Metsä Board Annual Review 2024

METSÄ BOARD Annual review 2024

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, and the summary and process of the materiality assessment 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. Board of Directors and its committees Metsä Board’s Board of Directors is the company’s highest body overseeing sustainability. The duties and responsibilities of the Board of Directors and the CEO are determined in accordance with the Limited Liability Companies Act and the company’s rules. In addition, the Board of Directors has approved written Rules of Procedure which define the Board of Directors’ duties in greater detail, including the assessment, supervision and decision-making concerning sustainability-related impacts, risks and opportunities. The Rules of Procedure of the Board of Directors and its committees are reviewed annually and updated as required. In 2024, the Board had nine (9) members, of whom 56% were men (5), and 44% were women (4). Of the nine (9) Board members, 89% (8) were independent of the Company, and 67% (6) were independent of a major shareholder of the Company. The Board as a whole has extensive experience of good corporate governance, international business and management, either in operational or fiduciary positions in various industries, including the forest industry, forestry, engineering, the steel industry, the food industry and auditing. In addition, a majority of the Board members have experience in pulp, board and/or paper products. To ensure the efficient management of the Board’s duties, the Board of Directors has appointed an Audit Committee and a Nomination and HR Committee from among its members. They prepare the decisions made by the Board and support the Board in the duties assigned to it. The Board of Directors approves the Metsä Group Code of Conduct and policies, including the procurement, HR, antitrust, quality, risk man- agement, contracts, legal, data protection, information security, taxation, communication, equality, environmental and corporate security policies, which guide the company’s operations and internal control. Metsä Board’s Board of Directors approves the company’s sustainability targets as part of the company’s strategy and supervises their achievement. The policies and targets are updated if any changes that must be addressed take place in the operating environment. Sustainability is incorporated into Metsä Board’s strategy, long-term business and investment plans, risk assessments and annual action plans approved by the Board of Directors. Reviews related to various fields of

CEO and Corporate Management Team Metsä Board’s CEO is in charge of the implementation of sustainability measures in accordance with the Board’s instructions. Once a year, the CEO reports to the Board on material impacts, risks and opportunities related to sustainability and on the progress made in achieving sustaina- bility targets by presenting a sustainability review and a separate environ- mental review to the Board, either alone or jointly with the company’s sus- tainability specialists. In addition, the CEO presents an occupational safety review to the Board of Directors and jointly with the SVP, Development, an R&D review twice a year. The CEO reports to the Board without delay on all sustainability-related risks with a significant impact on the company. In 2024, the Corporate Management Team had six (6) members, of whom 83% were men (5), and 17% were women (1). The representation of employees in the company’s management is organised so that the management team of each of the company’s production units includes one employee representative. The company’s Corporate Management Team prepares sustainabili- ty-related matters before the CEO presents them to the Board of Directors and for its part, supervises the implementation of the approved sustaina- bility measures and sustainability-related impacts, risks and opportunities regularly at its meetings. Of the Corporate Management Team’s members, the SVP, Development is responsible for research and product development, and for business development and sustainability. The SVP, Development reports monthly to the Corporate Management Team on topical sustainability-related matters that affect the company. Metsä Board’s and Metsä Group’s sustainability specialists present a review of sustainability matters to the Corporate Management Team twice a year. The SVP, Development participates in the management team of Metsä Group’s sustainability process and reports the results of sustainability measures to the team quarterly. The SVP, Development manages Metsä Board’s product safety and sustainability function, which includes the company’s Product Safety and Sustainability Director and several specialists. The team works in close cooperation with production, wood supply, procurement and logistics, HR, marketing and sales, communications, investor relations, finance, and legal affairs. Wood supply and procurement are centrally handled in Metsä Group. In turn, the company’s CFO heads Metsä Board’s Risk Committee, which handles sustainability risks as part of the company’s general risk assessment. The Corporate Management Team regularly discusses reviews related to occupational safety, the environment, energy, information security, current regulation and compliance. In addition, the Corporate Management Team discusses the internal control monitoring report, including sustainability controls and their results, twice a year.

sustainability prepared by Metsä Board’s acting management and Metsä Group’s specialists are regularly discussed at the Board of Directors’ meetings. The reviews provide the Board members with information about the company’s main sustainability-related impacts, risks and opportuni- ties, and the progress made in the company’s sustainability targets. The reviews also ensure that the Board of Directors has up-to-date insight and competence in sustainability matters. The Audit Committee plays a key role in sustainability matters, and especially in assessing the accuracy and transparency of the Sustainability statement. In the 2024 financial period, the Board of Directors convened 15 (2023: 15) times. In the 2024 financial period, the Board’s Audit Committee convened five (2023: 5) times. In the 2024 financial period, sustainability-related topics discussed at the meetings of the Board of Directors and its committees included: • An environmental review • A sustainability review • An occupational safety review and a separate review of the development of occupational safety • An R&D review twice a year • Insider training • The long-term development plan, incl. a risk assessment • Legal affairs review • Application of the Corporate Sustainability Due Diligence Directive • The company’s key sustainability figures, 2030 sustainability targets, and the most significant risks and uncertainties related to environmen- tal, employee and social matters • The annual plan for internal auditing and the audit report • The Corporate Governance Statement • A compliance review • A cybersecurity and information security review • The internal control monitoring report, including key sustainability controls and their results • A risk management review • Calculation of value chain emissions and related development work • The sustainability reporting process and observations by the auditor.

and sustainability targets. The company encourages activities in line with its values and interests – responsible profitability, reliability, renewal and cooperation. At least one sustainability target is included in the annual performance-based remuneration of every Metsä Board employee. The target-setting model will continue to encourage the continuous assess- ment and improvement of sustainability matters. The principles of Metsä Board’s remuneration and the overall remuneration of the administrative, management and supervisory bodies are described in greater detail in the 2024 Remuneration Report and Remuneration Policy . The Board of Directors approves the CEO’s salary and remuneration, as well as the principles applied to the remuneration of other members of the Corporate Management Team. The Board of Directors also approves the structure, target group, principles and indicators of the company’s remuneration schemes and the relevant target values for the indicators. The Board of Directors’ Nomination and HR Committee assists the Board in handling matters related to the remuneration, terms of employment and rewarding of management and prepares the Board’s decisions concerning management remuneration. The CEO decides on the compensation of other Corporate Management Team members in cooperation with the Chair of the Board of Directors and in accordance with the principles approved and guidelines issued by the Board. The remuneration of the Board of Directors is not linked to Metsä Board’s performance. In 2024, the maximum level of remuneration available in the CEO’s short-term incentive system was, accounting for Metsä Group’s EBIT multiplier, 75% of the fixed annual salary. The reward is based on Metsä Board’s operating result (50% weighting) and the strategic targets defined by the Board of Directors (50% weighting), including the sustainability targets, as well as the realisation of Metsä Group’s EBIT multiplier. In 2024, the CEO’s sustainability targets were related to occupational safety and strategic programmes, the goals of which include reducing fossil-based CO 2 emissions, promoting the use of fossil-free raw materials and reducing process water use in production. The weighting of the CEO’s occupational safety target was 10%, and its realisation was 132%. In 2024, the maximum level of remuneration available in the short-term incentive system for other Corporate Management Team members was, accounting for Metsä Group’s EBIT multiplier, at most 50% or 62.5% of the fixed annual salary. The reward is based on Metsä Board’s operating result (50% weighting) and the targets of its own responsibility area, including sustainability targets (50% weighting), as well as the realisation of Metsä Group’s EBIT multiplier. In 2024, the sustainability targets of other Cor- porate Management Team members were related to occupational safety, wellbeing at work, fossil-free products and production, the development of recyclable, compostable and bio-based products, and strategic pro- grammes, the goals of which include reducing fossil-based CO 2 emissions, promoting the use of fossil-free raw materials and reducing process water use in production. The weighting of sustainability targets was on average 16 % for the other Corporate Management Team members, and their realisation was on average 102%.

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

Strategy and financial targets

Value creation

Financial development 10 Key figures 12

Report of the Board of Directors

20 20 37 70 89 96

• Sustainability statement

General information

E – Environment

S – Social responsibility

G – Governance

Annexes to the Sustainability statement

98 Consolidated financial statements 102 Notes to the consolidated financial statements 150 Parent company financial statements 153 Notes to the parent company financial statements 166 The Board’s proposal to the Annual General Meeting for the distribution of funds 167 Auditor’s Report 171 Sustainability statement assurance report 173 Shares and shareholders 177 Ten years in figures 178 Taxes 179 Production capacities 181 Calculation of key ratios and comparable performance measures Corporate governance 183 Corporate governance statement 190 • Board of Directors of Metsä Board 194 • Corporate Management Team of Metsä Board

The expertise and skills of Board members regarding sustainability

The sustainability-related expertise and skills of Metsä Board’s Board members are ensured with regular sustainability, environmental and regu- lation reviews in accordance with the annual cycle, which provide the Board members with information about material impacts, risks and opportunities related to the company’s sustainability, and the progress made in the company’s sustainability targets. In addition, the Board members annually participate in training concerning insider regulation. The reviews are mainly presented by the company’s and Metsä Group’s internal specialists in various fields. If required, the Board of Directors and its committees can also acquire third-party expertise in sustainability matters. Several Board members have many years of experience in sustainability-related impacts risks and opportunities concerning the company’s branch of industry and its products, which they have acquired from operative duties or positions of trust.

Integration of sustainability-related performance in incentive schemes

At Metsä Board, remuneration is based on the following principles: • Ensuring sustainable and responsible business operations • Ensuring performance and profitable growth

Business model, value chain and strategy

• Supporting competence development and renewal • Consistency, competitiveness and transparency.

196 Remuneration report 201 Investor relations and investor information

Business model and value chain Metsä Board uses renewable raw materials to produce premium resource-efficient fresh fibre paperboards that support the principles of the circular economy and offer an alternative to fossil-based packaging

To ensure the sustainability and responsibility of its business, Metsä Board uses remuneration to support the achievement of its strategic, operational

Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2024