Metsä Board Annual review 2023

METSÄ BOARD Annual review 2023

■ Engaging with the workforce and workforce representatives about impacts

Health and safety Metsä Board’s occupational safety is guided by the safety management system, comprising the Corporate Security policy and the safety princi- ples, standards, processes and work instructions. Metsä Board’s safety management system considers each country’s legislation, for example, the Occupational Safety and Health Act in Finland. In addition to guiding occupational safety, the ISO 45001 standard calls for a safety management system. Metsä Board’s CEO is responsible for the implementation of safety policies in accordance with the requirements specified by Metsä Group’s senior management. The roles and responsibilities of occupational safety are defined in the safety management principles. The related e-learning course is mandatory for the employees of production units. The General Safety Induction e-learning course on hazards and risks in the work environment is mandatory for Metsä Board’s own workforce working in production units and construction sites. All Metsä Board mills comply with the ISO 45001 standard for occupa- tional health and safety. All Metsä Board mills and the company’s head office apply the 5S method for organising workplaces and standardising working methods, which aims to increase productivity, safety and wellbe- ing at work. At Metsä Board, wellbeing and the improvement and maintenance of work ability are guided by the Code of Conduct and the guidelines for wellbeing and occupational safety, in which Metsä Group commits to promoting the employees’ physical and mental wellbeing. The promotion of workplace wellbeing and work ability is proactive, the goal being to identify threats to employees’ work ability, initiate actions and maintain the employees’ health throughout their careers. The sites are responsible for compliance with applicable legislation and Metsä Group’s requirements for workplace wellbeing. Metsä Board organises healthcare for its employees in accordance with each country’s legislation. Information about healthcare services is availa- ble on the company’s intranet pages, and it is also included in employees’ induction. Other work-related rights As part of the Code of Conduct, Metsä Board is committed to acting in accordance with the UN Guiding Principles on Business and Human Rights and to respecting internationally recognised human rights in accordance with the UN’s Universal Declaration of Human Rights and the ILO’s Declaration on Fundamental Principles and Rights at Work. Metsä Board is committed to ensuring that no child or forced labour, human trafficking or other forms of modern slavery occurs in its business operations and supply chain. Metsä Group publishes a modern slavery statement annually in accordance with the UK Modern Slavery Act, in which it describes the actions taken to ensure that no modern slavery occur in the company’s own operations or its supply chain. Metsä Board supports the UN Global Compact initiative and its principles concerning human rights and employ- ees, among other things. Human rights matters are discussed in e-learning courses such as those focusing on sustainability, the Code of Conduct and DEI, which all employees are required to complete regularly.

Metsä Board measures employees’ commitment to the company and their views on the ethics of business with the Pulse survey, conducted four times a year. The results of the employee survey, ethics barometer and Pulse survey are used as indicators for strategy implementation.

the vision. As part of the continuous development work, an equal pay survey is conducted annually, employees are trained regularly, and measures are taken to ensure that the gender distribution in supervisor and leadership trainings corresponds to the DEI targets. Breaking the forest sector’s traditional male dominance has been identi- fied as a key theme in Metsä Board’s social responsibility. In addition to the company’s strategic target (>30% of women in management positions), efforts are made to increase the share of women at all organisational levels. Anonymous recruitment is the main recruitment method. It supports the diversity of employees by encouraging people with different backgrounds to apply for jobs at Metsä Board. Anonymous recruitment encourages personnel to consider their unconscious biases and their potential impact on recruitment. Based on the results of the 2022 ethics barometer, increasing awareness of the Metsä for all vision and strengthening its implementation at the local level was determined as a development area. To promote it, a workshop-based programme was launched for local management. In the workshops, development measures will be determined based on the results of the DEI survey conducted among local employees. Key areas of development identified in the DEI surveys conducted by the end of 2023 include the unequal distribution of workload, the unequal treatment of employees and poor work-life balance. The workshops will continue in the first half of 2024. Training and skills development The aim is to ensure the availability and retention of skilled employees by investing in development programmes, successor planning, cooperation with educational institutions, and employer image. Competence surveys support the development of multi-competence and competence measure- ment. Personal assessments and wider competence surveys can guide the individual, group and organisational level competence development and the content of development programmes. Metsä Board encourages its employees to actively develop their com- petence and participate in different types of training. Everyone is provided with a personal development plan to support their development at both the personal and team levels. In 2023, to promote continuous development, Metsä Group launched academies for procurement, leadership, sustain- ability and sales alongside the previously launched Finance Academy. Mentoring programmes support the employees’ professional growth and enable the use of tacit knowledge. The implementation of competence development is monitored at two levels. Metsä Board monitors the number of personal development plans and employee survey results related to the opportunities to use one’s own competence. In addition, feedback is collected for each academy. Metsä Board’s employees have a bonus system, and the personal performance bonus goals of each employee covered by the system include a sustainability target. Personal goals and development items are set, and progress is monitored in performance and development appraisals (PDAs), which all employees conduct with their supervisor twice a year. The bonus system does not cover trainees, thesis workers, employees who have worked less than four months during the bonus scheme year or individuals who are not in an employment relationship at the time of the bonus payment.

Metsä for all vision Interaction with employees played an important role when defining the Metsä for all vision. The vision’s content was influenced by the opinions of the international working group comprising the company’s employees, as well as the results of the survey for all employees. The site-specific development measures related to the vision were determined in workshops for local management, aided by site-specific DEI employee surveys. The workshops and DEI surveys are discussed under Actions . Collective agreements Company-specific collective agreements for the chemical forest industry are renewed among the parties based on the principle of continuous negotiations. The concluding of company-specific collective agreements marked the beginning of measures carried out jointly with the employees’ representatives to renew and improve work life. Cooperative activities Metsä Board complies with local legislation and applicable collective agreements in all its operating countries. Cooperation is carried out in accordance with each country’s legislation. The aim of cooperation is to develop the company’s operations and the employees’ opportunities to influence the company’s decision-making concerning their work, working conditions and position in the company. In Finland, elected representatives participate annually in Metsä Group’s cooperation forum and Metsä Board’s corporate meeting, where the elected representatives and the company management discuss the elected representatives’ questions, development proposals and the group’s financial position. In addition, the management team at all mills in Finland includes an elected representative. Metsä Board has a European Works Council (EWC). The goal of the EWC is to promote the company’s internal information flow and contacts between the Corporate Management and employees, as well as to regularly discuss questions about the company’s multinational operations that are significant to the employees, primarily in accordance with the Finnish ver- sion of the EWC agreement. The Works Council is not intended to discuss matters regulated through national or local collective agreements. Employee survey, ethics barometer and Pulse survey Metsä Board conducts an employee survey, measuring job satisfaction, and an ethics barometer, measuring the employees’ views on the practical implementation of the Code of Conduct, in alternate years. The ethics barometer is discussed under G1 – Business conduct . The employee survey is the responsibility of the HR function, which supports the company management in handling the survey results and addressing them in decision-making. The results are discussed at different organisational levels and with elected representatives. Supervisors are trained to process the results, and teams are offered professional support for processing the results and preparing development actions. The results are used in the workplace communities to define development measures, the implementation of which is monitored in units and by the company management.

Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6

Safety talks and occupational health and safety committees

Strategy and financial targets

Occupational safety is promoted and supported with safety talks, or infor- mation sessions for the workforce, which are recorded in the system. The occupational health and safety committees of mill sites regularly discuss matters related to the promotion of occupational safety with various groups of the workforce. The occupational health and safety committee prepares an annual action plan for occupational safety, based on which the occupational health and safety manager and the committee jointly determine the key development measures related to occupational safety. The occupational health and safety committees represent the company’s own workforce as a whole, that is, the company’s own employees and leased labour. ■ Processes to remediate negative impacts and channels for the company’s own employees to raise concerns Compliance and ethics channel The company’s own workforce can report any ethical concerns or non-compliance with legislation they detect through Metsä Group’s Compliance and Ethics Channel or to their supervisor, local management, HR or the Compliance Committee. The Compliance and Ethics Channel, raising concerns and the processing of notifications are discussed in more detail under G1 – Business conduct .

Value creation

Financial development 10 Key figures 12

Report of the Board of Directors

20 72

• Sustainability statement • Sustainability statement assurance report

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

Working conditions

Health and safety Metsä Board’s risk assessment and management is supported by the HSEQ system, designed for recording and monitoring safety observations, accidents, close calls, corrective measure, employee briefing sessions, known as safety talks, and safety walks. Entries can be made by anyone belonging to the company’s own workforce. Safety observations are dis- cussed in daily meetings. Metsä Board does not accept countermeasures against whistle-blowers. If required, whistle-blowers can also submit a report anonymously through the Compliance and Ethics Channel. All accidents and hazardous situations are investigated. The investiga- tion creates conditions for avoiding similar situations and identifying any shortcomings in safety management. When the investigation report is completed, a summary of the investigation is distributed to all Metsä Group business areas.

170 Remuneration report 174 Investor relations and investor information

■ Actions

Equal treatment and opportunities for all The focal points of the Metsä for all vision are equality and gender equality, diversity, inclusion, and cultural change. They guide the development of employee processes and the annually determined measures for achieving

Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2023