Metsä Board Annual Review 2024

METSÄ BOARD Annual review 2024

S3 – Affected communities

If shortcomings are observed in the service providers’ occupational safety, the same approach is followed as in other incidents of non-compli- ance concerning suppliers – that is, the provider is first offered the oppor- tunity to rectify their way of working. If the service provider is unwilling or unable to rectify their way of working, cooperation with the service provider is discontinued. In 2024, in a demolition project related to the Husum production unit’s maintenance investment, one contractor was removed from the site due to shortcomings in occupational safety. Actions In 2024, Metsä Board’s operations did not cause severe human rights impacts, and no confirmed severe human rights issues or human rights violations in the upstream of downstream value chain were brought to the company’s attention. Less severe work-related accidents causing personal injuries, incidents and complaints are discussed under S1 – Own workforce . Metsä Board’s actions seek to mitigate negative impacts and produce positive impacts on value chain workers. The measures are continuous and annual. Processes are developed in line with continuous improvement. Metsä Board has not identified significant operating or capital expenditure allocated to actions concerning value chain workers. Working conditions A background check is always carried out for new suppliers, excluding pri- vate forest owners and certain low-risk suppliers. In addition, compliance is monitored continuously during the supplier relationship. Any known human rights violations and negative publicity related to human rights are reviewed as part of the background check. More detailed supplier assessments and audits are conducted for the most important suppliers, but also for suppliers whose branch of industry, country or performance involves a heightened risk related to sustainability or availability. Supplier assessments and audits are conducted to ensure that each supplier has adequate means to recognise and minimise impacts on the working conditions and other work-related rights of their employees. Among other things, evaluations seek to ensure that the companies have adequate proactive measures for ensuring occupational safety, as well as a written code of conduct and an anonymous reporting channel for employees. Audits include observations of working conditions and interviews with employees if required. Some of the key actions to safeguard the rights of value chain workers in Metsä Group’s wood supply include the requirement that contractors commit to sustainability requirements, background checks of entrepre- neurs, close cooperation with the network of entrepreneurs, compliance with certification schemes and chains of custody (PEFC and FSC) and ISO standards (ISO 9001, 14001, 45001), as well as validation of operations by independent parties. In most large strategic construction projects, the subcontracting chain’s sustainability is ensured proactively with the operating model for combat- ing the grey economy. It ensures that companies in the subcontracting chain comply with laws and collective agreements and handle taxes and other obligations appropriately. The backgrounds of businesses are checked at the offer stage, and spot checks are carried out regularly to detect any deviations.

To ensure the sustainability of suppliers, customers and other coopera- tion partners, Metsä Board follows third-party due diligence with its Know Your Business Partner background checks, which are discussed in more detail under G1 – Business conduct . Supplier management practices are discussed in greater detail under G1 – Business conduct . Health and safety The general safety induction dealing with hazards and risks in the work environment is mandatory for service providers working at Metsä Board’s production units and construction sites. Before beginning to work on Metsä Board’s site, suppliers also receive a work-specific safety induction and permits to work. Service providers must assess the risks in their own work, prepare for them with a safety plan and submit their plan to Metsä Board. Service providers participate in Metsä Board’s safety walks and risk assessments. Work-related accidents that occur in the service providers’ operations at Metsä Board are registered in the HSEQ system. Accidents and reported safety observations are monitored continuously. In con- struction projects, the safety performance of different service providers is monitored, and any safety deviations observed are actively addressed. Metsä Fibre, Metsä Board’s associated company, organises regular cooperation forums with key service providers to discuss the conditions and joint development needs of safety cooperation. A key safety develop- ment measure in the next few years is to expand cooperation forums to Metsä Board. Metsä Group’s wood supply contractors participate in regular safety walks at the loading and unloading sites of production units and terminals and in the safety management training organised in 2024 and 2025. In 2024, an application for employees working alone in the forest was introduced in wood supply. In addition, a risk assessment is conducted for each forest worksite. Equal treatment and opportunities for all Supplier management practices for ensuring social responsibility are discussed under Working conditions in this section. Equal treatment and opportunities for all are considered in supplier audits, in which attention is paid to matters such as the adequacy of written instructions to promote equality and non-discrimination and practices for ensuring compliance with the instructions. Other work-related rights Supplier management practices, including audits to ensure the realisation of social responsibility, are discussed under Working conditions in this section. The auditors have been trained to detect risks related to forced labour and labour exploitation, for example.

Material impacts, risks and opportunities related to affected communities

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 • Land-related impacts • Adequate housing

Opportunity: Metsä Board considers the views, needs and rights of various stakeholders such as the affected communities when making decisions and developing operations, which improves the management of sustainability impacts. The appreciation of Metsä Board’s operations and the company’s reputation as a sustainable operator improve.

As part of Metsä Group, Metsä Board can contribute to social equality and consensus among different communi- ties through systematic stakeholder en- gagement. The needs of local communi- ties and other affected communities are taken into account in decision-making and the development of operations. Metsä Board’s production units and wood supply promote employment, livelihood and tax revenue especially in small localities. Any negative environmental impacts of production units such as noise, odour or dust. Commercial forest use may affect the recreational use of forests compared to old-growth, natural or primary forests.

• Operating model for stakeholder engagement.

• Consideration of stakeholder feedback in the sustainability materiality assessment. • Metsä Board actively provides information about its operations and organises local public events on significant events such as investments. • In the localities of production units, local residents are offered greater opportunities for participation, and initiatives are taken to improve the local quality of life. • Metsä Board’s business model is based on the use of native tree species. The regenerative forestry actions of Metsä Group, in charge of wood supply, aim to verifiably strengthen the state of nature in commercial forests by 2030. • Biodiversity plans will be drawn up for all mill sites in line with the principles of regenerative land use. • In the home region of the Sámi, Metsä Group engages in local dialogue about the coordination of reindeer husbandry and forestry with key stakeholders such as forest owners and reindeer owners’ asso- ciations. Communication with the Sámi is typically related to practical questions and conditions for operations. • The Sámi Parliament is included in the operating model for stakeholder engage- ment, which was introduced in 2024.

Strategy and financial targets

Value creation

Financial development 10 Key figures 12

Report of the Board of Directors

Risk: If the views, needs and rights of various stakeholders such as communities affected by Metsä Board are not adequately taken into account, 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 appreciation 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 live- lihoods, in its decision-making and operational development, improving the management of impacts. Through active interaction, the tradi- tional knowledge and experience of the Sámi concerning climate change-induced impacts on northern nature can be harnessed. Engaging stakeholders and considering their views in decision-making has long-term impacts on the acceptability of the company’s operations and on the company’s financial position. 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 decision-making, which weakens the appreciation of the company’s operations and its reputation as a sustainable operator. The traditional knowledge and experience of the Sámi concerning climate change-induced impacts on northern nature cannot be taken into account.

20 20 37 70 89 96

• Sustainability statement

General information

E – Environment

S – Social responsibility

G – Governance

Annexes to the Sustainability statement

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 are taken into account in decision-making and operational development.

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 Northern Finland and Northern Sweden, wood supply has potential impacts on the ability of the Sámi to pursue their livelihood. Inadequate engagement would lead to the needs of indigenous peoples and the conditions for their livelihoods not being adequate- ly considered in decision-making and operations.

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 2030 sustainability targets, and their setting and moni- toring, are discussed in greater detail under Sustainability governance and strategy and Material sustainability-related impacts, risks and opportunities. The sustainability targets related to the environment and the supply chain’s sustainability especially seek to directly or indirectly reduce the negative impacts of Metsä Board’s operations or promote their positive impacts on affected communities.

196 Remuneration report 201 Investor relations and investor information

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