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Asetek A/S Assensvej 2 DK-9220 Aalborg East Denmark

Phone: +45 9645 0047 Fax: +45 9645 0048 Web: www.asetek.com Mail: [email protected]

CVR-number: 3488 0522 Published [February XX, 2022]

This report provides a status on Asetek's work on Corporate Social Responsibility (CSR) for the fiscal year of 2021, covering the period from January 1st 2021 to December 31st 2021.

The report is part of the management commentary section in Asetek's 2021 annual report as stated in section 99a, 99b and 99d of the Danish Financial Statements Act, through which Denmark has implemented Directive 2014/95/EU on non-financial reporting.

Find the report here: https://ir.asetek.com/reports-and-presentations/annual-reports

We welcome feedback, including suggestions, comments, and questions.

Please direct any feedback to Peter Dam Madsen, CFO at Asetek, at [email protected] or tel. (+45) 20 80 72 00.

Our Business Explained6
Our Commitment and Strategy7
Goals10
Sustainability Governance in Asetek11
We Support The UN Sustainable Development Goals 13
Our Products and Operations 16
Responsible Products 16
Responsible Operations 20
Our Role in Society 21
Working for a Greener Future21
Protecting Business Integrity21
Being a Good Corporate Citizen23
Our People 24
Promoting Human Potential and Diversity24
Our Business Partners 30
Foster Responsible Business Relationships 30
Data 31
Data definitions33

CEO STATEMENT

DEAR READER,

For us at Asetek, 2021 was an extremely busy. A year, which brought us significant changes in our business with the opening of a new, promising business area and the gradual scaling back of another.

2021 was also a year where we continued our committed work in the sustainability area. One year ago, we launched a whole new sustainability framework. At this point, we are entering into a phase of continued evolvement and impact rather than foundation building.

Among the activities carried out during 2021, I would like to mention our first human rights impact assessment; following a commonly acknowledged methodology. We believe that if we adhere to a methodology, where we are transparent about our own impact, in exchange, we can expect an equal level of transparency at other levels of the supply chain from end to end. This exercise plays well into our activities around responsible business relations where we have now received confirmations from over 95% of our top-50 component suppliers, that they understand and acknowledge our code of conduct.

We have also been doing high level life cycle analysis on our products to gain better insights into their impact on the world around us. This work has laid the foundation for us to begin work at a detailed level with specific products and their subcomponents. In the years to come, our product development efforts will naturally incorporate intelligence around reusability of raw materials and less negative impact on scarce resources.

The Asetek SimSports business segment is a new venture for Asetek. Not only are we working with a new palette of product types and component suppliers; we are also working with end-user interaction at a much more sophisticated level than ever before. The way we approach sustainability as a business concept has had a role to play in all the deliberations made during the launch phase of the new business model.

We clearly see our investors' focus on ESG performance increase these years. In response, we are upping our game in terms of structure and reporting. And we communicate actively with various rating firms to aim our measurements and communication even better.

Thank you for your interest in Asetek,

André Sloth Eriksen CEO and founder

2021 SELECTED HIGHLIGHTS

In 2021, Asetek has:

// Reached an all-time high on product performance in terms of energy efficiency
// Continued efforts to implement our sustainability strategy
// Analyzed product material use as part of Life-cycle Assessment
// Continued implementing our policy commitments
// Conducted our first Human Rights risk assessment
// Trained our sales force in anti-corruption practices
// Improved ESG data management
// Improved our overall ESG rating since we working systematically with sustainability
// Conducted first sustainability strategy review

2021 Selected Financial Key Figures

Category	2021	2020	2019	2018	2017
Comprehensive Income (\$000's)
Revenue	79,803	72,750	54,334	67,314	58,194
Income before tax	1,397	9,426	1,454	4,870	1,499

Ratios & Metrics
Organic growth	9.7%	33.9%	-19.3%	15.7%	14.3%

Share price (NOK)	41,00	108,80	31,00	40,60	105,00
Market capitalization (\$000's)	119,825	323,054	90,205	119,083	322,972

Business Drivers
Sealed loop units shipped (000's)	1,386	1,201	895	1,119	1,020
Revenue per employee (\$000's)	528	661	560	709	626
Number of employees	151	110	97	95	93

Balance Sheet (\$000's)
Total assets	75,413	71,393	54,105	51,398	49,176
Total equity	48,668	47,525	39,008	38,958	33,394
Investment in property, plant and
equipment, net	11,732	7,049	6,115	4,103	3,856
Investment in intangible assets, net	10,938	3,217	1,920	2,414	2,754

OUR BUSINESS EXPLAINED

A GLOBAL LEADER

Founded in 2000, Asetek is headquartered in Demark and has operations in California, Texas, China and Taiwan.

Today, Asetek is a global leader in liquid cooling solutions for computer hardware enthusiasts, gamers, servers, and data centers. Asetek's products enable increased performance and provide lower acoustic noise, power savings and improved efficiency when compared with traditional air cooling.

Asetek's Gaming and Enthusiast products are all-in-one coolers that provide reliable, maintenance-free liquid cooling to gaming and high-performance PC customers. Through the use of circulating liquid, which by nature is a much stronger heat capacitator than air, Asetek's products provide significantly higher cooling per consumed wattage than competing products based on air cooling. At scale, our technology enables our customers to significantly reduce energy and mitigate climate change.

Our data center products offer direct-to-chip liquid cooling solutions to OEM (Original Equipment Manufacturers) customers for delivery of cost effective high performance data center solutions. These products can reduce the consumption of electrical power in data centers by up to 50%, and may in addition offer recapture of waste heat in the form of hot water, which can be used for subsequent heating of buildings, etc.

With over nine million liquid cooling units deployed, Asetek's patented technology is being adopted by a growing portfolio of OEMs and channel partners.

In 2021 Asetek decided to exit the High-Performance Computing (HPC) niche of the data center segment. Scalability was an issue in this sub-segment, and so we decided to prioritize the general data center market going forward.

REVOLUTIONIZING THE SIMRACING MARKET

In 2021, Asetek expanded into the rapidly growing Sim-Sports Gaming market, unveiling our initial sim racing products designed to give sim racers full immersion and the feel of a real racecar. We believe our sim racing pedals will excite and immerse sim racers like nothing else on the market.

GLOBAL OPERATIONS

Asetek's business model begins with its R&D team and technology labs based in Aalborg, Denmark, which manage collaboration with the Asetek's global customer base to define requirements and develop cutting edge technology. The Aalborg team works closely with the R&D team in Xiamen, China, to identify the optimal sources for the necessary components to fulfill specific customer requirements.

The sales and product management teams, based principally in USA and Taiwan, oversee customer relationships to facilitate communication and development, ensuring the developed product meets or exceeds customer demands.

The flow of physical products generally commences throughout Asia. Asetek's manufacturing and logistics team in Xiamen, China, evaluates and sources components and suppliers for the finished product to be assembled

by the Asetek's principal contract manufacturer based in Xiamen. Asetek only has a contractual relationship with the tier-1 contract manufacturer but carries out qualitative evaluations and oversight of the suppliers further up the value stream. Finished products are delivered directly to customer hubs in China, with smaller quantities shipped to Europe and USA. Lower volume, highly complex data center products and components are manufactured in Asetek's own plant in Aalborg.

A sizeable quality team is divided in two groups: one in Denmark and one in Xiamen. Their main focus is to ensure cradle-to-grave control over all aspects of quality and compliance with a growing number of regulated parameters.

The first of Asetek's innovative racing simulator gear, the premium performance Invicta sim racing products, includes a throttle and brake pedal, and as an add-on, a clutch pedal, along with intuitive RaceHub™ software for quick and easy adjustments and calibration. In 2022, Asetek will continue working on establishing the product value chain of these components and start delivering to customers.

OUR COMMITMENT AND STRATEGY

OUR STRATEGIC SUSTAINABILITY FRAMEWORK

In the Spring of 2020, we concluded Asetek's first comprehensive sustainability strategy which runs until end of 2023.

Asetek's Strategic Sustainability Framework outlines our general commitment to sustainable development and how it is supported by a number of strategic focus areas and overall ambitions for addressing our material topics. The framework also forms the structure of the following report chapters.

OUR COMMITMENT TO SUSTAINABLE DEVELOPMENT	AS THE GLOBAL LEADER IN HIGH PERFORMANCE LIQUID COOLING AND SIMSPORTS SOLUTIONS FOR GAMERS, ENTHUSIASTS, AND DATA CENTER OPERATORS, ASETEK IS COMMITTED TO PROVIDING CUTTING EDGE TECHNOLOGY THAT RESPONDS TO THE CHALLENGES OF THE WORLD AND PROMOTES SUSTAINABLE DEVELOPMENT
OUR CORE STRATEGIC FOCUS AREAS	OUR PRODUCTS AND OPERATIONS	OUR ROLE IN SOCIETY	OUR PEOPLE	OUR BUSINESS PARTNERS
OUR AMBITIONS	Responsible Products Minimize the environmental and climate impact of our products by developing responsible liquid cool ing and SimSports solutions Responsible operations Walking the talk by mitigating adverse environmental impacts of our operations and working towards climate neutrality	Working for a Greener Future Engage with key external stakehold ers and lobby for a greener future Protecting Business Integrity Promote transparency and prevent corruption Being a Good Corporate Citizen Foster strong local communities through engagement and sponsor ships with end-users	Promoting Human Potential and diversity Ensure healthy, fair, and safe working conditions for all people in Asetek Promote inclusive and effective learning and working environments to inspire skills and potentials of all employees Promote diversity among all employ ees and management	Fostering Responsible Business Relationships Ensure that Asetek's business rela tionships, including suppliers and partners, demonstrate responsible business conduct Act against the use of conflict minerals
OUR FOUNDATION	ASETEK'S SUSTAINABILITY POLICY FRAMEWORK
	OUR VALUES

OUR MATERIAL CSR ISSUES AND STAKEHOLDERS

It is central to our goals and efforts that we continuously address the topics that are most relevant to Asetek and our surrounding business environment and society. Our most recent materiality assessment from Spring 2020 identified 25 topics. Among these are topics about climate, product design, suppliers, human rights

and lobbying among the most relevant.

Our stakeholder analysis is primarily aimed at creating a good foundation for ensuring that our goals and actions cover the requirements and desires of our internal and external stakeholders in the best possible way. Our most significant stakeholders are owners, customers, the board of directors, employees, the EU and politicians. In 2022, we will revisit the stakeholder analysis as we embark on engaging directly with B2C customers as part of our SimSports business.

OVERVIEW OF OUR MATERIAL ISSUES

CATEGORY	TOPIC
Society	Responsible purchasing	Conflict metals	Local engagement	Anti-corruption	Human Rights
Finance	Responsible sales	CSR data and reporting	Sustainability communication	CSR compliance	Lobbying	Tax matters	CSR organisation
Environment	CO2 emissions	Energy consumption	Waste	Packaging
Products	Product design	Hazardous substances	Safe end-of-use disposal	Product information	Design	Hazardous substances
Employees	Employee satisfaction	Diversity	Discrimination	Training	Stress

Based on the preceding analyses and identification of 25 identified CSR and ESG topics, we decided to prioritize seven

material topics for Asetek to work on in the period 2020-2023.

OVERVIEW OF OUR MOST MATERIAL ISSUES

MATERIAL TOPIC	ABOUT	READ MORE ON PAGE
Responsible purchasing	…Ensuring that that our work on responsible purchasing is at least equal to standard practice in the area, globally recognized principles, and advisory industry standards	XX
CSR data and reporting	… Ensuring effective and systematic CSR and ESG data management and continuous reporting on our development and actual results to our primary stakeholders	XX
Lobbying	… Conducting responsible lobbying in our mission to change the rules of the game in the market for cooling solutions	XX
CSR communication (internal and external)	… Increasing our CSR and ESG communications efforts internally and externally to improve transparency, awareness, knowledge, and initiative	XX
CSR compliance	… Ensuring a solid and appropriate foundation of policy commitments and obligations that drive our future work and help us avoid adverse impacts on internationally
	recognized principles for responsible business conduct (UNGPs/OECD/RBA)	XX
CO2 emissions	…Taking our own medicine by reducing CO2e emission to enhance our integrity as per our climate mitigating product solutions	XX
Product design	… Implementing a holistic approach to sustainability in our product design and use phases, fx life cycle considerations, circular economy etc., besides being the market
	leader in energy-efficient cooling systems	XX

PERSPECTIVES ON RISK

Being a fast-growing technology company that sources, develops, manufactures, and distributes high-tech cooling and SimSports solutions globally is inevitably associated with the risk of causing or contributing to adverse impacts on human rights, the environment and anti-corruption.

Some overall risk perspectives include:

// Compliance risks due to faulty systems for identifying, preventing, or mitigating actual and/or potential adverse impacts on principles defined by the UNGPs/ OECD guidelines and the RBA industry standard. Partially also with respect to conflict metals.
// Product and operational risks due to immature systematic management of climate and environmental matters with regard to waste, waste from products' end-of-use-phase, chemicals, hazardous substances, responsible business relationships etc.
// Management risks in a fast-paced growth company due to poor or lacking assessment of staff conditions, physically and mentally, with respect to satisfaction, stress, accidents etc.
// Business risks due to lack of transparence, communication and reporting on CSR issues to our primary stakeholders.

As a consequence, we are especially focused on maintaining and developing an agile organization that adheres to sound practices and strengthens its resilience to avoid adverse impacts on our business, our customers and society at large. We aim to hedge risks through strategy, policy commitments and practices that align with globally recognized principles for responsible business conduct and industry standards.

In 2021 we conducted our first impact assessment to identify potential or actual adverse impacts that we may cause or contribute to according to our Commitment to Sustainability. We will run this assessment systematically bi-annually in the years to come. Read more about the results in this sustainability report.

GOALS

Setting the level of ambitions and actionable goals is an iterative and very dynamic process. Hence, we will revise our goals and ambitions yearly at a minimum.

In December 2021, halfway through the strategy period, we conducted our first strategy review as planned. In the review, the steering committee concluded that all sustainability goals remain relevant.

Hence, in our sustainability strategy we continue to pursue these ambitious goals that are to be attained before the end of 2023:

// Asetek's operations are climate-neutral (Scope 1 + 2, partly 3) by 2023
// We have reduced our absolute CO2 emissions by a minimum of 50% (index year 2019)
// We have conducted an LCA assessment on 100% of our products
// 100% of our primary suppliers have signed Asetek's Responsible Business Relationships Code of Conduct
// 100% of our employees have a high understanding of Asetek's goals within sustainability
// We systematically collect quantitative data for all our CSR policy areas to ensure a high-quality standard of our sustainability data and the ability to monitor progress of our efforts
// Our goals align 100% with RBA
// We have defined and implemented a process for continuously identifying, preventing, or mitigating potential and/or actual adverse impacts according to the principles reflected in our CSR policy commitments and the UNGPs/OECD
// We have significantly increased communication, transparency and awareness of our efforts towards our stakeholders

The goals are further described in later sections of this report and more goals will be presented in each chapter.

SUSTAINABILITY GOVERNANCE IN ASETEK

SUSTAINABILITY MANAGEMENT

Our CSR committee that was established in 2020 and the board of directors continues to assess the risks, opportunities, and progress of Asetek's sustainability efforts and decide which initiatives are relevant to launch, adjust or discard.

The committee consists of VP's and managers that cover all areas of Asetek's operations. Asetek's CFO heads the committee and reports to the board of directors. A sustainability project manager coordinates the many projects that have been initiated as part of the sustainability strategy. She reports directly to the CFO and the sustainability steering committee meets with the project manager monthly to discuss and coordinate progress or issues

ASETEK'S SUSTAINABILITY POLICY FRAMEWORK

Asetek's Sustainability Policy Framework ensures a solid and appropriate foundation and obligations that drive our future work.

We expand the Policy Framework with more relevant policy commitments when appropriate for our business conduct.

ASETEK'S COMMITMENT TO SUSTAINABLE DEVELOPMENT

CORE POLICIES	THEME POLICIES	RESPONSIBLE BUSINESS RELATIONS	COMPLIANCE MANAGEMENT
Environment	Staff handbook	Business Relationsships Code of Conduct	Whistleblower
Human Rights	Diversity		Grievance mechanism (Tell us mechanism)
Anti-corruption	Lobbying
	Data Ethics

Asetek's Commitment to Sustainable Development (our general CSR policy) and Asetek's Business Relationships Code of Conduct (our expectations to all business relations including suppliers) are fundamental to all other polices.

Our general and associated policies support our business decision making at all levels and provide a frame of reference for how we want to deal with business opportunities and risks. Our general commitment as well as the other policies are applicable to all Asetek's products, services, and organizational units as well as our business relations.

KEY MESSAGES IN OUR POLICY COMMITMENTS
Rule of law	We respect the rule of law and comply with national regulations in all countries in which we operate.
Human Rights	We respect human rights by embedding this policy commitment in all our policies and processes in line with the UN Guiding Principles on Business and Human Rights (UNGPs).
Environment (including climate)	We commit to promoting and supporting environmentally sustainable practices. We will continuously work to reduce our own adverse environmental impacts by applying and developing climate and environmentally friendly services, solutions, and technologies in our operations and product range.
Anti-corruption	We commit to being open and transparent about our business activities. We will not accept any form of bribery, corruption, or fraud.
Business relationships	We expect all our business relationships to meet the same global minimum standard for responsible business conduct (UNGPs/OECD) to which we hold ourselves accountable.
Data Ethics	We commit to high data ethics standards andt to comply with all applicable data and privacy laws and regulations. We expect employees to prevent and mitigate all data and privacy risks and to inform, through our management system or grievance mechanisms, any breach of this expectation or doubts that our expectations are being met.

Read more about Asetek's Commitment to Sustainability and our Business Relationships Code of Conduct here:

https://ir.asetek.com/governance/governance-documents-and-policies

HOW WE MEASURE PROGRESS

We want to ensure a high-quality standard of our sustainability data and thereby a robust basis for monitoring and reporting on our policy commitments, our efforts, and results. In 2021, we continued developing a sustainability KPI structure and data collection process based on leading data calculation and reporting standards.

Further, we conducted our first comprehensive impact assessment according to the principles reflected in the UNGPs/OECD guidelines to identify and address actual and potential adverse impacts in our business practices and value chain.

Read more about the results in this report or read the full impact assessment reports here: https://ir.asetek.com/ governance/governance-documents-and-policies

WE SUPPORT THE UN SUSTAINABLE DEVELOPMENT GOALS

With Asetek's Commitment to Sustainable Development and our concrete actions, we seek to contribute to the UN Sustainable Development Goals (SDGs) in the best possible way. The global goals continue to give us a frame of reference in our strategy and a perspective on the business opportunities that lie within our sustainability work.

ASETEK IS A VALUABLE PARTNER IN HI-TECH SOCIAL EDUCATION PROJECT

YOUNGSTERS LIVING WITH CONDITIONS SUCH AS ADHD, CHILDHOOD AUTISM, ASPERGER'S AND TOURETTE'S SYNDROME ARE FINDING THEIR WAY BACK INTO PRIMARY AND SECONDARY EDUCATION WHILE WORKING WITH ASETEK'S LIQUID COOLERS AT THE EXZENTRIQ ESPORTS CENTER.

The moment you step inside, the Exzentriq eSports center in Aalborg stands out as somewhere at the cutting edge of technology, with its rows of highly tuned gaming PCs, and at the same time as a welcoming place with its muted lighting, relaxed hangout spaces and cosy café.

But Exzentriq, which Asetek has been providing with support including liquid cooling systems for several years, has grown into something more. For example, there are also workshops where children and young people from 12 to as old as 40 can learn skills such as replacing tablet screens and fitting computers with efficient liquid coolers.

At the same time, the premises host a social education programme offering special youngsters who have been losing their way in the education system for years a welcoming, socialising place to come and meet likeminded people. Through their interest in gaming, and with the help of committed staff, shy young people often find a way back despite diagnoses including ADHD, childhood autism, Asperger's and Tourette's syndrome.

Yet another step is currently being taken as privately-run Exzentriq, in collaboration with local secondary school Aalborghus Gymnasium, gets ready to offer a Higher

Preparatory Examination course that will be based around passion for gaming and computers, but on which young people from 17 to 20 will also get back into the habit of getting up in the morning and generally being with other people in the physical world. The course, which will be the first of its kind in Denmark, will be specially adapted: for example, it will not start until 10 in the morning for the first year, partly because of the young people's diagnosis-related sleep problems. All municipal primary schools in Aalborg already have the option of referring especially challenged children aged 12 and up to Exzentriq, and this has proven a success in more than 90% of cases, with primary/lower secondary schooling being completed.

During the same period, Asetek's commitment has grown deeper and deeper. As well as liquid cooling systems and teaching, the company now provides cash support for the operation. And the tech firm, which is based just 3 miles away, is also working toward taking on interns from among Exzentriq's students, who often dream of a professional future in the IT industry.

'Although the young people may have been pretty much adrift in today's performance race, often they are also dedicated people with a natural enthusiasm and almost nerdy interest in products like ours. We definitely want to help them get on', says Michael Hermansen, Product Test Specialist at Asetek.

At Exzentriq, too, manager Casper Skafte is very happy:

'In a future where we all have to get climate-aware, collaborating with Asetek makes a great deal of sense, because

the company's liquid cooling technology can also make a significant difference to the global CO2 footprint, while our students can experience being of value to an exciting technology firm that into the bargain has also begun de-veloping sim racing products – something that naturally interests many gamers', he explains.

Exzentriq students being taught by Exzentriq instructor Mick. In the background are Exzentriq manager Casper Skafte (left) and Asetek's Michael Hermansen.

Fun and concentration at Exzentriq's Asetek-cooled gaming computers.

OUR PRODUCTS AND OPERATIONS

2021 HIGHLIGHTS

Reached an all-time high on product performance in terms of energy efficiency

Launched Asetek's first SimSports products

0 non-compliance cases in 2021 with reference to EU Regulation

First results from our product life cycle assessment

RESPONSIBLE PRODUCTS

OUR APPROACH

It is Asetek's ambition to minimize the environmental and climate impact of our products by developing liquid cooling and SimSports solutions that are responsible in all relevant aspects of the product's lifecycle and performance.

Our current state of innovation has already given Asetek a head start as our solutions for data center cooling enable our customers to drastically reduce energy consumption by more than 50% and recover 75% of the energy in the form of 60C degree hot water, e.g. for district heating purposes.

However, to incorporate more sustainability aspects into our products, including our products for gaming and enthusiasts, besides energy efficiency we are on a mission to better understand our products' lifecycles, our material use and how we can integrate circular product design practices into our innovation processes.

Our results goals in 2023:

We have conducted an LCA assessment of 100% of our products

We have completed a substitution assessment of 100% of our product materials with respect to use of alternative, sustainable materials

We have integrated LCA assessments into our design processes

We continue le lead energy efficiendcy within our product category

We currently measure progress by these KPI's. More KPI's will be added in future reports

Year	Reative Power Draw
2009	100%
2012	47%
2015	31%
2020	26%
2022	16%

OUR ACTIONS AND RESULTS IN 2021

Climate mitigating solutions – greener data centers

Asetek's liquid cooling technology provides an energy efficient alternative to air-cooled data centers. Our data center product line enables significant reductions in energy consumption and thereby create climate benefits for our customers. In 2021, we continued developing our green solutions for data centers.

The below figure shows the relationship between Asetek's pump generations and the power needed to achieve the

same thermal performance in °C/W, which is a performance parameter widely used in the industry.

As seen in the figure, Asetek has reduced the amount of power needed to achieve the same thermal performance by 84 % from 2009 to 2021.

In 2021 Asetek's own data center setup continued to deliver waste heat to Aalborg district heating network and has been doing so for 4 years by 2021. Aalborg District Heating network receives 60 degree hot water directly from Asetek's own datacenter.

SUSTAINABLE FROM CRADLE TO GRAVE

IN ADDITION TO DESIGNING PRODUCTS THAT HELP CUSTOMERS REDUCE THEIR CO2 FOOT - PRINT, ASETEK'S ENGINEERS ALSO HAVE THEIR EYES SET ON FINDING MATERIALS THAT ENHANCE PRODUCTS' CRADLE-TO-GRAVE SUSTAINABILITY.

Since the company's inception, Asetek has worked relentlessly on creating cooling products that not only live up to the highest functional demands but are also bestin-class on energy efficiency. Both when it comes gaming computers and when it comes to large-scale data center solutions, Asetek's liquid cooling is recogni zed worldwide for its energy-saving design.

In server cooling for data centers, in particular, Asetek's products offer a substantial energy-saving, because liquid cooling of processors simply consumes less power than traditional air cooling. Nowadays, more and more users are also realising that, with the water-cooling technology, waste heat from data centers can be put to circular reuse in municipal and private district heating networks etc. at an appropriately high temperature of 60-65º Celsius.

That's all well and good, as it helps customers markedly reduce their CO2 footprint – but what about the sustainability of the materials used to produce Asetek's products?

'Choice of materials has always been a priority for us, both as a means to sustainability, and not least because the right materials improve product quality. In recent years, though, our attention has become strongly focused on whether the materials we use in our products are as sustainable as they can be, in the green sense of the word',

explains Thomas Ditlev, Asetek's VP Global R&D, mentioning copper, plastic and aluminium, among others.

As a new initiative, Asetek has decided to carry out comprehensive life cycle assessment, i.e. analyses where product sustainability is assessed from cradle to grave.

'Our aspiration has two sides: Firstly, we will not and cannot compromise on Asetek's recogni zed quality. Secondly, we are striving to identify and incorporate the most sustainable materials wherever – with our engineers' knowledge and ingenuity and based on plenty of testing. Even though it may mean slightly higher costs', explains Thomas Ditlev:

'Naturally, Asetek is also taking its own medicine and using as many sustainable high-quality materials as possible.'

Thomas Ditlev also points out that Asetek supplies lots of milled aluminium for reuse, while the R&D department is considering whether liquid cooling systems can achieve an even greater cooling capacity with the same volume of materials, e.g. by having a higher density of cooling fins on the same area of copper cooling plate.

'In reality, there is no end goal. Asetek will always be in the process of making further product improvements in a race against time, partly because we constantly need to match the best possible cooling with more and more high-performance – and consequently hotter – processors. Now, though, we have not just efficiency improvement but also a focus on sustainability as a significant parameter in our ongoing quest for perfection', concludes Asetek's VP.

PRODUCT DESIGN

In 2021, our life-cycle assessment project took a big leap forward as we concluded a comprehensive analysis aiming to shed light on our material and resource use and assess opportunities for optimization, both climate-wise and type-wise. The analysis paid special attention to our use of copper, aluminum, and different types of plastics.

We will use the knowledge from the initial analysis in 2021 to assess the opportunities for designing products, packaging, transport etc. smarter with respect to a circular economy and reuse of materials. A group of engineers is now looking at a new cooling plate design that will reduce the amount of copper used by 5 - 10%. We expect to launch this new optimized design in 2023.

PRODUCT SAFETY

Asetek is subject to a number of EU regulations like REACH and RoHS regarding product safety and we are also met with customer requirements about the use of hazardous substances.

At Asetek we prefer to stay ahead of the industrial changes to environmental requirements. This means that we not only continue to live up to the most recent revisions of 3TG (conflict minerals), California Proposition 65, REACH and RoHS directives, but also more stringent requirements not dictated by law.

These additional requirements are the result of environmental responsibility, not only to climate and health, but also towards our customers to make sure our products stay ahead of the game in order to avoid any future surprises as more and more substances are phased out from industrial use.

Examples of extraordinary efforts include, but are not limited to, reduction/removal of halogenated flame retardants in wires and plastics, use of low-halogen PPS, exclusion of PVC and use of non-leaded aluminium and steel alloys.

Our efforts to ensure product safety have resulted in 0 non-compliance cases in 2021 with reference to EU Regulation 1907/2006; Annex XVII of REACH, Candidate List of SVHC of the REACH Regulation, RoHS Directive 2011/65/EU, 3TG Conflict Minerals and Proposition 65 of OEHHA under CalEPA.

All of our products are marked with standard markings such as the CE and UL marking.

To prevent risks of any legal changes falling through the cracks unnoticed, we continue to assess our products in partnership with Mediator A/S. Mediator is specialized in legal and practical consultancy within chemical, environmental, safety and transportation requirements for international businesses.

We have a list of substances where use is either prohibited or proactively reduced by Asetek (going above and beyond legal requirements under RoHS, REACH etc.).

The list includes but is not limited to:

// PVC

// All brominated flame retardants

// All chlorinated flame retardants
// PPS with >1000 ppm residual chloride

THE WAY FORWARD IN 2022, WE EXPECT TO:

// Further increase energy efficiency of our cooling solutions
// Scale our product life-cycle assessment project and include product lines.
// Include our new SimSports business line in our life-cycle assessment
// Further develop our sustainability KPI's

RESPONSIBLE OPERATIONS

OUR APPROACH

On equal terms with our ambitions for responsible products, we are committed to reducing our own environmental and climate impacts by promoting and supporting environmentally sustainable technologies and practices in our operations. This is not least because our data center product solutions have a recognized climate profile by virtue of energy efficiency, which is why it makes sense that we also take our own medicine to enhance our integrity in the climate area.

Our results goals in 2023:

Our operations are climate neutral (Scope 1 + 2, possibly 3)

We have reduced our absolute CO2 emissions by a minimum of 50% (index year 2019)

We have implemented all appropriate reporting areas from the GHG Protocol in our calculation method

We currently measure progress with these KPI's. For data breakdown see data section page 31. More data will be included in the aggregation in future reports.

Category	2021	2020	2019
Total Scope 1 emission	42.9	43.0	52.5
Total Scope 2 (location-based method)	156.5	143.7	159.6
Total Scope 2 (market-based method)	263.2	284.0	321.6
Total Scope 3 emission	1,060.7	822.1	930.5
Total (location-based method)	1,260.1	1,008.8	1,142.6
Total (market-based method)	1,366.8	1,149.1	1,304.6
Percentage change	18.9%	-11.9%

OUR ACTIONS AND RESULTS IN 2021

Walking the talk – A Greener Asetek

Based on our fist carbon accounting in 2020, we looked into areas for improvement on our company sites in 2021.

We first looked at Scope 1 and 2 reduction opportunities. We considered implementing an energy surveillance system and an external consultant advised us on energy optimization on our Danish site. However, we concluded that neither of the two alternatives would lead to significant reductions compared to the investments needed. Not least because Asetek is building new headquarters which we will move to in 2024. Hence, we decided to allocate the budget to scale our life-cycle assessment in 2022. Investing in LCAs and circular product design

can lead to significant emission reductions compared to reducing energy use in our office buildings.

We have compensated our Scope 1 and 2 CO2 emissions in 2021 with certified carbon credits from a leading provider of such.

We conducted and internal impact assessment according to OECD's guidelines on environment and found no severe impacts.

We continued our efforts to reduce waste production by means of our waste sorting system (only Danish operations) and use of paper and water in our daily operations.

THE WAY FORWARD IN 2022, WE EXPECT TO

// Conduct a comprehensive scope 3 screening to refine our climate accounting report and consider Scope 3 emission reductions.
// Consider revising our 2023 result goal regarding CO2 emissions due to the building of our new headquarters (to open in 2024).