Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Responsibility
• Social Responsibility
• Data Protection and Information Security
• Anti-corruption and Anti-bribery

Environmental Achievements

• 20 Good Deeds campaign including a green coding workshop, donation of computer displays, installation of charging stations for electric vehicles, and a kayak plogging initiative.
• Policy for extending the lifecycle of computers, donating used computers to schoolchildren.
• Recycling of recyclable materials.

Social Achievements

• PeopleFirst theme with quarterly training and webinars on self-management, well-being, teamwork, and diversity.
• In-house coaching and internal mentoring program launched.
• Recruitment and training of 15 undergraduate students.
• Participation in Mimmit koodaa (Women code) program.

Governance Achievements

• Updated dividend distribution policy.
• Certified information security management system in accordance with ISO 27001.
• Regular internal audits to develop data protection and information security.
• Designated information security manager and data protection officer.
• Anonymous whistleblowing channel for reporting violations of Code of Conduct.
• Training on Code of Conduct concerning anti-corruption and anti-bribery.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting sales activities, particularly in Sweden, Norway, and Denmark.
• Competition in the IT services market.
• Risks related to project profitability, personnel costs, changes in technology, data protection, information security, and global operations.
• Financing risks related to interest rates, exchange rates, and credit risks.

Mitigation Strategies

• Cost reductions due to the pandemic helped EBITDA reach a record high.
• Focus on remote work and related operating models.
• Investment in continuous personnel development and employee well-being.
• Strengthening of the team, training of personnel, and development of the organization and management style.
• Focus on selected industries and solution areas with high growth potential.
• Shifting revenues from projects to products and continuously managed services.
• Improving digital marketing and sales skills.
• Focus on competence planning, recruiting, and resource optimization.
• Implementation of self-organized teams and reduction of organizational layers.
• Continuous improvement of the flexible value-adding delivery model.
• Acquisition of additional financing and renegotiation of loan terms.
• Implementation of a formal information security management process based on standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ILO Declaration on Fundamental Principles and Rights at Work, UN Universal Declaration of Human Rights, UN Sustainable Development Goals, principles of the ICC Business Charter for Sustainable Development, ISO 9001, ISO 27001, ISO 13485 and AQAP-2110 standards

Certifications: ISO 9001, ISO 27001, ISO 13485, AQAP-2110

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 8: Decent Work and Economic Growth
• Goal 13: Climate Action

Innofactor contributes to these goals through its digital solutions in healthcare, its focus on employee well-being and development, and its efforts to reduce the environmental impact of its operations.

Sustainable Products & Innovation

• Innofactor Dynasty
• Innofactor Membership Management System (MMS)
• Innofactor Virtual Data Center
• Innofactor Managed Azure services
• Innofactor® TeamsMate™
• Innofactor® DataSight™

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Data Security and Data Protection
• Diversity and Inclusion
• Employee Well-being

Environmental Achievements

• Calculated carbon footprint for the first time in 2022 (383.3 tCO2e), compensated emissions to be carbon neutral.
• Increased use of charging stations for electric and hybrid cars at Espoo Campus.
• Recycling of all recyclable materials.

Social Achievements

• Launched weekly exercise breaks and lectures on self-management for employees.
• Offered COVID-19 vaccinations to employees.
• Recruited and trained 37 undergraduate students.
• Made two charitable donations to UNICEF to support children in Ukraine.
• Allowed teams to use working hours for volunteering.

Governance Achievements

• Established a new sustainability task group.
• Signed the Microsoft Partner Pledge to commit to the development of digital skills, diversity, ethical AI, and environmental responsibility.
• Maintains a certified information security management system in accordance with the ISO 27001 standard.
• Arranged training activities concerning the Code of Conduct at regular intervals.

Climate Goals & Targets

Environmental Challenges

• Decreased profitability in Sweden.
• High personnel costs in Nordic countries.
• Risks related to project profitability.
• Tough competition in the IT market.
• Risks inherent in research and product development.
• Risks related to data security and data protection.
• Risks related to acquisitions.
• Challenges in organizational changes.
• General financial uncertainty and changes in customers’ financial situations.
• Financing risks.
• Interest risk.
• Exchange rate risk.
• Risks related to the cash position.
• Risks related to receivables from projects.
• Credit risk.
• Risks related to deferred tax assets.

Mitigation Strategies

• Taken corrective measures in Sweden.
• Focus on improving operational efficiency and increasing the invoicing rate.
• Increasing the share of licenses and SaaS services.
• Increasing the number of employees.
• Proactive player in the Nordic M&A field.
• Investing in the continuous development of personnel and high personnel satisfaction.
• Improving the management of project and service contracts.
• Reducing employee turnover.
• Developing self-directed team models.
• Focusing on growing Microsoft solution areas.
• Keeping the order backlog on a sufficient level.
• Investing in new technologies and central areas of know-how.
• Implementing standard-based data security and data protection management processes.
• Centralized financing risk management.
• Interest rate hedging.
• Regular monitoring of project receivables.
• Centralized monitoring of credit decisions.

Supply Chain Management

Responsible Procurement

• All subcontracting took place within the EEA or USA.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ILO Declaration on Fundamental Principles and Rights at Work, UN Universal Declaration of Human Rights, UN Sustainable Development Goals, ICC Business Charter for Sustainable Development, ISO 9001, ISO 27001, ISO 13485, AQAP-2110

Certifications: ISO 9001, ISO 27001, ISO 13485, AQAP-2110

UN Sustainable Development Goals

• Goal 7
• Goal 13

Awards & Recognition

• Microsoft Tech for Good Partner of the Year 2022 in Finland

Environmental Metrics

ESG Focus Areas

• Sustainable operations
• Climate change
• Sustainable development
• Employing young graduates

Social Achievements

• Innofactor recruited 14 graduate students in Finland in 2021 in their DigiStar program

Climate Goals & Targets

Environmental Challenges

• Absences due to sickness arising from the COVID-19 pandemic, resulting in decreased net sales and operating margin.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• we innovate for good
• we are fair
• we put people first
• we build trust

Social Achievements

• Innofactor published a sustainability strategy in 2023.
• Innofactor strengthened its team, trained personnel, completed certifications, and developed its organization and management style in 2023.
• Innofactor signed a company-specific collective agreement for Finland in early 2023.
• Established a personnel bonus fund at the end of 2023.

Governance Achievements

• Innofactor Plc complies with the recommendations of the Corporate Governance Code 2020 for Finnish listed companies.

Climate Goals & Targets

Environmental Challenges

• Challenging market situation with intense price competition, particularly in the public sector.
• Decreased net sales and negative profitability in Sweden and Denmark.
• Lagging behind strategic growth target.
• Need to improve operational performance to drive growth and reach long-term EBITDA target of approximately 20%.
• Challenges outside Finland impacting profitability in Cloud, Data, Modern Work and Data Security solution area.

Mitigation Strategies

• Focus on increasing net sales per active employee.
• Shifting sales focus to the private sector for better price levels.
• Improving operational performance to drive growth and profitability.
• Paying particular attention to improving profitability in operating countries outside Finland.
• Looking for acquisition targets to enable inorganic growth.
• Decreasing the share of project business to reduce associated risks.
• Investing in new technologies and key areas of expertise.
• Developing offerings related to artificial intelligence.
• Actively seeking new strategic partnerships in the Nordic countries.

Supply Chain Management

Climate-Related Risks & Opportunities