1. Policy regarding social responsibility

HS Veitur is a progressive company in the field of knowledge and service and conducts activities that are considered part of important infrastructure. The objective of the Company is to increase the customers’ quality of life by providing access to clean and renewable resources in a sustainable and efficient way that is consistent with statutory obligations. HS Veitur is staffed by about 95 employees who engage in various tasks to meet the objective of the Company. The Company works on various tasks in the field of sustainability and influences many parts of society.

This sustainability policy encompasses the responsibilities of HS Veitur in a wide context, and the concepts of social responsibility and sustainability will be used equally in the following policy statement and descriptions of tasks which the Company will focus on. With its Sustainability Policy, the Company declares that it intends to work responsibly to minimize negative impact on society and increase the positive effects which it can have.

1.1 Policy Statement

HS Veitur is guided by sustainability in all its activities, which ensures the common interests of society as well as that of its customers, staff and owners. The Sustainability Policy is divided into three fields of emphasis: the environment, social factors and governance.

The Environment
We protect our environment by working according to efficient processes, using environmentally sound sources of energy, minimizing waste and managing waste in a responsible manner.

Social factors
We emphasize health, equilibrium and good internal and external communication, while being guided by the interests of our society, customers, staff and owners.

Governance
The governance of HS Veitur promotes open and reliable communication between the Company and society, customers, staff and owners. The Board of Directors of HS Veitur reassesses its governance practices regularly based on recognized guidelines on corporate governance.

1.2 The process of formulating the policy
A team of staff members contributed to the formulation of the policy and participated in the selection of UN sustainable development goals. This was done with reference to the university student project “Proposal for a sustainability policy for HS Veitur” and the Company’s previous policy formulation under the guidance of a consultant from Ráður ehf. The work was done in three sustainability workshops, in addition to which the presentation of the overall policy was updated. Upon completion, the findings were submitted to senior managers for confirmation before it was presented to the Board of Directors for final approval.

The policy is formulated for the entire Company and applies equally in all its places of business. It is consistent with the Company’s policy formulation and guided by its values: Trust, respect, progress.

1.3 Interested parties
The principal interested parties of HS Veitur are society, customers, staff and owners. HS Veitur can have a major effect on its interested parties by its activities as the service provided by the Company is part of the daily life of the people who live and work in the areas where HS Veitur conducts its activities. HS Veitur therefore intends to lead by example regarding sustainability issues and provide clear and reliable information on the Company's performance. The Company will also endeavor to inform its interested parties about the significance of the sustainability factors that relate to the use of the Company’s products and service, and encourage them to do their part.

1.4 HS Veitur’s points of emphasis regarding sustainability up until the time of formulation of the policy
HS Veitur has always been conscious of its effect on the environment and society, and the importance of responsible use of the resources which the Company works with. Over the years, large-scale projects have been undertaken to work towards sustainability even though formal policy making regarding this issue did not begin until they year 2021. The heat pump station in the Westman Islands ensures a much more environmentally sound way to heat water, which previously was heated by using up to triple the amount of electric energy and by burning oil. The heat pump station was activated in 2018 and formally declared open on 29 May 2019. The automation of water meters was completed in 2019. This involved replacing nearly all water meters in the Company’s distribution network with the objective of minimizing waste of hot water. The year 2013 saw the beginning of the sorting of waste and measuring of the exhaust produced by the Company’s activities began in 2017. At the end of 2020 HS Veitur was awarded equal pay certification, and a job satisfaction survey was conducted among the staff in the year 2021 for the first time since HS Veitur became a separate company. An ESG report was completed in cooperation with Klappir for the first time for the year 2020.

The Board of Directors of HS Veitur endeavors to maintain good governance and follows the “Guidelines on the governance of companies”, which Iceland’s Chamber of Commerce, NASDAQ OMX Iceland and the Confederation of Icelandic Employers have published. The Board has also established rules of procedure for itself, which are reviewed on a regular basis.

1.5 Parties responsible for the policy
The Board of Directors of HS Veitur approves the sustainability policy, and its owner is the Managing Director of HS Veitur, who is responsible for ensuring that it is reviewed every two years. The Director of safety, health and environment is responsible for the implementation of the policy and will appoint a steering group that will include Director of safety, health and environment, the Head of the Financial Department and the Human Resources Manager. The Sustainability Committee is responsible for implementing the goals and actions of the Policy and is composed of representatives from the Company's management and employees. The Committee will oversee follow-up with the social action programmed that is attached to the policy, as well as regular revision.

2. HS Veitur’s points of emphasis regarding sustainability

2.1 United Nations Sustainable Development Goals
The goals which the Preparatory Group agreed to emphasize to begin with are the following:

2.2 HS Veitur’s points of emphasis for each aspect of sustainability (ESG)

Environment
We protect our environment by working according to efficient processes, using environmentally sound sources of energy, minimizing waste and managing waste in a responsible manner.

Social factors
We emphasize health, equilibrium and good internal and external communication, while being guided by the interests of our society, customers, staff and owners.

Governance
The governance of HS Veitur promotes open and reliable communication between the Company and society, customers, staff and owners. The Board of Directors of HS Veitur reassesses its governance practices regularly based on recognized guidelines on corporate governance.