G1 Business conduct

Sandvik is committed to maintaining appropriate standards of responsible business conduct throughout our operations and our value chain, including driving the same standards in our supplier management and procurement practices. Sandvik has identified potential impacts and risks related to business conduct and our governance framework and management system, The Sandvik Way, is designed to mitigate those risks and impacts.

Impacts related to S2 Workers in the value chain is material for Sandvik and we are committed to sustainable procurement practices. For more information see disclosure G1-2.

G1-1 Corporate culture and Business conduct policies and corporate culture

Code of Conduct

Sandvik believes that ethical and sustainable business practices are a crucial foundation for a successful business. Sandvik has a long history of working in accordance with applicable laws and internationally recognized principles, as well as in partnership with our local communities. Our Code of Conduct is built on our internal core values and external principles, such as the International Bill of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention against Corruption as outlined in the ten principles of the United Nations Global Compact. We are also committed to adhering to the OECD Guidelines for Multinational Enterprises, and the UN Guiding Principles on Business and Human Rights.

The Code of Conduct is a vital component in The Sandvik Way, our governance framework. It guides our actions as individual employees and as a company in our daily work, it sets the ethical standards we adhere to, and plays a key role in achieving our strategic objectives.

The Sandvik Code of Conduct underscores our strong commitment to ethical and responsible business practices, ensuring compliance with relevant laws and regulations across all our markets. The Code of Conduct defines the principles governing individual and corporate behavior, providing guidance for our actions and everyday business decisions.

To uphold these standards, Sandvik has set a target to train 100 percent of employees and long-term contractors who have been employed for over 90 days, in the Code of Conduct. This training covers critical topics such as anti-bribery, corruption, and inclusion, among others. The target is monitored via compliance reports and training dashboards. By the end of 2025, 97 percent (94) of employees and long-term contractors had completed the Code of Conduct training. All members of the Group Executive Management and the Board of Directors have undergone training in the Code.

The goal for onboarding new employees is to train 90 percent within three months of their hiring. By the end of 2025, the outcome was 86 percent (79). Additionally, refresher training, reinforcing Code of Conduct principles, is automatically deployed to employees who completed the training more than two years prior. As of December 31, 2025, 88 percent (87) of the invited population had successfully completed this refresher training.

Speak Up

Employees and external parties who witness a violation of the Code of Conduct, laws, or our policies can report the concern anonymously through the company’s global whistleblowing tool, Speak Up. The tool is accessible via our intranet and web portals, as well as through telephone hotlines in all major countries where Sandvik operates. All reports undergo initial screening and are then assigned to an investigator from the relevant business area, ensuring an independent and impartial process. Investigators conduct the necessary investigations with support from the Business Integrity specialist investigation function. The Ethics Office oversees the overall effectiveness of the Speak Up process, and all reports, investigations, and remediation actions are recorded, monitored, and included in reporting to the Audit Committee.

In accordance with the Sandvik Speak Up policy, no retaliation will be taken against any employee or business partner who raises concerns in good faith.

Our reporting tool, Speak Up, is publicly and directly accessible to all stakeholders, enabling them to report any negative impacts, including key human rights concerns. This process ensures that suspected breaches are identified and addressed appropriately. Sandvik has a separate process for handling local grievances. Additionally there are also other support systems for employees that go beyond legal requirements, such as foundations providing rehabilitation and financial support related to health and wellbeing. The European Works Councils and relevant local unions have been involved in establishing local whistleblowing channels and appointing investigators.

According to our employee engagement survey, employees rated the statement, “If I report a serious misconduct in Speak Up, I’m confident Sandvik would take action to rectify the situation”, at 8.0 (7.8), which falls within the middle range of the engagement tool benchmark. The scale is from 0 to 10.

In 2025, there were 486 (412) reported Speak Up incidents excluding inquiries (see distribution in table). Of the cases closed during the year 71 percent (68) were closed within 90 days.

The substantiation rate for closed cases, including those partially substantiated, was 40 percent (37). In 2025, there were no cases (0) related to human rights. All Speak Up cases undergo investigation, resulting in either substantiated or unsubstantiated findings based on the allegations. The consequences for substantiated cases vary from warnings and enhanced controls/training to employee dismissal, contract termination, non-renewal for business partners, or referral to relevant authorities for further investigation. The execution of the consequences is carefully managed within the remit of the law and our policies, including the obligation to protect the identity of the whistleblower and to follow relevant data privacy regulations.

Compliance

The Sandvik compliance program encompasses four key areas: Anti-Bribery and Corruption (ABC), competition law, trade & third-party management, and data privacy. The purpose is to establish a well-functioning structure for effectively managing primary compliance risks in all countries where Sandvik operates. Group Compliance sets the compliance program requirements, including risk identification, policies, relevant training and communication, monitoring and assurance, reporting, and more. Additionally, Group Compliance identified the main customer and supplier-facing functions at Sandvik, and defined their medium and senior management as functions “at-risk” for ABC training purposes. The program requirements are implemented by each business area. The Group Compliance function reports to the Sandvik Group General Counsel, the Group Executive Management, and the Audit Committee.

For coordinating efforts, identifying synergies, and driving continuous improvements, a compliance functional council has been established. This council, comprising representatives from both the Group and business areas, has been operational for several years and typically meets on a quarterly basis.

Sandvik operates in countries and industries with elevated corruption and sanctions risks, both directly and indirectly through business relationships. To address these challenges, Sandvik runs a compliance program based on a zero-tolerance approach. Key guiding documents shaping the anti-corruption part of this program include the Code of Conduct, an anti-corruption policy, and procedures governing Commercial and administrative intermediaries, Gifts and hospitality, and Conflicts of interest. The commitment to identify and prevent corruption is not limited to these, but is also integrated into other steering documents such as the Mergers and acquisitions procedure and the Community involvement, sponsorship and donations procedure. The Speak Up policy and its underlying investigation procedure are vital components of the program.

All operational entities within Sandvik have a mandate to assess and collaboratively address their compliance risks together with the compliance organization. The aim is to identify and prevent potential negative impacts stemming from compliance-related issues. The actions taken by these entities undergo scrutiny from both internal and external audits. Any perceived negative impacts and weaknesses can also be raised, and where relevant, remediated through the Speak Up process. Where possible, this process supports the identification of concerns and enables a dialogue with individuals reporting issues. To measure and assess progress, targets and indicators are established annually through the Compliance functional council. These may include self-assessments covering various aspects including anti-corruption, sanctions, export control, data privacy, and competition law efforts. Action plans are then formulated based on identified gaps, with a commitment to completing them within specified deadlines. This systematic approach ensures ongoing evaluation and improvement in our compliance practices. In 2024, the compliance program was subject to an external review focusing on anti-bribery and corruption, competition law, and trade & third-party management. Recommendations from this review will help us enhance the program further in the coming years.

Human rights and fair labor conditions

Our commitment to human rights and fair labor conditions is confirmed in our Human rights policy, Human rights commitment, Code of Conduct, and Supplier Code of Conduct. These guiding documents endorse key international frameworks, including the International Bill of Human Rights, the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work, and the UN Guiding Principles on Business and Human Rights. The Sandvik Code of Conduct, aligned with our core values, serves as a guide in the identification, prevention, and mitigation of risks associated with human rights and fair labor conditions. To mitigate risks related to human rights, we continuously work to ensure compliance with national legislation and internationally agreed-upon human rights standards and regulations. We are firmly against modern slavery, forced labor, slave labor, and child labor. We regularly evaluate our processes and procedures for identifying, preventing, and mitigating these risks in the Group’s operations and in our value chain. The double materiality assessment has taken into consideration human rights across our value chain. Our work on human rights and fair working terms is integrated into our regular processes and procedures in different ways, for example, in our sustainable supplier management, our safety work, and in our inclusion work. We support children’s rights and the right to education. Every employee has the right to join a union and be covered by a collective agreement and we support the right to organize. Our commitment extends to rejecting all forms of harassment or bullying. We firmly believe in fostering a diverse workforce and maintain a zero-tolerance policy against discrimination based on sex, gender identity or expression, sexual orientation, ethnicity, national origin, age, disability, belief, marital status, social group, or any other characteristics. We believe that all employees should have the right to fair working conditions and wages. Speak Up is available for employees and external partners for our entire value chain.

G1-3 Prevention and detection of corruption and bribery

The Board of Directors and the Group Executive Management team have ultimate responsibility for our Anti-Bribery and Corruption (ABC) efforts, and they approve the Group ABC policy. On a day-to-day basis, the Board has delegated responsibility for the creation of the ABC Compliance program to the General Counsel, the VP & Group Head of Compliance, and the Group Head of Anti-Bribery and Corruption. In addition, there is a Group Compliance functional council where all business areas are represented, and the ABC compliance program is developed in line with the compliance framework.

The compliance framework

Sandvik operates a risk-based compliance program in relation to the prevention and detection of bribery and corruption. We follow a clear framework as depicted in the illustration below.

The gold sections relate to our prevention efforts, the dark gray relates to detection, and the light gray relates to how we respond to any incidents of bribery or corruption.

Risk assessment

In 2024, we performed a risk assessment which covered ABC, assisted by an external expert ethics and compliance assessment consultant. As a result of the assessment, we initiated a process of enhancing our ABC compliance program. The current program consists of ABC policies, procedures, training and communication. There are dedicated members of the compliance team with expertise in ABC practice to provide advice to each of the business areas and we have a self-assessment tool, Compliance House, for risk assessment, and monitoring compliance. Our internal audit function provides assurance on the operation of the ABC program. Our whistleblowing mechanism, Speak Up, is available for all employees as a way to raise concerns relating to ABC. Matters can also be raised with line managers or the compliance team directly.

Policies and procedures

In our policy framework, we have a clear commitment to ABC in our Code of Conduct. We have an overarching ABC policy which clearly states that Sandvik is dedicated to conducting business with honesty, integrity and a zero-tolerance approach to bribery and corruption across the organization, including controlled joint ventures. The policy strictly prohibits offering or accepting anything of value to improperly influence business decisions or actions, and also prohibits facilitation payments, even if they are legal in certain jurisdictions. 

In addition to the ABC policy, we have procedures relating to conflicts of interest, gifts and hospitality, and sponsorships and donations.

Sandvik recognizes the great contribution that intermediaries, such as agents and distributors, make to the success of its business. However, there is an acknowledgement that these relationships can often bring about additional compliance risks and therefore Sandvik has a procedure governing how such third-party intermediaries are engaged. Sandvik also requires that relevant commercial intermediaries sign an anti-corruption and export control/trade clause in the contract. The use of the anti-corruption clause and the Business Partner Code of Conduct is followed through the Compliance House. Out of the entities during 2025 who responded that they were using commercial intermediaries, 89.3 percent responded that all their commercial intermediaries had signed the Sandvik Business Partner Code of Conduct and 80.4 percent that all commercial intermediaries had signed a contract including an anti-corruption clause. The entities’ responses are audited and confirmed by the internal and external audit functions as part of the regular audit programs.

Our Conflicts of interests procedure is designed to guide employees in identifying, disclosing, and managing conflicts of interest to maintain high ethical standards.

Sandvik understands that gifts and hospitality are part of normal business dealings but appreciates that there is a need for limits to be placed on these items to ensure that they remain appropriate in all circumstances. Therefore we have a procedure to govern gifts and hospitality.

Sandvik believes strongly in helping the communities in which its sites are located and supporting local charities and organizations with time, equipment, and, on rare occasions, money. To manage the nature of the sponsorship or donation to ensure that they meet our principles in respect of such matters, and to manage the compliance risks related to such sponsorships and donations, Sandvik has a Community involvement sponsorship and donations procedure. Key elements of the above mentioned procedures are found under G1-1.

Training and communication

We are transitioning to a new compliance training framework which will govern the level of training employees will receive on a variety of compliance topics, including ABC, according to their exposure to the relevant risks related to their role and level of seniority. The training will be on a three-year rotation and therefore it is anticipated that we will train a third of “at-risk” (and other relevant) employees annually. The training may also be supplemented by topic-specific courses, should there be a change in policy or procedure, or when we observe a specific need to improve understanding or operation of the policies and procedures. In terms of communication, policies and procedures are communicated by a combination of intranet announcements and in-person briefings depending on the complexity of the topic.

Technical advice and implementation

We have a team of dedicated professionals with ABC-specific experience to help implement the relevant policies and procedures and advise the business accordingly.

Monitoring and assurance

The Group and business area compliance teams perform a variety of monitoring activities using a variety of online tools to assess how well the businesses are implementing and operating our compliance programs, including our ABC compliance program. Our internal and external audit teams also include ABC matters in their scope for their audits.

Breach investigation and remediation

Breaches of policies or procedures are taken seriously and remediation action is taken where appropriate.

Reward and discipline

We take appropriate action against anyone, employees or external third parties acting on our behalf, found to be in breach of our ABC, or other compliance policies and procedures.

G1-4 Confirmed incidents of corruption or bribery

In 2025, there were no major public legal cases regarding potential non-compliance with laws and regulations brought against Sandvik, nor did Sandvik receive any significant fines or non-monetary sanctions for non-compliance with laws or regulations.

G1-2 Management of relationships with suppliers

With a global footprint and a supply chain encompassing approximately 43,000 suppliers across 100 countries, we recognize the critical role our suppliers play in our operations. We are committed to responsible sourcing and ethical procurement practices that promote transparency, fairness, and sustainability.

The Procurement policy defines the framework for sourcing practices and supplier relationships, including the requirements outlined in our Supplier Code of Conduct. It is supported by procedures designed to minimize risk, create business value, and ensure that procurement activities are conducted in an ethical and sustainable manner.

Our Supplier Code of Conduct sets forth sustainability expectations for suppliers, covering areas such as human rights, health and safety, climate, and environmental responsibility. It requires suppliers to maintain inclusive and respectful workplaces and to proactively manage risks within their own supply chains. These requirements are embedded in our onboarding and assessment processes.

It is the responsibility of the supplier to ensure that its suppliers comply with the requirements of the Supplier Code or equivalent set of requirements, and to evaluate and monitor its supply chain compliance. Suppliers who fail to comply with our Supplier Code, or do not demonstrate progress or willingness to adapt, may be considered in material breach of contract and risk termination of their business relationship with Sandvik.

The sourcing and procurement organization maintains ongoing dialogue with suppliers to assess and proactively address risks related to working conditions, environment, health and safety, thus fostering trust through transparency and collaboration. Supplier scorecards are used to evaluate performance across several critical criteria. Regular reviews, meetings, and training sessions are conducted to discuss results, resolve issues, and identify opportunities for continuous improvement.