Transparency Act – Annual account for due diligence

According to the Transparency Act, Jotun is committed to carry out due diligence, provide information upon request and publish an account of due diligence assessments each year. The following is to be considered Jotun’s annual account for due diligence pursuant to Section 5 of the Transparency Act for the period 1 January 2024 to 31 December 2024, and was approved and signed by the Board of Directors on 14 February 2025.

1. Organisation

Jotun is a global company consisting of 67 companies in 47 countries worldwide. The company extends its geographic reach through a network of subsidiaries, joint ventures, associated companies, sales offices and distributors. The parent company, Jotun A/S, is headquartered in Sandefjord, Norway. Of the Group’s operating revenue, approximately 8 per cent is related to activities in Norway, while the remaining 92 per cent is related to the rest of the global network.

Jotun’s business is organised into five regions: Europe and Central Asia (ECA), Middle East, India and Africa (MEIA), North East Asia (NEA), South East Asia and Pacific (SEAP) and Americas (AM).

Jotun’s product and service offerings are organized into two business areas: Decorative Paints and Performance Coatings, and four business segments: Decorative Paints, Marine Coatings, Protective Coatings and Powder Coatings. For more info – see jotun.com.

2. Jotun’s commitment to human rights

Jotun has embedded the OECD Guidelines for Multinational Enterprises in its own Human Rights Policy. Jotun’s social sustainability framework is based on the company’s Human Rights Policy. This policy is aligned with the United Nations Guiding Principles on Human Rights and the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work. The company adheres to the United Nations Global Compact (UNGC) to contribute to the goal of creating a sustainable and inclusive global business with decent working conditions.

Jotun is committed to develop an organisational culture and a relationship with our business partners that respect internationally recognised human rights and seek to avoid human rights abuses. Main principles for ensuring responsible business in Jotun are anchored with the Board of Directors of Jotun A/S and are developed and strengthened in close collaboration with Group Management. This in turn leads to a hierarchy of steering documents that ensure Jotun companies in all markets operate within the same set of rules. All policies are available to all employees through the Jotun Management System.

Jotun’s whistleblowing channel is open to both internal and external stakeholders who wish to report on any potential violations of Jotun’s Business Principles, policies, laws or regulations. Jotun encourages employees and external stakeholders to raise concerns if malpractices or wrongdoings are suspected, so the company can address and follow up the concerns. Concerns can be reported openly or anonymously, and once a concern is logged, it is investigated and handled according to established procedures. All reports are handled confidentially and individuals are protected and treated respectfully. The whistleblowing solution is GDPR compliant.

3. Framework for risk assessments

3.1 Own workforce

Jotun acknowledges that our activities may potentially impact fundamental human rights of our stakeholders. The risk varies between the different countries and regions in which Jotun is active. Due diligence of potential human rights breaches in own organisation is done through structured risk-based assessments on Group and country level, Health, Safety, Environment and Quality (HSEQ) risk assessments and reported incidents in the HSEQ register.

Examples of potential risks in own organisation include:

• Safe and decent working conditions
• Living wage
• Discrimination
• Child labour
• Freedom of association and collective bargaining
• Forced labour and modern slavery
• Freedom of expression
• Right to privacy

Through various audits and reviews, Jotun monitors each company’s risk mitigating actions. Human rights are addressed in the regular Business Reviews and Compliance Reviews in all companies. Jotun has control systems in place and regularly runs control reports on salary reviews, working hours, gender pay equality measures, and ensure all employees have proper employment contracts in a language they understand. Reviews are followed up with actions according to findings.

Jotun’s HSEQ Management System defines the requirements for how to operate worldwide with regards to health, safety, environment and quality to ensure the security of people and operations. The comprehensive system provides a structure to track and manage 15 elements related to HSEQ. More information can be found on our website. Jotun reports every tertiary on sick leave, incidents (lost time injuries), working hours, fires and potential fires.

Regular employee surveys are conducted in all companies to obtain candid feedback from employees on satisfaction level on a variety of topics, included but not limited to diversity and inclusion, development opportunities, respect, recognition, pay and benefits. Findings from these surveys are followed up with action plans and feedback based on results.  

3.2 Suppliers and business partners

Jotun’s guidelines for purchasing activities are incorporated in the Group Purchasing Policy, which has “Sustainable sourcing” as one main pillar. The policy outlines the key principles and requirements for ethical, responsible, and professional procurement and sourcing of materials for Jotun entities. It details the roles and responsibilities of the Group Purchasing function and local purchasing managers, emphasizing the importance of adhering to Jotun's values, business principles, and anti-corruption policy. The policy also highlights the need for continuous improvement in purchasing practices, supplier evaluations, and the development of purchasing competence. 

All direct suppliers and major indirect suppliers must undergo the “Supplier Approval Procedure”, outlining Jotun's process for approving suppliers, which includes annual sustainability assessments and physical audits by third-party or approved auditors. It details the responsibilities of various roles, in initiating and conducting these assessments and audits. The document also categorises suppliers based on risk and geographical location, with specific audit requirements for each category.

All Jotun’s suppliers are expected to comply with our “Supplier Code of Conduct” principles which entails labour and human rights issues and requires compliance with UN Guiding Principles on Human Rights and the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work.

Through the Supplier Code of Conduct, the suppliers commit to:

• Ensure compliance with internationally recognized standards for human rights in their own operations, and with their sub-suppliers.
• Provide a safe and healthy workplace and minimize environmental impact from their operations.
• Comply with ethical standards, hereunder anti-corruption.

Jotun screens and approves direct suppliers mainly through sustainability assessments done by EcoVadis Ratings. EcoVadis is the world’s largest and most trusted provider of business sustainability ratings, and has delivered sustainability assessments to Jotun since 2022. More details about the assessments can be found on EcoVadis’ web pages.

These assessments entail the topics environment, labour and human rights, ethics and sustainable procurement. Apart from EcoVadis Ratings assessment, supplier audits are done by third party auditors or by approved internal auditors in Jotun.

Potential risks connected to suppliers include:

• Safe and decent working conditions
• Living wage
• Discrimination
• Child labour
• Forced labour and modern slavery
• Freedom of association and collective bargaining
• Freedom of expression
• Right to privacy

4. Risk assessments and mitigating actions

4.1 Own organization

In general, it is considered low risk of breaches of human rights and decent working conditions for employees in Jotun. The potential risks are described below along with mitigating actions, where relevant.

4.1.1. Safe and decent working conditions

With 40 factories and regional R&D facilities, we acknowledge the inherent health and safety risks related to our operations. Jotun has a zero vision for injuries and fires. Still, there were instances during 2024 of minor fires and injuries that led to absence from work. To constantly improve and mitigate the risks related to operations, there are a number of actions implemented, examples include:

• Comprehensive and regular training and awareness campaigns, comprising workshops, digital learning tools, discussion groups, safety walks, lessons learned etc.
• The “I Care” awareness programme has been an integral part of HSEQ work in Jotun for many years. The goal is to strengthen HSEQ awareness in Jotun in order to reduce the number of unwanted incidents. The campaign requires all companies to run three relevant campaigns each year. One is initiated on a global level, while the other two are local and should be based on local incidents, challenges or risks. In 2024, the “I Care” campaign focused on “Zero Fires” and in 2025 global focus will be “People Safety” with the aim to reduce the number of injuries.
• Projects to increase automation, physical barriers, safety interlocks etc to minimize risk of crush injuries.
• Improvements in controls and replacement of ageing equipment.

Reporting shows that some individuals have exceeded the maximum number of working hours in one year. This is primarily a challenge among production staff and is mainly due to seasonal variations in demand or sudden increase in required production volumes. The breaches are addressed and mitigating actions include:

• Hiring of additional staff.
• Investments in additional and more efficient machinery.
• Ensure monthly monitoring by the local HSEQ department to avoid excessive working hours.

4.1.2. Living wage

Jotun has access to solutions offering information of wage levels in relevant countries. Through Job Profiles, all positions in the organisation are graded based on predefined criteria. The Compensation Policy requires that all salaries shall be right, fair and competitive and includes market salary comparison, which in turn can be compared to living wage estimates. Going forward, Jotun will look into improving current processes to regularly review wages to monitor and address any instances of payment of wages below the cost of living estimates.

4.1.3. Discrimination

Jotun has clear policies in place prohibiting discrimination in any form. It is still considered a risk that discriminatory practices happen in Jotun companies and/or during hiring processes, based on age, gender, ethnicity or other grounds for discrimination. Jotun is a male-dominated company, with the risks that entails for discriminatory practices against women. Jotun takes this seriously and address the risk by targeted mitigating actions that include, but is not limited to:

• Training and awareness campaigns for all employees, such as “Diversity Day” (global initiative, arranged in all companies annually), “Diversity and Inclusion Training” (mandatory for all employees, part of onboarding), and “Culture Alignment Workshop”.
• Training and awareness campaigns specifically targeted to managers, such as “Inclusive Hiring workshop”, designed to identify and minimize unconscious bias in recruiting process, learn to create job adverts that widen the applicant pool and implement inclusive hiring techniques in the interview and selection process.
• Jotun’s recruitment system is set up to not display gender or age of applicants in the first phases of recruitment.
• Salaries are set based on job profiles to ensure that equal jobs are paid equal salary.

4.1.4. Child labour

We do age verification of all candidates before hiring, ensuring we do not employ persons under the age of 15 in our operations, and that we do not employ persons under the age of 18 to do work that may potentially entail a risk to their health or safety. The risk is considered low.

4.1.5. Freedom of association and collective bargaining

Jotun operates in several countries where the freedom of association is forbidden by law, hence there is a substantial inherent risk in this area. To ensure employee views are represented and that employees are able to voice their opinions, mitigating actions include:

• Anonymous employee surveys and audits play an important role to ensure issues are voiced and addressed.
• Regular meetings between employees and local management to ensure that employees can voice their opinions.
• Welfare/ethics committees and/or communications teams, to secure open communication and good relations between employees and management on working environment and welfare arrangements.

4.1.6. Forced labour and modern slavery

Jotun will not use any form of forced labour or accept any form of modern slavery. All our employees have freely chosen to work for and stay in a contractual relationship with Jotun. It is ensured that all employees have employment contracts in a language they understand. All employees are free to leave work premises at the end of their shifts, free to resign from their jobs with a reasonable time of notice, and Jotun never retains the passports of any employees. The risk is considered low.

4.1.7. Freedom of expression

It is considered a risk in some companies that employees fear negative consequences from management if expressing their opinions. Jotun constantly works to support and enhance our corporate culture where employee dialogue and feedback is essential. Actions include:

• “Speak-Up” campaign. This awareness campaign emphasises the importance of fostering a culture where employees feel comfortable expressing their ideas, opinions, and concerns without fear of negative consequences. The campaign was launched in 2023, continued in 2024 and will be further revised into 2025 including a stronger focus on whistleblowing as part of a speak-up culture.
• Information/staff meetings.
• Whistleblowing procedures.

4.1.8. Right to privacy

Jotun is committed to the protection of personal data through relevant legislation and Jotun’s Binding Corporate Rules (BCR). The BCR applies to all the Group’s companies, binding all to the same set of rules based on General Data Protection Regulation (GDPR). There have been occurrences of data privacy breaches in Jotun. The incidents have been reported accordingly and corrective actions have been taken. These actions include:

• Training to regional privacy resources.
• Restrict access controls to IT-systems.
• Revision of guidelines.

4.2 Suppliers and business partners 

Due diligence is performed to analyse risks for breaches of fundamental human rights and decent working conditions in the value chain. All suppliers of direct materials (raw materials and packaging materials) and selected indirect materials shall be approved in line with the Supplier Approval Procedure. The assessments are prioritised based on various criteria, such as volume purchased/size of supplier, country of origin, and Environmental Social Governance (ESG) risk assessments. Local suppliers are part of local risk assessments.

Suppliers who are considered high risk based on an initial assessment will be subject to closer follow-up and investigation, to determine whether improvements can be made or whether Jotun will terminate relations with the supplier. These investigations include information gathering, detailed EcoVadis documentation and physical audits, following the process described in the Supplier Approval Procedure.

4.2.1 Direct materials

The category comprises raw materials and packaging materials and amount to approximately 65 per cent of Jotun’s total purchasing spend. Status as of end 2024 is that 99 per cent of the raw material purchased (spend) comes from suppliers approved either through EcoVadis Ratings assessments or audits.

The suppliers are followed up depending on score in the assessment:

1. Pass: The supplier is approved until a re-assessment is done by EcoVadis or an audit is conducted.
2. Temporary pass: Feedback to supplier with areas for needed improvement. Suppliers are given 6-12 months to document improvement to meet “pass”.
3. Fail: Feedback to supplier with areas for improvements. If the supplier fails to document sufficient improvement in a short time, Jotun will initiate a process to terminate the contract.

Out of the total number of direct material suppliers, 86 per cent have satisfactory results according to Jotun’s requirements. The remaining are being followed up due to either

• expired assessments,
• too low score based on insufficient or inconclusive information, or
• supplier is in the process of conducting a re-assessment or an external audit.

4.2.2 Indirect materials

This is a diverse category which covers all Jotun’s purchases that are not raw materials or packaging materials. Through 2024, Jotun has done a substantial clean-up of the indirect supplier database, to remove inactive suppliers and ensure all listed suppliers are active and current suppliers to Jotun, and are registered with correct information. This is crucial to be able to start structured assessments in EcoVadis using their IQ plus platform.  Jotun has conducted a pilot assessment of suppliers in selected countries.

EcoVadis has recently launched a specific report to follow up relevant human rights issues related to the Transparency Act, and results show main risks to be within the areas of child labour, forced labour, discrimination/harassment and employee health and safety. There are no findings of confirmed breaches, but the risk reflects lack of relevant documentation or inconclusive documentation. However, Jotun acknowledges that there could be a risk that breaches are not discovered or reported, specifically due to a large number of suppliers.

Mitigating actions include:

• Revised Supplier Code of Conduct with a strengthened focus on human rights, and a more structured follow-up of compliance.
• Close follow-up of suppliers based on initial ESG assessments.
• Implementation of a new Supplier Management System, enabling closer dialogue between Jotun and suppliers as well as better control measures.

Going forward, category managers will be made accountable to ensure all suppliers are enrolled in Ecovadis and will continue to work with improvements based on findings. Jotun will further improve assessments and follow-up of suppliers, both in the raw materials and the indirect materials categories.