Environmental, social and governance (ESG) accounting

The following sustainability information is presented in accordance with Nasdaq's ESG Reporting Guide 2.0. issued in February 2020. As part of Icelandair's Annual and Sustainability report, it provides a comprehensive insight into the Company's approach to sustainability and should include all information to fulfill the Icelandic law (3/2006, 66. gr. d.) on non-financial reporting, as amended with reference to EU directive 2013/34 in year 2016.

Environment

Units 2023 2022 2021
E1 GhG Emissions
Total amount, in CO2 equivalents, for Scope 1 tCO2e 1,114,297 951,572 486,064
Total amount, in CO2 equivalents, for Scope 2 tCO2e 243 222 213
Total amount, in CO2 equivalents, for Scope 3 tCO2e 114 114 68
E2 Emissions Intensity
Total GhG emission per output scaling factor tCO2e per FTEs 306 313 233
tCO2e per passenger 0.26 0.26 0.33
Total CO2 emissions per scaling factor CO2 per OTK 0.76 0.77 0.93
Total non-GhG emissions per output scaling factor - - -
E3 Energy Usage
Total amount of energy directly consumed (fossil fuels) kWh 4,532,282,210 3,932,409,653 1,973,201,386
Total amount of energy indirectly consumed (electricity and heat) kWh 26,196,708 24,144,673 22,904,111
E4 Energy Intensity
Total direct energy usage per output scaling factor kWh per FTEs 1,253,018 1,299,361 957,824
kWh per passenger 1,064 1,082 1,366
E5 Energy Mix
Non renewable energy (Fossil fuels are the primary energy source) % 99% 99% 99%
Renewable energy % 1% 1% 1%
E6 Water Usage
Total amount of water consumed m3 376,458 342,546 346,556
Total amount of water reclaimed m3 - - -
E7 Environmental Operations
Does your company follow a formal Environmental Policy Yes/No Yes Yes Yes
Does your company follow specific waste, water, energy, and/or recycling policies Yes/No Yes Yes Yes
Does your company use a recognized energy management system Yes/No Yes Yes Yes (fossil fuel)
E8 Climate Oversight / Board
Does your Board of Directors oversee and/or manage climate-related risks Yes/No No No No
E9 Climate Oversight / Management
Does your Senior Management Team oversee and/or manage climate-related risks Yes/No Yes Yes Yes*
E10 Climate Risk Mitigation
Total amount invested, annually, in climate-related infrastructure, resilienve, and product development - - -

Social

Units 2023 2022 2021
S1 CEO Pay ratio
CEO total compensation to median FTE total compensation ratio 5.68 5.53 6.4
Does your company report this metric in regulatory filings Yes/No Yes Yes Yes
S2 Gender Pay Ratio
Gender pay analysis (regular earnings) % 2.8% in favor of men 2.9% in favor of men 3% in favor of men
S3 Employee Turnover
Year-over-year change for full-time employees % 4% 8% 7%
S4 Gender Diversity
Total enterprise headcount held by men and women women/men% 46/54 46/54 45/55
Entry- and mid- level positions held by men and women women/men% - - -
Senior- and executive-level positions held by men and women (only executive committee) women/men% 38/62 33/67 25/75
S5 Temporary Worker Ratio
Total enterprise headcount held by part-time employees women/men% - - -
Total enterprise headcount held by contractors and/or consultants women/men% - - -
S6 Non-Discrimination
Does your company follow a sexual harassment and/or non-discrimination policy Yes/No Yes Yes Yes
S7 Injury Rate
Frequency of injury events relative to total workforce time - - -
S8 Global Health & Safety
Does your company follow an occupational health and/or global health & safety policy Yes/No Yes Yes Yes
S9 Child & Forced Labor
Does your company follow a child and/or forced labor policy Yes/No Part of CoC Part of CoC Part of CoC
If yes, does your child and/or forced labor policy also cover suppliers and vendors Yes/No Part of SCoC Part of SCoC Part of SCoC
S10 Human Rights
Does your company follow a human rights policy Yes/No Yes Yes Yes
If yes, does your human rights policy also cover suppliers and vendors Yes/No Yes Yes Yes

Governance

Units 2023 2022 2021
G1 Board Diversity
Total board seats occupied by women (as compared to men) % 40% 40% 40%
Committee chairs occupied by women (as compared to men) % 0% 0% 25%
G2 Board Independence
Does company prohibit CEO from serving as board chair Yes/No Yes Yes Yes
Total board seats occupied by independants % 80% 80% 80%
G3 Incentivized Pay
Are executives formally incentivized to perform on sustainability Yes/No Yes No No
G4 Collective Bargaining
Total enterprise headcount covered by collective bargaining agreements % 99% 97% 97%
G5 Supplier Code of Conduct
Are your vendors or suppliers required to follow a Code of Conduct Yes/No Yes Yes Yes
G6 Ethics & Anti-Corruption
Does your company follow an Ethics and/or Anti-Corruption policy Yes/No Yes Yes Yes
If yes, what percentage of your workforce has formally certified its compliance with the policy % 100% of new employees 100% of new employees 100% of new employees
G7 Data Privacy
Does your company follow a Data Privacy policy Yes/No Yes Yes Yes
Has your company taken steps to comply with GDPR rules Yes/No Yes Yes Yes
G8 ESG Reporting
Does your company publish a sustainability report Yes/No Yes Yes Yes
Is sustainability data included in your regulatory filings Yes/No Yes Yes Yes
G9 Disclosure Practices
Does your company provide sustainability data to sustainability reporting frameworks ? Yes/No Yes Yes Yes
Does your company focus on specific UN Sustainable Development Goals (SDGs) Yes/No Yes Yes Yes
Does your company set targets and report progress on the UN SDGs Yes/No Yes Yes Yes
G10 External Assurance
Are your sustainability disclosures assured or validated by a third party Yes/No No No No

Our sustainability information that is presented in this report has not been assured by a third party although some information has been assured independently. The Company’s Equal Pay management system is audited by BSI every year. The environmental management system is certified by the International Air Transport Association (IATA) every other year and the independent auditing company ACS performs the audits on their behalf. Before submitting our emissions report to the Environment Agency of Iceland, the CO2 emissions from flights are audited by Verifavia, an independent environmental auditing company, every year in relation to the ETS and Corsia validating processes. The environmental data around topics such as water, electricity and waste are gathered through a software by Klappir – Green solutions. Sustainability and climate related topics have been discussed at quarterly meetings of the Board of Directors from the beginning of 2023.