Kesko

Board of Directors and Committees

Reference: page 90 (Governance).

Kesko's Board of Directors is responsible for corporate governance including sustainability topics. The Board has confirmed a written charter; the Board and Audit Committee charters include tasks on monitoring and evaluating sustainability reporting and its assurance.

At the AGM held 24 March 2025, seven members were elected. Of Board members, 57% are men and 43% are women (average female-to-male ratio 0.75); members are aged 44-64. Approximately 57% are considered independent of the Company; 86% independent of significant shareholders. All members are non-executive; no personnel representatives.

The Board approves all Group-level policies, including the sustainability policy, people policy, risk management policy, governance policy, data protection policy and tax policy.

Sustainability governance model

• Audit Committee: monitors sustainability reporting system and assurance; reviews the Authorised Sustainability Auditor's report.
• Remuneration Committee: considers sustainability-related matters in management remuneration.
• President and CEO / Group Management Board: overall responsibility for implementing sustainability strategy; 62.5% men / 37.5% women at end of 2025 (8 members).
• Group sustainability management team: chaired by the EVP, Legal and Sustainability; coordinates Group-level initiatives across divisions.

Information flow to the Board

Reference: page 92 (Governance).

The Board of Directors decides on Group strategy including sustainability topics and targets; progress is reported regularly, including via the President and CEO's review at every regular Board meeting. The EVP, Legal and Sustainability presents specific themes (e.g. the 2025 climate target update) for Board approval.

During 2025 the Board: approved sustainability-related remuneration criteria; approved the update of scope 1 and 2 climate targets; approved short- and long-term scope 1/2/3 reduction targets including the net-zero target to 2050; approved short- and long-term land-use related GHG targets; and approved Kesko's commitment to zero deforestation in the most critical deforestation-linked commodity groups.

The Group Management Board addressed climate targets, biodiversity, sustainability regulation, reporting development, occupational safety/wellbeing, and compliance/ethical culture. In 2025, the Board's Audit Committee addressed sustainability reporting in four of its five regular meetings, and reviewed the material IROs list underlying the update of the double materiality assessment.

Sustainability-related targets in incentive schemes

Reference: page 93 (Governance).

Kesko has four share-based commitment and incentive plans: PSP President and CEO, the transitional Bridge Plan, PSP, and Key Personnel Share Plan (KPSP). One of the performance criteria in the PSP President and CEO, Bridge Plan and PSP is Kesko's sustainability target with a weight of 10%. The most significant sustainability targets used are scope 1 and 2 emission-reduction targets and targets linked to international sustainability indices and assessments. Terms are approved by the Board of Directors.

In the KPSP, sustainability metrics are linked to the individual's job description and approved by their manager.

In 2025, in addition to share-based plans, the performance bonus criteria for division/common-function management teams and their direct reports included a sustainability target aligned with the sustainability strategy, defined individually by role; targets are also set for other key personnel and approved by each person's manager.

Statement of due diligence

Reference: page 93 (Governance).

The Group's statement on sustainability due diligence processes is described by reference to the following sections of the sustainability statement:

• S2 Workers in the value chain - Policies and processes related to value chain workers
• S4 Consumers and end-users - Policies and processes related to product safety
• S4 Consumers and end-users - Policies and processes related to data protection
• G1 Business conduct - Policies related to corporate culture and business conduct

This follows the ESRS 2 core due-diligence elements (policies, embedding in governance, engaging stakeholders, identifying/assessing impacts, taking action, tracking effectiveness) via cross-reference to the topical sections rather than a single consolidated due-diligence narrative.

Risk management and internal controls over sustainability reporting

Reference: page 93 (Governance).

Group Management Board members are responsible for effective internal control and risk management in their areas. An independent risk management function provides the framework and coordinates implementation. Internal control aims to give the Board and management reasonable assurance that sustainability-statement information is prepared appropriately and presented fairly.

Risks identified specifically for sustainability reporting relate to reporting accuracy, reliability of data processing, completeness of data, and the tight reporting timetable. Key measures: developing data collection/consolidation processes, strengthening personnel competence, and clarifying ownership of sustainability information.

Internal audit incorporates sustainability topics into its risk-based audit planning; the 2026 internal audit plan includes an audit of Science Based Targets initiative-aligned targets and related reporting, supporting reliability assessment.

Strategy, business model and value chain

Reference: page 94 (Strategy).

Kesko is a Finnish listed trading sector company operating in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania and Poland, with approximately 1,700 stores. Three divisions/reportable segments: grocery trade; building and technical trade (building/home improvement plus technical trade); car trade (new/used cars, services, leasing, plus sports trade). Net sales 2025: EUR 12,475 million. Wholesale to K-retailers: 43% of net sales; B2B trade: 41%; B2C trade: 16%. Total personnel: 18,991.

Business models include the chain business model (Kesko as wholesaler, independent K-retailer entrepreneurs resell), own retail, and B2B trade.

Sustainability strategy - four focus areas

1. Climate and nature - GHG reduction across the value chain, resource efficiency/circular economy, recycling and food waste reduction (E1, E5).
2. Value chain - cooperation with goods/service providers, K Code of Conduct implementation (S2, S4, G1).
3. Our people - own workforce focus areas (S1).
4. Good governance - corporate culture, K Code of Conduct commitment (G1).

Interests and views of stakeholders

Reference: page 96 (Strategy).

Stakeholder views are communicated to the Board, its Committees and management as needed, including as part of the double materiality assessment process.

Key stakeholder groups and topics (table, p.96)

Engagement channels include customer surveys, the K-Kylä customer community, personnel surveys (K Voices), retailer events, investor meetings, and NGO dialogue.

Material impacts, risks and opportunities

Reference: page 97 (Strategy: Material impacts, risks and opportunities).

As an outcome of the updated 2025 double materiality assessment, Kesko identified material impacts related to seven ESRS standards: E1 Climate change (mitigation, energy), E4 Biodiversity and ecosystems (land-use/freshwater/sea-use change), E5 Resource use and circular economy (packaging, waste, food waste), S1 Own workforce (working conditions, equal treatment), S2 Workers in the value chain (working conditions, child/forced labour), S4 Consumers and end-users (health and safety, privacy), and G1 Business conduct (corporate culture, whistleblowers, supplier relationships, corruption/bribery).

Non-material ESRS standards: E2 Pollution, E3 Water and marine resources, S3 Affected communities.

Notable IRO table findings (28 rows total)

Mostly actual/potential negative impacts: E1 (3 rows, all negative - GHG emissions, own ops and value chain), E4 (1 row, negative - land-use change), E5 (4 rows, all negative - packaging, waste, food waste). S1 carries mostly positive impacts (wages, dialogue, equal treatment, training) plus one negative (health and safety). S2, S4 and G1 combine negative impacts with financial risks (product safety, data protection, supplier conduct, regulation); G1 also carries positive impacts. Per IRO-1, no material opportunities were identified in 2025.

Identification and assessment of material IROs

Reference: page 102 (Impact, risk and opportunity management).

Kesko conducted a full-scale double materiality assessment in 2024 (per ESRS 1); for 2025, Kesko reviewed and confirmed the 2024-identified material impacts, risks and opportunities rather than repeating a full-scale process, since no significant changes in business operations or environment were assessed to have occurred.

Impact assessment (2024 process)

Topic-specific workshops with sustainability, sourcing, finance, risk, legal and HR staff across all three divisions; impacts scored on severity (scale, scope, remediability for negative impacts) and likelihood.

Risk and opportunity assessment

Via Kesko's COSO-based risk management process, by division then aggregated at Group level; evaluated on financial impact and likelihood. "No material opportunities were identified in the assessment."

2025 update specifics

• E1 climate risk: division reviews found no material climate risks at Group level; the risk material in the 2024 DMA was reassessed as not financially material for 2025.
• E4 Biodiversity: new material impact (land/freshwater/sea-use change) identified via LEAP/SBTN High Impact Commodity method, WWF Risk Filter and ENCORE.
• Stakeholder interviews (investors, suppliers, B2B customers) corroborated the assessment; no directly-affected-community consultations were held.

Disclosure requirements covered

Reference: page 106 (cross-reference index, pp.105-107).

Kesko's sustainability statement covers ESRS 2 (BP-1, BP-2, GOV-1 to GOV-5, SBM-1 to SBM-3, IRO-1, IRO-2); E1 (E1-1 to E1-8, excluding E1-9 anticipated financial effects); E5 (E5-1, E5-2, E5-3, E5-5, excluding E5-4 resource inflows and E5-6 anticipated financial effects); S1 (S1-1 to S1-6, S1-8, S1-9, S1-10, S1-13, S1-14, S1-16, S1-17 - excluding S1-7, S1-11, S1-12, S1-15); S2 (S2-1 to S2-4, excluding S2-5 targets); S4 (S4-1 to S4-5, all covered); G1 (G1-1 to G1-4, excluding G1-5 political engagement and G1-6 payment practices).

E4 Biodiversity and ecosystems is addressed narratively under the ESRS 2 paragraph 17 transitional provision for newly-material topics rather than through numbered E4-1 to E4-6 disclosure requirements.

Kesko applies transitional provisions for ESRS 2 SBM-1 (paragraphs 40b, 40c) and SBM-3 (paragraph 48e), in addition to the E4 phase-in. Per Basis for preparation, Kesko does not include information on the anticipated financial effects of material impacts, risks and opportunities, consistent with these transitional provisions.

Transition plan for climate change mitigation

Reference: page 120.

In 2024, Kesko prepared a transition plan (2025-2034) for reducing scope 1 and 2 emissions from own operations, reviewed by the Group Management Board and formally approved by the Board of Directors; it was updated during 2025 alongside the broader climate target update. During 2025, Kesko set new near- and long-term targets, including a commitment to net-zero GHG emissions across the value chain by 2050, approved by the Board in October 2025 and submitted to the SBTi; validation was confirmed after the reporting period, in January 2026.

At end of 2025, Kesko had not prepared a transition plan for value-chain (scope 3) energy/industrial emissions or FLAG emissions; this is planned for 2026, extending to 2034, for Group Management Board review and Board approval.

Locked-in emissions are assessed as limited and not threatening near-term targets, associated mainly with electricity in Poland/the Baltics, district heating, and possible constraints on logistics electrification. Kesko had not participated in or financed GHG removal/storage projects via carbon credits; neutralisation needs for long-term targets are identified but options/quantities not yet investigated. No internal carbon pricing mechanism was in place during the reporting period.

Policies related to climate change mitigation and adaptation

Reference: page 121.

Sustainability policy: guides Kesko's climate work; commits to international climate summit goals and to reducing emissions from own operations and the value chain. Approved by the Board of Directors; implementation overseen by the EVP, Legal and Sustainability. An updated version (approved end-2025) takes effect 1 January 2026, broadening principles on GHG reduction and energy efficiency.

Energy strategy: guides energy procurement and sets energy-efficiency and renewable-electricity-sourcing principles; approved by the Group Management Board, overseen by the Group's Energy Director.

K Code of Conduct for business partners: requires partners to encourage sustainable practices through their supply chains, cascaded to subcontractors.

Kesko committed under SBTi criteria to no deforestation across primary deforestation-linked commodities by end of 2025. Both policies are publicly available on Kesko's website.

Actions to reduce GHG emissions

Reference: page 122.

Own operations (scope 1 & 2)

• Logistics electrification: 34 electric vehicles in operation end-2025 (+6 delayed to early 2026), plus 23 gas-powered vehicles; ~2,400 t CO2e reduction in 2025 from fleet changes; ~25,000 t by 2034. Estimated 30% of logistics transport on fossil-fuel alternatives by 2030, ~40% by 2034.
• Renewable electricity: 97% of purchased electricity from renewable sources, 1% nuclear, in 2025; Denmark (Davidsen Koncernen) and Norway/Sweden fully renewable/emission-free since 2025; Baltics/Poland transition planned for 2026. Reduced electricity-related emissions by ~3,800 t.
• Energy efficiency: ~17.6 GWh of measures implemented in 2025 (~730 measures), including waste-heat recycling systems in 9 properties (~3.5 GWh reduction); ~900 t CO2e reduction expected.
• Heating conversion: 81 properties still fossil-heated (mostly Poland/Baltics); target zero-emission/district heating by 2029; 5 properties converted, 18 oil-heated properties removed from the network in 2025 (~1,400 t reduction; 1,300 t planned by 2034).
• Refrigerants: natural refrigerants by 2030 per F-gas Regulation (~4,000 t reduction expected).

Value chain (scope 3)

Since 2021, Kesko has encouraged suppliers to set science-based targets; also improving emissions-data accuracy, including new product-level emissions reporting for building/technical trade selections.

Climate targets and progress

Reference: page 124.

Kesko's updated 2025 targets follow SBTi criteria (1.5C for scope 1&2 near-term; "well below 2C" for scope 3), validated by SBTi in January 2026, base year 2024.

2025 progress vs. 2024 base year

• Scope 1&2 market-based: 91,135 to 74,204 t CO2e (-19%), ahead of the -58.8%-by-2034 pace.
• Scope 3 (purchased goods/use of sold products): 6,941,006 to 7,768,187 t CO2e (+12%), moving away from the -35%-by-2034 target.
• Scope 1 FLAG: -6%; Scope 3 FLAG: -4%.
• Suppliers with science-based targets: 47% (2024) to 47% (2025), vs. 67%-by-2026 target.

Also: energy efficiency target of +10% by 2030 vs. 2024 (38.5 GWh of 95 GWh implemented by end-2025); 2024-reported 50%-by-2034 own-operations target was superseded by the new 58.8% SBTi-aligned target.

Energy consumption and mix

Reference: page 128.

Note: 2024 comparative figures were restated (total energy 2024 increased from 752,695 to 777,155 MWh following corrections; see Basis for preparation).

Energy intensity from high-climate-impact activities: 58 MWh/EUR million net sales in 2025 (65 in 2024). Kesko's operations are classified as a high climate-impact sector under the EU framework, except car leasing (immaterial share of net sales). Energy data are based on metered/invoiced consumption; ~5-6% of purchased electricity/district heating is estimated based on floor area for unmetered sites.

Gross Scope 1, 2, 3 and total GHG emissions

Reference: page 129.

Scope 3 covers categories 1, 2, 4, 11, 12 and 14 (>99% of scope 3 energy/industrial emissions); categories 3, 5, 6, 7, 9, 13, 15 excluded (combined <1%). GHG intensity (market-based, energy/industrial): 654 tCO2e/EUR million net sales (2025) vs 618 (2024). Reported per GHG Protocol Corporate and Scope 3 Standards; 94% of scope 3 based on activity data, 4% supplier-specific data.

GHG removals and carbon credits

Reference: page 120-121 (Transition plan for climate change mitigation).

"Kesko has not participated in projects to remove or store GHG emissions, nor has it financed such projects by purchasing carbon credits." The need for neutralisation to achieve Kesko's long-term (2050 net-zero) climate targets has been identified, but options and quantities have not yet been investigated. No carbon credits were purchased or cancelled in the reporting period.

Internal carbon pricing

Reference: page 120-121 (Transition plan for climate change mitigation).

"Kesko did not have an internal carbon pricing mechanism in place during the reporting period." No further detail on a planned mechanism or shadow price is provided in the sustainability statement.

Policies related to biodiversity and ecosystems

Reference: page 88-89 (Basis for preparation: Disclosures in relation to specific circumstances).

Disclosed under the ESRS 2 paragraph 17 transitional provision for newly-material topics. Kesko's sustainability policy, updated in 2025, "provides the foundation for Kesko's work to promote biodiversity," with the principle of preventing biodiversity loss in own operations and across the value chain.

Raw material/product-specific sustainability guidelines exist for commodities identified with biodiversity impacts: cocoa, coffee and tea, fish and seafood, palm oil, soy, textiles, and timber and paper - guiding sourcing mainly for private label products via internationally recognised certification schemes. In 2025 Kesko expanded its cotton guideline into a broader textile guideline. New/updated guidelines are approved by Kesko's Group sustainability management team; implementation is managed through division-specific steering groups, with annual review by divisions' sustainability units.

Actions related to biodiversity and ecosystems

Reference: page 88-89 (Basis for preparation: Disclosures in relation to specific circumstances).

During 2025, Kesko prepared action plans for all three divisions to mitigate biodiversity-related impacts in the value chain, focused on four areas: (1) strengthening sourcing personnel competence through training; (2) identifying biodiversity-critical raw materials and establishing guidelines where possible; (3) improving availability/coverage of origin-related data for products containing critical raw materials; (4) establishing strategic partnerships to reduce biodiversity-loss impacts.

Hyvinkää logistics centre: Kesko and the City of Hyvinkää agreed on voluntary compensation for nature losses from the Onninen/K-Auto logistics centre construction (completed autumn 2025), partly based on the Finnish Nature Conservation Act's voluntary ecological compensation principles.

Policies related to resource use and circular economy

Reference: page 137-138.

Sustainability policy: commits to reducing food waste in own operations and with stakeholders (e.g. independent K-food retailers), and to reducing packaging material use (especially plastics) and promoting recyclability in private label products. Approved by the Board of Directors, updated end-2025 (effective 1 January 2026) to take circular economy principles into account more broadly; overseen by the EVP, Legal and Sustainability. Note: the policy "does not include the waste hierarchy or prioritise avoiding or minimising waste over recycling."

Packaging guideline: covers private-label retail packaging and packaging used in own production/warehouses; renewed in 2025 (replacing separate packaging and plastics guidelines), covering the full packaging lifecycle. Commits to favouring renewable/recycled/sustainable-origin materials and reducing plastic use. Approved by the Group's sustainability management team; monitored by division-level steering groups.

Actions on resource use and circular economy

Reference: page 138.

Main actions target waste recycling rates and food waste reduction.

• Wood packaging recycling pilot (with Koskisen Oyj): wood packaging (pallets, plastic pipe supports) from Onninen's central warehouse used as chipboard raw material rather than incinerated as mixed waste; ~108 tonnes processed after becoming a regular operating model at end-2025.
• Loss-prevention model for non-food products across K-Citymarket stores: efficient assortment planning, discount pricing, outlet areas, and charity donation of unsold products before disposal.
• Recycling development: separate waste collection, staff sorting training, circular economy manager site visits.
• Food waste prevention: automatic ordering systems and assortment management in Kesko, K-food stores and Kespro; in 2025, strengthened assortment management of waste-sensitive categories (fruit, vegetables, bread) via system development, plus a new grocery-trade centre of excellence with food waste as a training focus area.

Targets and progress: waste and food waste

Reference: page 139.

Recycling-rate target: +6 percentage points by 2030 vs. 2024 baseline; voluntary, not science-based; recycling rate fell to 66% in 2025 (Finland's rate fell slightly; Norway fell most). Grocery trade's food waste target: halve the percentage by 2030 vs. 2019 baseline; this is one of the metrics tied to Kesko's sustainability-linked loans. Both food waste metrics improved versus 2024 and are assessed as on track. External stakeholders were not involved in setting either target.

Resource outflows: packaging recyclability

Reference: page 141.

At end-2025, 97% (97% in 2024) of packaging materials for Kesko's private label products were recyclable, covering retail packaging of private label products Group-wide excluding Danish operations (2024 comparative covered Finland only). The figure indicates recyclability of the packaging material but not whether it is actually sorted correctly by the end user; non-recyclable materials sorted as mixed waste include rubber, wood in consumer packaging, ceramics and porcelain.

Packaging data are collected from product suppliers and maintained in Kesko's internal systems; data-maintenance deficiencies remain, as packaging information is not consistently updated for all products, though comprehensiveness has improved.

Waste

Reference: page 140-141 (Metrics).

Largest waste fraction: cardboard from packaging (transport/storage); second largest: energy waste (incinerated for heat/electricity). Grocery trade generates significant biowaste (category 3 by-products); building/technical trade generates wood, mixed and construction wastes; car trade generates metal/steel and hazardous waste (batteries, paints, oils). Radioactive waste from purchased nuclear electricity: 14 kg (2024: 141 kg). In 2025, Kesko collected construction/demolition waste data for the first time (limited to select projects): ~41,700 tonnes recorded, not comprehensive across all projects.

Policies related to own workforce

Reference: page 145.

People policy (updated 2025, effective 1 January 2026): covers recruitment, competence, leadership, compensation, equality/non-discrimination, safety and wellbeing across all operating countries; approved by the Board of Directors; most senior responsible role is the EVP, HR.

People principles (approved by the President and CEO, effective 2025): Customer always first; Sales and growth in mind; Positive get-things-done attitude; Stronger together; Fair play.

Kesko prohibits child labour, forced labour, human trafficking and modern slavery per the K Code of Conduct. Complies with the ILO Declaration on Fundamental Principles and Rights at Work; committed to the UN Women's Empowerment Principles.

Health and occupational safety: legal requirements, risk identification, good-practice implementation; ISO 45001 certification in building and technical trade in all operating countries.

Equal treatment: zero-tolerance discrimination policy; Employee Equality and Non-Discrimination Group; DEI programme.

Remuneration: competitive, performance-based; base salary set via job evaluation or collective agreement; Kesko is preparing for the EU Pay Transparency Directive.

Engaging with own workforce

Reference: page 147.

Kesko respects freedom of association and collective bargaining per local legislation, applying agreements for retail, automotive trade/repair, and salaried employees. Dialogue in 2025 covered the EU Pay Transparency Directive, collective agreement updates, remuneration system reliability, working time, wellbeing and social protection.

Forums: cooperation group (twice yearly), employee representative committee (monthly), business-area HR management groups (monthly/quarterly), equality and non-discrimination group (twice yearly), European Works Council (next meeting 2026). Most senior responsible role: EVP, HR.

Surveys: K Voices employee engagement survey conducted across the workforce (excluding Denmark, which uses its own survey); Let's K survey conducted twice in Finland; discussions held with language-minority employees in Finland.

In Finland, occupational safety representation was strengthened via a new management model and six-monthly risk-map updates.

Channels for own workforce to raise concerns

Reference: page 147.

Employees raise concerns via employee forums, dialogue sessions, and locally available occupational health/safety or employee representatives (e.g. Finland's Task Force approach for serious/extensive reports). Anonymous input is also possible via country-specific wellbeing, satisfaction and culture surveys.

SpeakUp channel: employees/consultants report suspected misconduct primarily to their manager; if not possible, via the confidential SpeakUp channel, handled by Kesko's Governance, Compliance & Ethics function under strict confidentiality (described further under G1). Kesko applies clear communication, prompt/systematic investigation, and a fair process with protection for the employee; corrective-action effectiveness is actively monitored. Non-SpeakUp cases (routine HR/employment-law matters) are handled by business HR and employee representatives and not centrally reported.

Actions on own workforce

Reference: page 148.

Occupational safety: Group-wide occupational safety risk map compiled in 2025 with country-specific improvement plans (e.g. Sweden working environment committee; Norway internal audits; Poland store/terminal H&S audits; Lithuania new-representative training). Car trade focus on occupational disease prevention (vehicle-tyre-related work, manager training, hygiene measurements). Finland piloted a psychosocial-load self-assessment tool (~6,600 employees; under 6% reported frequent/constant load).

Equal treatment and inclusion: updated 'Diversity and inclusion' online training (2025, more language versions); Leader@K training for new managers; diversity pledge in job advertisements (no age/gender disclosure required); buddy programme at K-Kampus for international-background employees; immigrant-background programme in grocery trade combining on-the-job training with store employment.

Training and skills development: new common K Learning environment launched in Finland and the Baltics; 'Manager supporting growth and development' training in Finland; AI-tool adoption training.

Targets related to own workforce

Reference: page 150.

Targets set for health and safety, gender equality, diversity, and training/skills development, base year 2024, target level 2030. TRIF and wellbeing index progress assessed as on track. Women's representation in top management held flat versus 2024; middle-management representation declined from baseline. Targets were discussed with the employee representative committee, equality/non-discrimination group, occupational safety steering group/committee, and external occupational health/insurance partners.

Characteristics of employees

Reference: page 152.

Total employees: 18,991 (2024: 18,309); Female 7,536 / Male 11,440 / Other 15. Employee turnover: 16.4% (2024: 18.5%); 3,807 employees left during 2025.

By country (2025 headcount): Finland 12,598; Norway 1,918; Sweden 1,283; Denmark 1,862; Estonia 185; Latvia 95; Lithuania 94; Poland 941; China 15 (Onninen purchasing office, Shanghai).

Collective bargaining coverage and social dialogue

Reference: page 154.

Total employees covered by collective bargaining agreements: 75.8% (2024: 75.6%). In Finland, Norway and Denmark, blue- and white-collar employees are covered (excluding senior salaried employees in Finland, covered by a separate local agreement). In Sweden, all employees are covered except the country director. No collective agreements exist in Estonia, Latvia, Lithuania and Poland.

Social dialogue with workplace representation reported for Finland and Norway (EEA countries with >50 employees / >10% of total employees).

Diversity metrics

Reference: page 154.

Age distribution (2025 / 2024)

• Under 30: 5,169 (27.2%) / 4,763 (26.0%)
• 30-50: 8,739 (46.0%) / 8,547 (46.7%)
• Over 50: 5,083 (26.8%) / 4,999 (27.3%)

Gender distribution of top management (director-agreement level)

Top management defined as directors with a director agreement.

Adequate wages

Reference: page 155.

Kesko is committed to paying all employees a competitive salary meeting or exceeding legal minimum requirements and sufficient to cover basic living costs. In the Nordic countries, base salary is compared against the applicable collective agreement wage; in Estonia, Latvia, Lithuania and Poland (no collective agreements), employees are entitled to at least the statutory minimum wage, and base salary is compared against the national minimum wage. No explicit percentage of employees meeting/not meeting the adequate-wage threshold is separately quantified in the disclosed text.

Training and skills development metrics

Reference: page 155.

By gender (2025): Male 5.1 hrs / Female 4.0 hrs / Other 1.3 hrs performance-discussion participation and training hours reported. In 2025, 75.2% of own workforce participated in performance management discussions/reviews under the common operating approach (2024: 63.5%), broadened via a model addressing logistics employees' needs in Finland. Online training duration is estimated at 15 minutes per session for calculation purposes.

Health and safety metrics

Reference: page 156.

Occupational health and safety management system covers 100% of Kesko's own workforce. TRIF calculated as work-related accidents x 1,000,000 / hours actually worked; figures exclude non-employees (e.g. recruitment agency employees).

Compensation metrics

Reference: page 156.

Gender remuneration ratio (average pay gap): 2.7% in 2025 (2024: 2.2%); described as affected by 2025 Danish acquisitions, personnel changes from organisational restructuring, and job-classification refinements. Ratio of highest-paid individual's annual total remuneration to median annual total remuneration (excluding the highest-paid person): 47 (2024: 33).

Pay gap is calculated as the weighted average difference in total remuneration between women and men in comparable jobs within the same operating country; median excludes individuals who started after the beginning of the reporting year or were absent more than three months.

Incidents, complaints and severe human rights impacts

Reference: page 157.

SpeakUp reports concerning working conditions, employment terms and other work-related rights of own employees: 36 in 2025 (2024: 15). Estimated discrimination/harassment reports concerning own employees: ~15 in 2025 (2024: ~10-15), an estimate with acknowledged uncertainty (excludes some out-of-scope or unfounded reports).

"In 2025, no severe human rights violations were identified at Kesko. Kesko has not been fined or subjected to other sanctions for the cases discussed above, or for cases from previous years."

Policies related to value chain workers

Reference: page 159.

Principles defined in Kesko's sustainability policy and the K Code of Conduct for business partners, which requires respect for internationally recognised human rights (UN Universal Declaration of Human Rights, UN Convention on the Rights of the Child, OECD Guidelines/Due Diligence Guidance, ILO Declaration, UN Guiding Principles). Prohibits forced labour, human trafficking and child labour; requires proper working conditions, decent hours, fair remuneration, freedom of association.

Kesko is a member of amfori (BSCI Code of Conduct incorporated into supplier/service-provider contracts) and a signatory of the International Accord for Health and Safety in the Textile and Garment Industry (Bangladesh factories manufacturing private-label clothing/home textiles). Sourcing guidelines exist for cocoa, coffee, tea, palm oil, soy, textiles and timber/paper. Policy is to collaborate only with risk-country suppliers within the scope of social responsibility audits; Division Presidents are responsible for execution. Kesko published a human-rights statement of commitment and impact assessment aligned with the UN Guiding Principles; a 2025 update focused on value chain workers, completed end-2025, with follow-up work continuing into 2026.

Engaging with value chain workers

Reference: page 160.

Engagement is primarily indirect, via multi-stakeholder initiatives (amfori, Fairtrade for agricultural supply chains, the Centre for Child Rights and Business) and third-party social responsibility audits (chiefly amfori BSCI and SMETA) at risk-country suppliers, required at least every two years with follow-up audits within 12 months of non-conformity findings. The amfori BSCI process includes a Zero Tolerance Protocol, triggering the Centre for Child Rights and Business's remediation model if child labour is detected.

Since 2025, social responsibility audits extend to private-label fresh fruit and vegetable suppliers beyond general risk-country classification, using the GLOBALG.A.P. country risk list. The report states directly: "Currently, there is no direct engagement with value chain workers that would allow their perspectives to be taken into account in decisions or activities aimed at managing the impacts on value chain workers."

Remediation and grievance channels for value chain workers

Reference: page 160.

Kesko's own SpeakUp channel is open to value chain workers (described further under G1); additionally, amfori Speak For Change is available to workers in Vietnam, Turkiye, Bangladesh and four regions of India at suppliers within amfori BSCI audit scope. The K Code of Conduct for business partners requires partners to implement complaint-handling mechanisms.

When issues arise, the sustainability unit and division procurement staff engage with the supplier and define corrective actions. For serious violations, Kesko follows an escalation process (updated 2025) involving the Governance, Compliance and Ethics function; a multidisciplinary team assesses the case, and cooperation may be suspended/terminated with authorities informed if the supplier does not commit to resolving issues within an agreed timeline. In 2025, two SpeakUp reports concerning service providers related to labour/working-time legislation violations and financial reporting failures.

Actions on value chain workers

Reference: page 161.

Purchases from risk-country suppliers: 1.2% of goods purchases in 2025 (2024: 0.9%). Risk-country supplier factories with a valid social responsibility audit: 970 (2024: 705), audit coverage 97.6% (2024: 90.7%).

2025 incidents/actions: terminated orders from 4 factories over unresolved working-conditions issues; engaged suppliers on Finnish berry-picking sector human trafficking concerns (written explanations, K Code of Conduct training required, joint audit of harvesting/accommodation conditions); a district court in autumn 2025 convicted one supplier and a key individual of human rights violations (case first reported in the 2024 statement) - Kesko terminated that supplier agreement; a related case involving another supplier in the same sector remains ongoing; engaged with a supplier in Panama following worker dismissals after a strike; aware of an additional ongoing legal case involving a domestic supplier.

Training: 205 Kesko suppliers (2024: 62) participated in amfori-provided training on fair remuneration, working hours, harassment and management systems; K Code of Conduct online training released for suppliers in 2025; internal training on labour exploitation in subcontracting chains delivered with the Deaconess Foundation, the Assistance System for Victims of Human Trafficking, the National Bureau of Investigation and HEUNI.

Policies related to consumers and end-users

Reference: page 165.

K Code of Conduct commitments cover equal treatment of customers, safety/accessibility of customer interactions, product/service safety, and responsible data use (transparency, high data-protection standards). No suspected or confirmed human rights violations relating to consumers/end-users were identified in 2025.

Product safety: division-specific principles; grocery trade uses HACCP-based self-control plans across purchasing, storage, transport and stores; Kesko Logistics plus subsidiaries Reinin Liha and Kalatukku E. Eriksson hold FSSC 22000 certification; private-label supplier plants must hold a certified product-safety system or undergo a Kesko audit; product testing via an ISO 17025-accredited lab (T251). Building/technical trade: product standards plus ISO 9001 certification at Onninen and Kesko AB (Sweden). Car trade: Kesko is importer for Volkswagen, Audi, SEAT, CUPRA, Porsche, Bentley; documents safety concerns to manufacturers who own recall campaigns.

Data protection: governed by the data protection policy and information security policy (Board-approved); President and CEO holds overall responsibility; risk-based approach with assessments at the planning stage of processing and annually. Updated data protection policy approved end-2025, effective 1 January 2026.

Engaging with consumers and end-users

Reference: page 167.

Key channels: the Hymy customer feedback system, twice-yearly customer satisfaction surveys for K-food and K-Rauta stores, a continuous pulse-type NPS survey, and the K-Kylä customer community (all three divisions). K-Kylä conducted ~90 studies generating ~87,000 responses in 2025; community membership grew to ~68,000 (2024: ~44,000). Data protection matters are also channelled through a public data protection portal (Finland) and register-specific contact points/data protection officers, who respond to requests without undue delay.

Remediation channels for consumers and end-users

Reference: page 167.

All business areas provide feedback/complaint websites; private-label packaging carries customer service contact details; customers can also use phone or social media. Grocery trade's Consumer Services received ~25,700 feedback instances in 2025 (~15,800 product complaints); K-Rauta received ~37,600 (~10,900 complaints); average grocery trade customer satisfaction was 94%.

Product recalls (2025): grocery trade carried out 149 recalls (34 private-label/own-import; 1 public recall with potential health impact); building/technical trade had no public recalls in Finland; car trade (K-Auto) initiated 19 recall campaigns and Kesko became aware of 5 rechargeable-vehicle fires.

SpeakUp is open to consumers but not specifically targeted at them; Kesko does not separately assess consumer trust in the channel. A defined information-security-incident process applies for suspected data protection breaches, including GDPR-required notifications to authorities and affected individuals.

Actions on consumers and end-users

Reference: page 168.

Product safety: in grocery trade, the Quality and Product Development Unit decides on private-label recalls and communicates to stores, B2B customers, consumers and authorities; for other products, the supplier/importer is responsible.

Data protection: a data protection compliance programme provides regular training and communications; the Group data protection manual plus country-specific instructions apply to all personnel; employees handling personal data complete online training every two years. In 2025, Kesko processed 936 data protection requests in Finland (2024: 875); detected/investigated 273 information security breaches in Finland (44 reported to the Data Protection Ombudsman) and 8 in other countries (4 reported to local authorities). "Neither Kesko nor its subsidiaries received any remarks regarding their operations from the Data Protection Ombudsman during 2025"; three requests for additional information were issued based on complaints received, with responses provided on time.

Targets: nutritional reformulation

Reference: page 169.

"Kesko has not set measurable time-bound targets related to product safety and data protection, but it regularly monitors certain metrics related to these topics." In 2025, 36 products were reformulated (2024: 42), for cumulative reductions since baseline of 15,353 kg salt, 97,171 kg sugar and 32,347 kg saturated fat across 125 reformulated products total. Kesko met its sugar-reduction target but not its salt or saturated-fat targets by the 2025 target level.

Corporate culture and business conduct policies

Reference: page 171.

Ethical conduct is governed by the K Compliance operating model and the K Code of Conduct, both Board-approved, plus commitments to amfori BSCI, OECD Guidelines for Multinational Enterprises and OECD Due Diligence Guidance, the UN Guiding Principles, UN Global Compact, SDGs, UN Universal Declaration of Human Rights, and the ICC business charter for sustainable development. New people principles (fair play, openness/honesty, sustainability) launched late 2025.

K Compliance programmes (approved by the President and CEO) covered in 2025: data protection, competition law, trade sanctions/export controls, and corruption/bribery prevention; a new Sustainability K Compliance Programme was approved in 2025 to strengthen supplier due diligence covering human rights, environment, corruption and ethics.

Monitoring: 94% of employees submitted the annual K Code of Conduct confirmation in 2025 (2024: 85%); 88% completed K Code of Conduct training in 2024 (no group-wide training round in 2025, but all new employees required to complete it). Target: 100% annual confirmation rate by 2030 (on track per 2025 result).

Management of relationships with suppliers

Reference: page 173.

Suppliers/service providers are required to commit to the K Code of Conduct for business partners (or equivalent own principles) and, in building and technical trade, to a sustainability attachment (introduced 2024, covering climate, biodiversity, environmental protection, social responsibility, conflict minerals and chemicals) incorporated into an increasing number of supplier agreements. Kesko's principle is to cooperate only with high-risk-country suppliers subject to social responsibility audits (see S2).

In 2025, the President and CEO approved the Sustainability K Compliance Programme to strengthen due diligence and supplier management. Kesko runs annual sustainability trainings/information events for business partners and, in 2025, launched an online K Code of Conduct training for partners (available on kesko.fi in all operating-country languages plus Chinese), designed especially for small/medium suppliers.

Prevention and detection of corruption and bribery

Reference: page 173.

Managed via the K Compliance programme with regular risk assessments; identified specific risk areas: property/store site operations, procurement of goods/services, public procurement participation, new geographical/business areas, government-official relations, and M&A. Risk-function employees complete K Code of Conduct eLearning (including a corruption/bribery section); in 2025, workshop-style anti-corruption/anti-bribery training was held for defined risk functions in Finland, Sweden and Estonia (81% participation), with Norway, Denmark, Poland, Latvia and Lithuania scheduled for 2026. Detailed anti-corruption/bribery principles took effect in 2024, supplementing the K Code of Conduct. Board members receive the same training as executive management.

Confirmed incidents of corruption or bribery

Reference: page 174.

"In 2025, no confirmed cases of corruption or bribery came to Kesko's attention, and no related court judgments or fines were imposed." All SpeakUp reports, including any concerning corruption/bribery, are independently investigated by the Governance, Compliance & Ethics function and reported regularly to the Audit Committee. Total SpeakUp reports concerning Kesko in 2025: 84 (2024: 53); no incidents of serious misconduct were identified and no misuse of the reporting channel was proven.