Interests and views of stakeholders
METSÄ BOARD Annual review 2024
Strategy According to its strategy, Metsä Board aims to grow in fibre-based packaging materials and renew its industrial operations. The company implements its strategic programmes, including growth and development investments, to improve the mills’ production and resource efficiency and reduce the carbon footprint of products. The Leader in Sustainability stra- tegic programme focuses on achieving completely fossil-free production and products by the end of 2030. The goals of the Efficient Innovation programme include reducing the weight of paperboard and developing recyclable products. The company’s resource-efficient, fresh fibre paper- boards are already used to replace fossil-based materials and reduce the carbon footprint of packaging. Metsä Board’s sustainability targets and the progress made on them are described in greater detail on page 29. The company’s decision-making is guided by financial and sustainability targets and long-term shareholder value growth. Metsä Board focuses on the continuous improvement of cost-effectiveness and sustainability, and on customers who benefit from the high performance of the company’s products and services. The company’s long-term goal is to achieve at least a 12% comparable return on capital employed and keep the ratio of interest-bearing net liabilities and comparable EBITDA below 2.5. Interests and views of stakeholders Metsä Board interacts with its key stakeholders and develops its operations based on stakeholder feedback. Stakeholder interaction is carried out at different organisational levels. For example, regular dialogue is conducted with customers and investors to build trust and learn about their views and needs. Dialogue with local communities is often conducted at the mill level and with policymakers, while stakeholder cooperation is centrally handled in the Corporate Affairs unit of Metsä Group’s Group services. In 2024, Metsä Group introduced a new Group-level operating model for stakeholder engagement, in which all the stakeholder feedback concerning sustainability is collected twice a year. The feedback is ana- lysed and compiled into a report concerning the weaknesses, strengths, risks and opportunities of Metsä Group’s operations in terms of sustaina- bility. This process will enable an increasingly systematic identification and active engagement of key stakeholders and the collection and processing of stakeholder feedback. The process will also ensure that the feedback is taken into account in operational development and decision-making. The process is coordinated by Metsä Group’s Corporate Affairs unit. Stakeholder feedback is used in risk management and as a basis for new cooperation projects, examples of which are included in section S3 – Affected communities . In the process, stakeholders’ main messages and key feedback are regularly reported to Metsä Board’s Corporate Management Team, which ensures that the results are taken into account in the company’s operations. Stakeholder feedback is also used in the annual double materiality assessment and the 2030 target setting, which is based on the materiality assessment. The materiality assessment is discussed in greater detail under Material sustainability-related impacts, risks and opportunities.
materials. The company is Europe’s leading producer of folding boxboard and white kraftliners, and the world’s largest producer of coated white kraftliners. In 2024, folding boxboard accounted for 57% of turnover, while 25% of turnover came from white kraftliner, 14% from market pulp, and 4% from other operations. Metsä Board employs approximately 2,400 people in 17 countries. The number of employees by country is presented under S1 – Own workforce . The company’s eight production units are in Finland and Sweden, close to its main raw material, wood fibre from northern forests. Metsä Board’s folding boxboard is mainly used in consumer product packaging like food and pharmaceutical packaging. The end uses of white kraftliners are related to various packaging needs in the retail sector. The company produces chemical pulp and bleached high-yield pulp (BCTMP), which are used in its own paperboard production, with some sold as market pulp. Metsä Board sells paperboard and market pulp worldwide. The com- pany’s main market areas are Europe and North America. Key customer groups include international brand owners, paperboard converters, manufacturers of corrugated products and the retail sector. Metsä Board supports paperboard sales with a service mix that helps customers deal with various packaging challenges such as reducing the carbon footprint of packaging and plastic use, and improving production efficiency. In addition to its own pulp production, a 24.9% holding in its associated company Metsä Fibre secures the company’s self-sufficiency in pulp and ensures the high and consistent quality of its end products. The company covers its energy consumption with its own production, electricity pur- chased from its associated company Metsä Fibre and electricity purchased at cost price from Pohjolan Voima, in which Metsä Board has a 2.6% holding. Metsä Board’s energy self-sufficiency is around 90%. The procurement of other raw materials and services is centrally handled by Metsä Group’s procurement and logistics unit, which strives, through its procurement process, to ensure that partners operate sustain- ably. Relationships with goods and service suppliers are discussed under section G1 − Business conduct . The resources used by Metsä Board and the company’s output are discussed under section E5 − Resource use and circular economy and in the Annual Review, under Value creation . Metsä Board is part of Metsä Group, the parent company of which is Metsäliitto Cooperative, owned by approximately 90,000 Finnish forest owners. Metsä Board does not own forests. The procurement of wood raw material is handled centrally through Metsä Group from forests that are regenerated after felling, and where attention is paid to biodiversity. Further information about biodiversity is disclosed in section E4 – Bio- diversity and ecosystems . In Finland, most of the wood is acquired from Metsäliitto Cooperative’s owner-members, who together own 32% of all Finnish forests. In Sweden, wood is mainly procured from Norra Skog’s owner-members, who own around 10% of all the productive forest land in Sweden. Norra Skog has a 30% holding in Husum Pulp AB, Metsä Board’s subsidiary, which owns the Husum pulp mill.
This table includes a summary of Metsä Board’s key stakeholders, and of how themes important to them are considered in the company’s strategy and business model.
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Stakeholder
Stakeholder engagement
Themes important to stakeholders
Impact on operations, business model and strategy
Own workforce
• Employee survey and Pulse survey • Cooperation with employee representatives • Safety and health at work and related observations • Compliance and Ethics Channel
• Health and safety • Diversity, equality and inclusion (DEI)
• Certified safety management systems • Metsä For All vision • Anonymous recruitment
• Competence development and good leadership • Working conditions and other work-related rights • Organisation’s resilience • Information about product performance and sustainability • Product safety and quality • Sustainable forest management and biodiversity • Climate change mitigation across the value chain • Climate change adaptation • Climate change mitigation across the value chain • Climate change adaptation • Paperboard as a replacement for plastic • Biodiversity and availability of wood raw material • Human rights and diversity • Management of sustainability risks and good governance • Impact of sustainability regulation on the demand for paperboard and availability of wood raw material • Safety and health • Working conditions and other work-related rights • Climate change mitigation across the value chain • Climate change adaptation • Biodiversity • Circular economy • Local impacts of mills such as noise, dust and odour nuisance • Climate change mitigation and climate change adaptation • Biodiversity • Promotion of employment, livelihood and entre- preneurship; tax revenue • Rights of indigenous peoples • Safeguarding traditional livelihoods • Climate resilience of northern nature • Free, prior and informed consent • Intergenerational and experimental knowledge of indigenous peoples alongside scientific knowledge • Circular bioeconomy • Climate change mitigation and climate change adaptation • Biodiversity • Logistics and public infrastructure
• Metsä Group’s academies and other training • Development of leadership and key capabilities • Measures determined based on the employee survey • Products replacing fossil-based materials and recyclable products • Carbon footprint of products and the use and development of life-cycle calculation • Strategy of regenerative forestry • Resource-efficient production • Product safety and quality, and certified management systems • Up-to-date product information • Investments in fossil-free production and products, and the improvement of the mill’s production and resource efficiency • Forest certification and regenerative forestry • Metsä For All vision • Sustainability targets in management remuneration • Definition and management of sustainability risks and assess- ment of financial impacts • Certified safety management systems • Proactive model for combating the grey economy in construc- tion projects • Strategy of regenerative forestry • Joint sustainability targets with partner suppliers • Measures defined based on the cooperation survey for suppliers • Assessment of suppliers’ sustainability as part of the selection process and cooperation • Inclusive cooperation and decision-making • Resource-efficient and fossil-free production, waste-free production • Best available techniques • Regenerative land-use policies and biodiversity plans at mills • Inclusive cooperation and decision-making • Engagement of suppliers knowledgeable about the rights of the Sámi • When planning and implementing wood supply and forestry work, measures are taken to locally ensure that the reindeer herding of the Sámi is not jeopardised. The conditions for the reindeer herding of the Sámi are safeguarded with agreements and regular audits of our wood suppliers • New investments • Resource-efficient and fossil-free production, waste-free production • Products replacing fossil-based materials and recyclable products • Strategy of regenerative forestry • Regenerative land-use policies and biodiversity plans at mills • Funding programme for nature projects • Products replacing fossil-based materials and recyclable products • Resource-efficient and fossil-free production • Strategy of regenerative forestry • Regenerative land-use policies and biodiversity plans at mills • The wood processing industry’s biodiversity roadmap and further measures • Joint research and development projects • Strategy of regenerative forestry • Regenerative land-use policies and biodiversity plans at mills • Funding programme for nature projects • Education and training cooperation, and partnerships • Jobs and traineeships • Student guidance and induction • Strategy of regenerative forestry • Regenerative land-use policies and biodiversity plans at mills • Funding programme for nature projects • Forest protection (incl. METSO programme) • The wood processing industry’s biodiversity roadmap and further measures
Strategy and financial targets
8
Value creation
Customers, consumers and end-users
• Continuous dialogue and cooperation • Events and training • Customer experience surveys • Customer feedback forms • Sustainability assessments • Contact forms on web pages • Continuous dialogue and cooperation • Investor meetings and events
Financial development 10 Key figures 12
Report of the Board of Directors
Shareholders, analysts and other capital market representatives
20 20 37 70 89 96
• Sustainability statement
General information
coordinated by the company and/or brokerage firms, including mill visits • Financial reporting and releases • Annual General Meeting • Cooperation with external assessors and credit rating agencies • Supplier days • Cooperation forums for occupational safety • Cooperation survey for suppliers • Sustainability working group activi- ties with partner suppliers • Continuous dialogue and cooperation • Compliance and Ethics Channel
E – Environment
S – Social responsibility
G – Governance
Annexes to the Sustainability statement
Suppliers and workers in the supply chain
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
Local communities • Open house and other events at production units • Consultation of local communities in investment projects • Cooperation days • Compliance and Ethics Channel
Indigenous peoples (the Sámi)
• Bilateral meetings • Cooperation days • Compliance and Ethics Channel
Policymakers
• Public hearings • Bilateral meetings • Events, seminars and panels • Forest and mill visits • Compliance and Ethics Channel
• New products and innovation • Renewal, investments and jobs • Solutions-oriented cooperation
Lobbying and industrial associations
• Bilateral meetings • Events, seminars and panels • Cooperation days • Forest and mill visits
• Sustainable products • Climate change mitigation and climate change adaptation • Biodiversity • Safeguarding biodiversity • Advocacy cooperation • Wellbeing of the industry, value chain and operators • Research and development cooperation • Education, training and competence • Investments and jobs • Learning, training and education • Working life • Diversity, equality and inclusion • Biodiversity • Climate change mitigation and climate change adaptation • Forest protection and old-growth forests • Forestry methods • Forestry’s impact on waterbodies
Researchers, educational institutions and students
• Cooperation projects • Cooperation events • Forest and mill visits • Recruitment events • Thesis assignments and traineeships • Surveys • Bilateral meetings • Project cooperation • Cooperation days • Compliance and Ethics Channel
196 Remuneration report 201 Investor relations and investor information
NGOs
24
25
Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2024
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