1、Annual Report 2024Sustainability and Corporate Responsibility ReportRemuneration ReportCorporate Governance ReportFinancial ReportPart of Ericsson Annual Report 2024Sustainabilityand CorporateResponsibilityReportSustainability and Corporate Responsibility Report 2024This Sustainability and Corporate
2、 Responsibility Report is rendered as a separate report added to the Financial Report in accordance with the previous version of the Annual Accounts Act(SFS 1995:1554,Chapter 6,Section 10 and 11)applied before 1 July 2024.An assurance report from the Companys auditor is appended hereto.Introduction1
3、Targets and impacts22024 highlights3 Environment3 Social5 Governance7Sustainability statements9 General disclosures10 Environment19 Social34 Governance50Appendix54Assurance Report61Glossary62Forward-looking statementsThis Sustainability and Corporate Responsibility Report includes forward-looking st
4、atements,including statements reflecting the Companys current views relating to the growth of the market,future market conditions,future events,financial condition,and expected operational and financial performance,including,in particular the following:The words“believe,”“expect,”“foresee,”“anticipa
5、te,”“assume,”“intend,”“likely,”“projects,”“may,”“could,”“plan,”“estimate,”“forecast,”“will,”“should,”“would,”“predict,”“aim,”“ambition,”“seek,”“potential,”“target,”“might,”“continue,”or,in each case,their negative or variations,and similar words or expressions are used to identify forward-looking st
6、atements.Any statement that refers to the Companys strategy,future financial performance,expectations,projections or other characterizations of future events or circumstances,including any underly-ing assumptions,are forward-looking statements.Such statements are based on managements expectations as
7、 of the date of this report,unless an earlier date is specified,including expectations based on third-party information and projections that management believes to be reputable.We caution investors that these statements are subject to risks and uncertain-ties many of which are difficult to predict a
8、nd generally beyond our control that could cause actual results to differ materially and adversely from those expressed in,or implied or projected by,the forward-looking information and statements.Important factors that could affect whether and to what extent any of our for-ward-looking statements m
9、aterialize include but are not limited to the factors described throughout this Sustainability and Corporate Responsibility Report.These forward-looking statements also represent our estimates,assumptions and expectations only as of the date that they were made,and to the extent they represent third
10、-party data,we have not undertaken to independently verify such third-party data and do not intend to do so.Given these risks and uncertainties,readers are cautioned not to place undue reliance on such forward-looking statements.Readers are urged to carefully review and consider the various disclosu
11、res made in this Sustainability and Corporate Responsibility Report and in other documents we file from time to time with our regulators that disclose risks and uncertainties that may affect our business.Unless specifically indicated otherwise,the forward-looking statements in this Sustainability an
12、d Corporate Responsibility Report do not reflect the potential impact of any divestitures,mergers,acquisitions,or other business combinations that have not been completed as of the date of this report.We expressly disclaim a duty to provide updates to these forward-looking statements,and the estimat
13、es and assumptions associated with them,after the date of this Sustainability and Corporate Responsibility Report,to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events,whether as a result of new information,future events or otherwise,except
14、as required by applicable law or stock exchange regulation.This Sustainability and Corporate Responsibility Report includes websites or references to additional company reports.These are intended to provide inactive,textual references only.The information on websites and contained in those reports i
15、s not part of this report and not incorporated by reference in this report.This Sustainability and Corporate Responsibility Report contains statements based on hypothetical scenarios and assumptions as well as estimates that are subject to a high level of uncertainty,and these statements should not
16、necessarily be viewed as being representative of current or actual risk or performance,or forecasts of expected risk or performance.In addition,historical,current,and forward-looking environ-mental and social-related statements may be based on standards for measur-ing progress that are still develop
17、ing and on internal controls and processes that continue to evolve.While certain matters discussed in this Sustainability and Corporate Responsibility Report may be significant,any significance should not be taken,or otherwise assumed,as necessarily rising to the level of materiality used for purpos
18、es of complying with Ericssons public company reporting obligations pursuant to the US federal securities laws and regulations,even if the report uses the words“material”or“materiality.”Ericsson 2024Sustainability and Corporate Responsibility ReportRemuneration ReportCorporate Governance ReportFinan
19、cial ReportSustainability and Corporate Responsibility ReportSustainability and integrity for long-term value creation Ericsson was founded on the belief that com-munication is a basic human need,and for over 145 years,the Company has helped transform lives,industries and society for the better.Thro
20、ugh our strategy,we aim to increase the value of mobile networks for our customers by building high-performing,pro-grammable and energy-efficient networks,and through accelerating the digitalization of enterprises.By developing new use cases and monetization opportunities,we are also supporting peop
21、le,business and society benefit from continued investments in mobile connectivity.Sustainability through efficiency At Ericsson,we believe that digitalization is a prerequisite for a low carbon future.While the Information and Communications Technol-ogy sector itself only represents a small share of
22、 the global carbon footprint1),5G paired with technologies such as AI and the Internet of Things is vital to increasing productivity and efficiency in other industries,which in turn enables them to reduce their emissions.We are continuing our efforts to reduce the environmental impact of mobile netw
23、orks and to have Net Zero emissions in our value chain by 2040.A critical part of this transition is to develop networks with increased capacity and reduced energy consumption,which leads to lower energy costs for our customers and lower emissions.We have made steady progress on our target and have
24、reduced the energy consumption of typical radio base station sites by 37%compared to just three years ago.This increased efficiency is important not only for sustainability,but also because it means our mobile network products and solutions continue to deliver the best performance at the lowest tota
25、l cost of ownership to our customers.This,in turn,enables our customers to continue to invest in their networks,which benefits our business.Integrity and sound risk managementIntegrity is one of our core company values and a cornerstone of how we manage risk and conduct business,supporting sound and
26、 ethical decision-making.As a global company,we are present in markets that can be challenging in terms of business culture,geo-political stability and maturity of institutions.In response,we have set high standards for ethics,integrity and respect for human rights for ourselves and for our business
27、 partners.We have put considerable efforts into strengthening our corporate governance,Ethics and Compliance Program,and have implemented an integrated approach to risk management in which we aim to cap-ture business opportunities and effectively identify,assess and manage environmental,social and b
28、usiness conduct related risks.By continuing to embed ethical decision-making throughout our operations,we have further strengthened the foundation for responsible business practices and sound risk manage-ment,which we believe creates business resilience in a fast-changing geopolitical environment.Gr
29、owth through digital solutionsDespite the rapid expansion of mobile broad-band,a third of the global population still does not have a fast and reliable connection due to lack of affordability and accessibility2).To address this,we are supporting digital inclusion through several solutions,including
30、Fixed Wireless Access,which can be deployed rapidly and can deliver cost effective and high-speed broadband to underserved areas,and a mobile wallet platform that supports about 85 million active users with mobile financial services.By enabling previously unconnected people to participate in the dig
31、ital economy,Ericsson and our customers are contributing to economic growth which enables invest-ments in new businesses,infrastructure and societal services.We also work with customers,governments and educational institutions to support essential societal needs,such as access to education and emplo
32、yment opportunities in the digital economy.As an open innovation platform,5G acts as an engine for economic growth and sus-tainable development,with a direct impact on a range of societal infrastructure and industry sectors including transport,manufacturing,energy utilities and public safety.It supp
33、orts the ongoing digital transformation of industry and society,which is a precondition for the future competitiveness of businesses and countries.We remain steadfast in our strategy of leadership in mobile networks and focused expansion into enterprise,and we are excited to be a part of the next wa
34、ve of digitalization,underpinned by a strategic commitment to sustainability and a company culture based on integrity and responsibility.1)Malmodin et al.(2023).ICT sector electricity consumption and greenhouse gas emissions 2020 outcome,SSRN Electronic Journal2)ITU.(2023).Measuring digital developm
35、ent-Facts and Figures 2023,ITU Publications1Ericsson 2024IntroductionRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportTargets and impactsPerformance on goals and targetsBelow is a summary of the performance and current status of Ericsson
36、s Sustainability and Corporate Responsibility goals and targets.Commentary on performance highlights is presented on pages 38,and target specifics and detailed performance data can be found on pages 1953 of this report.Goals and performance targetsPositive impacts on people,the economy and the plane
37、tBeyond its own operations,Ericsson,its solutions and the ICT industry as a whole can positively impact people,the economy and the environment which helps advance progress on the United Nations Sustainable Development Goals.E EnvironmentS SocialG GovernanceEmissions reductions Near-termReduce total
38、GHG emissions in the value chain by50%,and scope 1 and 22)by 90%.(SBTi3)validated).Emission reductions Long-termNet Zero GHG emissions across the value chain,covering scope 1,2 and 32)(SBTi3)validated).Portfolio energy performanceReduce the energy consump-tion of typical new radio base station sites
39、 by 40%.Supply chain engagementHave 350 high-emitting and strategic suppli-ers set their own 1.5 C aligned emissions reduc-tion targets.Health and safetyZero fatalities and lost work-day incidents among employ-ees and suppliers of field services.Equal treatment and opportunities30%share of women amo
40、ng all employees,linemanagers and top manage-ment.Ethics and ComplianceStrengthen and enhance the Ethics andCompliance Program to help ensure an effective and sustainable anti-bribery and corrup-tion program.Base year1)Base year1)Base year1)2020202020212020202020212019Target yearTarget yearTarget ye
41、ar20302040202520252025203020242024 performance2024 performance2024 performanceTotal value chain emissions:37%4)Scope 1 and 2 emissions:55%4)37%reduction4)323 suppliers with accepted targetsFatalities:2Lost workday incidents:72All employees:26.5%Line managers:24.0%Top management:32.0%Compliance monit
42、or-ship concluded.Continued focus on the programs sustainability and accountability for leaders.1)For targets tracked using a relative performance metric compared to a set baseline the base year is shown.For targets not tracked through a relative metric,the year the target was set(start year)is show
43、n.2)Explanations of the boundaries for Scope 1,2 and 3 emissions are included in the glossary on page 62.Detailed GHG accounting principles can be found in section E1.3)Science Based Targets initiative.4)Compared to the target base year.567,000 children and youth reached through Ericssons Connect to
44、 Learn program.85 million con-sumers accessing financial services through the Ericsson Mobile Wallet Plat-form every month.At least 0.8%growth in GDP for every 10%increase in mobile broadband adoption1).Potential for 15%reduction of global GHG emissions enabled by ICT solutions2).1)Edquist et al.(20
45、18).How important are mobile broadband networks for the global economic development?,Information Economics and Policy2)Malmodin&Bergmark(2015)Exploring the effect of ICT solutions on GHG emissions in 2030,Atlantis Press2Ericsson 2024IntroductionRemuneration ReportCorporate Governance ReportFinancial
46、 ReportSustainability and Corporate Responsibility Report2024 highlightsRadio base station energyconsumption%504030201002024202320227303740 Achieved reductions 2025 targetValue chain carbon footprintMillion metric tons of CO2e/%05101520253035202420231)202292%8%311%1%1%7%8%93%92%321519 Scope 1 and 2(
47、accounted for less than 1%)Scope 3 Upstream Scope 3 Downstream 2030 target1)Data for 2023 has been restated.For further information,see page 10.EnvironmentNet Zero by 2040 Ericssons long-term target is Net Zero green-house gas(GHG)emissions across its value chain by 2040,with a near-term target to h
48、alve total value chain emissions and reduce Scope 1 and 2 emissions by 90%by 2030 compared to a 2020 baseline.The targets have been validated as 1.5 C aligned by the SBTi1).During 2024,Ericsson developed a transition plan to reach these targets.The plan details the decarbonization levers critical fo
49、r the Company to reach Net Zero,with a focus on activities with a larger impact such as product design and radio site energy consumption.The largest potential for emission reduc-tions in Ericssons value chain comes from continued improvements in the energy perfor-mance of the portfolio and through i
50、ncreased use of renewable energy by customers.This is followed by reductions of upstream emis-sions through supplier engagement,product design and material choices.In 2024,total value chain GHG emissions were about 19(32)million metric tons.92%(93%)of the footprint occurred downstream2)in the value
51、chain,primarily derived from the energy use of sold network equipment.8%(7%)occurred upstream2)in the value chain,and primarily came from emissions embodied in purchased goods and services.Emissions from Ericssons own operations(Scope 1 and 2)accounted for less than 1%(1%)of total emissions.Compared
52、 to 2023,total value chain emis-sions decreased by 41%and compared to the 2020 baseline the decrease was 37%.This was primarily caused by downstream emission reductions in the use phase of sold products,including improvements in energy performance of delivered network equipment and increased custome
53、r purchases of renew-able electricity.Ericsson has continued to improve the energy performance of its port-folio,delivering increasing mobile broadband capacity in relation to the energy consump-tion of its solutions.Higher energy efficiency also creates financial value for customers by helping to r
54、educe energy-related opera-tional expenditures and therefore total cost of ownership.2024 also saw a geographical shift in sales to markets that have comparatively larger shares of electricity from renewable sources in their national grids which con-tributed to lower emissions.These kinds of shifts
55、can result in significant variances in downstream emissions year-over-year.The variances are so large because reported downstream emissions from the use of sold products in a given year includes the sum of the estimated total lifetime emissions from that network equipment:the emissions are not accru
56、ed over the products estimated lifetime.Portfolio energy performanceThe lifetime emissions from the use-phase of products sold in 2024 represented 92%(93%)of total value chain emissions.Ericsson estimates that improved energy performance has the potential to reduce product use-phase emissions by abo
57、ut 30%by 2030 compared to the 2020 baseline.Through the introduction of 5G Advanced,Ericsson has continued to implement capabil-ities that enable high-performing,program-mable and energy-efficient networks that can be optimized for different use-cases.This allows communications service providers to
58、operate their networks more intelligently to meet traffic demand and deliver the best user experience with lower energy use.The Com-pany has continued to work towards its target to reduce the average energy consumption of typical new radio base station sites by 40%by 2025 compared to a 2021 baseline
59、.By year-end,the Company had achieved a reduction of 37%(30%)and is on track to achieve this target.Investments in portfolio energy efficiency is one eligible use of pro-ceeds in Ericssons Green Financing Frame-work,under which the Company emits green bonds and other green financing instruments.Supp
60、ly chain climate actionSupply chain emissions represented 8%(7%)of the total value chain carbon footprint,and Ericsson is working to reduce these emissions through supplier engagement,design improvements and transport efficiency.As supply chain emissions are a key priority for its customers,working
61、to decarbonize the supply chain strengthens Ericssons competitiveness.The Company has continued to explore and implement ways to reduce the weight and size of products and has conducted studies on how to reduce emissions from carbon intense materials and processes such as aluminum.Climate-related cr
62、iteria are included in scorecards for those suppliers that have been assessed to have a higher environmental impact.Ericsson has a 1)Science Based Targets initiative.2)Explanations of what constitutes the upstream and downstream parts of a companys value chain are included in the glossary on page 62
63、.3Ericsson 20242024 highlights EnvironmentRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportScope 1 and 2 emissionsKiloton CO2e 020406080100120202420232020721126951424027341711/Scope 1 Scope 2(market-based)2030 targetShare of renewable el
64、ectricity and energy at facilities%020406080100202420232022706584846782 Facility electricity All facility energySupplier climate engagementNo.0100200300400202420232022350225237323 Suppliers with accepted targets 2025 target2025 target for 350 high-emitting and stra-tegic direct suppliers to set thei
65、r own emis-sion reduction targets aligned with the 1.5 C ambition,including a halving of emissions by 2030.Direct emissions from these suppliers,together with the emissions across their sup-ply chains,represent a majority of Ericssons upstream carbon footprint.By year-end,323(237)suppliers had set a
66、ccepted targets.However,to achieve targeted supply chain emissions reductions,high-emitting suppli-ers will need to use more renewable energy in their processes.During the year,Ericsson began collecting verified data on the share of renewables used by a selection of suppliers to assess how such meas
67、ures can be scaled.Climate action in own activities Scope 1 emissions decreased to 17,340(27,029)metric tons,primarily as a result of a reduction in the number of field service vehicles.Scope 2 emissions decreased to 34,007(42,251)metric tons,primarily driven by lower electricity consumption and tar
68、geted purchases of renewable energy instruments in markets with comparatively more emissions-intense national grids.The share of purchased renewable electricity was 84%(84%),which represented 65%(70%)of total facility energy consumption.Since the 2020 target baseline,yearly Scope 1 and 2 emis-sions
69、have decreased by about 62,000 metric tons.While emissions from business travel increased to 54,215(52,599)metric tons in 2024,they remain lower compared to pre-pandemic levels.Ericsson has set a cap on business travel to limit business travel emissions to no more than 50%of pre-pandemic 2019 levels
70、.Emissions from employee commuting increased to 51,700(49,000)metric tons,as a result of increased work on-site compared to the previous year.Focus areas for 2025 will remain to be automation of data management and the exploration of new ways to increase the share of renewable energy used in facilit
71、ies.Transition to circular economy The Company made additional efforts to increase product take-back volumes and the sale of refurbished equipment continued during 2024.A prerequisite for a more circu-lar approach is accurate information on the material composition of products.Ericsson has begun col
72、lecting information from sup-pliers about the recycled material content in purchased products and components through a new section in the standard form for declar-ing the material composition of products.Ericsson will implement this new section in a stepwise approach,starting with prioritized produc
73、ts to build up knowledge on the use of secondary raw materials.After assessing the criteria for alignment with the EU Taxonomy for Sustainable Activities,Ericsson has concluded that none of its eligible turnover,which primarily derives from manufacturing of electric equipment,meets all the criteria
74、for alignment with the taxonomy.The taxonomys criteria are chal-lenging to apply to Ericssons products,partly because they are based on consumer electron-ics and not industrial goods,such as network equipment.More details about this assess-ment can be found in section E6 of this report.Enabling effe
75、ct of ICTAccording to research1),the ICT sector represents a small and decreasing contri-bution to global GHG emissions.However,Ericsons research shows that the potential for ICT solutions to support other industries to decarbonize is substantial and much more significant than the sectors own carbon
76、 foot-print2).For example,key transformations in society and industry,such as electrification and increased use of renewables,depend on connectivity and communication network infrastructure to reach their full potential.Another study by Ericsson3)found that there is additional potential for emission
77、s reductions if enterprise applications enabled by 5G are adopted in other high-emitting sectors of the economy.Throughout 2024,Ericsson has continued to explore this topic through the publication of two policy recommendations on digitalization for sustainability and achieving a competitive and gree
78、n Europe.These recommendations showcase the importance of connectivity and digitalization in decarbonizing industries and for reaching global Net Zero emissions4).1)Malmodin et al.(2023).ICT sector electricity consumption and greenhouse gas emissions 2020 outcome,SSRN Electronic Journal 2)Ericsson M
79、obility Report(2024).3)Ericsson.(2021).Connectivity and climate change,Ericsson4)Policy paper Achieving a competitive and green Europe CEO Alliance and Policy paper Digitalisation for Sustainability-CEO Alliance.4Ericsson 20242024 highlights EnvironmentRemuneration ReportCorporate Governance ReportF
80、inancial ReportSustainability and Corporate Responsibility ReportLost workday accidents andfatalitiesNo.025507510012515020242023202281096272126 Lost workday accidents1)Fatalities1)As of 2024 lost workday accidents occurring among third parties are excluded from the statistics as Ericsson has limited
81、 possibility to verify the number of actual days lost.Third parties are still included in the statistics for fatalities and recordable workplace accidents shown here and in section S1.Breakdown of fatalities by causeNo.03691220242023202248145102411 Other1)Fall from heights Traffic/driving accident1)
82、Detailed information in section S1.Share of women per employeecategory%01020304020242023202225.535.021.726.532.024.026.031.422.7 Top management All employees Line managers 2030 ambitionSocialHealth,safety and well-beingTarget Zero is Ericssons goal of zero fatalities and lost workday incidents.The C
83、ompany has continued embedding safety in its company culture and strengthening processes and gov-ernance including supplier management.As part of these efforts,maturity assessments for site service suppliers continued during 2024 and covered 98%of current and new sup-pliers by the end of the year.Th
84、e main areas identified for improvement were controlling high-risk activities,managing sub contractors and strengthening project hazard and risk assessments.When a nonconformity with Ericssons safety criteria is identified,or when an incident or fatality occurs,warnings are issued to the supplier pa
85、ired with other consequences such as monetary fines or contract termination.Throughout the year,the number of reported fatalities decreased to 2(10)and involved site service suppliers.The causes were a driving accident and a fall during work at a base station site.No fatalities involved Ericsson emp
86、loyees.Root cause analyses of the fatal incidents show that poor supervi-sion,inadequate risk assessment and unsafe behaviors were major contributors.Lost workday accidents for both suppliers and employees also decreased to 72(96)and primarily occurred during site assembly,installation and maintenan
87、ce work.In 2024,Ericsson launched a new manda-tory safe driving training for both employees and suppliers in addition to its existing safety trainings.Ericsson also fully implemented the Stop Work Authority standard that requires and empowers people to immediately stop work when unsafe working condi
88、tions are identified.In addition,the Company believes that recognizing positive efforts helps to improve suppliers safety performance and introduced a global supplier safety recogni-tion program to award safe behaviors and promote best practices among field service suppliers.The ongoing work to redu
89、ce the weight and size of products as a way to reduce embodied greenhouse gas emissions also has health and safety benefits as it makes transportation and installation work easier.Equal treatment and opportunitiesAs an ICT company with a strategic goal of sustaining technology leadership in its indu
90、stry,Ericsson relies on a highly skilled workforce,especially in the fields of science,technology,engineering and mathematics.To ensure that Ericsson retains access to an innovative and impactful workforce it uses a merit-based hiring approach that values employees with a diversity of experiences,pe
91、rspectives and skillsets.Ericsson believes that this enables well-rounded and informed decisions and,therefore,better outcomes.Leaders at Ericsson undergo training on inclu-sive leadership to help them make better and fairer merit-based decisions,which do not discriminate against any group.Ericsson
92、also continues to support a network of Employee Resource Groups that are open to all employ-ees and cover a wide range of topics,includ-ing groups dedicated to neurodiversity and people with disabilities.In addition,Ericsson has focused on access and opportunities for women at all levels within the
93、Company through merit-based selection processes in compliance with anti-discrimination laws.Work towards improving pay equity has continued,and the Company has made addi-tional efforts to ensure that pay is appropri-ately merit based.Targeted work has been done to address confirmed gaps,and as part
94、of these efforts,internal education continues to help ensure that pay decisions are made fairly.Talent attraction,retention and developmentEricssons talent acquisition strategy is built on three key focus areas:identifying key talent markets,demand planning and capacity,and attracting and retaining
95、talent with critical skills.During 2024,Ericsson has continued to enhance its sourcing capacity,improved recruiter capa bilities and invested in new technology to provide a better hiring experience.The Company also continues to prioritize the development of critical skills connected to its strategy.
96、By year-end,more than 75,000 people had built critical skills across areas such as Cloud Native,Power Skills and Artificial Intelligence,including Generative AI.Employees are encouraged to align learning goals to their career ambitions and to put their skills to work through internal job mobility an
97、d short-term development projects.This is supported by an open talent market and targeted succession planning.In 2024,a new approach to performance management was launched in which annual performance reviews factor in both accom-plished results in comparison to agreed goals as well as how the person
98、 demonstrated the Companys values and fulfilled expectations of ethical behavior in their work.Since 2021,Ericsson has an employee share purchase plan to promote retention through subsidizing the purchase of Company stock by employees.At the end of 2024,the plan was available to about 76,000(77,700)
99、employees,with a participation rate of 17.3%(18.0%).5Ericsson 20242024 highlights SocialRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportEmployee satisfactioneSAT score 020406080100202420232022778174748079 Ericsson employees BenchmarkDig
100、ital education Connect to LearnThousands No.01002003004005006002024202320224855674345360102030405060400 Impacted children and youth Countries deployedEricsson Mobile Wallet accountsand active usersMillion 0100200300400500600202420232022858045753085379 Accounts Monthly active usersDue to a challengin
101、g market in 2024,Ericsson made headcount reductions in several countries.Still,employee satisfaction scores remained high at 79(80)points on a scale of 0 to 100 and continue to be above the benchmark value for comparable companies in the industry,which was 74(74).Human rightsEricsson continues to in
102、tegrate human rights due diligence across its business,such as in its sourcing and sales processes and undertakes heightened due diligence activities when the Company determines they are needed.Dur-ing the year,Ericsson conducted key activities related to human rights.Among others,the Companys human
103、 rights specialists visited India,where Ericsson has a significant part of its workforce.Focus during the visit was on capacity-building of key employees and heightened due diligence related to risks and impacts across Ericssons value chain.To improve both local and group level due diligence priorit
104、ies,the team engaged with employees and civil society organizations on salient human rights issues that Ericsson has identified across its value chain,such as working conditions,right to privacy and freedom of expression.Key findings included a need to further strengthen oversight of working conditi
105、ons for non-employees in Ericssons workforce and improving internal awareness of these human rights issues.The Companys approach to assessing the risks of working with customers in the defense and public safety sector,including governmental institutions and agencies,was strengthened by establishing
106、clear criteria for evaluating human rights risks in such engagements.These criteria include the intended use of Ericsson solutions as well as customer and country-specific risks,such as the strength of the rule of law and preva-lence of armed or violent conflicts.Evaluation of these criteria can tri
107、gger heightened due diligence measures.As part of its membership with the Global Network Initiative(GNI),Ericsson participated in an exercise in which the Company presented how it had handled a business engagement involving privacy-related concerns in a country with a high-risk regulatory environmen
108、t.The participat-ing stakeholders,which included academic experts,other companies and civil society organizations,assessed how well Ericssons actions were aligned with GNIs principles.The conclusion was that Ericssons actions were well-aligned to these principles,but that there is opportunity for th
109、e Company to work for collective action between industry and civil society to influence policies of high-risk countries,when possible.Impact on communitiesEricsson continued to invest in connected reforestation projects in multiple countries and planted over 400,000 saplings through three projects i
110、n India.In support of the United Nations-recognized World Cleanup Day,more than 1,400 volunteers in over 40 locations collected two metric tons of waste in Ericssons largest employee volunteering engagement to date.In Ethiopia,Ericsson Response and the Emergency Telecommunications Sector provided co
111、nnectivity to RETS1)partner offices supporting 91,000 refugees in the Mirqaan,Bokh district.Ericsson Response also supported the WFP-led ETC2)efforts in Jamaica and Union Island after the devastating hurricane Beryl.Furthermore,Ericsson Response continued to support WFPs preparedness and resilience-
112、building project in the Philippines.Digital inclusionThe Ericsson Mobile Wallet Platform supported 530(457)million registered mobile wallet accounts in 2024.About 85(85)million active consumers many of whom were previously unbanked use mobile financial services powered by the platform every month.Th
113、e platform has enabled many businesses and organizations to accept digital payments,which helps to accelerate the growth of cash-light digital economies.As UNICEFs first private sector partner to make a multimillion-dollar commitment to the Giga initiative,Ericsson has contributed to efforts to impr
114、ove access to connectivity at more than 14,500 schools,benefiting 7.8 million students during the past four years3).Through its Connect to Learn initiative,Ericsson has to date positively impacted 567,000(485,000)children and young adults in 45(43)countries by providing access to digital learning an
115、d skills development programs.1)Refugee Emergency Telecommunications Sector,led by the United Nations High Commissioner for Refugees(UNHCR).2)World Food Programme Emergency Telecommunications Cluster.3)UNICEF.6Ericsson 20242024 highlights SocialRemuneration ReportCorporate Governance ReportFinancial
116、 ReportSustainability and Corporate Responsibility ReportCompletion rates for ethics andcompliance trainings%020406080100202420232022939798949999 Foundational ABC training Enhanced ABC trainingGovernanceStrengthening corporate governanceEricsson is committed to maintaining the highest standards of c
117、orporate governance and has established a governance frame-work that strengthens the business,enabling strategic execution and operational excel-lence,and promotes and facilitates effective oversight across the organization.The aim is to enable high-quality decision-making with clear accountability
118、and to instill a robust approach to risk management to effectively identify,manage and mitigate risks and capture opportunities.Ericssons governance framework guides its people while building on their strengths fostering a culture of transparency,collaboration and open dia-logue.It is one of the fou
119、ndations for sound and ethical business decisions,strong risk management and cross-functional coordi-nation.Ericsson has also implemented clear rules of governance across the organization.These range from matters requiring approval of the Companys shareholders and members of its Board,to conflicts o
120、f interest policies and director and management duties and obligations.All of these aspects are corner-stones for Ericsson to manage its business in line with its values:professionalism,respect,perseverance and integrity.Ericssons intensive work on strengthen-ing and simplifying its corporate govern
121、-ance practices continued throughout 2024 and was pursued in parallel with further improvements to its Ethics and Compliance Program.In June 2024,Ericsson concluded its four-year compliance Monitorship.The role of the Monitor was to comprehensively review,assess,evaluate and test all aspects of Eric
122、ssons global Anti-Bribery and Corrup-tion(ABC)Compliance Program and internal controls.The Monitors certification and the conclusion of the Monitor teams work and term was an important milestone,but the work is by no means complete.As part of Ericssons continuous journey of integrat-ing and improvin
123、g its Ethics and Compliance Program,the Company remains conscious of the fact that the breadth of its global organi-zation and the industry in which it operates requires ongoing vigilance.Ethics and complianceOver the past several years,Ericsson has invested significant resources to strengthen its E
124、thics and Compliance Program by imple-menting and maintaining strong systems,controls and policies,including in the areas of ethics,ABC,conflicts of interest,anti-money laundering and competition law.Ericsson believes that integrating integrity into day-to-day decision-making requires constant focus
125、 to ensure that its compliance processes and related controls are fit for their intended pur-pose.Looking ahead,as the business evolves,Ericsson will continue the work to improve on its anti-corruption controls and further inte-grate them into its operations and manage-rial decisions.At the same tim
126、e,Ericsson will also continue rigorous testing of its Ethics and Compliance Programs effectiveness,which includes clear expectations for management to understand and address testing results and process adherence within the areas of their responsibility.This will further strengthen the foundation for
127、 a well-integrated,self-sustaining Ethics and Compliance Program.To reinforce accountability throughout the organization,all employees who are eligible for a short-term variable compensa-tion payout may be denied all or part of the entitlement if they act in breach of Ericssons Code of Business Ethi
128、cs.In addition,senior executives are subject to evaluation accord-ing to a set of pre-defined integrity criteria,which includes compliance training,third party management,allegation management and other matters tied to the Companys Ethics and Compliance Program.Underper-formance against these criter
129、ia can reduce short-term variable compensation payout by up to 100%.Corporate contributions are an impor-tant part of corporate responsibility and help demonstrate Ericssons support for various communities and causes.The Company has systems in place to review donations,spon-sorships and other contri
130、butions to ensure that they are consistent with the Companys values,free from conflicts of interest and comply with laws.Ericsson continues to provide mandatory training on topics critical for creating behavio-ral change and promoting integrity within the Company such as ABC,health and safety and se
131、curity awareness.At year-end,mandatory foundational ABC training had been com-pleted by 99%(99%)of the full workforce and enhanced ABC training for people in high-risk roles had a 94%(98%)completion rate.In 2024,the number of reported compli-ance concerns was 1,201(1,201),of which a majority were re
132、lated to human resource matters.The Company views the consistent number of reports as an indicator of contin-ued trust and confidence by employees and third parties in Ericssons allegation man-agement,investigation capabilities and the seriousness with which the Company treats potential misconduct.O
133、ut of the reported concerns,138(125)cases were referred for further investigation.1,063(1,076)cases were not referred for investigation as they were either inquiries of a general nature,not deemed to be related to misconduct or Compliance concerns reported,referred for investigation and substantiate
134、d investigations No.02004006008001,0001,2001,4002024202320221,09221511891611381,2011,201125 Concerns reported1)Concerns referred for invesigation Substatiated investigations2)1)All reported cases received in in the reporting year,of which a majority were related to human resource matters.2)All cases
135、 concluded and deemed as substantiated during the reporting year,some of which were received in previous years.Corrective and disciplinary actions taken1)020406080100OtherResignationVerbal warningWritten warningTermination296Total:196No.1960821)Actions taken as a result of substantiated breaches of
136、Ericssons Code of Business Ethics.Each correc-tive action represents a unique individual meaning the total of actions shown here cannot be directly compared to the number of substantiated cases shown above,as each case may involve several individuals.An individual can be subject to several correctiv
137、e actions but is only counted once in these statistics,with the most severe consequent deter-mining classification in the above presentation.7Ericsson 20242024 highlights GovernanceRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility Reportbreache
138、s of the Code of Business Ethics,or suitable for handling without an investiga-tion.633(582)of the reported concerns not referred for investigation were referred to other functions,such as the human resource and sourcing departments,to be addressed in accordance with their processes.During the year,
139、61(91)cases were concluded and found to be substantiated.At year-end,49(78)cases were still under investigation.This fig-ure includes cases reported both in 2024 and in 2023.More details are available in section G1 of this report,including reported cases broken down by category.During the year,196(2
140、01)corrective and disciplinary actions were taken in connection with investigations by Corporate and Government Investigations.82(112)of these actions resulted in termina-tions and 60(58)in written warnings.For further information on compliance-related matters,see page 20 of the Financial Report,pag
141、es 45 of the Corporate Govern-ance Report and section G1 of this report.Third-party management and supplier audits Ericsson has continued to improve its third-party vetting and oversight with the aim to ensure that it only works with parties that meet its expectation of zero tolerance for bribery an
142、d corruption.Through the global Third-Party Management Program,Ericsson identifies and mitigates corruption and integrity-related risks in its third-party rela-tionships.Business Partner Review Boards,comprised of senior business leaders guided by compliance professionals,evaluate third parties with
143、 higher risk,approve or reject interactions and monitor the risk landscape in the geographies where Ericsson conducts business.The Third-Party Management Program works with the business to obtain transactional assurance and helps to ensure compliant payments.Ericsson has a range of approaches to ass
144、ess and manage risks of third parties,including audits of suppliers.79(123)audits based on the criteria in Ericssons Code of Conduct for Business Partners were con-ducted in 2024.Ericsson uses a risk-based approach to make the yearly audit selection.The inherent risk is based on factors such as coun
145、try,type of product and service supplied,time since the last audit and purchase volume.A third-party service firm conducts the audits.Critical nonconformities were identified at 3%(1%)of the audited suppliers,with all concerning health and safety standards and management.Ericsson also conducted 14(1
146、9)Contract Compliance audits,performed by internal certified auditors.No critical nonconformities were identified at these audits.Each audit is seen as an opportunity for improvement and corrective action plans are established together with suppliers to address noncon-formities.Out of the nonconform
147、ities iden-tified at the Code of Conduct audits,84%(79%)had been addressed by corrective actions within predetermined timeframes.The corresponding figure for Contract Com-pliance audits was 76%(65%).In addition to these audits,Ericsson may also,through a third-party with forensic expertise,perform t
148、argeted audits of a suppliers financial records to address ABC-related risks.During 2024,such audits were performed on 13 suppliers.Interactions with governmental authoritiesEricsson is and has been involved in legal pro-ceedings involving governmental authorities in different jurisdictions.Further
149、information about current proceedings is included in the Financial Report on page 2223.Data privacy and cybersecurity Ericsson has continued to execute its security and data privacy strategies with the goal to strengthen its operational and portfolio resilience.For further information on these topic
150、s,see pages 67 of the Corporate Governance Report.Political engagement and advocacy Ericsson has continued to advocate for poli-cies that encourage and incentivize the digi-tal ecosystem to deploy and use advanced connectivity to support the digitalization of industry and society.Ericsson acts as a
151、trusted partner for policy makers,sharing its expertise and knowledge to address policy dilemmas and opportunities.All material policy-influencing interactions with public officials are documented for internal audit purposes and declared according to local regulations and practices.The Company is an
152、 active member of industry organizations and partnerships that develop policies and thought leadership.Examples include the European Round Table,where Ericsson promotes advanced connec-tivity to enable digitization,productivity and competitiveness,and Digital Europe,where it drives climate and envir
153、onmental topics.Ericsson also contributed to an international training program,ICT Regulation Policy and Practice,commissioned by the Swedish International Development Cooperation Agency.Board of DirectorsStockholm,February 26,2025Telefonaktiebolaget LM Ericsson(publ)Org.no.556016-02808Ericsson 2024
154、2024 highlights GovernanceRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportSustainability statements General disclosuresGeneral disclosures10S SocialS1 Own workforce34S2 Workers in the value chain40S3 Affected communities44S4 Consumers a
155、nd end users47AppendixIOther metrics55IIData points from other EU legislations57III Statement on due diligence59IVSignificant memberships60E EnvironmentE1 Climate change19E2 Pollution25E3 Water and marine resources26E4 Biodiversity and ecosystems27E5 Resource use and circular economy27E6 EU Taxonomy
156、 on sustainable activities29G GovernanceG1 Business conduct509Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportGeneral disclosures General basis for the preparation of the sustainability statements T
157、his Sustainability and Corporate Responsibility Report(the report,this report),published on February 27,2025,constitutes Ericssons annual statutory sustainability statements and contains information about mate-rial environmental,social and governance(ESG)related impacts,risks and opportunities,as we
158、ll as governance and policies,management approaches,metrics and targets relevant to these matters.Unless otherwise stated,the information and data provided pertain to Ericssons fiscal year,which is January 1 to December 31.Reporting scope and boundaries The report has been prepared as a consolidated
159、 report for the Group,which is made up of the parent company Telefonaktiebolaget LM Ericsson and its subsidiaries as presented in note P8 to the parent companys financial state-ments.The report does not include environmental and social data related to associated companies or joint ventures over whic
160、h Ericsson does not exercise operational control.The report also contains disclosures related to Ericssons upstream and downstream value chain including suppliers,vendors,customers and other business partners.There are inherent uncertainties to the completeness,accuracy and verifiability of this inf
161、ormation,as it relates to performance and activities that are beyond the Companys direct influence and control.Reporting principles and frameworksThe report has been prepared in accordance with the Global Reporting Initiative(GRI)standards.Ericsson has,in preparing the report,applied the reporting p
162、rinciples prescribed in the standard GRI 1:Foundation(2021).The report also includes climate-related disclosures included in the recom-mendations of the Taskforce on Climate-Related Financial Disclosures(TCFD)as well as relevant disclosures in applicable Sustainability Accounting Standards Board(SAS
163、B)standards.Ericsson has begun aligning its sus-tainability-related disclosures to coming regulatory requirements in the European Union.A list of material data points derived from other EU legislations is included in Appendix II.As a supplement to the report,an ESG reporting reference index is publi
164、shed on the ESG section of the Investor Relations pages on Ericssons website.This index includes the GRI content index.Disclosures in relation to specific circumstancesTime horizonsFor the purpose of this report,Ericsson defined short-,medium-,and long-term time horizons as up to 2025(1 year),2025-2
165、030(5 years)and beyond 2030(more than 5 years),respectively.This applies primarily to the analysis of climate scenarios as presented in section E1.Sources of estimation and outcome uncertainties,including value chain informationThe report contains quantitative information subject to high levels of m
166、eas-urement uncertainty and/or reliance on value chain information derived from indirect sources.Where a data point disclosed in this report contains significant measurement uncertainty,or is derived from proxy data,this is explained in a footnote to that data point.Ericsson is continuously working
167、to refine its measurement and data collection methodologies to improve the accuracy of its ESG disclosures.The report also contains forward-looking information about potential sustainability-related impacts,risks and opportunities.This information is also subject to high levels of uncertainty.Change
168、s in the preparation of information and reporting errors in previous periodsDuring 2024,Ericsson revised several of its sustainability reporting steering documents to align them with emerging statutory reporting requirements.As part of this process,measurement methodologies related to energy consump
169、tion and waste generation in own operations have been revised.Ericsson has agreements with local utility companies to provide excess heat from data centers in exchange for district cooling.In previous years,these arrangements were not reflected in the information about energy con-sumption in own ope
170、rations as presented in section E1.As of 2024,Ericsson includes the gross district cooling received in such arrangements in reported energy figures,but has not restated past years information due to limitations in data availability.These changes in methodology have increased total district cooling c
171、onsumption reported by about 100%.Since no restatements of previous years figures have been made,there are limitations in the comparability between values for 2024 and the previous years.End-of-life electrical and electronic equipment from Ericssons own operations is sometimes handled through Ericss
172、ons own Product Take-Back scheme.As of 2024,the end-of-life equipment that is collected from Ericssons facilities is reported as waste from Ericssons own operations in section E5.This change in methodology has increased the total weight of waste reported by about 70%.Since no restatements of previou
173、s years figures have been made,there are limitations in the comparability between values for 2024 and the previous years.When reviewing its reporting principles for estimating downstream Scope 3 greenhouse gas(GHG)emissions from sold products,Ericsson iden-tified that energy consumption from certain
174、 products sold in 2023,and used to estimate these emissions,had been overestimated.The value for emis-sions in this category for the year 2023 has therefore been restated.Restated metricsAfter restatementsPrior to restatements(metric tons of CO2e)Section in this report20232023Scope 3 GHG emissions f
175、rom sold productsE129,658,20035,057,200Incorporation by reference Information about policies and actions relevant to information and cyber security,which is a matter associated with material impacts,risks and opportunities,is included in the Corporate Governance Report and is incorporated by referen
176、ce in this report.10Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportGeneral disclosures,contd.Business model,strategy and value chainBusiness model Ericsson is a multinational company headquartered
177、in Stockholm,Sweden,and serves customers in more than 175 countries.Ericsson sells hardware,software and services for information and communications technology(ICT)communication infrastructure.The business consists of three primary seg-ments,also referred to as business areas,as well as an additiona
178、l fourth segment,which is primarily engaged in outsourced broadcasting services.Ericsson has about 94(100)thousand employees in about 110 countries,of which 38(39)thousand are in Europe and Central Asia,23(23)thou-sand in South Asia,14(16)thousand in East Asia and the Pacific,10(11)thousand in North
179、 America,6(7)thousand in Latin America and Caribbean,2(3)thousand in Middle East and North Africa and 1(1)thousand in Sub-Saharan Africa.Business segmentsSegment Networks develops and deploys mobile network infrastructure to communications service providers,who use the networks to provide tel-ecommu
180、nication services to consumers and businesses.Segment Networks offering includes network hardware,such as radios,basebands and anten-nas,software to operate the hardware equipment and related services such as network deployment and maintenance.In 2024,Segment Networks made up 64%(65%)of the Groups t
181、otal net sales.Segment Cloud Software and Services provides digital solutions to commu-nications service providers to operate and optimize the performance of their networks,with a focus on helping customers transition to cloud operations and automated networks.The segment also manages networks on be
182、half of communications service provider customers.In 2024,Segment Cloud Software and Services made up 25%(24%)of the Groups total net sales.Segment Enterprise consists of two business areas:Global Communi-cations Platform and Enterprise Wireless Solutions.The former includes the Vonage business acqu
183、ired in 2021 and primarily provides cloud-based com-munication solutions to enterprises,which enables businesses to optimize processes,drive innovation and accelerate digitalization.It also has a large developer community.Enterprise Wireless Solutions develops and delivers network infrastructure for
184、 private networks and wireless wide area networks(WAN)to enterprises.Segment Enterprises customers are private and public enterprises across various industries.In 2024,Segment Enterprise made up 10%(10%)of the Groups total net sales.There is further information about the segments in note B1,and abou
185、t the net sales mix broken down by hardware,software and services,in note B2 to the consolidated financial statements.Ericsson does not generate revenue from the exploration,mining,extraction,production,processing,storage,refining or distribution includ-ing transportation and trade of fossil fuels,o
186、r from chemicals production,controversial weapons or the cultivation and production of tobacco.Strategy and sustainability-related goals As regards Ericssons sustainability-related goals,one key objective is the transition to Net Zero GHG emissions across the Companys value chain.As the energy consu
187、med by the network equipment deployed by customers is the cause of over 90%of Ericssons total value chain carbon footprint,continuously improving the portfolios energy performance is a key component in this transition.Addressing supply chain emissions embodied in the network hardware sold to custome
188、rs through,for example product design,substitution of carbon-intense materials and supplier engagement on emission reduction measures is also an important decarbonization lever.However,to be able to reach Net Zero emissions across the value chain,Ericssons customers and suppliers must transition to
189、using emissions-free electricity to power the networks,a challenge that is largely beyond Ericssons direct control.Another challenge relates to the health and safety of the people working on behalf of Ericsson.Most of the major accidents recorded in recent years have occurred within field service op
190、erations when Ericssons employees and employees of field service suppliers perform network deployment and main-tenance work.The fatalities occurring in recent years have almost exclusively involved employees of field services suppliers,with the most common causes being accidents during field work at
191、 base station sites and driving accidents.Ericsson has a target to have zero fatalities and lost workday incidents among its workforce and employees of field service suppliers.As an ICT company with a strategic goal of sustaining technology leader-ship in its industry,Ericsson relies on a highly ski
192、lled workforce,especially in the fields of science,technology,engineering and mathematics.To ensure that Ericsson retains access to an innovative and impactful workforce it uses merit-based hiring approach that values employees with a diversity of experiences,perspectives and skillsets.Ericsson beli
193、eves that this enables well-rounded and informed decisions and,therefore,better outcomes.A key goal relates to driving sustainable organizational health where Ericsson aims to remove barriers that appear to have prevented equal opportunities for all,as detailed in the following sections regarding Eq
194、ual Treatment and Opportunities.The work during the last several years to strengthen Ericssons Ethics and Compliance Program has significantly improved Ericssons ability to identify and address actual and alleged misconduct as incidents arise,and ensure they are effectively remediated in a clear and
195、 consistent manner.Looking ahead,as the business evolves,Ericsson will continue to work to improve on its anti-corruption and anti-bribery controls and embed them into its operations and managerial decisions.At the same time,Ericsson will also continue the comprehensive testing of the Ethics and Com
196、pliance Programs effectiveness,which includes clear expectations for management to understand and address testing results and process adherence within their areas of responsibility.These measures will further strengthen the foundation for a well-integrated and self-sustaining Ethics and Compliance P
197、rogram.Value chainAs with many other multinational companies,Ericssons value chain is complex with several layers and interconnections,creating challenges for visibility and traceability beyond the first tier of suppliers and customers.In 2024,the Company had about 17,000 active direct suppliers,of
198、which about 200 are providers of materials and components used in Ericssons hardware.In contrast,Ericsson has a fairly concentrated customer base.Global electronics manufacturingDirect suppliersOwn operationsDirect customersEnd users andconsumersTraders andexhangesElectronic compo-nents and hardware
199、 manufacturingCommunications service providersService usersPrivate and public enterprisesDevelopers and programmersField servicesIT and softwareCloud processing and storage Networks Cloud Software and Services Enterprise Wireless Solutions and Global Communications PlatformSmelters andrefinersRaw ma
200、terials11Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportGeneral disclosures,contd.Manufacturing sites and supply chain hubs115161817311108121952420Manufacturing sitesHubsLocations Ericsson manufact
201、uring site Supply1.Bors7.Hsinchu City13.Suzhou(2)19.Tlaxcala Third-party manufacturing site Component2.Dallas8.Kuala Lumpur14.Tainan City20.Venlo3.Dubai9.Nanjing15.Tallinn21.Wuxi4.Duisburg10.Penang16.Tczew5.Guadalajara11.Pune17.Timisoara6.Hong Kong12.So Jos dos Campos18.Tiszajvros921137146 Out of a
202、base of more than 500 customers,the 10 largest customers,mainly communications service providers,accounted for 44%(43%)of net sales.The value chain illustration on the previous page is intended to give an overview of Ericssons extended value chain but does not aim to capture all its features.Key val
203、ue chain actors relevant for understanding Ericssons material sustainability-related impacts,risks and opportunities,especially those related to Ericssons products and services,are included,but the illus-tration should not be interpreted as exhaustive.Business support services not unique to Ericsson
204、s business model or value chain,such as facility pro-viders and real estate services,logistic providers,consultancies and suppliers of external workforce are not included for the sake of simplicity.Electronics manufacturing value chainIn simple terms,the global electronics manufacturing value chain
205、begins with the extraction of natural resources used in electronic hardware,which are then sold and transported to smelters and refiners for processing.The refined materials are traded and exchanged and subsequently used in the manufacturing of parts and components,which are assembled into finished
206、products.Ericssons regional hubs consolidate material from component suppliers and serve as focal points of supply to production sites.Manufacturing and assembly of Ericssons communication equipment takes place both at the Companys own manufacturing sites and at third-party electronics manu-facturin
207、g suppliers.In 2024,78%(86%)of the electronic equipment pro-duced was manufactured by contracted electronics manufacturing suppliers.Ericsson operates supply hubs,which are regional logistics and distribution centers serving customers with the collection of deliveries from production units and suppl
208、iers,warehousing,co-packing,order configuration and transport.The graphic below shows where Ericssons own manufacturing sites,primary third-party electronic manufacturing suppliers,and component and supply hubs are located.Other significant elements of the upstream value chainEricsson also purchases
209、 field services from suppliers,which deliver network deployment and maintenance services at customer sites.To a large extent,IT including software,as well as cloud processing and storage capacity,are sourced externally.Downstream value chainIn terms of revenue,the communications service providers co
210、nstitute Ericssons most significant customer group.They,in turn,deliver connectivity services in the form of mobile broadband and voice calls to end users,such as consumers and businesses,using the network infrastructure Ericsson has sold to them.Segment Enterprises customers consist of private and
211、public enterprises in various industries,to whom the Company primarily provides private network solutions,and whose end users are either their employees or their consumer customers.Application developers and programmers are emerging as important actors in the mobile communication ecosystem,as the ca
212、pabilities of programmable 5G networks are exposed to cater to the specific needs of end users and businesses,enabling new revenue streams for communications service providers.12Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Cor
213、porate Responsibility ReportThe role of the Board of Directors and executive managementGovernance of material sustainability-related impacts,risks and opportuni-ties follows Ericssons overall governance structure.The Board of Directors,executive management team and managements respective roles and r
214、esponsibilities regarding these matters are described below.Board of Directors The current Board of Directors(the Board”)consists of nine directors elected by the shareholders at the Annual General Meeting 2024 for the period until the close of the Annual General Meeting 2025,eight of whom are non-e
215、xecutive directors,and the President and CEO,who is an executive director.Carolina Dybeck Happe resigned from the Board on September 23,2024,following her appointment to a new role.It also includes three employee representatives appointed by the unions in Sweden.The unions also appoint three deputy
216、employee representatives.Information about each Board members principal work experience is included on pages 1518 in the Corporate Governance Report.The Board oversees Ericssons strategy,peri-odically receives reports on developments and performance of sustainability-related targets and approves the
217、 sustainability statements as part of the Companys statutory Annual Report.Board committees In addition to the principal oversight exercised by the Board,each of the committees of the Board is involved in overseeing specific aspects of Ericssons strategy for sustainability and corporate responsibili
218、ty.The Audit and Compliance Committee oversees Ericssons Ethics and Compliance Program and whistleblower procedures,and it regularly receives updates on compliance-related matters from the Chief Legal Officer and the Head of Compliance Office and Investigations.It also reviews the Groups handling of
219、 information and cybersecurity,and data privacy matters,as well as overseeing its sustainability and ESG reporting practices.The Finance Committee oversees the consideration of environmental sustainability in external funding through the application of Ericssons Green Financing Framework.As part of
220、its role to prepare and propose rewards and compensation policies that attract and motivate senior management and align with the Companys strategy,the Remuneration Committee considers the appropriate inclusion of environmental,social and business conduct cri-teria in variable compensation plans,and
221、monitors the performance of such criteria.Part of the Enterprise Business and Technology Committees role of monitoring the Companys technology ecosystem,relationships and part-nerships involves reviewing matters related to environmental sustainability,such as energy-related matters in Ericssons prod
222、uct portfolio.President and CEO and the executive managementExecutive management(the Executive Team)consists of the President and CEO,the Executive Vice President and 15 senior vice presidents,of whom four(24%)are women and 13(76%)are men.It is responsible for Group-wide sustainability-related targe
223、ts and regularly receives reports on the implementation of strategies and progress made on targets and milestones.Its members are also part of dedicated steering boards and committees that provide more frequent strategic guidance and oversight of sustainability and corporate responsibility-related m
224、atters.Steering boards and committeesChaired byBusiness Risk Committee Chief Financial Officer and Chief Legal OfficerGroup Compliance CommitteeChief Legal OfficerGroup Enterprise Security and Privacy BoardChief Financial OfficerProduct Security BoardChief Technology OfficerGlobal People Leadership
225、TeamChief People OfficerGlobal Occupational Health and Safety BoardChief Marketing and Communications OfficerEricssons President and CEO is a member of the European Round Table,where Ericsson promotes advanced connectivity to enable digitization,pro-ductivity and competitiveness.Ericssons Chief Tech
226、nology Officer is a com-missioner on the ITU/UNESCO1)Broadband Commission for Sustainable Development,which develops and advocates policy recommendations to advance broadband connectivity and digital inclusion.Risk managementEricsson has established a Group Business Risk Committee,which is co-chaire
227、d by the Chief Financial Officer and the Chief Legal Officer and serves as a risk escalation and oversight forum that strengthens managements ability to take decisions on how to manage material risks on a Group level.The Business Risk Committee applies a heightened scrutiny approach when evaluating
228、and mitigating these types of risks,and the Company implements various actions to address these risks,ranging from enhanced contractual protections,changes to the scope or nature of operations or decisions to responsibly exit relevant jurisdictions or significant customer relationships.Operational m
229、anagementOperational responsibility for managing,developing and implementing strategies,policies,steering documents,targets and processes related to environmental sustainability,human rights,community impacts and occu-pational health and safety sits with specialized units reporting to the Chief Mark
230、eting and Communications Officer.Strategy related to Ericssons own workforce is developed by the Group People Leadership Team,reporting to the Chief People Officer.Ericssons Compliance Office,reporting to the Chief President and CEOSustainability-related steering boards and committeesAudit and Compl
231、iance Committee Finance Committee Remuneration Committee Enterprise Business and Technology CommitteeExecutive managementBoard of DirectorsMarket areasGroup functionsBusiness areasComposition of the Board of Directors Representation of Men and WomenIndependence3)%WomenMenIndependentNon-independentDi
232、rectors elected by the shareholders1)22786733Employee representatives2)33670100Total257550501)Based on the number of directors as of December 31,2024.2)Not counting deputy employee representatives.3)Based on the definition in the Swedish Corporate Governance Code.General disclosures,contd.1)Internat
233、ional Telecommunication Union/United Nations Educational,Scientific and Cultural Organization.13Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportLegal Officer,oversees global compliance matters and s
234、upports fostering a culture of integrity and ethical business practices.This office manages key compliance areas,including adherence to the Code of Business Ethics,anti-corruption,fraud and conflict of interest.Additionally,it offers support to local operations within each of the business areas and
235、regional sales organizations,ensuring alignment with corporate values and compliance standards,and integrating compliance into daily business operations.Integration of sustainability considerations in supply chain management is the responsibility of Ericssons Group Sourcing department,which reports
236、to the Senior Vice President for a Group-wide function responsible for global operations.Responsibility for executing strategies and implementing processes lies with the Group functions,business areas and regional sales areas,often in cross-functional collaborations.Management systemsEricsson has a
237、global management system,further described on page 19 of the Corporate Governance Report.The Companys environmental,health and safety and information security management systems are certified to ISO 14001,ISO 45001 and ISO 27001,respectively.Identification and treatment of environmental,social and b
238、usiness-con-duct-related risks is an integrated part of the Enterprise Risk Management(ERM)framework,which is a part of the Groups management system.There are also dedicated risk management frameworks aligned with the ERM framework that cover specific areas of risks such as anti-corruption,environme
239、nt,health and safety and information security.Collective knowledge and skills on sustainability mattersThe Board and the Executive Team have access to internal subject matter experts on matters such as climate change,energy and resource circularity,social matters such as human rights,health and safe
240、ty,equal treatment and opportunities,as well as business conduct matters such as anti-bribery and corruption.In 2024,a targeted Board training program was started,focusing on,among other things,the evolving regulatory landscape concerning sustain-ability matters,including regulation of both disclosu
241、res and due diligence requirements.Information provided to and sustainability matters addressed by the Board and executive managementSustainability matters addressed by the Board The Board considers cybersecurity risks as part of its risk oversight function and has delegated the specific oversight o
242、f cybersecurity risks to the Audit and Compliance Committee(ACC),which received regular briefings from the Chief Security Officer on cybersecurity matters.The ACC also received regular reporting on compliance-related matters from the Chief Legal Officer and the Head of Compliance Office and Investig
243、ations,including matters related to anti-bribery and corruption.The Head of Compliance Office and Investigations also regularly reported to the ACC on the effective opera-tion of the Ethics and Compliance Program,including actual or suspected serious Code of Business Ethics violations,insights from
244、investigations out-comes and remediation activities,the identification of patterns of failures and emerging risks and challenges in the legal and regulatory environment.The ACC was also briefed twice during the year about the developments of Ericssons sustainability disclosure practices.Sustainabili
245、ty matters addressed by executive management In connection with previously approved Net Zero targets,a group of senior managers reviewed the proposal for a more detailed Net Zero transition plan,which was subsequently approved by the Executive Team.The Global Occupational Health and Safety Board cha
246、ired by the Chief Marketing and Communications Officer convened several times during the year to review fatalities and major incidents.The Chief People Officer received regular updates on the progress on the Companys goal to promote a diverse compo-sition of employees and presented these results to
247、the Executive Team.The Business Risk Committee met on a regular basis to address topics of material risk including matters related to sales opportunities with potential heightened human rights-related risks.Executive management received updates on several occasions on ethics and compliance-related m
248、atters from the Chief Legal Officer and the Head of Compliance Office and Investigations,including matters related to anti-bribery and corruption and the Ethics and Compliance Program.Group-wide policies relevant to sustainability mattersThe policy documents below constitute the foundational steerin
249、g documents for Ericssons management of material sustainability-related impacts,risks and opportunities.The Code of Business Ethics is approved by the Board of Directors and the Code of Conduct for Business Partners and Group-wide policies are approved by the President and CEO.Code of Business Ethic
250、sEricssons Code of Business Ethics is a core governance pillar within the Company that sets out the Companys expectations,principles and require-ments for employees as they conduct business.It provides the framework for ethical decision-making,and guides employees in making decisions and managing ri
251、sk as they engage with colleagues,customers,partners and other stakeholders.It is available in over 40 languages on the Companys website and intranet.Specific provisions of the Code of Business Ethics relevant to material sustainability-related impacts,risks and opportunities are included in the sub
252、sections of the sustainability statements.Code of Conduct for Business PartnersThe Code of Conduct for Business Partners outlines expectations on Ericssons business partners,including its suppliers,in areas such as business ethics and anti-corruption,labor and human rights,occupational health and sa
253、fety,the environment and climate change.It is based on the Responsible Business Alliance Code of Conduct and the UN Global Compacts 10 principles but also includes Ericsson-specific requirements.The Code is part of standard supplier contracts and is a binding requirement for all business partners.It
254、 is available in several languages on the Companys website.Business partners are expected to ensure that their suppliers and subcon-tractors also comply with the Code,or other agreed equivalent standards.Since this Code is part of standard supplier contracts,suppliers failing to adhere to it may hav
255、e their contracts terminated.Specific provisions of the Code of Conduct relevant to material sustainability-related impacts,risks and opportunities are included in the relevant subsections of the sustainability statements.Sustainability PolicyThe Sustainability Policy sets out the Companys foundatio
256、nal principles on environmental sustainability.The policy outlines Ericssons aim to use life-cycle analysis methodology to determine the Companys significant environmental aspects as well as to assess the environmental impacts of information and communications technology,reduce the negative environ-
257、mental impact of its own operations and take a precautionary approach to environmental challenges,applying design to ensure continuous environ-mental improvements with a life-cycle perspective on its portfolio.The policy also addresses considerations for adequate sustainability requirements in the s
258、upply chain and the Companys aim of increasing the knowledge and awareness of sustainability amongst its employees.Business and human rights statementThe statement clarifies Ericssons commitments to human rights,and how those commitments are expected to be implemented in practice.It states that Eric
259、sson is committed to respecting internationally recognized human rights set out in the United Nations International Bill of Human Rights and the International Labor Organizations Declaration on Fundamental Principles and Rights at Work.In furtherance of this,Ericsson aims to inte-grate the UN Guidin
260、g Principles on Business and Human Rights(UNGPs)throughout its operations.The statement articulates that Ericsson shall con-duct human rights due diligence,which among other elements includes iden-tifying and assessing salient human rights risks and impacts,taking action to avoid causing or contribu
261、ting to adverse human rights impacts,establishing and maintaining effective grievance mechanisms,providing for access to remedy,as well as communicating and consulting with employees and other stakeholders,in order to identify and assess specific human rights risks and to further continuous improvem
262、ent of Ericssons efforts to respect human rights.General disclosures,contd.14Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportIntegration of sustainability-related performance in incentive schemesSus
263、tainability-related performance criteria are included in the share-based long-term variable compensation to the Executive Team and their direct reports.The features of the long-term variable compensation program are described in detail in note G3 to the consolidated financial statements.Five percent
264、 of the performance criteria is based on the achieved annual GHG emissions reductions in Scope 1,Scope 2 and the Business travel emissions category within Scope 3,which is line with the Companys trajectory toward its 2030 emissions reduction target.An additional 5%of the weight of the performance cr
265、iteria is based on the annual achievement level of increasing the share of women managers within Ericsson through merit-based selection processes in compliance with anti-discrimination laws,as discussed in the following sections regarding Equal Treatment and Opportunities.Ericsson also has annual ca
266、sh-based short-term variable compensation plans that incorporate business conduct-related criteria.Short-term variable compensation to the Executive Team and their direct reports contains cri-teria tied to compliance training,third-party management,allegation man-agement and other components of the
267、Companys Ethics and Compliance Program.Underperformance against these criteria can reduce short-term variable compensation by up to 100%.In addition,all employees who are eligible for a short-term variable compensation payout may be denied all or part of the entitlement if they act in breach of Eric
268、ssons Code of Business Ethics.The Remuneration Committee reviews and prepares,for resolution by the Board,proposals to the Annual General Meeting on the long-term variable compensation program and similar equity arrangements,and approves target levels of short-term variable compensation payouts for
269、the Executive Team except the President and CEO.There is further information about Ericssons remuneration practices in the Remuneration Report.Statement on due diligenceAppendix III contains references to where in the sustainability statements Ericsson describes how core elements of due diligence fo
270、r people and the environment have been applied.Risk management and internal control over sustainability reportingDuring 2024,Ericsson initiated work to strengthen its risk management and internal control over sustainability reporting as part of the work to prepare for emerging statutory disclosure r
271、equirements in Europe.This work has been centered around three main workstreams:1.Revision of the Companys sustainability-related reporting principles and steering documents.2.Reviews of selected reporting processes by the internal control function to assess reporting risks and propose mitigating me
272、asures.The main risks identified stem from the complexity of several of the metrics included in the sustainability statements,combined with reliance on a multitude of data sets,some of which,in turn,rely on external sources over which Ericsson has limited ability to verify their accuracy and complet
273、eness.3.Implementation of dedicated reporting software to reduce manual handling of complex datasets originating from several source systems.Building on the progress made in 2024,focus going forward will be on uti-lizing IT for automatization of the reporting process and design of related controls,a
274、s well as introducing self-assessments and independent testing of controls for metrics with high complexity and risk,such as those dependent on value chain information.General disclosures,contd.15Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSust
275、ainability and Corporate Responsibility ReportGeneral disclosures,contd.Interests and views of stakeholdersEricsson continuously engages with stakeholders that are or potentially could be affected by the Companys activities to understand their inter-ests and views about sustainability matters,includ
276、ing impacts that are relevant to them.Ericsson also engages with other stakeholder groups in its eco system to understand their views and interest of Ericsson and its sustainability-related impacts,risks and opportunities.The tables below contain examples of stakeholder engagements taking place over
277、 the past year,and the primary topics covered.The views of stakeholders inform Ericssons due diligence process and the materiality assessment,which is described in more detail on the following pages.Affected stakeholdersStakeholder groupEngagement channelsMatters in focusOwn workforceEngagement take
278、s place both directly and indirectly through:Company-wide annual employee surveys.Employee resource groups,open to all employees.Dialogues with unions in countries where such exist.Targeted country visits,in 2024 to Ericssons operationsin India.Employee satisfaction and perceptions about the working
279、 environment andcompany culture.Health,safety and well-being of the workforce.Equal treatment and opportunities.Working conditions,remuneration and benefits.Workers in the value chainEngagement takes place both directly and indirectly through:Supplier audits incorporating worker interviews.Participa
280、tion in organizations that can be regarded as proxies for value chain workers,especially regarding human and labor rights,such as the Responsible Business Alliance(RBA)and the Shift Business Learning Program.Working conditions and labor rights.Health and safety of workers.Affected communities,consum
281、ers and end usersEngagement takes place primarily through participation in organizations that can be regarded as proxies for these groups of stakeholders,such as:Global Network Initiative.UN B-Tech Project.Business Network on Civic Freedoms and Human RightsDefenders.Freedom of expression and right t
282、o privacy in the ICT sector.Application of the UNGPs in the ICT industry.Protection of civic freedoms and human rights defenders.Operating in conflict-affected and high-risk countries.Other stakeholdersStakeholder groupExamples of engagementsMatters in focusCustomers Individual customer meetings and
283、 dialogues.Customer ESG assessments.Joint research and development.Portfolio energy performance and circularity.Product security and quality features.Role of industry and digitalization in society.Supplier management with a focus on working conditions,labor rights andhealth and safety.Investors anda
284、nalysts Individual investor dialogues.Analyst inquiries and meetings.ESG ratings and rankings.Business ethics and anti-corruption.Corporate governance.Portfolio energy performance and circularity.Supplier management with a focus on labor rights and working conditions.Suppliers Supplier assessments a
285、nd audits.Supplier training,seminars,and workshops.Dialogues as part of Ericssons supplier climateengagement target.Business ethics and anti-corruption.Labor rights and working conditions,including occupational health and safety.Conflict minerals,and materials and product traceability.Ericssons envi
286、ronmental and climate-related requirements.Civil society,international institutions,and NGOs Partnerships with-UNICEF/UNHCR/UN World Food Programme.-UN B-tech Project.-World Health Organization.-ITU Broadband Commission for Sustainable Development.-Exponential Roadmap Initiative.-Global Child Forum.
287、Use of information and communications technology(ICT)in mitigating climate change.Environmental and human rights impacts in the ICT sector.Digital inclusion,education,and connectivity.Corporate donations,volunteering and humanitarian relief efforts.Radio waves and health.Academia andbusiness Joint r
288、esearch and research funding.Development of technology curriculum.Participation in standardization bodies.Membership of industry associations.Use of ICT technology in mitigating climate change.Radio waves and health.Environmental impacts of the ICT sector.16Ericsson 2024Sustainability statementsRemu
289、neration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportProcesses to identify and assess material impacts,risks and opportunitiesEricsson undertook its most recent materiality assessment in 2023 to update its understanding of its material sustainab
290、ility-related impacts,risks and opportunities.The scope of the materiality assessment was the operations of the Group and its upstream and downstream value chain,with a focus on the electronics manufacturing supply chain when analyzing upstream impacts.The geographical scope of the assessment was gl
291、obal,but with a focus on the countries and regions in which the Company has a considerable number of employees,suppliers and customers,also factoring in the Companys pres-ence in geographies with known heightened risks of human rights violations and substandard working conditions.The assessment was
292、carried out in the following main phases:General disclosures,contd.Desktop research and benchmarking Existing due diligence processes General stakeholder feedback Internal subject matter experts Reference group of senior leaders External subject matter experts in human and labor rights Executive man
293、age-ment team Board Audit and Compliance Committee1 Defining universe of sustainability matters2 Initial assessment and hypotheses 3 Internal stakeholdervalidation 4 External stakeholdervalidation 5 Review and approval 1 The universe of environmental,social and governance(ESG)matters assessed was ba
294、sed on those included in widely used ESG reporting frameworks,supplemented by input from benchmarking of matters included in industry peers and customers external ESG disclosures,as well as matters covered in the assessment methodologies of a select number of ESG rating providers.2 After scoping out
295、 matters with no apparent relation to Ericsson and its value chain,the remaining ones were analyzed in more detail to identify actual and potential negative and positive impacts,as well as actual and potential financially material risks and opportunities.Ericssons current understanding of impacts,ri
296、sks and opportunities,based on the Companys peer-reviewed research into the environmental impacts of its products and solutions,existing human rights due diligence processes and risk management framework,as well as ongoing stake-holder engagements,were incorporated in this phase of the assessment.Ad
297、ditional sources of information used included,but were not limited to,external scientific research,industry and non-governmental organization reports,third-party ESG risk intelligence tools,results of employee surveys,results from supplier audits,internal risk assessments and information about cases
298、 reported via the Ericsson Compliance Line.The analysis incorporated the results of previously conducted climate scenario analyses.The methodology and results of these are further detailed in Section E1.Negative impacts were assessed based on their severity(scale,scope and irremediable character)and
299、 positive impacts were assessed based on their scale and scope.For potential impacts,the likelihood of the impact occurring was also considered.When assessing impacts down-stream in the value chain,in relation to customers and end users,impacts with a connection to Ericssons portfolio were considere
300、d.Impacts occurring within customers operations or value chains but with no or minimal connection to Ericssons products,solutions or technology were not considered relevant for the assessment.While numerical scales were used to quantify scale,scope and irremediability in the initial stages of the as
301、sessment of all impacts,the thresholds applied for determining if a matter should be considered material or not were largely qualitative and involved varying degrees of subjective and professional judgement.Risks and opportunities were assessed based on their magnitude and likelihood of occurrence.W
302、here relevant,existing conclusions and thresholds in Ericssons Enterprise Risk Management process were factored into the assessment.However,these factors also entail significant discretion and judgment by the Company3 The preliminary results were reviewed with internal subject matter experts and bus
303、iness representatives to validate the assessment of materiality and embed understanding of impacts,risks and opportunities across the Company.A group of senior managers representing various parts of the Group reviewed and preapproved the results.4 Subsequently,a not-for-profit organization with expe
304、rtise in human rights was consulted for a review of identified impacts related to human and labor rights.This review was intended to function as external subject matter expert input.While it is not an affected stakeholder,the organiza-tion had the opportunity to highlight impacts that affected stake
305、holders would expect to see analyzed and managed.This review did not result in any significant changes to the initial conclusions.5 The consolidated results were reviewed and approved by the Executive Team and the Audit and Compliance Committee of the Board of Directors.17Ericsson 2024Sustainability
306、 statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportMaterial impacts,risks and opportunities and their interaction with the strategy and business model The table below gives an overview of Ericssons material sustainability-relate
307、d impacts,risks and opportunities and where they occur,or may occur,in the value chain.While the assessment scope included risks and opportunities,these will need to be further analyzed and incorporated into other business processes to enable a more refined analysis of their potential financial impl
308、ications,and to ensure consistent treatment with other risk factors,going forward.More detailed descriptions of identified impacts,risks and opportunities,and Ericssons policies and actions to manage these can be found in the topic-specific sections of this report.General disclosures,contd.The prese
309、ntation above has been slightly revised to provide a clearer and more summarized overview of material impacts,risks and opportunities,but there have been no changes in the assessment results compared with the previous reporting period.The impacts that are most unique to Ericsson and its value chain
310、are socio-economic impacts of ICT and digital education,further described in section S3.Ericssons impacts as relates to freedom of expression and right to privacy are also different from many other companies,as they primarily derive from how potential misuse of the Companys technology could adversel
311、y affect end users rights,further described in section S4.Impact occursMaterial sustainability mattersUpstream,extended supply chainOwn operationsDownstream,customers and end usersPotential risks and opportunitiesDetails in sectionE EnvironmentClimate change and energy consumptionE1Air pollutionE2Su
312、bstances of concern and very high concernE2Water resourcesE3Natural resources and circularityE5S SocialTalent developmentS1Work-life balanceS1Health and safetyS1,S2Equal treatment and opportunitiesS1,S2Workers rights and working conditions S1,S2Forced and child laborS2Adequate housingS2Technology et
313、hicsS3Corporate citizenship and emergency responseS3Socioeconomic impacts of ICT and digital educationS3Freedom of expression and right to privacyS4Responsible marketingS4G GovernanceCorruption and briberyG1Anticompetitive behaviorG1Supplier relationships and payment termsG1Data privacy and cybersec
314、urityG1Political engagement and advocacyG118Ericsson 2024Sustainability statementsRemuneration ReportCorporate Governance ReportFinancial ReportSustainability and Corporate Responsibility ReportImpact occursMaterial sustainability mattersUpstream,extended supply chainOwn operationsDownstream,custome
315、rs and end usersPotential risks and opportunitiesClimate change and energy1)Ericsson Mobility Report 2021.2)Malmodin&Bergmark(2015),Exploring the effect of ICT solutions on GHG emissions in 2030,Atlantis PressMaterial impacts,risks and opportunitiesEricsson has identified material impacts,risks and
316、opportunities related to climate change upstream and downstream in its value chain and in its own operations.The information and communications technology(ICT)sector represents a relatively small share of global greenhouse gas(GHG)emis-sions,with emissions primarily being derived from the sectors en
317、ergy con-sumption.Currently,the vast majority of GHG emissions in Ericssons value chain,approximately 90%in recent years,occur downstream,primarily from electricity consumption in the use phase of sold products,mainly mobile communication networks sold to customers.Upstream emissions,which include b
318、oth resource extraction and processing,manufacturing activities and transportation represent around 10%of total value chain emissions,but this share is expected to increase in the medium to long term as more renewable energy is deployed and used in the downstream portion of the value chain,reducing
319、emissions from the use phase of sold products.While emissions from Ericssons direct operations(Scope 1 and 2)represent less than 1%of the total carbon footprint,they are still considered a material impact,as all sectors of the economy need to reduce emissions to reach global agreements on climate mi
320、tigation.With the rollout of each new generation of mobile network standards(2G,3G,4G and 5G),new equipment has been added,which over time has increased total energy consumption of mobile networks.The increases have been stable across each mobile generation.Ericssons own research1)shows that it is t
321、he installation of new equipment when deploying new generations of mobile networks that has driven the increased energy usage,reflected in increasing population coverage with multiple mobile generations.Data traffic impacts the capacity needed in mobile networks.However,the increase in energy use is
322、 less than the increase in data traffic.While the ICT sector must address its own carbon footprint,it can also play an important role in enabling other sectors in their decarbonization efforts.Many of the solutions needed in other sectors to reduce emissions,such as management systems and smart mete
323、rs in buildings,smart electrical grids,telematics,and storage and inventory management solutions in enterprises,are all dependent on ICT solutions and infrastructure to function.Ericssons own peer-reviewed 2015 research2)suggests that ICT solutions have the potential to enable decarbonization of up
324、to 15%in other sectors by 2030,and potentially even higher when including the enabling potential of 5G and the Internet of Things.In 2021,Ericsson analyzed potential climate-related risks and opportuni-ties using two different scenarios:Net Zero 2050 and Current Policies.The main conclusions from th
325、is analysis are presented below.A summary of the assessment methodology and assumptions under the two scenarios used is included at the end of this section.The results of the scenario analysis were incorporated into Ericssons materiality analysis when identifying material climate-related risks and o
326、pportunities.During 2025,Ericsson plans to conduct further assessments of physical climate-related hazards to further deepen its understanding of its exposure to such risks.Increased demand for energy-efficient networks(opportunity products and services)In the Net Zero 2050 scenario,both emission re
327、duction targets and higher energy prices drive further efforts by communications service providers to increase energy performance in mobile networks.The combination of these two factors creates opportunities for Ericsson to expand its offering of net-work energy performance solutions in the short,me
328、dium and long term.Enabling emission reductions in enterprise sectors(opportunity markets)As other more emission-intense sectors such as power and utilities,transport and manufacturing rapidly increase efforts to decarbonize in the Net Zero 2050 scenario,significant investments are made to achieve d
329、ecarbonization goals.Many of these investments,such as the deployment of smart grids and private networks,depend on ICT solutions,which provides significant opportunity for Ericsson to expand its connectivity offering to these sectors in the medium to long term.Increased demand for equipment with lo
330、wer embodied emissions(opportunity products and services)In the Net Zero 2050 scenario,the price of carbon emissions increases substantially.At the same time,Ericssons customers rapidly increase the share of renewable energy used to power the networks,meaning the rela-tive share of their upstream em
331、issions increases.To address these embodied,and increasingly costly,upstream emissions,demand for products made from less emission-intense materials and production processes,is expected to increase.This can mean new business opportunities for Ericsson in the medium to long term.Increased costs due t
332、o carbon emissions pricing(transition risk policy)In the Net Zero 2050 scenario,the price of carbon emissions increases,lead-ing to increased costs for high-emitting suppliers in Ericssons value chain in the medium to long term.This could mean increased costs of goods for Ericsson,which could affect
333、 profitability,assuming that upstream emissions stay the same and that costs cannot be passed on to Ericssons customers.Disruptions caused by severe weather events(acute physical risk)In the Current Policies scenario,the frequency and intensity of severe weather events,as well as coastal and riverine flooding,increases in the long term.This leads to heightened risks for business interruptions and
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