ESG Report, Tagra Biotechnologies Ltd, 2024-2025. Published December 2025.

Introduction

Founded in 1998, Tagra Biotechnologies Ltd. is a company specializing in innovative microencapsulation and delivery-system technologies for the cosmetics industry. Over the years, we have become a trusted partner for global beauty brands, offering more than 70 products across six main families, including pigments, vitamins, essential oils, and UV filters. Our patented microencapsulation technology enables controlled release and enhanced performance of active ingredients, supporting both innovation and sustainability in product development.

This ESG Report covers the period from January 1 to December 31, 2024, and includes our operations and activities based in Israel, where our research, development, and manufacturing take place.

Throughout 2024, we continued to strengthen our commitment to environmental, social, and governance (ESG) principles, integrating them into every aspect of our business. Our approach is guided by Tagra's official internal policies, including our Code of Ethics; Quality, Satisfaction, Safety and Environmental Policy; Labor Practice and Human Rights Policy; and Statements of Regulatory Compliance, which reflect our dedication to responsible growth and transparency.

As part of our sustainability objectives, we set annual energy efficiency targets. In 2025 we established a target to reduce water consumption by optimizing our production process, specifically by increasing sub-batch load (kg), which was successfully achieved in 2025 for one of our products. Tagra is also in the process of implementing emissions reduction initiatives and setting long-term reduction targets for the upcoming years. Until these long-term goals and initiatives are fully in place, we are committed to operational activities that improve and maintain our yearly intensity targets, supporting our broader effort to improve resource efficiency and minimize our environmental impact. For the purposes of this report, we are using the Operational Control methodology to define the scope and measure the results of our ESG activities.

All company activities comply with valid legal and governmental requirements, as well as with the standards EN ISO 9001:2015 (Quality Management), EN ISO 14001 (Environmental Management) and EN ISO 22716:2007 (Cosmetic Products). In 2025, we submitted the CDP Corporate Questionnaire (covering 2024 data) under the Climate Change category, and completed the EcoVadis assessment, which was awarded a Bronze Medal in recognition of our sustainability achievements. All these efforts reaffirm our commitment to environmental transparency and continuous improvement.

This ESG report outlines our policies, actions, and progress toward measurable ESG goals, underscoring Tagra's ongoing commitment to sustainability, responsible management, and operational excellence. The following sections cover our approach to Environmental Sustainability, Social Responsibility, and Governance and Ethics.

Part 1: Environmental Sustainability

Environmental Sustainability Overview

At Tagra Biotechnologies, we are committed to reducing our environmental footprint while maintaining high standards of quality and innovation. Our Quality, Satisfaction, Safety, and Environmental Policy, supported by our ISO 14001-certified Environmental Management System (EMS), defines the framework for monitoring and managing environmental impacts across all operations.

Environmental initiatives are overseen by the Quality Manager, ensuring alignment with our corporate strategy and sustainability objectives. Our policies cover energy, water, emissions, waste, chemicals, and product lifecycle management, ensuring compliance with all relevant regulations and recognized standards.

Since October 7th, 2023, Tagra's activities have operated under the prolonged impacts of the war. Throughout 2024, our priority was the safety, stability, and well-being of our employees. This exceptional situation affected our operational capacity, including long periods during which the factory operated with minimal staffing. As a result, certain targets had to be postponed, and we were unable to maintain systematic monitoring of energy use, water consumption, waste streams, and other indicators during this period.

In 2025, Tagra implemented a comprehensive review of its environmental management methodology, including data collection processes, KPI definitions, monitoring practices, and target-setting procedures. The year 2024 therefore serves as the baseline year for all our environmental indicators. This includes electricity and water consumption, waste generation and disposal, and greenhouse gas emissions. Our priority moving forward has been to re-establish robust monthly data collection and build a more consistent, reliable, and transparent environmental performance tracking system that supports future improvement targets.

Environmental Commitment and Policy Framework

Tagra's environmental policy primarily covers direct operations, including production, internal processes, and employee activities, while extending to downstream impacts through commitments to product quality, functional safety, and compliance with customer standards.

Tagra continuously updates its statements of regulatory compliance and procedures to reflect evolving global environmental frameworks and customer expectations. Full adherence to environmental laws, regulatory standards, and internal policies remains a priority, and these are continuously updated and improved as part of the Environmental Management System.

To support these commitments, our employees receive regular training on waste management, energy conservation, and climate action, ensuring that environmental responsibility is embedded in daily operations and supported across all departments.

Furthermore, as a result of joint efforts between operations and R&D, we are advancing sustainable material innovation and operational efficiency. The main goals include reducing raw material usage, minimizing wastewater generation, and developing biodegradable solutions.

We have decided to fully replace acrylic polymers with cellulose-based alternatives, transitioning toward 100% biodegradable polymers. These bio-based materials are scientifically recognized as biodegradable, and biodegradability tests are currently being conducted in accordance with regulatory guidelines. This transition supports our broader commitment to reducing persistent microplastics in our products and supply chain.

Operational Environmental Management

Tagra manages all critical environmental aspects through its EMS, ensuring continuous compliance and improvement. Our procedures, guidelines and ongoing activities cover several topics, such as:

• Air pollution prevention: Emissions are monitored and reported to local authorities in accordance with regulatory requirements, ensuring compliance with air quality standards.

• Materials and chemicals management: Employees handling chemical products receive detailed training and follow strict guidelines. We maintain comprehensive emergency procedures and continuously evaluate safer alternatives.

• Product use and end-of-life: All products include Safety Data Sheets (SDSs) that comply with international regulations (e.g., REACH). We provide guidance on safe handling of substances of very high concern (SVHC), and our product brochures inform customers of health and safety aspects.

Our operational environmental management approach helps us reduce consumption, minimize waste, and improve efficiency across our activities. The following sections outline how we manage waste, reduce emissions and enhance energy efficiency.

Waste Management and Related Emission Reduction Initiatives

At Tagra, we actively work to reduce waste generation and to ensure that all waste is managed responsibly. In 2024, the total amount of recovered waste was 14,830 kg. We manage several distinct waste streams, all handled by certified waste management vendors. As much as possible, these streams are sent for recycling, in line with our commitment to minimize environmental impact and increase resource recovery.

Looking ahead, Tagra has set 2026 targets focusing on implementing several process improvements to reduce waste generation and associated carbon emissions:

• Computerized weighing rooms: Replacing manual paper-based records eliminated paper usage in raw material weighing, reducing waste and saving an estimated 0.04 metric tons of CO₂e annually.

• Redesigned raw material preparation: Components are now weighed immediately before mixer feeding, removing the need for plastic jerrycans and preventing unnecessary plastic waste. Estimated annual savings: 0.51 metric tons of CO₂e.

Together, these initiatives will minimize material waste and operational inefficiencies, while strengthening overall environmental performance.

Energy Management

Due to the operational challenges experienced during the war, following up on electricity consumption was difficult. We have since established a monthly monitoring system, and the figures presented below should be considered as the baseline.

We have scheduled a Management Review for December 2025 in which we will approve targets for 2026 and beyond.

Water Management

We continued improving water efficiency across production lines by optimizing sub-batch operations. This adjustment allows us to reduce water consumption per kilogram of product, while maintaining process quality and stability. We closely monitor our consumption patterns and efficiency trends to identify further opportunities for reduction.

To further improve water efficiency, we conducted detailed analyses of our production batches to identify opportunities for process optimization. Between 2023 and 2025, the manufacturing processes of several product formulations were modified to reduce the volume of water required per kilogram of product while maintaining the same compositions and properties of the products. The table below summarizes the percentage of water saved for each product line following these improvements. Across all optimized products, we achieved an average water consumption reduction of approximately 16%, demonstrating consistent progress toward process efficiency and sustainable resource use.

These optimizations contribute to our broader environmental objectives by reducing overall water consumption intensity.

Water Efficiency Improvements (2023–2025)

GHG Emission Calculation and Reporting

We actively monitor and manage our greenhouse gas (GHG) emissions as part of our commitment to reducing environmental impact and improving operational efficiency. We calculate our GHG emissions using the operational control methodology, covering our direct operations in Israel.

Our calculations are based on verified activity data and international standards, including the Greenhouse Gas (GHG) Protocol, covering our Scope 1, 2 and 3 emissions. We calculate our GHG emissions using operational activity data and verified emission factors from recognized sources, and a third-party auditor verifies the emissions calculations and report, ensuring transparent and consistent reporting.

2024 marks the first time that we completed a full GHG emissions inventory across Scope 1, 2, and 3. Furthermore, our carbon footprint calculation was verified by a third party. Conducting this comprehensive baseline assessment represents a significant step for improving our ESG reporting.

Scope 1, 2 and 3 Distribution in 2024

Total emissions distribution by scope (tCO2e): Scope 1, 3%; Scope 2 (market-based), 35%; Scope 3, 62%.

• Scope 1 (direct emissions): Representing emissions from fuel consumption and ozone-depleting substances (ODS), Scope 1 totaled 69.24 metric tons CO₂e in 2024. Of Scope 1 emissions, 47% came from diesel (emergency generators and pumps) and 53% from refrigerants and fire suppression gas.

• Scope 2 (indirect, electricity): Associated with purchased electricity, Scope 2 emissions were calculated using two approaches: location-based, 736.15 metric tons CO₂e; market-based, 1,025.37 metric tons CO₂e.

• Scope 3 (value chain): Covering indirect emissions from our upstream and downstream activities, Scope 3 accounts for the largest share of our GHG footprint.

These Scope 3 emissions were calculated using data from procurement, production, and operational records, including raw materials, packaging, transport, electricity, and travel activities. We plan to expand our Scope 3 coverage and refine our methodology in future reporting cycles, aligning with evolving international best practices and improving data accuracy over time.

Part 2: Social Responsibility

At Tagra Biotechnologies, we believe that sustainability goes beyond environmental performance and must include a deep commitment to our employees, their well-being, and the communities in which we operate. In full compliance with all Israeli laws regarding employment, social rights, and human rights, our Labor Practice and Human Rights Policy ensures safe, fair, and inclusive working conditions while upholding the highest social standards across our operations.

Employee Health and Safety

Protecting the health and safety of our employees is a central pillar of Tagra's operations. We conduct regular risk assessments, provide periodic health check-ups, and maintain an updated annual safety plan led by a qualified safety officer who conducts inspections, employee training on health and safety and good working practices, equipment safety inspections, and accident investigations when required.

We also ensure emergency preparedness, maintain clear evacuation procedures, and provide ongoing training on safety protocols and equipment use. Protective equipment is provided wherever necessary to ensure a safe work environment.

During 2024, there were no work-related accidents or injuries. One traffic accident was reported involving one of our employees on their way to work; however, it was not a work-related accident. Tagra ensured proper follow-up regarding this incident and any associated lost days. We remain committed to the health and safety of our employees and continue to pursue the goal of zero work-related injuries.

Working Conditions

Tagra is committed to providing employees with safe, hygienic, and supportive working conditions. Employees work in clean facilities equipped with showers and sufficient toilets, ensuring high standards of hygiene. All employees are employed under personal agreements that fully comply with regulations and include comprehensive pension benefits. The company strictly does not employ workers under 18 years of age.

We promote a flexible organization of work, offering options such as remote work and flextime, and ensure comprehensive health care coverage for all employees.

Career development and continuous learning are integral to Tagra's work environment. The company provides training programs tailored to operational, technical, and managerial needs, equipping employees with the skills and tools necessary to grow within the organization.

In 2024, we conducted multiple training sessions. However, due to the war and the operational disruptions it caused, we were not able to fully monitor or document all sessions. In 2025, we resumed full tracking and have already delivered more than 20 training sessions covering professional development, Health & Safety, ethics, prevention of harassment, and emergency preparedness and response, with an average of 37 training hours per employee. We aim for 100% attendance from all relevant employees and provide additional sessions whenever needed to ensure full coverage.

Diversity, Equity and Inclusion Measures

Tagra is committed to fostering a respectful, inclusive, and equitable workplace. Employment decisions are based solely on professional ability and job suitability, with zero tolerance for discrimination based on religion, race, sexual orientation, or any other personal characteristic. The company strictly prohibits all forms of forced labor or human trafficking.

We respect workers' rights to freedom of association and social dialogue, recognizing employee representatives and their role in regular engagement. A Health & Safety (H&S) committee is led by the H&S officer, with employee and manager representatives from different areas. The purpose of the committee is to discuss H&S issues, such as emergency preparedness and response and H&S good working practices, and to address employees' concerns and H&S needs at the workplace. The committee meets eight times per year.

Tagra actively promotes diversity and equal opportunity through initiatives such as anti-harassment and discrimination training and measures to include employees with disabilities both onsite and online. In 2024, women represented 26% of Tagra's workforce. This proportion reflects the nature of our industry, where factory-based roles traditionally attract fewer female applicants, while women are more represented in administrative positions. Nevertheless, we recognize the importance of improving gender balance and we are committed to creating conditions that support and encourage the recruitment, retention, and advancement of women across all roles.

Through responsible labor practices, continuous dialogue, and investment in employee well-being, Tagra fosters a workplace built on safety, equality, and opportunity. These principles strengthen our long-term sustainability and reflect our commitment to operating with integrity and respect for human rights.

Part 3: Governance and Ethics

At Tagra, we are committed to conducting our business with integrity, transparency, and accountability. Our governance framework includes policies and procedures designed to prevent corruption, protect confidential information, manage risks, and ensure responsible supply chain practices. These commitments guide the way we operate and reinforce trust with our employees, suppliers, and customers.

Ethics, Anti-Corruption and Business Conduct

Our Code of Ethics sets the standards for ethical behavior across all operations. It includes our commitments to integrity, responsible decision-making, fair business practices, data confidentiality, and respect for the law. All employees are expected to follow the Code and uphold Tagra's values in their daily work.

We follow strict ethical standards in all our activities. Tagra has clear policies to prevent corruption, conflicts of interest, and fraud, and we act transparently and in full compliance with all applicable laws. We also commit to never engaging in money-laundering and to always respecting fair-competition rules.

As part of our ISO 9001 and ISO 14001 certifications, we conduct yearly risk assessments that also cover ethical issues such as corruption risks, sustainability impacts in the supply chain, and information security. We evaluate each based on existing controls, legal requirements, and its likelihood and potential impact. When needed, we define specific actions and include them in our business plans.

Tagra also has a Whistleblower Policy that provides a clear and confidential reporting process. It includes a strict no-retaliation commitment and ensures that the manager or the CFO follows up appropriately on every report.

Our ethics commissioner is available by email or phone for any questions related to the ethical rules and all topics covered in this chapter, including Ethics, Anti-Corruption and Business Conduct; Information Security and Data Protection; Sustainable Procurement and Supplier Engagement; the RSPO standard; and our Conflict Minerals Policy.

All employees receive mandatory annual training on business ethics, and additional role-specific training is provided where relevant to strengthen the practical application of these principles in daily work.

Information Security and Data Protection

Protecting business and third-party information is a key priority. An external information security company supports us in implementing measures to safeguard third-party data against unauthorized access or disclosure. Additionally, we have detailed procedures for records retention and we sign Non-Disclosure Agreements (NDAs) with suppliers to strengthen protection throughout the supply chain.

Sustainable Procurement and Supplier Engagement

A significant portion of our environmental footprint lies within our supply chain. As part of our commitment to responsible sourcing, we have developed an ESG questionnaire to distribute to our suppliers to assess their environmental management systems, emissions reduction initiatives, and resource efficiency practices. Based on the results, we intend to integrate environmental performance indicators into supplier evaluation and selection, giving preference to partners aligned with our sustainability principles.

Our procurement team collaborates closely with R&D to ensure that all raw materials and polymers meet evolving environmental and regulatory standards.

Compliance with microplastic regulations (as defined by European, U.S., and Israeli frameworks, OPA criteria) requires extensive polymer testing to confirm the absence of microplastics. Although this process is both costly and time-consuming, Tagra's suppliers are actively undergoing such testing. Meanwhile, products incorporating these biodegradable polymers have already reached the market, reflecting our proactive approach to innovation and regulatory alignment.

Through these actions, we aim to promote a supply chain that supports innovation, regulatory compliance, and reduced environmental impact across all product life cycles.

Roundtable on Sustainable Palm Oil (RSPO) Standards

Tagra has been an RSPO member since 21/05/2019 and holds a Supply Chain Certification issued by Control Union Certifications B.V. (Certificate No. CU-RSPO SCC-881423). This certification confirms our commitment to sourcing palm-derived ingredients responsibly and in line with RSPO requirements.

To strengthen internal expertise, 100% of our procurement team has completed RSPO training, covering key terminology, certification criteria, and the importance of maintaining a sustainable and traceable palm-oil supply chain.

Conflict Minerals Policy

We maintain a Conflict Minerals Policy ensuring that none of the materials we purchase originate from sources that finance armed conflict or violate human rights. This policy guides supplier selection and supports responsible mineral sourcing across our value chain.

Part 4: Contact Information

Tagra Biotechnologies is committed to running our business responsibly, paying attention to the environment, safety, our people, and good governance. We are always looking for ways to improve and to be more transparent about our progress. If you have any questions, contact qa-manager@tagra.com.

About This Report

This Environmental, Social, and Governance (ESG) report was prepared by Tagra Biotechnologies together with Green Target, an EHS and Sustainability Consulting Firm. The purpose of the report is to present Tagra's sustainability initiatives, programs, and performance in a clear and transparent manner. Through this report, we aim to highlight the steps Tagra is taking toward responsible, ethical, and sustainable business operations, and to reaffirm our shared commitment to contributing to a sustainable future.