developed human resources procedure.

In addition to the general measures already described in the human rights section above, Kolmar:
• Provides employee presentations with updated information in the Code of Conduct on labour issues;
• Is working on a new version of the Employee Manual, which employees can easily refer to on any point of concern;
• Makes sure that there is equal representation of women and men employees, with a current ratio of 46%/ 54% (F/M) and a ratio of 52%/ 48% (F/M) employees in managerial positions at the date of this Communication on Progress;
• Performs safety training for all employees (including fire drills and defibrillator training);
• Arranges regular safety checks of office equipment;
• Ensures office premises are supplied with sanitizers, masks and other equipment to prevent the spread of COVID-19 and other illnesses;
• Provides e-learning courses for employees;
• Introduced the Hybrid WFH (“Work From Home”) Model allowing employees to work remotely several days per week;
• Encourages employees to report any concern or violation related to labour issues to HR and/or the Legal Department with an option to submit their report anonymously.

Kolmar’s HR Department monitors and reports employment and safety indicators and statistics such as workplace diversity, accident frequency rate, accident severity rate, and average training hours per employee to management. Kolmar aims to maintain zero accidents and to work on achieving and maintaining 50/50 gender parity among all employees and senior management.

Kolmar’s HR and Legal Departments are authorized to respond to and evaluate any concerns about the work environment which are reported to them. No reports have been received this year up to the date of this Communication on Progress.

Kolmar recognizes its responsibility for the environment in its operations, throughout the supply chain and in the context of its products. We are dedicated to continuously improve our environmental performance and reduce the impact of our activities on the environment. This includes complying with all applicable laws and regulations in our business activities. We use renewable fuel energy and climate-friendly products, and re-use or recycle waste wherever possible.

Kolmar’s product portfolio includes renewable fuels such as waste feedstocks, biodiesel, renewable diesel and ethanol, and it is a manufacturer of biofuels in the US under the name of American GreenFuels, LLC, with production sites for biodiesel in Connecticut and Texas. All our production sites have adopted their own policies and responses, e.g. the Spill Prevention Control and Countermeasure Plan and the Stormwater Pollution Prevention Plans (“SPCC Plans”) to counter environmental hazards and risks linked to their particular activities.

We are focusing on global decarbonization in the transport and fuel industry in the US through American GreenFuels by providing the market with emissions-reduced sustainable biodiesel and heating oil. The company has invested significantly in cellulosic technology with new production of renewable diesel coming online in 2022.

Also in 2022, Kolmar announced its investment in Synpet S.A., a company which will use the thermal conversion process (TCP) to manufacture circular products for the chemical industry out of difficult-to-recycle plastics. The technology will help to process such plastics into circular naphtha, a circular feed for steam crackers. In case of processing other waste feeds, TCP can make other products as well including fertilisers and synthetic oil.

Kolmar Group AG is in the process of being certified in accordance with ISCC CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation and is committed to achieving the ICAO Member States’ target of reducing greenhouse gas emissions from air transportation, including carbon-neutral growth from 2020 and a 50% reduction of net aviation carbon emissions by 2050.

Kolmar is committed to revolutionizing its core business, the petrochemical industry, by promoting the re-use and recycling of plastics, polymers and synthetic rubbers, and leading the way in reducing the dependency of the petrochemical industry on fossil feedstock such as crude oil and oil derivatives.

In close cooperation with our industry partners, we are providing Renewable Energy Directive II (RED II) compliant waste-based, non-food, non-animal feed and non-deforestation and land use sensitive biofuels in Europe to facilitate decarbonization of the European transport industry.

Certification, registrations and memberships help us achieve the highest standards of product quality and safety, environmental protection and supply chain sustainability.

In addition to the general measures already described in the human rights section above, Kolmar:
• Collects, evaluates and stores information and documents about the sustainable origin of renewable fuels and other related products purchased by Kolmar;
• Takes into account the nature of products purchased by Kolmar and the possible effects that they may have on the environment, and ensures that all suppliers provide relevant sustainability representations and warranties in contracts in particular regarding compliance with all environmental regulations;
• Arranges waste recycling by separate collection and disposal of waste in our offices;
• Is working on measuring and decreasing water and energy consumption, the total weight of hazardous and non-hazardous waste, GHG emissions, and also increasing consumption of renewable energy and the total weight of waste recovered;
• Holds the ISCC EU, ISCC PLUS certificates and the National Italian Scheme certificate;
• Kolmar Americas, Inc. (a subsidiary of Kolmar Group AG) and its subsidiaries, American GreenFuels, LLC and American GreenFuels Rockwood (Tennessee), LLC, hold the ISCC EU certificate;
• Kolmar Americas, Inc. and American GreenFuels Rockwood (Tennessee), LLC hold ISCC Plus certificate;
• Kolmar Americas, Inc. and American GreenFuels, LLC hold the National Biodiesel Accreditation Program BQ9000 registration;
• American GreenFuels, LLC is registered with the Low Carbon Fuel Standard, and completed multiple Environmental Claim Validations from UL. Deficiencies and Corrective Action Plans have been developed by American GreenFuels, LLC to correct any possible deficiencies in its SPCC Plans;
• Kolmar NL B.V., Kolmar Italia S.r.l., Kolmar Belgium S.A. and Kolmar Singapore Pte. Ltd. (subsidiaries of Kolmar Group AG) hold the ISCC EU certificate;
• Kolmar NL B.V., Kolmar Italia S.r.l. and Kolmar Singapore Pte. Ltd. hold the National Italian Scheme certificate.

Kolmar’s HR and other departments monitor and report relevant indicators and statistics such as weight of waste produced, weight of PET bottles recycled and natural resources thus saved, amount of energy and water consumed, and GHG emissions to management.

Kolmar’s Legal Department is authorized to respond to and evaluate any concerns raised about environmental issues. No reports have been received this year up to the date of this Communication on Progress.

Kolmar ensures that it complies with requirements to obtain or renew environment-related certificates.

Kolmar strictly applies anti-corruption and bribery policies and has zero tolerance of bribery, fraud or other corrupt practices.

Counterparties must adhere to and are required to demonstrate compliance with all relevant laws and regulations, and conduct business with integrity, including the core principles of the OECD’s Due Diligence Guidance for Responsible Supply Chains. All our counterparties are constantly monitored. Our Legal and Compliance Department monitors and evaluates the compliance system and collaborate closely with the ESG Committee, as well as the Client Relations Department. Monitoring aims to identify the effectiveness, regularity and frequency of controls and reduces the risk of breaches of law, regulations or procedures. The frequency and extent of monitoring (including audits) is risk-based.

We expect our employees and agents to act in the best interests of Kolmar at all times, to avoid conflicts of interest, and not accept or give any payments or gifts which could adversely impact the integrity of Kolmar’s business or that of its partners. Kolmar complies with all applicable trade restrictions imposed by the relevant authorities.

Kolmar:
• Addresses anti-corruption risks when dealing with business partners by screening them via compliance databases, performing comprehensive KYC and collecting relevant information and documents during the onboarding procedure;
• Obtains express representations and warranties from its business partners both prior to concluding contracts and upon conclusion of such contracts by means of specially drafted compliance and sustainability clauses;
• Is working on Anti-Money Laundering, Anti-Bribery & Corruption and Gift Policies;
• Provides sanctions and compliance training to its employees on an ongoing basis;
• Is developing e-learning courses for all employees to raise their awareness and deepen their knowledge of anti-corruption related issues.

The number of employees successfully completing compliance training is monitored and reported to senior management. Kolmar aims to achieve and maintain a 100% completion rate.

While Kolmar’s Client Relations Department is responsible for the timely and full-scale screening of all onboarded business partners, the Legal Department monitors the content of all negotiated contracts and ensures that they include the required sustainability and compliance provisions. No contract is concluded without the above-mentioned provisions or if a business partner refuses or fails the KYC procedure.

All reports regarding corruption concerns are addressed to the Legal Department for review and evaluation. No reports have been received during 2022 as of the date of this Communication on Progress.