E1 Climate change

ESRS 2 SBM-3 Material impacts, risks, and opportunities and their interaction with strategy and business model

Sandvik has identified several impacts related to climate change where we have an actual or potential material impact on people and environment, either from own operations or other parts of the value chain. We have also identified climate-related risks and opportunities that may impact the financial position.

The effects of climate change and the need to transition to a low-carbon economy places increasing demands on societies and companies to adapt and innovate. As a result of climate-related physical risks, Sandvik has identified a potential financial risk. The risk assessment for climate considered several different aspects that may affect the total risk. Factors considered included entities at climate risk, insured value and possible lost business, costs for climate adaptation activities, supply chain and customer disruptions, legal requirements, external expectations and physical climate impacts that can generate effects throughout our value chain. Further details on resilience and climate scenario analysis is found under IRO-1 in the chapter General information.

One major consequence of the transition to a low-carbon economy is the rapid electrification of society, which is driving demand for critical minerals and fossil-free energy sources. Sandvik is a global leader in electric mining equipment and supplies advanced tools and tooling systems for the energy sector, including solutions for renewables. The growing market for battery-electric vehicles presents significant opportunities for our mining operations.

Climate action is embedded in the Sandvik strategy. We aim to be a key enabler of our customers’ transitions through a strong focus on innovation and a leading offering in new technologies, digitalization, automation, and sustainable solutions. About 4 percent of our annual revenues are spent on Research and Development (R&D) to ensure a leading product offering. Across all our businesses and value chains, we have opportunities to enable the transformation into a low-carbon economy through innovative, sustainable solutions and close collaboration with customers and suppliers. By focusing on improving customers’ productivity and sustainability we secure market-leading positions. Our global reach, local presence and decentralized business model allow us to be flexible and adapt to changing conditions. All our business areas have action plans in place to manage changes in market conditions. As the world transitions to a low-carbon economy, we have opportunities to expand our offering of, for instance, electrified mining equipment, low-carbon cutting tools, and energy-efficient products.

E1-1 Transition plan for climate change mitigation

Sandvik has made a long-term commitment to address climate change by setting science-based targets consistent with the Science Based Targets initiative (SBTi).

GHG reduction targets and decarbonization levers

Our transition plan for climate change mitigation outlines our key levers to reach our GHG emission reduction targets. Our GHG emission reduction targets and their compatibility with the limiting of global warming to 1.5°C in line with the Paris Agreement are further disclosed within E1-4.

For own operations, we see efficiency measures and usage of fossil-free energy as key enablers for reducing GHG emissions. We approach our scope 1 and 2 emissions through the lens of transportation, production processes, and electricity usage. Our waterfall diagram on scope 1 and 2 reduction is based on these decarbonization levers.

About 65 percent of our value chain emissions are tied to the usage of our sold mining and rock processing products. Reducing these downstream emissions by developing solutions that reduce tailpipe emissions is a key priority. Applicable solutions include, for example, efficiency measures, and engines running on renewable fuels and electrification. In the upstream value chain, initiatives targeting resource efficiency, circularity, and purchasing goods with less embedded GHG emissions are key enablers for reducing GHG emissions. Uncertainties remain however, particularly regarding further developments in the fuel and electricity market, and customer preferences. These external factors are critical for achieving our long-term climate targets. The high degree of dependencies surrounding upstream and downstream emissions makes the mapping of a robust reduction pathway complex. However, we know our emissions hotspots and our focus lies on collaborating with suppliers and customers to reduce emissions. By developing and offering electrified mining and rock processing equipment that enhances customer productivity and profitability, we provide products that enable net zero within the industries that we serve.

The following table discloses our decarbonization levers and how GHG reduction is enabled.

The waterfall diagram below indicates how we aim to reduce our scope 1 and 2 emissions to 2030 and reach our related reduction targets.

Progress in implementing the transition plan

By the end of 2025, we achieved a -37 percent reduction of scope 1 and 2 GHG emissions, demonstrating that we are ahead of our SBTi approved targets for scope 1 and 2. This was achieved through efficiency measures, switching to renewable fuels, and using more fossil-free electricity. Within scope 3, our focus is on supplier engagement to reduce emissions from the supply chain and product development to reduce emissions from the use of sold products. Our scope 3 emissions in 2025 were stable compared to the 2019 baseline. More information about our progress is found within E1-4.

Alignment with business strategy and financial planning

Achieving our climate targets is central to our strategy and integrated into our annual business and financial planning. Consequently, the necessary Capital and Operational Expenditures (CAPEX and OPEX) to meet our climate targets and transition plan are included within the business strategy and financial planning for the relevant business segments.

Our ambition to achieve net zero emissions by 2050 and our 2030 GHG emissions targets are approved by the Group Executive Management team and the Board of Directors. Each business area and division contributes to the delivery of the targets, along with specific roadmaps on how to reach the targets.

Assessment of locked-in GHG emissions

Sandvik has conducted a qualitative assessment of potential locked-in GHG emissions from its key assets and products, as well as from the company’s value chain. The assessment indicates that our locked-in GHG emissions stem from the use of sold mining and rock-processing products. When calculating the impact from the use of our sold products, we account for the full anticipated lifespan of the products and take a conservative approach by assuming our non-electric vehicles are run on diesel, thereby assuming that the emissions are locked-in. However, all our combustion engine mining vehicles are equipped with engines that are compatible with renewable fuels/biofuels such as Hydrotreated Vegetable Oil (HVO). For certain product categories, such as rotary blast hole drills, we provide customers with the option to convert diesel-powered units to fully electrified versions in the field. By offering these alternatives, emissions from our products can be reduced during the product lifetime which reduces transition risks.

For electric equipment, the GHG emissions are closely linked to the electric grid mix of the country the product is sold to. Sales of electric equipment to countries with a higher share of fossil free electricity result in lower GHG emissions and less locked-in emissions.

We do not consider the locked-in emissions to pose a risk to achieving our GHG emission reduction targets. We are committed to reaching our net-zero target and provide solutions to our customers that have zero tailpipe emissions, such as our electric equipment. As a leading supplier of battery-electric vehicles (BEVs) we are committed to providing our customers with sustainable solutions that reduce their environmental footprint while also increasing efficiency and productivity.

EU taxonomy alignment and EU Paris-aligned benchmarks

Sandvik has minimal economic activity that falls under the scope of the EU taxonomy. As a result, we have not pursued plans for EU taxonomy alignment.

Sandvik is included in the EU Paris-aligned benchmarks.

E1-2 Policies related to climate change mitigation and adaptation

Sandvik has adopted several policies and procedures to manage our material impacts, risks, and opportunities related to climate change mitigation and adaptation.

All climate-related policies and procedures are part of our group governance framework, The Sandvik Way, and accessible on our global intranet. More information on our policy governance is found under GOV-1. Our Code of Conduct, Supplier Code of Conduct, Business Partner Code of Conduct, Risk management policy and a short version of the Environment, Health and Safety (EHS) policy are accessible on our external website home.sandvik.

E1-3 Actions and resources in relation to climate change policies

Our climate-related policies, along with group objectives and targets, guide our climate-related actions. Each business area develops plans to meet the Group objectives, with annual targets set to drive performance at all organizational levels. Our decentralized way of working empowers sites, divisions, and sales areas to implement mitigation actions that are relevant in their respective context or market. Common focus areas, ways of working, and best practices are shared and decided upon within the business areas and the Sandvik Group councils. The councils also appoint working groups to address specific topics on climate change, such as energy efficiency and sourcing.

As stated within E1-2, we require that all major sites (non-administrative Sandvik sites with more than 25 individuals) attain external ISO 14001 certification. At the end of 2025, about 75 percent of the established sites had achieved this certification (recently commenced and acquired sites excluded).

Through our community involvement and sponsorship activities, we have the opportunity to contribute to addressing climate-related challenges in the areas where we operate. For example, this may include supporting local communities with solutions to help mitigate the impacts of climate change.

The necessary Capital and Operational Expenditures (CAPEX and OPEX) to meet our climate targets and transition plan are embedded within the business strategy and financial planning for the relevant business segments. There were no significant monetary amounts of CAPEX and OPEX identified to implement the transition plan for 2025, and the years up to 2030.

In the following table, our climate-related implemented key actions in 2025 are disclosed and linked to our decarbonization levers. The actual GHG reductions resulting from the implemented key actions are included in our GHG calculations, disclosed in E1-6. Expected reductions from future actions are incorporated into our transition plan which is disclosed in E1-1.

E1-4 Targets related to climate change mitigation and adaptation

Climate change mitigation

In 2023, our targets to reduce GHG emissions were validated by the Science Based Targets initiative (SBTi). We are committed to:

• Reduce absolute scope 1 and 2 GHG emissions by 50% by 2030, with 2019 as the baseline.

• Reduce absolute scope 3 emissions by 30% by 2030, with 2019 as the baseline.

• Reduce absolute scope 1 and 2 GHG emissions by 90% by 2040, with 2019 as the baseline.

• Reach net-zero GHG emissions across the value chain by 2050 at the latest.

In 2025, we reached a scope 1 and 2 reduction of -37 percent (-37), compared to the 2019 baseline. Our scope 3 emissions in 2025 were stable compared to the 2019 baseline. Progress on our 2030 targets is disclosed below.

We have not adopted any group-wide targets related to renewable energy deployment, energy efficiency, and transitional risk mitigation. As a highly decentralized, global and diverse company, targets on, for instance, energy efficiency are implemented at division and site level. We track the effectiveness of our policies through several monitoring processes, where each policy outlines how compliance is monitored. The monitoring includes internal control, employee surveys, and internal and external audits.

To achieve our GHG emission reduction targets, we consult with employees, customers, and suppliers to determine new technologies to, for instance, advance our product offering and optimize production processes within our operations. The integration of these technologies is important for meeting our targets. Sandvik is a global, industrial technology group providing solutions that enhance productivity, profitability, and sustainability for the mining, manufacturing, and infrastructure industries, adopting and developing new technologies is at the core of our business. “Accelerate digital” is one of our strategic objectives. We see a growing opportunity to develop our customer offering through digital solutions, to support our customers to become more efficient, productive, and automated. Digitalization is a tool for us to stay competitive and develop sustainable solutions.

The International Energy Agency (IEA) climate scenario Net Zero Emissions by 2050 Scenario (NZE) served as our underlying policy and climate scenario when we set the targets. The scenario describes what is needed for the global energy sector to achieve net‐zero CO₂eq emissions by 2050. The targets have not been derived using a sectoral decarbonization pathway, as no relevant pathway is available for our type of sector.

We monitor and review the scope 1 and 2 target progress at all levels within the organization on a quarterly basis. The data collection is based on the quarterly energy and GHG reporting that takes place on location level. More information about our reporting principles is found within E1-5 Energy consumption and mix and E1-6 Gross scopes 1, 2, 3, and total GHG emissions. We are on track towards reaching our 2030 scope 1 and 2 target.

We monitor and review the scope 3 target progress on a divisional, business area and Group level annually. The data collection is based on our scope 3 inventory. More information about our reporting principles is found within E1-6 Gross scopes 1, 2, 3, and total GHG emissions. The current progress pace is lagging behind the linear target progress for the near-term scope 3 target.

Our decarbonization levers and their overall contributions to achieve the GHG emissions reduction targets are described in the following table.

Climate change adaptation

Sandvik has not adopted any specific targets on climate adaptation on a Group level. Sandvik recognizes the importance of addressing climate change adaptation in relation to physical risks. This aspect is addressed in our Enterprise Risk Management (ERM) process, business contingency plans, and our insurance-focused site visits. We track the effectiveness of our policies through several monitoring processes, where each policy outlines how compliance is monitored.

E1-5 Energy consumption and mix

E1-6 Gross Scopes 1, 2, 3, and Total GHG emissions

E1-8 Internal carbon pricing

Sandvik Group has not implemented an internal carbon pricing procedure.