HKFoods

Reference: page 43. HKFoods Plc's Board of Directors, the Group's highest decision-making body for responsibility matters, had eight regular members in 2025 and did not include anyone in operational management or employed by the Group; there is no separate employee representation on the Board. The Board has four committees (Audit, Compensation, Working and Special) and appoints the CEO, deputy CEO and Group Executive Team. Board gender composition in 2025 was 25% female (2/8) and 75% male (6/8), in line with Corporate Governance Code recommendation 8. Following the AGM on 23 April 2025, 62.5% (5/8) of Board members were independent of the Company and 62.5% independent of significant shareholders; independence is assessed annually. The Audit Committee, chaired by Anne Koutonen until the AGM and by Outi Henriksson afterwards, oversees the sustainability reporting process. No separate sustainability training was organised in 2025 since Board, Audit Committee, CEO, CFO and EVP Administration and Legal received it in 2024.

Reference: page 45. The Corporate Responsibility team updates HKFoods' double materiality assessment as part of the annual risk management process, feeding into the Group's Enterprise Risk Management (ERM) process, which follows uniform principles for identifying and managing risk. VP Corporate Responsibility reports the assessment and responsibility programme results to the Board at least once a year, and the internal auditor reports annually to the Board on the main sustainability risks and the implementation of responsibility work as part of the ERM outcome. Sustainability targets, metrics and results go to the Group Executive Team and Board at least once a year. In 2025 the progress of responsibility work was presented to the Board twice, and topics discussed by the Board and its committees included the 2025 double materiality assessment update, the climate scenario and resilience analysis, the internal audit of SBTi-approved climate targets, the animal welfare assessment, occupational safety, information security and the Deforestation Regulation.

Reference: page 46. Sustainability matters were not taken into account in the remuneration of HKFoods Plc's Board of Directors for the 2025 reporting period, and climate-related targets have not been considered in the remuneration of the Board or the CEO. Of the 2025 short-term incentive scheme for Group Executive Team members (excluding the CEO), 70% is linked to comparable EBIT of the Group and/or business unit and 30% to personal targets. Four of five Group Executive Team members (excluding the CEO) had a responsibility-related target, the lost time injury rate (LTIR), as part of their personal targets, weighted at 5 percentage points of the personal metrics. In the medium term the Company aims to systematise and more comprehensively introduce sustainability metrics and targets into its remuneration system by responsibility area and role. The Board's Compensation Committee prepares incentive programmes and bonus criteria for approval by the Board.

Reference: page 47. HKFoods presents a table mapping the core elements of the due diligence process to where they are addressed in the Sustainability Statement, noting that the double materiality assessment was updated in accordance with official standards and guidelines during spring and summer 2025. Integration of due diligence into governance, strategy and business model is located at ESRS 2 GOV-2, GOV-3 and SBM-3. Engagement with affected stakeholders links to SBM-2 and IRO-1. Identifying and assessing negative impacts links to IRO-1, SBM-3 and the topical SBM-3 sections of S1, S2, E1, E2 and E4. Taking action on negative impacts links to G1-1, G1-2, the S1 and S2 SBM-3 sections, S2-4, E1-3, E2-2 and E4-3. Tracking the effectiveness of actions links to G1-5, G1-6, G1-2, S1-5, S2-5, E1-4, E2-3 and E4-4.

Reference: page 47. HKFoods' sustainability reporting is based on the double materiality assessment approved by the Board, with information produced by experts from different responsibility areas and compiled systematically in line with the ESRS structure. The key identified risks in sustainability reporting relate to the sufficiency of human resources and ESRS expertise across the organisation and to the management and technical implementation of data collection. The Company used a model developed by external experts to help identify risks and opportunities in accordance with ESRS standards, and its data collection systems were used to ensure comprehensive data sourcing and ESRS-compliant analysis. Internal checks were carried out by each responsibility area (finance, strategy and corporate responsibility, administration, innovation and research, packaging development, quality and environment, HR, risk management and safety, industrial sales, primary production development, and procurement), with the Audit Committee following the preparation of the 2025 reporting.

Reference: page 48. HKFoods' core business is the production, marketing and sale of pork, beef and poultry meat, meat products and ready meals, operating in Finland and Poland and exporting to around 40 countries; employee numbers were 3,083 in Finland and Poland at end-2025 (2024: 3,119). HKFoods updated its strategy and long-term financial targets in 2025 around four focus areas: growth in selected food moments, operational excellence, competent and healthy personnel, and a sustainable value chain, with new targets of EBIT above 5% of net sales, ROCE above 12%, net gearing below 80% and dividend above 50% of net profit. Cattle and sow slaughtering at the Paimio unit ended in March 2025 and was centralised in Outokumpu. Material environmental topics are climate change adaptation, biodiversity and circular economy; material social topics are the producer community, own employees and healthy, safe food, alongside governance, corporate culture and animal welfare.

Reference: page 52. HKFoods' key stakeholders are customers, consumers, employees and potential employees, contract producers and other value chain workers, partners, owners, investors and financiers, public authorities, the media, and NGOs and associations, with strategy described as market-driven and guided by stakeholder expectations. The Sustainability Statement sets out engagement channels and key themes per stakeholder group, for example customer meetings, satisfaction surveys, audits and the Fair Way whistleblowing channel for customers; consumer service and brand reputation studies for consumers; and cooperation groups, the producer portal and the Supplier Code of Conduct for contract producers. The double materiality assessment used studies, analyses and dialogue with primary production operators but no dedicated external stakeholder survey. In 2025 HKFoods made no significant strategy changes based on stakeholder views and expects none in the medium term; the Board considers stakeholder views case by case, informed by management reporting and the annual risk management process.

Reference: page 54. HKFoods updated its double materiality assessment in 2025, presenting its material impacts, risks and opportunities in a table spanning E1 Climate change, E2 Pollution, E3 Water and marine resources, E4 Biodiversity and ecosystems, E5 Circular economy, S1 Own workforce, S2 Workers in the value chain, S4 Consumers and end-users, and G1 Business conduct, mostly concentrated upstream in raw materials and suppliers. HKFoods has not made an accurate assessment of the financial effect of material risks and opportunities on its results, cash flows or financial position and will supplement the assessment in the medium term. In 2025 the Company for the first time prepared a climate change scenario and resilience analysis (described under E1), whose results fed into the double materiality assessment. HKFoods states it has no entity-specific reportable items outside the ESRS topical standards.

Reference: page 56. HKFoods first conducted an ESRS-aligned double materiality assessment in 2024 and updated it in 2025, supported by EFRAG guidance, reviewing material impacts, risks, opportunities and thresholds in 14 internal workshops across HR, administration, risk management, procurement, industrial sales, innovation and quality, finance, environment, primary production and communications functions. Impact severity was scored 1-5 on scale, scope, irremediability and likelihood, with a materiality threshold of 15 (moderate 15-20, high 20-22, distinct 22-25); financial materiality used the same threshold plus a risk-rating/likelihood test. A total of 25 topics were listed in the impact assessment and 12 in the risk and opportunity assessment, approved by the Group Executive Team, Audit Committee and Board. Key 2025 changes: G1 whistleblower protection, political influence and payment practices dropped below threshold, S1 secure employment/collective bargaining/health and safety risks and opportunities fell below threshold, and E5 resource inflows emerged as a new risk.

Reference: page 59. HKFoods provides tables listing the ESRS disclosure requirements and data points it has complied with, cross-referenced to page numbers, to allow navigation of the Sustainability Statement on a double materiality basis, plus references to ESRS-compliant information located elsewhere in the Report of the Board of Directors or the Financial Statements (for example BP-1 to Note 28 on related-party transactions, and E1-5/E1-6 to the Consolidated Financial Statements). A further table lists other datapoints derived from EU legislation under Annex B of ESRS 2, marking each as disclosed, non-material or unavailable (dash). Datapoints marked non-material include the SBM-1 fossil fuel, chemical production, controversial weapons and tobacco involvement questions, GHG removals and carbon credits (E1-7), and several E3/S1/S3 human-rights and water datapoints; several E1-9 financial-institution-oriented datapoints (benchmark portfolio exposure, real estate energy-efficiency classes) are marked with a dash as not yet available.

Reference: page 78. HKFoods launched the preparation of a transition plan for climate change mitigation in autumn 2025, guided by the Company's updated 2025 strategic guidelines and taking into account its corporate structure and geographic footprint; the plan, extending to 2030, is intended to be completed in the coming years in accordance with all ESRS requirements. The Company commits to reducing GHG emissions across own operations and the value chain, financed from operating cash flow, and states it has no significant locked-in GHG emissions for key assets or products that could jeopardise its reduction targets or pose a transition risk. HKFoods has no economic activities within the scope of the EU Taxonomy's climate delegated acts and is not excluded from the EU Paris-aligned Benchmarks. The most significant reduction levers are electrification of steam and heat production (own operations) and engaging value chain actors, including farmers, in emission reduction.

Reference: page 70. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against (confirmed by the basis of preparation citing Commission Delegated Regulation (EU) 2023/2772); content is back-filled from ESRS 2 IRO-1 and the E1 climate risk/scenario sections. HKFoods' 2025 double materiality update assessed a broad range of chronic and acute physical risks and transition risks (politics, legislation, markets) plus opportunities, following the TCFD framework, covering the whole value chain including upstream feed costs and disease exposure and downstream consumer demand. A dedicated scenario analysis, prepared for the first time in 2025 under the requirements of ESRS E1-5, modelled two scenarios to 2030 and 2050: a 1.5°C scenario (SSP1-1.9, carbon neutrality by 2050, aligned with HKFoods' climate targets) and a 3°C scenario (SSP2-4.5, net zero not reached by 2100). Tools included Monte Carlo simulation for disease risk, market-trend forecasting for protein demand, and carbon-pricing models; key assumptions covered feed costs, carbon pricing (Denmark's CO2e tax, IEA forecasts) and Finnish meat-consumption trends. Limitations disclosed include exclusion of geopolitical events, non-climate sustainability topics, and unquantified reputational risks. Climate-specific risk identification and scenario analysis is also presented under E1-2 (2025 ESRS numbering).

Reference: page 74. This disclosure requirement did not exist under the 2023 ESRS the report was prepared against; content is back-filled from ESRS 2 SBM-3 and the E1 resilience discussion. Based on the 2025 scenario and resilience analysis, HKFoods states it has the prerequisites to achieve its 1.5°C-aligned Scope 1 and 2 targets for 2030, underpinned by a long-term energy plan to replace fossil energy with low-emission electricity. Reduction of Scope 3 emissions is described as dependent on third parties, particularly the ability of upstream agricultural suppliers to cut emissions and on low-emission alternatives from the energy sector; the Company states it can adapt its strategy and business model to climate change in the medium and long term via market-driven product development. The resilience analysis also warns that, without further action, net sales are likely to decline due to falling meat demand, rising production costs and tightening legislation, and that HKFoods must reinforce key climate actions and complete an SBTi FLAG- and ESRS-compliant transition plan to reach its 2030 Scope 3 targets. Climate-specific resilience assessment is also presented under E1-3 (2025 ESRS numbering).

Reference: page 74. HKFoods' climate work is led by the Board-approved Code of Conduct, Supplier Code of Conduct and Environmental Policy, all published on the Company's website, providing the framework for managing climate change mitigation, adaptation and energy-related impacts, risks and opportunities across the value chain. The CEO is responsible for the Code of Conduct, the Procurement Director for the Supplier Code of Conduct, and the Quality and Environment Director for the Environmental Policy. The Environmental Policy's key climate principles include complying with and monitoring environmental laws and permits, reducing environmental and climate impacts from production facilities and transport (energy efficiency, reduced energy consumption, renewable energy, reduced water consumption), improving material efficiency, promoting the circular economy, reducing environmental impact in primary production with contract farmers, conserving biodiversity and forests, and requiring that supply chains do not cause deforestation or conversion of natural ecosystems.

Reference: page 75. HKFoods' investment plan for its production sites is based on its short-term SBTi emission reduction target; if implemented as planned, the Company estimates it will meet its Scope 1 and 2 reduction target by 2030. Own-operations measures for 2025 include replacing fossil energy at the Vantaa plant's steam unit with electricity (guarantees of origin, around 80% electric from 2026), new electric steam boilers at the Eura unit, AI-controlled air compressors at Forssa, expanded LED lighting, and around 30 new EV charging points; approximately EUR 300,000 was spent in 2025 on climate-mitigation operating costs and external expertise (2024: about EUR 700,000). Upstream, measures on contract farms include animal feed development, regenerative farming, optimised fertiliser use and reduced methane from cattle. Research projects include From Footprints to Digital Handprints (environmental impact calculation for pork, poultry and field crops) and Finnish Meteorological Institute soil-carbon modelling.

Reference: page 77. HKFoods aims for net zero GHG emissions by 2050, in line with the Paris Agreement's 1.5°C goal though not yet meeting ESRS net-zero requirements since the Company has not committed to SBTi's long-term target. Under SBTi-approved short-term targets versus a 2022 baseline, HKFoods commits to cutting absolute Scope 1 and 2 emissions from industrial operations and energy by 42% by 2030 (2025 result: -12% versus baseline, 2024: +12%); cutting Scope 3 emissions in categories 3.1, 3.3, 3.4, 3.9 and 3.15 by 42% (2025: +22%, 2024: +73%); and cutting Scope 3 FLAG land-based emissions in category 3.1 Finnish meat by 30.3% (2025: +0.3%, 2024: +5.3%). Due to 2023-2024 divestments, HKFoods will update its short-term targets under the SBTi's land-sector emission calculation guidelines in 2026. In the 2022 base year Scope 1 was 0.91%, Scope 2 was 0.32% and Scope 3 was 98.77% of emissions.

Reference: page 80. HKFoods' total energy consumption was 225,711 MWh in 2025 (2024: 229,965, restated), of which 60,872 MWh (27%) came from fossil sources (2024: 64,302 MWh, 28%), down from a 2024 fuel mix that included 10,549 MWh of natural gas versus 4,667 MWh in 2025. Total renewable energy consumption was 139,373 MWh, or 61% of the total (2024: 39,888 MWh, 17%), driven by purchased renewable electricity, heat, steam and cooling rising to 136,161 MWh from 38,868 MWh. Self-produced non-fuel renewable energy was 194 MWh and renewable fuel consumption (including biomass and biogas) was 3,018 MWh. Energy consumption from other sources (excluded from the fossil/renewable/nuclear split) was 13,006 MWh. The prior-year fossil-fuel, renewable-fuel and total figures were each corrected for calculation errors, reducing the previously reported values by approximately 1-19%.

Reference: page 81. HKFoods reports 2025 gross Scope 1 emissions of 10,155 tCO2e (2024: 15,590; -35% year on year; 2030 target 7,825), market-based Scope 2 of 8,931 tCO2e (2024: 8,728; +2%; 2030 target 2,797), and gross Scope 3 of 1,325,741 tCO2e (2024: 1,634,941; -19%; 2030 target 773,752), with purchased goods and services (category 3.1) the dominant category at 1,150,731 tCO2e. Total market-based GHG emissions were 1,344,827 tCO2e (2024: 1,659,259; -19%), giving a GHG intensity of 1,350 tCO2e per million euros of net sales (2024: 1,656) using market-based factors. The calculation follows the GHG Protocol Corporate Standard and Land Sector and Removals Guidance; the Company does not use emissions compensation, avoided emissions or removals. Approximately 80% of Scope 3 emissions are based on primary data, and electricity accounted for 62% of Scope 2 energy, with guarantees of origin covering 100% of purchased electricity (wind for Finland/Poland, nuclear for two subsidiaries).

Reference: page 73. Although E1-9 is not listed with a page reference in HKFoods' own IRO-2 concordance table, the Sustainability Statement carries a dedicated "E1-9 Anticipated financial effects from material climate-related risks and opportunities" section. Financial effects are bucketed as very significant (over EUR 100 million), significant (EUR 30-100 million) or moderate (under EUR 30 million). Modelling shows the 3°C scenario could have, at most, a very significant negative effect on net sales by 2050 from declining red-meat demand, rising production costs and stricter regulation. Anticipated negative impacts of physical risks on revenue are moderate by 2030 and significant by 2050 under the 1.5°C scenario, versus significant by 2030 and very significant by 2050 under the 3°C scenario; transition-risk impacts on net sales are significant by 2030 and very significant by 2050 under both scenarios. Opportunity-related financial impacts (alternative proteins, low-emission meat, exports) are moderate by 2030 and very significant (1.5°C) or significant (3°C) by 2050. Four E1-9 sub-datapoints on benchmark-portfolio physical-risk exposure and real-estate energy efficiency are marked "-" (not available) in the Annex B table, as they are oriented to financial-sector reporters (page 62).

Reference: page 86. HKFoods' Code of Conduct and Supplier Code of Conduct cover pollution prevention and control, committing the Company to increasing positive environmental impacts and preventing or reducing negative impacts in line with national and international regulation and environmental permits. Suppliers are expected to work towards minimising environmental risks in line with continuous improvement, and HKFoods encourages suppliers to conduct systematic environmental work aligned with ISO 14001. The Company identifies its most significant, likely and actual pollution impacts, risks and opportunities upstream, in nutrient loading from agriculture on water bodies in raw-material production areas (agriculture contributes over half of the Baltic Sea's nitrogen and phosphorus load); for its own operations, site-specific environmental impacts are assessed as required by environmental authorities, though catchment-area-level impacts on water bodies have not yet been surveyed. Not all meat and animal suppliers have yet committed to the Codes of Conduct; the goal is to extend coverage in stages by the end of 2028.

Reference: page 87. HKFoods' Responsibility Programme for 2026-2028 aims to assess the water load of its own contract production in the Archipelago Sea catchment areas and reduce its impact, implementing the water protection action plan on pilot farms by the end of 2028 (applying to HKFoods Finland's contract production only). HKFoods acted as responsible party in the Business Finland-funded From Footprints to Digital Handprints (FF2DH) project, which continued research with pilot farms on reducing negative impacts on water bodies, including expanding the environmental impact calculation system and researching regenerative farming, manure utilisation and nitrogen fertilisation; the project ended in January 2026 with a final report due in 2026. Other 2025 pollution-prevention work included researching eutrophication effects of beef production through the Valio Carbo Environmental Calculator partnership and surveying eutrophication potential of contract farms in the Archipelago Sea catchment areas. HKFoods has not set requirements for contract farmers' or other suppliers' wastewater quality.

Reference: page 87. In accordance with its Code of Conduct, HKFoods commits to due diligence obligations under local environmental laws and to preventing environmental damage in its own operations, taking immediate corrective action in emergencies in cooperation with authorities. The Company's principal quantified pollution-related target is embedded in its Responsibility Programme 2026-2028: assessing the water load of its own contract production in the Archipelago Sea catchment areas and implementing the resulting water protection action plan on pilot farms by the end of 2028, applying only to HKFoods Finland's contract production. This target is described in more detail under E4 Biodiversity and ecosystems, where the wider Archipelago Sea project and its farm-level review are set out. HKFoods has not set a separate Group-wide numerical target for reducing pollutant emissions or wastewater loading from its own production sites beyond compliance with permit conditions.

Reference: page 87. Wastewater quality from HKFoods' own operations is systematically monitored through laboratory analyses where required by environmental permits, with municipal wastewater treatment plants responsible for meeting quality criteria for treated water released into the environment; independent laboratories analyse samples at sites where permit conditions or industrial water contracts require monitoring, meeting EU-BREF Best Available Techniques requirements where applicable. The thresholds for non-GHG emissions defined in Annex II of the EU E-PRTR Regulation are not exceeded at HKFoods' own operations and are therefore not reported. Historical data on the impacts of HKFoods' own operations and contract producers on water bodies have not been collected, so changes over time in water body status cannot be reported. There were no significant changes in the Company's emissions or in environmental permit conditions for these emissions during 2025.

Reference: page 89. HKFoods' Group-wide Environmental Policy sets reducing water consumption and complying with wastewater limit values in environmental permits as key principles. The Company's most material actual impacts, risks and opportunities relate both to the upstream value chain (animal production and agriculture) and its own operations (water withdrawal and consumption); in its own production, water is mainly used for manufacturing and facility cleaning, while on contract farms it is used for animal drinking water and irrigating feed crops. HKFoods has no sites in areas of high water stress or water risk, and production units operate within permit conditions set by regional environmental authorities, who have assessed wastewater risks to local water bodies. HKFoods has not found it necessary to hold consultations with affected communities, since water withdrawal and its local impacts are primarily the responsibility of water treatment companies. The Company's other policies do not describe specific water-related product design measures.

Reference: page 89. Use of water resources is guided by the Environmental Policy and by improving water-use efficiency at each production site; HKFoods monitors wastewater quality in line with the sampling plan required by environmental permit conditions. Production units set their own operational targets for water withdrawal and draw up site-specific action plans, monitoring both total usage and usage relative to production volumes. In 2025 no significant investments were made to reduce water consumption, and the Company has not assessed the long-term capital and operating expenditure that would be required to do so. HKFoods states it has not reported on water resource management activities with the accuracy required by the ESRS standard, since efficiency measures are site-specific rather than Group-wide; water consumption targets were therefore not included in the Responsibility Programme for 2026-2028, as local water price and availability do not pose a significant risk to the Company's operations.

Reference: page 90. HKFoods has not set any ESRS-compliant, Group-level measurable targets for managing impacts, risks and opportunities affecting water and marine resources or for reducing water withdrawal and consumption. Individual production units have set their own operational targets for reducing water withdrawal proportional to their production volumes, but no single numerical target applies across all units. In the medium term HKFoods will estimate the need for long-term Group targets on reducing water withdrawal and consumption. The Company states that, since its Group companies have no operations in water-risk areas, there are no material impacts, risks or opportunities in such areas that would require target-setting. Section E3-4 Water consumption is identified as the key performance indicator that is measured on an ongoing basis for water resource use in the absence of a formal reduction target.

Reference: page 90. HKFoods' total water withdrawal was 1.596 million m3 in 2025 (2024: 1.598 million m3), of which 84% was surface water and 16% groundwater. Estimated water consumption fell approximately 4% year on year to 111,859 m3 (2024, adjusted for comparability: 117,035 m3); the previously reported 2024 figure was about 48% lower than the adjusted comparable figure due to calculation errors. Water intensity (total water consumption in m3 relative to net sales in EUR million) was 112 in 2025 versus an adjusted 117 in 2024. HKFoods' production units do not use recycled or reused water, though the Company launched a study in 2025 on the potential use of recycled water in the food industry. Withdrawal data is collected by site and reported monthly using actual water-meter readings; groundwater/surface-water splits come from local water treatment plant data, and consumption includes an estimate of water evaporated or retained in products.

Reference: page 93. HKFoods states it does not currently have a strategic transition plan to support biodiversity through which detailed biodiversity-related development targets, action plans and associated financial impacts would be defined. The Company's main raw materials depend on natural ecosystem services such as pollination and soil diversity and fertility, and HKFoods has assessed the resilience of its business and value chain in relation to biodiversity and ecosystems as part of its strategy and business model, which are dependent on Finnish primary production; physical, transition and systemic risks from climate change are assessed as part of the Group's annual Enterprise Risk Management process. Based on its impact and risk analysis, HKFoods states it is not aware of factors that would negatively affect its resilience in the short term, and considers its current strategy and business model capable of responding to physical, transition and systemic biodiversity risks in the medium term.

Reference: page 96. HKFoods' biodiversity-related policies concern climate change, land-use change, water use, ecosystem services and pollution of nature, set out across the E1, E2, E3 and E5 sections and the ESRS 2 policies table. The Environmental Policy commits the Company to operating throughout its value chain in a way that protects biodiversity and forests, requiring raw-material and other suppliers to commit to the same and to not cause or support conversion of natural ecosystems; the Supplier Code of Conduct and procurement principles reinforce this. HKFoods complies with local environmental inspection obligations under ISO 14001 in Finland, updates contingency plans annually for its Finnish sites (assessing Natura 2000 site impacts), and will be obliged, once the EU Deforestation Regulation enters into force, to manage traceability data for beef, soy, palm oil and wood-based products. HKFoods has not yet analysed how social impacts should be reflected in its biodiversity policies.

Reference: page 97. To prepare for the EU Deforestation Regulation (EUDR, now expected for large operators from 30 December 2026), HKFoods implemented a service with the Finnish cattle industry to collect origin data and can generate a due diligence reference number via the EU Traces system. As part of the Archipelago Sea project, HKFoods reviewed its contract farms' locations and eutrophication-prevention measures in 2025, finding the greatest potential impact in the Aurajoki and Mynälahti catchment areas, covering 15% of pork and 14% of broiler production; cattle farms were excluded as their share was very small. The From Footprints to Digital Handprints project (Luke life-cycle models) and the Valio Carbo Farm Calculator partnership support environmental impact calculation on farms. HKFoods sources only sustainability-certified soy (RTRS, ProTerra) and RSPO-certified palm oil, and has not used biodiversity offsets.

Reference: page 99. HKFoods set its first biodiversity targets in 2025 as part of the Responsibility Programme 2026-2028. The primary target is for the environmental impact calculation system (covering biodiversity coefficients for broiler and pig farms and eutrophication/acidification impacts for cattle farms) to cover more than 80% of broiler, pork and beef procurement volumes by 2028; in 2025 it covered 11%. A second target commits the Company to assess the water load of its own contract production and reduce its impact in the Archipelago Sea catchment areas in line with the 2026-2028 water protection action plan, applying only to HKFoods Finland's contract production. A third target requires 100% of EUDR-covered products to meet the Regulation's requirements once implementation begins, with schedule and scope to be defined as the Regulation's content and national guidelines are finalised. HKFoods has not used biodiversity offsets and does not plan to in target-setting.

Reference: page 99. HKFoods states that the aim of its first biodiversity targets, set in 2025, is to use a science-based assessment tool to collect information on environmental impacts upstream in the value chain; the assessment tool itself is ready, but the analysis and comprehensive impact assessment have not yet been carried out. HKFoods has therefore not yet reported quantified impact metrics on biodiversity and ecosystems change beyond the 11% procurement-volume coverage achieved in 2025 for its environmental impact calculation system (see E4-4). The Company states the assessment will be carried out, where possible, in line with the requirements of general international reference frameworks, and that it will specify the geographical delimitation for biodiversity when setting more precise targets and metrics in the medium term.

Reference: page 104. Impacts, risks and opportunities related to resource use and circular economy are covered by HKFoods' Board-approved Environmental Policy, which requires operating in accordance with the certified ISO 14001 environmental management system, including developing packaging materials, complying with the waste hierarchy, minimising production waste and using animal raw materials efficiently. As HKFoods' business is food production, it cannot switch to recycled raw materials beyond legislation permitting food contact materials; product packaging is identified as the main area where recycled materials can gradually be introduced. The Product Development Director is responsible for packaging material development. HKFoods' Board-approved internal Procurement Policy, applying to all suppliers except contract producers of animals, sets guiding principles for sustainable procurement extended to the supply chain through the Supplier Code of Conduct.

Reference: page 105. In 2025 HKFoods conducted a by-products study across all HKFoods Finland Ltd sites, finding the economic return from side streams is being optimised more systematically and materials redirected to human food, pharmaceutical and pet food processing; the study led to an investment decision at the Outokumpu unit for a new production line improving bone material utilisation from cattle slaughtering. HKFoods owns 50% of Honkajoki Oy, which processes by-products into raw materials for animal feed, fertilisers and biofuels. Food waste arising downstream is assessed via monitoring of customer credits for quality defects, informing corrective production measures. Consumer packaging recyclability was increased in 2025 by testing and developing new technically recyclable materials across all product groups with packaging suppliers, ahead of the EU Packaging and Packaging Waste Regulation's 2030 recyclability requirement. The Company has not assessed long-term circular economy capital and operating expenditure.

Reference: page 106. HKFoods' Responsibility Programme for 2026-2028 sets new waste-reduction targets from 2025 levels: food waste down 20% and mixed/energy waste down 20% (measured in tonnes relative to tonnes sold), aiming for food waste at 1.3% and mixed/energy waste at 0.6% of tonnes sold by 2028, against 2025 baselines of 1.6% and 0.8% respectively; progress will be monitored from 2026. Packaging targets require 80% of sales packaging materials to be technically recyclable by end-2028 (64% in 2025), all sales packaging to carry sorting instructions under EU Regulation 2025/40 by 1 January 2028 or 24 months after the implementing regulation's adoption, and BPA and PFAS compounds to be phased out of packaging materials once relevant requirements take effect in August 2026. The waste targets are voluntary and exceed legislative requirements; the packaging targets stem from EU legislation.

Reference: page 106. HKFoods' primary outflow-related products are foodstuffs requiring packaging, mainly cardboard or plastic, for storage and transport; recyclability targets for packaging are set out under E5-3. Food production generates a large amount of animal material as a by-product that cannot be used as food; most by-products go either to Honkajoki Oy (50% owned by HKFoods) for processing or to other industries as raw materials, such as bovine hides for the leather industry. HKFoods states that the sustainability of its packaging relative to industry averages, and packaging repairability, are not relevant to its resource outflows; recyclability instead depends on separable packaging components and local recycling infrastructure. HKFoods' packaging waste mainly enters the Finnish market, and consumer packaging is sorted according to the recycling instructions printed on it.

Reference: page 107. HKFoods generated 32,096 tonnes of total waste in 2025 (2024: 30,951 tonnes, restated). Solids from water treatment, grease-trap sludge and organic animal by-products (manure, litter, wood chips) together account for about 85% of total waste, with mixed waste the largest of the remaining categories. Non-hazardous waste diverted from disposal was 27,750 tonnes and hazardous waste diverted from disposal was 7.92 tonnes; non-recycled waste was 4,338 tonnes, or 14% of total waste (2024: 10%), while total hazardous waste was 25 tonnes (2024: 12). Non-hazardous waste directed to disposal (incineration, landfill and other operations) totalled 4,320 tonnes. Waste data is collected site by site using the Group's common accounting system, based on European Waste Catalogue classification and figures reported by waste management companies; 2024 comparatives were revised for some fractions due to record-keeping errors, so the years are not fully comparable for all categories.

Reference: page 113. Management of material impacts, risks and opportunities on HKFoods' own workforce is guided by the Code of Conduct and the Group HR Policy, which apply to all members of the Company's own workforce regardless of role, background, gender or employment type; the CEO is responsible for the Code of Conduct and the SVP HR owns the HR Policy. Lihatukku Harri Tamminen Oy drew up its own aligned HR Policy in 2025, and Kivikylän kotipalvaamo Oy began preparing one. The Code of Conduct commits HKFoods to not accepting forced labour, wage slavery, labour coercion, modern slavery, human trafficking or child labour, and respects the International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights, the UN Convention on the Rights of the Child, ILO conventions and the UN Global Compact. A separate Health & Safety Policy and Equality and non-discrimination plan set out further operating principles for workplace safety and non-discrimination.

Reference: page 116. HKFoods holds a European Works Council (EWC), meeting twice a year, to promote information flow and dialogue between management and staff, and a Finnish National Negotiations Council, convening four times a year on financial situation, staff issues and Co-operation Act topics, prepared by a monthly Working Committee; a national Health and Safety Committee also meets twice a year. HKFoods conducts a Voice employee survey at least every three years to assess satisfaction, commitment and willingness to recommend the Company, covering supervisor work, job meaningfulness, psychological safety and diversity; Kivikylän kotipalvaamo Oy surveys at least every four years and Lihatukku Harri Tamminen Oy four times a year. HR management implements the survey process, and top management is responsible for ensuring results are processed and reflected in decision-making, discussed with shop stewards and turned into team-level improvement plans monitored through the management system.

Reference: page 117. HKFoods' own employees and other persons may report suspected misconduct through the Fair Way whistleblowing system, operated by an external service provider, either by name or anonymously; HKFoods Finland Ltd and HKFoods Poland Sp. z o.o. share a reporting channel investigated by a working group that reports to the Board's Audit Committee, while Kivikylän kotipalvaamo Oy (GuavaHR) and Lihatukku Harri Tamminen Oy (Webropol) operate their own channels. Reports are handled confidentially in accordance with the Whistleblower Act, and employees are informed of the channels during Code of Conduct induction training. HKFoods has a cooperation forum model for consultation with shop stewards covering local and national issues, and a separate occupational health and safety organisation and service that also allow employees to raise concerns directly. Continuous improvement and initiative activities give personnel further channels to influence working methods and conditions.

Reference: page 118. HKFoods' HR Action Plan, extending to 2028, covers succession planning, skills assurance, standardised job-specific induction and occupational wellbeing support; the Equality and non-discrimination plan and Work Community Development Plan are reviewed annually to define further action plans. In 2025 HKFoods assessed occupational safety across all Finnish and Polish production units against ISO 45001 requirements, introduced a new HESQ safety reporting system, launched a machine and line-specific risk assessment model, and continued reviewing fire compartments and fire safety at production plants. Occupational health measures included a musculoskeletal-disorder care pathway at all locations, physiotherapist-led rehabilitation groups, Kela's Kiila rehabilitation, early and enhanced support model training for supervisors, flexible work arrangements, and low-threshold mental health chat services and mood coaching, alongside a young-adult mental health pilot at the Rauma site. Sickness absences and turnover are monitored quarterly with the occupational health provider and reported to management.

Reference: page 121. HKFoods' Responsibility Programme 2026-2028 targets a lost time injury rate (LTIR) of 8.19 by the end of 2028 for HKFoods Plc, HKFoods Finland Ltd and HKFoods Poland (2025: 8.2; base year 2024: 16.9), with separate targets of under 20 for Lihatukku Harri Tamminen Oy (2025: 19.4) and Kivikylän kotipalvaamo Oy (2025: 34.9). The sick leave rate target is under 4.9% by end-2028 for the main Group entities (2025: 6.2%, comparison 2024: 7%), with entity-specific targets for the two subsidiaries. A new Employee Net Promoter Score (eNPS) target of above 35 by end-2028 replaces a prior target of above 10 (2025 base-year eNPS: 22 for the main entities, 17 for Lihatukku Harri Tamminen Oy). Targets were not set through direct communication with employees or their representatives, and achievement is monitored via the National Negotiations Council, Working Committee and EWC.

Reference: page 122. HKFoods Group employed 3,083 people by headcount at end-2025 (2024: 3,119), comprising 2,890 in Finland (2024: 2,936) and 193 in Poland (2024: 183), both countries meeting the threshold of at least 50 employees and 10% of the total workforce. The Group had 2,576 permanent employees (2024: 2,537), 334 temporary employees (2024: 393) and 173 non-guaranteed-hours employees (2024: 189); the gender split was 1,322 female and 1,761 male, with no employees recorded as other or not reported. Average fixed-term headcount during the year was 590 (2024: 640), reflecting seasonal summer peaks. Permanent-employee turnover during 2025 was 205 people, a rate of 6.7% (2024: 6.5%). Figures cover all HKFoods Group companies and are disclosed as headcount at 31 December 2025, while the Financial Statements report average full-time-equivalent figures.

Reference: page 123. HKFoods complies with national legislation and local collective agreements in Finland and Poland to ensure all workers' terms and conditions meet minimum standards, and presents a coverage chart for collective bargaining and social dialogue (workplace representation) across both countries; there have been no changes to this information since 2024, except that Poland's 2024 collective bargaining coverage figure was revised following reinterpretation (previously reported in the 2024 Sustainability Statement as 20-39%). Poland does not have a collective bargaining system comparable to Finland's, which is why its coverage rate differs from Finland's, though the report states that in social dialogue all employees are represented at their workplace in both countries. Social dialogue mechanisms themselves, including the EWC and National Negotiations Council, are described in more detail under S1-2.

Reference: page 123. HKFoods' top management (the Executive Team: CEO, CFO, EVP Administration and Legal, EVP Poultry, EVP Meat and EVP Processed Foods) numbered 6 people in both 2025 and 2024, with 1 woman (17%) and 5 men (83%) in each year. By age band, 19.7% of employees were under 30 (2024: 21%), 46.8% were 30-50 (2024: 46%) and 33.5% were over 50 (2024: 33%) in 2025, out of 3,083 total employees. Employment relationships are, as a rule, open-ended and full-time; fixed-term contracts are used for justified reasons under the Employment Contracts Act and part-time employment where appropriate. Agency workers are subject to the same collective agreements as permanent employees, guaranteeing equivalent wages, working hours and holidays.

Reference: page 124. HKFoods recorded 14,947 total training hours in 2025 (2024: 11,088), or an average of 4.9 hours per employee (2024: 3.6), with 4.7 hours per male employee (2024: 3.4) and 4.6 hours per female employee (2024: 3.8). Some 68% of employees participated in regular performance and career development reviews in 2025 (2024: 53%), comprising 51% of male employees (2024 unspecified split shown) and 69% of female employees (2024: 55%). Training activity is described elsewhere as including occupational wellbeing card courses, supervisor leadership training, quality and safety training, language and diversity training, and succession-planning and ageing-programme support; these are detailed further under S1-4 Taking action on material impacts on own workforce.

Reference: page 124. There were no fatalities in 2025 among HKFoods' own workforce or other workers on HKFoods' sites (2024: also zero), and HKFoods recorded 75 recordable work-related accidents (2024: 128), giving an accident rate of 15.3 per million hours worked (2024: 25.92) across 4,912,241 hours worked (2024: 4,938,088). The accident-frequency figure calculated to ESRS standards includes accidents leading to sick leave, transfer to lightened work, or medical treatment assessed as a significant risk. The percentage of HKFoods' own workforce covered by an occupational health and safety management system based on legal requirements and/or recognised standards or guidelines is reported as 0%, reflecting that the Company's occupational health and safety approach is not currently certified to such a recognised external management-system standard.

Reference: page 124. HKFoods' Group-level gender pay gap in 2025 was 11.7% (2024: 12%), based on gross hourly earnings weighted by country-specific employee numbers, with total pay for women versus men calculated as a headcount-weighted average. The Company's highest salary in 2025 was 14.8 times the median salary (2024: 19 times), though the 2024 figure is not fully comparable since its calculation included all individuals employed at any point during that year, whereas the 2025 median excludes those who started mid-year and excludes the highest-paid individual. Remuneration metrics are disclosed on the basis of active staff as at 31 December 2025. HKFoods pays wages and benefits in accordance with national legal provisions or generally applicable industry standards, including minimum wages, with employment terms communicated before employment starts and recorded in employment contracts.

Reference: page 130. Material impacts, risks and opportunities affecting value chain workers are managed as part of HKFoods' supplier approval and assessment process, under the Code of Conduct and Supplier Code of Conduct, which set requirements on working conditions, occupational safety, equal treatment and other employment rights for all value chain worker groups; suppliers must provide a safe working environment, prevent accidents, and treat all employees fairly regardless of contract type. Suppliers must not use forced or child labour, or subcontractors that do, covering all forms of slavery including modern slavery and human trafficking, and workers must be free to leave the workplace after their shift and resign after reasonable notice. HKFoods' human rights due diligence consists of supplier screening, assessments and surveys plus communication and grievance mechanisms; in 2025 the Company participated in a Business & Human Rights training programme run by UN Global Compact Network Finland.

Reference: page 132. Contract producers' views are addressed through species-specific cooperation groups (discussing production targets, results and development measures), network meetings, personal contact and farm visits where necessary; during 2025 cooperation groups met 4-11 times per production line (2024: 6-11), more informal network meetings were held 1-11 times (2024: 6-13), and cooperation reached around 80% of poultry farms, 66% of pig farms and 25% of cattle farms. For other value chain worker groups, engagement occurs via collaboration meetings, supplier surveys and supplier audits, feeding into procurement criteria updates. HKFoods has no general framework agreement with trade unions covering value chain workers; commitment to their human rights is instead channelled through the Supplier Code of Conduct, and effectiveness of communication is assessed case by case, partly via supplier surveys.

Reference: page 132. Negative impacts on value chain workers are addressed case by case through general procurement practices, giving contract producers, suppliers and other value chain worker groups the chance to remedy their conduct in cooperation with HKFoods; if a supplier is unwilling or unable to correct its conduct, the procurement relationship may be terminated. In 2025, 18 supplier audits were carried out (2024: 16), targeting suppliers selected by risk factors, delivery quality and capacity, and strategic development needs; other groups are contacted through interviews as part of these audits. Value chain workers may report wrongdoing anonymously through the Fair Way whistleblowing channel or directly to a designated HKFoods contact; suppliers are required to use the channel under the Supplier Code of Conduct. Supplier audits found value chain workers not very aware of these reporting options, so HKFoods aims to increase awareness.

Reference: page 133. HKFoods had no ESRS-compliant Group-wide target or action plan for value chain worker risks and opportunities in 2025, but included targets for HKFoods Finland's contract producer community in its Responsibility Programme 2026-2028. In late 2025 the Pyhäjärvi Institute and HKFoods Finland launched a roughly two-year sustainability training programme for pig, broiler and beef cattle producers across four regions, covering climate and water emissions, biodiversity, soil fertility, water management, animal welfare and feed chain development. The Next Generation programme provides young producers with training on strategic farm management, risk management, responsibility and employer obligations; around 80 young farmers have completed it since 2019, with the next cohort planned for autumn 2026. In 2025 HKFoods Finland surveyed loading conditions in animal transport to improve drivers' working conditions and safety, and expanded its supplier management system to cover animal-transport companies.

Reference: page 134. HKFoods Group set new targets in its Responsibility Programme 2026-2028 for managing impacts, risks and opportunities affecting value chain workers, both applying to all of HKFoods Finland's meat raw-material contract production across all animal species. The first target is to develop the interaction, competence and satisfaction of a competitive and socially sustainable producer community in line with a 2026-2028 producer cooperation plan, monitored annually from 2026; the three-year development plan was completed at the end of 2025 and will be reviewed against livestock species-specific annual cycles. The second target is to create and implement a new feedback system to measure producer satisfaction by the end of 2027. HKFoods' procurement organisation, poultry and meat businesses, and quality and environmental organisation are responsible for managing these impacts.

Reference: page 139. The HKFoods Group Food Safety and Quality Policy, publicly available and Board-approved, sets food safety and quality management principles applied across the Group and its supply chain, owned by the Director of Quality and Environment; it requires all Group production units to be certified to a food safety standard approved by the Global Food Safety Initiative (GFSI). Commitments include professional management, induction and regular training, clear objectives with timely action, staff competency in food safety and hygiene, awareness of food fraud risk, supplier and subcontractor compliance, high traceability, and animal welfare. HKFoods complies with legislation requiring nutritional information on packaging, and public-sector food service contracts must meet national nutritional recommendation criteria; allergen and labelling errors are systematically prevented through the food safety management system, and the Code of Conduct commits to fair handling of product complaints.

Reference: page 140. HKFoods provides consumers and end-users a direct communication channel via brand websites, social media and weekday phone-based customer service, complying with consumer protection, product liability and GDPR requirements. Beyond direct consumer service, HKFoods gathers views from clients in direct contact with consumers and from national eating-habit research and comprehensive food surveys, and conducts consumer tests during product development to inform recipe changes. Business directors are responsible for ensuring customer, consumer and end-user needs feed into decision-making; senior sales and marketing directors handle brand-specific consumer service complaints, production directors handle unit-level complaints, and quality organisation staff ensure complaint findings translate into corrective practices. HKFoods' Code of Conduct includes human rights commitments on healthy and safe food, comprehensive product information, and the right to give feedback, though no specific practical human-rights-remediation measures were in place in 2025.

Reference: page 141. Where a product may cause negative effects on consumers or customers, HKFoods follows its recall process, assessing defect severity and determining the scope of recall and communication under its recall guidelines; serious defects (health hazards, allergen errors, pathogen contamination, foreign objects, labelling errors) trigger public communication via newspaper advertisements, media releases and customer notices. Every recall triggers a root-cause analysis and reassessment of product safety risk management, and the recall process is functionally tested at least once a year with success and development needs assessed. HKFoods' product packaging includes manufacturer contact details, place of manufacture and consumer service information, also available on the Company's website at all times, though HKFoods does not specifically assess consumer or end-user awareness of these contact channels.

Reference: page 141. All HKFoods Group production units must be GFSI-certified; at end-2025 the Eura, Lappi and Luumäki units were not yet certified, and 80% of production plants overall were certified. HKFoods carried out zero public product recalls in 2025 (2024: three). Each Group company runs its own operating model for consumer and end-user risk management rather than a single Group-wide action plan; effectiveness is assessed through external and internal BRC/FSSC 22000 audits, consumer and customer feedback, and internal deviations. In early 2025 HKFoods launched the Flavoured Salt innovation, cutting sodium content by up to 25% in HK whole-meat cold cuts, new beef and pork chips, and Kariniemen marinated fillet products; four nutrition-related commitments made at end-2024 delivered 18 Heart Symbol Kariniemen fillet products, 4 of 8 planned HoReCa plant-based products, 11 HoReCa Heart Symbol recipes, and 13 cold-cut products with 25% less salt.

Reference: page 143. HKFoods' Responsibility Programme for 2026-2028 targets 30% of HKFoods Finland's own-brand retail and food service products meeting Heart Symbol criteria (or equivalent) by end-2028, calculated by sales volume; the 2025 base year figure was 27.9%, with 200 Heart Symbol products in the range. A second target requires 100% of production units to hold a valid GFSI food safety certificate (FSSC 22000 or BRC) by end-2028, against an 80% base-year figure in both 2024 and 2025. A third target is zero public recalls each year for products launched on the market, including private label; 2025 recorded zero recalls versus three in 2024. Targets are set for each production unit, approved by production directors, and informed by prior-year results, customer feedback, annual customer and brand surveys, and complaint volumes.

Reference: page 149. HKFoods ensures ethical business practice through legislation, international agreements and the Group Code of Conduct, publicly available and covering human rights impact management, prohibitions on forced and child labour and discrimination, workers' rights, environmental impact reduction, and product quality and safety, alongside anti-corruption, anti-bribery, competition compliance and data protection principles. The Supplier Code of Conduct extends equivalent principles, plus sanctions compliance, to suppliers, subcontractors and business partners. The Board approves the Code of Conduct and major policy revisions; the CEO approves the Supplier Code of Conduct. All blue- and white-collar employees complete online Code of Conduct training every two years; in 2025, 85% of all employees (86% white-collar, 85% blue-collar) had completed it. HKFoods' three material G1 sub-topics are corporate culture, animal welfare and supplier relationships; the Board-approved Animal Welfare Policy applies the WOAH Five Freedoms and the Naseva/Sikava national health-monitoring systems across contract production.

Reference: page 154. HKFoods classifies suppliers into primary producers (animal procurement) and suppliers of services and other raw materials, generally using written supply agreements that address sustainability risks and impacts, monitored through regular cooperation meetings. The supplier management system introduced in 2024 surveys suppliers on animal welfare, product safety, quality, environment, social responsibility, occupational health and safety, data protection and business continuity; in 2025 surveys covered at least 80% of procurement costs in raw materials and packaging and at least 90% of direct suppliers in contract manufacturing and meat procurement, with all end manufacturers behind traders in raw materials also surveyed. Four new and 14 existing suppliers were audited in 2025. The Board-approved Procurement Policy requires suppliers to sign the Supplier Code of Conduct, respond to category surveys, and be assessed on animal welfare, quality, environment, safety, information security and continuity criteria, with zero tolerance for corruption or bribery.

Reference: page 151. HKFoods' statement is prepared under the 2023 ESRS, which had no standalone business conduct targets requirement; this content is back-filled from the G1 chapter's metrics and targets sections. HKFoods sets a quantified Code of Conduct training target: 100% of white-collar and blue-collar employees to complete the training every two years, tracked from a 2025 base year of 85% overall (86% white-collar, 85% blue-collar); a related target requires all white-collar employees to complete training on other policies and guidelines by end-2026 and blue-collar employees by end-2027, from a 2025 base of 24% and 31% respectively. A separate supplier-facing target commits 100% of poultry farms, 100% of pig farms, 40% of cattle farms (100% of quality-assured cattle farms) and 70% of other suppliers to sign the Supplier Code of Conduct by end-2028; 2025 monitoring showed 72.3% of pig farms, 7.4% of cattle farms, 51.3% of poultry farms and 26.5% of other suppliers signed.