METSÄ BOARD Annual review 2024
The identification and assessment of material impacts, risks and opportunities The material impacts on affected communities 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 affected communities that were identified in the double materiality assessment are presented in the table on page 83. The assessment of human rights impacts and the materiality assessment are discussed on pages 26–28. The main communities affected by Metsä Board include forest owners, local communities in mill localities, the nature around the mills and the people who earn their livelihood from it, as well as other interested parties such as indigenous peoples (the Sámi), and various NGOs. In mill localities, Metsä Board’s impacts on communities are directly caused by the company’s own operations. In wood supply areas, the impacts are caused in the value chain. If realised, the impacts are generally systematic, which is why the affected communities are considered in investment planning and in mill and wood supply operations. Individual impacts may occur during exceptional situations at mills, for example. Policies Sustainability concerning affected communities is guided by the Code of Conduct and the Supplier Code of Conduct, which include commitments to human rights. In all its operations, Metsä Board respects internationally recognised human rights and in accordance with the UN Guiding Principles on Business and Human Rights, it is committed to rectifying any negative human rights impacts. In relation to affected communities, 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. The Code of Conduct and the Supplier Code of Conduct are discussed in more detail under S1 – Own workforce and S2 – Workers in the value chain . In addition to the company’s own workforce and workers in the value chain, the commitments concern all affected communities. The hearing of affected communities is guided by the production units’ environmental permits and environmental management systems, among other things. These operating principles are discussed under sections E1 , E2 , E3 , E4 and E5 and in this section under Engaging with affected communi- ties about impacts . Special attention is paid to affected communities in the operating model for stakeholder engagement. Metsä Board also strives to develop its operations by regularly surveying opportunities for cooperation.
engagement is described on page 25. Stakeholder feedback is collected and reported centrally in Metsä Group twice a year. Each report defines actions for managing the weaknesses or negative impacts of operations and for harnessing opportunities. In addition, the status and effectiveness of previously adopted actions are assessed. The scope and frequency of engagement differs, depending on the stakeholder. Metsä Group’s Corporate Affairs unit aims to organise a bilat- eral meeting at least once a year with each stakeholder in a key position at the Metsä Group level. Other engagement mechanisms include coopera- tion days, visits, and cooperation projects. No specific frequency has been defined for meetings with local communities. Instead, engagement takes place in the form of open house events, investment projects, meetings with the authorities or feedback channels, for example. The company engages directly with community members such as the residents of mill locations or their representatives such as the local authorities. Of indigenous peoples, the Sámi are affected by Metsä Board’s oper- ations especially in the context of wood supply. In the home region of the Sámi, Metsä Group engages in dialogue about the coordination of reindeer husbandry and forestry with stakeholders, including forest owners and reindeer owners’ associations, and ensures locally that wood supply does not jeopardise the conditions for reindeer husbandry.
any non-compliance with legislation. The operating model ensures that corrective action linked to defective performance results in greater benefit than harm to nature. Nature compensation is applied in accordance with the Nature Conservation Act and Forest Act, which play a key role for biodiversity. The compensation model is being developed, and it will be applied to detected deviations retroactively from 2023. During 2025, an independent expert group will participate in determining the sites’ nature hazards and compensation measures, and the operating model and its methods will be developed with the future in mind. Compliance and Ethics Channel The affected communities can also report any ethical concerns or non-compliance with legislation through Metsä Group’s Compliance and Ethics Channel. In the Supplier Code of Conduct, the supplier commits to rectifying any non-compliance with the code. The Compliance and Ethics Channel is described under G1 – Business conduct . 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 related to the affected communities were brought to the compa- ny’s attention. Incidents, complaints and severe human rights impacts are discussed under S1 – Own workforce . Metsä Board began following its new operating model for stakeholder engagement in 2024. Metsä Group also organised its first cooperation day, which will become an annual event aimed at increasing cooperation among stakeholders. A wide range of representatives of Metsä Group’s stakeholders, especially from the research sector, environmental and other organisations and think tanks, were invited to the event.
Actions for managing negative impacts and promoting positive impacts at mill localities include systematically reducing environmental impacts, engaging local communities and increasing initiatives that improve local cooperation and quality of life through better employment and recreational opportunities, for example. In wood supply, the main local stakeholders are taken into account, and compliance with certification requirements is ensured. Biodiversity plans will be drawn up for each Metsä Board production unit in the next few years as part of the action programme launched by Metsä Group in 2023. The biodiversity plans will be prepared in cooperation with an NGO that specialises in the biodiversity of the built environment. The goal is to raise the level of the biodiversity protection of the built environ- ment to a new level in mill environments and develop cooperation with local communities. The regenerative forestry strategy is a solution that Metsä Group has been systematically developing to seriously address stakeholders’ such as NGOs concerns about biodiversity loss and climate change. In addition to regenerative forestry, Metsä Group is promoting other actions such as the voluntary METSO forest conservation programme and its implementation. To its forest-owner members, Metsä Group offers regenerative forestry service solutions such as the Metsä Group Plus service. Regenerative forestry and biodiversity work are described in greater detail under E4 – Biodiversity and ecosystems . The costs for biodiversity plans in the reporting year are presented under E4 – Biodiversity and ecosystems . Metsä Board has not identified other significant operating or capital expenditure allocated to actions concerning affected communities.
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
General information
E – Environment
S – Social responsibility
G – Governance
Annexes to the Sustainability statement
Processes to remediate negative impacts and channels for affected communities to raise concerns
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
Metsä Board engages in continuous dialogue with its stakeholders. The implementation of large projects such as new production units or lines always includes an environmental impact assessment, carried out in advance, which also involves hearing local communities and other stake- holders. In addition, local communities have a statutory right to participate in the mills’ environmental permit processes by submitting reminders and views on environmental permit applications, which are considered in the permit process. In other matters, the affected communities can raise concerns by directly contacting local operations through the production units’ contact persons, Metsä Board’s Communications or Metsä Group’s Corporate Affairs, for example. The feedback received is processed, a response is sent to the feedback provider, and an entry is made in the HSEQ system as soon as possible. Open house events organised at Metsä Board’s production units are an established way of informing local residents and other interested parties about Metsä Board’s operations. Metsä Board aims to keep the public widely informed about events through different media such as newspapers and social media. It is also possible to provide feedback and ask questions through the company’s website. To remediate any negative impacts, the company acts without delay and in cooperation with the local and regional authorities if required. Social sustainability, including local communities and safeguarding the rights of indigenous peoples, has been taken into account in the requirements of forest certification and the Chain of Custody. In any violation of these, an investigation is launched in accordance with wood supply’s due diligence system, and corrective action is taken if required. To remedy any environ- mental deviations, Metsä Group, in charge of the company’s wood supply, will introduce a voluntary nature compensation as part of regenerative forestry, which will overcompensate the harm to nature resulting from
Engaging with affected communities about impacts
Metsä Board communicates openly on the impact of its operations and products with for example, the help of life-cycle analyses and aims for active dialogue with stakeholders. The goal of stakeholder engagement is to ensure that stakeholders are met and heard, and that the company obtains feedback on its operations. Feedback is analysed, and it is taken into account in operational development and reported to senior management and administration. The operating model for stakeholder
196 Remuneration report 201 Investor relations and investor information
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Report of the Board of Directors | METSÄ BOARD ANNUAL REVIEW 2024
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