Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy intensity (a new way of measuring was introduced in 2018 and is therefore not comparable with the 2017 measurement figures. 2.05 kWh/kg is thus a starting value.)
• Reduced accidents leading to sick leave by 16.8%
• 100% of employees signed the Code of Conduct
• 100% of strategic suppliers accepted Bulten’s Code of Conduct or complied with a corresponding own code.
• Heat recovery project in Poland reduced energy consumption by approximately 2150 MWh per year, corresponding to a CO2 reduction of approximately 400 tons.

Social Achievements

• Employee Engagement Index score of 73 (target was 70 or higher)
• Global employee survey conducted
• Group-wide health and safety project implemented
• Global HR system with training platform launched

Governance Achievements

• Continued work in the sustainability committee
• Developed focus on stakeholder dialogue and materiality analysis
• Established new sustainability goals
• Revised environmental policy
• Published Communication on Progress to the UN Global Compact

Climate Goals & Targets

Environmental Challenges

• Higher global market prices for steel and other metals
• Uneven rate of production due to market volatility
• Increased uncertainty on the market during autumn (partly due to new environmental tax regulations and Brexit uncertainty)
• Delays in the Polish plant expansion project due to land exploitation and building negotiations

Mitigation Strategies

• Adjustment in production towards the end of the year to adapt to the prevailing situation
• Continued investment in higher production capacity
• Further streamlining of operations
• Relocation of Chinese operation from Beijing to Tianjin
• Investment in a new heat treatment line in Hallstahammar (increasing capacity by 25% and energy efficiency)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Conduct for Suppliers and Business Partners
• ISO 9001 (IATF 16949) and ISO 14001 certifications for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, Core level

Certifications: ISO 9001, ISO 14001, IATF 16949

Third-party Assurance: PricewaterhouseCoopers AB

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 8 (Decent work and economic growth)
• Goal 13 (Climate action)

Bulten's initiatives contribute to these goals through energy efficiency improvements, investments in new plants, responsible logistics, code of conduct, health and safety programs, and efforts to reduce environmental impact.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Jaguar Land Rover Global Supplier Excellence Award

Environmental Metrics

ESG Focus Areas

• Governance and Business Ethics
• Sustainable Supply Chain
• Sustainable own Production
• Sustainable Customer Offering/Products
• Diversity and Inclusion

Environmental Achievements

• Launched BUFOe product family – fasteners produced with a 30% smaller carbon footprint and 50% less energy consumption than the average fastener in Europe.
• All of Bulten’s plants in EU purchase fossil-free electricity since 2020.
• CO2 intensity decreased by 20.9% compared to 2019 and 38% compared to 2018.

Social Achievements

• Updated and implemented a new code of conduct.
• Conducted a global, Group-wide employee survey.
• Annual development dialogue between managers and employees.

Governance Achievements

• Updated and implemented a new code of conduct.
• Introduced a supplier ranking system.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted production and sales during the first quarter.
• Lack of microprocessors caused disruptions to customers’ production, expected to continue during the first half of 2021.

Mitigation Strategies

• Measures to adapt the company’s operations to the situation in each market were taken.
• Accelerated efficiency initiatives.
• Maintained flexibility and adapted operations to the situation.
• Continued anti-infection measures at plants.

Supply Chain Management

Supplier Audits: 81% of total purchasing volume assessed via SAQ

Responsible Procurement

• Code of conduct for suppliers
• Sustainability self-assessment questionnaire (SAQ)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products (BUFOe)

Reporting Standards

Frameworks Used: GRI Standards, Core level

Certifications: ISO 9001, ISO 14001, IATF 16949, ISO 45001 (two plants)

Third-party Assurance: PricewaterhouseCoopers AB

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Investments in renewable energy, energy efficiency, sustainable products, responsible supply chain, and employee well-being initiatives.

Sustainable Products & Innovation

• BUFOe

Awards & Recognition

• EcoVadis Gold medal

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Gender equality
• Children's rights
• Supply chain responsibility

Environmental Achievements

• Reduced GHG emissions under Scope 1 and 2 by 18% in 2021/22
• Increased spare parts volume by 24%
• Environmental audits covering 83% of total purchasing volume
• Avoided 350 tonnes of fossil carbon emissions from using stearin candles instead of paraffin

Social Achievements

• Launched "Give some love" concept with repair kits and workshops
• Donated SEK 27,000 to children's rights organizations through Tise partnership
• Donated more than 1.3 MNOK to the Norwegian Retailers’ Environment Fund
• Trained 100 sustainability ambassadors

Governance Achievements

• No deviations from the Swedish Corporate Governance Code
• No deviations reported regarding Code of Conduct or Code of Business Ethics
• Increased proportion of unannounced audits in the supply chain

Climate Goals & Targets

Environmental Challenges

• Continued impact of COVID-19 pandemic on supply chain and customer behavior
• War in Ukraine causing increased economic uncertainty
• Rising prices of food, fuel, and electricity impacting customers
• Historically high transport costs and rising sourcing costs
• Disruptions to global logistics chains

Mitigation Strategies

• Placed orders earlier and maintained close dialogue with suppliers and forwarding agents
• Established purchase offices in Poland and Vietnam (previously mentioned)
• Built up slightly larger inventories
• Focused on developing priority areas of product range (e.g., home organization)
• Optimized store network (opened 4, closed 3, remodeled/relocated 9 stores)

Supply Chain Management

Supplier Audits: 113 environmental audits (83% of purchasing volume), 37 social audits of new suppliers

Responsible Procurement

• Code of Conduct
• Social and environmental audits
• Sustainability assessment model for products

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

Sustainable Products & Innovation

• SmartStore Ocean (buckets made from recycled fishing nets)

Awards & Recognition

• Brilliant Awards – Customer Experience 2022 (Best customer service)
• Sustainable Brand Index 2022 (Industry winner in Sweden and Norway)

Environmental Metrics

ESG Focus Areas

• Climate change mitigation
• Water security
• Forest protection
• Biodiversity
• Circular economy
• Resource efficiency
• Responsible corporate culture
• Supply chain sustainability
• Product safety
• Occupational health and safety
• Human rights
• Anti-corruption
• Anti-bribery

Environmental Achievements

• Reduced fossil-based CO2 emissions (Scope 1 and 2, market-based) by 33% per tonne produced since 2018.
• Achieved 87% fossil-free energy share of total energy consumption.
• Utilized 99.9% of production side streams.
• Reduced process water use by 12.2% per tonne produced since 2018.
• Improved energy efficiency by 2.7% since 2018.
• 99.3% of raw materials and packaging materials were fossil-free.

Social Achievements

• Achieved an ethics index of 85% in the ethics barometer.
• 25% of executives were women.
• 98% of personnel completed the DEI e-learning course.
• Reduced Total Recordable Injury Frequency (TRIF) to 6.7 per million hours worked.

Governance Achievements

• 100% of personnel completed the previous version of the Code of Conduct e-learning course.
• 70% of employees completed the revised Code of Conduct e-learning course.
• CEO's remuneration linked to ESG targets (safety at work in 2022).

Climate Goals & Targets

Environmental Challenges

• Rapid cost inflation (approx. 20% of overall costs).
• Decreasing demand for consumer products and inventory adjustments in the value chain.
• Increased paperboard imports from Asia to Europe.
• Limited availability of transport capacity and higher fuel prices.
• Discontinuation of wood supply from Russia.
• Extended energy crisis and limited availability of natural gas.
• Volatile electricity market prices.
• Climate change risks (droughts, floods, storms, insect damage).
• EU regulation on forest use.
• Potential changes in industrial and trade policies of leading industrialized countries.

Mitigation Strategies

• Successful price increases exceeding cost inflation.
• Reallocation of folding boxboard volumes previously directed to Russia to new markets.
• Long-term supply agreements and derivatives contracts.
• Investments in energy efficiency and transition to fossil-free energy sources.
• Plans to secure paperboard deliveries in case of production interruptions.
• Alternative sourcing strategies for wood.
• Readiness to use LNG in Kyro and Joutseno mills.
• Phased transition to completely fossil-free energy by the end of 2030.
• Mill-specific measures to increase water recycling and reduce raw water intake.
• Supplier Code of Conduct with recommendation to set emission reduction targets.

Supply Chain Management

Supplier Audits: 16 audits in 2022 (2 by Metsä Group, 14 by external party)

Responsible Procurement

• Supplier Code of Conduct
• Know Your Business Partner background checks
• Sustainability assessments for key suppliers
• Country risk classifications
• Category-specific risk analyses

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather phenomena (storms, drought, floods)
• Rising average temperature and changes in precipitation
• Damage caused by snow, storms, drought, forest fires, insects and fungi

Transition Risks

• Increasing regulation
• Market and reputation risks
• Changes in supply and demand of products in a low-carbon economy

Opportunities

• Development of energy-efficient products
• Increased growth of forests and wood removal due to global warming

Reporting Standards

Frameworks Used: GRI Standards 2021, SASB Pulp & Paper Products Sector Standard, TCFD recommendations

Certifications: ISO 9001, ISO 14001, ISO 50001, ISO 45001, ISO 22000, FSSC 22000, PEFC, FSC®

Third-party Assurance: PricewaterhouseCoopers Oy (limited assurance)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 15 (Life on land)

Initiatives contribute to these goals through renewable energy use, resource efficiency, emissions reduction, and sustainable forest management.

Sustainable Products & Innovation

• Lightweight dispersion barrier board
• Recyclable protective barrier coatings for food packaging
• Metsä Group’s 3D fibre product

Awards & Recognition

• CDP 'A' List in climate change mitigation, water security, and forest protection (triple A)
• EcoVadis Platinum rating (100/100 in Environment section)
• Finnish Circular Economy Award
• Finnish Quality Award

Environmental Metrics

ESG Focus Areas

• Climate change
• Occupational health and safety
• Product safety
• Diversity and inclusion
• Talent development and retention
• Business ethics and integrity
• Responsible value chain
• Circular business models

Environmental Achievements

• Reduced CO2 emissions from own operations by 38% compared to 2019 baseline
• Increased renewable energy share to 63.6% of total energy use
• 95% of projects for new or redesigned products had targets for reduced carbon impact

Social Achievements

• Improved employee engagement scores above global benchmark
• Increased share of female employees to 22%
• Launched a Diversity & Inclusion index

Governance Achievements

• 99% of employees participated in new ethics training and signed Code of Conduct compliance statement
• 90% of significant suppliers signed Code of Conduct compliance statement
• Established a new Group identity

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Geopolitical challenges
• Not yet bending the curve of emissions from the use phase of products
• Limited availability of renewable energy in some markets

Mitigation Strategies

• Invested in new manufacturing capabilities in the US, Asia, and Europe
• Developed alternative sourcing strategies
• Increased focus on R&D for efficient technologies and solutions for low-carbon society
• Rolled out climate awareness training and held hackathons

Supply Chain Management

Supplier Audits: Over 900 suppliers audited on safety, health, environment, and ethics

Responsible Procurement

• Code of Conduct; Business partner criteria; screening and regular on-site audits; customer sustainability assessments; targeted training

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events; flooding; droughts; rising sea levels

Transition Risks

• Market shifts; regulatory changes; increased energy prices and taxes

Opportunities

• Development of energy-efficient products; growth in new segments connected to renewable energy and electric vehicles

Reporting Standards

Frameworks Used: GRI Standards, EU Taxonomy Regulation

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 16

See page 35 for details

Sustainable Products & Innovation

• B-Air battery powered screw compressor; H2Y hydrogen compressor; ZR CO2 + ND CO2 compressor and dryer; DZS 600-1200 VSD+ dry claw vacuum pump; Edwards STPiXA4507 turbomolecular pump; E-Pump range of electric dewatering pumps; CP86 battery-powered cordless nutrunner

Awards & Recognition

• Not disclosed