Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• One factory in Finland switched completely to green energy.
• Special initiatives launched to measure environmental impact from optimizing customers’ manufacturing chains.
• Investments in energy-optimized machinery in several factories.
• Construction of a new energy-efficient production facility in Estonia.

Social Achievements

• 72% of scheduled career-development meetings conducted.
• Reduction in workplace accidents from 36 in 2019 to 32 in 2020.
• Implementation of a Group-wide work-environment system.
• Two incidents of discrimination reported and processed.

Governance Achievements

• Established a sustainability framework in 2020 for governance and monitoring of sustainability issues.
• Implemented a global anti-corruption policy.
• No incidents of corruption reported in 2020.
• 12 of 14 factories scheduled for ISO 14001 and ISO 45001 certification by June 2021.

Climate Goals & Targets

Environmental Challenges

• Climate-impacting emissions from resource consumption and transportation.
• Stringent customer requirements on quality, delivery, sustainability, and ethics.
• Risks related to employee health and safety.
• Pandemic impacting planned activities (e.g., employee survey, anti-corruption policy follow-up).

Mitigation Strategies

• Regional manufacturing clusters to minimize transport requirements.
• Continuous internal process improvements and stakeholder dialogues.
• Supplier Code of Conduct and assessments.
• Investments in energy-efficient machinery and facilities.
• Implementation of ISO 14001 and ISO 45001 management systems.
• Adaptive measures for employee health and safety (e.g., preventive healthcare subsidies, health week).

Supply Chain Management

Supplier Audits: All subsuppliers assessed based on Supplier Code of Conduct

Responsible Procurement

• Supplier Code of Conduct (covering environment, labor law, human rights, business ethics, and corruption).

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Contributing to global environmental efforts
• Long-term and sustainable relationships
• Employees and local communities

Environmental Achievements

• 12 out of 16 factories certified to ISO 14001 (environmental management system)
• Heinävesi, Finland factory switched completely to green energy in 2020
• New Tartu, Estonia plant uses approximately 25% proprietary electricity from a photovoltaic system
• 8% of overall energy supplies in 2021 originated from green energy sources
• Reduced hazardous waste

Social Achievements

• 11 out of 16 factories certified to ISO 45001 (Occupational Health and Safety Management Systems)
• Reduced workplace accidents from 32 in 2020 to 26 in 2021
• Improved gender balance in the organization in 2021
• Implemented HANZA’s policies, guidelines and work-environment management system in acquired Finnish and German production facilities
• Various health improvement measures implemented across different locations (wellness allowances, private healthcare, health checks, etc.)

Governance Achievements

• All 16 factories certified to ISO 9001 (Quality Management Systems) by late 2021
• Swedish operation and Estonian service center certified under ISO 27001 (Information Security Management Systems) by year-end 2021
• Developed and implemented a system for managing data security in the Group
• Zero incidents of corruption reported or discovered in 2021
• Zero whistleblower reports in 2021

Climate Goals & Targets

Environmental Challenges

• Dominant climate footprint from Scope 3 emissions (value chain, mainly freight and input material production)
• Increased waste management costs in 2021
• Pandemic-related delays in internal follow-up of the Code of Conduct
• Risks linked to employee health, safety and other work environments in the manufacturing industry

Mitigation Strategies

• Keeping manufacturing operations within regional clusters to reduce freight
• Bulk sourcing from fewer suppliers
• Investment in energy-efficient machinery
• Stringent environmental requirements imposed on suppliers
• Implementing preventive measures to improve work environment and reduce workplace accidents
• Broad internal follow-up of the Code of Conduct planned for 2022

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• HANZA’s Supplier Code of Conduct
• Special assessment criteria pertaining to climate impact (added in 2021)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Tighter regulations and green investment requirements

Opportunities

• Strengthened competitiveness through manufacturing clusters providing environmental benefits and traceability

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 27001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

HANZA has selected several development goals where its operations contribute to several interim goals. Specific interim targets are presented in the report for each focus area.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment and climate
• Security and ethics
• Employees

Environmental Achievements

• Increased proportion of energy use from fossil-free energy sources in own operations to 27% in 2022.
• Reduced CO2 emissions from energy use in own operations relative to sales.
• Reduced waste and hazardous waste relative to sales of electronics and mechanics.

Social Achievements

• Implemented a work environment management system to prevent workplace injuries, resulting in a lower LTIFR (8.6 in 2022 compared to 10.6 in 2021).
• No cases of confirmed discrimination in 2022.
• Implemented various health-enhancing measures such as wellness allowances, private healthcare, health checks, and free lunches across different locations.

Governance Achievements

• Zero incidents of corruption reported in 2022.
• All employees acknowledged HANZA’s Code of Conduct.
• Zero data breaches in 2022.
• Enhanced supplier evaluation process to ensure compliance with sustainability standards.

Climate Goals & Targets

Environmental Challenges

• Global logistics disruptions leading to high workloads and delays in internal anchoring work.
• Increased metal consumption (31% in 2022) despite efforts to minimize material spillage.
• Maintaining a good gender balance across different professional categories and clusters.

Mitigation Strategies

• Initiated motivation-enhancing initiatives and anti-stress work environment measures.
• Continued efforts in quality control and recycling to minimize product defects and reduce material spillage.
• Setting targets to increase the proportion of women in managerial roles.

Supply Chain Management

Supplier Audits: Annual audits of significant suppliers (starting 2023)

Responsible Procurement

• Code of Conduct for Suppliers
• Systematic evaluation of suppliers’ impact on environment, labor, human rights, business ethics, and sustainable purchasing.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Increased legislation and capital market demands for controlled environmental footprints.

Opportunities

• Minimizing freight through local manufacturing.
• Transition to green energy sources.

Reporting Standards

Frameworks Used: UN Global Compact, ILO Declaration on Fundamental Principles and Rights at Work, OECD Guidelines for Multinational Enterprises

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 27001 (partial)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment and climate
• Security and ethics
• Employees

Environmental Achievements

• Reduced metal consumption by 28% compared to a sales increase of just over 17%
• Heinävesi, Finland factory fully switched to green energy in 2020, all factories in Sweden use only green energy
• Several machine lines replaced by more energy-efficient machines in Töcksfors, Sweden in 2023
• Share of hazardous waste in relation to turnover decreased in 2023 in mechanical processes

Social Achievements

• Annual employee surveys and dialogues with local managers and union representatives resulting in action plans
• Implementation of health improvement measures such as new assembly plant in Tartu, expansion of Töcksfors, wellness allowances, private healthcare, health checks, and free daily soup lunches
• Two cases of harassment investigated in 2023, with measures initiated including training for managers and support for those involved

Governance Achievements

• One whistleblower complaint investigated and managed in 2023; no reports of corruption or other breaches of rules identified
• HANZA Code of Conduct communicated internally through various channels and included in onboarding training
• ISO 27001 information security system implemented, ensuring procedures and policies are followed

Climate Goals & Targets

Environmental Challenges

• Increased climate-related risks due to customer demand for reduced carbon emissions
• System implementation for supplier evaluation taking longer than expected
• Increased number of workplace accidents in 2023 compared to 2022 (40 vs 31)

Mitigation Strategies

• Minimizing freight through cluster strategy geographically close to customers
• Investments and efficiency improvements to reduce energy use
• Gradual transition to green energy sources
• Implementation of a number of different types of system support for supplier evaluation processes
• Improvement program implemented in one mechanics factory with high accident rate
• Measures to reduce injury rate, including safety training, safety protocols, and instructions in local languages

Supply Chain Management

Supplier Audits: Annual audits of significant suppliers planned for 2024

Responsible Procurement

• HANZA Supplier Code of Conduct linked to all suppliers since 2023

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Legislation, capital market requirements, and public opinion regarding carbon footprint

Opportunities

• Reduced emissions from cluster strategy, ability to control climate emissions

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 27001

Third-party Assurance: Reviewed by auditors in accordance with RevR 12

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Processes, expertise, and services related to climate-smart alternatives, such as incorporating green steel into customers' designs

Awards & Recognition

• Not disclosed