Kemira

The Board of Directors and the President and CEO are responsible for Kemira's management and operations, including sustainability matters, as defined in the Finnish Companies Act and Kemira's Articles of Association. The Board approves the company's values, the Code of Conduct, the sustainability targets and the Sustainability Statement. It has appointed two committees: the Audit Committee, which oversees the financial and sustainability reporting process, internal control and assurance, and the Personnel and Remuneration Committee, which prepares matters such as compensation linked to sustainability-related KPIs. The Management Board is the operative body, with responsibility for individual sustainability targets shared among its members, supported by the Sustainability Steering Team (led by the EVP of Strategy). Under the Articles of Association the Board comprises 5 to 10 members; the AGM on March 20, 2024 elected eight members. In 2024, 100% of Board members were independent and non-executive. The Board was 29% female and 71% male, and the Management Board 25% female and 75% male.

Kemira describes how sustainability matters are addressed by its governance bodies. The Sustainability Reporting Compliance Team leads the CSRD-related reporting and reports to the Management Board and onward to the Audit Committee. Impacts, risks and opportunities management progress is reported to the Sustainability Steering Team and the Management Board and from there to the Audit Committee. The implementation of the ESRS and other sustainability topics was presented in all Board of Directors meetings by management in 2023 and 2024, covering the sustainability strategy and targets, the sustainability program and policy updates, the 2023 sustainability report review, the modern slavery statement, EU Taxonomy and CSRD developments, safety performance and other key figures, and the progress and results of the materiality assessment. The Audit Committee addressed sustainability reporting in all meetings, including the CSRD and ESRS implementation plan with timeline, gap analysis and roles, the Financial Supervisory Authority's inquiry, risks related to new reporting practices, an SBTi validation review, and the 2024 Sustainability Statement draft.

Kemira has integrated key sustainability priorities into its incentive programs to keep the sustainability transformation a high priority and to drive profitable growth. It operates both short-term and long-term incentive plans, with the long-term plans targeted at selected members of senior management. Safety, with a 5% weight, has been a key performance indicator of the short-term incentive plan for several years, and the short-term program for 2024 includes a new target for strategic revenue growth. Sustainability targets are incorporated in the two latest performance periods of the long-term incentive program, 2023 to 2025 and 2024 to 2026. Revenue Growth of Renewable Solutions and the climate target for Scope 1 and 2 have been included in the long-term incentive plan since the beginning of 2023, both with a weight of 10%. The climate target reflects Kemira's commitment to an annual reduction rate in line with the Science Based Targets initiative. The Board of Directors defines and approves the main principles for the incentive schemes.

Kemira provides a statement on due diligence. It states that acting ethically and responsibly is not only the correct thing to do but also benefits the business and stakeholders. Kemira works in accordance with the United Nations Guiding Principles, which require companies to conduct due diligence to protect and respect human rights and to remedy victims of business-related abuses. Kemira's Sustainability Statement is structured according to its due diligence processes. A table maps the steps of due diligence to where they are addressed in the statement: assessing impacts and risks is covered under the material impacts, risks and opportunities in the General disclosure; integrating and acting to address impacts and risks is covered by actions related to topical standards; tracking the effectiveness of efforts by targets related to topical standards; communicating impacts and risks by the material impacts, risks and opportunities under topical standards; and stakeholder engagement in due diligence by policies related to topical standards and the stakeholder engagement in the General disclosure.

Kemira describes its risk management and internal controls over sustainability reporting. The Board of Directors defines the main principles of risk management and approves the Group's Risk Management Policy. The business segments and functions identify, assess and manage risks in their areas, the Group Risk Management function coordinates and supports the process and ensures risks are reported to and reviewed by the Management Board and the Board, and the Internal Audit function monitors and evaluates the effectiveness of the risk management system. Risk management is based on the Finnish Corporate Governance Code, the Code of Conduct and Kemira's values, and aligns with international frameworks such as ISO 31000. Sustainability reporting risks are managed through Kemira's Integrated Management System and the Enterprise Risk Management process, with internal controls covering all Group operations including sustainability reporting. Identified risks relate mainly to the completeness of qualitative and quantitative information and the timing of reporting. Sustainability reporting compliance is assured by external auditors through limited assurance.

Kemira provides sustainable chemical solutions for water-intensive industries and has two business areas: Pulp and Paper, and Industry and Water. In Pulp and Paper it supplies chemicals for bleaching, packaging, tissue and printing and writing, and in Industry and Water it offers coagulants and polymers for municipal and industrial drinking water and waste water treatment. At the end of 2024 Kemira had operations in 38 countries and 58 manufacturing facilities, with three regional business areas: EMEA, APAC and the Americas. A new operating model effective January 1, 2025 introduces three business units, Water Solutions, Packaging and Hygiene Solutions and Fiber Essentials, and its impact on sustainability matters will be assessed in 2025. The value chain runs from upstream feedstocks (renewable, recycled, fossil-based and mineral) through own manufacturing to customers and distributors across the three regions. In 2024, 58% of revenue came from products that improve customer resource efficiency, and Kemira aims to reach EUR 500 million in renewable solutions revenue by the end of 2030.

Kemira regularly reviews stakeholders' expectations and potential concerns, with engagement ranging from information sharing to active dialogue and collaboration. Feedback is integrated into operational development and decision-making and is considered in setting company strategy, and the views of stakeholders were used in the 2024 materiality assessment. A stakeholder engagement table sets out the purpose of engagement, how engagement is organized and the outcomes and impacts on operations, business model and strategy for each group. The identified stakeholder groups are own workforce, shareholders and lenders, customers, suppliers, affected communities, regulatory bodies and trade associations. Examples of engagement include performance and development dialogues and an ethics and compliance hotline for the workforce, financial reporting, roadshows, ESG ratings and the AGM for shareholders and lenders, direct contacts and surveys for customers, active dialogue and due diligence for suppliers, community dialogue for affected communities, and consultations and bilateral meetings for regulatory bodies and trade associations.

Kemira presents the material impacts, risks and opportunities identified through its double materiality assessment and how they interact with its strategy and business model. Sustainability is embedded into all operations, including strategy and Enterprise Risk Management. A total of 212 positive and negative impacts, risks and opportunities were identified and 50 were found to be material. The most significant sustainability topics for the 2024 reporting period were Climate change, Resource use and the circular economy, and Water and marine resources, a result that follows Kemira's strategy and anticipated future scenarios. Two social standard topics, Affected communities and Consumers and end-users, were found not material, which underlines Kemira's position in the value chain and its business model. A results table maps material topics and sub-topics to their position in the value chain (upstream, own operations, downstream), the nature of impacts and financial materiality, and the number of impacts, risks and opportunities identified and material for each standard, covering E1 to E5, S1, S2 and G1.

Kemira describes the process used to identify and assess its material impacts, risks and opportunities through a double materiality assessment based on its strategic priorities and management's view. Its first assessment based on the ESRS was conducted in 2023, covering the entire value chain including own activities and the upstream and downstream value chain, and it was revised in 2024 to reflect business changes, mainly the divestment of the Oil and Gas business, with the scoring reviewed and realigned. The materiality scoring was linked to Kemira's internal Enterprise Risk Management scale for both impact and financial materiality. Six phases were defined: scoping of impacts, risks and opportunities; engagement of stakeholders to identify them; assessment of individual impacts, risks and opportunities in internal workshops; revision of the assessment; prioritization using both impact and financial materiality against a set threshold; and management review and validation with the Board of Directors and Audit Committee. Impact materiality was scored for severity and likelihood, and financial materiality for scale and likelihood. The assessment is dynamic and reviewed at least annually.

Kemira includes an ESRS content index listing the disclosure requirements covered by its sustainability statement, with the page number for each. Under General disclosures it lists the ESRS 2 requirements BP-1, BP-2, GOV-1, GOV-2, GOV-3, GOV-4, GOV-5, SBM-1, SBM-2, SBM-3, IRO-1 and IRO-2. Under environmental information it covers the EU Taxonomy disclosures and the topical standards E1 Climate change (including the transition plan E1-1 and metrics E1-5 to E1-8), E2 Pollution (E2-1 to E2-5), E3 Water and marine resources (E3-1 to E3-4), E4 Biodiversity and ecosystems (E4-1 to E4-4) and E5 Resource use and circular economy (E5-1 to E5-5), each with the topic-level SBM-3 disclosures. Under social information it covers S1 Own workforce (S1-1 to S1-17, with some numbers not applicable) and S2 Workers in the value chain (S2-1 to S2-5), including SBM-2 and SBM-3. Under governance it covers G1 Business conduct (G1-1, G1-3, G1-4 and G1-5). The index also states where topic-level interests and views of stakeholders and material impacts, risks and opportunities disclosures are located.

Kemira is committed to the Science Based Targets initiative (SBTi), and its climate targets were validated by SBTi in 2024. The near-term Scope 1 and 2 target is aligned with the Paris Agreement goal of limiting global warming to 1.5C, and Kemira is not excluded from the EU Paris-aligned Benchmarks (PAB). Kemira joined the Renewable Carbon Initiative to accelerate the shift from fossil to renewable carbon and raw materials, and set a long-term ambition to reach carbon neutrality by 2045 for combined Scope 1 and 2 market-based emissions. Climate risk scenario analysis followed the TCFD framework (phases in 2022 and 2023) across 11 manufacturing sites and 8 business functions, using IPCC RCP 2.6 and RCP 8.5 pathways over short (to 2030), medium (2030-2050) and long-term (2050+) horizons. Kemira states that in 2025 it will complete a climate transition plan to bind together all climate-related initiatives, integrated into business plans.

Kemira's climate policies are anchored in its Sustainability Policy, which includes commitments to climate change mitigation and adaptation and to energy efficiency and renewable energy deployment. The policy is aligned with the Kemira Code of Conduct and other internal policies and contributes to the Kemira Group Risk Management Policy. Kemira operates an Integrated Management System following the ISO 14001 standard with third-party verification, intended to ensure Kemira meets its commitments and complies with applicable requirements. Value chain partners are governed through the Code of Conduct for Business Partners, which sets environmental responsibility requirements; suppliers, agents and distributors are subject to due diligence and EcoVadis assessment (528 suppliers assessed in 2024). Key contents, scope, process, accountability and availability of the policies are described in the G1 Business Conduct section under Corporate Culture and Business Conduct Policies. The policies cover both mitigation and adaptation.

Kemira continued its E3plus energy efficiency program in 2024, implementing 55 projects that delivered 20,675 MWh per year of savings, equal to EUR 1.1 million; since 2010 more than 725 projects have saved a cumulative EUR 16 million. The EnRe5 program (2022 base year) targeting coagulant and polymer sites achieved about 16,000 MWh of savings from 18 projects in 2024, an 8.5% reduction that surpassed the 5% target. Under Finland's Energy Efficiency Agreement (2017-2025), reported savings total 125,000 MWh per year, about EUR 3.8 million annually. Kemira set a target to grow renewable-solutions revenue above EUR 500 million by 2030 and reached EUR 240 million in 2024. Other actions include a supplier engagement program, PPAs, and a 927-kW solar system at the Mojave, California site. Resources are allocated from EHSQ, Sourcing, R&D, Product lines and Manufacturing. Kemira states it has no significant OpEx or CapEx as defined in ESRS to report related to implementation of the actions. EU taxonomy-aligned CapEx and OpEx were 0.0% in 2024.

Kemira's Scope 1, 2 and Scope 3 emission reduction targets were formally validated by SBTi in 2024. The near-term Scope 1 and 2 (market-based) target follows an absolute contraction approach with a 4.27% annual reduction from the 2018 base year, equalling a 51.23% reduction from 894,303 tCO2eq in 2018 to 436,000 tCO2eq by 2030. The Scope 3 target requires a 2.71% annual reduction from the 2021 base year, a total 32.50% reduction from 2,337,475 tCO2eq in 2021 to 1,577,000 tCO2eq by 2033 (covering categories 3.1, 3.4 and 3.9, about 75% of total Scope 3). By 2024 Kemira had reduced Scope 1 and 2 emissions by 34.48% (585.9 kt) and Scope 3 by 19.54% (1,880.7 kt) versus base years. The near-term Scope 1 and 2 target is aligned with 1.5C. Kemira's long-term ambition is carbon neutrality by 2045 for Scope 1 and 2, and it will reevaluate targets by 2029, setting targets every five years after 2030 as needed.

Total energy consumption was 3,956,749 MWh in 2024 (4,082,007 MWh in 2023), reported for a high climate impact sector. Total fossil energy consumption was 1,236,898 MWh (31.3% of the total), including natural gas 375,310 MWh, other fossil sources 237,737 MWh, crude oil and petroleum products 19,714 MWh, and purchased electricity/heat/steam/cooling from fossil sources 604,137 MWh; coal consumption was N/A. Other non-renewable energy was 334,966 MWh (8.5%) and nuclear energy 1,283,988 MWh (32.5%). Total renewable energy consumption was 1,100,898 MWh (27.8%), mainly purchased renewable electricity/heat/steam/cooling of 1,100,753 MWh plus 144 MWh self-generated non-fuel renewable energy; fuel consumption from renewable sources was nil. Energy delivered off-site was 401,845 MWh, leaving 3,554,905 MWh net. Energy intensity was 0.001 (total energy per net revenue of EUR 2,948.1 million). Energy production comprised 19,777 MWh renewable and 425,796 MWh non-renewable.

Gross Scope 1 GHG emissions were 118,364 tCO2eq in 2024 (136,676 in 2023), excluding Oil & Gas business emissions. Gross Scope 2 emissions were 626,533 tCO2eq location-based and 467,561 tCO2eq market-based. Combined Scope 1 and 2 (market-based) emissions were 585,925 tCO2eq against an 894,303 tCO2eq 2018 base year. Gross Scope 3 emissions were 2,528,713 tCO2eq (2,876,625 in 2023), including all relevant categories (3.1, 3.3-3.9); total indirect Scope 3 was 1,880,746 tCO2eq versus a 2021 base of 2,337,475, with purchased goods and services 1,691,323, upstream transport 159,176 and downstream transport 30,247 tCO2eq. Total GHG emissions were 3,273,610 tCO2eq location-based and 3,114,638 tCO2eq market-based. Scope 3 constitutes more than 80% of total emissions. The share of contractual instruments for Scope 2 was 5.6% in 2024 (none in 2023), and 27.6% of Scope 3 emissions were calculated using primary data (10.8% in 2023). By region, market-based total emissions were EMEA 1,607,509, APAC 498,978 and Americas 1,008,151 tCO2eq.

Kemira applies internal carbon pricing. It introduced an internal carbon pricing sensitivity analysis in 2019 for investments exceeding EUR 500,000, updated in June 2022 to align with EU Emission Trading Scheme (ETS) prices, setting the internal carbon price at EUR 100 per tonne of CO2eq. The scope is global across Kemira's entire value chain and, as of January 2024, it applies to all CapEx investments exceeding EUR 100,000. In 2024, internal carbon pricing applied to projects with significant climate impacts totaling EUR 217,000. Kemira states the pricing has increased internal awareness of current and future carbon costs, strengthened internal controls related to risk management, and helped identify opportunities within its operations and supply chain.

Kemira is committed to operating safely and responsibly and to reducing its impacts across its whole value chain, following strategy, the Code of Conduct and other policies and the Integrated Management System. Minimizing harmful releases into air, water and soil, reducing resource consumption and waste generation, and consistent product quality are treated as fundamental prerequisites. The Sustainability Policy is aligned with the Code of Conduct and internal policies including the Product Stewardship Policy, Recruitment Policy and the Sourcing and Procurement Policy. The Sourcing and Procurement Policy defines how sustainability is taken into account in sourcing and supplier management and sets requirements for the upstream value chain. The Product Stewardship Policy ensures products can be safely used and that chemical risks are incorporated into decision making. Key contents, scope, accountability and availability are described in the G1 Business Conduct section.

Kemira's certified Integrated Management System includes global and site-level standards and procedures to comply with permit and regulatory requirements. Minimum requirements include spill prevention, process safety and maintenance standards, with incidents reported in Kemira's incident reporting system. Management systems are audited internally and externally against ISO 9001, ISO 14001 and ISO 45001. Sites hold environmental permits with pollution control technology compliant with Best Available Techniques (BAT), including scrubbers, baghouses and wastewater treatment. Third-party EHS legal compliance audits are conducted annually on a sample of sites. In 2024 Kemira launched a Global Safety Training Program for shop floor supervisors and continued the Transportation Safety enhancement program in EMEA (started 2023, expected until mid 2025). Actions to manage environmental liabilities continued, including soil and landfill remediation at a former site in Vaasa, Finland (started 2022). Kemira reports no significant OpEx or CapEx as defined in ESRS related to these actions.

Kemira has several indicators followed internally for impacts, risks and opportunities related to pollution, but these are not defined as in the ESRS. Kemira continues to evaluate and develop these indicators. As part of the Integrated Management System, internal indicators and associated targets for own operations related to pollution include: number of environmental incidents (ENV); number of loss of primary containment incidents (LOPC); number of reportable process safety incidents (RPSI); and number of environmental operating conditions (EOC). Kemira is also further developing its Life Cycle Assessment (LCA) capabilities and intends to use this data for developing future pollution related indicators and metrics for its direct and upstream value chain operations. No ESRS-aligned quantified pollution reduction targets are set.

Kemira collects data centrally and annually on emissions of air pollutants and effluent from all manufacturing sites. In 2024 there were no significant emissions to soil. Emissions to air, water and land by pollutant (tonnes): ammonia to air 8.7 (2023: 12.5); non-methane volatile organic compounds to air 581.9 (2023: 569.4), the latter driven by cutting oil emissions at a UK site where cutting oil is classified as a volatile organic compound. Emissions from own operations are estimated based on direct measurements, published emission factors, mass balance or engineering calculations, with methodologies varying between sites. Reported emissions represent the consolidated amount from all Kemira sites where the European Pollutant Release and Transfer Register (E-PRTR) Annex II thresholds are exceeded. Data is limited to manufacturing sites with environmental permits; R&D centers, corporate offices and tolling/contract manufacturers (under 1% of sales volume) are excluded.

Volumes of substances of concern (SoC) and substances of very high concern (SVHC) are calculated from material compositions linked to sourcing, production and sales data. Kemira does not centrally collect data on amounts that leave facilities as emissions; collection is planned within the next two years. In 2024 the total amount of substances of concern generated, used or procured was 214,052 tonnes (largest categories: skin sensitisation 125,715; carcinogenicity categories 1 and 2 61,100). Substances of concern leaving facilities as emissions, products or as part of products or services totalled 74,814 tonnes. Total SVHC generated, used or procured was 13,945 tonnes, including carcinogenic (Article 57a) 11,411 and toxic for reproduction (Article 57c) 1,959. SVHC leaving facilities as emissions, products or part of products totalled 3,526 tonnes. Kemira operates a priority substance management process covering its entire value chain, preparing management plans and mitigation such as substitution, phase-out or limiting exposure.

Kemira has Sustainability Policy Commitments including commitments to protect the environment, reduce emissions, improve energy efficiency, reduce water and material use and waste through circular economy principles, and protect biodiversity through sustainable raw material sourcing. The commitment to reduce water use includes material water consumption in areas of water risk and water stress areas. The Sustainability Policy Commitment states Kemira will provide products for wastewater treatment that enable availability of clean, high-quality water to people and nature. With its Nature Stewardship program, Kemira strives to minimize water consumption and the negative impact of water discharge on receiving water bodies across the value chain. Product and service design considerations are covered in the Product Stewardship Policy. Kemira does not currently have policy commitments for its upstream water impacts; this is planned for development in the upcoming years. Key contents, scope, accountability and availability are described in the G1 Business Conduct section.

Through its ISO 14001 environmental management system and Nature Stewardship program, Kemira continuously evaluates opportunities and implements actions to decrease water withdrawal, consumption and discharge via recycling, reuse, process redesign and optimization. Kemira will increase the use of recycled water from third-party suppliers at two sites in high water stress areas. A project to improve water accounting continued through a systematic review of water balances at all manufacturing sites and centralized reporting in 2024, with critical water flow measurements installed by year-end. Information collected will be used in 2025 to update the water stewardship action plan, focusing on high water stress areas. Water consumption is assessed in mergers and acquisitions via Environmental Due Diligence, in CapEx investments exceeding EUR 100,000, and in New Product Development. In 2023 and 2024 Kemira invested in expanding coagulant capacity in Norway, Spain and the UK, and completed the acquisition of Norit's UK reactivation business, entering the activated carbon market for micropollutant removal. Kemira reports no significant OpEx or CapEx as defined in ESRS.

Kemira has set internal water targets to improve water management in own operations and also has water related indicators followed internally, which are not currently defined as in the ESRS. Kemira will continue evaluating these internal indicators and is preparing to set water related targets for downstream operations given its ambition to double its water business. In 2021 Kemira introduced a voluntary target to improve water management to Leadership level (score A/A-) based on the CDP Water Security scoring methodology by end of 2025. Kemira has retained a B score (Management level) since 2021 even as criteria tightened, ranking above European, Global and Chemical industry averages (all score C). Manufacturing sites set their own site-specific water targets based on site-level materiality assessments; not all sites have such targets. Kemira is evaluating global level water target options and is planning to set a new water target for its own operations.

Total water consumption in 2024 was 4,843,124.0 m3 (2023: 5,194,856.0), of which water consumption in areas at water risk (including high-water stress areas) was 599,507.0 m3 (2023: 584,531.0). Water recycled and reused was 982,132.0 m3 (2023: 1,014,784.0). The water intensity ratio was 1,642.8 m3 per million EUR net revenue (2023: 1,535.3). Total water consumption has decreased by 26% and water consumption intensity by 33% since 2019, mostly due to a decrease in the proportion of water-intensive products. Water consumption is defined as water drawn into site boundaries and not discharged back, calculated as total withdrawals minus total discharges. Kemira has 58 manufacturing sites, of which 12 are located in water stress areas. Data is limited to manufacturing sites with environmental permits; R&D centers, offices, tolling/contract manufacturers and closed former sites are excluded. The expected difference between calculated and reported water consumption is no more than plus or minus 5%.

Kemira initiated an internal evaluation of its direct impacts, dependencies, risks and opportunities related to biodiversity and ecosystems at the end of 2021, with assessment of indirect impacts beginning in 2023. As biodiversity and ecosystem related risks are expected to increase, Kemira will, in the next two years, develop a strategic plan for adapting its business model and strategy in response to ongoing assessment findings. An initial high-level resilience assessment of the business model and strategy relative to biodiversity and ecosystems-related physical and transition risks was conducted in 2023 (systemic risks were not evaluated), covering direct and indirect impacts, dependencies, risks and opportunities across own operations and the value chain, with an outlook up to 10 years, communicated to the Board of Directors and Management Board. Kemira considers its current business model resilient, with the most significant future indirect impact likely in the upstream value chain associated with conventional and renewable raw materials. No full transition plan aligned to biodiversity is yet in place.

Through its Sustainability Policy and Nature Stewardship program, Kemira is committed to reducing negative impacts on biodiversity and ecosystems and promoting responsible, efficient use of natural resources across the value chain. The Sustainability Policy incorporates evaluation of near-term and long-term climate change mitigation and adaptation risks and opportunities but does not cover all material dependencies or all physical and transition risks related to biodiversity. The Sourcing and Procurement Policy defines sustainability requirements for the upstream value chain, and the Product Stewardship Policy ensures products are safe. Kemira's policies do not fully cover traceability of products, components and raw materials with significant biodiversity impacts, and the Sustainability Policy does not address social consequences of biodiversity-related impacts. Kemira has not adopted separate biodiversity and ecosystem protection policies for sites in or near biodiversity-sensitive areas, nor policies on sustainable land/agriculture, sustainable oceans/seas, or deforestation. Key contents are described in the G1 Business Conduct section.

Kemira initiated an assessment of actual and potential impacts to biodiversity and ecosystems in the upstream value chain for Tier 1 suppliers in 2023, identifying major indirect nature impacts and dependencies in its Pulp & Paper, Polymers and Coagulants product lines. The work followed the Step 1a&b guidelines of the Science Based Targets Network's (SBTN) Science-Based Targets for nature, using both primary and secondary data. Results identified that the main indirect biodiversity impacts in the upstream value chain are caused through terrestrial ecosystem use, water use, GHG emissions and pollution. Kemira has not used biodiversity offsets and does not plan to do so in the upcoming years. It has not incorporated local and indigenous knowledge or nature-based solutions into its biodiversity actions and does not plan to in the next two years. Kemira has not concluded that it is necessary to implement biodiversity loss mitigation measures. A roadmap was created through the Nature Stewardship program to manage identified material negative impacts in the upstream value chain.

Kemira has indicators followed internally for impacts, risks and opportunities related to biodiversity and ecosystems, but these targets are not defined as in the ESRS. Kemira will continue evaluating these indicators in the following years. On impact metrics, Kemira has not yet established metrics related to material impacts, risks and opportunities in the upstream and downstream value chain, and plans to establish such metrics in the upcoming years based on an impacts, dependencies, risks and opportunities assessment. The Nature Stewardship program's ambition is to establish, at a minimum, internal quantitative indicators to track progress; the base period will be determined once quantitative indicators are established. Kemira uses IBAT and the WWF Risk Filter Suite to monitor priority sites near protected and key biodiversity areas, assessed annually. In 2024 Kemira had 10 sites located in and/or near protected areas and key biodiversity areas; its 58 manufacturing sites hold environmental permits, are on industrial land, and per environmental impact assessments do not negatively affect biodiversity-sensitive areas.

Kemira has a Sustainability Policy and a Sourcing and Procurement Policy that set the principles for resource use and the circular economy. In the Sustainability Policy, Kemira commits to reducing emissions and waste, improving resource efficiency, enabling a circular economy, adopting circular business practices and having a positive impact across its value chain. The policy covers Kemira's global value chain activities in full. The Sourcing and Procurement Policy focuses particularly on inflow-related impacts, risks and opportunities and covers global sourcing and purchasing of direct materials, corporate services, manufacturing sourcing, energy and logistics, setting supplier selection principles based on sustainability performance. Kemira does not currently have a policy on transitioning away from virgin resources or the use of secondary resources, but its circular economy approach is embedded in the corporate sustainability program and built on five circular economy principles. Kemira is planning to introduce policies for sourcing renewable and secondary materials in the coming years.

Kemira's actions center on transitioning to renewable and recycled raw materials. In 2024 it dedicated 46% of R&D CapEx to renewable materials and 6% to digital solutions, and it runs a Growth Accelerator unit (established 2023) to speed commercialization of renewable products. It uses biomass-balanced and mass-balanced products and pursues new chemistries through partnerships with IFF (alfa glucan) and Danimer Scientific (PHA). Coagulants draw up to 70-80% of raw materials from recycled sources. Kemira uses the EcoVadis platform to assess supplier sustainability, including waste management, and tracks voluntary upstream indicators (supplier spend coverage, non-compliant suppliers, quality and CSR audits). Waste reduction actions use the ISO 14001-based Integrated Management System and Nature Stewardship program, and include improved ore recovery, sourcing higher-quality raw materials and cooperating with waste handlers on recovery of filtrate wastes. Kemira reports no significant OpEx or CapEx as defined in ESRS related to these actions.

Kemira has three resource-related targets. Renewable solutions revenue: a target of EUR 500 million by end of 2030, from a 2020 baseline of EUR 184 million; it reached EUR 240 million in 2024 (EUR 226 million in 2023). This is a voluntary target and an outflow (product) measure; a renewable solution means more than 50% of organic carbon is from renewable sources. Products improving customer resource efficiency: a target of more than 50% of revenue with no target year, from a 2017 baseline of 50%; it reached 58% in 2024 (59% in 2023), an outflow (products) measure. Disposed production waste intensity reduction: a target of -15% by 2030 (from a 2019 baseline of 4.4 kg per tonne of production to 3.7), an outflow (waste) measure covering hazardous and non-hazardous waste but excluding recovered waste; intensity was 4.2 in 2024 (4.1 in 2023). Targets were set and approved by Kemira's highest management, which monitors progress.

Kemira identified resource inflows as a material sub-topic, focusing on raw materials that cover over 52% of total spend; plants and equipment, water and packaging were assessed as non-material. Raw materials are organic and inorganic and based on non-renewable (fossil, mineral), renewable or recycled sources, including by-products, side-streams and waste of other industries. In 2024 the overall total weight of products, raw materials and biological materials used was 2.6 million tons (2.5 in 2023). Renewable sources (biological materials) accounted for 2.6% of purchased raw materials (2.8% in 2023), equal to 65,380 tons (70,456 in 2023). Recycled sources (secondary materials) accounted for 1.3 million tons (1.1 in 2023), or 49% of raw materials (44% in 2023). Kemira reports a separate figure that 49.2% of purchased raw materials came from recycled sources. Renewable raw materials use the ISCC PLUS certification system to ensure the cascading principle and traceability.

Kemira identified resource outflows, including waste, as a material sub-topic; packaging was non-material. Products fall into two categories: solutions that improve the customer process (e.g. pulping and water treatment chemistries, biogas yield improvement, digital services) and solutions that become part of the customer end-product (e.g. strength and coating chemistries). In 2024, 58% of Kemira's revenue related to products that improve customer resource efficiency (target more than 50%). Given the industrial-chemicals nature of products, durability or repairability is not seen as applicable, though Kemira products strongly support customers' product durability and use of recycled fibers. More than 90% of products are delivered as bulk transports with no packaging; the rest use plastic-and-metal-frame IBCs whose recyclability depends on the chemical. Kemira does not systematically collect packaging recycling-rate data given the bulk majority. Renewable solutions revenue reached EUR 240 million in 2024. Waste figures are summarized under E5-5-Waste.

Kemira generated 72,483 tons of waste from manufacturing processes in 2024, collected across seven composition categories (chemical waste, sludge, metallic waste, mineral waste from construction and demolition, other mineral waste, soils, wastewater and other). Manufacturing-site total waste was 72,482.6 tons in 2024 (90,567.7 in 2023). Including liability and demolition sites (41,144.5 tons in 2024; 114,919.3 in 2023), total waste generated was 113,627.1 tons in 2024 (205,487.0 in 2023). At manufacturing sites, hazardous waste was 17,196.0 tons and non-hazardous waste 55,286.7 tons in 2024. Group totals: hazardous 26,385.3 tons (37,963.9 in 2023) and non-hazardous 87,241.8 tons (167,523.2). Directed to disposal: hazardous 16,432.6 tons, non-hazardous 25,858.5 tons. Diverted from disposal: hazardous 9,952.6 tons, non-hazardous 61,383.3 tons. Non-recycled waste totaled 84,363.8 tons (share 74.2%). Since 2019, total manufacturing waste fell 52% (hazardous 70%, non-hazardous 42%). The internally followed recovery rate in 2024 was 71%, and 62% of non-recycled waste is incinerated with energy recovery.

Kemira's policies covering its own workforce are anchored in the Code of Conduct, which sets the human rights standard and commits the company to the Universal Declaration of Human Rights, core ILO conventions and the UN Global Compact, to safe and healthy working conditions at all locations, and to respecting diversity, talent and abilities. Safety and wellbeing is the first core principle. The Sustainability Policy commits Kemira to operating safely and responsibly under an Integrated Management System. The Recruitment Policy applies to all recruitments and commits Kemira to recruiting fairly and respecting diversity, equal opportunity and treatment. The Group Privacy Policy defines detailed data privacy requirements, complemented by an Employee Privacy Notice. A Remuneration Policy frames governance-body pay. Kemira also publishes a Modern Slavery statement approved by the Board and a Diversity and Inclusion statement available to all employees and contingent workforce. Policy contents, scope and accountability are described in the G1 Business Conduct section.

Kemira engages its own workforce through continuous listening and confidential online pulse surveys run with an external provider since 2019, with participation typically 70 to 80%. Engagement pulse surveys are ordinarily conducted twice a year to follow the Engagement Index and Inclusion Index, and further surveys cover safety, Ethics and Compliance (Integrity Index) and IT. Regular meetings are held with leaders of Employee Resource Groups such as KemPride and the Women's Network to collect feedback. The global Performance and Development Discussion (PDD) process facilitates ongoing manager and employee conversations. Collaboration with employee representatives and Works councils is ensured through regular local meeting procedures, and the Kemira European Forum, with representatives from the biggest EU countries, meets annually as a further dialogue channel. Non-employees (contingent workforce) each have a nominated Kemira supervisor and are included in local communication, collaboration activities and trainings.

Kemira provides channels for employees and non-employees to raise concerns and is prepared for remediation. The Ethics and Compliance Hotline, hosted by an external service provider, is available 24/7 to both employees and contingent workforce, accessible via phone or web form in the reporter's own language, promoted on the intranet and posters at all locations. Reporters may remain anonymous and all reports are treated confidentially. The Ethics and Compliance Committee reviews, investigates and classifies cases and ensures consistency in remedial actions; matters may also be handled by Internal Audit, with outcomes reported to the Audit Committee. If misconduct occurred, Kemira takes corrective, disciplinary or legal measures. Employees can also report unsafe conditions via an internal reporting system and raise concerns through formal and informal channels. Kemira measures the Integrity Index on employees' perceptions of being able to report unethical behavior without fear of retaliation.

Kemira takes actions to prevent, mitigate and remediate negative impacts and to advance positive ones. For health and safety it maintains a Health and Safety Management System including systematic occupational and chemical risk assessments, Process Safety Management, Management of Change, safety observation reporting, behavior-based safety and safety training. Effectiveness is tracked by incident frequency, completed corrective actions and leading safety indicators. On DEI, a program has run since 2023: during 2023 to 2024, 87% of white-collar employees completed DEI eLearning and 92% of people managers attended DEI training; DEI workshops were held at 21 manufacturing sites and the Inclusive Leaders Program reached 132 employees in 2024. A recruitment handbook, bias-aware trainings, open job posting and piloted Diverse Recruitment Panels support fair recruitment, while structures, market and salary data drive equitable pay. Privacy actions include awareness building, Employee Privacy Notices, risk and gap assessments and a confidential reporting channel.

Kemira's social sustainability targets cover safety and people. The safety target, Total Recordable Injury Frequency (TRIF), was originally set in 2019 from a baseline of 2.1, aiming for 1.5 by end of 2025 and 1.1 by end of 2030, and is reported monthly by the EHSQ function and reviewed annually. For 2024 the target was 1.9, but due to several minor hand and finger injuries actual TRIF was 3.2, leading Kemira to re-evaluate and adjust the target to 2.2 by end of 2025 and 1.5 by end of 2030. The TRIF target applies to all of Kemira's own workforce. In the people focus area, Kemira aims to reach the top 10% cross-industry norm for Diversity, Equity and Inclusion by end of 2025, measured via the Inclusion Index (Authenticity, Belonging, Growth, Inclusive Leaders). In May 2024 the Inclusion Index score was 77, three points below the latest top 10% norm of 80. The Inclusion Index target, applying to all employees, was unchanged during the reporting period.

At the end of 2024 Kemira employed 4,698 people (headcount), down from 4,915 in 2023, a decrease of 217 mainly due to the divestment of the Oil and Gas business. By gender, there were 1,278 female and 3,420 male employees. By region, EMEA had 2,517, APAC 939 and Americas 1,242. By contract type, 4,622 employees were permanent and 76 temporary; 4,618 were full-time and 80 part-time. Kemira had no employees on non-guaranteed hours in 2024. Temporary contracts are used mainly in EMEA (72 of the 76). By country, Finland had 779, China 692 and the United States 780 employees, with 2,447 in other countries. Total employee turnover was 13.9% in 2024 (646 leavers), up from 9.6% (465) in 2023, influenced by the Oil and Gas divestment. Headcount figures are at 31 December 2024 and include non-active employees such as those on long leave.

Kemira's own workforce includes non-employees (contingent workforce), defined as workers employed by a third-party partner or self-employed who perform their work on behalf of Kemira. The contingent workforce typically provides temporary resourcing with specific skills and competences, substitutes others, or balances seasonal workload fluctuations. In 2024 there were 424 contingent workers (headcount at the end of the reporting period), compared with 428 in 2023. All non-employees have a nominated Kemira supervisor they can contact on any topic, are included in local communication and collaboration activities and trainings, and can use the Ethics and Compliance hotline. Working hours and incidents affecting the contingent workforce are included in Kemira's overall incident statistics rather than reported separately.

Kemira respects freedom of association and collective bargaining as stated in its Code of Conduct and through its commitment to the UN Global Compact, and provides regular Code of Conduct training to raise employees' awareness of these rights. In 2024, Kemira did not identify any violations of freedom of association or collective bargaining agreements in its own operations. In 2024, 2,225 employees, representing 47% of Kemira employees globally, were covered by collective bargaining agreements. The working conditions and terms of employment of employees not covered by collective agreements are defined based on company policy, local labor laws and applicable legislation. Coverage of collective agreements and employee representatives is based on the number of employees on 30 September 2024. Kemira also reports social dialogue through workplace representation, with a coverage table covering countries with more than 50 employees representing at least 10% of the total, including the EEA and Finland.

Kemira monitors the distribution of gender and age groups to promote diversity across all levels. In management (Director, Vice President and Senior Vice President positions, excluding the Management Board), there were 130 people in 2024 (136 in 2023), comprising 38 women and 92 men. Women represented 29% of management in 2024, down from 31% in 2023, while men were 71%. Across the total workforce by age group in 2024, 444 employees (9%) were under 30, 2,758 (59%) were aged 30 to 50, and 1,496 (32%) were over 50, out of 4,698 employees. The age distribution was broadly stable versus 2023, when the under-30 group was 10%. Overall workforce gender split was 1,278 female and 3,420 male.

All employees at Kemira receive a salary above the adequate wage. The adequate wage level has been analyzed and confirmed by comparing employee salaries in the lowest pay categories to available data on adequate wages. The adequate wage benchmarks follow wage levels as established in collective bargaining agreements, national or sub-national legislation, or living wage references.

Kemira is committed to the training and skills development of all employees, providing access to competence development programs and learning through on-the-job learning, buddy, coaching and mentoring programs, and classroom and digital learning. In 2024 it continued moving all training and development hours into a global learning management system, though some activities remain recorded locally. Programs offered in 2024 included Code of Conduct, Human Rights and Business, DEI training, Kemira principles trainings completed by about 3,400 employees, the Learn and Grow month with about 420 attendees, and a Global Safety Training Program for shop floor supervisors. For performance and career development reviews (permanent employees excluding those on leave, as of 30 September 2024), 4,498 employees received a review at 98% coverage, up from 93% in 2023. By gender, coverage was 99% for women and 98% for men; by category, 98% for both white-collar (2,735) and operational (1,763) employees.

All Kemira locations and operations maintain an Integrated Management System meeting ISO 45001; the share of ISO 45001 certified locations rose from 94% in 2023 to 97% in 2024, covering 68 locations. Both employees and non-employees are 100% covered by the health and safety management system. Kemira reports Total Recordable Injuries (TRI) and Lost Time Incidents (LTI) with frequencies per million working hours. Total TRIs were 43 in 2024 (37 in 2023) with a TRIF of 3.2 (2.5); employees accounted for 29 injuries at a TRIF of 2.7, and contractors for 14 at 5.3. Total LTIs were 16 (21) with an LTIF of 1.2 (1.4); employee LTIF was 0.6 (7 incidents) and contractor LTIF 3.4 (9 incidents). No permanent injuries were reported in 2024, and there have been no fatalities involving Kemira employees, contingent workforce or contractors since 2005. Contingent workforce hours and incidents are included in the overall statistics.

Kemira reported an unadjusted gender pay gap of 5.8% in 2024, covering all employees in all operating countries. The gender pay gap was calculated using gross annual average salaries of female and male employees converted to euros, expressed as a percentage of the average pay of male employees, and excludes additional compensation such as incentives, overtime, shift allowances and benefits. Kemira reported closing an unexplained pay gap already in September 2023, and regular pay equity monitoring reviews justified pay differences (location, position level, expertise, performance, local requirements) alongside gender, nationality, ethnicity and age to detect and address unjustified gaps. The annual total remuneration ratio, comparing the highest paid individual (the President and CEO) to the average remuneration of all other employees, was 27 in 2024. CEO remuneration includes base salary, benefits and short and long-term incentives; the given average figure is stated to represent the median as required by the directive.

During 2024, a total of 59 complaints were reported, of which 33 related to discrimination or harassment. By the end of 2024, 25 of those had been investigated and closed, and 14 were confirmed as discrimination or harassment cases. Kemira has not categorized the discrimination cases by gender, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation. During 2024, Kemira received no allegations of severe human rights incidents, and therefore paid no compensation for the remediation of any human rights incidents or complaints in 2024. Grievance and remediation data is collected by several functions: Ethics and Compliance and Internal Audit collect reported cases, while HR collects numerical case data on human rights violations globally from local HR contacts to ensure severe grievance cases have been reported and handled through a comprehensive process.

Kemira maintains several policy statements setting high level human rights objectives for its business partners, all covering the whole value chain and all value chain workers. The Code of Conduct and the Code of Conduct for Business Partners lay out expectations for suppliers and customers on respecting human rights and the safe use of chemicals. The Code of Conduct for Business Partners commits partners to respect fundamental human rights, never use child or forced labor, and pay compensation compliant with wage laws, in line with the UN Universal Declaration of Human Rights and core ILO conventions. All suppliers must follow it, and it is communicated through the ordering process as part of Kemira's terms and conditions. The Product Stewardship Policy addresses the safe handling and use of chemicals across the value chain. A publicly available Modern Slavery statement, approved by the Board, summarizes the codes and policies and addresses human trafficking and child and forced labor prevention. Detailed policy content is described in the G1 Business Conduct section.

Kemira regularly reviews stakeholders' expectations and potential concerns, with engagement ranging from information sharing to active dialogue and collaboration. Feedback is integrated into operational development and forms part of risk management, including for upstream and downstream value chain workers. Kemira maintains active dialogue with upstream suppliers, carrying out supplier audits and performance evaluations regularly, reviewing results with suppliers and creating improvement plans. It conducts an annual Voice of Customer relationship survey to understand customer needs and satisfaction, including on safety. For external contractors working at Kemira locations on maintenance, repair, turnaround and specialty work, Kemira carries out regular contractor performance evaluations reviewed together with the contractors, plus local practices such as safety events on health and safety topics. Despite this dialogue with suppliers, customers and external contractors, Kemira states it has not yet adopted a general process to engage with all workers in the value chain or their legitimate representatives to hear their perspectives and needs in relation to Kemira's material impacts on them.

Kemira's Ethics and Compliance Program enhances compliance management continuously, with the Ethics and Compliance function reporting to the Audit Committee. The Ethics and Compliance Committee oversees compliance allegations to ensure fair investigation, remediation and consistent disciplinary action. Kemira emphasizes raising issues to the Ethics and Compliance hotline, with more detail in the S1 Own workforce section, and has a Misconduct Reporting Policy protecting whistleblowers, disclosed in G1 Business Conduct. A customer and supplier complaint channel, handled by a formal process, can be used by Kemira personnel to raise value chain concerns and is indirectly available to upstream and downstream workers, though currently used mainly for quality complaints. An internal system collects health, safety and quality reports, near misses and hazardous conditions, indirectly available to value chain workers. In 2024, Kemira received no allegations of severe human rights violations against value chain workers through these channels. Kemira does not actively assess whether value chain workers are aware of or trust its channels, but is conducting a comprehensive study of its grievance and remediation management to identify deficiencies.

Kemira took actions during 2024 covering the whole value chain. Upstream, supplier management and supplier risk and compliance management anchor its sustainable sourcing roadmap, with suppliers segmented into strategic, critical, volume and base categories. The Supplier Performance Evaluations program provides regular feedback, and the Vendor Value Program builds supplier management capabilities. Kemira uses EcoVadis to assess key suppliers against 21 criteria grouped into Environment, Labor and Human Rights, Ethics and Sustainable Procurement, measured across Policies, Actions and Results; suppliers below performance criteria must take corrective action. Kemira audits relevant direct material suppliers for quality and CSR, with CSR audits conducted by a certified third party, monitored monthly and reviewed with suppliers. Downstream, products are labeled per legal requirements with Safety Data Sheets provided, and substances of concern and very high concern are monitored. External contractors follow a contractor management standard, mandatory safety induction and permit-to-work process. Planned 2025 actions include finalizing the grievance study, continuing EcoVadis and CSR audits, and increasing contractor performance evaluations and engagement.

Kemira reports that it has indicators followed internally for managing impacts, risks and opportunities related to workers in the value chain, but states these are not defined as ESRS targets. Kemira will continue evaluating the indicators in the following years. Upstream related indicators are disclosed in more detail under E5 Resource use and circular economy, for example the number of supplier quality and CSR audits. Kemira has identified potential health and safety impacts, especially risks related to chemical safety, as the most significant potential negative impact for value chain workers, and maintains internal indicators for Substances of Very High Concern and Substances of Concern, with priority substance work since 2016. For external contractors working at Kemira's own sites, occupational safety is measured as Total Recordable Injuries Frequency, covering both employees and contractors. Kemira's target is to improve TRIF to 2.2 by the end of 2025 and to 1.5 by the end of 2030. The external contractor TRIF changed from 4.8 to 5.3 in 2024, with 14 (16) external contractor injuries. The target setting process is described in the S1 Own workforce section.

Kemira's corporate culture is founded on its corporate values and Code of Conduct, approved by the Board of Directors. The Code contains 19 principles reflecting commitments to key stakeholders (work community, customers, suppliers, markets, society and investors) and applies to every employee, manager and the Board. It is public and available in multiple languages. Suppliers must follow the Code of Conduct for Business Partners, communicated during onboarding. Business conduct policy content is part of induction training for all employees, with repeat training typically every two years, delivered via a global electronic platform. Policies are reviewed and revised every two years, each with a named owner. Kemira has signed the UN Global Compact and is a Responsible Care signatory. A Misconduct Reporting Policy and externally hosted Ethics and Compliance Hotline allow confidential, anonymous reporting without retaliation. Engagement is tracked through pulse surveys and an internal Engagement Index.

Kemira's policy is to reject any form of corruption, including bribery, facilitation payments, embezzlement, fraud, conflict of interest and money laundering. The policy is documented in the Code of Conduct and the Gifts, Entertainment and Anti-Bribery Policy, consistent with the UN Convention Against Corruption. Anti-corruption principles are communicated to all employees through recurring mandatory training, with the Board of Directors aware of them, and to all suppliers and vendors who must commit as a condition of doing business. Kemira has assessed which operations are most at risk, noting operations in nearly 40 countries and sales to public utilities that pose higher public corruption risk. It applies a risk-based third-party due diligence process for distributors and sales agents, globally implemented key controls covering funds, accounting and contracting, and a three-lines-of-defence model verified by Internal Audit. Training coverage in 2024 was 92% (EMEA), 97% (APAC) and 92% (Americas).

In 2024, Kemira did not have any convictions or fines for violation of anti-corruption and anti-bribery laws. During the year, Kemira recorded eight allegations related to violation of internal anti-corruption and anti-bribery policies. Diligent internal investigation confirmed seven incidents where own employees had breached internal procedures relating to anti-corruption or anti-bribery. In total, seven own employees were either dismissed or otherwise disciplined for confirmed corruption or bribery-related incidents. Any allegations or detected incidents of corruption are addressed through an internal investigation overseen by the Compliance Committee, with investigators separate from the management involved. Results are shared with relevant management and an overview of all investigations is reported to the Audit Committee of the Board of Directors.

According to Kemira's Code of Conduct, the company observes neutrality regarding political parties and candidates for public office. Kemira does not take part in political activities or make corporate donations to political parties or candidates, and its name and assets are not used to promote their interests. This is further elaborated in the Sponsorship and Donation Policy and the Gifts, Entertainment and Anti-Bribery Policy, which prohibit financial support to politicians, parties or political organizations. No financial or in-kind political contributions by Kemira came to its attention during 2024. Kemira maintains dialogue with the European Commission, MEPs and the Council of the EU, mainly through trade associations Cefic and Kemianteollisuus ry. It is registered in the EU Transparency Register (number 934980845504-83). Public affairs are managed by the Corporate Communications Department and supervised by the Management Board. Three named Management Board and Board members previously held comparable public administration positions within the two preceding years.