Our role as a global company is to respect human rights worldwide, both in our operations and by influencing our suppliers through our business relationships. Combating modern slavery requires persistence, ongoing due diligence, stakeholder engagement, and continuous improvement. This work is consistent with the core values of CTL.

The California Transparency in Supply Chains Act of 2010, the United Kingdom Modern Slavery Act 2015, and the Australia Commonwealth Modern Slavery Act 2018 together require businesses to disclose information relating to their efforts to address the risks of modern slavery (including forced labor and human trafficking) in their operations and supply chains. The following statement of CTL Inc. and its consolidated subsidiaries1 responds to these requirements and outlines our efforts during the fiscal year that ended June 30, 2022.

1 CTL Inc. and its consolidated subsidiaries share the same core business operations and supply chains as well as the modern slavery policies, processes, and risks described in this statement. CTL Inc., therefore, provides this statement for itself and on behalf of certain foreign subsidiaries that are directly covered by a disclosure obligation in their respective jurisdictions. This includes CTL Spain S.L and CTL Inc. UK Limited, under Section 54(1) of the UK Modern Slavery Act 2015. Through this statement, CTL also satisfies its obligations under the California Transparency in Supply Chains Act of 2010.

Our Business

CTL supplies Chrome OS products to K-12 and enterprises. The company operates in several countries and territories, with approximately 50 Employees. CTL Inc. is incorporated in Delaware with principal executive offices in Beaverton, Oregon. CTL Inc. and its subsidiaries operate worldwide.

Our Operations and Supply Chain

CTL’s unique products require a vast network of suppliers and partners spanning multiple continents, with most suppliers based in the Asia Pacific. We have approximately ten manufacturing and less than 20 non-manufacturing suppliers that provide goods and services in support of our operations, and we disclose the names of our key manufacturing suppliers.

We utilize many outsourced manufacturers (“OMs”) worldwide to manufacture CTL-designed and -branded products. This helps us maintain flexibility in our supply chain and manufacturing processes. In some circumstances, products designed and produced by third-party suppliers are sold under the CTL brand. We also manufacture, or our OMs manufacture on our behalf, finished products from components and subassemblies that we acquire from a wide range of suppliers. We have direct business relationships with suppliers representing up to four manufacturing tiers, including materials, components, sub-assemblies, branded components, and final assembly suppliers.

CTL’s operations include manufacturing, design and product development, supply chain management, marketing, sales, customer support, and administrative functions. Our operations are supported by non-manufacturing suppliers that provide services and facility management.

Addressing COVID-19

The COVID-19 pandemic forced CTL to rapidly reassess how we manage our operations and supply chain to address the severe disease risks to workers and communities. As many of our facilities worldwide— mainly manufacturing sites—were deemed essential, we needed to find ways to continue working while protecting workers' health & safety. CTL’s response to a global crisis mirrors our commitment to respecting human rights. First, we identified the risks to our employees and contingent workers (and partners), then acted decisively to manage and mitigate them. To help keep our employees safe, we quickly pivoted most of our employees to work from home. For those in manufacturing and other critical functions that could not transition to a remote model, we quickly implemented safety and hygiene training and protocols, such as physical distancing, safety gear mandates, site visitor restrictions, alternate staffing shifts, and enhanced cleaning and sanitization practices, to protect the employees in our labs or manufacturing and production facilities. We have also implemented contact-tracing initiatives. The impact of the pandemic on travel and site access reduced the number of audits and assessments we could complete during the year. However, we remained in communication with our suppliers and found ways to safely conduct assurance activities using in-person and remote audits and assessments. Our CTL Supplier Code of Conduct has strict health and safety expectations. We published best practice guidelines for suppliers to support the protection of their workers, support work environment morale, and assist workers in remaining comfortable during these challenging times. CTL continued to help suppliers with global virtual training on mitigating the risks of forced labor and the impacts of COVID-19, discussing how travel restrictions and health fears could increase worker vulnerability. These engagements reached more than 1100 supplier managers and supervisors.

Our Policies

CTL Governance

CTL recognizes that many business functions across the company play a role in addressing modern slavery risks. CTL’s Chief Executive Officer oversees the implementation of our company-wide human rights commitments (found within our Human Rights Policy) and designing processes to prevent, mitigate, and remediate related impacts, including any relating to modern slavery. Chief Executive Officer engaged with the following business functions to prepare this statement:

Integrity at CTL

Respect for fundamental human rights is embedded in the Integrity at CTL program. We apply strong ethics and anti-corruption principles within our operations, value chain, and communities where we do business. CTL’s Chief Executive Officer and HR Director oversee the Integrity of the CTL program. We require ethical conduct by our employees and use our scale and influence to drive progress. We are committed to complying with all applicable laws and regulations. This program helps integrate respect throughout our operations.

Human Rights Policy

Our Human Rights Policy defines our commitments and actions that guide the integration of respect for human rights into our operations, products, and supply chain. It includes our prohibition on forced labor within CTL and requirements of our suppliers to adhere to the CTL Supplier Code of Conduct and other implementing policies and standards.

Contingent Worker Code of Conduct

CTL’s Contingent Worker Code of Conduct applies to all non-employees performing services for CTL on a CTL site or who are the face or representative of CTL to CTL customers (“contingent workers”), and to suppliers of these workers. We expect suppliers and the workers they provide to share our commitment to conducting business with integrity. The contingent worker code applies to CTL personnel managing contracts with migrant workers. This code prohibits charging applicant or recruiting fees. It requires compliance with applicable employment standards, non-interference with identity documents or passports, and employees’ ability to resign at any time (all local country legislation and Workers Council Agreements apply). Suppliers of contingent work and contingent workers themselves are also prohibited from engaging in trafficking in persons. Finally, the code requires suppliers and contingent workers to adhere to all relevant CTL policies.

Supplier Code of Conduct

CTL’s requirements for all suppliers are contained in the CTL Supplier Code of Conduct, which incorporates international labor and human rights principles (and aligns with the Responsible Business Alliance (“RBA”) code of conduct). CTL has purchasing agreements or purchase order terms and conditions with our direct suppliers requiring them to comply with international standards and applicable laws and regulations regarding forced labor and human trafficking as specified in the CTL Supplier Code of Conduct. CTL’s direct suppliers agree that their operations comply with these laws and regulations through their consent to the relevant terms and conditions in their agreements with CTL. The CTL Supplier Code of Conduct expressly requires that suppliers ensure workers associated with CTL services and production have: (i) the right to freely chosen employment; (ii) the right, under local laws, to join labor unions voluntarily, to bargain collectively and to engage in peaceful assembly; and (iii) the right to a workplace free of harassment and unlawful discrimination. CTL requires our manufacturing and non-manufacturing suppliers to require their next-tier suppliers to acknowledge and implement the CTL Supplier Code of Conduct and hand it down to their sub-tier suppliers. We also need suppliers to monitor their next-tier suppliers' performance against the code's requirements.

Foreign Migrant Worker Standard

Foreign migrant workers are especially at risk for exploitative and forced labor practices. CTL was the first technology company to set requirements for suppliers on how they recruit, hire, and manage such workers. Our Supply Chain Foreign Migrant Worker Standard requires direct employment of foreign migrant workers by our suppliers, prohibiting retention of worker passports and personal documentation and requiring the elimination of worker-paid recruitment fees.

Risks of Modern Slavery

CTL monitors the risks of modern slavery through our human rights assessments and due diligence program. Our human rights due diligence program considers our business activities and potential threats to rights-holders consistent with the UN Guiding Principles for Business and Human Rights. We assess risks in our operations (CTL offices, CTL manufacturing and distribution operations, and suppliers that support these operations) where we could cause or contribute to adverse human rights impacts. We also consider risks associated with our manufacturing and non-manufacturing suppliers (operating in their facilities) where we may be directly linked through business relationships. CTL conducts human rights risk assessments to identify potential human rights risks that could be associated with the CTL business models and operations. Historically, the potential for forced labor, debt bondage, and child labor was confirmed as salient human rights risks.

The following paragraphs characterize the different business contexts in which industry information and our past experience indicate that there could be a risk of modern slavery.

• In our operations, the risks of modern slavery are predominantly associated with the non-manufacturing suppliers supporting our offices (janitorial, facilities, security, etc.) or our CTL-managed manufacturing operations. We have previously seen risks associated with foreign migrant hourly workers employed by our non-manufacturing suppliers. CTL does not use any foreign migrant hourly workers.

• In our supply chain, the risks of modern slavery are predominantly associated with manufacturing suppliers operating in countries with a high volume of foreign migrant labor and a lack of legal protections or enforcement of protections for migrant labor.

  Specific risks of modern slavery associated with migrant workers at supplier sites include payment of recruitment fees, retention of worker passports, lack of an employment contract in a language the worker understands, and failure to provide return transportation to the country of origin.

  Risks of modern slavery can also occur deeper in our materials supply chain with entities that are more than four supplier actors removed from CTL. In these instances, we align our practices with the relevant portions of international guidance, such as the Organization for Economic Co-operation and Development’s guidance on responsible minerals. We work with other companies to build leverage with intermediate actors deep in the supply chain. Through this work, we can influence business relationships with entities operating in challenging contexts to mitigate the risks of modern slavery, such as those associated with mineral extraction.

Risk Detection

Operations

CTL maintains a strong culture of open communication. We encourage anyone with a concern to speak up without fear of retaliation. Multiple communication channels allow employees and other stakeholders to ask questions or report concerns to CTL. We do not tolerate retaliation against anyone who raises a concern or question honestly and in good faith.

Investigations in response to grievances lodged are conducted comprehensively, objectively, and free from management or business influence. All investigations follow a process designed to ensure consistency and fairness. The investigation cycle involves interviews, formal reporting, and recommendations under the oversight of Human Resources and relevant senior management.

We include 100% of CTL-managed manufacturing in our due diligence scope and non-manufacturing suppliers that support these operations.

Supply Chain

CTL considers its supply chain to include (i) suppliers who operate in their facilities that contribute to manufacturing our products and (ii) suppliers that provide outsourced services and products that support our operations (including logistics providers and recycling providers). CTL’s supply chain responsibility program focuses on protecting and empowering workers, which we believe benefits our customers and us. With our supply chain policies and standards as a baseline, detecting and addressing the risks of modern slavery are part of a broader approach to identifying and mitigating social and environmental concerns. CTL works to identify and characterize sources of risk and their context, whether at a global or regional level or the level of individual manufacturing and non-manufacturing suppliers.

Independent third-party auditors conduct audits of certain high-risk manufacturing suppliers through the RBA Validated Assessment Program or by certified CTL auditors. A supplier self-assessment questionnaire is used to prioritize audits. If an audit is scheduled, it will evaluate the supplier’s conformance to the CTL Supplier Code of Conduct and specialized CTL labor standards. We engage in quarterly monitoring for suppliers with identified non-conformances related to foreign migrant workers to encourage continuous improvement.

While all suppliers are expected to meet – and may be required to demonstrate – the standards outlined in the CTL Supplier Code of Conduct, we emphasize the treatment of foreign migrant workers in our supply chain. To evaluate risks related to modern slavery and conformity to our Foreign Migrant Worker Standard, we analyze indicators such as the employment of vulnerable worker groups and the use of third-party agents in recruiting or managing workers. Our manufacturing and non-manufacturing supplier risk assessment for foreign migrant workers considers supplier location, manufacturing process or services provided, supplier reputation and business information, and external stakeholder information. Typically, suppose the supplier is regarded as a high-risk supplier with whom we have a certain level of spend. In that case, we require the completion of a foreign migrant worker self-assessment questionnaire. For non-manufacturing suppliers, high-risk suppliers must complete a social and environmental responsibility risk assessment that addresses a subset of the CTL Supplier Code of Conduct and always includes labor and ethics elements. For selected manufacturing and non-manufacturing suppliers with high risk, we conduct onsite assessments in conformance with our Foreign Migrant Worker Standard.

A finding of non-conformance with the CTL Supplier Code of Conduct or any other CTL policy or standard related to modern slavery does not necessarily indicate that an instance of forced labor has occurred but may signal a lack of operations or procedures to prevent such an occurrence. Following a finding of non-conformance, suppliers are

required to produce and implement corrective action plans to resolve the issue. In addition, we regularly assess our audit findings to improve our approach to detecting and addressing the risks of modern slavery in our supply chain.

Auditors are required to escalate any findings of indicators of modern slavery. Suppliers must immediately cease all practices contributing to a modern slavery audit finding and report their corrective action within 30 days following the audit. The finding will then be re-examined by a third party or certified CTL auditor during a site visit to confirm the resolution.

A multi-step process addresses remedies for workers that paid fees prohibited by CTL policy, including the CTL Supplier Code of Conduct, Contingent Worker Code of Conduct, and Supply Chain Foreign Migrant Worker Standard. After the supplier is notified of the finding in the audit report, we work with the supplier to agree on a corrective action plan. Our program relies on our business relationship to drive suppliers to complete corrective action plans. In parallel, our local auditing teams help provide the support and feedback suppliers need to achieve resolution and to reimburse the workers. We also work to build suppliers’ capabilities through partnerships with external organizations. Suppliers are then able to conduct their due diligence within their operations. This due diligence involves conducting worker interviews, reviewing documents, and researching migration costs as estimated by external organizations. Once they have confirmed payment to workers (usually via signed receipts or pay slips), CTL schedules an onsite validation visit which consists of a document review and confidential worker interviews conducted by certified auditors. Finally, we take the additional step of internally monitoring these suppliers from non-conformance identification to corrective action and beyond through our quarterly essential performance indicator program to ensure timely resolution and continuous improvement. We share this report with CTL executives that manage the business relationship. Our organization's global structure communicates any salient risks we have identified to the highest levels. A summary of any findings and corrective actions relating to modern slavery risks is reported to the Chief Executive Officer.

Effectiveness in Addressing the Risks of Modern Slavery

The impact of the pandemic on travel and site access continued to reduce the number of audits and assessments we could complete during the year. However, we remained in communication with our suppliers and found ways to safely conduct assurance activities using local in-person and remote audits and assessments.

Supply Chain

We focus primarily on engagement with suppliers with whom we have a direct contractual relationship. We have multi-year agreements with many of our manufacturing and non-manufacturing suppliers. This allows us to build supplier awareness and capability to meet our social responsibility expectations, including implementing and adhering to policies and processes to address the risks of modern slavery. These agreements require, in turn, that our manufacturing and non-manufacturing suppliers mirror our expectations of their suppliers. CTL was not aware of any violations.

The CTL Social and Environmental Responsibility Manufacturing Supplier Scorecard measures and incentivizes supplier performance on various factors, including audit results and other performance metrics. Suppliers with exceptional performance in these areas benefit from their commercial relationship with CTL. This process has enabled continuous supplier improvement.

Other Initiatives

External Collaboration

We work through the RLA to create and share leading practices and programs to advance improvements to the RLA/RBA Code of Conduct and the capabilities of its member suppliers. Consistent with the United Nations Guiding Principles on Business and Human Rights, we work to build influence in our business relationships with suppliers by partnering with other peer companies and key stakeholders.

Training

Our employees have trained annually on Integrity at CTL, with a training completion rate of more than 99% of active employees. The training sets out our company expectation that all employees comply with Integrity at CTL, which includes provisions prohibiting the use of child, prison, forced, or trafficked labor in CTL operations.

We also seek to raise supplier awareness of and conformance to the CTL Supplier Code of Conduct and specialized labor standards, including ways to identify and address the risks of modern slavery. CTL's supply chain capability building program conducts regular workshops on the RBA Code of Conduct and educates suppliers on our Foreign Migrant Worker Standard.

Approval

Approved on March January 01, 2023, by the CTL Inc. Board of Directors, or a committee thereof delegated with authority to address such matters and signed by:

Erik Stromquist
Chief Executive Officer and Member of the Board of Directors, CTL Inc.