Bakkafrost P/f

Environmental & Social Information • Mar 31, 2023

HEALTHY LIVING SUSTAINABILITY REPORT 2022 SUMMARY

www.bakkafrost.com/sustainability

Sea water Processing Sales/Marketing

About Bakkafrost

BAKKAFROST: Established in 1968.

Location: Faroe Islands Headquarters, Glyvrar, Eysturoy

Production and business-to-business sale: salmon, packaging, canned seafood, cleaner fish farming, biogas, fish meal, oil and feed. Longest integrated value chain in the industry: Fully owned subsidiaries: FOF segment Havsbrún, Fuglafjørður (production of fishmeal, -oil and -feed); Bakkafrost Scotland (Scottish Salmon producer, processing, and sales); Bakkafrost UK, Grimsby (salmon import and sales); Bakkafrost USA, New Jersey (seafood import, processing and sales); FÖRKA, Tórshavn (biogas plant) Svínoyar Rognkelsisstøð (cleaner fish farming), FarCargo (airfreight) and subsidiary Munkebo Seafood, Denmark (canned seafood processing and sales).

Fishmeal, oil and feed Breeding Smolt Biogas

Listed: Oslo Børs with the ticker symbol BAKKA

FTE: 1,778

Sustainability highlights in 2022

-8% GHG intensity for scope 3 emissions

Strong biological performance in the Faroe Islands with

annual survival rate 95% Historically low

Delivery of 7,000 m3 well boat "Bakkafossur" in the Faroe Islands

sea lice levels in Faroes and Scotland

0.28 FAROE ISLANDS 0.22 SCOTLAND

Shortlisted for edie award with The Faroese Sustainable Business Initiative

Top 2023 targets from Bakkafrost Healthy Living Plan

Our mission is to produce healthy, sustainable, world class salmon. We believe that by investing in the health of our business, our people, our salmon, the environment and the communities in which we operate, we will enable healthy living for millions of people globally. Our Healthy Living Plan outlines our sustainability goals in one place.

• Investment in key skills to facilitate sustainable growth
• Increase transparency on local value creation
• Educate key stakeholders on the benefits of salmon aquaculture

• Continue investment via our Healthy Living Fund in the Faroes and Community Fund in Scotland

• Faroese Scope 1&2 CO2 emission reduced 50% in 2030.

• Net zero by 2050
• 97% water recycling in all hatcheries
• Ensured sustainable feed ingredients for further growth.

• 0 fatalities

For the full version of Bakkafrost Healthy Living Plan please see page 12 in Bakkafrost Healthy Living Sustainable Report 2022

Salmon aquaculture, a sustainable solution

Today's food systems face extraordinary challenges, as the global population is growing, putting an enormous pressure on food resources. To feed nine billion people by 2050, we must focus on growing sustainable food systems with minimal footprint that preserve the earth for future generations.

Aquaculture has been identified as a sustainable solution to meet the increasing demand for nutritious protein to feed the growing population. Farmed salmon is among the healthiest protein sources with it's high content of omega-3 fatty acids, vitamin D, selenium, and B vitamins.

Aquaculture is the most sustainable option for consumers, compared to other farmed proteins. Sustainable sourced salmon has one of the lowest carbon footprints of all animal proteins including chicken, pork, beef and lamb. It is highly resource efficient and has the highest protein retention. It also has the lowest feed conversion ratio and water footprint compared to these proteins.

Responsible salmon production, conducted in a way that minimises potential negative impact, is the solution to providing future generations with healthy and environmentally friendly protein options.

Bakkafrost and the UN SDGs

Bakkafrost and the UN Sustainable Development Goals (SDGs)

We have conducted a mapping of the SDG against our activity to understand which are most relevant for us. We have distinguished between areas where there is potential for high positive impact, areas for limited positive impact, and areas where we have a responsibility to mitigate potential negative impacts.

We continue to work hard to help achieve these goals.

High positive impact Limited positive impact Minimise negative impact

For more information see page 13 in our Healthy Living Sustainability Report 2022.

Memberships and ratings

Bakkafrost salmon at a glance

ENVIRONMENT & HEALTH

ASC CERTIFIED SITES 100% Faroe Islands

BAP Scotland

AUDITS PASSED 100%

at Bakkafrost in 2022

ESCAPES

ANTIBIOTIC USE

0 Faroe Islands

0 Scotland operation

Faroe Islands

0.22 Scotland

Average female adult lice per fish over 12 months

MEDICINE IN BATH

2.7 g per tonne · Faroe Islands

0.39 g per tonne · Scotland

Used by Bakkafrost to treat sea lice in 2022

STOCKING DENSITY 6.79 kg/m³

Faroe Islands

8.31 kg/m³ Scotland

FEED CONVERSION RATIO

1.06

Faroe Islands

1.26 Scotland

Per 1 kg of salmon (1.2-1.5kg GSI average))

ANNUAL SURVIVAL RATE

95.09%

Faroe Islands 76.84%

Scotland

MONTHLY SURVIVAL RATE 99.6% %

Faroe Islands 98.2%

Scotland

0 Faroe Islands 0 Scotland

Number of salmon

SEA LICE COUNT

0.28

GSI data: Global Salmon Inititative www.globalsalmoninitiative.org/en/sustainability-report/

of non-compliance: • No product recall

• No market bans
• Zero security incidents
• No reports relating to human rights violations

Customer Score

of Bakkafrost customers were either satisfied or more than or very satisfied

2022

Absence rate

4.53% GROUP

We aim to be an employer of choice, where everyone can work safely, in an inclusive environment and encourage employees to take responsibility and pride in their work. Our people are the heart of our business and we treat our employees equally and fairly. We are committed to the health and safety of our employees and their personal development.

COMMITMENT

Increase number of women in management positions (managers with direct reports) to at least 25% by 2025

WE HAD NO FATALITIES IN 2022 0 2022

Equality WOMEN 25% Of workforce

whistle blower reports

Human Rights

33.3% Board of directors 20% of managers with direct reports

LOST TIME INJURY RATE LTIR PER MILLION WORKING HOURS

14.88 GROUP

We are members of Sedex and we conform to the Ethical Trade Initiative

Antibiotic use 0 FAROE ISLANDS 0 SCOTLAND

Main causes of reduced salmon survival

FAROE ISLANDS

• Marine • Treatment Handling
• Diseases (CMS)
• Reduced smolt quality

Freshwater

• Technical issues
• Reduced roe quality
• Treatment Handling

• Treatment Handling
• Transfer Mortality

• Disease (Gill Health)

SCOTLAND Marine

Freshwater

• Technical incidents
• Transfer
• Physical (Deformity)

76.84% SCOTLAND

SEA LICE COUNT 2022

0.28 FAROE ISLANDS 0.22 SCOTLAND

Biosecurity Risk Reduction

• Cleanerfish
• Freshwater & flushing
• treatments • Larger smolt
• Broodstock • Decreased stocking density
• Veterinary health plans

At least 98.2% of the volume is water in our cages*

SALMON

WATER

*Average on max biomass

Certifications

+13% which is a 0.5% increase in GHG intensity per products sold

Renewable electricity IN 2022 FÖRKA PROVIDED

100% Scotland of the total

52% Faroe Islands PRODUCTION (Faroe Islands)

RENEWABLE ELECTRICAL

SCOPE 3 GHG EMISSIONS:

SCOPE 1 & 2: GHG EMISSIONS

SCOPE 3: BREAKDOWN BY SOURCE

Förka - Biogas Plant

IN 2022 FÖRKA PROVIDED

of the total RENEWABLE ELECTRICAL PRODUCTION (Faroe Islands)

FARMED SALMON IS A VERY RESSOURCE EFFICIENT SOURCE OF HEALTHY PROTEINS

	Farmed Atlantic Salmon	Chicken	Pig	Beef	Lamb
CARBON FOOTPRINT CO2e PER KG PRODUCT	Lowest 3.24	3.52	3.44	23.92	21.00
LAND USE M2/100 G PROTEIN	3.7 Lowest	7.1	11	102	185
FEED CONVERSION RATIO (KG)	1.2 - 1.5 Lowest	1.7-2	2.7-5	6-10	No data
WATER FOOTPRINT LITRE / KG EDIBLE MEAT	Lowest 2,000	4,200	6,000	15,000	No data
EDIBLE YIELD EDIBLE MEAT PER KG FEED	68% Highest	46%	52%	No data	38%

CO2 figures only for farming/production stages. Source: WWF Sverige, Carboncloud & GSI

bFCR Feed Conversion Ratio

Industry average 1.2-1.5 (GSI)

Sustainable feed

The plant proteins and oils in Havsbrún feed

• All non-GMO
• Soybeans (Pro-Terra, Europe Soya or similar)
• No use of palm oil
• Not produced in areas threatened by deforestation

Marine raw materials

Whilst the feed industry has focused on replacing marine raw material with alternatives, Bakkafrost has chosen to continue with the high inclusion of marine content as this is a more sustainable approach given our location. The local availability of marine raw material means that marine ingredients are sourced with relatively low carbon footprint.

R&D

Feed development and optimisation is an ongoing process at Havsbrún. Together with our R&D activities, which facilitate as feed experiments, we spend significant amount of time with potential collaborators where we investigate new opportunities. This includes assessing opportunities in novel ingredients.

Wheat products 21.3% (28,162 tonnes)

13.5%

Plant oil (17,843 tonnes)

Use of co-products

Cleaned Fish Oil

Non-GMO SPC 10.0% (13,261 tonnes)

Healthy communities

Bakkafrost is committed to our local communities and proud of our heritage. We farm in some of the most remote coastal locations in the Faroes and Scotland and we respect the integral role we play in the local communities in which we live and work. We are focussed on driving multinational growth and global market share and recognise that our futures are intrinsically linked with our communities.

60%

Initiatives supported 4.5 M DKK

Community Events

HEALTHY COMMUNITIES

GREEN WORKBOAT RECEPTION

In the autumn of 2022, we took delivery of our first fully electric catamaran named Grønarók. We had a reception for invited stakeholders, including business partners, politicians, Faroese media and other key stakeholders, who got a trial of the boat.

BEACH CLEANS ON THE SCOTTISH COAST

We are committed to preserving the natural environment in the rural areas in which we operate. In Scotland, we have a tradition of facilitating beach clean ups, and in 2022 we carried out seven beach cleans across Scotland, providing both manpower as well as equipment.

ANNUAL CLEAN UP WEEK

For several years, Bakkafrost has arranged a clean-up week in the Faroe Islands where Bakkafrost staff cleans coasts in the areas in which we operate.

Bakkafrost has recently purchased Svínoyar Rognkelsisstøð, a facility which produces lumpfish for our farming operations. Shortly after the purchase, as one of the first actions, a team of Bakkafrost employees went to the small island of Svínoy to clean up remains from a previous production (Bakkafrost was not responsible for the production at the time). Significant amounts of waste were cleaned and transported off the island for appropriate disposal.

In addition, Bakkafrost staff participated in the national clean-up day in the Faroe Islands supporting the community by providing equipment for the cleaning of the harbour in the capital of Tórshavn, including removing 79 rubber tires from the seabed.

SALMON MARKET

On the 23rd of July, as part of the local "Salmon Market" at Glyvrar, we opened the doors of our offices and production plant in the Faroe Islands to the community. We received more than 2,000 visitors, who were given an insight into our corporate and sustainability strategy and had the opportunity to ask our CEO questions.

COWAL HIGHLAND GATHERING

Bakkafrost Scotland also celebrated the company's ninth year as headline sponsor of the Cowal Highland Gathering which welcomed local and international visitors from across the globe.

Renowned across Scotland, the Gathering is a celebration of traditional Highland festivities including the Heavy athletics events, pipe bands, solo piping, drum majors, ceilidh, fun run, and an exhibition of Argyll's finest food and drink.

ISLE OF SKYE HALF MARATHON

2022 events included the Isle of Skye Half Marathon which took place in challenging conditions but those involved enjoyed breath-taking views of the world-famous local landscape throughout the 13.1mile closed-road course.

The event is also important for local businesses, with runners keen to experience all the island has to offer.

MUNKEBO SCHOOL FOOTBALL TEAM Local school, Munkebo skole, football team wearing t-shirts sponsored by Munkebo Seafood

LOCHCARRON GAMES

The company also took the role of headline sponsor, at the Lochcarron Games and more than 2,000 people enjoyed a variety of traditional Scottish activities in a 'live' environment for the first time in three years.

Now in its 42nd year, the 'Friendly Games', brought locals and visitors together to be a part of history and to celebrate the unique traditions of the Scottish Highlands.

The event includes the traditional mixture of 'heavy events' such as hammer throwing and tossing the caber, alongside track and field events and a tug of war.

In September 2022, Bakkafrost took delivery of the 100% electric catamaran workboat, Grønarók, which is the result of a collaboration between Bakkafrost and the Nordic Council of Ministers, the Faroese Government and the Faroese power company SEV.

The construction of an 100% electric catamaran was part of a project facilitated by the Nordic Council of Ministers aiming to find sustainable energy solution for remote areas, and Bakkafrost committed to particapte in the project and eventually buy the vessel once completed.

The Faroese shipyard MEST tendered the construction project and has through this project in many ways become a pioneer within the area of constructing electric boats for the aquaculture industry.

In conjunction with MEST shipyard, Bakkafrost arranged an event where the green catamaran was officially handed to Bakkafrost.

The catamaran has commenced operations at the Gulin farming site in Tórshavn.

Bakkafossur

In December 2022, Bakkafossur, a new 109-metre well boat, one of the largest well boats in the global aquaculture industry, was added to Bakkafrost fleet of Farming Service Vessels.

Bakkafossur can carry up to 1,000 tonnes of live salmon and is regarded as a huge upgrade to secure sustainable operations in the future.

Equipped with reverse osmosis technology for desalination of water with a production capacity of 6,000 tonnes of freshwater a day, Bakkafossur adds significant freshwater treatment capacity to Bakkafrost's operations in the Faroe Islands. Treating salmon with freshwater is an efficient way to rinse the gills, restore gill health and ensure more robust and healthy growth. In addition, Bakkafossur will be equipped with a flushing sea-lice removal system, increasing biosecurity in line with Bakkafrost's sustainability strategy. The vessel also provides options for enclosed treatments for a more controlled treatment environment.

Bakkafossur not only contributes substantially to the biosecurity of our operations – it also brings state of the art renewable hybrid energy technology into our value chain. In addition to its five diesel-electric engines, the vessel is equipped with large batteries, ensuring an approximately 20% increase in energy efficiency. The strategic placement of the engines on the top deck secures the opportunity for a swift change to sustainable energy solutions when such are available on the market.

Bakkafrost P/F • Bakkavegur 9 • PO Box 221 • FO-625 Glyvrar Tel +298 40 50 00 • Fax +298 40 50 09 • bakkafrost@bakkafrost.com • www.bakkafrost.com

24 SUMMARY · SUSTAINABILITY REPORT 2022