Metsä Board Annual Review 2024

METSÄ BOARD Annual review 2024

information security; occupational safety; the environment; breaches of the Supplier Code of Conduct; and other reports. Crimes against the company and attempts of such are also taken into account in the number of reports. In 2024, no confirmed cases of bribery or corruption were brought to the company’s attention. In addition to the principle of continuous development followed in the company’s Compliance & Ethics programme and the anti-corruption principles published in 2024, a decision was made to conduct a survey of bribery and corruption risk in 2025. In 2024, Metsä Board was made aware of incidents that might have had a direct or indirect negative impact on the company’s human rights obligations. Incidents, complaints and severe human rights impacts are discussed under S1 – Own workforce . Incidents concerning the occupational safety and other work-related rights of suppliers’ employees are discussed under S2 – Workers in the value chain . None of the reports of inappropriate behaviour to the company concerned forced labour or the use of child labour. The changes required by the EU Whistleblowers Directive (EU 2019/1937) in Metsä Board’s operating countries have been taken into account in the Compliance and Ethics Channel, the investigation of reported incidents, and the protection of whistleblowers over the 2022−2024 period as local legislation in EU Member States has entered into force. The company is committed to fairly investigating all reports submitted in good faith and adopting the required actions based on the investigation and its results. The company is also committed to protecting the rights and privacy of people who report breaches in good faith. These commitments have been confirmed in the company’s Code of Conduct and the Principles on non-compliance notifications and the related investi- gation, which have been updated to meet the requirements of the Whistle- blowers Directive. The Compliance Committee defines the required actions to ensure that the prohibition of countermeasures and the prevention of reporting is followed. Whistle-blowers are requested to immediately report if they suspect any countermeasures. The prohibition of countermeasures and the role of communication is emphasised in the investigation of incidents. In cases involving a higher risk of countermeasures, a follow-up contact will be organised if required. In 2024, no cases of countermeasures against whistle-blowers were brought to the company’s attention.

equivalent principles and to pass the background checks. Agreements may also include more specific sustainability requirements related to occupa- tional safety, product safety or environmental management, for example. These requirements apply to industrial wood suppliers and intermediaries in wood supply, and other raw material and service providers. To ensure the sustainability of suppliers, Metsä Board follows third-party due diligence in its Know your Business Partner background check, as described under Policies . Wood supply Metsä Board uses wood from the Northern European forests as its main raw material. Wood and purchased pulp account for 93% of the company’s raw material consumption, measured in weight. Metsä Board produces all the pulp and high-yield pulp it uses or procures the material from its associated company Metsä Fibre. Metsä Group has wood supply organisations in Finland, Sweden and Latvia. The company works in close cooperation with local contract entrepreneurs in harvesting, transport and forestry work. All the countries from which wood is procured have issued legislation requiring the renewal of forests after regeneration felling. Metsä Group requires wood suppliers to commit to wood sustainability requirements with an agreement, chain of custody certificate and their own assurance, which includes environmental and sustainability requirements and obligations for the wood supplier and forest owner. The wood fibre’s sustainability and traceability are ensured by practices which meet the requirements of the EU Deforestation Regulation (EUDR), PEFC Chain of Custody and FSC Chain of Custody. In 2024, Metsä Board updated its due diligence system to comply with the requirements of the Deforestation Regulation. Metsä Board assesses these practices with internal and third-party audits annually. The audits focus on matters related to environmental and social responsibility, as well as on the traceability of wood fibre in Metsä Board’s production and subcontracting. Metsä Board aims for certified wood to account for at least 90% of all the wood fibre used by the company by 2030. The share of certified wood fibre in 2024 is presented under Metsä Board’s 2030 sustainability targets . Non-certified wood is also required to be of a sustainable origin, and the wood always meets at least the requirements for PEFC Controlled Sources and FSC Controlled Wood. Metsä Board’s policies concerning indigenous peoples are discussed under S3 – Affected communities . Procurement of other raw materials and services In addition to the Know Your Business Partner background checks, more detailed supplier assessments focus on the core suppliers and on suppliers operating in industries with identified potential risks related to human rights, corruption or the environment. Suppliers’ sustainability and supplier-related risks are assessed with surveys, the EcoVadis tool and supplier audits. Metsä Group, an external HSEQ cluster, and another external party, if required, conduct annual supplier audits focusing on ethics, environmental responsibility, occupational safety, and quality. The supplier assessments

and audits are used as the basis for making development proposals and monitoring any corrective action taken. The results are the responsibility of a third party or a Metsä Group employee who is not responsible for suppli- ers. In 2024, no serious deviations were detected in supplier assessments and audits. To ensure the equal treatment of suppliers, the procurement employees are trained to disqualify themselves in decisions that may involve conflicts of interest. A written commitment to this is required in the procurement process. Approximately every two years, suppliers can respond to an anon- ymous survey concerning the smoothness and fairness of cooperation and factors contributing to these matters. The survey results are submitted to the suppliers, and measures to improve procurement practices are adopted based on them. The procurement employees have annual finan- cial performance targets related to matters such as conducting supplier sustainability assessments and monitoring improvements proposed by suppliers. In 2024, sustainability themes were discussed in the procurement academies organised for procurement and logistics employees. In addition, training on the use of EcoVadis supplier assessments to ensure a sustainable supply chain was offered to employees. The company’s target is to agree joint sustainability targets and measures to achieve them with all its partner suppliers. The management of environmental impacts in cooperation with suppliers is discussed in greater detail under E1 – Climate change . Another target is to know the origin, or at least the country of manufacture, of all the company’s raw materials, including wood, and process, basic, and coating chemicals, and packaging materials by the end of 2030. Annual monitoring of suppliers and raw materials ensures that Metsä Board’s products comply with statutory and Metsä Board’s own stringent product safety requirements. Product safety is discussed in greater detail under S4 – Consumers and end-users.

principles for avoiding conflicts of interest, crucially linked to anti-corrup- tion, and principles on gifts and hospitality. In 2024, Metsä Group released its new anti-corruption principles that supplement the Code of Conduct. Metsä Group is committed to anti-corruption and anti-bribery in its own operations and in relation to its partners. A similar prohibition is included in Metsä Group’s Supplier Code of Conduct. Anti-corruption and anti-bribery efforts contribute to Metsä Group’s 2030 sustainability targets concerning a responsible corporate culture and supply chain. The following are the main measures for preventing and detecting corruption and bribery: • Training in the Code of Conduct and other policies guiding Metsä Group’s operations (discussed in greater detail under Completion of e-learning courses ). • The new anti-corruption principles published in 2024 and related communication. • The ethics index used to measure the employees’ experience of ethics in business and to identify areas of development (under Metsä Board’s 2030 sustainability targets ). • The Compliance and Ethics Channel available to all internal and external stakeholders. A standard process has been defined for processing reports (discussed in greater detail under Mechanisms for identifying, reporting and investigating concerns ). • Due diligence in ensuring the sustainability of partners, and the required background checks (third-party due diligence) as part of the Know Your Business Partner process (discussed in greater detail under Policies ). • Continuous development of ethical operations in the supply chain. The key measures in this respect include supplier commitment to the Supplier Code of Conduct in line with the 2030 sustainability targets, as well as supplier audits and assessments (discussed in greater detail under Relationships with goods and service suppliers ).

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

General information

E – Environment

S – Social responsibility

G – Governance

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

Completion of e-learning courses

Procurement of wood fibre by country, %

2024

2023

2024

2023

CODE OF CONDUCT Number of employees who completed the Code of Conduct training Share of all employees who have completed the Code of Conduct training, % Share of Board members who have completed the Code of Conduct training, % DIVERSITY, EQUALITY AND INCLUSION Number of employees who have completed DEI training Share of all employees who have completed DEI training, % SUSTAINABILITY Number of employees who have completed Sustain- ability training Share of all employees who have completed Sustain- ability training, %

Finland

2,332

2,214

Sweden

Baltic countries

9.0

8.1

99,2

Others

1.5

0.02

Relationships with goods and service suppliers

100

Supplier management practices Metsä Board’s wood supply is ensured by Metsä Group’s Wood Supply and Forest Services. The procurement of other raw materials and services is centrally handled by Metsä Group’s Procurement and Logistics unit. The related procurement process seeks to ensure that the company’s partners operate sustainably to minimise any risks in the supply chain related to matters such as the environment, health, corruption, the use of child labour and human rights violations. As a minimum requirement in supplier selection, suppliers are required to commit to the Metsä Group Supplier Code of Conduct or their own

New supplier background checks, %

2,310

2215

2024

2023

Share of suppliers for which a Know Your Business Partner background check was made

Prevention and detection of corruption and bribery

2,295

1,930

Metsä Board complies with Metsä Group’s principles and practices for pre- venting and detecting corruption and bribery. The Code of Conduct, which guides ethical operations, prohibits corruption and bribery. It also includes

One of the Board members completed the Code of Conduct training in January 2025.

196 Remuneration report 201 Investor relations and investor information

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