BillerudKorsnas

The role of the administrative, management and supervisory bodies

Board composition and structure

The articles of association stipulate that the Board of Directors of Billerud shall consist of not fewer than six members and not more than ten members, with no more than six deputies.

The 2024 AGM established that the Board of Directors should consist of six members and voted to re-elect the Board members Victoria Van Camp, Jan Svensson, Florian Heiserer, Magnus Nicolin and Regi Aalstad, and to elect Andreas Blaschke as a new member of the Board. The annual general meeting decided to elect Jan Svensson as Chairman of the Board.

The employee organizations have appointed two employee representatives to serve on the Board. These are Per Bertilsson and Nicklas Johansson, and as deputies Bo Knöös and Magnus Axelsson.

Other than the employee representatives and their deputies, none of the Board members are employed by the Group. Of the Board members elected by the AGM, two are women and four are men.

Independence

The composition of the Board meets the Code's requirements as to independence in relation to the company, the company's management and the company's major shareholders.

Independence status of Board members:

Board responsibilities and organization

The Board of Directors is the company's highest administrative body below the AGM. The Board of Directors is charged with the organization of the company and management of the company's affairs, ensuring that the company's organization is structured such that accounting, asset management and the company's financial affairs otherwise are supervised in a satisfactory manner and with assessing the company's financial situation on an ongoing basis.

The work of the Board follows written rules of procedure to ensure that the Board obtains information on all issues, and that all aspects of the company's activities relating to the Board are addressed. The Board has also established a number of general policies for the company's activities. They include the company's Code of Conduct, which summarizes the company's responsibilities, values and goals.

Board committees

The Board currently has two Board committees:

Audit Committee:

• Members: Florian Heiserer (Chairman), Regi Aalstad and Magnus Nicolin
• An employee representative normally attends the meetings
• Main role: contribute to good standard of financial reporting and ensure professional, efficient and independent auditing
• Responsibilities: important accounting issues, general taxation issues, effectiveness of internal control and risk management, assist in preparation of proposals for auditor election and remuneration
• Meets with auditor on regular basis

Remuneration Committee:

• Members: Jan Svensson (Chairman) and Victoria Van Camp
• Principal function: prepare Board's decisions on remuneration principles, amounts and employment terms for Group Management Team
• Monitors and evaluates programs for variable compensation
• Monitors and evaluates implementation of remuneration guidelines

Board activity in 2024

The Board held 11 meetings in 2024, including the inaugurating meeting.

Attendance at Board meetings and committee meetings:

¹ Magnus Nicolin joined the Audit Committee after the AGM 2024
² Andreas Blaschke joined the Board of Directors at the AGM 2024
³ Jan Åström left the Board at the AGM 2024
⁴ Jan Åström left the Audit Committee after the AGM 2024

Key board focus areas in 2024

One of the top priorities for the Board during the year has been the investment strategy for the company's North American mills. In May 2024, the Board decided to not proceed with the original plans to convert the Escanaba mill to cartonboard production, but to instead gradually shift the product mix in North America towards packaging material, with a more moderate investment level.

The Board has also been actively engaged in the Group Management Team's work to develop the company's updated strategy – "Way Forward" – that was presented on the company's Capital Markets Day in December 2024. In connection therewith, the Board furthermore resolved on certain investments required for the North American strategic development and to update the financial and sustainability targets for the company, which emphasizes the importance of capital efficiency, profitability and cash flow.

The Board has also worked on other strategically important issues, such as the company's ongoing IT harmonization project, talent and succession planning and strategy to achieve sustainability goals.

Audit Committee work in 2024

The committee held five meetings in 2024. During the year, the committee addressed the following audit topics: review and recommendation of external audit firm, the external auditor's audit plan and results, 2024 internal audit plan and results, enterprise risk management, and internal control over financial reporting. The committee also reviewed Billerud's reporting structure, quarterly results, cash, financing, currency and energy hedging, update to accounting principles, tax, pension plan, claims and legal proceedings, tender of external audit, implementation of a global IT platform, sustainability, and future CSRD reporting requirements.

Remuneration Committee work in 2024

The committee held six meetings in 2024. In 2024, the committee considered bonus payments with respect to 2023, outcome on LTIP 2021 and prepared a proposal for a new LTIP 2024 (for the 2024 AGM) as well as a new LTIP 2025 (for the 2025 AGM). The committee decided the annual bonus objectives for the CEO and salary review for members in the Group Management Team. The committee also approved new members to the Group Management Team. The committee prepared the Remuneration Report for 2023 and Guidelines for remuneration to senior executives.

Board assessment

Billerud has procedures for assessing the work of the Chairman and members of the Board each year. The assessment serves as input for an action plan for improvements and as background to the Nomination Committee's work as they assemble a Board. With regards to 2024, the Board conducted an internal assessment of its work. The purpose of the assessment is to gain an understanding of how the Board's work is conducted and what measures could be taken to make the work of the Board more effective. It also aims to gain an understanding of whether the composition of the Board is adequate with respect to the company's business and strategy, and to identify areas which may require additional capabilities within the Board or areas which should be accorded more scope and time by the Board. The results of the assessment were discussed by the Board and presented to the Nomination Committee. The Board also assessed the work of the CEO, without the CEO being present.

CEO and Group Management Team

The company's President and Chief Executive Officer (CEO) is appointed by the Board of Directors. Ivar Vatne has been the CEO of the company since July 2023. The CEO is responsible for the ongoing management of the company's and Group's business operations in accordance with instructions and regulations established by the Board. These instructions include responsibility for financial reporting, preparation of information and input for decisions, and ensuring that agreements and other measures do not conflict with applicable legislation or regulations.

The CEO and the Group Management Team (GMT) are jointly responsible for daily operations. The CEO has appointed a GMT that is responsible for different parts of the business. The GMT consists of the CEO, CFO, EVP HR & Communications, EVP Sustainability & Public Affairs, EVP Legal & Strategic Projects, President Billerud Europe, Deputy President Billerud Europe, President Billerud North America and Deputy President Billerud North America.

The role of the GMT is to establish Group-wide values and a long-term vision, as well as strategies and policies for the Group based on the objectives set by the Board. The GMT sets targets for strategic and operational activities, allocates resources and monitors the business' earnings. The GMT is also responsible for investment planning and follow-up, acquisitions and divestments, and for preparations for Board meetings. The GMT is taking active measures to involve employees in developing the corporate strategy, culture, and to fulfill its values.

The CEO chairs GMT meetings and makes decisions in consultation with the other senior executives. The GMT usually meets once or twice a month to review the financial performance of the preceding month, update forecasts and plans, as well as to discuss strategic and operational activities and issues.

Policies and governance framework

An important element of the company's governance is the steering document framework, which ensures that governing documents in Billerud are established, implemented, applied, monitored and reviewed consistently and appropriately across the Group. The Board has adopted a specific set of eight policies that steer the company on the top level (below our Code of Conduct): Health and Safety Policy, Governance Policy, Responsible Business Policy, Sustainability Policy, Communication, Branding and Information Policy, Finance Policy, People Policy and Operations, Quality and Procurement Policy.

Conflicts of interest

The Board of Directors applies the Swedish Companies Act's rules on conflicts of interest. For example, Board members shall not participate in handling of matters that concern a) agreements made between the Board member and the company, b) agreements made between the company and a third party, if the Board member has significant interests in the matter that can conflict with the company's interests and c) agreements between the company and a legal entity that the member of the Board of Directors alone or together with other people represents, except in cases where the company's counterparty is a member of the same group. In its work, the Board shall pay particular attention to potential conflicts of interest that may arise between a Board member and the company. It is the responsibility of each Board member, before as well as during Board meetings to, as soon as possible, notify other Board members of the existence of conflict of interest that exists or is likely to exist.

Integration of sustainability-related performance in incentive schemes

Billerud has integrated sustainability matters in its incentive programs and remuneration policies.

Scope and Coverage

Two main programs integrate sustainability performance:

• Long-term share (incentive) program: Offered to members of the Group Management Team and other key employees
• Variable compensation scheme: Offered to all employees in Europe and a majority of employees in North America, including the Group Management Team

Long-Term Share (Incentive) Program

Structure and KPIs

The program is structured to promote:

• Financial targets (85% weighting)
• Sustainability targets (15% weighting)

The sustainability performance condition is based on the achievement of Billerud's long-term sustainability targets within E1 – Climate change related to CO2 emission reductions for the period 2024-2026.

Targets

The CO2 emission reduction is calculated based on information on CO2 emissions presented in Billerud's Sustainability statement. These are science-based targets, in line with the Science Based Targets initiative (SBTi), which are monitored monthly by the Group Management Team.

Performance Thresholds

Performance conditions are weighted so that:

• 85% of the share award based on fulfillment of the financial performance condition
• 15% of the allotment based on the sustainability performance condition

The board sets threshold and maximum levels for each performance condition:

• If the maximum level is achieved, the full allotment of performance shares will be granted
• If the threshold is not met, no shares will be allotted
• For outcomes between these levels, shares will be allotted proportionally on a linear scale

Governance

The program is:

• Proposed by the Remuneration Committee to the board
• Approved at the annual general shareholder meeting

Performance Period and Reporting

Details on performance outcomes will be provided at the 2027 Annual General Meeting (for the 2024-2026 performance period).

Variable Compensation Scheme

Scope

Offered to all Billerud's employees within Europe and a majority of employees in North America, based on contractual terms. This includes the Group Management Team.

Sustainability KPI

The program is linked to Billerud's yearly target on lost time injury frequency rate (LTIFR), for both own workforce and workers in the value chain.

Weighting by Role

The 2024 variable compensation for reaching the LTIFR target is:

• 20% of the total bonus for the CEO
• 10% to 20% for the Group Management Team and other employees, depending on their role and function

The LTIFR constitutes a performance benchmark.

Threshold Structure

The program has a defined threshold level and a maximum level:

• If the threshold level is not met, no compensation is rewarded

Governance

Billerud's Remuneration Committee determines the variable compensation for the CEO. The CEO confirms the program for other employees. The terms are approved and updated accordingly.

Remuneration Committee Activities 2024

The committee held six meetings in 2024 and:

• Considered bonus payments with respect to 2023
• Reviewed outcome on LTIP 2021
• Prepared a proposal for a new LTIP 2024 (for the 2024 AGM)
• Prepared a new LTIP 2025 (for the 2025 AGM)
• Decided the annual bonus objectives for the CEO and salary review for members in the Group Management Team

The committee prepared the Remuneration Report for 2023 and Guidelines for remuneration to senior executives. Complete resolution on principles for remuneration for 2024 is available in note 23.

Strategy, business model and value chain

Business model

Sustainability is at the core of Billerud's business model. Billerud offers high-performing paper and packaging materials made of wood raw material. Billerud's products are manufactured in ten production facilities in Sweden, Finland and the US. In addition to board and paper, Billerud sells pulp that is not used in its own production. All facilities, except the Wisconsin Rapids converting facility in the US, are operationally integrated mills that produce paper or board as well as pulp.

Billerud has sales in the entire world and its main markets are Europe and North America. In Europe, our most significant products offered include liquid packaging board, containerboard, carton board, kraft paper and sack paper. In North America, our most significant products offered include graphic paper, specialty paper and market pulp. Our customers are leading packaging producers around the world within the food, healthcare, retail, electronics and other packaging sectors. For further information about our significant products and markets served, please see the Financial overview on page 23.

On 31 December 2024, Billerud had 5,822 employees located in 17 markets. Most of them are employed in Sweden and the US. Read more about our employees in S1-6 on page 122.

Billerud has no products and services that are banned in certain markets. Billerud is not active in fossil fuel (coal, oil or gas) sectors.

Significant groups of products and services

Billerud's significant products are described in the table below:

Europe

• Liquid packaging board
• Containerboard
• Carton board
• Kraft paper
• Sack paper

North America

• Graphic paper
• Specialty paper
• Market pulp

Significant markets and geographies

Billerud has sales in the entire world and its main markets are Europe and North America.

Number of employees by geography

On 31 December 2024, Billerud had 5,822 employees located in 17 markets:

• Region Europe: 4,154 employees
• Region North America: 1,651 employees
• Asia: 17 employees

Strategy for sustainable and profitable growth

Billerud's "Way Forward" strategy is based on choices of prioritized markets and product categories, coupled with strategic initiatives to deliver on plans and reach targets. Our purpose "We make high performance packaging materials for a low-carbon society" guides our long-term direction.

We strive for improved performance and have set ambitious objectives. Some of the strategic initiatives are group-wide, while others are regional, reflecting their different characteristics and conditions. Having operations on two continents provides differentiation benefits for the Group, while it ensures stable supply chains, for the benefit of our customers. Billerud always puts health and safety first. The company's highest priority is for our employees and contractors to work safely every day.

The strategy is grouped into four pillars:

1. Region North America – Commitment to graphic and specialty papers, evolving towards packaging materials

In North America, Billerud is committed to remaining a quality, service and cost leader in graphic paper with the focus primarily on premium coated free sheet grades. We also aim to retain our position as a leading North American supplier of specialty label materials and to grow within the label market.

To execute the evolution towards packaging materials and thereby improve the product mix in North America, Billerud has decided to invest approximately SEK 1.2 billion in the Escanaba mill during 2024-2026, and around SEK 200 million in the Quinnesec mill in 2026. These investments will enable the production and sales of white liner, cartonboard and kraftliner, for which there is a large and growing demand in North America. The planned mill upgrades will be carried out in phases and in alignment with the scheduled maintenance shutdowns to minimize production disruptions.

Billerud is well positioned to grow within paperboard in North America as it has domestic, cost-competitive manufacturing and logistics as well as a strong service platform. Our new products for the North American market are being developed in collaboration with our European organization, which has extensive experience and knowledge of paperboard. During 2024, successful production trials for liner were performed with positive customer feedback. Billerud aims to gradually ramp up its sales of packaging materials in North America and has set the target of producing around 300 ktons of paperboard by the end of 2030.

2. Region Europe – Strengthen performance through existing asset base

For Region Europe, Billerud prioritizes strengthening performance through its existing manufacturing assets. Based on market trends and market dynamics, we will focus on maintaining our strong position within liquid packaging board and accelerating the growth in cartonboard and coated liner. Additionally, we will optimize value in fluting and in attractive niche applications for sack paper and MG paper, such as industrial bags and medical uses. Thanks to our broad product portfolio, which also contains uncoated liner and various kraft paper products, as well as our large-scale and flexible mills, we will be able to optimize operations across business cycles.

For the coming three years, the investment need in Region Europe beyond normal mill maintenance, is assessed to be limited. Investments in this region will thus be focused on maintaining competitiveness of our asset base.

3. Group commitment – Stronger performance culture

To succeed, Billerud needs skilled and committed employees and leaders. Going forward, we will strive for a stronger performance culture, that focuses on achieving results and has accountability as an important aspect. In support of our corporate culture, we emphasize two core values: "We care for each other" and "We do what we say". A key element of our culture is giving employees opportunities to grow within the company. Training in skills such as change management and sustainable leadership will also continue.

4. Sustainability embedded

Sustainability is at the core of Billerud's business model, and we take responsibility for our impact on society and the environment. We help our customers reduce their climate impact by replacing fossil-based packaging materials with our materials, which are not only recyclable but also have a lower carbon footprint. For our own part, we have a roadmap of actions that will reduce our greenhouse gas emissions in accordance with the Paris Agreement. Our updated CO2e emission reduction targets were approved by the Science Based Targets initiative in 2024. We are also exploring new business models for biogenic carbon capture storage and utilization (CCS/CCU) at our mills together with partners. In the longer term, we are working towards setting a net zero target.

Main challenges ahead connected to strategy

The main challenges ahead are described in Risks and risk management on page 40 and include for example risks posed by political initiatives, laws and regulations and the challenge of securing cost competitive wood in Europe.

Sustainability-related goals embedded in the business model

Billerud embeds sustainability in everything we do. Our Sustainability Platform, contributing to our Way Forward strategy, consists of three focus areas supported by five sustainability foundation areas:

Focus areas

1. Health and safety

• Accidents resulting in absence per million hours worked (own employees and contractors), LTIFR: <2.5 (2024)

2. Low carbon society

• Scope 1 and 2 emissions reduction of 42% & scope 3 emissions reduction of 25% (2030)

3. High performance sustainable paper & packaging materials

• Proportion of Billerud's packaging paper that is certified recyclable: 100% (2024) [for European operations]
• Proportion of production units certified according to food safety standards: 100% (2024) in Europe, 33% in North America

Sustainability foundation areas

Resource efficient production

• Target: Reduction of water usage in our mills, –1% (2024) [for European operations]
• Target: Proportion of Billerud's packaging paper that is certified recyclable: 100% (2024) [for European operations]

Responsible wood supply

• Target: Proportion of domestic wood supply: 96% (2024)
• Target: Group-certified forest owners in Billerud's group certificates for FSC® and PEFC: 320 (2024) [for European operations]

Engaging workplaces

• Target: Proportion of female employees in total: 22% (2024)
• Target: Proportion of female people managers: 25.5% (2024)

Responsible supply chain

• Target: Proportion of our supplier spend by signed Supplier Code of Conduct: 85% (2024)
• Target: Proportion of purchase value covered by supplier assessment: 83% (2024) [for European operations]

Responsible business

• Target: Proportion of employees who had completed Code of Conduct training: 95% (2024)

Description of the upstream and downstream value chain

Input to operations

Billerud purchases different types of direct and indirect material, such as wood raw material, chemicals and energy, that are essential for our operations. Billerud works with suppliers worldwide and it is important that we ensure that our suppliers meet our high standards for environmental stewardship and ethical practices. When it comes to wood raw material we work closely with both large forest owners and local suppliers, where the raw material is sourced exclusively from responsibly managed forests. This ensures a responsible, renewable resource base that supports our long-term commitment to the environment. It is also essential that Billerud maintains a stable and cost-efficient supply chain, and therefore we actively engage in strategic partnerships with our suppliers.

Outputs from operations

Billerud produces renewable and recyclable packaging materials designed to support a sustainable value chain. Our high-quality, lightweight materials serve a wide range of applications from food and beverages to luxury goods and medical supplies. Our products have a low carbon footprint, are recyclable and contribute to circular flows. By reusing materials and embedding sustainability in every step, we minimize waste and lower environmental impact, benefiting both our customers and society.

Energy and byproducts

Our manufacturing processes generate surplus renewable energy, which we use to power our facilities and contribute to district heating in nearby communities. We also repurpose byproducts like crude tall oil for biofuel production, energy recovery from wood residues further reducing waste and supporting renewable energy sources. This approach strengthens local infrastructure and reduces reliance on fossil energy.

Benefits for stakeholders

Billerud creates financial value for customers, shareholders and other stakeholders in the value chain, while also contributing to the transition towards a low-carbon society.

Customers: Customers benefit from our sustainable packaging solutions that support reduced material usage and lower associated emissions.

Investors: Investors see long-term value in our focus on sustainability, which enhances our market resilience and supports profitability.

Nature: Since the forest's ability to sequestrate carbon dioxide decreases after the age of 60, it is also very important that we have active forestry with growth to ensure long-term maximum carbon dioxide capture. After harvesting, the entire tree is used for different purposes. Certain parts are used in Billerud's products, while other parts becomes solid wood products or byproducts that become bioenergy. We only source wood raw material from forests that are responsibly managed, with respect for biodiversity and societies.

Employees and local communities: We strengthen local economies by providing employment and supporting jobs in areas with production facilities. Billerud had 5,822 employees on 31 December 2024, of which 4,154 in Region Europe, 1,651 in Region North America, and 17 in Asia. We engage with local communities, participating in development initiatives, addressing resident concerns or complaints, and fostering a collaborative local business environment.

Industry and environmental organizations: We participate in industry organizations and collaborate on environmental initiatives, contributing to regulatory dialogues, standard-setting, and the advancement of circular economy practices.

Upstream value chain

Our upstream value chain consists of wood supply, as well as procurement of other input material needed for operations. In relation to wood supply, we interact with forest owners and forest companies, to secure contracts for forest harvesting operations. We also interact with other actors for direct procurement of wood raw material. We interact with foresters and logging contractors for forest management activities.

The procurement of other input material includes interaction with direct suppliers in regard to material such as chemicals, logistics and energy. It also include actors further down our value chain (tier 2 and 3 in the supply chain), who support our suppliers with input to purchased material.

Incoming transports of raw materials to the production units are also included in the upstream value chain.

Downstream value chain

Our downstream value chain consists of outgoing transports of products to customers from the production units, as well as our customers and end-consumers. Billerud's customers are on the international paper and packaging market, and consist of packaging manufacturers and brand owners, who constitute our customers' customers. They supply products to consumers and end-users. Our value chain ends with the end-of-life stage, including waste management of our own waste generated in process, as well as recycling and waste of the products we put on the market. Billerud's recyclable products are based on renewable material. Paper fibers can be sent for material recovery many times, after which they can be used for energy recovery. Constant input of fresh fiber is necessary to be able to keep the recycling loop going.

Value chain visualization

Billerud makes high performance packaging material for a low carbon society. Our value chain consists of a chain of upstream activities, own activities and downstream activities. Each step below demonstrates the business activities performed and/or business relationships involved throughout our value chain. Billerud's double materiality analysis covers material sustainability impacts, risks and opportunities (IROs) across our value chain.

Upstream:

1. Wood supply (raw materials) - For example, forest owners, forest companies or sawmills
2. Wood supply (harvesting) - For example, foresters and loggers contracted for forest management
3. Suppliers in tier 2 and 3 - Indirect suppliers providing products, components and materials to tier 1
4. Tier 1 suppliers - Suppliers of direct materials (chemicals), logistics, energy, other materials and services

Own activities: 5. Forestry - Owned forests and own forestry management 6. Operations - Paper mills and/or board mills 7. Business operations - Operational and strategic functions (for example, sales, procurement, operations, HR and finance) 8. Logistics - For example, logistics coordination and planning

Downstream: 9. Distribution - For example, purchased transport 10. Customers - For example, packaging manufacturers and our customers' customers: brand owners 11. Consumers and end-users - Private consumers 12. End-of-life - For example, waste management & recycling

Key outputs

Heat, Energy, Biofuel (as outputs from own activities)

Interests and views of stakeholders

Stakeholder engagement approach

Billerud continuously engages in formal and informal dialogue with internal and external stakeholders. The purpose of stakeholder engagement is to listen and learn, collaborate and gain insight from stakeholders, as well as to inform them about the business. Dialogues occur across channels and topics, and help to understand expectations and how to meet stakeholders' requirements and needs. Learnings from stakeholder engagement feeds into the double materiality assessment, Sustainability Platform and overall strategy and business model development.

Key stakeholder groups and engagement

The table below describes key stakeholders, focus matters and how engagement is organized:

Integration of stakeholder views into strategy and business model

There are several processes in place to inform administrative, management and supervisory bodies at Billerud about the views and interests of affected stakeholders regarding sustainability impacts, risks and opportunities.

At the mills, management is informed of the views of affected stakeholders through the management system processes, which requires yearly stakeholder dialogue and communication with affected stakeholders.

During the board meetings, the Board of Directors is informed of stakeholder dialogues and specific events if relevant for their knowledge. Similarly, the Group Management Team is informed by specific events if relevant for their decision making, for example in relation to strategy development or target setting processes. The EVP Sustainability & Public Affairs is responsible for presenting such information to the board and Group Management Team within the framework of the double materiality process.

The Sustainability & Public Affairs department is informed of the views of affected stakeholders through consultation and interviews with relevant stakeholders throughout the double materiality process.

Further steps planned

During the double materiality assessment process, Billerud leveraged the information provided from stakeholder dialogues to assess impacts, risks and opportunities. For example, learnings from ISO-certification processes from Billerud's mills and wood supply were used in the assessment, including perspectives from affected stakeholders.

In the future, Billerud will work on further integrating stakeholder dialogues into the double materiality assessment process and especially utilize stakeholder engagements from applicable management systems, to feed into the assessment of impacts, risks and opportunities.

In connection to a future revision of the double materiality assessment, Billerud plans to increase its engagement with affected and potentially affected stakeholders. An updated structure for this engagement will be developed during 2025. Such steps are not likely to modify the relationships with stakeholders. No other strategy and/or business model amendments are expected or planned to address specific interests and views of stakeholders for 2025. However, learnings from stakeholder engagements are continuously integrated into process improvements, for example, based on learnings from the annual employee survey or health and safety incidents.

Material impacts, risks and opportunities and their interaction with strategy and business model

Overview

During the double materiality assessment, Billerud identified material sustainability-related impacts on people and the environment in our operations and value chain. We also identified material risks and opportunities associated with sustainability matters for our business.

Material impacts, risks and opportunities (IROs)

Material impacts, risks, and opportunities (IROs) identified during the double materiality assessment are outlined below. The topic specific SBM-3 requirements are further elaborated under the respective topic standard.

Environmental impacts, risks and opportunities

E1 Climate change

E2 Pollution

All topics under ESRS E2 Pollution are assessed as impact material.

E3 Water and marine resources

All topics under ESRS E3 Water and marine resources are assessed as impact material.

E4 Biodiversity and ecosystems

Billerud's impacts on biodiversity are considered double material (both impact and financially material).

E5 Resource use and circular economy

All topics under ESRS E5 Resource use and circular economy are assessed as double material (both impact and financially material).

Social impacts, risks and opportunities

S1 Own workforce

Material impacts include health and safety, working conditions, and human rights within Billerud's own workforce. These are assessed as impact material.

S2 Workers in the value chain

Material impacts include working conditions, health and safety, and human rights in Billerud's supply chain. These are assessed as impact material.

S3 Affected communities

Material impacts on local communities from operations, including environmental impacts and community engagement. These are assessed as impact material.

S4 Consumers and end-users

Material impacts related to product safety and quality affecting consumers and end-users. These are assessed as impact material.

Governance impacts, risks and opportunities

G1 Business conduct

Material risks and opportunities related to business ethics, anti-corruption, and compliance. These are assessed as double material (both impact and financially material).

Interaction with strategy and business model

Sustainability foundation areas

Resource efficient production

We are committed to implementing measures throughout our operations to reduce our environmental impact. This includes reducing emissions, optimizing water use, and minimizing waste. These efforts are integral to our business model and support our ambition to provide high-performance packaging materials for a low-carbon society.

Climate and biodiversity

Climate change and biodiversity are at the core of our sustainability strategy. Our science-based targets for emissions reductions and our efforts to protect biodiversity in our value chain are fundamental to our long-term competitiveness and license to operate. These sustainability foundation areas can potentially impact people and communities in nearby areas. Billerud addresses and manages biodiversity aspects with all wood suppliers through certification schemes and supplier assessments.

Working conditions and human rights

We are committed to ensuring fair working conditions in our supply chains. This is mainly achieved through assessments and close cooperation with suppliers.

Integration with business model

Sustainability is at the core of Billerud's business model. Billerud offers high-performing paper and packaging materials made of wood raw material. Our purpose "We make high performance packaging materials for a low-carbon society" guides our long-term direction.

Our "Way Forward" strategy is based on choices of prioritized markets and product categories, coupled with strategic initiatives to deliver on plans and reach targets. The strategy is grouped into four pillars, with sustainability embedded throughout.

Resilience to identified IROs

Climate resilience

Billerud has conducted climate scenario analysis using IPCC's Representative Concentration Pathway (RCP) 2.6 scenario (aligned with Paris Agreement to keep temperatures well below 2 degrees) and RCP 8.5 four-degree scenario to consider both transition and physical climate risks.

For physical risks, Billerud has implemented preventive actions to secure production against severe weather events. For transition risks, Billerud's climate transition plan includes clear investment plans and monitoring mechanisms.

Supply chain resilience

To ensure resilience against decreased wood supply due to climate change, Billerud applies:

• Geographic purchasing strategy to ensure steady wood supply
• Sourcing of certified wood raw material (FSC®, PEFC, SFI®) to ensure forests are managed with resilience in mind
• Climate adaptation measures in owned forestry operations

Financial resilience

Anticipated financial effects from physical and transition risks have been considered as part of Billerud's double materiality assessment. The climate scenarios and related assumptions are compatible with the impairment tests that are part of the financial statements.

Time horizons

The time horizons used align with Billerud's strategic planning horizons and capital allocation plan:

• Short term: 0-1 year
• Medium term: 1-5 years
• Long term: 5-10 years

Value chain coverage

The double materiality assessment covers:

• Upstream: Wood supply (raw materials and harvesting), tier 1, 2 and 3 suppliers, forestry activities
• Own operations: Owned forests, paper/board mills, business operations, logistics
• Downstream: Distribution, customers, consumers/end-users, end-of-life/recycling

Materiality result on ESRS topic level

Double material (both impact and financially material):

• Climate change (E1)
• Resource use and circular economy (E5)
• Pollution (E2)
• Biodiversity and ecosystems (E4)
• Business conduct (G1)

Impact material:

• Affected communities (S3)
• Own workforce (S1)
• Workers in the value chain (S2)
• Consumers and end-users (S4)
• Water and marine resources (E3)

Description of the process to identify and assess material impacts, risks and opportunities

Overview

The process for conducting Billerud's double materiality assessment is the basis for the 2024 Sustainability statement. The process has changed since the previous year, when the GRI standards were used as the basis for preparation. The process for the double materiality assessment involved collaboration with a wide range of stakeholders as well as interviews and desktop research. The double materiality assessment followed a defined process to ensure continuity and transparency of the results.

Step-by-step methodology

Identification of key sustainability matters and stakeholders

Billerud's Sustainability & Public Affairs department is responsible for developing and overseeing the double materiality assessment. First, a working group identified key stakeholders within Billerud to identify and assess impacts, risks and opportunities. To ensure representation of affected stakeholders and users of the Sustainability statement, stakeholders who had a broad knowledge of Billerud's operations and regular interaction with external stakeholders were selected.

No external stakeholders were directly involved in this year's double materiality assessment, as their views were deemed to be properly represented by the involved internal stakeholders.

Mapping of sustainability matters

To ensure that all sustainability matters were covered by a stakeholder interview, the double materiality assessment working group conducted a mapping of all sustainability matters and ensured that information on such sustainability matters were covered in each interview. If no impacts, risks or opportunities were identified, sanity checks with key stakeholders were completed, to assess that this was reasonable due to the nature of Billerud's business.

Coverage of value chain

The double materiality assessment covered Billerud's own operations as well as the value chain. The focal points of the value chain assessment were impacts, risks and opportunities connected to workers within forestry and at Billerud's mills as well as first-tier suppliers.

• Upstream value chain impacts, risks and opportunities relate to, for example, suppliers within wood supply and forestry activities as well as chemical suppliers
• Downstream impacts, risks and opportunities were related to end-products and consumers, waste management and recycling

Inputs to the assessment

Internal sources

Prior to interviews, the working group collected information on already identified impacts, risks and opportunities related to environmental, social and governance (ESG). This included:

• Previous materiality assessment
• Task Force on Climate-Related Financial Disclosures assessment
• Other sustainability disclosures
• ISO risk assessments

External databases and frameworks

• ENCORE
• SASB
• ESRS sector benchmarks and guidance

Stakeholder consultation

During the interviews, stakeholders provided input to already identified topics as well as new insights on sustainability matters. The identification and assessment of all impacts, risks and opportunities was documented together with applicable assumptions, scorings, rationales and associations to affected stakeholders, value chain position from where the impact, risk or opportunities emerged, time horizons, positive/negative impacts, actual/potential impacts and human rights impacts.

The process allowed for the assessment of impacts, risks and opportunities that had already been identified as relevant and inclusion of entity specific topics. No additional entity specific topics were included.

Scoring criteria

Impact materiality scoring

Impacts were assessed by severity (scale, scope and irremediability) and likelihood.

• Severity components: Scale, scope, and irremediability were each assessed on a scale from one to five, respectively. Each score is uniquely described based on the stakeholder(s) being affected by the impact.
• Likelihood: Actual impacts were given a 100% likelihood. Potential impacts were categorized from unlikely to almost certain using a five-step scale.
• Threshold: A threshold was established that gave precedence to severity over likelihood. Adjustments were made for human rights-related impacts by applying a lower threshold.

Financial materiality scoring

Risks and opportunities were scored based on financial magnitude and likelihood and classified by nature of the financial effects.

• Financial magnitude: Built on the existing scale in the ERM framework
• Likelihood: The same scale as outlined for impacts

Risks identified within the Enterprise Risk Management (ERM) framework were also mapped to the sustainability topics and included when relevant. Additional risks were assessed on a qualitative basis.

Internal controls during scoring

When scoring impacts, risks and opportunities, internal control measures were applied to ensure objectivity in scoring. This included documenting all identified impacts, risks and opportunities with:

• Description
• Scoring
• Rationale of the score
• Source of who had identified the impact, risk or opportunity

Calibration of results

The preliminary result was presented in a session with Billerud's Group Management Team. The purpose of this step was to quality check the scoring conducted by internal stakeholders and ensuring calibration and consistency of the material matters against Billerud's business model.

Sign-off by management

After final adjustments, the result of the double materiality assessment was presented to members of Billerud's Group Management Team for sign-off. Billerud's Audit Committee and Board of Directors have also been presented with the result of the double materiality assessment during the year and accepted results. In addition, the final result of the double materiality assessment has been presented to external stakeholders, including an employee representative group, customers as well as business partners.

Internal control of processes

During the first year of conducting the double materiality assessment, no pre-defined internal control process of the assessment has been in place. However, by following a set methodology for the double materiality assessment described above, checks have been carried out to ensure transparency, objectivity and consistency as a basis for internal control. During the year, the Audit Committee has given an increased mandate to the Internal control function to set up its capabilities for conducting internal control of the double materiality assessment process and Billerud's Sustainability statement.

Value chain mapping

The double materiality assessment covers Billerud's own operations and activities in the upstream and downstream value chain. No part of Billerud's value chain was excluded from the assessment.

Frequency and review

Billerud will define a process to evaluate the double materiality assessment annually to ensure relevancy and alignment with best practices. The next scheduled double materiality assessment review will be conducted during 2025. A process has been initiated for capturing the identified risks within the double materiality assessment in the yearly Enterprise Risk Management review.

In the next double materiality assessment review, Billerud will work on developing the process of integrating ISO risk management findings, as well as findings from other relevant frameworks, into the double materiality assessment. Billerud will also focus on reviewing how to feed stakeholder engagement directly into the double materiality assessment.

Integration with risk management

Billerud will work on further integrating stakeholder dialogues into the double materiality assessment process and especially utilize stakeholder engagements from applicable management systems, to feed into the assessment of impacts, risks and opportunities.

The internal audit and internal control function reports to the chairman of the Audit Committee as well as the CFO and collaborates with the Sustainability & Public Affairs department to ensure alignment between Billerud's Enterprise Risk Management (ERM) framework and the double materiality process.

Link to climate scenario analysis

For climate-related matters, Billerud integrated information from its climate-related scenario analysis into its double materiality assessment. The scenario analysis has been conducted according to Task Force on Climate-related Financial Disclosures. See E1 IRO-1 on page 75 for detailed methodology on climate scenario analysis.

Transition plan for climate change mitigation

Scope of the plan

Billerud's transition plan for own operations is approved by senior management and executives of Billerud's Group Management Team. The transition plan has been approved during the reporting period and covers both European and North American operations. Activities listed will be initiated in 2025 and carried out until 2030.

The scope of the current action plan is limited to Billerud's own operations (scope 1 and 2 emissions). Scope 3 decarbonization levers and activities are not part of the current transition plan. During the reporting period, Billerud is developing its transition plan for reducing emissions from specific scope 3 activities.

Target year(s) for net zero / carbon neutral

Billerud has near-term science-based targets approved by the Science Based Targets initiative with the target year of 2030. Billerud has no long-term climate mitigation target (beyond 2030). Billerud's ambition is to set a net zero target that is based on a 90% absolute reduction of scope 1-3 emissions and follows the 1.5°C pathway.

Billerud's vision as stated in the opening pages indicates the company targets to "be the enabler for a net zero society."

Scope 1, 2, 3 reduction milestones with baseline years

Baseline year: 2022

Near-term targets (2030):

• Scope 1 and 2: Absolute reduction of 42% to 1,032 ktons CO₂e by 2030 (Covering 100% of total scope 1 and 2)
• Scope 3: Absolute reduction of 25% to 2,650 ktons CO₂e by 2030 (Covering 70% of total scope 3)

Baseline values (2022):

• Scope 1 and 2: 1,032 ktons CO₂e baseline implies target starting point of ~1,779 ktons CO₂e
• Scope 3: 3,770 ktons CO₂e (2022 baseline)

Progress to date (2024):

• Scope 1 emissions: 686 ktons CO₂e (883 ktons in 2022)
• Scope 2 emissions (market-based): 9 ktons CO₂e (150 ktons in 2022)
• Total scope 1 and 2 reduction: 337 ktons CO₂e (33%) compared to base year, representing 78% of the total reductions needed
• Scope 3 emissions: 3,016 ktons CO₂e (3,770 ktons in 2022)

Interim progress: The company does not have formal interim or milestone targets between the baseline and 2030.

Alignment with 1.5°C / SBTi validation status

Billerud's scope 1 and 2 targets are aligned with 1.5°C. The scope 3 target is well below 2°C compatible.

Targets were approved by the Science Based Targets initiative in December 2024 (announced 12 December). The company commits to reduce its scope 1 and 2 emissions by 42% by 2030, with 2022 as base year, and to reduce its scope 3 emissions by 25% within the same timeframe.

Billerud's near-term targets follow the latest criteria document from the SBTi. Targets are based on cross-sector absolute reduction pathways. SBTi stipulates that near-term targets include at least 95% of scope 1 and 2 and 67% of scope 3.

Key levers / decarbonization pillars

Billerud's decarbonization strategy focuses on three key levers:

1. Efficiency in production

• Overall energy efficiency improvements in own operations
• Landfill projects (primarily in North America)
• Increase Overall Equipment Efficiency (OEE) to utilize each production line to fullest capacity
• Increase asset performance and energy performance in operation

2. Fossil free energy

• Use of Renewable Energy Credits (RECs) / Emission Free Energy Credits (EFECs)
• Switching from fossil to bioenergy alternative feedstocks
• Continue switching to bioenergy in North America and transition towards eliminating fossil fuels in production in Europe
• Includes both on-site generated energy and purchased electricity
• Purchased electricity for all Billerud's pulp and paper mills is fossil free globally
• Purchased heat and steam in Europe is 99% fossil free during the reporting period

3. Electrification

• Technology switching in production
• Replacement of steam engines to electric alternatives to reduce demand for on-site produced steam and electricity generated from fossil sources in North America

Key actions – reporting period 2024:

Total 2024 reduction: 43 ktons CO₂e achieved vs 28 ktons CO₂e expected

Key actions – planned 2025–2030:

CapEx / investment commitments

Future Capex required to implement the scope 1-2 action plan for Billerud's European and North American operations is estimated at SEK 150-200 million (2025-2030).

Investments include:

• Improvements in bark handling equipment
• Renewal of drying systems
• Retrofitting old oil systems to enable using bioenergy in production
• Other investments for increasing energy performance in operations

Future climate-related action plan investments are separate from other investment portfolios.

2024 Capex: SEK 36 million has been invested in Billerud's European and North American operations for projects related to the transition plan during the reporting period.

Operating expenses: Future Opex is seen as insignificant in the context of the action plan. Capex investments will lead to significant Opex reductions after implementation.

Financing: Billerud has several financing streams through its debt portfolio with different time horizons as well as a syndicated credit facility. Total capacity of the debt portfolio amounts to SEK 16,500 million excluding term and bond loans. In addition, Billerud has a SEK 400 million R&D use of proceeds loan from the Nordic Investment Bank (NIB) that will be partly allocated to the action plan.

Billerud has no green bonds or sustainability linked loans at this time.

Locked-in emissions and stranded asset analysis

Locked-in GHG emissions:

Billerud mainly uses bioenergy at the mills. Billerud's North American operations used approximately 1.9 TWh of natural gas during 2024. In the following reporting periods Billerud will focus on reducing use of fossil fuels with efficiency measures and fuel switching towards bioenergy in accordance with the established roadmap.

Starting fuel and some natural gas boilers can be viewed as locked-in emissions.

Billerud's North American operations have direct greenhouse gas emissions from the disposal of organic material in landfill that will decompose continuously over a long time period. In Europe, Billerud is 98% fossil free. However, locked-in emissions include emergency and start-up fuel that is hard to fully remove.

Assessment conclusion: The evaluation determined that locked-in emissions do not drive transition risks or jeopardize climate targets. Billerud will evaluate alternative use cases for landfill gas and generated organics currently put on landfill in North America. Current emissions from landfills are not to the magnitude to divert from target fulfilment. Operational use of fossil fuels will be continuously phased out. Electrification, increased efficiency measures and higher use of fossil free energy will enable Billerud to reach current action plan for own operation.

Locked-in emissions were evaluated for production units in parallel with planned activities in the action plan. Since the current scope of the action plan is limited to own operations, screening of locked-in emissions does not include scope 3 activities.

Paris-aligned benchmarks exclusion: Billerud's operations and business practices are not covered under Article 12 of the Commission Delegated Regulation (EU) 2020/1818 and are hence not excluded from EU Paris-aligned Benchmarks.

Use of carbon credits / removals

Billerud has a separate disclosure point (E1-7 GHG removals and carbon credits) which is listed as "Not material" in the index.

The transition plan does not currently incorporate carbon credits or removals as a decarbonization lever for the 2030 targets.

However, Bio-CCS & Bio-CCU opportunity: Demand for carbon capture and storage (CCS) and carbon capture and usage (CCU) is expected to increase rapidly in the next few years as governments and companies work to meet their climate targets. Through Bio-CCS and Bio-CCU, Billerud's industry has a significant business opportunity to be part of a negative carbon emissions market. Billerud is exploring this opportunity further at the Gävle mill.

Scope 3 approach

For scope 3, Billerud is currently developing its transition plan for reducing emissions from specific activities. Scope 3 decarbonization levers and activities are not part of the current transition plan.

For scope 3 near-term targets, a change in the production of chemicals, upstream logistics and further processing of sold products by customers are seen as vital reduction areas to meet the target.

Decarbonization levers in the value chain have not yet been individually quantified and formulated into an action and transition plan.

Connection to financial planning

Billerud's climate change mitigation action plan is outside the context of available economic activities within the EU Taxonomy. No mapping of EU Taxonomy-defined KPIs in relation to alignment has been done, nor an EU Taxonomy capital expenditures plan.

Future climate-related action plan investments are separate from other investment portfolios.

Billerud's action plan is linked to availability of low-cost financing alternatives. Billerud uses available debt portfolio to ensure timely production efficiency increasing operational investments, R&D and maintenance in its own operations. Investments and mill-renewal activities are linked to Billerud's efficiency enhancement program to ensure a cost-effective operation that leverages environmental and energy improvements.

Governance

The transition plan is approved by senior management and executives of Billerud's Group Management Team during the reporting period.

Reduction targets are linked to the incentive program.

Ensuring constant supervision of climate transition plan and ensuring transition plan connected with necessary investments is a key mitigation action.

Climate scenario analysis

Billerud has used two climate scenarios to establish its climate-related impacts, risks and opportunities derived from its Task Force of Climate-Related Financial Disclosures (TCFD) reporting. Climate scenarios range between well below 2°C and 4°C.

• RCP 2.6 scenario: Used to identify transition risks due to stricter policy measures and changed market behavior
• RCP 8.5 scenario: High-emission scenario that helps uncover exposure to physical climate-related risks

The climate scenarios and related assumptions used are compatible with the impairment tests that are part of the financial statement.

In 2025, Billerud will initiate a TCFD update to reflect necessary changes in climate projections and update its climate scenario analysis with a climate scenario in line with 1.5°C.

Time horizons applied: short-term (0-1 year), medium-term (1-5 years) and long-term (5-10 years).

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in provision

Billerud has chosen to use the phase-in provision regarding not disclosing the anticipated financial effects for the first year of reporting.

Time horizons

The time horizons applied for considering resilience are based on the time horizons within the double materiality assessment:

• Short term (below 1 year)
• Medium term (1-5 years)
• Long term (above 5 years)

Methodology

Billerud updated its climate-related scenario analysis in 2023, to consider Billerud's resilience in handling the identified risks. The resilience analysis was based on assumptions related to:

• Increased costs for energy
• Increased costs for raw materials
• Changes in the supply chain
• Changes in the regulatory landscape towards stricter requirements on permits and sourcing activities, with a key focus on wood supply

Risks already quantified in Billerud's ERM framework and/or scenario analysis have been included in the double materiality assessment. The financial risk scale builds on Billerud's Enterprise Risk Management Scale.

No part of Billerud's value chain was excluded from the scenario analysis. Nor were any physical risks or transition risks excluded.

Types of financial effects identified

Physical risks

For physical climate-related risks, the following types of financial effects were identified:

• Operational disruptions leading to increased operational costs and decreased sales
• Disrupted harvests (own operations)
• Supply chain disruptions (upstream) leading to increased operational costs and decreased sales

Mitigating actions

Mitigating actions and resources needed as a response to identified risks are listed in the tables on page 77 and page 78, but for more details on Billerud's decarbonization actions, see section E1-3 on page 82.

Pollution of air, water and soil

Pollution emissions (E2-4)

Billerud reports emissions to air and water for pollutants exceeding the applicable threshold value specified in Annex II of Regulation (EC) No 166/2006 (E-PRTR). Emissions are measured at several parts of operations with local variations. Main sources of emissions to air are recovery boilers, lime kilns and bio boilers. Pollutants emitted to water are based on laboratory testing applied to process effluent, monitored with flow meters and verified using manual testing methods.

Outcome 2024:

Notes:

• The table presents accumulated emissions from each production unit with emissions above the threshold in Annex II of Regulation (EC) No 166/2006
• A hyphen (–) indicates that the pollutant is not measured or that reported values have not reached the applicable threshold
• Data does not include Escanaba mill, which does not measure certain parameters

Grievances – entity specific measures (E2-4)

Outcome 2024:

Grievances are followed up through notices from regulatory bodies or other instances of stakeholder contacts. Only logged grievances are tracked in this metric. Noise and negative odors are also part of production permits and subject to local and regional variations.

Water consumption

Total water consumption and intensity

¹ Based on the outcome of the water risk assessment, no related impact has been deemed significant for Billerud.

² Billerud recycle and reuse water within the production facilities, but Billerud is unable to measure or estimate the amount of water that is recycled or reused for this reporting.

Water intensity

Water withdrawal and discharge

Billerud withdraws water primarily from surface water sources for production processes and returns it to waterways. 2-5% of withdrawn water is not released back to the source, primarily due to evaporation and water retention in finished products.

Water stress areas

Billerud has one converter facility located in an area of high-water stress with overall water risk rated as medium-high (Wisconsin Rapids). Since it is a converting facility, it uses small quantities of water compared to a pulp and paper mill. All Swedish production units are members of local water management associations. Billerud does not operate any pulp and paper mills in areas of high-water risk or high-water stress.

Billerud applied the WRI's Aqueduct Global Water Tool for water risk assessment.

Methodology notes

Billerud's metrics for water consumption are based on a study for Nordic pulp and paper mills conducted by IVL Swedish Environmental Research Institute. Water consumption includes water retention in products and water leaving production facilities as steam. Water consumption from evaporation and retention are based on assumed 5% loss from quantities of water withdrawal, in cases where mills cannot determine their flows.

The consolidated metrics for 2024 have not been validated by an external body other than the assurance provider.

Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities

Financial effects from resource use and circular economy

No specific CapEx or OpEx amounts are allocated to the resource use and circular economy action plan in its current form besides project and employee costs. Financial resources allocated to resource use and circular economy are mainly for maintenance and renewal of current operational investments.

No significant CapEx or OpEx related to actions taken during the reporting period.

Financial resources related to future key actions have not been evaluated at this stage.

Resource allocation

Resource inflows and circular economy activities are central in Billerud's business practices, operations and steering documents. Expected outcomes of planned key actions have not been assessed.

Billerud's key actions are meant to serve as a basis for exploring future targets and activities within the area of resource use and circular economy.

External targets

Billerud does not have external targets related to sustainability matters of actual and potential impacts for resource outflows apart from recyclable packaging material. There are no external targets based on financial opportunities.

Billerud's global operations are largely driven by regulatory requirements regarding resource outflows (for example emissions, solid waste, wastewater). Compliance with regulatory requirements is a prerequisite for Billerud's operations and not formulated as aspirational targets.

Characteristics of the undertaking's employees

Total headcount

On 31 December 2024, Billerud had 5,822 employees located in 17 markets. Most of them are employed in Sweden and the US.

Breakdown by region:

• Region Europe: 4,154 employees
• Region North America: 1,651 employees
• Asia: 17 employees

Prior year comparison

The parent company had an average of 177 employees on 31 December 2024 (164 in 2023).

Gender breakdown

Target: Proportion of female employees in total: 22% (2024)

Employment location

Approximately 7.7 million cubic meters of wood raw material was purchased from Swedish forests in 2024 (around 7.8 million cubic meters in 2023).

Production facilities staffing

Region Europe facilities:

Note: The data shows headcount by facility for Region Europe production sites. Employment contract type (permanent/temporary), full-time/part-time splits, turnover rates, and new hires are not disclosed in the available excerpts.

Characteristics of non-employees in the undertaking's own workforce

Billerud engages contractors in both its mill operations and forestry operations, who can be subject to negative health and safety impacts in their work. Contractors are included in Billerud's health and safety monitoring and targets.

Contractors

Contractors working within Billerud's mills and forestry operations are subject to the same health and safety requirements as employees. Billerud has established processes for engaging with contractors including:

• Contractor contact points
• Incident registration and follow-up
• Training programs
• Annual contractor survey (North America)
• Follow-up activities and audits

All injuries to contractors that result in lost time must be reported through incident management systems immediately after becoming aware of the injury.

Health and Safety Metrics Including Contractors

Lost Time Injury Frequency Rate (LTIFR) - 2024

LTIFR includes both employees and contractors

The LTIFR is calculated as lost time injuries per one million worked hours. Lost time injuries include fatalities.

Total Recordable Injury Frequency Rate (TRIFR) - 2024

TRIFR includes both employees and contractors

The TRIFR includes work-related injuries and illness that lead to restricted work and medical treatment beyond first aid, per one million worked hours.

Methodology

• Counting method: Frequency rates based on hours worked (per million hours)
• Scope: Both employees and contractors within own operations across all markets and mills
• Coverage: Contractors in mill operations and forestry operations
• Data collection: Web-based incident management systems for incident and event reporting

Note: The 2024 targets were not achieved. Billerud's vision is zero accidents, with a target LTIFR for employees and contractors of less than 1.5 at Group level.

No quantitative breakdown is provided for the number of contractor workers by type (contractor, agency, self-employed) or by headcount/FTE. No separate injury metrics are disclosed exclusively for contractors apart from employees.

Diversity metrics

Governance bodies and employees by gender and age (2024)

Women in management positions

Scope: Top level management is defined as the Group Management Team, which is the highest executive management team. Managers are defined as all managers with employee accountability. Metrics for the board and GMT contain all consolidated companies except subsidiary Scandfibre Logistics AB, the joint arrangement Bomhus Energi AB, and the associate Trätåg AB. Metrics for employees include all consolidated companies.

Social protection

Coverage and rehabilitation process

BillerudKorsnäs has a group-wide rehabilitation process for employees experiencing health issues or injury. Through early and proactive actions, the rehabilitation process aims to prevent long-term sick leave and repeated short periods of sick leave. The group-wide process for implementing a rehabilitation procedure applies throughout Billerud and comprises:

• Initiation planning measures (e.g. health interviews and rehab meetings)
• Implementation measures (e.g. follow-up meetings)
• Conclusion measures (e.g. conclusion whether the individual has been able to return to work)

The goal of the rehabilitation process is to help employees return to work as soon as possible.

Health services access

Billerud collaborates with local occupational health services to handle individual issues related to the work environment and stress. All employees have free access to health services through internal and/or external service providers, such as access to doctors, nurses, ergonomists, and other health specialists. In addition to physical health and safety, Billerud also provides support for mental health issues for those in need.

As an employer, Billerud is responsible for providing organized adaptation and rehabilitation activities at the workplace, though specific remedy cases are not disclosed due to individual privacy.

Social security contributions

For Sweden, retirement and family pensions for salaried employees are secured through an insurance policy with Alecta (a multi-employer defined-benefit plan, disclosed as a defined-contribution plan). Social security contributions for share-based payment programs are accounted for during the service period as an employee benefit expense and continuously based on the fair value of the shares.

Limitations

No specific percentage of employees covered by social protection against major life events (sickness, unemployment, employment injury, parental leave, retirement) is disclosed. No breakdown by country, scheme type (public vs. private), or exclusions is provided.

Training and skills development metrics

Performance review coverage

All white-collar employees in all regions are included in the review procedure. In Sweden and Finland, blue-collar employees are also included in the review procedure.

During 2024, specific questions regarding stress and recovery were addressed in the annual employee performance review process. The review includes a distinct section on learning and development.

Training programs

Sustainable Leadership Program

During 2024:

• Approximately 50 leaders in Europe completed the training
• Approximately 50 leaders in North America completed the training
• A preparatory e-learning was completed by 99 leaders in 2024

For 2025, the plan is set for 40 new leaders to be trained in Europe.

Sustainable Employee Program

During 2024, a total of 544 people completed the Billerud Sustainable Employee e-learning course provided in the training catalog. This course will be mandatory for all employees going forward.

Training recommendations

Billerud's overall recommendation for employees is that they spend 30 minutes a week on their professional development, for example through the training catalog.

Data quality note

Billerud is currently overseeing data quality regarding training hours and will evaluate the possibility and relevance of setting a target related to training in the coming years. Training targets are set individually for employees and determined during employee performance conversations.

Health and safety metrics

Coverage by health and safety management system

100% of own workers are covered by Billerud's health and safety management system. 100% of own workers are covered by a health and safety management system which has been internally audited and/or audited or certified by an external party.

Fatalities and recordable work-related accidents

Lost time injury frequency rate (LTIFR) and total recordable injury frequency rate (TRIFR)

Methodology notes:

• The LTIFR includes work-related injury and illness that leads to sick leave and is calculated as the number of lost time injuries per one million worked hours. From 2025, it will also include work-related ill health.
• The TRIFR also includes work-related injuries and illness that leads to restricted work and medical treatment beyond first aid.
• While the TRI presented in S1-14 is presented on a separate row than fatalities, the LTI and TRI used for the basis of Billerud's target includes fatalities.
• One change to the methodology of calculations was conducted between 2023 and 2024: in 2024, Billerud covered a gap of hours worked for white-collar workers that was limited in 2023. The adjustment is not material for the outcome.
• Metrics include Billerud employees and employees in consolidated companies except for Trätåg AB.
• The target includes all employees and contractors in own operations and the value chain across all Billerud's geographies and activities, except for contractors within inbound and outbound transports.

Number of days lost

No specific metric for number of days lost to work-related injuries, fatalities and work-related ill health is disclosed. Billerud states this datapoint is subject to transitional provision under S1-14 paragraph 88 (e).

Incidents, complaints and severe human rights impacts

Discrimination and harassment incidents

Billerud investigates both reports received through the Speak-Up Line and directly to managers, and assesses which cases should be classified as discrimination cases. After the investigating phase, Billerud takes corrective measures based on the severity of the case. All employees in all regions are covered in the scope of such measures if necessary. Processes are in place to handle discrimination and harassment cases, which are specified in guidelines and action plan for combating victimization and harassment.

There is a risk related to completeness of discrimination cases, as cases which have not been reported through either Speak-Up Line, HR or the responsible manager will not be reflected in metrics.

Incidents, complaints and severe human rights impacts metrics (2024)

Grievance and provision of remedy

Cases of discrimination and harassment can be reported on the Speak-Up Line or directly to managers. Billerud investigates both types of reports and assesses the cases which should be classified as discrimination cases. After the investigating phase, Billerud takes corrective measures based on the severity of the case.

Scope and methodology

The total number of incidents of discrimination, including harassment, is broken down by complaints filed through the Speak-Up Line and incidents reported through human resources procedures. Such procedures include occurrences where an employee reported an incident directly to HR or to their manager, who escalated the matter to HR.

The number of severe human rights incidents include lawsuits, formal complaints and serious allegations in public reports and media. Such incidents are brought to Billerud's attention through reports to the Speak-Up Line, through internal quarterly Litigation Reports to the audit committee and through an annual compliance survey for a selection of 35 high-level managers. The survey captures all Billerud's operations. The survey is not anonymous and is sent out to higher and top management, the GMT and mill managers in Europe and North America. The metrics reported are based on what is reported by a limited group (to higher and top management) in the organization. In addition, the survey excludes insignificant violations. Each reporting person determines what constitutes an insignificant violation.

Metrics include all consolidated companies except joint arrangement Bomhus Energi AB, and the associate Trätåg AB.

The total amount of fines, penalties and compensation for damages equals 0, and as such, is not reflected in financial statements.

Metrics are not validated by external bodies other than the assurance provider.

Payment practices

Scope and context

Billerud's payment terms regarding its suppliers are stipulated in internal instructions for each purchaser. There is no group-level payment policy, but the instructions function as a guideline for payment terms.

Region Europe works together with some small suppliers that potentially could be affected by late payments, while Region North America works together with larger suppliers that are not exposed to the same level of risk. The metrics below are disclosed for Region Europe and Wood Supply.

Average time to pay invoices

Billerud's average time to pay an invoice from the date when the contractual or statutory term of payment starts to be calculated was 46 days in 2024.

Standard contractual payment terms and performance by supplier category

The metrics are limited to Region Europe (purchases for the Finnish and Swedish mills) and do not include Wood Supply. Data is divided according to the main supplier categories from which Billerud purchased during 2024 and includes both Swedish and foreign suppliers.

Region Europe's standard payment terms are 75 days for direct suppliers and 60 days for indirect and maintenance suppliers. A payment term of 30 days is acceptable for small and medium-sized enterprises (SMEs).

Payment frequency context: During 2024, the proportion of payments aligned with payment terms was largely due to the fact that Billerud sent payment files twice a week. This changed at the end of 2024, and the company has since seen an increase in the proportion of payments made on time.

Legal proceedings for late payment

There was one legal proceeding currently outstanding for late payments at year-end 2024.

The number of legal proceedings currently outstanding for late payments includes one supplier.

Methodology notes

Due to data unavailability, the presented metrics have not been broken down by supplier size. The metrics are not validated by an external body other than the assurance provider.