Sustainability Performance 2020

Research and development (R&D) and technological innova- tion not only further improves the competitiveness of wind against other forms of energy and meet other customer needs, it is increasingly part of our approach to tackle sus- tainability challenges. More than ever, we steer our R&D efforts towards sustainable innovation and join forces with industry peers to manage the sustainability of turbine blades throughout their entire life cycle – from design to end of life. Research and development R&D forms the backbone of our products. In 2020, we have continued to invest 4.0% of our revenue in R&D - a slight increase compared to 3.9% in 2019. Among other innovations related to material optimization and manufacturing process- es, we launched 12 new blade designs in 2020 – almost twice the number in 2019. In November 2020 - after passing a full- scale test including static test, fatigue test and post-fatigue test - LM’s record breaking 107 meter blade received its Com- ponent Certificate for GE Renewable Energy’s Haliade-X plat- form, bringing GE one step forward to actually installing and operating the largest wind turbine in the world. Quality and supplier management Quality management systems are implemented at all our sites. All our blade manufacturing sites in operation are certi- fied against ISO 9001. GE’s Supplier Responsibility Guidelines (SRG) are fully embed- ded and are a part of the LM Wind Power supplier qualifica- tion process, ensuring that new suppliers are assessed before any business or product qualification commence. Suppliers are required to follow all applicable laws in their respective countries as well as GE standards. We also strongly advise that suppliers use an environmental management system to manage their impacts. Other expectations of suppliers include: • Compliance with laws and regulations protecting the environment; improving resource efficiency • Providing workers a safe and healthy workplace • Employing workers above the applicable minimum age requirement or the age of 16, whichever is higher • No forced, prison or indentured labour, or workers subject to any form of compulsion, coercion or human trafficking • Compliance with minimum wage, hours of service and over- time wage laws • Freedom of association • No discrimination • No harassment • Adherence to ethical business practices • Respect intellectual property • Avoiding sourcing 3-TG (tin, tantalum, tungsten and gold) from conflict mines • Maintaining an international standard of security measures • Expect their suppliers to conform to similar standards In 2020, we have continued to engage the suppliers to improve their quality performance and adhere to our supplier requirements. A key supplier quality indicator is the non-con- formity rate, on which we achieved 987 parts per million and outperformed our target of 1500. Suppliers are prioritized for detailed, on-site assessments depending upon the country in which they are located, their past performance and whether they are producing parts or components that will be incorpo- rated into our products. All of LM Wind Power’s direct materi- als suppliers on our mandatory countries list require an on- site audit. All suppliers are required to receive at least one audit every two years and suppliers with previously recorded concerns will be audited every year. In 2020, we completed 26 audits in total during which no major areas of non-compli- ance were found. Revenue invested in R&D, compared to 3.9% in 2019 $12 million in 2019 million compared to 25% in 2019 Employees trained in anti- corruption and bribery, compared to 90% in 2019 95% New blade designs launched, compared to 7 in 2019 12 4.0% Rev nue invest d in R&D, compared to 3.9% in 2019 $12 million i 2019 mill on compared to 25% in 2019 Employees trained in anti- corruption a d bri ery, compared to 90% in 2019 5% New blade signs launched, compared to 7 in 2019 1 . 26 | LM WIND POWER SUSTAINABILITY PERFORMANCE 2020