Climate Change Data

Environmental Metrics

ESG Focus Areas

• Forestry
• Employee well-being
• Environmental impact
• CO2 emissions management
• Development of side stream use

Environmental Achievements

• Developed Riga ECOlogical resin, reducing carbon footprint of plywood production.
• Reduced fossil natural gas consumption by 63% in seven years.
• Achieved 85% heat from renewable sources and 86% renewable electricity.
• Negative GHG emissions from forests (-10,500 tonnes of CO2 equivalent).

Social Achievements

• TRI*M index increased from 63 to 68, exceeding the target.
• Voluntary employee turnover rate of 7.0%.
• Implemented fixed monthly support payments to employees due to geopolitical factors.
• Granted share options to 292 managers and senior executives, 95 of whom were not previously shareholders.

Governance Achievements

• Established a tax risk management system.
• Achieved gold, silver, and bronze levels in the Latvian State Revenue Service's advanced cooperation program.
• Participated in working groups for Latvian Tax Policy Guidelines 2024–2027.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the war in Ukraine (phased out Russian resources).
• Need to improve data gathering for GHG emissions.
• Global climate change and its impacts.

Mitigation Strategies

• Completely phased out the use of resources from Russia.
• Launched a GHG emissions inventory.
• Implemented energy efficiency measures and increased renewable energy use.
• Developed new resin technologies with reduced fossil fuel reliance.

Supply Chain Management

Supplier Audits: Detailed supplier assessments for major procurements; 0.2% non-compliance in 2021.

Responsible Procurement

• Group's Procurement Policy; long-term partnerships with leading suppliers; assessment of supplier reputation and social responsibility.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products
• Increased use of renewable resources

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative)

Certifications: PEFC, FSC®C001599, EcoCert

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Riga ECOlogical resin
• Riga Poliform plywood with WPC coating
• Birch bark extracts from Betulin Lab

Awards & Recognition

• Balance Award 2021

Environmental Metrics

ESG Focus Areas

• Forestry
• Positive employee experience
• Environmental impact
• Management of CO2 emissions
• Development of side streams utilization
• Performance
• Sustainability
• Safety

Environmental Achievements

• Expanded the calculation of indirect emissions in line with the GHG Protocol guidelines, including previously uncalculated emission sources.
• Reduced accident frequency rate by around a third compared to 2022 (from 15.2 to 10.5 accidents per million hours worked).
• Increased safety reporting from 69 reports per million hours worked in 2022 to 132 reports per million hours worked in 2023.
• Reduced the variety of materials used in packaging of finished birch plywood products to switch to recycled plastic or bioplastic film.
• Developed Riga ECOlogical resin, using bio-based lignin as a partial substitute for phenol and formaldehyde, significantly reducing the carbon footprint.

Social Achievements

• Awarded 3rd place in the “TOP Employer 2023” survey in the manufacturing companies category.
• Awarded the “Export Champion” title in the “Export and Innovation Award 2023”.
• Won the award in the nomination “National Capital Company with the highest net turnover”.
• Employee turnover rate decreased from 7.0% in 2022 to 6.6% in 2023.
• Implemented 1498 KAIZEN projects involving 491 employees.
• Introduced employer-paid lunch soup and fruit for all employees of AS Latvijas Finieris, AS Riga Wood Baltics and SIA Latvijas Finieris Mežs.

Governance Achievements

• Implemented and certified management systems: ISO 14001, ISO 45001, ISO 50001, and ISO 9001.
• Revised and updated Whistleblowing Regulations in 2023.
• Developed a tax risk management system, maintaining Gold Level status in the Advanced Cooperation Programme administered by the State Revenue Service (until its cessation in 2024).

Climate Goals & Targets

Environmental Challenges

• Russia’s war in Ukraine negatively affecting economic growth and creating uncertainty in birch plywood markets.
• Involvement in the European Commission’s investigation into the possible circumvention of anti-dumping duties on sanctioned plywood products.
• Global geopolitical and economic shocks impacting employers and employees.

Mitigation Strategies

• Adapting to challenging external changes and continuing to work on the development of the Group, including a €200 million investment program.
• Actively advocating for fair competition and supporting the European Commission’s investigation into circumvention of anti-dumping restrictions.
• Implementing a Work Efficiency Programme focusing on employee engagement and process optimization.

Supply Chain Management

Responsible Procurement

• Group’s Procurement Policy; assessing suppliers' reputation and social responsibility; prioritizing local suppliers (90% for basic materials).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: PEFC, FSC ®C001599, ISO 14001, ISO 45001, ISO 50001, ISO 9001

Sustainable Products & Innovation

• Riga ECOlogical resin
• Birch chips and polypropylene composite (WPC)

Awards & Recognition

• TOP Employer 2023 (3rd place)
• Export Champion (Export and Innovation Award 2023)
• National Capital Company with the highest net turnover
• Krone Group’s “Supplier of the Year 2022”