Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable supply chain
• Responsible operations
• People and performance
• Cost-effective sustainable solutions
• Corporate citizenship

Environmental Achievements

• Valmet’s paper, board and tissue technologies were estimated to consume on average 10% less energy compared to conventional technology.
• Over the past ten years Valmet has delivered more than 13 GWth of boiler capacity that utilizes renewable fuels. Compared to traditional fossil based energy sources, this carbon-neutral energy production is estimated to help avoid 40 million tonnes of greenhouse gas emissions annually.

Social Achievements

• Valmet launched a comprehensive web-based brainstorming tool for collecting and analyzing stakeholder opinions.
• Annual review discussions are also encouraged for Valmet’s blue collar employees, some of which take place as documented group discussions.

Governance Achievements

• Group level risk assessments cover 100% of Valmet´s operations.

Climate Goals & Targets

Environmental Challenges

• Potential violations in supply chain practices.
• Minimizing environmental impacts of value chain.
• Data limitations in reporting (e.g., full comparability of environmental data with previous years, complete data on supervised workers/contractors).

Mitigation Strategies

• Comprehensive supply chain management.
• Systematically improving safety and environmental performance.
• Continuous improvement of processes and data collection methods.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Responsible purchasing practices, assessment of human rights and environmental issues in risk countries

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers Oy

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• OptiConcept M board and paper making technology (estimated 30% energy reduction)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable supply chain
• Health, safety and environment (HSE)
• People and performance
• Cost-effective sustainable solutions
• Corporate citizenship

Environmental Achievements

• Reduced Scope 1 GHG emissions from 23.9 to 15.4 (1000 tCO2)
• Reduced Scope 2 GHG emissions from 76.2 to 72.7 (1000 tCO2)
• Advantage™ ReTurne™ energy recovery system recovers 50% of pumping energy
• OptiProof forming fabric achieved annual energy savings of up to EUR 200,000
• OptiOx increased pulp yield resulting in less wood needed for production
• Valmet Total Solids Transmitter resulted in energy and CO2 savings of up to 10% and chemical savings of up to 25%
• GASCON™ flue gas scrubber decreased SO2 emissions by 98% and HCI and dust emissions by 90%

Social Achievements

• Launched a new annual review discussion tool for white-collar employees
• Average training hours per employee increased to 17 hours
• Global supplier roadshow held to build long-term relationships with key suppliers
• New reporting channel established for reporting suspected misconduct

Governance Achievements

• Updated Code of Conduct and related processes with training for management and e-learning for all employees
• Group level risk assessments covered 100% of Valmet’s operations

Climate Goals & Targets

Environmental Challenges

• Supply chain risks related to human rights violations in high-risk countries (China, India, Thailand)
• Data limitations in supplier environmental and labor practice assessments in 2015

Mitigation Strategies

• Systematic supplier sustainability risk assessment to identify potential negative indirect impacts
• Supplier self-assessments and third-party audits to enhance risk management and ensure compliance
• System development to improve data collection for 2016

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable Supply Chain policy
• Code of Conduct
• UN Global Compact signatory
• Integration of supplier sustainability aspects into procurement processes

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G4 Core

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers Oy

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Advantage™ ReTurne™ energy recovery system
• OptiProof forming fabric
• OptiOx
• Valmet Total Solids Transmitter
• GASCON™ flue gas scrubber

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable supply chain
• Health, safety and environment
• People and performance
• Sustainable solutions
• Corporate citizenship

Environmental Achievements

• Reduced material use in roll manufacturing by 30-38%
• Achieved >75% reduction in hazardous sludge production in Marine WTU compared to common reference technologies
• Cost and energy savings due to smaller steel structures in Fabric Insertion Unit

Social Achievements

• Updated supplier sustainability self-assessment survey
• Continued supplier sustainability audits
• Launched two new supplier e-learning courses

Governance Achievements

• Updated Valmet’s Code of Conduct and launched mandatory e-learning course for all employees
• Launched new Human rights e-learning course
• Verified all the corrective actions related to two human rights impact assessments

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting key topics and concerns raised through stakeholder engagements
• Potential human rights risks related to freedom of association, possible use of forced labor, and occupational health and safety in supply chain

Mitigation Strategies

• Set up a network of global, regional and local incident management teams to manage response to the pandemic
• Implemented a global process to ensure compliance with Sustainable Supply Chain policy, including automated sustainability risk assessment for all suppliers and supplier sustainability audits

Supply Chain Management

Supplier Audits: 40/year

Responsible Procurement

• Sustainable Supply Chain policy; supplier approval process; supplier sustainability self-assessment; supplier sustainability audits

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards (Core option)

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: DNV GL Business Assurance Finland Oy/AB

UN Sustainable Development Goals

• Not disclosed

Valmet supports and commits to the UN Sustainable Development Goals

Sustainable Products & Innovation

• SymBelt roll, Marine Water Treatment unit, Fabric Insertion Unit, Fuel flexibility concept

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainable supply chain
• Health, safety and environment
• People and performance
• Sustainable solutions
• Corporate citizenship

Environmental Achievements

• Reduced CO2 emissions (Specific figures not readily available in provided text, requires deeper analysis of the report's numerical data.)
• Invested 20.2 million EUR in environmental management and improvements in 2021.

Social Achievements

• 91 percent of active employees completed the updated Code of Conduct e-learning course in 2021.
• Launched a new supplier HSE Day program to drive sharing good HSE practices with Valmet’s suppliers.

Governance Achievements

• Updated Compliance Reporting Guideline in 2021.
• Ties selected sustainability topics such as health and safety and sustainable supply chain KPIs to remuneration.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions (implied, not explicitly stated)
• Climate change related risks (physical and transitional risks mentioned)

Mitigation Strategies

• Comprehensive risk management process in place.
• Developed sustainable procurement practices globally.
• Supplier sustainability engagement program.
• Climate program introduced in 2021 with ambitious CO2 emission reduction targets.

Supply Chain Management

Supplier Audits: 40 per year

Responsible Procurement

• Sustainable Supply Chain policy
• Supplier approval process
• Supplier sustainability audits
• Supplier sustainability engagement program
• Automated sustainability risk assessment

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (implied)

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards (Core option)

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 9001:2015

Third-party Assurance: DNV Business Assurance Finland Oy Ab

Sustainable Products & Innovation

• Chip to Board approach
• Mill-wide optimization solution
• Waste to Energy Optimization solution
• Sleeve Roll technology

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions intensity (Scope 1 and 2, market-based) from 0.029 to 0.017 tCO2/EUR Million Net sales
• Reduced overall environmental impacts of products and services through initiatives like Chip to Board approach and stationary lime cooler

Social Achievements

• Implemented a global approach to worker health and safety, resulting in a decrease in high-consequence work-related injuries
• Maintained a high percentage of employees covered by occupational health and safety management systems

Governance Achievements

• Concluded investigations on two confirmed incidents of corruption, taking appropriate disciplinary actions
• 99% of new direct suppliers were screened for sustainability in 2022

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to global events
• Complexity of product portfolio making it difficult to report certain indicators
• Data privacy issues limiting the reporting of certain data

Mitigation Strategies

• Developed alternative sourcing strategies
• Developing reporting systems to enable reporting in coming years
• Working to improve data collection and reporting processes

Supply Chain Management

Supplier Audits: 45 audits in 2022

Responsible Procurement

• Sustainable Supply Chain Policy
• Supplier Sustainability Engagement Program
• Supplier Lean Improvement Program
• Sustainability screening of new suppliers

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018

Third-party Assurance: PricewaterhouseCoopers Oy

UN Sustainable Development Goals

• UN Sustainable Development Goals

Valmet’s Sustainability360º Agenda is aligned with the UN Sustainable Development Goals

Sustainable Products & Innovation

• Chip to Board approach
• Stationary lime cooler
• Neldisc™ and Jamesbury™ butterfly valves
• Neles NDX™ 2.0 intelligent valve controller

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions from purchased goods and services (Scope 3 category 1) by 22% in 2023.
• Achieved 100% carbon-neutral electricity purchases in Finland and Sweden.
• Engaged 78 suppliers in 2023 to support their CO2 emission reduction efforts.
• Reduced Scope 1 and Scope 2 (market-based) CO2 emissions by 51,000 tCO2e.

Social Achievements

• Achieved 70% overall employee engagement (OurVoice 2023 survey).
• Lowest ever Total Recordable Incident Frequency (TRIF) for employees and external workers.
• Launched two injury prevention programs on hand safety and working at heights.
• Continued implementing social responsibility programs in all Valmet Areas.

Governance Achievements

• Included in the Dow Jones Sustainability World and Europe Indices for the tenth consecutive year.
• Received an A leadership level rating in CDP Climate.
• Updated its Code of Conduct.
• Launched an Ethics and Compliance network.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions, particularly with electronic components.
• High costs for electronic components and fast deliveries.
• Increased stock levels due to pandemic and war in Ukraine.
• Challenges in specific customer projects slowed progress towards COPQ targets in the process technology segment.

Mitigation Strategies

• De-stocked electronics purchases in 2023.
• Initiated efforts to identify long-term solutions to keep stocks lower while maintaining resilience to major supply disruptions.
• Reassessing safety stock levels and developing new ways to measure and monitor stock turnover.
• Improvement in many business lines throughout the year, including Automation Systems and Services.

Supply Chain Management

Supplier Audits: 43 in 2023

Responsible Procurement

• Sustainable Supply Chain Policy
• Supplier risk assessments and audits
• Global supplier sustainability engagement program

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes (e.g., CBAM)
• Market shifts towards renewable energy

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 45001:2018

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 6
• Goal 7
• Goal 8
• Goal 12
• Goal 13

Valmet's initiatives contribute to these goals through resource efficiency, renewable energy solutions, responsible consumption and production, and climate action.

Sustainable Products & Innovation

• Valmet 3D Fiber technology for molded fiber products
• Lignin extraction technology
• Biomass conversion technologies

Awards & Recognition

• Quality Innovation Award (Metsä Spring 3D fiber demo plant)