S2 Workers in the value chain

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

In our double materiality assessment we included workers in the value chain involved in the extraction of metals or minerals, in refining, manufacturing or other forms of processing and transportation, as a group that may be materially impacted. Impacts are associated with our upstream and downstream value chain through products or services, as well as through business relationships.

Based on reports related to sourcing of minerals and metals, and mining value chains, we have tried to develop an understanding of which groups might be more at risk of harm.

Sandvik manages its material impacts related to workers in the supply chain. We have developed and implemented our Double materiality assessment procedure to identify and assess our material topics, as outlined in the General Information section. Furthermore, impacts are identified in the external sustainability risk assessment tool, where our suppliers (91 percent addressable spend coverage) are screened for inherent risk, based on country, industry and size. We use the risk screening to segment our supply chain by labor & human rights risks in each country and industry. Further due diligence is conducted, with a risk-based approach.

The value chain workers covered in this report include primary sector producers, employees in supply chain factories and external warehouses, and local communities around raw material extraction and manufacturing sites. At Sandvik, we are committed to respecting human rights and promoting decent work across our own operations, suppliers, and business partners. Safeguarding human rights is integral to all our business functions and our operations.

Sandvik has an evolving management program for sustainability in the supply chain, including material issues related to workers in the value chain. We evaluate these issues by considering human rights violations or social non-compliance, including child labor, excessive overtime, forced labor, unsafe work environments, breaches of freedom of association, unsecured employment, lack of workers’ representation, and insufficient training.

Sustainability and sustainable supplier management is integrated in our strategy. We are committed to sustainable procurement practices that prevent and mitigate our negative social and environmental impacts as well as support and improve the sustainability performance of our suppliers and manage risk in our supply chain. For more information see G1-2.

S2-1 Policies related to value chain workers

Sandvik has a comprehensive set of policies and procedures to guide us in managing risk related to human rights and value chain workers.

Key in this regard is our Supplier Code of Conduct, which details the minimum requirements we expect suppliers to adhere to regarding labor conditions, human rights, environmental protection, and business ethics. It is aligned with international frameworks, including the International Labour Organization (ILO) Conventions, the UN Guiding Principles on Business and Human Rights, the UN Global Compact, and the OECD Guidance for Responsible Business Conduct. The Code also outlines the expectation for our suppliers to implement the Code or similar requirements with their sub-suppliers. It is communicated through several internal channels and is publicly available on our external website home.sandvik. We monitor compliance with our Supplier Code. See more in section S2-5.

Sandvik has not developed specific policies related to downstream workers in the value chain.

Policies are approved annually by the Board of Directors and Group Executive Management.

S2-2 Processes for engaging with value chain workers about impacts

A strong partnership and close collaboration with suppliers are crucial for Sandvik.

We have not developed specific procedures for systematic direct engagement for workers in the value chain. Our current processes to engage directly with supply chain workers includes audits, supplier days, industry forums, and Non-Governmental Organizations (NGOs). Sandvik hosts events locally involving representatives of supplier workers. Market research on workers in supply chains is conducted by industry forums where Sandvik is represented, such as the Cobalt Institute. We also consider reports from relevant NGOs as proxy engagement with workers in the value chain as described under SBM-2.

Interviews with workers are conducted during the Supplier Code of Conduct audits by independent and certified third-party auditors. Supplier audits are based on a risk approach and cover human rights and health and safety topics. The Sandvik Procurement council is responsible for ensuring that engagement with supply chain workers occurs and that the results of this engagement inform our approach. Additionally, investigations are carried out by Sandvik quality auditors regarding the health and safety of workers in our suppliers’ facilities.

S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns

Sandvik encourages all stakeholders to report concerns about suspected breaches of Sandvik Supplier Code of Conduct, policies, and the law, without fear of retaliation.

Speak Up is available for workers in the value chain, both upstream and downstream, and information about that is provided in the Supplier Code of Conduct and on our external website home.sandvik. Speak Up is also available through country-specific telephone hotlines 24 hours a day, 7 days a week, and in all major countries where Sandvik has operations.

The Speak Up process follows all applicable whistleblowing and data privacy laws. More information about Speak Up is found under G1-1.

As outlined in our Speak Up policy, Sandvik does not tolerate any retaliation against representatives from a supplier, employee or business partner who, in good faith, voices their concern.

Currently, Sandvik procurement does not measure or assess the effectiveness of Speak Up specifically for workers in the value chain. We aim to have awareness-raising activities in relation to our Speak Up channel and track the number of cases from year to year. 

S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

Based on the impacts identified within our supply chain and in support of Sandvik policies, we initiated a series of targeted actions in 2025. These measures aim to address key challenges and advance our commitment to sustainable practices and responsible sourcing. The table below outlines the specific actions underway to mitigate barriers and enhance performance across our priority areas.

No specific actions have been developed for downstream workers in the value chain.

S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

We have not developed specific targets related to workers in the value chain. Sandvik measures the progress in achieving policy objectives for sustainable supplier management through Supplier Code of Conduct acceptance and compliance. These metrics are part of the policies monitoring of compliance.

To systematically embed sustainability into supplier management, Sandvik is committed to having all suppliers compliant with the Supplier Code of Conduct.

We distinguish between a supplier’s acceptance to comply with the Supplier Code of Conduct and being assessed as complying with it. Acceptance refers to the supplier’s formal acknowledgement and agreement to adhere to the Code, typically through signing it. This is a key metric used to ensure broad alignment with our expectations and has been measured over an extended period. Being assessed as complying with our Code is defined using a risk-based methodology. A supplier is considered compliant if they are identified as low risk through inherent risk screening, meet our scoring criteria following an in-depth sustainability assessment via EcoVadis, or have successfully passed a compliance audit. An in-depth sustainability assessment includes a comprehensive questionnaire, supporting documentation, expert analysis, and publicly available sources, such as media and stakeholder reports. The entity specific metric of Suppliers Code of Conduct acceptance and compliance is used to monitor progress.

Sandvik has not developed a specific target related to downstream workers in the value chain. We are linked to these impacts through our business relationships. We therefore apply phase in provisions for the development of entity specific metrics related to downstream workers in the value chain.