1. I. Codes of Conduct and Embedded Policies

   1. CTS Nordics demonstrates its dedication to the Transparency Act through formally defined principles embedded in its Codes of Conduct. These codes, adopted by CTS Nordics’ Board of Directors, permeate all levels of its management and operations. Rooted in the legal frameworks provided by the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Human Rights, its Codes of Conduct ensure adherence to the highest ethical standards.

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      In 2024, CTS Nordics further reinforced its commitment by updating its Codes of Conduct to align more closely with the principles of the Transparency Act. This revision underscores its unwavering dedication to upholding fundamental human rights and ensuring decent working conditions across its entire organization. CTS Nordics  has bolstered its expectations, mandating that all employees and service providers take these responsibilities with the utmost seriousness.

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      CTS Nordics’ Codes of Conduct and other supporting policies govern its ethical, environmental, labor, and sustainability objectives. Reflecting its commitment to decent working conditions, CTS Nordics has intensified its efforts to ensure health and safety on all construction sites. By implementing stricter safety measures and protocols, CTS Nordics aims to achieve its ultimate goal of zero accidents or incidents across its operations. This comprehensive approach not only promotes a culture of integrity and accountability but also ensures that its activities contribute positively to society while respecting the rights and dignity of all individuals involved.

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      To ensure the consistent application of these principles, CTS Nordics takes deliberate steps to embed the policies contained in its Codes of Conduct throughout all levels of operations. This embedding process guarantees that its policies and objectives are continuously adhered to, prompting and requiring compliance at every level of management. By integrating these standards deeply into its daily operations, CTS Nordics reinforces its commitment to ethical conduct and sustainability, ensuring that every aspect of its business aligns with its core values.

2. II. Integration with Suppliers and Subcontractors

   1. As a matter of internal policy and regulation, all subcontractor and substantial supplier contracts must include provisions that mandate adherence to CTS Nordics’ Codes of Conduct. Alternatively, they must contain comparable provisions based on the OECD Guidelines for Multinational Enterprises or the UN Guiding Principles on Business and Human Rights that are substantially similar to CTS Nordics’ own requirements. This contractual commitment ensures that CTS Nordics’ human rights and labor objectives are clearly understood and followed by its suppliers, providing an enforcement mechanism to compel compliance if necessary.

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      CTS Nordics is committed to adhering to the Startbank/Achilles system to verify the Transparency Act compliance of its subcontractors. This system allows companies to review their suppliers’/subcontractors’ ISO certifications, policies, procedures, and financials, facilitating CTS Nordics’ due diligence processes. By leveraging this system, CTS Nordics streamlines its efforts and focuses more effectively on enhancing its standards regarding human rights and decent working conditions. Ensuring safe working conditions on CTS Nordics’ construction sites is paramount, and CTS Nordics continuously evaluates the internal Health, Safety, and Environment (“HSE”) policies and procedures of its subcontractors to ensure their compliance with its high standards for decent working conditions.

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      Additionally, CTS Nordics continuously engages in training and development programs for its employees and subcontractors to foster a deep understanding and commitment to its Codes of Conduct. This ongoing education ensures that everyone involved in CTS Nordics’ operations is well-versed in the ethical, labor, and environmental standards, thereby strengthening the overall compliance and fostering a culture of continuous improvement.

3. III. Independent Internal Oversight

   CTS Nordics and its holdings are structured so that the CTS Nordics Compliance Department is independent of the production and operational departments of CTS Nordics. The CTS Nordics Compliance Department provides compliance support and monitoring for both the mother company and its holdings. This basic structural decision ensures that the Compliance Department supports CTS Nordics’ overall activities without being subsumed by project management or financing operations.

   
   CTS Nordics’ Chief of Compliance is a senior official in the company. The Compliance Specialist, who reports to the Chief of Compliance, is responsible for developing and implementing sustainability objectives as they apply to human rights and the Transparency Act on a corporate basis. CTS Nordics’ Chief of HSE, who is also a senior official in the company, along with her department develops, reviews, and maintains the HSE framework, and monitors and enforces compliance of all HSE laws and regulations at the operational level at the project sites, production facilities and offices making it the primary monitor for human rights risks and other forms of labor exploitation. 

   
   The organization’s occupational health and safety (“OH&S”) management system is structured in accordance with ISO 45001:2018, providing a systematic approach for hazard identification, risk control, and legal compliance, while promoting a proactive safety culture through strong leadership and active worker involvement. The integrated safety management system (“ISMS”) brings together OH&S, environmental, and quality management frameworks, streamlining processes, reducing redundancies, and strengthening risk mitigation across all operations, as confirmed by regular audits for ISO alignment.

   
   In 2024, CTS Nordics partnered with CTS-VDC Services, based in Dublin, Ireland. This collaboration marks a significant step in CTS Nordics’ commitment to sustainability and operational excellence within the data center construction sector because it combines technical innovation with CTS Nordics’ expertise to enhance efficiency and sustainability in data center construction. A Sustainability Reporting and Strategy team, under CTS-VDC Services, plays a key role in supporting CTS Nordics by ensuring compliance and proper reporting in CTS Nordics’ sustainability reporting, thus making sure that the organization meets evolving European sustainability standards with transparency and accuracy.

   
   CTS-VDC Services has developed internal policies and frameworks that guide CTS Nordics’ approach to managing environmental impacts, employee safety, quality, employee well-being, diversity and inclusion, codes of conduct, and anti-corruption. In 2024, CTS Nordics began aligning these efforts to sustainability reporting requirements. This will support its efforts toward completing a comprehensive double materiality assessment in 2025.

   
   Beyond regulatory support, CTS-VDC Services serves as the official hub for sustainability initiatives, health and safety oversight, planning coordination, and bid management across CTS Nordics’ operations. By centralizing these critical functions, the partnership enables a more integrated and efficient approach to project execution and long-term strategy.

   
   This joint venture is instrumental in furthering CTS Nordics’ overarching vision which is to simplify, continuously optimize, and innovate the way data centers are designed and built. Together, CTS Nordics and CTS-VDC Services are driving forward a future-focused agenda rooted in sustainability, technological advancement, and responsible development practices that support a greener, more resilient digital infrastructure.

4. IV. Grievance Mechanism, Requests for Information and Whistleblowing

   1. Under the Transparency Act, every individual has the right to request information on how CTS Nordics addresses potential or actual adverse impacts on fundamental human rights. CTS Nordics is committed to maintaining a transparent method for both the public and its employees to inquire about its compliance with the Transparency Act. CTS Nordics publishes its annual Transparency Act report on its website by June 30th each year and responds promptly to written requests for information received under the Transparency Act. Requests regarding the Transparency Act should be sent to transparency.act.requests@cts-nordics.com.

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      Additionally, CTS Nordics has enhanced its whistleblower channel by adding a feature on its website, accessible to the public, including its employees and subcontractors’ employees which allows users to submit cases through a third-party company, ensuring the process is safe and anonymous if the applicant chooses. The cases are managed exclusively by the Chief Compliance Officer, who is authorized to investigate matters and take necessary actions. Retaliation is strictly prohibited at CTS Nordics, and it encourages all stakeholders to report concerns without fear of negative repercussions. The anonymous complaint system and prohibition of retaliation provide a safeguard for individuals within the organization.

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      Furthermore, CTS Nordics conducts training sessions and workshops to educate employees and stakeholders about their rights and the procedures for reporting concerns. These sessions aim to foster a culture of transparency and accountability, ensuring that everyone feels empowered to report any violations without fear of retaliation. By continually refining the grievance and whistleblowing mechanisms, CTS Nordics demonstrates its commitment to upholding the highest standards of ethical conduct and human rights protection.

5. V. Due Diligence

   1. The Transparency Act requires all enterprises subject to it to conduct due diligence in accordance with the OECD Guidelines for Multinational Enterprises. CTS Nordics undertakes a due diligence review of its operations and supply chain to identify any areas of potential human rights risks as required by the Transparency Act. CTS Nordics also uses this process as an opportunity to review its own internal policies and practices regarding human rights and labor exploitation to ensure that it is complying with the law and its Codes of Conduct. It conducts the following due diligence:
      
      

1. 1. a) Human Rights Assessment for the Supply Chain: CTS Nordics initiated an assessment process aligned with the RFI requirements of the Transparency Act to gather data from key suppliers and partners, enabling analysis of its supply chain and the identification of potential human rights risks. The process received strong engagement, with responses from the majority of participants.

      
      b) Monitoring and Screening of Suppliers: In the event a risk or violation was identified a formal process managed by CTS Nordics’ Compliance Department determines the appropriate course of action depending on the nature of the risk or violation. In most instances CTS Nordics hopes that dialogue with the supplier or subcontractor will lead to a timely and satisfactory outcome, however, if the risk is not mitigated or resolved in a manner consistent with the law and/or its Codes of Conduct, CTS Nordics undertakes more substantive measures. CTS Nordics and its holdings use, with very few exceptions, suppliers who are already subject to European Economic Area (“EEA”) or EU regulation and must comply with laws and regulations consistent with both the Transparency Act and the OECD Guidelines for Multinational Enterprises.

      
      According to the RFI responses received by CTS Nordics this year, around ninety percent of its suppliers are located in the Nordics, with seventy percent based solely in Norway. This led CTS Nordics to keep more focus on the decent working conditions, namely employee/management grievances, payment/working hours conditions, safety at work etc. It was observed that there were only minor issues that needed to be addressed with the subcontractors and, through CTS Nordics’ channels via the Compliance Department and Health and Safety Department, it communicated with the subcontractors and ensured they took the necessary actions to remedy these issues.

1. 1. c) Employment and Labor Monitoring: As a design and build contractor focused on large construction projects, CTS Nordics understands labor exploitation is an inherent human rights risk within the construction industry. Therefore, CTS Nordics takes steps to ensure compliance with all applicable laws and regulations. As part of its risk management process to adhere to the law and to mitigate any human rights and labor exploitation risks as required by the Transparency Act, CTS Nordics and its holdings use an established set of internal controls where two separate and independent groups are responsible for monitoring and mitigating these risks.

      
      CTS Nordics’ project management teams, with support from its Human Resources Department are responsible for complying with all relevant laws and regulations, particularly those related to human rights and labor. Separately and independently, the CTS Nordics’ Compliance and Health and Safety Departments are responsible for monitoring all project and production activities for compliance with all the relevant laws and regulations.

      
      d) Training: CTS Nordics is committed to fostering a culture of integrity, compliance, and safety through comprehensive training programs. It is developing a formal process to ensure that all employees receive thorough training on its Codes of Conduct both during onboarding and annually thereafter. This training is designed to raise awareness of all relevant laws, regulations, health and safety practices, and the obligations under the Transparency Act.

      
      By investing in comprehensive and ongoing training, CTS Nordics ensures that its employees are well-informed, confident in their roles, and committed to upholding the standards of ethical conduct and regulatory compliance. This proactive approach not only safeguards the organization but also reinforces its dedication to maintaining a responsible and transparent business environment. 
      
      

1. VI. Diligence Findings and Future Actions

Under the Transparency Act, enterprises shall identify and assess actual and potential adverse impacts on fundamental human rights and decent working conditions that the enterprise has caused or contributed to. While conducting its due diligence, CTS Nordics did not find evidence of any adverse human rights impacts requiring immediate remediation or termination of a business relationship. However, as required by the Transparency Act, CTS Nordics has identified areas where there are potential risks that should be monitored and potentially mitigated on an ongoing basis, they are:

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      a) Supply Chain: In terms of its supply chain, CTS Nordics and its holdings procure Information Technology (“IT”) materiel used in the construction of data centers or the production of infrastructure and support equipment for data centers. According to the Transparency Act (2022) and the UN Environment Program’s Supply Chain Integrated Program (2023–2025), IT materials are widely recognized as posing significant human rights risks, particularly in the earliest stages of their supply To mitigate these risks CTS Nordics uses the processes and policies described in this statement to screen suppliers. Another potential issue in the supply chain is e-waste. According to the UN Environment Program, significant quantities of e-waste are disposed of in developing countries where reclamation workers are exposed to hazardous substances and waste may be processed in an environmentally harmful way. CTS Nordics mitigates this risk by following Norwegian law by complying with the Norwegian Pollution Control Act and all relevant regulations related to the disposal of e-waste.

      
      b) Labor: According to the ILO in 2022, the worldwide construction industry accounted for 16.3% of identified forced labor exploitation cases. The construction industry in the Nordic countries, despite high levels of oversight and compliance with labor laws, still experiences challenges in this area. CTS Nordics and its holdings are aware of this risk. By following all applicable laws and regulations for labor and employment, CTS Nordics monitors the labor practices of any subcontractors providing services to any of its construction projects. As described earlier, CTS Nordics’ existing internal controls for monitoring the risk of labor exploitation are based on a separation of duties where two separate departments of CTS Nordics are responsible for implementing its Codes of Conduct and complying with all applicable laws and regulations as it relates to human rights risks and labor exploitation.

      
      c) Unlawful Business Practices: CTS Nordics maintains a zero-tolerance stance toward unlawful business practices, including corruption, bribery, fraud, and other forms of unethical conduct that can adversely impact human rights and decent working conditions. Throughout the due diligence process, CTS Nordics has not identified any instances of unlawful practices within its operations or supply chain that require immediate remediation. Nevertheless, it recognizes that risks related to unlawful business practices can exist in any complex supply network, particularly where multiple subcontractors and suppliers are involved. To mitigate these risks, CTS Nordics enforces strict compliance policies embedded within its Codes of Conduct, which explicitly prohibit any form of corrupt or illegal behavior. The contractual agreements with suppliers and subcontractors include clauses requiring adherence to all applicable anti-corruption and anti-fraud laws.

1. VII. Conclusion

   CTS Nordics remains steadfast in its commitment to upholding the principles and obligations set forth by the Transparency Act. Through a structured and rigorous approach to due diligence, supplier engagement, internal oversight, training, and grievance mechanisms, it actively works to prevent and reduce negative effects on human rights and ensure decent working conditions across all areas of its operations.

   
   As this statement outlines, CTS Nordics has made meaningful progress in embedding responsible business conduct throughout its organization and supply chain. While no severe violations were identified in the reporting period, it acknowledges the ongoing risks inherent in the construction and technology sectors, particularly related to labor conditions and the sourcing of IT materials. These areas will continue to be a focus of CTS Nordics’ monitoring and improvement efforts moving forward.

   
   CTS Nordics’ transparent governance structures, strong ethical framework, and commitment to continuous improvement serve as the foundation of its human rights strategy. As it grows and evolves, CTS Nordics will continue to align its operations with international human rights standards and national legislation, ensuring that its business practices contribute positively to society while minimizing potential harm.

   
   CTS Nordics is dedicated to building a sustainable and responsible future, both in the data centers it constructs and the ethical standards it upholds. CTS Nordics views this annual statement not only as a legal obligation, but as an opportunity to reaffirm its values and enhance trust with its stakeholders, partners, and the broader community.

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