Climate Change Data

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Weak market environment and weaker than anticipated seasonality support.
• Uncertainties in executing the remedy commitments required by the European Commission.
• Optimization of production capacity after divestments.
• Risks related to the ramp-up of projects in Calvert, USA, and Tornio, Finland.
• Structural overcapacity and continued weak markets for stainless steel.
• Risk of litigation or adverse political actions affecting trade or changes impacting environmental legislation.
• Major fire or accident.
• IT-dependence risk and a lack of harmonized IT architecture.
• Personnel-related risks.
• Changes in the price of nickel, molybdenum, electricity, and fuels.
• Currency risks.
• Interest rate risks.
• Risks related to Talvivaara and certain other equity prices.
• Risks associated with a loan receivable from Luvata.
• Other credit risks.
• Limitations on financial flexibility and the risk of financial distress.

Mitigation Strategies

• Implementing the new strategy with full speed and maintaining a high level of customer service and satisfaction.
• Aiming for higher prices during 2013 to support the turnaround.
• Cost-cutting programs (P150) aiming for EUR 150 million savings by the end of 2014.
• Headcount reductions (2,500 by 2017).
• Working capital management and improved financial performance.
• Ferrochrome and Calvert ramp-ups.
• Ongoing value-enhancing and new cost-saving projects.
• P300 cash flow and working capital management reduction program.
• Refinancing negotiations for syndicated loans.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety

Environmental Achievements

• Emissions into the air and discharges to water remained within permitted limits. Outokumpu was recognized as a leader for the depth and quality of its climate change data disclosed to investors by CDP in 2014. Outokumpu has been awarded for the fifth consecutive year with a position on the Nordic Climate Disclosure Leadership Index (CDLI).

Social Achievements

• Lost-time injury frequency (lost-time accidents per million working hours) during 2014 was 2.7, below the target of less than 4.0. For 43 people whose positions were eliminated due to the Kloster mill closure, Outokumpu found new positions in other units in Sweden.

Governance Achievements

• Successfully concluded negotiations with employee representatives and unions in Germany regarding the new industrial plan in Europe. The rights issue that Outokumpu carried out was oversubscribed by 23% and resulted in net proceeds of EUR 640 million.

Climate Goals & Targets

Environmental Challenges

• Technical issues in Calvert mill cold rolling lines during the second half of the year decreased deliveries by about 40,000 tonnes and had a negative impact of EUR 34 million on profitability. Weakening market toward the end of the year. Contractor's fatal accident in Calvert, US. Serious machinery breakdown incidents took place at ferrochrome production unit in Tornio and at cold rolling mills in Calvert.
• High Asian imports into the European market.
• Volatile nickel price and eroding demand in the APAC region.

Mitigation Strategies

• Repair work performed on cold rolling lines. Optimizing production network, developing raw material strategy, delivering faster and more reliably. Expanded efficiency programs targeting annual savings of EUR 550 million in 2017 and release of EUR 400 million cash from net working capital. Focus on preventive maintenance and machinery breakdown loss prevention.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• New steel grades, including ferritic 21% Cr stainless steel 4622, austenitic 4420 and formable duplex stainless steels FDX 25™ and FDX 27™

Awards & Recognition

• ISSF sustainability award

Environmental Metrics

ESG Focus Areas

• Resource efficiency
• Climate change
• Safety
• Stakeholder engagement
• Compliance
• Human rights
• Community relations

Environmental Achievements

• Reduced total carbon profile per tonne of steel produced by 7.4% compared to the 2007-2009 baseline.
• Improved energy efficiency by 8% versus baseline (9.5% including closed sites).
• Reduced direct CO2 emissions from production operations by 1% per tonne of stainless steel processed, accumulating to 4.4% with 2007–2009 as the baseline period.
• Increased use and recycling of slag.
• Reduced dust emissions by 26%.

Social Achievements

• Organized a Safety Week to emphasize the importance of safety.
• Launched a comprehensive e-learning program on anti-corruption for 3,700 employees (99% completion rate).
• First employee engagement survey (O’People) showed high commitment.
• Sheffield melt shop won the RoSPA Gold award for a fifth consecutive year.
• Kemi mine won the International Chromium Development Association’s award for safety.

Governance Achievements

• Issued a new Anti-Corruption Instruction and launched a subsequent Anti-Corruption e-learning course.
• Engaged 438 stakeholders in a materiality analysis to sharpen corporate responsibility approach.
• Participated in several corporate responsibility forums (Global Compact Nordic Network, UN Global Compact, World Steel Association’s Sustainable Development Charter).

Climate Goals & Targets

Environmental Challenges

• Market pressure and financial challenges.
• Supply chain disruptions (implied by restructuring and closures).
• Inconsistent delivery performance.
• EU Emissions Trading System (EU ETS) and related consequences affecting Outokumpu’s business (indirect extra electricity costs).
• Changes in energy policy (Germany and Finland).
• EU chemicals legislation (REACH and CLP).

Mitigation Strategies

• Restructuring and cost-cutting measures.
• Development of alternative sourcing strategies (implied by increased scrap use).
• Implementation of a more systematic performance management cycle.
• Continuous improvement of safety practices.
• Participation in low-carbon energy projects.
• Intensive communication with stakeholders and authorities regarding EU regulations.

Supply Chain Management

Supplier Audits: More than 63% coverage of raw material suppliers assessed for human rights.

Responsible Procurement

• Supplier requirements integrated into procurement strategy.
• Focus on human rights in supplier evaluation.
• Outokumpu Code of Conduct.

Climate-Related Risks & Opportunities

Transition Risks

• EU ETS and related electricity price increases.

Opportunities

• Development of energy-efficient products and solutions.

Reporting Standards

Frameworks Used: GRI G4 Guidelines (Core option), UN Global Compact

Certifications: ISO 9001 (quality management), ISO 14001 (environmental management - planned for 100% coverage by early 2016), ISO 50001 (energy management - several sites)

Third-party Assurance: PricewaterhouseCoopers Oy (limited assurance)

UN Sustainable Development Goals

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

Outokumpu's stainless steel contributes to sustainable solutions in various sectors, including energy, construction, and transportation; focus on resource efficiency and emissions reduction.

Sustainable Products & Innovation

• New steel grades (Forta H-Series, Core 4622, Supra 4420, Forta FDX 25, Forta FDX 27, Ultra 654 SMO); less-reflective stainless steel finishes (Deco Linen Star, Deco Linen Matt, Deco Linen Supermatt).

Awards & Recognition

• Nordic Climate Disclosure Leadership Index (CDLI) for sixth consecutive year.
• RoSPA Gold award (Sheffield melt shop).
• International Chromium Development Association’s award for safety (Kemi mine).

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Water stewardship
• Safety
• Responsible supply chain
• Employee well-being

Environmental Achievements

• Reduced carbon profile by 13.3% compared to 2007-2009 baseline.
• Improved energy efficiency by 12.7% compared to 2007-2009 baseline.
• Recycled 99% of water used in Mexican operations.
• Zero significant environmental incidents.

Social Achievements

• Launched Organizational Health Index survey to improve employee well-being.
• Reduced lost time injury frequency rate (LTIFR) to 2.2 (from 3.0 in 2015).
• Completed industrial restructuring in Europe with no compulsory redundancies in Benrath.
• Hundreds of employees received training and new opportunities through job rotation.

Governance Achievements

• Implemented a simplified organization with fewer management layers.
• Reduced sales, general, and administrative costs by €69 million compared to 2015.
• Released €307 million from net working capital, exceeding the target of €200 million.

Climate Goals & Targets

Environmental Challenges

• Global economic uncertainty leading to moderate growth in stainless steel demand.
• Low nickel and ferrochrome prices.
• High import volumes from China.
• Need to further reduce net debt.

Mitigation Strategies

• Launched ambitious vision to be the best value creator in stainless steel by 2020.
• Defined six must-win battles (safety, high-performing organization, world-class supply chain, manufacturing excellence, commercial excellence, and Americas).
• Implemented a €100 million savings target on sales, general, and administrative costs.
• Streamlined organization and reduced management layers.
• Filed for antidumping duties in the US to curb imports from China.

Supply Chain Management

Supplier Audits: Regular compliance screenings started for key production facilities in Europe in 2016, with a target to cover the majority of suppliers in 2017.

Responsible Procurement

• Stringent requirements on suppliers regarding ethical and environmental responsibility.
• Provision of environmental and ethical profiles for products.

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather conditions (e.g., lightning)

Transition Risks

• Changes in environmental legislation
• EU Emissions Trading Scheme (ETS)

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: GRI G4 Core option

Certifications: Null

Third-party Assurance: KPMG Oy Ab

UN Sustainable Development Goals

• Goal 9: Industry, Innovation and Infrastructure
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Outokumpu contributes to these goals through its sustainable stainless steel production, recycling initiatives, and commitment to reducing carbon emissions.

Sustainable Products & Innovation

• Supra 316 Plus steel
• Forta H-series high-strength stainless steels

Awards & Recognition

• ISSF sustainability award for water recycling in San Luis Potosí, Mexico.

Environmental Metrics

ESG Focus Areas

• Safe and healthy workplace
• Resource efficiency in energy and materials
• Environmental impacts and climate change

Environmental Achievements

• Reduced CO2 emissions intensity by 0.2%
• Improved energy efficiency by 2% (1.1 million MWh savings)
• Reduced landfill waste by more than 8%
• Maintained 87% recycled content in stainless steel production (despite challenges)

Social Achievements

• Workplace accidents decreased significantly (TRIFR 4.4 vs target <8.0)
• 100% of administrative employees had regular performance discussions with their manager
• Launched behavioral safety training program (SafeStart)

Governance Achievements

• Implemented group-wide Cardinal Safety Rules
• Conducted second annual Organizational Health Index (OHI) survey

Climate Goals & Targets

Environmental Challenges

• Upstream emissions increased due to external ferrochrome sourcing (production issues)
• Scrap delivery problems at Calvert site due to hurricanes
• Fatal accident involving a contractor
• Supplier for dust processing had production issues

Mitigation Strategies

• Revised CO2 emission reduction targets according to Science Based Target initiative
• Comprehensive improvements implemented after contractor accident
• Ongoing efforts to improve energy efficiency and increase recycled content
• Working with suppliers to address issues

Supply Chain Management

Supplier Audits: 60% of suppliers undergo monthly compliance screening for sanctions; 6 suppliers completed self-assessment and 2 on-site audits in 2017.

Responsible Procurement

• Code of Conduct; supplier requirements including quality management system, general terms and conditions, and clear documentation of supply and production control processes

Climate-Related Risks & Opportunities

Transition Risks

• EU Emissions Trading Scheme (ETS)

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI (Global Reporting Initiative) Core option

Certifications: ISO 9001, ISO 14001

Third-party Assurance: KPMG Oy Ab

Sustainable Products & Innovation

• Supra 316plus steel grade
• Outokumpu Core 4622
• Weldable sandwich technology
• Outokumpu Ultra Alloy 825

Awards & Recognition

• Sustainability Award from International Stainless Steel Forum (ISSF)
• Materialica Design and Technology Award 2017
• Gold Award from International Stainless Steel Forum (ISSF)

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Supply chain sustainability
• Diversity, equity and inclusion

Environmental Achievements

• Launched a new emission-minimized product line, Circle Green, with up to 92% lower carbon footprint than the global average.
• Achieved a record-high recycled material rate of 94%.
• Reduced CO2 emissions intensity by 18.4% compared to the 2016 baseline.
• Published product-specific carbon footprints for stainless steel products produced in Europe.

Social Achievements

• Launched regular employee pulse surveys focusing on employee engagement and safety culture.
• Conducted a company-wide inclusion survey to create a roadmap and targets in diversity, equity, and inclusion.
• Published a Human Rights Policy and a Supplier Code of Conduct.
• Employee engagement index score was 79.

Governance Achievements

• Relaunched company-wide eLearning on anti-corruption, with 99% of administrative employees completing the training.
• Linked long-term incentive plans to the company’s science-based climate targets.

Climate Goals & Targets

Environmental Challenges

• Lower production volumes impacting energy efficiency.
• Supply chain disruptions due to geopolitical events (e.g., war in Ukraine).
• Challenges in reporting upstream emissions due to difficulty in obtaining correct emission factors.
• Risks related to emissions trading system (ETS) and carbon leakage.

Mitigation Strategies

• Investing in energy efficiency improvements (aiming for 8% improvement by end of 2024).
• Expanding low-carbon electricity supply, investing in renewable energy projects, and buying certificates.
• Integrating CO2 emissions into purchase decision-making.
• Working with raw material suppliers to decrease upstream emissions.
• Developing a roadmap to reach ambitious climate targets, including biocoke and biomethane plant investment.
• Implementing various digitalization projects to increase yield, energy, and material efficiency.
• Conducting human rights impact assessments and social audits of suppliers.

Supply Chain Management

Supplier Audits: 11 supplier visits, 1 audit, 3 impact assessments in raw material procurement; 12 audits in general procurement (2022)

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements
• EcoVadis platform for self-assessments
• Risk-based approach to supplier management
• Compliance screening for sanctions

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Changes to climate policies
• Increased price of greenhouse gas emissions
• Rising electricity price
• Risk of losing customers and market share

Opportunities

• Growing market in the transition to a low-carbon society
• Financial advantages in investments and the transition to the low-carbon society

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD recommendations

Certifications: ISO 9001, ISO 14001

Third-party Assurance: PricewaterhouseCoopers Oy

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
• Goal 17: Partnerships for goals

Contributions through operations and products are detailed in the report.

Sustainable Products & Innovation

• Circle Green product line

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate change
• Circularity
• Sustainable supply chain
• People and society

Environmental Achievements

• Reduced emission intensity by 27% since 2016 baseline.
• Achieved 95% recycled material content.
• Kemi mine achieved one-third of its carbon-neutral target by 2025.
• Supported customers in reducing their emissions by 12 million tonnes.

Social Achievements

• Total recordable injury frequency rate decreased by 17% from 2022 to 2023.
• Increased diverse leaders by 57 compared to the July 2022 baseline.
• Reached inclusion target: over 60% of group employee respondents agreed on all areas related to inclusion in our People Pulse survey.
• First ever Ethics and Compliance Week organized.

Governance Achievements

• Completed ResponsibleSteel audits for all European manufacturing sites.
• Received Platinum ranking from EcoVadis, among the top 1% of assessed companies.
• Acknowledged as a Climate Leader by the Financial Times.

Climate Goals & Targets

Environmental Challenges

• Weaker market environment, especially in Europe.
• High energy costs.
• Elevated inventory levels.
• Geopolitical tensions and trade policies.
• Supply chain disruptions.
• Climate risks (physical and transition).

Mitigation Strategies

• Cost reduction measures and profitability improvements.
• Long-term extension to hot rolling partnership in Americas.
• Restructuring plans for German operations.
• Investments in energy efficiency (aiming for 8% improvement by end of 2024).
• Strengthening sustainable raw material supply through partnerships (CRONIMET, FPX Nickel, Envigas AB, Greenland Resources Inc.).
• Investment in pelletizing plant for biocoke in Tornio, Finland.
• Implementation of safety strategy and focus on zero accidents.

Supply Chain Management

Supplier Audits: 1 social audit and 2 human rights impact assessments completed in 2023; 9 EHSQ audits.

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements
• Human Rights Policy
• EcoVadis platform for self-assessments
• Country-level risk assessment
• On-site reviews and audits

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Extreme weather events

Transition Risks

• Changes in climate policies
• Increased cost of greenhouse gas emissions
• Rising electricity prices
• Decarbonization technology viability

Opportunities

• Growing market for green steel
• Competitive advantage from low-carbon products
• Financial advantages from investing in sustainable projects

Reporting Standards

Frameworks Used: GRI Standards 2021, EU Taxonomy, TCFD

Certifications: ISO 14001, ISO 9001

Third-party Assurance: PricewaterhouseCoopers Oy (limited assurance)

UN Sustainable Development Goals

• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 17

Contributions through operations and products.

Sustainable Products & Innovation

• Outokumpu Circle Green®

Awards & Recognition

• Climate Leader (Financial Times)
• Platinum ranking from EcoVadis