Metsä Board Annual Review 2024

METSÄ BOARD Annual review 2024

Targets Metsä Board has set sustainability targets concerning value chain workers and supplier commitment in the Code of Conduct, as well as supplier assessments and audits. These targets are discussed under G1 – Business conduct . The identification and assessment of material impacts, risks and opportunities The material impacts concerning the workers in the value chain were identified in a human rights impact assessment, the results of which were included in the company’s double materiality assessment. The impacts, risks and opportunities related to workers in the value chain that were identified in the double materiality assessment are presented in the table on page 79. The assessment of human rights impacts and the materiality assessment are discussed on pages 26–28. The Know Your Business Partner process; supplier assessments and audits; industry-, country- and supplier-specific risk analyses; the ethics statements in the employee survey; and the Compliance and Ethics Channel are also key elements in identifying, assessing and managing the impacts, risks and opportunities associated with the value chain. They are discussed under G1 – Business conduct . Value chain workers are involved especially in Metsä Board’s investment projects, production unit maintenance, and harvesting and transport. Metsä Group’s harvesting, transport and forestry partners, who are independent contractors, are equated with value chain workers. In the case of these groups, the assessment of human rights impacts specifically highlighted potential negative impacts on health and safety – and in investment projects, also on equality, working hours and wages. In addition to these key impacts, the assessment also pointed out a potential negative impact on the working conditions of workers in the forest management value chain, especially during the forest regeneration stage. In other respects, the most significant potential negative impacts in the upstream value chain are related to the value chains of chemicals, binders, coatings and pigments, as well as mill equipment, which are long and may have human rights impacts extending to high-risk countries. The potential negative impacts on these value chain workers are related to poor working conditions, labour exploitation and occupational safety. The products produced by the company are sold to globally operating customers, some of whose branch of industry or country of location have been identified as involving a higher risk of human rights violations. The human rights situa- tion of countries is taken into account when assessing risks associated with customer relationships. A country’s poor human rights situation affects especially vulnerable workers of customer companies or their value chains. For example, the tobacco industry’s value chains are generally associated with potential negative impacts especially on women’s and children’s rights and on occupational safety in the production process. Depending on their nature and the stage of the value chain, realised impacts may be individual incidents such as occupational accidents or be systemic, especially in long value chains and high-risk countries. Policies Sustainability related to the employees of Metsä Board’s suppliers is guided by Metsä Group’s Supplier Code of Conduct, approved by the company’s Corporate Management Team, and the safety management system. Metsä Board’s minimum requirement in supply agreements is that suppliers commit to Metsä Group’s Supplier Code of Conduct or equivalent

Processes to remediate negative impacts and channels for value chain workers to raise concerns

Other work-related rights The Supplier Code of Conduct specifies many binding requirements concerning other work-related rights of suppliers’ employees: • Respecting internationally recognised human rights in accordance with the United Nations’ Universal Declaration of Human Rights and the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. • Acting in compliance with the UN Guiding Principles on Business and Human Rights. • Taking action to remedy any adverse human rights impacts. Special attention must be paid to any adverse impacts on groups or individuals that may be at higher risk of vulnerability, such as migrant workers. • Prohibiting the use of any form of child labour and forced labour, includ- ing modern slavery and trafficking in human beings. Further information about Metsä Group’s Supplier Code of Conduct is available on Metsä Board’s website . In relation to the upstream or downstream value chain, no confirmed incidents of non-compliance with the UN Guiding Principles on Business and Human Rights, the ILO’s Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises have been brought to Metsä Board’s attention.

supplier-specific principles. Metsä Board does not have separate policies for downstream value chain workers. To ensure sustainability in the down- stream value chain, Metsä Board carries out due diligence in accordance with its Know Your Business Partner process, which is discussed under G1 – Business conduct . One of Metsä Board’s strategic programmes focuses on safe and effi- cient operations and organic growth. The programme’s focal areas include the continuous improvement of occupational safety. One of the goals is to reduce the number of work-related accidents. Working conditions The Metsä Group Supplier Code of Conduct includes several requirements related to the working conditions of suppliers’ employees, with which suppliers must comply: • Fair employment practices

In the Supplier Code of Conduct, the supplier commits to rectifying any non-compliance with the code. Suppliers must also ensure that their employees and stakeholders can raise concerns or grievances, and that there are appropriate practices for handling such cases. The rectification of any deviations identified based on supplier assess- ments and audits is monitored. A model for combating the grey economy, as well as on-site spot checks, are in use in construction projects. Suppliers’ satisfaction and awareness of the means of communication and interaction are assessed with supplier surveys. A more detailed description is provided under Policies in this section and under G1 – Business conduct . Any non-compliance related to working conditions, health and safety or other human rights is handled in accordance with Metsä Board’s escalation process, and in large investment projects, in accordance with the project’s management model. The idea is first to offer suppliers the chance to rectify their way of working. If the supplier is unwilling or unable to rectify their way of working, cooperation with the supplier is discontinued. The most serious cases are presented for processing to Metsä Board’s Corporate Management Team. Compliance and Ethics Channel Workers in the value chain can report any ethical concerns or non-compli- ance with legislation they detect in connection with their cooperation with Metsä Board through Metsä Group’s Compliance and Ethics Channel or to their contact person at Metsä Board. The notification procedures are discussed in the general safety induction for service providers’ employees working in the company’s operations. To increase awareness of the Compliance and Ethics Channel, the channel is promoted in the supplier network, and in information channels and on posters on the sites. In accordance with the Supplier Code of Conduct, the suppliers’ employees can report incidents of non-compliance through the Compliance and Ethics Channel. The Compliance and Ethics Channel, raising concerns and the processing of notifications are discussed in greater detail under G1 – Business conduct .

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

• A living wage as required by laws and regulations • Freedom of association and collective bargaining • Respect for privacy • Anti-harassment

General information

E – Environment

S – Social responsibility

G – Governance

The implementation of the Supplier Code of Conduct is the responsibility of Metsä Group’s procurement organisation, which also centrally handles the procurement of Metsä Board’s raw materials and services. The head of the procurement unit reports to Metsä Group’s President and CEO. Health and safety The Supplier Code of Conduct requires suppliers to provide a safe and healthy working environment to prevent accidents, injuries and illnesses, and to ensure that employees are aware of and adequately trained in these issues. Suppliers must have an occupational health and safety management system according to ISO 45001 or an equivalent system, as applicable. Metsä Board’s occupational safety is guided by the safety management system, comprising the corporate security policy and the safety principles, standards, processes and work instructions. The safety management system encompasses all the employees of service providers working in Metsä Board’s operations, and the system’s requirements are the same for the company’s own workforce and service providers. The implementation of safety policies is the responsibility of Metsä Board’s CEO in accordance with the requirements specified by Metsä Group’s senior management. The responsibilities related to safety policies are described under S1 – Own workforce . The Safety Management Standard for Metsä Group Service Providers specifies requirements for the work management and supervision, employee competence, safety reporting, and permits to work of service providers working in Metsä Board’s operations. Equal treatment and opportunities for all The Supplier Code of Conduct requires suppliers to commit to providing equal opportunities to all its employees and to prohibiting discrimination. The Code of Conduct includes the prohibition of all discrimination based on gender, age, origin, race, nationality, language, religion, belief, opinion, political activity, trade union activity, family relations, pregnancy, health, disability, sexual orientation or any other personal characteristics. Indirect discrimination is also prohibited.

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

Engaging with value chain workers about impacts

The need for interaction with suppliers’ employees or their representatives is highlighted when suppliers’ employees work in operations comparable to Metsä Board’s own operations, for example, at mills or on construction sites. In other respects, the views of suppliers’ employees are conveyed indirectly through supplier management activities such as cooperation meetings and surveys and audits. Metsä Group’s Procurement and Logistics is responsible for the implementation of these activities and for considering the results. The functioning of interaction with suppliers’ employees and the development of cooperation are monitored with a supplier cooperation survey, which is conducted approximately every two years. Cooperation is supported by a supplier network communication channel intended for the management of supplier cooperation, which pro- vides information about training, instructions and topical matters. Supplier management practices are discussed under G1 – Business conduct . Safety is continuously developed and monitored with service providers working at the mills and in construction projects. Service providers’ safety performance is monitored in large investments such as construction pro- jects. Regular on-site safety talks are organised for the project employees, and observed safety deviations are actively addressed. A contact person from the applicable trade union and a health and safety representative are assigned to projects. A model for combating the grey economy is used in construction projects, and project employees can also use the notification channel to report any concerning issues they observe. Metsä Board does not have a process for directly communicating with workers in the downstream value chain. Communication with corporate customers is discussed under S4 – Consumers and end-users .

Working conditions

Health and safety Safety is continuously developed and monitored with service providers working at the mills and in construction projects. Service providers are required to engage in systematic and proactive safety work such as safety observations, walks and talks. Service providers’ employees record their safety observations in the HSEQ system. The recording of safety observations is enabled across the value chain. Safety observations are discussed in connection with 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. Accidents and hazardous situations are investigated thoroughly in coop- eration with service providers. In the case of serious accidents, the author- ities are also involved. The investigation 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 also distributed to all other Metsä Group business areas.

196 Remuneration report 201 Investor relations and investor information

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