Material sustainability-related impacts, risks and opportunities The identification and assessment of material impacts, risks and opportunities Process Metsä Board’s sustainability-related material impacts, risks and opportunities have been identified in a double materiality assessment based on the principles of the company’s risk management process. The risk management process complies with the COSO Enterprise Risk Management methodology. The key goal is to identify and assess the risks, threats and opportunities potentially significant to the implementation of the company’s values and strategy and to the achievement of long-term targets, as well as to identify and assess the company’s impacts on society and the environment. In addition to the company’s own operations, the
METSÄ BOARD Annual review 2024
Methodology The assessment identifies any potential impacts, risks and opportunities for each sub-topic and sub-sub-topic of the ESRS. If no material impacts, risks or opportunities are identified, the sub-topic or sub-sub-topic is assessed to be non-material. Impacts, risks and opportunities are assessed across the value chain. Likelihood and financial risks and opportunities are assessed using a scale defined in Metsä Board’s risk management process, which is the same for all business risks. Impact assessment was added to the scale to account for double materiality. The final assessment of impacts is based on their scale, scope, duration and remediability. The assessment table is presented in this section. Remediability is assessed on the following scale: short-term (less than one year), medium-term (1−5 years), long-term (5−10
identification and assessment of impacts, risks and opportunities encom- passes the upstream and downstream value chain and any other parties that the company’s operations affect. Metsä Board’s risk management process and its responsibilities are described in greater detail in the 2024 Corporate Governance Statement. The double materiality assessment is conducted annually, and it is linked to the annual risk management cycle to make risk identification, assess- ment and prioritisation, and the definition of management measures part of the annual planning process. The double materiality assessment is dis- cussed and approved by Metsä Board’s Corporate Management Team as part of the risk management review in the last quarter. Internal control also monitors and reports on sustainability risks and the control environment to Metsä Board’s Corporate Management Team and Audit Committee in accordance with Metsä Group’s internal control governance model and the annual cycle. The control of sustainability risks is planned, described and implemented on a risk basis in business processes.
years), very long-term (10−30 years) and irremediable. The very long-term option was included to illustrate the nature of the forest sector more accurately. The final size of the impact, risk or opportunity is determined by multiplying its likelihood by its financial or external impact. Development of the double materiality assessment Metsä Board conducted its first double materiality assessment in 2022 by collecting the views of external and internal stakeholders of the company’s real and potential impacts, risks, and opportunities through interviews and surveys. The stakeholders interviewed included the company’s own employees, as well as its customers, investors, goods and service suppliers, and NGOs. Based on the material collected, the impacts, risks and opportunities were prioritised in management workshops.
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Strategy and financial targets
8
Value creation
Financial development 10 Key figures 12
Report of the Board of Directors
20 20 37 70 89 96
• Sustainability statement
Assessment scale for impacts, risks and opportunities
General information
E – Environment
Material sustainability topics
S – Social responsibility
Annual
Very likely
5
5
10
15
20
25
G – Governance
Theme
Topic
Sub-topic
Materiality
2030 target
E – ENVIRONMENT 1. Safeguarding biodiversity and the ecological sustainability of forest use
Annexes to the Sustainability statement
E1 Climate change
Climate change mitigation
12
√
Climate change adaptation
8
√
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
In the next three years
Likely
4
4
8
12
16
20
Energy
9
√
2. Mitigating climate change and reducing emissions
E2 Pollution
Pollution of air, water and soil
5
Microplastics
5
3. Resource efficiency and sustainable production
E3 Water and marine resources E4 Biodiversity and ecosystems
Water
6
√
In the next six years
Possible
3
3
6
9
12
15
Direct impact drivers of biodiversity loss
10
√
Impacts on the state of species and the extent and condition of ecosystems
11
√
Impacts and dependencies on ecosystem services
10
√
In the next ten years
Unlikely
2
2
4
6
8
10
E5 Resource use and circular economy
Resources inflows, including resource use
7
√
Resource outflows related to products and services
10
Waste and side streams
8
√
S – SOCIAL RESPONSIBILITY 4. Respecting everyone
Unlikely in the next ten years
Very unlikely 1
1
2
3
4
5
S1 Own workforce
Equal treatment and opportunities for all
9
√
Health and safety
11
√
5. Promoting safety and wellbeing at work
Other working conditions
6
√
1
2
3
4
5
Other work-related rights
5
Financial impact
Very limited
Limited
Moderate
Significant
Very significant
S2 Workers in the value chain
Equal treatment and opportunities for all
9
√
Health and safety
11
√
Long-term national concern, significant change in market share, significant operations restricted
Other working conditions
9
√
Local harm to reputation, impact on local operations
Short-term national concern, long-term impact on reputation
Long-term national concern, decisive change in market share
Local mention, quickly forgotten
Reputation
Other work-related rights
7
√
S3 Affected communities Communities’ economic, social and cultural rights
7
Rights of indigenous peoples
9
Very limited impact on individuals and/or the local environment
Limited impact on a group of people and/or the regional environment
Moderate short-term impact on society and/or the environment
Significant short-term impact on society and/or the environment
Severe long-term impact on society and/or the environment
S4 Consumers and end-users
Personal safety of consumers and end-users
8
Impact on the wellbeing of society, nature and other stakeholders
Information-related impacts on consumers and end-users
6
G – GOOD GOVERNANCE AND CORPORATE CULTURE 6. Doing the right thing, innovation and open-minded cooperation G1 Business conduct
Impact
Corporate culture
8
√
Corruption and bribery
6
7. The significance of forest-based bioeconomy to society
Management of relationships with suppliers, including payment practices
8
√
196 Remuneration report 201 Investor relations and investor information
Protection of whistle-blowers
5
Political influence and lobbying activities
7
26
27
Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2024
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