Sustainability policy
Introduction
IAR is the world’s leading provider of embedded development solutions for programming processors in embedded systems and advanced security solutions focusing on the Internet of Things (IoT). IAR provides the solutions required to create the necessary security and assured quality in the development of the digital products of today and the innovations of tomorrow.
Our technology is used across a wide range of industries — from automotive and medical technology to industrial automation and consumer electronics. This broad reach brings with it a responsibility to contribute to a more sustainable future. Sustainability is becoming an increasingly important part of how we operate and how we support our customers, employees, and partners. While we are in the early stages of fully integrating sustainability across our business, we are actively working in this direction through various initiatives. As a software company with a relatively low direct environmental footprint, we focus on areas where we can make a tangible difference, such as enabling energy-efficient applications, promoting responsible resource use, and supporting secure and ethical technology.
To increase transparency and accountability, we currently include voluntary sustainability information in our annual report. Our ambition is to develop this work further over time, in alignment with future reporting requirements and stakeholder expectations.
This Sustainability Policy outlines our approach to environmental, social, and governance (ESG) topics. It reflects our core values — integrity, accountability, respect, and excellence — and builds on the foundation laid out in our Code of Conduct, which guides how we act and make decisions across all areas of our business.
Our sustainability strategy focuses on three key areas:
- Environmental sustainability – We reduce our environmental footprint and support the transition to a low-carbon, resource-efficient economy.
- Social sustainability – We promote human rights, diversity, and safe, inclusive working conditions throughout our operations and value chain.
- Governance – We lead with transparency, fairness, and compliance, ensuring accountability in all parts of our organization.
Scope of application
This policy applies to all employees and operations within I.A.R. Systems Group AB, including subsidiaries. The CEO is responsible for the implementation and regular review of the Sustainability Policy, as approved by the Board of Directors.
Environmental sustainability
As a software company, our direct environmental footprint is relatively low. However, we recognize our responsibility to contribute to a more sustainable and resource-efficient future. Our environmental work focuses on reducing climate impact, enabling energy-efficient development, supporting circularity, and ensuring compliance across our value chain.
Energy-efficient product development
We design and deliver software tools that support energy-efficient embedded systems. By enabling reduced power consumption, optimized performance, and extended product lifecycles, our solutions contribute to lowering the environmental impact of the products developed by our customers.
Climate action and emission reductions
We are working to align with the goals of the Paris Agreement and the UN Sustainable Development Goals (SDGs). Our efforts
focus on reducing Scope 2 and 3 emissions through actions such as:
- Selecting suppliers with lower environmental impact,
- Reducing packaging and transportation,
- Limiting non-essential business travel.
Circularity and resource efficiency
We apply circular economy principles in our operations and development processes. This includes promoting reuse, responsible disposal, and material efficiency. We are continuing our circularity support through the IAR Green Innovation Program, allowing eligible organizations to easily access our pro-
ducts for their innovations in renewable energy and clean-tech.
Environmental compliance and supplier requirements
We comply with all applicable environmental laws, regulations, and directives. In addition, we require our suppliers to implement
structured environmental management systems, such as ISO 14001, and to actively reduce emissions, waste, and the use of hazardous substances. This helps us ensure environmental performance throughout the value chain.
Responsible innovation and technology
We aim to ensure that the technologies we develop support both environmental and social responsibility. This includes developing software that enables efficient resource use, promoting secure and ethical use of digital technologies, and integrating sustainability considerations into product design.
Social sustainability
We recognize that long-term success is built on people, trust, and shared responsibility. Our social sustainability commitment spans customers, employees, and products, and is anchored in our Code of Conduct, the UN Global Compact, and international human rights principles.
Customer responsibility
We enable innovation by delivering high-quality tools that empower our customers to build secure, sustainable, and future-ready embedded systems. We are committed to:
- Providing superior technology that supports high code quality, functional safety, and energy-efficient performance.
- Building long-term partnerships that support our customers’ development needs, including emerging ecosystems and future-proof product evolution.
- Sharing our expertise through committed teams, ensuring that our customers are empowered to make informed decisions and succeed in their innovation journeys.
- Acting with integrity and transparency, maintaining fair relationships and respecting contractual and regulatory requirements across all markets.
Employee responsibility
Our employees are our most valuable asset. We foster a respectful, inclusive, and safe workplace where collaboration, personal growth, and well-being are prioritized.
We are committed to:
- Offering challenging and meaningful work, focused on technical problem-solving, innovation, and global collaboration.
- Promoting diversity, inclusion, and equal opportunity, and strictly prohibiting any form of discrimination or harassment.
- Supporting freedom of association and collective bargaining, fair working conditions, and mental and physical well-being.
- Maintaining a workplace culture based on respect, mutual trust, and pride in individual and team contributions.
- Engaging employees in our culture through regular dialogue and representation, including quarterly work environment committee meetings.
- Upholding international labor standards, including compliance with local laws on contracts, working hours, and
- compensation.
- Encouraging individual responsibility and teamwork, where each employee contributes to shared goals and strengthens the overall impact of the organization.
- Expecting our suppliers to respect human rights, fair working conditions, and labor standards, as part of our broader commitment to social responsibility across the value chain.
Product responsibility
Our products reflect our values: quality, innovation, and responsibility. We develop and deliver embedded development and security solutions that:
- Support safety and sustainability throughout the product lifecycle.
- Enable our customers to meet high environmental and security standards in their own products.
- Are developed in compliance with relevant regulations and designed for long-term performance and minimal environmental impact.
- Promote responsible technology and digital ethics, including secure design, cybersecurity, and ethical use of AI.
We continue to provide more competitive products and solutions— embedded development and security solutions to support customers’ development paradigms and high code quality, functional safety and security demands. We have established cooperative solid relationships with leading industry partners and are strengthening our partnerships in emerging ecosystems.
Corporate governance
We are committed to responsible business conduct and transparent leadership. Governance at IAR encompasses our structures, policies, and practices for managing risks, ensuring compliance, and promoting long-term value creation — ethically and sustainably.
Corporate governance
Our corporate governance is built on clear responsibilities, ethical leadership, and accountability throughout the organization.
We ensure:
- Alignment with the UN Global Compact, OECD Guide lines, and other international sustainability standards.
- Board-level oversight of ESG strategy and performance.
- Integration of sustainability into strategic planning, risk management, and decision-making.
- Regular reviews of our Code of Conduct, policies, and internal controls.
Business ethics & compliance
We conduct our business with integrity, fairness, and in compliance with all applicable laws and regulations.
Our principles include:
- Zero tolerance for corruption, bribery, anticompetitive behavior, or conflicts of interest.
- Compliance with trade, export, tax, and financial reporting obligations.
- A global culture of transparency and legal accountability in all operations.
Data privacy & information security
Protecting sensitive data and intellectual property is a top priority.
We ensure:
- Compliance with the General Data Protection Regulation (GDPR).
- We treat data with care, following thoughtful routines for how it’s accessed, used, stored, and eventually disposed of.
- Continuous improvements to cybersecurity practices, including awareness and training.
- Safeguarding of customers’, employees’, and partners’ personal and confidential information.
Responsible sourcing & due diligence
We hold our suppliers to high standards and require them to act in accordance with our values.
Our approach includes:
- Conducting Supplier Due Diligence and encouraging the implementation of certified management systems
(e.g. ISO 14001). - Requiring compliance with regulations on conflict minerals and labor rights.
- Expecting all partners to respect human rights and environmental standards.
Whistleblowing & accountability
We promote a speak-up culture and handle concerns with seriousness and confidentiality.
We offer:
- An anonymous reporting tool: “A Safe Place to Be Heard” — accessible to employees and external stakeholders.
- Clear non-retaliation policies for those reporting in good faith.
- Regular monitoring of implementation and compliance with our policies.
Financial sustainability
A strong and stable financial foundation is essential to achieving our sustainability ambitions. At IAR, we view financial sustainability as an enabler of long-term environmental, social, and governance (ESG) performance.
Through our recurring revenue model, we maintain the ability to invest in innovation, quality, and continuous improvement.
This financial resilience allows us to:
- Maintain a recurring revenue model based on licenses and subscriptions.
- Ensure robust financial controls and compliance with international accounting standards.
