Climate Change Data

Environmental Metrics

ESG Focus Areas

• Energy Efficiency
• Safety
• Accessibility
• Urbanization
• Employee Engagement
• Ethical Business Practices
• Supply Chain Management

Environmental Achievements

• New elevators are 70% more energy efficient than 2008 models.
• New escalators consume 30% less energy than 2010 models.
• Operational carbon footprint relative to net sales decreased by 2.5% compared to 2011.
• Operational carbon footprint of externally assured scope 1 and scope 2 greenhouse gas emissions decreased by 7.5% relative to net sales.

Social Achievements

• Employee engagement survey response rate reached an all-time high of 91%.
• Workplace injuries declined by over 15% compared to 2011.
• Launched a global framework for employee well-being.
• KONE Centennial Foundation supported a youth program in Johannesburg.

Governance Achievements

• Global Code of Conduct sets out ethical business practices.
• Detailed Competition Compliance Policy focuses on competition law.
• Supplier Code of Conduct sets out ethical requirements for suppliers.

Climate Goals & Targets

Environmental Challenges

• Challenging business environment in many countries.
• Intensified price competition.
• Weakening new equipment demand in many markets outside Asia-Pacific.
• Longer lead times in decision-making for major projects.

Mitigation Strategies

• Focus on five programs to develop people, operations, and solutions.
• Improved delivery processes and services.
• New volume elevator offering to increase competitiveness.
• Programs targeting increased competitiveness (resulting in approximately 550 fewer jobs globally by the end of 2013).

Supply Chain Management

Supplier Audits: 69 supplier factories certified (2012)

Responsible Procurement

• Supplier Code of Conduct
• Supplier Excellence Certification Program

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3 B-level

Certifications: ISO 14001, ISO 9001, OHSAS 18001

Third-party Assurance: Ecobio Oy

Sustainable Products & Innovation

• KONE EcoDisc hoisting machine
• KONE MonoSpace elevator
• KONE JumpLift
• KONE Polaris destination control system
• New range of elevators and escalators

Awards & Recognition

• Forbes list of the 100 most innovative companies (2012)
• Red Dot Award (2012)
• World Architecture News Product of the Year Award (2012)
• Architectural Products Magazine Product Innovation Award (2012)

Environmental Metrics

ESG Focus Areas

• Economic responsibility
• Environment
• Safety
• Our people
• Delivery chain

Environmental Achievements

• Decreased the carbon footprint of operations relative to net sales by 3.5%
• Further increased the number of energy-efficient elevator installations globally
• KONE’s current volume elevator offering is over 70% more energy-efficient than the 2008 offering in Europe, and 60-75% and 40% more energy-efficient than the 2008 offering in Asia Pacific and in the United States, respectively.
• KONE’s escalators are 30% more energy-efficient compared to the 2010 offering.

Social Achievements

• Substantial improvement in overall employee satisfaction
• Improvement in the proportion of women to men in management positions (17% in 2013, target is 20%)
• Global response rate of 92% in the Pulse employee satisfaction survey

Governance Achievements

• Established a new position on the Executive Board with responsibility for safety, quality, and installation

Climate Goals & Targets

Environmental Challenges

• Uncertainty in European markets
• Intense price competition
• Significant growth of the share of new equipment sales of total sales
• High level of deliveries of projects that were booked as orders received with lower margins in 2010 and 2011, particularly in North America

Mitigation Strategies

• Continued strong new equipment sales growth in Asia-Pacific, China in particular, and positive development in the service business globally
• Favorable impact of pricing actions taken during the past two years
• Increased fixed costs in areas that support the growth of the business, in particular in Asia-Pacific as well as process development and IT
• Optimizing logistics network and improving logistics efficiency per delivered unit

Supply Chain Management

Supplier Audits: 100% of KONE’s strategic suppliers were audited in 2013

Responsible Procurement

• KONE Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3 Guidelines (Application Level B)

Certifications: ISO 14001, ISO 9001, OHSAS 18001

Third-party Assurance: Ecobio Oy

Sustainable Products & Innovation

• KONE UltraRope™
• KONE EcoDisc® hoisting machine
• KONE MonoSpace® elevator
• KONE TransitMaster 120 escalator

Awards & Recognition

• Ranked among the top 50 most innovative companies in the world by Forbes Magazine for the third consecutive year
• GOOD DESIGN awards in 2008, 2009 and 2013
• Two red dot design awards and two honorable mentions in 2012
• Council of Tall Buildings and Urban Habitat (CTBUH) Innovation Award in 2013 for KONE UltraRope
• KONE Middle East awarded “Sustainable Supplier of the Year” at the BGreen Awards

Environmental Metrics

ESG Focus Areas

• End user safety
• Quality
• Competent and committed management and staff
• Occupational health and safety
• Customer satisfaction
• Employee satisfaction
• Environmental impact of our products, services and operations
• Impacting megatrends
• Innovations
• Ethical business practices
• Economic performance
• Accessibility
• Non-discrimination
• Diversity and equal opportunity
• Training and education

Environmental Achievements

• Reduced energy use carbon footprint relative to orders received by 60% between 2008 and 2014
• Current volume elevators are up to 75% more energy efficient compared to 2008 offering, and up to 90% more energy efficient than elevators from the 1990s.
• Operational carbon footprint relative to net sales decreased by 1.8% compared to 2013.
• Operational carbon footprint of externally assured scope 1 and scope 2 greenhouse gas emissions decreased by 9.1% relative to net sales.
• Achieved an A-class energy efficiency classification for its volume elevators according to the ISO 25745-2 energy efficiency standard.
• Received LEED Gold certification for KONE Park, its manufacturing and R&D site in Kunshan, China.
• KONE’s manufacturing unit in Hyvinkää, Finland awarded for long-term energy efficiency improvements.

Social Achievements

• Employee engagement score maintained its four-year upward trend and surpassed external benchmarks.
• Response rate in Pulse employee survey in 2014 was over 90%
• Received positive feedback in annual global customer loyalty survey, especially in the area of product quality and improvement initiatives on service communications.
• Number of serious employee or subcontractor accidents decreased by 16% compared to 2013.
• Industrial injury frequency rate (IIFR) improved by 9% and was 2.8.

Governance Achievements

• KONE supports the ten principles of the United Nation’s Global Compact on human rights, labor, environment and anti-corruption.
• CDP gave KONE the highest possible score of 100 for its reporting in 2014.
• Newsweek magazine ranked KONE as the 12th greenest company in the world.

Climate Goals & Targets

Environmental Challenges

• Intense price competition in many markets
• Weak economic development in Europe impacting modernization market
• Increasing employee headcount, sales and production volumes increasing absolute operational carbon footprint.

Mitigation Strategies

• Pricing actions to offset pressure from intense price competition
• Focus on accelerating development in mature markets and capturing growth opportunities in Asia-Pacific
• Continuous development of people and processes to provide best-in-class customer experience
• Improving logistics network through new distribution centers and optimized material flows
• Implementing energy saving programs and increasing share of green electricity.

Supply Chain Management

Supplier Audits: 100% of strategic suppliers audited in 2014

Responsible Procurement

• KONE Supplier Code of Conduct
• Supplier Excellence Certification Program
• ISO 14001 and ISO 9001 compliance

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3, Greenhouse Gas Protocol

Certifications: ISO 14001, ISO 9001, OHSAS 18001, ISO 50001

Third-party Assurance: Ecobio Oy

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• KONE MonoSpace® 500
• KONE NanoSpace™
• KONE UltraRope™

Awards & Recognition

• Newsweek magazine ranked KONE the world’s 12th greenest company in 2014.
• LEED Gold certification for KONE Park
• Energy efficiency award for Hyvinkää production site

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Quality
• Our People
• Creating Added Value for Stakeholders
• Supply Chain

Environmental Achievements

• Reduced operational carbon footprint relative to net sales by 12.1% compared to 2014 (4.4% with sales growth calculated at comparable exchange rates).
• Reduced Scope 1 and 2 carbon footprint relative to orders received by over 60% since 2008.
• Achieved best possible 100 A score in CDP’s climate change program and included in CDP’s Global A List.
• KONE MonoSpace® 500 elevator is up to 90% more energy efficient than KONE’s elevators from the 1990s.
• KONE UltraRope™ high-rise hoisting technology cuts energy consumption of a 500-meter elevator ride by 15%.

Social Achievements

• Industrial injury frequency rate (IIFR) among KONE’s employees was down by 18% from 2014 to 2.3.
• Reached a record high response rate of 93% in the global employee survey.
• Employee engagement score maintained its upward trend and surpassed external benchmarks.
• Continued rolling out global learning management system (konelearning.com), covering 86% of personnel.

Governance Achievements

• Renewed Code of Conduct, Competition Compliance Policy, and Supplier Code of Conduct.
• Launched new online trainings for Code of Conduct and Competition Compliance.
• All KONE employees who have daily access to a computer are required to complete the Code of Conduct online training program.

Climate Goals & Targets

Environmental Challenges

• Increased intercontinental deliveries, ramp-up phase of the distribution center in India, and challenges posed by volume growth in North America impacted logistics carbon footprint.
• Majority of employees are male (nearly 90% globally).

Mitigation Strategies

• Further optimization of distribution center network.
• New in-house calculation system for logistics emissions data.
• Strict requirements concerning the eco-efficiency of logistics service providers.
• Set goals for cultural diversity in headquarter teams.

Supply Chain Management

Supplier Audits: 100% of strategic suppliers audited in 2015

Responsible Procurement

• KONE Supplier Code of Conduct
• Supplier Excellence Certification Program
• 10x Better Supplier Quality program

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001, ISO 9001, OHSAS 18001 (some units), ISO 50001 (some units)

Third-party Assurance: Mitopro Oy

Sustainable Products & Innovation

• KONE MonoSpace® 500 elevator
• KONE UltraRope™
• KONE EcoDisc® hoisting machine
• KONE HybridHoisting™ system
• KONE EcoReel™ motor
• KONE Direct Drive

Awards & Recognition

• CDP’s Global A List
• Nordic Carbon Disclosure Leadership Index
• CDP’s global Supplier A List
• World’s 28th most sustainable company in the Global 100 index

Environmental Metrics

ESG Focus Areas

• Sustainability
• Safety
• Human Rights
• Anti-corruption
• Diversity & Inclusion

Environmental Achievements

• -4.1% y/y reduction in operational carbon footprint relative to sales
• 90% of waste recycled or incinerated
• 28% of green electricity
• KONE MonoSpace® 500 elevator received an A-class energy rating under ISO 25745
• TravelMaster™ 115 inclined autowalk received an A+++ rating under ISO 25745
• Green Certification by the Singapore Green Building Council (SGBC) for KONE N MonoSpace®, KONE N MiniSpace™ elevators and KONE TravelMaster™ 110 escalator
• carboNZero™ certification by Enviro-Mark Solutions for New Zealand operations

Social Achievements

• Industrial Injury Frequency Rate (IIFR) improved to 1.9 (2016: 2.1)
• 95% of eligible personnel completed performance discussions
• 92% of employees had a documented individual development plan
• More than 3,900 training programs and online modules offered
• Launched new leadership competencies focusing on customer-centricity and change management
• Launched Accelerate program to create a faster-moving, customer-centric organization

Governance Achievements

• KONE is a member of the UN Global Compact
• Included in the FTSE4Good index and listed among the top climate change performers by CDP
• Listed as one of the best employers in the world by Forbes
• 95% completion rate for Code of Conduct online training program
• Face-to-face compliance training provided to 1,645 employees in China, 456 in India, and 104 in Sourcing

Climate Goals & Targets

Environmental Challenges

• Price pressure in China's new equipment market
• Increasing raw material costs
• Higher R&D and IT spend
• Intense competition in maintenance market, particularly in South Europe
• Global economic environment weakening
• Digitalization and changing customer requirements
• Changes in regulations and geopolitical tensions
• Supply chain disruptions, particularly in China
• Reputational risks
• Availability of adequate operational resources
• Changes in raw material prices
• IT system reliability and cybersecurity risks
• Financial risks (foreign exchange, interest rate, liquidity, credit)

Mitigation Strategies

• Focused pricing actions
• Productivity improvements
• Investing in R&D and open innovation
• Monitoring market trends
• Monitoring regulatory developments
• Developing business continuity management capabilities
• Securing alternative sourcing channels
• Global property damage and business interruption insurance
• Strict quality control processes
• Transparent communication
• Stringent corporate governance principles
• Proactive project and resource planning
• Fixed-price contracts with major suppliers
• Security policies and controls to safeguard information systems
• Working with third-party security service providers
• Centralized risk management in accordance with the KONE Treasury Policy

Supply Chain Management

Supplier Audits: 94% of strategic suppliers were ISO 14001 certified

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Global Reporting Initiative G4

Certifications: ISO 14001, ISO 9001, OHSAS 18001

Sustainable Products & Innovation

• KONE Care™ maintenance offering
• 24/7 Connected Services
• KONE Residential Flow
• KONE CombiSpace™ elevator solution
• KONE TransitMaster™ 140 escalator
• KONE MonoSpace Home™ elevator
• KONE Destination 880™ group controller

Awards & Recognition

• Listed as one of the best employers in the world by Forbes

Environmental Metrics

ESG Focus Areas

• Safety
• Quality
• Diversity and Inclusion
• Ethics and Compliance
• Environmental aspects of offering and operations

Environmental Achievements

• 8.9% year-over-year reduction in operational carbon footprint relative to sales
• 11.8% year-over-year reduction of Scope 1 & 2 carbon footprint relative to sales
• 41% of green electricity
• 94.0% of waste recycled or incinerated
• Set science-based targets for significant reductions in greenhouse gas (GHG) emissions by 2030
• 14 elevator models with A class ISO 25745 highest energy efficiency ratings
• 4 escalators and autowalks with the best A+++ rating

Social Achievements

• 96% completion rate for the Code of Conduct e-learning, rolled out in 64 countries by the end of 2020
• Industrial Injury Frequency Rate (IIFR) improved to 1.2 from 1.7 the previous year
• 83% of external hires into leadership positions from local communities
• Forbes’ 2020 Global 2000: World’s Best Employers list

Governance Achievements

• EcoVadis platinum medal for sustainability performance
• CDP 2020 'A' score for corporate sustainability leadership

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting employees, customers, partners, and communities
• Supply chain disruptions due to the COVID-19 pandemic and global logistics market disturbances
• Aging urban infrastructure systems

Mitigation Strategies

• Adaptability and flexible working for employees
• Accelerated product development and increased training
• Development of alternative sourcing strategies
• Remote audit procedure for supplier audits
• Investment in online learning opportunities
• Strengthened cybersecurity team and capabilities
• Development of a supplier human rights assessment process

Supply Chain Management

Supplier Audits: 91% of strategic suppliers audited in 2020

Responsible Procurement

• KONE Supplier Code of Conduct
• ISO 14001 certification for strategic suppliers
• Supplier sustainability assessment

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Smart and green buildings
• New technologies for sustainable solutions

Reporting Standards

Frameworks Used: GRI Standards: Core option, SASB sustainability accounting standards for Electrical and Electronic Equipment

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 50001 (four manufacturing units)

Third-party Assurance: Mikael Niskala and Tomi Pajunen, Independent Sustainability Experts

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• KONE DX Class elevators with built-in connectivity and sustainable materials
• KONE MonoSpace®500 elevator with high energy efficiency

Awards & Recognition

• Four Red Dot Awards for KONE DX Class elevators
• EcoVadis platinum medal
• CDP A List
• Corporate Knights’ 2020 Global 100 Most Sustainable Corporations

Environmental Metrics

ESG Focus Areas

• Providing the most sustainable offering
• Working towards a more sustainable future
• Empowering our people and attracting the best talent
• Being a good corporate citizen

Environmental Achievements

• 15% reduction in absolute GHG emissions from own operations (Scope 1 and 2) compared to 2018
• Introduced the first carbon-neutral maintenance service in the elevator industry, KONE Care™ DX
• 23 elevator models with A class ISO 25745 highest energy efficiency ratings
• 8 escalators and autowalks with the best A+++ rating

Social Achievements

• 96% of KONE employees completed at least one compliance training session
• Published a pledge to systematically increase diversity, equity, and inclusion (DEI)
• Endorsed the UN Standards of Conduct and committed to LGBTIQ+ inclusion by partnering with Workplace Pride
• Forbes’ 2021 Global 2000: World’s Best Employers list

Governance Achievements

• Renewed KONE Code of Conduct with stronger emphasis on diversity and inclusion, fraud, corruption, and fair competition, as well as human rights and trade compliance
• EcoVadis platinum medal for sustainability performance

Climate Goals & Targets

Environmental Challenges

• Severe disruptions of global supply chains
• Rapidly increasing inflation
• COVID-19 restrictions
• Russia's invasion of Ukraine

Mitigation Strategies

• Empowered and accountable local teams
• Ceased deliveries to Russia and stopped signing new orders
• Global and local crisis coordination teams
• Donations through the Finnish Red Cross and KONE Centennial Foundation matching funds initiative

Supply Chain Management

Supplier Audits: 88% of key suppliers audited

Responsible Procurement

• KONE Supplier Code of Conduct
• Environmental annex to supplier contracts
• Supplier sustainability assessments
• Supplier quality and sustainability maturity assessments
• Supplier certification program

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Mitopro Oy

Sustainable Products & Innovation

• KONE DX Class elevators
• KONE Care™ DX maintenance service
• KONE Lane turnstile

Awards & Recognition

• CDP A List
• CDP Supplier Engagement Leaderboard
• EcoVadis Platinum medal
• Forbes’ 2021 Global 2000: World’s Best Employers list
• Red Dot Design Awards

Environmental Metrics

ESG Focus Areas

• Providing the most sustainable offering
• Working towards a more sustainable future
• Empowering our people and attracting the best talent
• Being a good corporate citizen

Environmental Achievements

• All manufacturing units became carbon neutral by the end of June 2023 (18 months ahead of schedule).
• Reduced Scope 1 & 2 emissions by 25% compared to 2018.
• Reduced Scope 3 emissions by 5.1% relative to ordered products compared to 2018.
• 97% of electricity from renewable sources.

Social Achievements

• Increased share of women at director level to 25.2% (exceeding the target of 24.5%).
• Industrial Injury Frequency Rate (IIFR) of 1.1 (record low).
• 90% of KONE employees completed a safety e-learning refresher.

Governance Achievements

• Mandatory Anti-Bribery & Corruption (ABC) e-learning completed by 85% of employees.
• 86% of KONE’s total spend with regular trade suppliers and installation subcontractors was with parties who had signed KONE’s Supplier Code of Conduct or equivalent.

Climate Goals & Targets

Environmental Challenges

• Limited offering of electrified vans in some countries.
• Lack of sufficient charging infrastructure in some countries.
• Long delivery times for ordered electrified vehicles.
• Increase in business travel emissions due to lifting of COVID-19 restrictions.
• Increase in logistics emissions due to growth in Spare Parts business (air freight).

Mitigation Strategies

• Transitioning to a low-emission vehicle fleet as leasing contract renewal periods allow and infrastructure improves.
• Incorporating electrified vehicles in local car policies, encouraging low-emission vehicle selection, and providing charging points.
• Optimizing logistics networks, prioritizing waterway and railway transportation over air freight, and improving space utilization in loading.
• Implementing an internal carbon cost to encourage carbon neutrality.

Supply Chain Management

Supplier Audits: 77% of key suppliers audited in 2023.

Responsible Procurement

• KONE Supplier Code of Conduct
• Environmental annex in supplier contracts
• Audits
• Quality and sustainability assessments
• Supplier performance assessments
• Supplier certification program
• Continuous automatic screening of suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events impacting operations, suppliers, and logistics.

Transition Risks

• Tighter regulations increasing raw material prices and reducing availability.
• Need to cost-efficiently meet demand for sustainable solutions in large volumes.

Opportunities

• Increased demand for KONE’s sustainable product offering.
• Development of energy-efficient products and services.
• Services helping customers with weather event loss prevention and post-event repairs.

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 27001 (digital services), IEC 62443 (KONE DX elevators)

Third-party Assurance: Ernst & Young Oy

Sustainable Products & Innovation

• KONE DX Class elevator
• KONE escalator (TM110/TM110T)
• KONE Care DX carbon-neutral maintenance

Awards & Recognition

• CDP 2023 Climate Change A List
• CDP Supplier Engagement Leaderboard
• EcoVadis Gold medal
• Forbes’ 2023 Global 2000: World’s Best Employers list
• Corporate Knights 2024 Clean200 list