METSÄ BOARD Annual review 2023
Sustainability statement General information
based on the materiality assessment were approved in early 2023, and reporting based on them was initiated in 2023. The materiality assessment was supplemented in 2023, with attention paid to the requirements of the European Sustainability Reporting Standards. Further information about the materiality assessment and its results is provided on pages 26–28 . Selected sustainability information and related claims have been assured (limited assurance) by KPMG Oy Ab, an independent third party. Assurance was conducted in accordance with the international assurance standards ISAE 3000 (Revised) and ISAE 3410. The reported GRI and SASB information, Metsä Board’s own metrics and their location in the Sustainability statement are indicated in separately published indices. The indices present any deviations and omissions from the GRI and SASB requirements along with the relevant explanations. The indices also contain further details about the indicator-specific information that has been assured. In a separate annex, Metsä Board also presents a table on climate-related risks and opportunities in accordance with the TCFD requirements. ■ Risk management and internal controls over sustainability reporting Metsä Board’s sustainability reporting complies with Metsä Group’s com- mon principles and processes for statutory reporting, risk management and internal control. In sustainability reporting, internal control is based on risk identification, analysis and a focus on the most material risks identified, as well as the best practices of internal control. Metsä Group’s internal control unit and internal control processes, as well as its risk management process, comply with the principles of the COSO (ERM) framework. The sustainability reporting control environment emphasises the company’s values, management’s commitment to sustainable operations, a corporate culture emphasising ethics and sustainability, policies promoting sustainable operations, centralised business processes, professional employees, and transparent operations. Metsä Board’s Chief Financial Officer, supported by the sustainability function , is in charge of the implementation of sustainability reporting. In its sustainability reporting, the company uses Metsä Group head office functions, especially financial services. The risks identified in sustainability reporting include the accuracy of information and the timing of reporting. To ensure that the disclosed infor- mation is accurate and appropriately timed, Metsä Group has defined and adopted a governance model that specifies the roles and responsibilities in sustainability reporting. Metsä Group has included the capacities required to produce the disclosed information in the common business processes that Metsä Board and Metsä Group’s other business areas and head office functions follow in their operations. The owners of business processes ensure that the process environment can transparently produce the required information for disclosure. The responsibility for the accuracy of content, as well as compliance with reporting schedules and the provision of material to Group Accounting, is assigned to the roles in Metsä Group’s business areas and head office functions specified in the governance model. To ensure the accuracy and timeliness of disclosed information, internal controls have been adopted in Metsä Group as part of the common busi- ness processes. Their systematic monitoring is part of the internal control unit’s reporting.
The internal control unit reports on the efficiency of the sustainability reporting controls according to the specified schedule monthly, quarterly, twice a year or once a year in compliance with the common governance model and process of internal control. The results of internal control are monitored, and control is supervised by Metsä Board’s and Metsä Group’s Audit Committee and Corporate and Executive Management Team, respectively, as well as by Metsä Group’s shared services and the manage- ment team for process development. Internal audit inspects sustainability reporting controls and internal control practices as part of its audit work.
the processes of internal control, internal audit and risk management is available in the Corporate Governance Statement .
Sustainability governance at Metsä Board Sustainable and ethical operations, as well as compliance with the law, are the foundation of Metsä Board’s business operations. The Board of Directors, CEO and Corporate Management Team are responsible for sus- tainability matters. Metsä Board’s operating methods are based on Metsä Group’s Code of Conduct and policies adopted by Metsä Board’s Board of Directors. The company’s sustainability targets are based on Metsä Board’s strategy, the materiality assessment of sustainability matters and Metsä Group’s sustainability targets. The seven themes guiding sustainability work, the 2030 sustainability targets, as well as the summary and process of the materiality assess- ment, are described under Material sustainability-related impacts, risks and opportunities . The impacts, risks and opportunities related to sustainability, as well as their management methods, are described in the Sustainability state- ment’s sections on the environment, social responsibility and governance and in the Report of the Board of Directors, under Most significant risks and uncertainties .
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Reporting principles
■ Sustainability statement reporting principles
Strategy and financial targets
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Value creation
Basic information Metsä Board Corporation and its subsidiaries form a forest industry group (“Metsä Board” or “group”). Metsä Board’s business operations comprise folding boxboards, white kraftliners and market pulp. Reporting covers the entire group and all the companies in which the group directly or indirectly holds more than 50% of the votes unless otherwise stated in connection with the disclosed information. Metsä Board owns 24.9% of its associated company Metsä Fibre Oy (“Metsä Fibre”), and financial reporting includes the share of Metsä Fibre’s results and balance sheet corresponding to this holding. The accounting principles are discussed in more detail in the consolidated financial statements, under 7. Group structure . In sustainability reporting, the corresponding share of Metsä Fibre’s sustainability information is not included in Metsä Board’s own sustainability information. Instead, Metsä Fibre is accounted for as part of the value chain. For example, Metsä Fibre’s Scope 1 and Scope 2 emissions are accounted for in the emissions from Metsä Board’s value chain (Scope 3). Metsä Board is part of Metsä Group, which publishes a Sustainability statement encompassing all of Metsä Group. In Metsä Board’s Sustainability statement, reporting mainly focuses on the Metsä Board Group. As Metsä Board follows Metsä Group’s policies and processes and uses Metsä Group’s shared services, reference is made to Metsä Group in some cases. Production unit-specific key figures related to the environment and employees are disclosed on page 71 . The Sustainability statement is published annually as part of the Report of the Board of Directors. The reporting period coincides with that of financial reporting, that is, the financial period from 1 January 2023 to 31 December 2023. The reporting principles for metrics related to each topic are described at the end of each section. Basis for preparation This Sustainability statement complies with the requirements of the Global Reporting Initiative (GRI) 2021 standard and the SASB Pulp & Paper Products industry standard. It also meets the reporting requirements of the Accounting Act for the reporting of non-financial information, in accordance with the EU’s Non-Financial Reporting Directive (NFRD). The progress made in Metsä Board’s strategic 2030 sustainability targets is also reported in this Sustainability statement. As of 2024, Metsä Board is bound by the EU’s Corporate Sustainability Reporting Directive (CSRD) and its reporting requirements, which have guided the content and structure of this 2023 report. The disclosed sustainability matters and key figures are based on a double materiality assessment, conducted in two stages in 2022–2023. The GRI reporting requirements that are material to the company’s operations, products and stakeholders were chosen based on the materiality assessment. The material topics and sustainability targets
Sustainability governance and strategy
Financial development 10 Key figures 12
Report of the Board of Directors
■ The role of, information provided to and sustainability matters addressed by the adminis- trative, management and supervisory bodies This sustainability statement provides details about sustainability govern- ance. Further information about the general duties, composition, diversity and experience of the administrative and supervisory bodies, as well as
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• Sustainability statement • Sustainability statement assurance report
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Consolidated financial statements
78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board
Sustainability governance at Metsä Board
Board of Directors
Metsä Group Sustainability Process Management Team
CEO and Corporate Management Team
Product Safety and Sustainability function
Business functions
Board of Directors Metsä Board’s Board of Directors is the company’s highest body overseeing sustainability. It approves the Metsä Group Code of Conduct and policies, including policies related to the procurement, HR, antitrust, quality, risk management, contracts, legal, data protection, information security, taxation, communication, equality, environmental and corporate security, as well as more detailed guidelines issued based on them, which guide the company’s operations and internal control. The company’s Board of Directors approves Metsä Board’s sustainability targets as part of the company’s strategy and supervises their achievement. The policies and targets are updated should any changes that must be addressed take place in the operating environment. Sustainability is incorporated into the company’s strategy, long-term business and investment plans, risk assessments and annual action
plans approved by the Board of Directors. In accordance with the annual cycle, the Board of Directors handles the environmental review and the sustainability review once a year. The Board also discusses other sustain- ability-related matters if required and consults with the company’s and Metsä Group’s internal sustainability specialists. In the 2023 financial period, the Board of Directors convened 14 (2022: 13) times and discussed the following sustainability topics at its meetings: • Adopting the 2030 sustainability targets • The CEO made quarterly presentations of the company’s 2030 sustainability targets and the key sustainability figures, as well as the most significant risks and uncertainties related to the environmental, employee and social matters.
170 Remuneration report 174 Investor relations and investor information
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Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2023
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