Sika AG

According to its Code of Conduct, Sika commits to ethical and sustainable operations and development in all business activities. One company rule prescribes that "using Sika funds to support politicians, political candidates or political parties is prohibited. Donations to political campaigns supporting Sika's strategy or business activities need to be approved by Group Management".

Throughout the year, the Sustainability Committee has played a crucial role in assisting the Board in defining the Group's strategy and overseeing its activities in the area of sustainability and long-term value creation, with special attention for climate change mitigation, energy, water, resource efficiency and circularity, safety, product stewardship, and regulatory compliance and advocacy. It has been instrumental in defining and setting long-term sustainability goals and targets, aligned with the company's overall strategy. The Sustainability Committee also assessed material sustainability risks and opportunities, and established the necessary processes and governance accordingly. Additionally, it has established a quarterly cadence of reviewing sustainability performance, and monitoring progress toward validated SBTi net zero targets. [...] The Sustainability Committee (SC) consists of three Board Members, each of whom brings expertise in a specific ESG area. For more information on BoD members' skills and expertise, please see the Leadership Report on p.166 of the Annual Report 2024. The Group prepares sustainability-related topics for discussion and decision-making in the Board. The SC focuses on the following three areas: completing a formal ESG risk and opportunity assessment via the Materiality Analysis; setting measurable goals that are aligned with the company's overall strategy; and the approval of the annual sustainability report. Sika's strong focus on ensuring the use of accurate and consistent quantitative measures in non-financial reporting is reflected in the close link between the Sustainability Committee and the Audit Committee, with one member sitting on both committees. In 2024, the Sustainability Committee met five times and among others, discussed, reviewed, and approved the following topics: annual sustainability report, non-financial assurance, SBTi net zero targets validation and progression, quarterly updates on sustainability reporting, material impacts, risks and opportunities, implementation of due diligence, and results and effectiveness of policies, actions, metrics, and targets adopted to address them. After each meeting, a report was issued to the BoD. For more information on Sika's BoD and Board Committees, please see the Corporate Governance Report on p.176 of the Annual Report 2024."
"POLITICAL CONTRIBUTIONS According to its [•] [Code of Conduct (CoC), Sika commits to ethical and sustainable operations and development](https://www.sika.com/en/about-us/who-we-are/values-principles/sika-code-of-conduct.html) in all business activities. One company rule prescribes that "using Sika funds to support politicians, political candidates, or political parties is prohibited. Donations to political campaigns supporting Sika's strategy or business activities need to be approved by Group Management". In 2024, Sika did not give donations to political parties, politicians, or related organizations. [1] [...] MEMBERSHIPS IN ASSOCIATIONS AND OTHER FORUMS Sika's engagement with associations and other platforms supports strategic alignment across the industry and provides an opportunity for exchange on perspectives and best practices. For more information on memberships of associations, initiatives, and collaborations, please visit the corporate webpage [•] [Partnerships and](https://www.sika.com/en/sustainability/innovation/research-development/partnerships.html) [Collaboration.](https://www.sika.com/en/sustainability/innovation/research-development/partnerships.html)

Strategically, the Board of Directors is responsible for Sika's ESG performance too. How can it influence this? Hälg: The Board of Directors lays down the values that need to be championed at operating level, and evaluates the findings it receives from regular exchanges with stakeholder groups. This makes Board members who hold executive roles in other companies important providers of stimuli. [...] Hälg: We have set up a Sustainability Committee in the Board of Directors to accompany and support management on ESG issues. Its primary task is to determine the materiality of the various aspects and set priorities.

Until 2021, the sustainability activities across the Group were coordinated by the Communications & Investor Relations department. To facilitate the interaction and align the various initiatives, an internal Sika Sustainability Committee was established. This committee steers and coordinates all sustainability-related projects aimed at achieving sustainability targets and monitoring proper implementation of the Sustainability Strategy throughout the Group. It also prepares the decision-making of Group Management on such topics. The Committee is now chaired by the Chief Innovation and Sustainability Officer and meets monthly. It includes the following corporate functions: Innovation and Sustainability, Operations, Quality & EHS, Communications & Investor Relations, Controlling, Mergers & Acquisitions, Human Resources and Compliance, Procurement, Marketing and Target Markets. [...] Moreover, in 2021, Sika has allocated the responsibility for the ESG controlling to the corporate finance function which is led by the Chief Financial Officer (CFO) to further strengthen the collection process of non-financial data and information for the Sika Group. The holistic controlling system enables Sika to track finance, operations, quality, and sustainability performance in a coordinated way, thus improving the quality of non-financial data and information. Furthermore, the controlling activities are strengthened and management at all levels is supported in their short, mid, and long-term decisional process.

### GOVERNANCE

From the SPM Evaluation, a portfolio view of the assessed product in the corresponding segment is obtained. The aim of this portfolio is to develop a deeper understanding of the sustainability and performance characteristics of Sika's products and to transition to an offering of more solutions with a proven sustainability performance. This portfolio view enables the clustering of products into six clusters, with three positive, one neutral, and two negative clusters.

###### Figure 6: SPM Governance structure

TABLE 4: SPM GOVERNANCE DEPENDING ON SPM PROFILE

Performance
Classification Governance Process

Below
Bottom

Sustainability
Classification

Best In Class
Added Value

Best In Class
Added Value

Best In Class
Added Value

Neutral Any Not considered Critical.

Concerns Any Considered Critical. An action plan is required for
the products classified as Concerns.

Barrier Any Considered Very Critical. An action plan is required
for products classified as Barrier. Need SPM
Steering Committee approval to proceed through
Sika's innovation process or remain in the market.

Best In Class
Above

Products are classified as Sustainable
Solutions and can be promoted under the SPM
marketing concept with additional branding as
"More Performance – More Sustainable" solutions.

SPM PRODUCT CLASSIFICATION (BASED ON SPM PROFILE)

Standard Products are classified as Sustainable Solutions
and can be promoted under the SPM marketing
concept.

Products are classified as Sustainable Solutions
and can be promoted under the SPM marketing
concept.

CLUSTER A CLUSTER B CLUSTER C CLUSTER D CLUSTER E CLUSTER F

SPM
SPM PROFILE VALIDATION & APPROVAL BY EXPERT TEAM STEERING
COMMITTEE

A Governance structure (Figure 6) has been established to evaluate next steps following the final product
classification resulting from an SPM Evaluation. This process defines the key actions that need to be taken
depending on the SPM Profile as an outcome of a product SPM Evaluation.

The Board of Directors (BoD) is Sika's highest governing body and is responsible for the assessment of risk management. Its duties include the annual reassessment of the risk situation at Group level, and it is also the highest governance level of climate-related risks and opportunities. It is responsible for reviewing and endorsing the implementation of sustainability policies, while the Chair of the Board oversees climate-related topics by receiving regular updates from the Group Management. [...] Group Management regularly reviews the processes underlying risk management, and it is responsible for the development and implementation of actions to address risks (including climate-change-related risks) in line with the defined sustainability strategy and targets. Group Management is responsible for risk management at the highest executive level and gives regular updates to the Board. Risk management (including climate-change-related risks) falls under the domain of the Corporate Finance department, headed by the CFO. The CFO oversees financial and non-financial information and data. For potential acquisitions, the Mergers & Acquisitions (M & A) team conducts assessments on financial and non-financial performance as part of the due diligence process."
"According to its [•] [Code of Conduct (CoC), Sika commits to ethi­](https://www.sika.com/en/about-us/who-we-are/values-principles/sika-code-of-conduct.html)
cal and sustainable operations and development in all business
activities. One company rule prescribes that "using Sika funds
to support politicians, political candidates, or political parties is
prohibited. Donations to political campaigns supporting Sika's
strategy or business activities need to be approved by Group
Management". In 2023, Sika did not give donations to political
parties, politicians, or related organizations [1].

Throughout the year, the Sustainability Committee has played a crucial role in assisting the Board in defining the Group's strategy and overseeing its activities in the area of sustainability and long-term value creation, with special attention for climate change mitigation, energy, water, resource efficiency and circularity, safety, product stewardship, and regulatory compliance and advocacy. It has been instrumental in defining and setting long-term sustainability goals and targets, aligned with the company's overall strategy. The Sustainability Committee also assessed material sustainability risks and opportunities, and established the necessary processes and governance accordingly. Additionally, it has established a quarterly cadence of reviewing sustainability performance, and monitoring progress toward validated SBTi net zero targets. [...] The Sustainability Committee (SC) consists of three Board Members, each of whom brings expertise in a specific ESG area. For more information on BoD members' skills and expertise, please see the Leadership Report on p.166 of the Annual Report 2024. The Group prepares sustainability-related topics for discussion and decision-making in the Board. The SC focuses on the following three areas: completing a formal ESG risk and opportunity assessment via the Materiality Analysis; setting measurable goals that are aligned with the company's overall strategy; and the approval of the annual sustainability report. Sika's strong focus on ensuring the use of accurate and consistent quantitative measures in non-financial reporting is reflected in the close link between the Sustainability Committee and the Audit Committee, with one member sitting on both committees. In 2024, the Sustainability Committee met five times and among others, discussed, reviewed, and approved the following topics: annual sustainability report, non-financial assurance, SBTi net zero targets validation and progression, quarterly updates on sustainability reporting, material impacts, risks and opportunities, implementation of due diligence, and results and effectiveness of policies, actions, metrics, and targets adopted to address them. After each meeting, a report was issued to the BoD. For more information on Sika's BoD and Board Committees, please see the Corporate Governance Report on p.176 of the Annual Report 2024.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Sika engages in numerous partnerships with organizations to actively drive the progress of sustainability in its industries and continuously develop its own performance. Collaboration across the entire value chain is one of the principles for strategic management.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes