Metsä Board Annual review 2023

S3 – Affected communities

METSÄ BOARD Annual review 2023

■ Engaging with affected communities about impacts

■ Actions The materiality assessment is further specified based on the feedback obtained from engagement with affected communities. The company seeks to harness identified opportunities by exploring potential business development and cooperation initiatives with interested stakeholders. Actions for managing negative impacts and promoting positive impacts at mill localities include systematically reducing environmental impacts, engaging with local communities and increasing cooperation, as well as adopting initiatives that improve the quality of life locally, such as improving employment and providing opportunities for recreation. Biodiversity plans will be drawn up for Metsä Board’s production units as part of Metsä Group’s action plan launched in 2023. The biodiversity plans will be prepared in cooperation with an NGO that specialises in the biodiversity of the built environment. The goal is to raise the level of the biodiversity protection of the built environment to a new level in mill environments and develop cooperation with local communities. The regenerative forestry strategy is a solution that Metsä Group has been systematically developing to seriously address stakeholders’, such as NGOs, concerns about biodiversity loss and climate change. In addition to regenerative forestry, Metsä Group is promoting other actions such as the voluntary METSO forest conservation programme and its implementation. To its forest-owner members, Metsä Group offers regenerative forestry service solutions such as the Metsä Group Plus service. Regenerative forestry and biodiversity work are described in more detail under E4 – Biodiversity and ecosystems . Cooperation with scientific communities will be strengthened, for example, through cooperation days organised for stakeholders to discuss topics such as the progress made in cooperation involving Metsä Group and scientific communities, as well as to offer Metsä Board’s stakeholders the opportunity to influence the company’s work more widely.

Material impacts, risks and opportunities related to affected communities

For example, Metsä Board communicates openly on the impact of its operations and products with the help of life-cycle assessments and aims for active dialogue with stakeholders. The goal of stakeholder engagement is to ensure that stakeholders are met and heard, and that the company receives feedback on its operations. Stakeholder feedback is analysed indi- vidually for various stakeholders, and it is taken into account in develop- ment and reported to Metsä Board’s management and administration. The scope and frequency of engagement differs depending on the stakeholder. The management processes for stakeholder engagement, which will be implemented in 2024, aim to diversify the methods of engagement and harmonise the scope and frequency of engagement with various stakeholders to ensure the opinions of all stakeholders are equally taken into account. The intention is to meet each stakeholder in person at least once a year. Other engagement mechanisms include cooperation days with NGOs and researchers, visits, and cooperation projects. Of indigenous peoples, the Sámi are affected by Metsä Board’s operations, especially in the context of wood supply. In wood supply, the main local stakeholders are taken into account, and compliance with certification requirements is ensured. Forest certification schemes also set out strict criteria for social sustainability, such as requirements for safeguarding the rights of indigenous peoples. In the home region of the Sámi, Metsä Group engages in dialogue about the coordination of reindeer husbandry and forestry with stakeholders, including forest owners and reindeer owners’ associations

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

Material sub-sub-topic

Impacts

Risks and opportunities for Metsä Board

Management

Communities’ economic, social and cultural rights

Opportunity : Metsä Board considers the views, needs and rights of various stake- holders such as the affected communities when making decisions and developing op- erations, which improves the management of sustainability impacts. The acceptability of Metsä Board’s operations and the com- pany’s reputation as a sustainable operator improve. Risk : If the views, needs and rights of vari- ous stakeholders such as affected commu- nities are not taken into account adequately, Metsä Board’s understanding of the impacts of its operations and value chain remains incomplete. This means Metsä Board is unable to take stakeholders into account in its decision-making, which weakens the ac- ceptability of the company’s operations and its reputation as a sustainable operator. Opportunity : As part of Metsä Group, Metsä Board considers the needs of indigenous peoples, especially the conditions for their livelihoods, in its decision-making and op- erational development, improving the man- agement of sustainability impacts. Metsä Board’s acceptability and its reputation as a sustainable operator improve. Risk : If adequate attention is not paid to the needs of indigenous peoples and especially the conditions for their livelihoods, Metsä Board’s understanding of the impacts of its operations and its value chain weakens. This means Metsä Board is unable to take indigenous peoples into account in its deci- sion-making, which weakens the accepta- bility of the company’s operations and its reputation as a sustainable operator.

• Land-related impacts • Adequate housing

Metsä Group can contribute to social equality and consensus among different communities through systematic stakeholder engagement. The needs of local communities and other affected communities are taken into account in decision-making and the development of operations. The inadequate management of stakeholder engagement could lead to the views and rights of affected communities not being considered in decision-making and operational development.

• The model for stakeholder engagement was developed in 2023 by defining process- es for the management of stakeholder engagement, which will be implemented in 2024. • Metsä Board actively provides information about its operations and organises local public events on major events such as investments. • Stakeholders are engaged in the materiality assessment concerning sustainability. • In the localities of production units, local residents are offered greater opportunities for participation, and initiatives are made to improve the local quality of life.

Strategy and financial targets

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

Rights of indigenous peoples • Free, prior and informed consent • Self-determination

Stakeholder engagement ensures that the needs of indigenous peoples and the conditions for their livelihoods can be taken into account in decision-mak- ing and operational development.

• In the home region of the Sámi, Metsä Group engages in local dialogue about the coordination of reindeer husbandry and for- estry with key stakeholders such as forest owners and reindeer owners’ associations. Communication with the Sámi is typically related to practical questions.

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

A lack of engagement would lead to the needs of indigenous peoples and the conditions for their livelihoods not being adequately considered in decision-mak- ing and operations.

■ Processes to remediate negative impacts and channels for affected communities to raise concerns

Metsä Board engages in continuous dialogue with its stakeholders. The implementation of large projects such as new production units or lines always includes an environmental impact assessment, carried out in advance, which also involves hearing local communities and other stake- holders. In other matters, the affected communities can raise concerns by directly contacting local operations through the production units’ contact persons, Metsä Board’s Communications or Metsä Group’s Corporate Affairs, for example. To remediate any negative impacts, the company acts without delay and in cooperation with the local and regional authorities if required. Open Doors events organised at Metsä Board’s production units are an established way of informing local residents and other interested parties about the operations. Metsä Board strives to comprehensively inform the public about events open to them, for example, through newspaper announcements and social media. Providing feedback and asking ques- tions through the company’s website is also possible. The affected communities can also report any ethical concerns or non-compliance with legislation through Metsä Group’s Compliance and Ethics Channel. In the Supplier Code of Conduct, the supplier commits to rectifying any non-compliance with the code. The Compliance and Ethics Channel is described under G1 – Business conduct .

Positive impact on the environment and society or on Metsä Board’s business Negative impact on the environment and society or on Metsä Board’s business

■ Targets Metsä Board’s strategic 2030 sustainability targets and the process for their setting and monitoring are described under Sustainability governance and strategy . The sustainability targets related to the environment and the supply chain’s sustainability especially seek to directly or indirectly reduce Metsä Board’s negative impacts or promote its positive impacts on affected communities. ■ The identification and assessment of material impacts, risks and opportunities The material impacts, risks and opportunities related to affected commu- nities have been identified in a double materiality assessment based on the principles of the company’s risk management process. The materiality assessment is discussed on pages 26–28 . The main communities affected by Metsä Board include forest owners, local communities in mill localities, the nature around the mills and the people who earn their livelihood from it, as well as other interested parties such as indigenous peoples and NGOs.

■ Policies Sustainability concerning affected communities is guided by the Code of Conduct and the Supplier Code of Conduct, which include commitments to human rights. Metsä Board respects internationally recognised human rights in all its operations. The commitments are discussed in more detail under S1 – Own workforce and S2 – Workers in the value chain . In addition to the company’s own workforce and workers in the value chain, the commitments concern all affected communities. In 2023, management processes and practices for stakeholder engage- ment were defined. The company will follow them from the beginning of 2024. Special attention is paid to affected communities in stakeholder activities and in the management processes introduced in 2024, the goal of which is to ensure good and confidential relationships, a low contact threshold, and regular meetings between Metsä Board and its stake- holders. Metsä Board also strives to develop its operations by regularly surveying opportunities for cooperation.

170 Remuneration report 174 Investor relations and investor information

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