Raute

Raute's sustainability work is managed through internal governance models, with the Board of Directors and the Executive Board (RxB) as the key bodies. The Chief Financial Officer reports on sustainability matters to all supervisory and management bodies. The Board of Directors has seven members, two women and five men, chaired by Laura Raitio. All members except Joni Bask (dependent for over ten years' service) are independent of the company. The reported figures show the Board with 85.7% independence and 40.0% gender diversity (women divided by the share of men). The Board is assisted by two committees: the Audit Committee, which started in June 2024 and has four members (one woman, three men, chaired by Mikko Kettunen), and the People Committee, with three members (one woman, two men, chaired by Laura Raitio). The Board approves Raute's strategy, the long-term sustainability strategy and targets, and supervises implementation. The Executive Board has seven members (one woman, six men), with Mika Saariaho as President and CEO. The ESG Steering Group has 16 members (five women, eleven men). No specific control measures were used to manage impacts, risks and opportunities in 2024.

The Chief Financial Officer updates the Executive Board, the Board of Directors and the Audit Committee on sustainability topics and the progress of related measures. Sustainability matters were reported to the Audit Committee five times during 2024 and regularly at Executive Board meetings. The Audit Committee's materials were available to the entire Board of Directors. The ESG steering group convened three times in 2024, addressing elements of the action plan, the disclosure requirements of sustainability reporting, information related to emission calculation and the contents of new policies. The administrative, management and supervisory bodies addressed the material impacts, risks and opportunities identified in the double materiality assessment during the reporting period. The 2023 assessment was updated in 2024, drawing on discussions with internal stakeholders. The Board approved the results of the materiality analysis and the long-term sustainability targets in February 2025. The Executive Board approved the assessment results, four new policies, and numerical metrics, and addressed emission calculation, climate targets, supply chain sustainability, safety, HR matters and R&D sustainability criteria. Whistleblowing cases are reported to the President and CEO immediately and to the Audit Committee twice a year.

At Raute, remuneration consists of basic salary including fringe benefits, profit- and performance-related remuneration (performance-based bonuses), and long-term incentive plans. Incentive plans cover the President and CEO, the Executive Board, key persons and the entire personnel. Annual short-term incentives are based on profit and/or personal targets, paid once a year after the financial statements are adopted. The long-term incentive plan, based on performance, share value and growth, includes three-year performance periods for 2022 to 2024, 2023 to 2025 and 2024 to 2026. The 2021 to 2023 plan ended and its reward was paid in 2024. The Board also decided on restricted share programs for 2022 to 2024, 2023 to 2025 and 2024 to 2026. Raute has incorporated safety as one of the reward metrics for sustainability: the executive team has a safety-related target based on the Lost Time Injury Frequency (LTIF), which accounts for 10% of the weighting in the short-term incentive program for management. Currently, climate-related greenhouse gas reduction targets are not included in executive compensation. The remuneration policy was approved by the Board on February 14, 2024 and by the AGM on April 4, 2024.

Raute's due diligence encompasses the identification, assessment and management of risks, stakeholder consultations and the transparency of reporting. In 2024, the focus was on embedding due diligence into the company's key sustainability risk management processes and on identifying risks and strengthening different organizational structures such as channels and policies. Sustainability-related risks were addressed at the Executive Board, Audit Committee and ESG steering group levels. Raute states it will clarify the processes to manage and communicate impacts, risks and opportunities using its supervisory and administrative structure, and that the double materiality assessment will be integrated into Raute's overall risk assessment process. The statement maps the core elements of due diligence to the sections where the information can be found: embedding due diligence in governance, strategy and business model (GOV-1, GOV-2, GOV-3, SBM-1, SBM-3, G1-1, G1-3); engaging with affected stakeholders (SBM-2, GOV-2, IRO-1, S1-2); identifying and assessing adverse impacts (SBM-3, IRO-1); taking actions to address them (E1-3, E5-2, S1-4, G1-3); and tracking effectiveness and communicating, done by the Executive Board and ESG steering group alongside the whistleblowing channel and safety observations.

Raute's sustainability manager is responsible for the processes related to sustainability reporting together with the Chief Financial Officer, who reports on the implementation of sustainability reporting to the Board's Audit Committee. Raute identified risks relating to the preparation of sustainability reporting, such as the reporting timeframe, the adequacy of internal and external resources, and limitations related to the availability, scope and trueness of data. Raute did not have a risk management model for prioritizing the risks related to preparing the sustainability statement. To mitigate the risk related to the adequacy of resources, persons from within Raute were extensively involved in the preparation process and external expert resources were used. The auditor verified the sustainability statement at a limited assurance level, and datapoint-level metrics were not validated by a separate assurance provider. Raute states it will develop the supervision of the risks and actions related to sustainability reporting and the definition of related controls. The controls will focus on finding a balance between regular audits, personnel training and metric data collection, and clear processes and guidelines will be created for data validation and documentation.

Raute is a Finnish technology company that wants to lead the way with its innovations as the partner to future-proof the engineered wood products industry. Its business model focuses on promoting resource-efficient production by offering complete mills, production lines, equipment and service solutions, with which customers produce veneer, plywood, laminated veneer lumber (LVL) or other engineered wood products. Net sales consist of machines, equipment and analytics services plus maintenance and spare part services. According to the company's competitor analysis, Raute is the market leader and the only full-scope supplier in the world offering mill-scale technological solutions for veneer, plywood and LVL. The three business units are Wood Processing, Analyzers and Services. Main markets are Europe, North America and Asia. Raute's strategy focuses on sustainable growth and resource efficiency, growing net sales, expanding into new markets, improving profitability and reducing volatility. In the upstream value chain, suppliers provide raw materials (roughly 95% of a product is metal, about 3,000 to 4,000 tons of metals per year), components and services; the downstream value chain includes manufacturers, distribution channels and end-users. The subsidiary Hiottu Oy merged into Raute Corporation on December 31, 2024 without significant impact on material topics.

Raute engaged in extensive dialogue with its stakeholders to identify its most material sustainability topics as part of its strategy work. The materiality assessment updated in 2024 applied the double materiality principle, taking into account both impact materiality and financial materiality. The company's own personnel was one of the significant stakeholders, along with customers, suppliers and partners. Views and expectations on material impacts, risks and opportunities were collected by interviewing employees, customers, members of the Executive Board and Board of Directors, and financiers, and through internal workshops, supplemented by Raute's internal understanding of customers' needs. The assessment covered the entire value chain and assessed where identified impacts, risks and opportunities occur. Stakeholder views were recorded in a separate assessment table during the assessment and were considered when assessing positive impacts and business opportunities; the table was communicated to the Executive Board and Audit Committee for approval, and views are compiled into the IRO table (see SBM-3). Regarding the need to change business models, Raute tracks market pressure such as changes in demand, legislation, costs and competitiveness conditions, paying particular attention to customers' expectations. The tabulated stakeholder groups are personnel, customers, and business partners and suppliers, each with its own discussion topics, engagement methods and operational impacts.

The material impacts, risks and opportunities identified in Raute's double materiality assessment relate to climate change (E1), the use of natural resources and the circular economy (E5), own workforce (S1), and business conduct (G1). Climate change impacts, risks and opportunities pertain to physical climate risks, transition risks, climate change mitigation, and energy consumption in own operations and downstream product use, with impacts emphasized at the downstream end due to lifecycle energy use. Circular economy impacts are most prominent upstream and in own operations, relating to non-renewable resource use and the environmental impact of steel products. For own workforce, impacts include negative effects on occupational safety and health and positive effects from skills development and diversity, with risks focused on talent shortages and opportunities in safety as a competitive advantage. For business conduct, key risks include corruption and bribery incidents and a weak corporate culture, with opportunities in prevention through training and a strong ethical culture. Stakeholder perspectives play a significant role in the assessment. The results of the 2024 assessment do not require changes to Raute's current strategy or business model. The financial impacts of risks and opportunities on financial position, performance and cash flows are not currently available, and management assesses that they do not have material financial impacts requiring reporting. A detailed SBM-3 IRO table describes each item's location in the value chain and time horizon.

In 2023 Raute carried out an extensive double materiality assessment, refined in 2024 for the materiality limits and the descriptions of impacts, risks and opportunities. It was conducted in accordance with the CSRD directive, ESRS standards and EFRAG's guidelines, using available datasets, interviews and workshops with stakeholders such as customers, financiers, analysts, employees, and members of the Board and Executive Board, with support from an external expert. Impacts on society and the environment were divided into actual and potential, positive and negative, and scored on scale, scope, irremediable character and likelihood. Financial risks and opportunities were scored by magnitude and likelihood using thresholds from ESRS 1 section 3.5. Financial impacts were multiplied on scales of 1 to 5 (likelihood multipliers ranging from 90% down to 10%) and deemed material if exceeding 1.8, or if both magnitude and likelihood were 3 or higher. Actual impacts were material above a level of 3.5, and any driver scored severe at 5 made an impact automatically material. Potential impacts combined severity and likelihood. The process reviewed Raute's activities, business relationships and geographies. The assessment will be updated annually. The company also assessed E2 Pollution, E3 Water, E4 Biodiversity and E5 Circular economy, finding no material impacts for E2, E3 and E4.

Raute's sustainability statement covers the ESRS 1 general requirements, the disclosure requirements prescribed by ESRS 2 General disclosures, and, as applicable, the requirements for ESRS E1 Climate Change, ESRS E5 Circular economy, ESRS S1 Own workforce and ESRS G1 Business conduct. ESRS E1 Climate Change is described comprehensively, though E1-7 and E1-8 have been omitted as not material because Raute does not use emission units or internal carbon pricing to mitigate climate change. For ESRS E2 Pollution, ESRS E3 Water and marine resources, and ESRS E4 Biodiversity and ecosystems, no material impacts, risks or opportunities were observed in the double materiality assessment. ESRS E5 Circular economy is reported in its entirety. For ESRS S1 Own workforce, around half of the disclosure requirements are covered; based on the assessment, disclosure requirements S1-7, S1-8, S1-10, S1-11, S1-12, S1-15, S1-16 and S1-17 were omitted. Of the sub-topics of ESRS G1 Business conduct, disclosure requirements G1-2 and G1-4 have been omitted based on the double materiality assessment. The company also applies phased-in disclosure requirements from Appendix C, including SBM-3 48(e), E1-9, E5-6, S1-13 and S1-14 anticipated financial effects and specific information for the first reporting year.

Raute states it has not yet prepared a climate change mitigation transition plan, nor a detailed climate resilience analysis or climate scenario analysis. It reports that a transition plan will be created in 2025 and adopted by the Board of Directors by 2026 at the latest, and that a strategy resilience analysis and climate scenario analysis will be completed during 2026 at the latest. Neither Raute nor its sector are excluded from the EU Paris-aligned Benchmarks. The transition plan will examine risks, long-term targets, and means to mitigate climate change and reduce Raute's own climate impacts, evaluated at a strategic level against business plans. Material impacts relate to physical climate risks, transition risks, climate change mitigation, and downstream energy consumption, especially the use of steel and the life-cycle energy consumption of manufactured equipment. Raute notes its operations are likely associated with locked-in GHG emissions through current infrastructure and operations, but a qualitative assessment of these has not been conducted and will be carried out alongside the transition plan. Raute's business model focuses on resource-efficient production in the engineered wood products industry.

Raute's environmental policy covers climate-related themes including emission reductions, resource efficiency, and the circular economy. It complies with the ten principles of the UN Global Compact, emphasizing the precautionary principle and the promotion of environmental responsibility. Raute has identified SDGs 8, 11, 12, and 13 as most significant. In its climate change mitigation and adaptation commitments, Raute pledges to minimize harmful emissions to air, water, and soil; improve environmental performance through energy and material efficiency, waste reduction, and renewable resources where feasible; develop strategies to mitigate climate impacts and improve resilience; promote the circular economy through long-lasting, repairable, upgradable, and energy-efficient products; and support customers with solutions that optimize resource use. The policy commits Raute to minimizing the carbon footprint of machines and its own operations, with product design focus areas of materials, repairability, durability, and energy efficiency. Raute notes its most significant climate impact arises from indirect scope 3 emissions. The Executive Board approved the environmental policy at the end of 2024, and the Chief Financial Officer is responsible for implementation. The policy is not publicly available but is provided to value chain parties on request. Employee training will be organized in 2025.

In 2024, Raute focused resources on reporting GHG emissions, collecting internal data, preparing the environmental policy, and the UN Global Compact Climate Ambition Accelerator training program. It set numerical emission reduction targets for scope 1 and 2 emissions during 2024 and assessed climate-related physical and transition risks. Because a climate roadmap requires significant resources and information, Raute began by calculating its scope 3 emissions and decided a transition plan would be prepared in 2025. Raute does not have a longer-term investment and funding plan for 2024, as it does not yet have a transition plan, and does not have financial instruments allocated to sustainability targets, financing operations primarily through cash flow. Decarbonization levers implemented in 2024 in own operations included expansion of PV panels in Finland (EUR 128,400), investment in renewable electricity in Finland (EUR 213,870), investment in renewable energy for heating in Finland (EUR 96,770), and replacing a diesel-powered forklift with an electric one in Finland (EUR 39,800). Work on defining scope 3 emission reduction actions is still ongoing and will likely focus on improving equipment energy efficiency. Raute's Lahti site uses only renewable energy, and all sites will switch to renewable energy by 2028. Actions related to climate change adaptation and their financial impacts will be determined by the end of 2026 at the latest.

Raute updated its emission reduction targets and metrics during 2024, with 2024 set as the baseline year. Raute states these goals do not fully comply with the minimum disclosure requirements for targets, because a transition plan has not been made and there was insufficient information on physical risks and opportunities to set outcome-oriented adaptation targets. Internal stakeholders were involved through a workshop; external stakeholders were not directly involved. Raute is committed to reducing scope 1 emissions from its own operations by 50 percent and scope 2 emissions by 80 percent from the 2024 baseline by 2030. This means a total emission reduction of 725 tCO2eq by 2030 from the 2024 baseline of 944 tCO2eq, of which scope 1 would reduce by 50 tCO2eq and scope 2 by 675 tCO2eq. The targets are expressed in carbon dioxide equivalent tons and apply to all Raute operations and countries of operation. For scope 2, the market-based method is used. The target aligns with limiting global warming to 1.5 degrees Celsius under the Paris Agreement, set using the SBTi target-setting tool. There is no industry-specific decarbonization pathway for Raute's sector. Targets cannot use removals, offsets, or avoided emissions, and are not externally verified. A scope 3 reduction target has not yet been set. Raute also aims to increase the share of renewable electricity to 100 percent by 2028, covering operations where it has operational authority, including Lahti, Kajaani, Delta, Changzhou, and Pullman.

Energy consumption figures cover all Raute operations in all countries of operation and are derived from Raute's own measurements, energy companies, and property managers. The data has not been externally verified. Total energy consumption in 2024 was 9,196.8 MWh. Total fossil energy consumption was 3,750.6 MWh, representing 40.8 percent of total energy consumption. This comprised fuel consumption from crude oil and petroleum products of 390.4 MWh and consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources of 3,360.2 MWh, with zero consumption from coal and coal products, natural gas, and other fossil sources. Consumption from nuclear sources was zero. Total renewable energy consumption was 5,446.2 MWh, representing 59.2 percent of total energy consumption, made up of purchased or acquired renewable electricity, heat, steam, and cooling of 5,285.2 MWh and self-generated non-fuel renewable energy of 161 MWh, with zero renewable fuel consumption. Energy intensity from high climate impact sectors was 44.95 MWh per million EUR of net revenue. Raute's operations fall within NACE Class 28.99, Manufacture of other special-purpose machinery, a high-impact sector. The Lahti and Kajaani sites have renewable electricity contracts, and Raute aims to reach 100 percent renewable electricity by 2028.

Raute's scope 1, 2, and 3 GHG emissions were calculated in accordance with the GHG Protocol using an external calculation professional and tool, covering the same operations as the financial and sustainability statements. Emissions are reported in metric tons of carbon dioxide equivalents and have not been externally verified. Gross scope 1 GHG emissions were 100 tCO2eq in 2024, with zero percent from regulated emission trading schemes. Gross location-based scope 2 emissions were 1,483 tCO2eq and gross market-based scope 2 emissions were 844 tCO2eq. Total gross indirect scope 3 emissions were 877,300 tCO2eq. Scope 3 categories included purchased goods and services at 15,592 tCO2eq, capital goods at 88 tCO2eq, fuel and energy-related activities at 322 tCO2eq, upstream transportation and distribution at 948 tCO2eq, waste generated in operations at 177 tCO2eq, business travel at 1,761 tCO2eq, use of sold products at 858,187 tCO2eq, and end-of-life treatment of sold products at 224 tCO2eq. Total GHG emissions were 878,883 tCO2eq location-based and 878,244 tCO2eq market-based. GHG intensity was 4,295.6 tCO2eq per million EUR net revenue location-based and 4,292.5 tCO2eq per million EUR market-based. Biogenic scope 2 CO2 emissions were 1,152 tCO2 and biogenic scope 3 CO2 emissions were 1,681,820 tCO2.

Raute's environmental policy describes practices that promote environmental responsibility, addressing emission reductions, resource efficiency and the circular economy. In the policy, Raute commits to promoting the use of renewable resources where possible and the sustainable procurement of renewable natural resources. The policy does not outline a target to increase the use of secondary (recycled) resources or to reduce the use of primary resources. It serves to manage environmental risks in the company's own operations and consider business opportunities. Commitments include meeting or exceeding environmental laws, minimizing adverse impacts, improving performance through energy and material efficiency, reducing waste, setting ambitious targets, and promoting the circular economy by designing products that are long-lasting, repairable, upgradable and energy-efficient. Raute also supports customers with solutions that optimize resource use, extending production line life cycles through repairs, upgrades and modernizations. The policy complies with the ten principles of the UN Global Compact and is aligned with SDGs 8, 11, 12 and 13. It is global, covers all geographies, targets own operations and partly the upstream value chain, and the Chief Financial Officer is responsible for implementation. Raute's Executive Board approved the environmental policy at the end of 2024.

Raute's actions related to resource use and the circular economy in 2024 focused mainly on its core business. The circular economy is considered in product design through a long life cycle, repairability, modularity, upgradability and energy efficiency. Raute carries out remanufacturing, meaning customized upgrades and modernizations, to maximize resource efficiency and extend the service life of existing machines by repairing or replacing worn-out or outdated components and modules. Raute implemented 45 customized upgrade and modernization projects during 2024, which supported extending the lifecycle of existing products. It also carried out development actions focused on its own operations to promote the circular economy, including investments in resource efficiency in product development covering both equipment and data analysis. Internal development actions included reporting on greenhouse gas emissions, use of renewable energy, and resource efficiency development in product solutions, alongside data collection, process creation and policy preparation. The company developed a comprehensive environmental policy considering resource use and circular economy, approved at the end of 2024, and adopted sustainability-related evaluation criteria emphasizing positive impacts to support product development investment decisions. Raute has no new planned actions; overall circular economy action development will be carried out in 2025 once climate-related assessments are completed.

Raute has not set measurable, result-oriented and time-bound targets related to resource use and the circular economy. In 2024, Raute allocated its resources to enabling ESRS reporting, building processes, identifying risks and outlining various policies. The company aims to set targets related to resource use and the circular economy during 2025, once implementation of the environmental policy has begun. Setting circular economy targets requires extensive internal research and more detailed information on matters such as the materials used in products. In 2024, Raute did not monitor the effectiveness of its policy and actions in relation to material sustainability impacts, risks and opportunities. After setting the targets, Raute states it will track the effectiveness of actions in relation to the material sustainability-related impacts, risks and opportunities.

Raute uses metal products in its manufacturing operations, with roughly 95% of a product being metal. The main resource inflows stem from materials, and metallic materials in particular may cause financial risks through additional regulatory costs. The upstream value chain includes procurement of raw materials such as steel, aluminum and other electronic components from reliable suppliers, managed by the procurement department. Raute estimated the total weight of materials used for products during the reporting period at around 3,905 tons, of which 3,579 tons (91.7%) were steel. Beyond steel, materials are mainly technical materials such as iron, aluminum, and electrical and electronic components, as well as plastic and rubber. The amount of bio-based materials, such as wood packaging, is not available, so the share of sustainably procured wood material is not available either. Information on rare earth elements and EU-defined critical raw materials is not available, because Raute's systems cannot separate these ingredients from the weight data of hundreds of thousands of items. Raute states there are shortcomings in the resource inflow metrics (31a, 31b, 31c) because not all information is available; packaging material amounts and secondary material weights are unavailable, part of the weight data is based on averages, and item-level detail is not achievable over the next few years without substantial system changes.

Raute's product portfolio consists of factories, production lines, individual machines and related parts. Product design emphasizes durability, reparability, modularity, upgradability and energy efficiency. Solutions for optimizing resource use include extending product lifecycles through design, enabling reparability and modernization through maintenance services, and optimizing process resource efficiency with digital solutions. Maintenance service models include spare parts sales, performance improvement projects, and product modernizations and upgrades, and entire machines can be remanufactured. All production processes and products are designed with circular principles, meaning durability, repairability, upgradability and recyclability. The impact of resource outflows is related to the use of steel, which may cause financial risks through CBAM regulatory costs or carbon-free steel procurement costs. Raute applies a product value retention strategy, and the life cycle of Raute's products spans decades, typically 15 to 40 years, extended through repairability, maintenance, spare parts and upgradability. There is a secondary market for used machines. Reported examples show Raute lifespans matching or exceeding market averages: dryers 30 years, composers 35 years versus a 25-year average, scarf 30 years versus 25, lathes 30 years, and lay-up and pressing 30 years. Raute's circular economy definitions, such as the R10 strategies, draw on Sitra's Circular Economy Playbook.

Raute states that waste from its own operations does not meet the definition of a material topic, but waste data is reported partly voluntarily. Despite the non-materiality finding, the report does present waste figures. The total amount of waste generated from Raute's own operations in 2024 was 910 tons. Of this, 825 tons were diverted from disposal (all non-hazardous, comprising 791 tons recycling and 34 tons other recovery), while 85 tons were directed to disposal (36 tons non-hazardous landfill and 49 tons hazardous waste incineration). The total amount of non-recycled waste was 119 tons, representing 13% of waste. The total amount of hazardous waste was 49 tons and radioactive waste was 0 tons. Preparation for reuse was reported as 0 for both non-hazardous and hazardous waste. Raute notes that material outflows and the share of waste have not been calculated per product, and the recyclable material amount cannot be specified per product. The circular economy metrics are subject to measurement uncertainty because waste data is incomplete and based on reporting and invoicing from the Lahti, Kajaani, Pullman and Changzhou units; no waste data is available for Delta. The most significant waste streams are metal and wood waste from the Lahti site, directed to recycling.

The Raute Code of Conduct is supplemented by global policies related to its own workforce, and the management of material impacts, risks and opportunities is guided by the Code of Conduct, the occupational safety policy and the Respect in the Workplace policy. These policies cover Raute's own workforce in its entirety and are global, covering all geographies and operations. The Code of Conduct was approved by the Board of Directors and covers everyone from management to employees, whether permanent or fixed-term. Raute is committed to respecting human rights, follows the UN Universal Declaration of Human Rights, is committed to eliminating forced labor and forbids child labor, requiring suppliers to follow the same principles. The Code of Conduct was updated in 2023; a mention on human trafficking will be added in 2025. Raute follows the OECD Guidelines for Multinational Enterprises in several respects. Non-discrimination is addressed in the Code of Conduct and the Respect in the Workplace policy. Policies are implemented through internal training and communications, with the Code of Conduct training repeated annually and the training coverage target at 100%. The safety policy and the Respect in the Workplace policy were approved in late 2024, with related training planned for 2025. The Board of Directors, President and CEO, CFO and Chief People Officer are responsible for implementation.

Raute engages with its own workforce partly by providing employees with training related to sustainability and responsible approaches. The company considers the views of its workforce in workforce-related decisions and on actual and potential material impacts, engaging directly with employees or employees' representatives. Every site has established meeting practices, and management regularly organizes reviews related to financial results and strategy progress. Raute encourages inclusive and open interaction through the Employees' Voice concept, so every employee has the opportunity to express views and be heard. Main direct engagement methods include personnel info sessions, strategy events, supervisor communication, performance and development discussions, training, various personnel surveys, and intranet, modern tools and internal newsletters. Personnel surveys are an essential part of the Employees' Voice concept, and each extensive survey is followed by smaller pulse surveys. The extensive survey carried out at the end of 2024 included topics such as diversity and inclusion, and development measures are defined and monitored based on results. In all countries where it operates, Raute complies with local labor legislation and collective bargaining agreements. In Finland, collective agreements and shop stewardship are one channel for collecting employees' views. Raute holds performance and development discussions, collects feedback through personnel surveys, and offers an anonymous channel for feedback. Raute does not consider its personnel to include particularly vulnerable groups requiring additional targeted surveys.

Raute promotes an open and transparent culture and follows high ethical standards, maintained through training and by offering the opportunity to report policy breaches. The company has in place a Code of Conduct, whistleblowing channels, defined sanctions for retaliation, and training and monitoring to protect whistleblowers. Raute encourages personnel to report potential misconduct at an early stage, for example through their supervisor or the HR department. If this is not possible, any suspected misconduct or violation of law can be reported through an electronic whistleblowing channel provided by a third party. Anonymous whistleblowing is possible, and the system enables communication with an anonymous whistleblower. The whistleblowing channel is available to Raute's own personnel on the intranet and on the company's public website, and Raute aims to offer as many channels as possible to raise issues. Raute's line organization and HR administration are responsible for promoting open dialogue and the appropriate handling of concerns. Personnel are trained in the use of the whistleblowing channel as part of the Code of Conduct training. Reports of suspected misconduct are investigated by a separately appointed Raute Ethics team and are regularly reported to the Audit Committee of the Board of Directors. Further information on the whistleblowing channel and related structures is provided under Disclosure Requirement G1-1.

Raute identified health and safety, training and skills development, and diversity as its material sustainability topics related to own workforce. Negative impacts relate to occupational safety and health, while positive impacts relate to skills development and diversity of backgrounds and expertise. Material risks focus on the shortage of skilled workers, which could lead to a lack of innovation and skilled workforce, while material opportunities relate to occupational safety as a competitive advantage. On health and safety, Raute advanced in 2024 the multi-year safety culture program launched in 2023, aiming to develop a more inclusive safety culture, harmonize ways of working and prevent risks, with a development plan extending until 2028. Raute hired a Group-level occupational safety manager and improved safety reporting. A global electronic system records and tracks safety observations, injuries, near misses, safety discussions and safety rounds, and every injury or near-miss is analyzed with corrective actions taken. On training and skills development, Raute launched the Performance Development Framework program in 2024, including separate performance and development discussions, and applies the 70-20-10 learning model. On diversity, a key 2024 measure was preparing and releasing the Respect in the Workplace policy, with implementation and training planned for 2025. Flexible ways of working such as flexible hours and hybrid work are also offered.

Raute's targets related to its own workforce did not follow the ESRS 2 Minimum Disclosure Requirements for Targets (MDR-T) for 2024, but Raute has defined MDR-T-aligned targets and related metrics for its own workforce for 2025 and beyond. In 2024, Raute updated its targets to align them with the MDR-T. In the area of social responsibility, Raute defined as its sustainability targets developing the competence and supporting the well-being of its personnel, an inclusive and engaging work culture, a zero-accident ambition, the strengthening of safety with safety standards and management practices, and developing the life-cycle safety of solutions. Extensive groundwork was carried out for these targets in 2024, but they will be measured and assessed for the first time at the end of 2025, with 2028 defined as the target year. The Lost Time Injury Frequency (LTIF) is monitored as part of management remuneration; it describes the number of work-related injuries leading to absence in relation to hours worked, counting all reported accidents causing at least one day of absence, and is reported per million working hours. Raute's LTIF for 2024 was 6.0. Because policy training and implementation take place in 2025, Raute has not assessed the effectiveness of its policies and actions for 2024, but tracks the effectiveness of internal development actions.

All employee information was collected from Mepco in January 2025 and is reported as headcounts reflecting the end of the reporting period, December 31, 2024. Almost all employees are permanent and full-time employees. By gender, Raute had 680 male employees and 103 female employees, for a total headcount of 783; the "other" category is not applicable. By country, the headcount was 115 in Canada (15 female, 100 male), 47 in China (14 female, 33 male), 552 in Finland (63 female, 489 male), 27 in the USA (8 female, 19 male), and 42 across all other employees in APAC, EMEA and AME (3 female, 39 male). By contract type, of the total 103 female and 680 male employees, 83 female and 629 male were permanent, 20 female and 43 male were temporary, and 0 female and 8 male were non-guaranteed hours employees, an employment type used only in Finland for workers called to work if necessary. During the reporting period, 122 employees left the undertaking, giving an employee turnover rate of 15.6%, which takes into account all terminated employment contracts in relation to the total number of employees as of December 31, 2024.

Raute reports diversity metrics on age distribution and gender distribution in management. By age group, the total headcount of 783 employees breaks down into 97 employees under 30 years old, 441 employees aged 30 to 50 years old, and 245 employees over 50 years old; this includes all employees, also the Executive Board. For gender distribution in management, Raute reports figures at the top management level. The gender distribution by headcount at the top management level was 13 female and 74 male, for a total of 87. Expressed as percentages, this equals 14.9% female and 85.1% male at the top management level, totaling 100%. Raute notes that its definition of management includes Line Managers but does not include members of Raute's Executive Board. Across all diversity figures, the "other" category is not applicable.

Raute reports that 100% of people are covered by its health and safety management system. Raute has an ESRS-aligned systematic approach to safety management, including the necessary organizational structures, responsibilities, practices and procedures, but does not have a certified safety management system. During the reporting period there were 0 fatalities as a result of work-related injuries and work-related ill health. The number of recordable accidents was 16, and the rate of recordable accidents was 10.7. This rate is calculated by dividing the recorded work accidents by one million working hours; working hours are estimated for Singapore and Finland, actual working hours are used for other locations, and estimates are based on previous years' realizations because the current system does not allow reliable tracking of actual hours. The number of cases of recordable work-related ill health of employees was 0. The number of days lost due to work-related accidents, injuries, fatalities and work-related ill health was 153. Raute states it will not report on non-employees in its sustainability report for the first year of preparation.

Raute's operations are guided by its Code of Conduct, first drawn up in 2018 and revised in 2023, which sets a general framework for appropriate conduct and applies to all people working for Raute. The Code covers compliance with laws and regulations, respect for human rights, diversity and non-discrimination, and anti-corruption. It is supported by the Respect in the Workplace policy and an anti-corruption policy approved in late 2024. All listed policies are global and cover every Raute geography. The Code of Conduct is available on the company website, while the other policies are not publicly available. The Board of Directors and President and CEO, together with the CFO and Chief People Officer, are responsible for implementing the Code. Raute's whistleblowing process is based on the EU Whistleblower Protection Directive and the Finnish Whistleblower Act, and the channel is open to both personnel and external stakeholders through the intranet and the public website. The channel is available in three languages: Finnish, English and Chinese. Anonymous reporting is possible. Raute promotes corporate culture through continuous training, communication about the reporting channel, and stakeholder discussions.

Raute has zero tolerance for corruption and bribery, as outlined in its Code of Conduct, and personnel are required to fight corruption in all situations. The entire personnel participate in annual Code of Conduct training delivered through an e-learning platform, covering all areas of the Code including identifying and preventing corruption. In 2024, Raute trained its entire personnel in corruption and bribery-related topics as part of the Code of Conduct training. In 2024, 97.6% of Raute employees completed the Code of Conduct training. Separate standalone anti-corruption and anti-bribery training has not been implemented, and no separate training has been organized for the Board of Directors, though the Code of Conduct training covers all other members of management and supervisory bodies. Raute has not carried out a detailed analysis of business exposure to corruption but will do so during 2025. It assesses that procurement, sales, project management, accounting and finance are the operations most exposed to corruption, with internal controls in place where necessary. The Executive Board approved new anti-corruption and anti-bribery principles in late 2024. Detection relies on proactive and reactive measures, including internal and external audits and unannounced audits in exposed businesses.

No convictions or fines for violation of anti-corruption and anti-bribery laws were given to Raute or members of its personnel or supervisory bodies in the financial year 2024. The number of convictions is 0 and the number of fines is 0. To maintain this situation and support personnel, Raute's Executive Board decided to provide more detailed instructions and principles on corruption and bribery and to offer targeted training for the identified risky operations going forward. Raute's whistleblowing channel is a key tool for detecting and handling potential incidents of corruption, alongside the company's internal controls. All reports submitted through the channel, including those related to suspected incidents of corruption and bribery, are first handled by Raute's Ethics team. Raute performs a thorough internal investigation if a report or investigation reveals a potential incident of corruption, and it is committed to co-operation with authorities, including submitting useful information for investigation and assisting in seizing and recovering the proceeds of crime.