SUSTAINABLE PROCUREMENT POLICY

Objectives
The Policy supports the following objectives:
• To integrate sustainability best practices into EDC’s supply chains
• To identify and manage ESG risks associated with procurement practices
• To evaluate supplier sustainability performance and ensure suppliers progressively meet EDC predefined sustainability criteria
• To reduce environmental impact through sourcing sustainable products and materials, promote resource efficiency, and reduce waste and emissions within EDC’s operations and within the supply chain
• To promote respect for human rights while enhancing worker welfare across the supply chain
• To strengthen local supply chains through upskilling, the adoption of innovation & technology, and job creation
• To enhance safety, compliance, and adherence to high quality standards within EDC’s supply chains
• To provide a fair and transparent procurement process
• To improve sustainability awareness among suppliers

Basis of Preparation
EDC conducts its business with honesty and integrity, in accordance with applicable laws and regulations and in alignment with global best practices.

The Policy is in line with the United Nations Global Compact, to which EDC is a signatory, and is also informed by the following globally recognized standards:

• The United Nations Guiding Principles on Business and Human Rights (UNGP)
• International Labour Organization (ILO) Standards
The key objectives of this Policy are also aligned with a number of relevant ISO standards and their associated policies. EDC is certified in the following standards:

1. ISO 14001:2015 Environmental Management System (EMS)
   
2. ISO 45001:2018 Occupational Health & Safety Management System (OH&S)
   
3. ISO 9001:2015 Quality Management System (QMS)
   
4. ISO 39001:2012 Road Traffic Safety Management System (RTS)
   
5. ISO 31000:2018 Risk Management System (RM)
   This Policy complements and should be read in conjunction with the Supplier Code of Conduct, which clearly defines the ethical business standards that EDC expects all approved suppliers to adhere to.

Sustainable Procurement Practices
EDC groups sustainable procurement-related topics under six categories:

1. Human Rights and Labor Practices Suppliers should treat their employees in accordance with applicable laws and regulations related to pay, working hours, annual leave, benefits, and other such obligations pertaining to labor law. Furthermore, EDC encourages suppliers to provide their employees with the best possible working conditions as well as fair wages. Suppliers should treat their employees with dignity and respect, while upholding the highest standards of human rights. They should refrain from engaging in labor practices that deprive children of their childhood, their compulsory education, or are harmful to their physical and mental development. Suppliers should promote diversity and equal opportunity within the workplace while adopting a zero-tolerance policy towards harassment, abuse, and discrimination of any kind. Suppliers should promote a culture of safety throughout their organization.
   
   

2. Fair Operating Practices Suppliers should behave according to the highest standards of ethical business conduct while ensuring they alwayscomply with all applicable laws and regulations including, but not limited to, anti-corruption practices, Anti-money Laundering, Combatting the Financing of Terrorism (AML/CFT), sanctions, fair competition, anti-trust, conflict of interest, intellectual property law, or other such.
   
   

3. Environment EDC is committed to the efficient demand side management of all procured resources, including the consumption of energy and water at our offices and facilities. This extends to efficiently managing our inventories of procured products and timing new orders to avoid waste. Suppliers should uphold the highest environmental standards throughout their business operations, in line with EDC’s mission to reduce its environmental impact and its commitment to achieve net zero emissions. Accordingly, EDC encourages suppliers to reduce their emissions through measures including, but not limited to, using resources and materials efficiently and using sustainable energy where feasible.
   
   

4. Community Development EDC is committed to supporting the local community through a variety of measures including, but not limited to,supporting local suppliers and SMEs. We encourage suppliers to adopt a similar approach to supporting the local ecosystem.
   
   

5. Consumer Issues Safety is EDC’s highest priority. Accordingly, suppliers should adhere to the highest safety standards throughout their business and in their approach to developing products and services. Suppliers should also commit to having appropriate measures in place to ensure customer data is always protected.
   
   

6. Responsible Sourcing As part of our commitment to sourcing products and services responsibly, EDC looks to substitute existing goods and services for more sustainable, eco-friendly alternatives wherever possible. EDC values supply chain transparency and encourages suppliers to source materials in an ethical and responsible way. We promote the use of sustainable materials and eco-friendly products where feasible and encourage suppliers to prioritize local procurement whenever possible. Suppliers should also manage their inventory efficiently to minimize environmental impact.
   
   

Supplier Engagement
EDC is committed to fostering collaborative partnerships to achieve shared objectives. As part of this approach, we foster close collaboration with suppliers to ensure compliance with the company’s sustainable procurement requirements. Supplier engagement includes:

1. Training EDC is prepared to hold supplier training sessions, including workshops and online tutorials, to support suppliers to understand and implement its sustainable procurement requirements.
   
   

2. Transparency EDC is committed to an open, fair and transparent pre-qualification and tendering process. All suppliers must meet the same requirements and are assessed on an equal basis.
   
   

3. ESG Assessment EDC has initiated an ESG assessment to proactively engage with suppliers, communicate its expectations, and assess the ESG performance of each supplier, with the aim of fostering improvements in ESG practices throughout the supply chain.
   
   

4. Facilitating Feedback As part of our commitment to close collaboration with all our partners, EDC welcomes feedback from suppliers through our dedicated channels.
   
   

Compliance

EDC expects suppliers to adhere to the principles set out in this Policy. We closely monitor and address risks that may impact our sustainability values and operations caused by suppliers who do not meet our standards. If suppliers encounter challenges in meeting our procurement requirements, we will work collaboratively with them to achieve compliance. If necessary, we will explore relationships with alternative companies for critical purchases. However, as a final measure, contracts may be terminated if suppliers fail to comply with our standards. Suppliers may report compliance issues promptly to EDC via the following email address: whistleblowing@edcad.ae.