HKFoods

Until the AGM on 18 April 2024, the Board of HKFoods Plc had six regular members and two deputy members; after the AGM it had eight regular members. No Board member is involved in operational management or employed by the Group, and there is no employee representation on the Board. The Board has broad expertise in Finnish primary agricultural production and includes two Finnish pork producers and one broiler meat producer. Gender composition before the AGM was 33.3% female (2/6) and 66.6% male (4/6); after the AGM it was 25% female (2/8) and 75% male (6/8). After the AGM 62.5% (5/8) of members were independent of the Company and 62.5% independent of significant shareholders. Independence is assessed annually under CG Code recommendation 10. The Audit Committee, chaired by Anne Koutonen, oversees the sustainability reporting process and reports to the Board. The CEO reports material risks, impacts and opportunities to the Board, which approves and signs the sustainability statement. The CR team runs operational work and updates the double materiality assessment; the Group Executive Team approves the final outcome.

As part of the annual risk management process, the Corporate Responsibility (CR) team updates HKFoods' double materiality assessment, which includes material impacts, risks and opportunities. The Group's Enterprise Risk Management (ERM) process provides uniform principles and systematic practices to identify risks, promote risk awareness and ensure management and the Board have sufficient information for decision-making; the Group Risk Management Policy applies across Group companies. The CR team reports on sustainability matters, impacts, risks and opportunities to the Group CFO and Executive Team, and the Executive Team reports to the Board. The internal auditor carries out the annual sustainability risk and opportunity assessment as part of the ERM process and reports once a year to the Board on the main sustainability risks and the implementation of sustainability work. Sustainability targets, metrics and results are reported to the Executive Team and Board at least once a year. During 2024 the Board discussed sustainability at three meetings (January, March, August). Topics reviewed by the Board and committees included SBTi-based climate targets, Group policy updates, occupational safety, information security and the materiality analysis; the Executive Team addressed the Deforestation Regulation, animal welfare and employee wellbeing.

Sustainability issues were not taken into account in the remuneration of HKFoods Plc's Board of Directors for the 2024 reporting period. In 2024 the Group Executive Team (excluding the CEO) had an ESG target (Lost Time Incident Rate, LTIR) linked to a personal goal in a single case; due to restructuring the Executive Team composition changed significantly during the year, so not all members had an ESG target for 2024. Of the 2024 short-term incentive reward for Executive Team members (excluding the CEO), 70% is linked to the comparable EBIT of the Group and/or business unit and 30% to personal goals. Sustainability-related performance indicators were not systematically used as benchmarks for the Executive Team's performance. In the medium term the Company aims to systematise and more comprehensively implement sustainability metrics and targets in its remuneration system by area of responsibility and role. The Company has not defined the share of sustainability targets in the remuneration scheme. As reported under the E1 standard, climate-related targets were not considered in the remuneration of HKFoods' Board or CEO. The Board's Remuneration Committee prepares incentive programmes and bonus criteria.

HKFoods presents a statement on due diligence in a table mapping the core elements of the due diligence process to where they are addressed in the sustainability statement. Integration of due diligence into governance, strategy and business model links to the double materiality assessment (ESRS 2 GOV-2, p.25), integration of sustainability performance into incentive schemes (GOV-3, p.24) and material impacts, risks and opportunities and their interaction with strategy (SBM-3, p.30). Engagement with affected stakeholders links to stakeholder interests and views (SBM-2, p.28) and the process to identify and assess material impacts, risks and opportunities (IRO-1, p.39). Identifying and assessing negative impacts on people and the environment links to IRO-1 and SBM-3, including own workforce (S1, p.32), workers in the value chain (S2, p.34), climate change (E1), pollution (E2) and biodiversity (E4). Taking action on negative impacts links to business conduct policies, whistleblowing and supplier relationships (G1-1, G1-2). Tracking the effectiveness of actions links to political influence and lobbying (G1-5), payment practices (G1-6), supplier surveys, S1-5, S2-5, E1-4, E2-3 and E4-4.

HKFoods' sustainability reporting is based on the results of the double materiality assessment approved by the Board. Experts from different responsibility areas produced the information, systematically compiled in line with the ESRS structure. Internal review was carried out by each responsible area, with each responsible director checking the accuracy of content; the responsibility areas are finance, administration, environmental and quality management, human resources, procurement and corporate responsibility. The Audit Committee followed the preparation and progress of reporting during 2024. In 2023 the Company conducted its first double materiality assessment based on ESRS draft standards, prioritising impacts, risks and opportunities and preparing a disclosure gap analysis per material theme and responsibility area; the assessment was updated to official standards during spring and summer 2024. The gap analysis showed the main risks relate to information gaps, inadequate human resources, ESRS competences and the establishment and technical implementation of the data collection management model. Information gaps were controlled by centrally collecting supplier sustainability data via a new supplier management system launched in autumn 2024; human resource and ESRS expertise gaps were managed using external experts. Reporting progress was reported to the Audit Committee five times and the Board three times.

HKFoods' core business includes pork, beef and poultry, meat products, ready meals and meal components, with an aim to grow in meals, meal components, snacks, poultry and new product categories. Key impacts from the double materiality assessment relate to climate change, waste streams, own workforce health and safety, employment security, training and development, consumers' health, safety and access to quality information, and animal welfare. In 2024 HKFoods sold its businesses in Sweden and Denmark and centralised production in Finland and Poland. Employees numbered 2,936 in Finland and 183 in Poland. At the end of 2024, sales channels were retail 62%, food service 18%, industrial 5% and exports 15%. The upstream value chain includes farms producing meat raw materials and suppliers; HKFoods' role covers procurement, product development, production, sales and marketing; the downstream chain is retail, food service and industrial customers reaching consumers. Upstream partnerships include DanHatch Finland, Finnpig, Lansi-Kalkkuna and InnoAgro; downstream partners include Honkajoki and Pakastamo. Long-term financial objectives are EBIT above 4% of net sales, return on capital employed above 12%, net gearing below 100% and dividend above 30% of net result.

HKFoods' key stakeholders include customers, consumers, staff and potential employees, contract farmers and other value chain workers, partners, owners, investors and financiers, public authorities and decision-makers, the media, NGOs and associations. Interaction with all these stakeholders is continuous. The Company has well-established dialogue practices letting stakeholders ask questions, make suggestions and provide feedback through channels such as customer and stakeholder events, meetings, consumer service, customer satisfaction and reputation surveys, and the Fair Way reporting channel for suspected Code of Conduct breaches. HKFoods participates in industry and trade associations including trade unions, the Finnish Food and Drink Industries' Federation (ETL), animal health and welfare organisations and farmers' interest groups. Its strategy is market-driven, guided by business needs and stakeholder expectations, with consumer behaviour, demand and competitor analyses feeding strategy updates. The double materiality assessment used materials such as studies, analyses and farm-specific discussions with primary production operators, but no actual dialogue such as interviews or surveys was conducted. In 2024 HKFoods made no significant strategy changes based on stakeholder views and expects none in the medium term. The Board regularly considers stakeholder views on a case-by-case basis.

HKFoods presents its material impacts, risks and opportunities in tables covering the topical standards E1 Climate change, E2 Pollution, E3 Water and marine resources, E4 Biodiversity and ecosystems, E5 Resource use and circular economy, S1 Own workforce, S2 Workers in the value chain, S4 Consumers and end-users, and G1 Business conduct. Impacts span the value chain, notably raw materials and suppliers, own operations, and customers and partners, across short, medium and long-term horizons. Meat production, the main raw material, generates significant GHG emissions (carbon dioxide and methane) and is the most significant challenge for HKFoods' emission reduction targets; related issues include water pollution from agriculture, water use, biodiversity, and resource use and circular economy. Social topics include working conditions, health and safety, collective bargaining, value chain workers' training and skills, and consumer safety; G1 covers animal welfare and corporate culture. The Company has not made an accurate assessment of the financial effects of material risks and opportunities and will prepare a supplemental assessment in the medium term; no resilience analysis has been prepared, planned during 2025. Before 2024 HKFoods had not conducted an ESRS-aligned double materiality assessment, and it has no entity-specific reportable topics. Topics are cross-referenced to the topical standards.

HKFoods updated its double materiality assessment in 2024 following ESRS 1 and the final topical ESRS classification sub-categories, supported by EFRAG guidance. All topics, sub-topics and sub-sub-topics in the topical standards were considered; first, topics irrelevant to the business were excluded, then the magnitude of impacts, risks and opportunities was assessed. Impact severity was assessed by scale, scope, irremediable character and likelihood, each rated 1 to 5 (5 highest). Financial materiality was based on the euro-denominated risk rating from the Company's risk management process, considering duration, financial impact and likelihood. An assessment tool prioritised topics; the impact threshold was set at 15, with sub-topics rated moderate (15-20), high (20-22) and distinct (22-25) defined as material. The financial threshold was also 15, or material where financial impact was 2 (low) with probability 5 (likely). There were 27 topics in the impact assessment and 14 in the risk and opportunity assessment; no risk or opportunity topics emerged that were not also material by impact. Thresholds and material topics were approved by the Executive Team, Audit Committee and Board. HKFoods has no single due diligence process; each material sub-topic's process is defined under its management process, and further definition into the ERM process is ongoing, targeted for completion in the medium term.

HKFoods provides tables listing the ESRS disclosure requirements it has complied with in preparing the sustainability statement on a double materiality basis, allowing navigation to the relevant information and identifying datapoints incorporated by reference. The tables present ESRS-compliant information referred to outside the Sustainability Statement, either elsewhere in the Report of the Board of Directors or in the Financial Statements. Examples of references outside the statement include BP-1 (Note 28 on related party transactions) and E1-5 and E1-6 (Consolidated Financial Statements). A further table shows all other datapoints derived from EU legislation listed in Annex B of ESRS 2, indicating their location or that they have been assessed as non-material based on the double materiality analysis, with a dash where data is not yet available. These include GOV-1 board gender diversity and independence, the GOV-4 statement of due diligence, SBM-1 datapoints on fossil fuel, chemical production, controversial weapons and tobacco (all non-material), and various E1 climate datapoints, alongside cross-references to SFDR, Pillar 3, the Benchmark Regulation and the EU Climate Law. The only topical standard assessed as not material is S3 Affected communities.

In 2024 HKFoods updated its climate emissions calculation and climate target as part of its Responsibility Programme. HKFoods states it does not have a transition plan in accordance with the Sustainability Reporting Standard; the 2024 divestments of the Swedish and Danish businesses significantly changed the Company structure, and HKFoods aims to have an updated transition plan for climate change mitigation in 2025, to be presented to senior management and the Board for approval. HKFoods aims to achieve net zero for all GHG emissions by 2050; it notes this target does not meet ESRS net zero requirements but is in line with the Paris Agreement goal of limiting warming to 1.5 degrees Celsius. Key actions include improving industrial energy efficiency, sustainable land use and cooperation with contract farmers. The transition plan is financed with cash flow from the business; in 2024 the Company invested around EUR 450,000 in activities contributing to climate targets and energy efficiency, the most significant being the Vantaa plant steam unit switching natural gas to electricity (89% of steam estimated to be produced with certified electricity). HKFoods reports no significant locked-in emissions and is not excluded from EU Paris-aligned Benchmarks.

HKFoods' climate work is guided by its Code of Conduct, Supplier Code of Conduct and Environmental Policy, which provide the framework for managing climate change mitigation and adaptation and energy-related impacts, risks and opportunities. The Code of Conduct is approved by the Board and published on the Company's website; the CEO is responsible for its implementation, the Procurement Director owns the Supplier Code of Conduct, and the Quality and Environment Director is responsible for the Environmental Policy. The Environmental Policy focuses on climate change mitigation, climate change adaptation, energy efficiency, using renewable energy and improving material efficiency. Its key climate-related principles include complying with and monitoring environmental laws and permits, cooperating with authorities and stakeholders, minimising environmental and climate impacts from production facilities and transportation (improving energy efficiency, reducing energy consumption, switching to renewable energy and reducing water consumption), improving material efficiency, promoting the circular economy throughout the value chain, reducing environmental impact in primary production together with contract farmers, conserving biodiversity and forests, and requiring that the supply chain does not cause deforestation or conversion of other natural ecosystems. HKFoods also monitors primary animal production from a sustainable development perspective.

Under its science-based climate targets HKFoods commits to reducing GHG emissions in line with the SBTi programme. Measures to reduce land-based emissions include development of animal feed, farming techniques improving soil condition, and reducing methane emissions from cattle digestion and manure. Measures to reduce industrial emissions include investments in production units to replace fossil energy use, heat recovery and utilisation in production processes, and committing the supply chain to climate targets. The site investment plan is based on the short-term target of 42% by 2030 versus the 2022 baseline. In 2024 around EUR 450,000 of investments related to climate change mitigation (technological development and modernisation of production units and premises), with additions to tangible assets shown in Note 12. HKFoods also ran a development project portfolio including pilot-farm trials during the 2024 growing season (recycled fertilisers, split fertilisation, legumes, catch crops, field water management, soil carbon sequestration), joined the Valio Food 2.0 partner ecosystem, and reports under the Energy Efficiency Agreement for Industries via the Motiva Ltd portal. In 2024 HKFoods spent EUR 700,000 on operational costs of projects and external human resources. HKFoods has no activities covered by the Taxonomy Regulation delegated acts.

The SBTi has adopted HKFoods' short-term climate targets aligned with the 1.5 degrees Celsius timetable, covering all seven GHGs. HKFoods commits to reduce absolute scope 1 and 2 GHG emissions from industrial operations and energy by 42% by 2030 compared with the 2022 baseline (scope 2 on a market-based methodology). It further commits to reduce emissions by 42% from industrial activities in scope 3 categories 3.1 Purchased goods and services, 3.3 Fuel and energy-related activities, 3.4 Upstream transportation and distribution, 3.9 Downstream transportation and 3.15 Financial investments over the same period, including emissions related to bioenergy feedstocks. In addition, HKFoods commits to reduce absolute scope 3 FLAG GHG emissions from land-based emissions by 30.3% by 2030 compared with the 2022 baseline, applying to Finnish meat raw material in scope 3 category 3.1. In the 2022 baseline, scope 1 accounted for 0.91%, scope 2 for 0.32% and scope 3 for 98.77% of emissions. Calculation follows the GHG Protocol and Land Sector and Removals Guidance; the Company uses no offsets, avoided emissions or removals. The climate target also aims to increase renewable energy use and improve energy efficiency.

For 2024 HKFoods reports total energy consumption of 233,284 MWh. Total fossil energy consumption was 64,301 MWh, a 27.56% share, comprising fuel consumption from crude oil and petroleum products of 24,357 MWh, natural gas of 10,549 MWh, coal and other fossil sources of 0 MWh, and purchased electricity, heat, steam or cooling from fossil sources of 29,395 MWh. Energy consumption from nuclear sources was 116,024 MWh (49.74% share). Total renewable energy consumption was 39,887 MWh (17.10% share), made up of fuel from renewable sources incl. biomass of 1,019 MWh, purchased renewable electricity, heat, steam and cooling of 38,867 MWh, and self-produced non-fuel renewable energy of 196 MWh. Total energy from other energy sources was 13,070 MWh. Energy intensity was 232.9 MWh per net sales MEUR, calculated on net sales of EUR 1,001.8 million from the Consolidated Income Statement. The total energy consumption of discontinued operations was estimated at around 56,500 MWh until closure, mainly nuclear power (about 71%) and district heating (about 22%).

For continuing operations in 2024 (tCO2eq., versus 2022 base year and 2030 milestone): Gross Scope 1 was 15,589 (2022: 13,492; 2030 target: 7,825), with 0% from regulated emission trading schemes. Gross location-based Scope 2 was 17,599 (2022: 21,037); gross market-based Scope 2 was 5,132 (2022: 4,823; 2030 target: 2,797). Total gross indirect Scope 3 was 1,503,033 (2022: 1,471,908; 2030 target: 773,752), dominated by category 3.1 Purchased goods and services at 1,292,037 (2022: 1,302,460; 2030 target: 761,217); other categories include 3.10 Processing of sold products 77,627 and 3.2 Capital goods 83,161. Total GHG emissions location-based were 1,536,222 and market-based 1,523,755. FLAG (Forest, Land and Agriculture) materials emissions for land-use change in 2024 totalled 1,209 million tCO2e including LUC and Non-LUC (base year 2022: 1,231 million tCO2e). GHG intensity was 1,521 tCO2e/MEUR market-based and 1,533 tCO2e/MEUR location-based (net sales EUR 1,001.8 million). Discontinued operations in 2024 were estimated at 0.711 million tCO2e. Biogenic emissions in 2024 were Scope 1: 212, Scope 2: 13,547, Scope 3: 13,435.

HKFoods' policy on environmental protection, in both its own operations and business relationships, is to comply with the conditions of permits issued by local environmental authorities and to reduce negative impacts on the environment. The Code of Conduct and Supplier Code of Conduct cover management of material impacts, risks and opportunities related to pollution prevention and control. The CEO is responsible for implementing the Code of Conduct; the Procurement Director owns implementation of the Supplier Code of Conduct requirements. The Supplier Code of Conduct refers to the Environmental Policy owned by the Director of Quality and Environment, detailed under E1-2. Suppliers must comply with all applicable legal and regulatory requirements, work towards minimising environmental risks and impacts in their operations and supply chains, and follow continuous improvement; HKFoods encourages ISO 14001-aligned environmental work. All suppliers of meat and animal species in primary production have not yet committed to the Codes. HKFoods handles chemicals and hazardous substances and treats discharges appropriately, with main principles set out in the Group's Environmental Policy. The Code of Conduct also addresses due diligence obligations under local environmental laws, requiring prevention of environmental damage and immediate corrective action in emergencies in cooperation with authorities.

In 2024, HKFoods had no completed actions in accordance with the European Sustainability Reporting Standard. During the reporting period, HKFoods started to examine ways to reduce negative impacts on water bodies in Finland through research and development projects, participating systematically together with its pilot farms. The pilot farms are contract farms with which research cooperation has been separately agreed; there are 18 pilot farms representing broiler, pig and cattle production. Projects on pilot farms may cover different topics, and not all pilot farms are involved in all pilots. In 2024, research projects provided information on, for example, the impacts with the greatest effect on catchment areas, and studied issues such as regenerative farming practices, manure management and nitrogen fertilisation of farmland. HKFoods is the responsible party in the Business Finland-funded R&D project FF2DH (From Footprints To Digital Handprints), which aims to promote responsible food production in Finland and help monitor and reduce environmental impacts of food production; the FF2DH project runs pilots involving the same pilot farms, with results shared with contract farmers at joint events and in the magazine Kotitilalta. In its own operations, HKFoods continued systematic work in 2024 to meet environmental management system and authority requirements. HKFoods also began work on the Archipelago Sea project, aiming to reduce diffuse agricultural pollution, with producers in the catchment areas of Aurajoki, Paimionjoki and Kemionsaari.

HKFoods has not set separate targets for water pollution. HKFoods aims to minimise the negative environmental impacts of its own operations through continuous monitoring and cooperation with supervisory authorities. Environmental permit conditions related to HKFoods' operations include wastewater quality criteria. The quality of wastewater generated by the Company's own operations is regularly monitored with the aim of conducting operations without exceeding permit conditions. The Company has no specific requirements for contract farmers of primary production or other suppliers of raw materials.

The quality of wastewater generated by HKFoods' own operations is systematically monitored through laboratory analyses when required by the environmental permit. Wastewater quality limits are set either by environmental authorities or in industrial water contracts. Wastewater from own operations is treated at municipal wastewater treatment plants, which are responsible for meeting the quality criteria for treated wastewater released into the environment. HKFoods has no measuring methods to monitor eutrophication of water bodies caused by the upstream value chain with sufficient accuracy; for now, assessments of the mechanisms, extent and status of water pollution are based on general international and local water status assessments produced by environmental authorities. Sites where permit conditions or industrial water contracts require monitoring of wastewater quality are subject to local regulations, with wastewater monitored regularly and samples analysed by independent laboratories; EU-BREF requirements are met where applicable. The thresholds for non-GHG emissions as defined in Appendix II of the EU E-PRTR regulation are not exceeded in the Company's own operations and thus are not reported by the Company. Historical data on impacts of own operations and contract farmers on water bodies have not been collected, so changes over time in the status of water bodies are not available. There were no significant changes in emissions during the reporting period, and permit conditions for these emissions did not change in 2024.

HKFoods' Group-wide Environmental Policy guides environmental work and impact management, applies to all Group employees and all business relationships including suppliers, and derives the Group's environmental targets. Environmental management is based on ISO 14001 requirements, with effectiveness reviewed annually. The key principle is reducing negative environmental impacts, including water consumption; suppliers must minimise environmental risks and impacts and follow continuous improvement. The Policy, published on the Company's website, is referenced in the Supplier Code of Conduct (described under G1) and applies to the entire supply chain, including upstream primary production, which has the greatest impact on water resources. The Policy is implemented by a separately appointed Environmental Director for each company; the Board regularly assesses its up-to-dateness, managerial approach and effectiveness. HKFoods has identified reduction of water consumption and compliance with environmental permit threshold values as key principles. The Code of Conduct does not describe specific water resource management aspects. The Group has identified that its production units are water-intensive; water is used in almost all production stages and for cleaning premises and must meet drinking water quality requirements. HKFoods has no sites located in areas of high water stress or water risk. Policies do not explicitly state how water and marine resource issues are addressed in product design, but HKFoods seeks to integrate water-related issues and marine resource conservation into activities, and integrates upstream water considerations into procurement, subcontracting and investment activities.

The Company has not defined specific measures for Group-wide water resource management in accordance with ESRS, as efficiency measures in water consumption depend on the nature of the sites' operational activities. Water consumption was not included in the Company's 2024 responsibility programme, as prices and availability of local water do not pose a significant risk to the Company's own business. In practice, water use is managed on the basis of continuous improvement principles on a site-by-site basis and Environmental Policy guidelines. As part of its environmental work, HKFoods monitors wastewater quality in accordance with the sampling plan required by environmental permit conditions. Production units set their own operational targets for water consumption and draw up action plans to achieve them. Water consumption of production units is monitored through total and proportional consumption. During 2024, no significant investments were made to reduce water consumption. The Company has not estimated the long-term capital and operating expenditure required to reduce water consumption.

The Company has not set ESRS-compliant Group-level targets for managing impacts, risks and opportunities to water and marine resources. HKFoods' Group companies do not have their own activities in areas at water risk; therefore there are no material impacts, risks and opportunities in areas at water risk that require management or management targets. Section E3-4 describes the Group's water withdrawal rate, a key performance indicator related to water resource use measured on an ongoing basis. HKFoods has not set Group-wide targets for reducing water withdrawal and consumption in accordance with the ESRS standard. Due to the water-intensive nature of production processes and the legal obligation to use domestic water, no clear water consumption reduction target has been set for all production sites. In its operational activity, production management regularly monitors developments and seeks to optimise and reduce the water intensity of each production unit. In 2025, HKFoods will assess the need to set long-term targets for reducing water withdrawal and consumption.

HKFoods' total water withdrawal was 1.598 million m3 in 2024, of which 84% is surface water and 16% groundwater. The estimated water consumption was 56,290 m3 in 2024. For the discontinued operations in Sweden and Denmark, the estimated water withdrawal was 0.701 million m3, with no reliable estimate of water consumption to report. In 2024, HKFoods had no activities in water risk or high water stress areas. HKFoods' production units do not use recycled or reused water. Data on water withdrawal is collected by site and reported monthly to the Group-wide reporting system, based on accurate measured actual data from water meters. Groundwater and surface water shares are based on data provided by local water treatment plants. Water consumption includes an estimate of the amount of water evaporated and discharged. In 2024, HKFoods' water intensity, i.e. total water consumption of operations in cubic metres relative to net sales (EUR million), was 56.19.

HKFoods does not currently have a strategic transition plan for biodiversity that would define specific biodiversity development objectives, action plans and associated financial impacts. It states its main raw materials depend on natural ecosystem services such as pollination and soil diversity and fertility, and it has assessed the resilience of its business and value chain to biodiversity and ecosystems. Its short- and long-term strategy and business model depend on Finnish primary production, where physical, transition and systemic risks from climate change are assessed within the Group's annual enterprise risk management (ERM) process. The impact and risk assessment did not identify factors that could negatively affect resilience in the short term, and HKFoods concludes its current strategy and business model are resilient in the medium term to physical, transitional and systemic risks related to biodiversity and ecosystems. Biodiversity impacts and risks were assessed across the value chain from four perspectives: climate change impact on biodiversity loss, impacts of water use and land use change, the value chain's dependence on ecosystem services, and impacts of pollution.

A key principle of HKFoods' Environmental Policy is to work across its value chain to conserve biodiversity and forests. The Policy is implemented by the Quality and Environment Director, while the HKFoods Group Supplier Code of Conduct supports the same principles, with the Procurement Director responsible for its implementation. HKFoods complies with local environmental authorities' obligations and requires value chain actors to comply with local environmental legislation. In Finland it follows regular inspection obligations under the ISO 14001 environmental management system, and contingency plans updated annually for Finnish sites assess key nature impacts including affected Natura 2000 areas. The Code of Conduct requires business partners to comply with local environmental protection law, and agricultural operators follow a separate sector-specific code requiring reporting to authorities. Biodiversity and ecosystem policies relate to climate change, land use change, water use, ecosystem services and pollution. The raw material procurement policy supports prevention of deforestation regarding the origin of beef, palm oil, soy and wood-based products; in 2024 HKFoods built capacity to implement EU Deforestation Regulation practices. HKFoods notes it has not yet analysed how social impacts should be considered in its biodiversity policies.

HKFoods states it has not defined actions in line with ESRS reporting requirements and has not set measurable, time-bound, results-oriented biodiversity targets. Its multi-year From Footprints To Digital Handprints (FF2DH) project includes a life cycle assessment package for broiler and pork, developing biodiversity and water scarcity assessment methods; during the reporting year work focused on building the LCA model. A study on biodiversity, grazing, cattle welfare and monitoring technology was carried out at Friskalanlahti, Turku in summer 2024, where grazing was observed to increase the area's biodiversity in both insects and vegetation. Pilot farm work investigated regenerative farming effects on soil carbon sequestration, nitrogen fertiliser optimisation, field water management and livestock manure use; the FF2DH project ends in 2025. HKFoods is committed to using responsibly produced soy and palm oil, increasing locally produced feed and replacing imported soy with broad beans and peas. HKFoods Finland Ltd uses only sustainability-certified soy (RTRS, ProTerra and similar) and is an RTRS member; palm oil used as an ingredient requires RSPO certification. HKFoods has not used biodiversity offsets. Its VP Corporate Responsibility and a team of sustainability experts hold responsibility for compliance.

HKFoods states it will set biodiversity targets over the next few years. A thorough and scientifically evidence-based biodiversity impact assessment is being prepared and will be carried out, where possible, in line with general international frameworks. The targets are intended to minimise business risks and reduce negative impacts on the environment in the value chain while increasing positive nature impacts using science-based criteria. As part of its target setting, HKFoods will take into account the targets set by the EU Biodiversity Strategy and their potential application to its value chain activities, and will consider ecological thresholds on a case-by-case basis. HKFoods will also specify the geographical delimitation as part of the target setting process. HKFoods has not used biodiversity offsets in its nature work and does not currently plan to use them in target setting. No measurable, time-bound biodiversity targets were in place for the 2024 reporting year.

HKFoods reports that it has not set any metrics for biodiversity and ecosystem-related material impacts for 2024, as target setting is currently underway. No quantitative biodiversity impact metrics are disclosed for the reporting period.

In its 2024 double materiality assessment HKFoods identified material resource use and circular economy-related impacts, risks and opportunities in its own operations and value chain. These are reflected in the Environmental Policy approved by the Board of Directors, described in more detail under E1-2. A key principle of the Environmental Policy is to operate in accordance with a certified environmental management system (ISO 14001), which includes developing packaging materials, complying with the waste hierarchy, minimising production waste and using animal raw materials efficiently. HKFoods is committed to promoting the circular economy throughout the value chain. Because its business is focused on food production, HKFoods states it cannot switch to recycled resources in its own production; only product packaging materials have been identified as an area where it can gradually move toward recycled materials within food contact material legislation, and it has set a target for the recyclability of packaging. Responsibility for circular economy and by-product management under the Environmental Policy lies with each company's director of environmental matters; packaging development is the responsibility of the product development director or the director responsible for product packaging. A Board-approved HKFoods Procurement Policy applies to suppliers other than animal contract farmers, extended to the supply chain via the Supplier Code of Conduct (described under G1-2).

HKFoods reports that in 2024 it did not have a Group-level action plan meeting the Sustainability Reporting Standard requirements, nor systematic, monitored actions to manage the impacts and opportunities of resource use and the circular economy; it aims to set targets and corresponding measures in the medium term. Circular economy development work has been the responsibility of unit-specific environmental managers, and plant-specific waste monitoring programmes and waste reporting are in place at production sites. During 2024 HKFoods worked to improve utilisation of meat raw material; by-products from production are primarily used as raw materials or energy in circular economy partners' operations. HKFoods owns 50% of Honkajoki Oy, which processes animal by-products into raw materials for animal feed, fertilisers and biofuels. It worked to reduce waste and increase recycling in line with the waste hierarchy, and food waste in the downstream value chain is assessed by monitoring customer credits in euros due to quality defects. Material efficiency was improved by increasing packaging recyclability and minimising production waste; new recyclable materials were tested across all product categories, new products launched in recyclable packaging, and the plastic box for Via ready meals was replaced with a recyclable one. No significant circular economy investments were made in 2024.

HKFoods' Environmental Policy is the basis for the Group's key targets on efficient use of energy, water and raw materials. For resource efficiency and circular economy, material efficiency and compliance with the waste hierarchy are identified as key targets, on which the Group carries out continuous site-by-site development work. No Group-wide target has been set for the management of waste or by-products. For resource outflows, HKFoods has set a long-term target of 100% recyclable packaging by the end of 2030, measured as the proportion of recyclable packaging materials out of all packaging materials used; this aligns with upcoming EU PPWR legislation. HKFoods has set targets to reduce food waste and food losses, but states they do not meet the MDR-T requirements of the ESRS standards in terms of content, and it will develop these targets in the medium term. Waste and by-product targets relate primarily to tiers 1 (reduction of waste) and 2 (recovery of reusable materials) of the waste hierarchy, though the Company also works on other tiers. HKFoods' resource use and circular economy targets are voluntary in nature.

HKFoods' primary product is foodstuffs manufactured by the Group, which require packaging for storage and transport; the packaging material is mainly cardboard or plastic and is subject to the recyclability targets set under E5-3. Food production also generates a large amount of animal material as a by-product that cannot be used as food; most of these by-products are sent either to HKFoods' 50%-owned Honkajoki Oy for processing or to other industries as raw materials, such as bovine hides for the leather industry. HKFoods states the durability of its packaging relative to industry average and its repairability are not relevant to its resource outflows. The share of recyclable product packaging at HKFoods in 2024 was 64 per cent. The recyclability of food packaging is determined by separable packaging components and the local recycling infrastructure; HKFoods' packaging waste mainly ends up in the Finnish market and consumer packaging is sorted according to the recycling instructions printed on it. HKFoods reports the packaging materials it places on the market to the producer responsibility organisation and pays waste disposal costs as part of producer responsibility.

For 2024 HKFoods reports total waste generated of 30,643 tonnes. Hazardous waste diverted from disposal was 1.76 t (0.00 t preparation for reuse, 1.34 t recycling, 0.42 t other recovery). Non-hazardous waste diverted from disposal was 27,643 t (0.29 t preparation for reuse, 1,880 t recycling, 25,763 t other recovery). Hazardous waste directed to disposal was 10 t (0.29 t incineration, 0.00 t landfilling, 10 t other disposal). Non-hazardous waste directed to disposal was 2,986 t (2,586 t incineration, 318 t landfilling, 82 t other disposal). Non-recycled waste totalled 2,997 t, a non-recycled percentage of 9.78%. Total hazardous waste was 12 t. Most waste is non-hazardous organic matter (biomass); the main categories are sludge from water treatment and grease traps, animal manure, litter and other animal by-products and biowaste, together about 87% of total waste, with mixed waste the largest of the remaining ~13%. Food waste is assessed by monitoring customer credits in euros due to quality defects. For discontinued operations in Sweden and Denmark, waste for 2024 was estimated from 2023 data at approximately 15,783 t, of which 9.86 t was hazardous. Waste data is collected site-by-site using the Group's accounting system and EWC classification.

HKFoods' management of impacts, risks and opportunities on its own workforce is guided by the Code of Conduct and the Human Resources Policy, which apply to all workers regardless of role, background, gender or type of employment. In 2024, subsidiaries Kivikylan kotipalvaamo Oy and Lihatukku Harri Tamminen Oy did not have a similar personnel policy and have started drawing up company-specific HR policies. The Group's CEO is responsible for Code of Conduct implementation; the SVP HR owns the HR Policy. Through its Code of Conduct, HKFoods respects the International Bill of Human Rights, UN Guiding Principles on Business and Human Rights, UN Convention on the Rights of the Child, ILO Declaration on Fundamental Principles and Rights at Work and the UN Global Compact. A Health and Safety Policy (owned by the SVP of Risk Management, Safety and Cyber Security) covers all countries and units, alongside a workplace accident prevention policy. Equality and non-discrimination plans and an Equality Plan promote diversity, equal treatment and freedom of association. Policies also prohibit forced and child labour and set principles on wages, working hours and discipline.

HKFoods complies with local labour legislation, collective agreements and local agreements in all countries where it operates, drawn up in conformity with its Code of Conduct. Collective agreements are renewed through regular collective bargaining between employers and workers' unions. A European Works Council (EWC) meets twice a year to promote information flow between management and staff. For national operations, a National negotiations council in Finland convenes four times a year to discuss the Company's financial situation, staff issues and Co-operation Act topics, prepared by a Working Committee that meets monthly. Local cooperation is carried out with shop stewards, and a national Health and Safety Committee representing each location meets twice a year. HKFoods conducts a Voice employee survey at least every three years, measuring satisfaction with supervisors, job meaningfulness, psychological safety and diversity. At Kivikylan kotipalvaamo Oy a staff survey runs at least every four years, and at Lihatukku Harri Tamminen Oy four times a year. HR management implements the survey; results are discussed with shop stewards and used to agree improvement measures. Quarterly internal briefings let staff question management directly.

HKFoods has drawn up and regularly monitors health, safety and welfare principles, focusing on proactive occupational safety and skills development to reduce negative impacts on employees. Continuous improvement and initiative activities let personnel influence their own work and the Company's operations. The Company's own workforce can report ethical concerns or legal violations to supervisors, local management or HR management, and HKFoods has agreed a model for consultation and cooperation with shop stewards covering local and national cooperation forums. A separate occupational health and safety organisation and occupational health service allow workers to raise concerns or needs directly. Employees and persons outside the Company may report suspected misconduct through the whistleblowing reporting system operated by an external service provider (Fair Way channel), either by name or completely anonymously. Reports are treated confidentially and in accordance with the Whistleblower Act. Employees are informed about the channels during induction as part of Code of Conduct training, and HKFoods regularly informs staff through each company's communication channels.

HKFoods' HR Action Plan covers the strategic period until 2027, addressing succession planning, skills assurance, standardised induction and occupational well-being support. The Company annually reviews its Gender Equality Plan and Work community Development Plan to manage material impacts, risks and opportunities. Excluding HKFoods Poland Sp. z o.o., an annual Occupational Health Care Plan and Occupational Safety and Health Policy are prepared with staff and occupational health services, with goals covering pension-risk and work-ability management, reducing harmful physical strain, promoting mental health (especially for young adults) and supporting labour availability. Wellbeing measures include an ageing programme, rehabilitation courses, occupational health care, exercise benefits and a lighter working model, plus part-time, fixed-term, flexible and hybrid remote working arrangements. HKFoods Plc, HKFoods Finland Ltd, Paimion Teurastamo Oy and HKFoods Poland Sp. z o.o. are preparing for the ISO 45001 standard, aiming for a compliant management model by end of 2025. Safety work uses Blue Rules guidelines, safety campaigns, safety card training, a new HESQ system and a fire safety project inspecting all production sites; cardiac stimulators (AEDs) were purchased for all sites. Effectiveness is monitored through staff surveys, feedback interviews and occupational health reports.

In 2024, HKFoods' Group-wide targets for managing own workforce risks and opportunities did not yet fully meet ESRS requirements; the Company continues developing compliant targets in the medium term. HKFoods aims for zero accidents at work, reduced work-related illnesses and occupational diseases, and improved overall employee wellbeing, with a focus on a proactive safety culture. The Group's accident frequency rate for occupational accidents resulting in sickness absence was 24.28 (counting accidents leading to sick leave, medical treatment, restricted work or transfer). A wellbeing target aims to reduce sickness absence to 5.7% by 2027 (7% was achieved in 2024). Inappropriate behaviour is measured by reports received through the WhistleBlow channel: in 2024 the channel received 8 reports, of which 4 related to inappropriate behaviour, against a target of zero reports. The Employee Net Promoter Score (eNPS) target is over 10, but eNPS was not measured in 2024. Subsidiaries Lihatukku Harri Tamminen Oy and Kivikylan kotipalvaamo Oy have their own sick-leave reduction aims but no numerical target set. Targets are set out in the Responsibility Programme, discussed with employees.

At 31 December 2024, HKFoods Group employed 3,119 people by head count: 2,936 in Finland and 183 in Poland. By gender: 1,306 female, 1,813 male, 0 other and 0 not reported. By contract type there were 2,537 permanent employees (Finland 2,397, Poland 140), 393 temporary employees (Finland 350, Poland 43) and 189 non-guaranteed-hours employees (Finland 189, Poland 0). Permanent employees split into 1,083 female and 1,454 male; temporary into 133 female and 260 male. The Group employed an average of 640 fixed-term employees during the year, with headcount peaking during the summer season and including non-active employees on family and sick leave. The total number of permanent employees who left during the reporting period was 204, a permanent-employee turnover rate of 6.5%. For discontinued operations, employees at the time of the transaction numbered 1,774 in Sweden and 699 in Denmark. In 2024 there were no fatal accidents at work in the HKFoods Group, either to its own staff or to service providers' staff on the same premises. In the financial statements numbers are presented as average FTE.

HKFoods complies with national legislation and local collective agreements so that all workers' terms and conditions meet minimum standards. Employment relationships are, as a rule, open-ended and full-time, with fixed-term contracts used for justified reasons under the Employment Contracts Act and part-time employment used where appropriate. Agency workers are subject to the same collective agreements as own permanent employees, with wages, working hours and holidays determined by the collective agreements, guaranteeing them the same conditions as permanent workers. For collective bargaining coverage, employees in Finland fall in the 80-100% band while employees in Poland fall in the 20-39% band. For social dialogue workplace representation, Finland is in the 80-100% band and Poland in the 20-39% band. The social dialogue is described in more detail under Disclosure Requirement S1-2.

HKFoods' top management consists of the Executive Team: CEO, CFO, EVP Administration and Legal, EVP Poultry Business, EVP Meat Business and EVP Processed Foods Business. In 2024, top management comprised 6 persons by head count, of whom 1 was female and 5 male, giving 17% female and 83% male representation at top management level. By age distribution across the workforce, 649 employees were under 30 years old (21%), 1,446 were between 30 and 50 years old (46%), and 1,024 were over 50 years old (33%). The Board of Directors is responsible for the management of HKFoods and the proper organisation of its activities, with duties determined by the Articles of Association and the Finnish Limited Liability Companies Act.

In 2024, HKFoods reported total training and skills development hours of 11,088. The average number of training hours per person was 3.6 for all employees, 3.4 for male employees and 3.8 for female employees. The percentage of employees who participated in regular performance and career development reviews was 53% overall, comprising 51% of male employees and 55% of female employees. HKFoods provides training through internal and external courses and programmes, including general induction, safety training, occupational wellbeing card training, Code of Conduct and information security training and other industry-relevant training.

In 2024, 0% of HKFoods' own workforce was covered by a health and safety management system based on recognised standards or guidelines (the disclosure notes systems based on legal requirements). There were 0.00 fatalities in the own workforce as a result of work-related injuries and ill health, and 0.00 fatalities among other workers working on the undertaking's sites. The number of recordable work-related accidents for the own workforce was 128, and the rate of recordable work-related accidents was 25.92 accidents per million working hours, based on 4,938,088 working hours used in the rate formula. The accident frequency includes occupational accidents resulting in sickness absence, significant accidents requiring medical treatment, and accidents resulting in restricted work or transfer to other duties. For discontinued operations reported at the time of the transaction, the Swedish operations' lost time injury rate (LTIR) was 19.5 for the three months preceding the transaction (1-3/2024), and the Danish operations' LTIR was 9.04 for the twelve months preceding the transaction.

HKFoods reports remuneration metrics on the basis of active staff as at 31 December 2024. The gender pay gap at the Group level in 2024 was 12%, calculated taking into account gross hourly earnings and country-specific differences in the weighted average for the number of employees. The ratio of total pay for women to total pay for men was calculated as the average weighted by the number of persons. On total compensation, during the reporting period the Company's highest salary was 19 times the median salary; the median for this ratio was calculated excluding persons who started in the middle of the reporting year and excluding the salary of the highest paid person. HKFoods pays wages and benefits in accordance with national legal provisions or generally applicable industry standards, including minimum wages, and employees are informed of employment conditions before starting, with conditions recorded in employment contracts.

In line with its Code of Conduct, HKFoods commits to respecting internationally recognised human and labour rights, including the Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. HKFoods is committed to the UN Global Compact and supports the UN Sustainable Development Goals. Impacts, risks and opportunities related to value chain workers are managed through the supplier approval process. The HKFoods Code of Conduct and Supplier Code of Conduct, approved by the Board, cover all value chain worker groups on working conditions, occupational safety, equal treatment and other employment rights. The Supplier Code of Conduct requires suppliers to provide a safe working environment, prevent accidents, and prohibits forced labour, child labour, all forms of slavery including modern slavery and human trafficking; workers must be free to leave the workplace and resign after reasonable notice. Suppliers must identify and address adverse human rights impacts in their supply chain and confirm that they and their subcontractors comply with the Code. In the reporting year a new supplier management system was introduced, assessing suppliers' practices through procurement category-specific questionnaires that cover suppliers other than the contract farmers of meat raw material.

The views of value chain workers are addressed in cooperation with contract farmers and other suppliers. Workers at HKFoods' production facilities can access initiative systems, and feedback from collaboration meetings, supplier surveys and supplier audits informs updates to procurement criteria. The Company has no general framework agreement with trade unions; commitment is made through the Supplier Code of Conduct. Effectiveness is assessed case-by-case, with improvement sought through supplier surveys. Contract farmers are a significant value chain worker group, contacted directly through cooperation groups and network meetings. During 2024 cooperation groups met 6 to 11 times depending on the animal production line, and there were 6 to 13 informal network meetings. Seven meetings were organised jointly for all production lines in 2024. Primary production cooperation groups and network meetings reached around 95% of poultry farms, 70% of pig farms and 20% of cattle farms. For other value chain worker groups, contact is made through interviews during supplier audits; not all suppliers are audited, and 17 supplier audits were carried out in 2024. Primary production contact is handled by the animal procurement organisations (poultry/broiler and meat/pig and cattle), whose business directors report to the CEO; other procurement contact is the responsibility of the Procurement Director, reporting to the Supply Chain Director.

The Company seeks to prevent and reduce negative impacts on value chain workers on a case-by-case basis in line with general procurement practices. The approach gives contract farmers, suppliers and other value chain worker groups the opportunity to work together to remedy their conduct; if a contract farmer or supplier is unwilling or unable to correct its conduct, the procurement relationship may be terminated. Value chain workers may report wrongdoing anonymously through HKFoods' whistleblowing channel (Fair Way) or directly to a HKFoods contact person responsible for taking appropriate action. The usability of these channels is required under the Supplier Code of Conduct, is surveyed through supplier surveys, and is communicated as part of supplier audits. Issues raised through the whistleblowing channel are dealt with confidentially on a case-by-case basis, with procedures described under G1-1. Based on supplier audit experience, the Company believes value chain workers are currently not particularly aware of the means available to raise concerns confidentially, so HKFoods aims to continuously improve interaction by increasing workers' awareness of and confidence in the reporting channels.

In 2024 HKFoods had no ESRS-compliant Group-wide targets, action plan or systematically monitored measures to manage risks and opportunities affecting value chain workers. With recent focus on restructuring and improving profitability, the Company aims to set such targets and actions in the medium term. Risks and opportunities are currently managed through primary production cooperation groups, face-to-face and network meetings, supplier meetings and requirements written into procurement contracts, including the Code of Conduct. All suppliers must commit to procurement terms, though contractual commitment remains low for the largest categories such as meat raw materials; HKFoods aims to improve contract coverage medium term. No systematic supplier risk assessment on value chain workers has been carried out; awareness is raised through cooperation groups, training, information and audits. Occupational safety is assessed through the electronic supplier survey and audits, and safety induction is mandatory for service suppliers in HKFoods' plants. Contract farmers' skills are strengthened through development groups, producer networks and farm-specific advice. Through the Next Generation programme, HKFoods provides young producers with information and networking; the second programme ran in 2023-2024 with 37 producers, and around 80 young producers have participated in total. Effectiveness is monitored via feedback and a producer satisfaction survey, last conducted in 2023.

HKFoods Group has not yet set targets to manage material impacts, risks and opportunities related to value chain workers. The timeline and content of target setting will be examined during 2025. The effectiveness of actions to address material sustainability impacts, risks and opportunities was not monitored in the reporting year 2024. The overall objective of the activity is to continually update the Group's view of the situation of contract farmers, achieved through regular cooperation group meetings and network meetings and through regular surveys such as the meat production outlook survey and the producer satisfaction survey. During the reporting year the supplier management system surveys covered suppliers of contract manufacturing, raw materials and packaging materials. In 2025 HKFoods plans to expand the supplier surveys to include suppliers of logistics and other major service providers. Where actual material adverse impacts are identified, HKFoods acts case-by-case in line with responsible procurement, first taking steps to remedy the situation with the supplier and, if that is not possible, potentially terminating the procurement relationship.

The Food Safety and Quality Policy, publicly available on the HKFoods Group website, sets out the food safety and quality management principles, regulations and rules that must always be followed, and requires all Group production units to be certified against a food safety standard approved by the Global Food Safety Initiative (GFSI). The Policy applies throughout the Group and across the entire supply chain, committing HKFoods to open communication with staff and stakeholders. It is owned by the Director of Quality and Environment and applied to all products reaching consumers and end-users, with Group management responsible for planning and resourcing. HKFoods' Code of Conduct includes human rights commitments relevant to consumers and end-users, including the right to healthy and safe food, comprehensive product information and the right to provide feedback; the Company uses risk assessments and due diligence to manage adverse impacts, but beyond this had no practical measures in 2024 to enable remediation of human rights impacts. HKFoods complies with local legislation mandating nutritional labelling, and food service contracts with public authorities require compliance with national nutritional recommendations. Allergen and labelling errors are systematically prevented through a product safety management system. Products include those for special diets (e.g. gluten-free, lactose-free) and Heart Symbol products. The Policy covers all consumer and end-user groups.

General engagement processes are described under S4-1. HKFoods regularly addresses consumer and customer feedback and end-user concerns, using the information to improve processes and assess product quality and food safety. During product development the Company conducts consumer testing, on the basis of which recipes can be changed. Direct contact with end-users is made through consumer services, particularly on product quality and taste; views are also obtained from clients with direct consumer contact and from research on national eating habits. HKFoods has a direct communication channel through each brand's website and social media, and consumers can contact Consumer Service by phone to give feedback or make a complaint. Consumer and end-user needs are also addressed based on comprehensive food surveys, with customer interaction findings discussed in sales meetings and, when necessary, in business or top management meetings. Each business director is responsible for ensuring consumer and end-user wishes are taken into account in decision-making. Consumer and customer service operates under local legislation and complies with GDPR, and HKFoods is committed to the UN's guidelines on human rights and business conduct. Products, services and marketing take into account UN Sustainable Development Goals 3 (Good Health and Well-Being), 5 (Gender Equality) and 12 (Sustainable Consumption). In 2024 HKFoods was not aware of any consumer or end-user incidents of non-compliance with the UNGP, the ILO Declaration or the OECD Guidelines.

The packaging of HKFoods products is labelled with the manufacturer's name and contact details; the Company does not specifically assess consumers' or end-users' awareness of the contact channels. Where a product has caused or may cause negative effects, HKFoods' recall process is followed to remove defective products from the market. The severity of the defect is assessed, and the need, scope and communication mechanisms of the recall are determined per the recall guidelines. For a serious defect, information is always provided through public communication channels such as newspaper advertisements, media releases and customer information. A defective product is one that may present a health hazard to consumers, may damage HKFoods' reputation or trademarks, or is required by authorities to be withdrawn. A defect is considered serious if it caused or may cause a health hazard or animal disease hazard (e.g. ASF), including allergenic errors, contamination with salmonella, listeria or other food poisoning bacteria or virus, incorrect cooking, unsafe levels of contaminants or additives, foreign objects, or a labelling error. Other defects not posing a health risk may, case-by-case, lead to product withdrawal. Channels for raising concerns are described under S4-2. Packaging also includes information on the manufacturer, place of manufacture and consumer service, and consumer service information is constantly available on the Company website.

HKFoods has no Group-wide action plan for consumers and end-users, managing product safety and quality on a business unit basis. The Food Safety and Quality Policy requires all production units to be certified to the GFSI-approved food safety standard; effectiveness is assessed through consumer and customer feedback, internal deviations and observations. At the end of 2024, the Kivikylan kotipalvaamo unit in Lappi and Tamminen in Luumaki were not certified, while Kivikylan kotipalvaamo in Eura was audited in 2024 with certification due in early 2025. In 2024 a project under HKFoods Finland developed the deviation and detection process, and a consumer and customer feedback reporting system was developed. The systematic food safety system follows BRC and FSSC22000 standards. Flavoured Salt product development was completed in 2024, enabling sodium reduction by up to 25%, introduced in HK wholemeat cuts and Kariniemen seasoned and marinated fillet products. HKFoods Finland made four nutrition-related commitments at end 2024 to reduce salt and increase plant-based products during 2025, to meet Heart Symbol criteria for Kariniemen products and reduce HK whole meat cut salt by 25% by end 2025, and to develop 10 new Heart Symbol recipes for HoReCa. In 2024 HKFoods made 3 public product recalls. At end 2024 it had more than 200 Heart Symbol products.

The Company has not set Group-wide numerical indicators or targets related to product safety and quality and nutrition. However, under the food safety management system, each production unit sets food safety and quality targets for its operations, approved by the director responsible for production. Targets are set taking into account previous years' performance and consumer and customer feedback. HKFoods' targets for managing consumer and end-user related material impacts, risks and opportunities relate to the following areas: a certified GFSI-compliant food safety system in all HKFoods production units; aiming for zero recalls; no level of pathogens in finished products exceeding the food safety criteria set by legislation; an annual numerical target for the number of consumer complaints relative to the volume of products sold; and consumer service dealing with complaints within the agreed response time. HKFoods systematically collects information from consumers and customers through its feedback process, conducts annual customer and brand surveys and uses the data to set targets, with the number of complaints received also used as a starting point for target setting. Information gathered and the achievement of targets are regularly monitored at different organisational levels. The Company communicates directly to consumers on a case-by-case basis about product changes, including recalls or novelties.

HKFoods Group's business and corporate culture are guided by internal policies based on the Group-wide Code of Conduct, which is publicly available on the company website and sets a general framework for appropriate behaviour. The Code covers management of human rights impacts, prohibition of forced and child labour, non-discrimination, workers' rights, environmental impacts, animal health and welfare, product quality and safety, competition law, anti-corruption and anti-bribery, avoidance of conflicts of interest and fraud prevention, and data protection. It embodies the Group's values: Inspire, Lead, Care and Deliver. HKFoods Plc's Board of Directors approves the Code of Conduct and policies; the CEO approves the Supplier Code of Conduct. A mandatory Code of Conduct online training must be completed by every staff member every two years and covers corruption and bribery. Misconduct can be reported confidentially and anonymously through the external Fair Way whistleblowing channel, investigated by the Fair Way Team (Risk Management, Legal and the Chief Shop Steward), which reports to the Board's Audit Committee. Whistleblowers are protected from retaliation under the Whistleblower Protection Act. Subsidiaries Kivikylan kotipalvaamo Oy and Lihatukku Harri Tamminen Oy do not yet have an anti-corruption policy in line with the UN Convention against Corruption; implementation plans are expected to be finalised in the first half of 2025. Functions most susceptible to corruption are procurement and sales.

HKFoods Group classifies its suppliers of goods and services into primary producers (animal procurement) and suppliers of services and other raw materials. Group companies and suppliers generally sign written supply agreements addressing sustainability risks, and supplier activities are monitored in regular co-operation meetings. In the 2024 review period HKFoods introduced a new supplier management system including supplier surveys assessing animal welfare, product safety, quality, environment, social responsibility, occupational health and safety, data protection, information security and business continuity management. The internal Procurement Policy, approved by the Board and updated for 2024, defines guiding principles for sustainable procurement and is extended to the supply chain through the HKFoods Group Supplier Code of Conduct, approved by the CEO. The Procurement Director is responsible for the Policy's content, updating and compliance. Key principles include a target that all approved suppliers sign the Supplier Code of Conduct, supplier surveys during selection, equal and fair treatment, and zero tolerance for corruption or bribery. A supplier cannot join the approved supplier network unless committed to the Supplier Code of Conduct. Some suppliers were found not to have made the commitment, and irregularities in commitment were identified in 2024; HKFoods continues efforts to obtain missing commitments. New suppliers' audit needs are determined at approval; existing suppliers are audited based on annual reviews. Three new suppliers and 14 existing suppliers were audited in 2024. HKFoods has no separate written policy on late payments to SMEs.

In HKFoods Group, political influence activities and related impacts, risks and opportunities are monitored by the Group's EVP Administration and Legal, and in subsidiaries Kivikylan kotipalvaamo Oy and Lihatukku Harri Tamminen Oy by the subsidiary's Managing Director. HKFoods Group made no political donations in cash or in kind, directly or indirectly, in the review period 2024. HKFoods Plc (Business ID 0111425-3) and HKFoods Finland Ltd (Business ID 1951458-9) are registered in the Transparency Register maintained by the National Audit Office of Finland, having met the requirements of the Finnish Transparency Register Act. During 2024, no persons who held a similar position in the public sector in the previous two years were appointed to the administrative, management or supervisory bodies of Group companies. Both companies conducted lobbying activities in 2024 under the Transparency Register Act on topics including meat inspection fees (seen as too high), property tax reform, the Animal Welfare Act and boar castration, mechanically separated meat interpretations, African swine fever control, animal transport conditions, the EU Deforestation Regulation, the castration law, exports to South Korea, and the Archipelago Sea programme. HKFoods also lobbies through the Finnish Food and Drink Industries' Federation (ETL), Finfood, Animal Health ETT and Lihatiedotusyhdistys ry.

In HKFoods Group, payment practices are explicitly agreed in separate contracts with suppliers and business partners. HKFoods Group companies pay invoices from suppliers of goods and services within an average of 37 days from the date agreed in the contract or prescribed by law. Invoices from primary producers (Groups 1 and 2) are paid on average within 14.7 days. Standard payment terms by supplier group are: Group 1 (broiler producers, perishable fresh vegetables and perishable food raw materials) 9.2% of invoices at 7 to 14 days net, 100% paid under standard terms; Group 2 (pig and cattle producers, perishable fresh vegetables and food raw materials) 30.2% at 15 days, 100%; Group 3 (non-perishable food raw materials) 15.3% at 16 to 30 days, 90%; Group 4 (maintenance spare parts, packaging materials and services) 14.8% at 31 to 45 days, 90%; Group 5 (same category) 16.3% at 46 to 60 days, 90%; Group 6 (same category) 14.2% at 61 to 90 days, 90%. The payment term is always agreed with each supplier individually. The difference in terms for food raw materials versus other suppliers is due to the Food Market Act. At the end of 2024, Group companies had no legal proceedings pending in relation to late payment.