Verkkokauppa.com's Board of Directors is the highest authority responsible for the sustainability of the Group. The Board approves the Group's strategy, Code of Conduct, policies, and guidelines, to which the targets and principles of responsible business are linked.

The CEO of Verkkokauppa.com is responsible for the implementation and execution of the Code of Conduct, policies, and guidelines approved by the Board, including sustainability targets and action plans within the company. Members of the Management Team are responsible for the implementation of the Code of Conduct and policies within their respective areas of responsibility, as defined by the CEO. In 2024, the Management Team consisted of eight members, all of whom, except the CEO, were employees.

The company's Board represents a diverse range of expertise and has a broad professional background, ensuring that work and international experiences, age, and gender complement and support each other to enhance the company's business and shareholder value. The Board and the Management Team have relevant experience in terms of industries, products, and geographical locations.

Composition of the Board of Directors:

• Arja Talma, Chair
• Robin Bade
• Henrik Pankakoski
• Kati Riikonen
• Samuli Seppälä
• Irmeli Rytkönen (as of 4 April 2024)
• Enel Sintonen (as of 4 April 2024)
• Johan Ryding (until 4 April 2024)
• Kai Seikku (until 4 April 2024)

CEO and Management Team:

• Panu Porkka, Chief Executive Officer
• Jesper Blomster, CFO (as of May 7 2024)
• Nina Anttila, Chief Supply Chain Officer
• Tatu Kaleva, Chief Commercial Officer
• Pekka Litmanen, Chief Experience Officer (CXO)
• Jyrki Tulokas, Chief Strategy and Technology Officer
• Suvituuli Tuukkanen, Chief Marketing, Communications and Sustainability Officer
• Satu Berlin, Chief HR Officer (as of 1 March 2024)
• Mikko Forsell, CFO (until 6 May 2024)

Diversity of governing bodies by gender:

As part of the double materiality analysis process, the company's Board of Directors, Audit Committee, and Management Team reviewed identified impacts, risks, and opportunities related to sustainability issues and provided feedback on their assessment and scoring. Principles, actions, and targets related to sustainability issues and reporting are reported to supervisory bodies whenever they are updated and when new principles, targets, or actions are developed.

Board of Directors meetings addressed:

• CSRD reporting and status updates
• Review and approval of the double materiality analysis, linking key impacts, risks, and opportunities to the company's strategy
• Update of the sustainability program
• Science-based climate targets
• Risk management, including risks related to data protection, cybersecurity, and ESG topics

Audit Committee meetings addressed:

• CSRD reporting and status updates
• Double materiality analysis, including the handling of all identified impacts, risks, and opportunities
• Update of the sustainability program
• Sustainability targets and roadmap for 2024
• Results of internal audits related to sustainability issues
• Risk management, including risks related to data protection, cybersecurity, and ESG topics

Remuneration Committee meetings addressed:

• Personnel matters and strategy broadly, such as well-being, diversity, equity, and inclusion, as well as engagement

Management Team meetings addressed:

• CSRD reporting and status updates, including the handling of all identified impacts, risks, and opportunities
• Double materiality analysis
• Update of the sustainability program, program metrics, and monitoring model
• Environmental policy
• Employee satisfaction survey results, eNPS
• Cybersecurity, data protection, and information security
• Diversity, equity, and inclusion, as well as engagement
• Practices to ensure the responsibility of the supply chain
• Personnel matters and strategy broadly, such as well-being, diversity, equity, and inclusion, as well as engagement

The remuneration of the company's governing bodies is based on the company's remuneration policy. The Remuneration Committee of the company's Board of Directors prepares the remuneration report for the board's review, and the board approves it for presentation to the general meeting. Shareholders make an advisory decision on the report at the annual general meeting. In accordance with the company's current remuneration policy, the remuneration applied in 2024 has supported the company's long-term financial success and the creation of shareholder value.

In 2024, the performance of management remuneration is assessed in relation to one sustainability-related target, which concerns minimizing product returns regarding "change of minds". The sustainability target is to keep the return rate below 1% annually, which supports the company's principle of selling products based on need while reducing customer returns and waste. The return rate is used to monitor the company's sustainability performance, and the metric is included in the management incentive system with a 10% weighting. The scope of the targets is different from the sustainability program target which is defined in section E5 Targets related to resource use and circular economy. The 2024 incentive system did not include targets directly related to greenhouse gas emissions.

Due Diligence Statement

Risks related to sustainability reporting are identified, assessed, evaluated, and managed as part of the company's comprehensive risk management work. The company's Board of Directors has approved the company's risk management framework, which is based on the ISO 31000 standard. Risk management is an integral part of the company's management system and is managed according to an annual cycle. The company assesses risks based on their occurrence, probability, and impact, considering financial aspects as well as impacts on operations, safety, and strategic objectives.

Sustainability reporting is part of the company's external reporting, overseen by the company's CFO. The processes related to the preparation of the sustainability report are the responsibility of the finance department and the sustainability unit, including adhering to reporting timelines and identifying risks related to sustainability reporting. The risks related to sustainability reporting identified through the company's risk management process concern the adequacy of the reporting content and ensuring the availability and accuracy of background information. Appropriate measures are defined for managing the identified risks in accordance with the risk management process.

To ensure the comprehensiveness of the Sustainability report's content and background information, the reporting is carried out by individuals familiar with the subject, who actively follow applicable directive standards and legislative developments. Additionally, roles have been defined to ensure the availability and accuracy of background information, the responsibility for collecting and providing the necessary information and implementing measures to supplement any missing information. Sustainability reporting is also supported by third-party assurance.

To develop the internal control processes of sustainability reporting, the company introduced monitoring controls during the reporting year and initiated the CSRD Steering Group work described in the The roles and responsibilities of the administrative, management and supervisory bodies section. The company continues to develop the internal control of sustainability reporting as part of its control environment. Progress in sustainability reporting, the availability of necessary information, and other reporting-related observations were regularly reported to the company's Management Team, Audit Committee, and Board of Directors as part of status reporting.

Business model

Verkkokauppa.com is a Finnish retail company specializing in consumer electronics and home and leisure products, primarily operating in Finland and Estonia. It serves both consumer and business customers online and through four stores located in Helsinki, Pirkkala, Raisio, and Oulu. The company's pick-up warehouses are located in Helsinki and Vantaa. Additionally, the company has consumer and wholesale sales in the EU and EEA regions.

Verkkokauppa.com's product range includes over 60,000 products, with more than 2,800 products under its private label brands. The core categories of the product range are computers and peripherals, TV and video, mobile devices, and home appliances. The company's service range includes installation, maintenance, and recycling services, trade-in services for used consumer electronics, visibility sales, and financing services.

In 2024, the company's revenue was 467.8 million euros (502.9) and the net profit was negative 0.8 million euros (2.1). At the end of the year, the company had 615 employees, of which 597 were in Finland, 15 in China, and 3 in Hong Kong.

Value chain

The company's strategy guides its actions in gathering, developing, and securing production inputs.

Significant production inputs and resources enabling operations:

• Own workforce
• Multichannel marketplace
• Business enablers such as the supply chain and supplier relationships, local warehouses, delivery methods, and own ERP system and e-commerce platform
• Intangible assets such as brand and recognition, service concept, product expertise and assortment management, customer and transaction data, product information and reviews
• Financial resources
• Owners

The added value and benefits produced by the company for stakeholders:

• Salaries and rewards, career paths and skill development, community and engagement for employees
• A wide product range and affordable prices, easy transactions, personalized customer experience, tailored services for businesses of all sizes, customer satisfaction for customers
• Purchases and a modern distribution channel to reach consumer and business customers for suppliers
• Profit for owners
• Taxes and tax-like payments for society
• Circular economy products and services to extend product lifecycles for the environment

The company's suppliers include well-known international electronics brands and wholesalers in Finland and abroad, as well as smaller suppliers. The company's procurement is decentralized and does not constitute a significant part of any supplier's annual production.

Value Chain Overview:

The company's key stakeholders are customers, personnel, suppliers and other partners, as well as owners and the capital market. In addition, the company has assessed the key interests, perspectives, and human rights aspects of the value chain workers.

The company engages in active dialogue with its stakeholders to strengthen the understanding of expectations directed at the company and to consider them in the company's strategy, business model, and responsibility program. The key topics related to stakeholders are described in the table Stakeholder Dialogue.

Feedback received from stakeholders is regularly reviewed by the Management Team and the board and is an essential part of the strategy process. During the 2023 strategy update, insights were collected from employees through three strategy surveys. Feedback was collected from customers regarding Verkkokauppa.com's differentiating factors, but it was not communicated that this information would be used in setting the company's strategic targets. Additionally, feedback was collected from suppliers.

The company conducts regular surveys on sustainability topics to map the expectations of consumers and end users. The sustainability barometer surveys conducted in 2022 and 2024, which addressed consumer electronics and the sustainability of online stores, each gathered over ten thousand responses, and their results have been utilized in updating the company's strategy, double materiality analysis, and setting the targets of the sustainability program as communicated in the survey.

The company reports its strategy and progress transparently and up to date, enabling interested stakeholders to monitor the company's operations.

Stakeholder dialogue

Other considered stakeholders

| WORKERS IN VALUE CHAIN | Social responsibility audits including employee interviews | Implementation of labor rights and human rights, such as safe working conditions, adequate rest, a living wage, prohibitions of harassment, discrimination, forced labor, and child labor | • Requirements set for suppliers<br>• Social responsibility audits and requiring suppliers to prepare and monitor development plans based on audit results |

The company conducted its double materiality assessment at the beginning of 2024. The assessment followed the principle of double materiality, considering the requirements of the ESRS standards and the sustainability themes previously identified by the company. The double materiality analysis included mapping the company's key sustainability topics and their impacts on the environment, people, and society, as well as assessing the related financial risks and opportunities for the company's business. The assessment of impacts, risks, and opportunities covered not only the company's own operations but also the entire identified value chain.

As a result of the assessment, seven material topics were identified for the company: Climate change, Pollution, Circular economy and resource use, Own workforce, Workers in the value chain, Customers and end-users, and Business conduct.

Responding to material impacts, risks, and opportunities and their interaction with business and strategy

The sustainability program integrates sustainability aspects into the company's strategy and guides action within the business, reducing negative impacts while enhancing positive ones. The company updated its sustainability program in 2024. The impacts, risks, and opportunities identified through the double materiality analysis, along with the updated 2023 strategy, formed the foundation for this update. The goal of the update was to ensure alignment between the program and the company's revised strategy.

The company identified material negative impacts related to climate change and pollution, with these impacts primarily concentrated at the beginning of the value chain. Positive impacts were observed throughout the value chain in promoting a circular economy, and in relation to the company's own workforce, workers in the value chain, consumers, and end-users. The company seeks to mitigate negative impacts through measures such as focusing on product quality, compliance, and responsibility to ensure an effective and responsible procurement process. At the same time, the company aims to increase long-term benefits for both the environment and society, as reflected in its circular economy-based vision of creating a new normal for buying and owning.

The company also identified significant risks and opportunities related to its own workforce, consumers, and business operations that could affect its financial situation and cash flows. No significant risks were identified in the recognized risks and opportunities that require material adjustments to the carrying values of reported assets or liabilities in the 2024 financial statements.

Based on the double materiality analysis, the company assesses that the identified material risks and opportunities could impact its financial position in the short and medium term. The double materiality analysis utilized the risk classification defined in the company's risk management process to assess the significance of these risks and opportunities.

Impacts of strategy on sustainability issues

A responsible approach is a central part of Verkkokauppa.com's strategy and vision of creating a new norm for buying and owning. The company's sustainability-related targets form the company's sustainability program, which was updated during the reporting year and approved by the Board of Directors at the end of the year.

The key topics of the updated program are sustainable consumption based on a circular economy, ensuring sustainable operations and supply chains, growth and well-being of the company's own personnel, and maintaining exemplary business practices. The program is set for the company's 2024–2028 strategy period and is aligned with the company's strategy and double materiality analysis. The program's targets apply to all customer segments and geographical areas.

As is common for the retail sector, the company's most significant climate and other environmental impacts occur at the beginning of the value chain, in the various stages of manufacturing the products sold. The company's extensive supplier network and the product range's emphasis on consumer electronics require strong processes to ensure the sustainability of supply chains, such as ensuring working conditions and climate targets in the value chain and the continuous development of processes.

The company conducted a double materiality analysis in 2024. The process utilized previously collected stakeholder insights, internal expertise from various departments, and support from an external expert. The analysis considered the key aspects of the company's operations, such as its location, sector and business structure. The double materiality analysis progressed in four stages, starting with mapping the value chain and moving on to identifying impacts, risks, and opportunities. The process concluded with workshops that first prioritized impacts and then focused on prioritizing risks and opportunities.

In the double materiality analysis process, sustainability topics were addressed thematically through sub-topics set by ESRS standards. A scoring matrix was developed to support the identification process, evaluating the significance and extent of impacts at different stages of the value chain. Subsequently, identified materialities were discussed in workshops involving experts from various company functions and an external expert who particularly supported the identification of potential future impacts. The workshops utilized facilitated group discussions and impact assessment matrices, evaluating the severity, likelihood, and duration of each topic from the perspectives of business and stakeholders. All emerging views were documented.

Impact assessment and prioritization

In assessing and prioritizing impacts, the company examined its actual and potential impacts on the environment and people throughout the value chain. The assessment considered impacts on various stakeholders, covering all activities, business relationships, and geographical areas. The review included both direct impacts of the company and indirect impacts arising from business relationships, such as product manufacturing at the upstream end of the value chain.

The process was also supported by essential stakeholder interviews, particularly to deepen the understanding of the company's impacts at the upstream end of the value chain. The assessment was conducted theme by theme, considering key sub-topics. Impacts were reviewed over short-, medium-, and long-term periods to determine when different sustainability factors would tangibly affect the business.

Identified impacts were prioritized based on their relative severity. Severity was assessed according to ESRS guidelines, considering the scale, scope, and remediability of the impacts. For potential impacts, their likelihood was also evaluated.

Risk and opportunity assessment and prioritization

In assessing risks and opportunities, the company's expert teams conducted targeted evaluations of financial risks and opportunities for each sustainability theme, considering the identified impacts. The identification of risks and opportunities examined factors that affected or were reasonably expected to affect the company's financial position, financial performance, cash flows, access to financing, or cost of capital. For the quantitative assessment of risks and opportunities, the company's internal risk matrix was used. The matrix considered the magnitude and likelihood of impacts, defined in the context of the company's business environment and financial objectives. The magnitude of impacts was assessed on a scale based on the financial impact on revenue and categorized into five levels according to the company's risk management process. The assessment covered short-, medium- and long-term risk factors.

Scoring

The severity of impacts was measured on a scale of 1 to 5, with 5 being the highest value. Similarly, the total score for risks and opportunities was calculated on a scale of 1 to 5, with 5 representing the greatest impact and highest likelihood. Impacts, risks, and opportunities scoring above 3.75 were identified as material. The threshold was determined in collaboration with the company's experts and management to ensure that the most significant and noteworthy impacts, risks, and opportunities were considered.

Detailed information about the processes to identify and assess material impacts, risks, and opportunities related to the environment

Regarding climate change, the company assessed the climate resilience of its operations and various stages of the value chain from the perspective of risks posed by different climate scenarios. The analysis did not identify any material financial climate risks.

Impacts, risks, and opportunities related to pollution, water resources, marine resources, resource use, and the circular economy were identified by screening the company's assets and operations across the value chain. To deepen the understanding of upstream impacts, the company conducted an interview with a supplier. The interview aimed to provide a comprehensive view of environmental impacts and potential social impacts related to production. Additionally, information was gathered about circular economy perspectives, such as product lifecycle management and opportunities for improving the value chain.

The company has not identified communities directly affected by its operations and has therefore not conducted community consultations.

Impacts on water and marine resources were identified at the upstream end of the value chain, where the production of consumer electronics generates significant environmental impacts, particularly through the mining of minerals required for manufacturing. The company's own operations were not found to have impacts, given that it does not have its own production facilities, and its locations are not in high water-risk areas. The company did not, however, identify any material impacts, risks, or opportunities related to water resources or marine resources.

The company assessed that its own locations had no direct impact on biodiversity, as they were not in or near areas sensitive to biological diversity. The biodiversity assessment process focused on the upstream end of the value chain, specifically the production of products sold by the company, where negative impacts related to key direct causes of biodiversity loss were identified. For example, the mining of minerals used in consumer electronics manufacturing can have harmful effects on local ecosystems.

Based on the double materiality analysis, the company assesses the following ESRS topics to be material and has therefore included them in its sustainability statement:

• ESRS 2 – General Disclosures: All disclosure requirements applicable to all companies
• E1 – Climate change: Focus on climate change mitigation and energy consumption
• E2 – Pollution: Focus on pollution of air, water and soil, and substances of concern
• E5 – Resource use and circular economy: Focus on resource inflows and outflows
• S1 – Own workforce: Focus on working conditions, equal treatment and opportunities for all
• S2 – Workers in the value chain: Focus on working conditions, equal treatment and opportunities for all, and other work-related rights
• S4 – Consumers and end-users: Focus on social inclusion of consumers and/or end-users
• G1 – Business conduct: Focus on management of relationships with suppliers including payment practices

The company did not identify the following topics as material:

• E3 – Water and marine resources
• E4 – Biodiversity and ecosystems
• S3 – Affected communities

The utilization of transitional provisions is presented throughout the relevant disclosure sections where applicable.

Transition plan for climate change mitigation

Status and commitment

After the reporting period, the company made the decision to commit to the Science Based Targets (SBTi) climate initiative and reduce its greenhouse gas emissions in line with the 1.5-degree warming target of the Paris Agreement. For years, the company has systematically reduced its emissions with the aim of reducing the emissions of its own operations (scope 1 and 2) to zero by the end of 2025. With the SBTi commitment, the company will set science-based climate targets to reduce indirect emissions (scope 3) in the value chain. The commitment is also recorded in the environmental policy drawn up during the reporting year, which is publicly available on the company's website.

The company's principles related to climate change mitigation were recorded in the company's Environmental policy during the reporting year, and the process of setting targets and plans has begun. The company has yet develop a climate change mitigation transition plan. At the end of 2024, the company decided to commit to the Science Based Targets (SBTi) initiative and to reduce its greenhouse gas emissions in line with the Paris Agreement's 1.5-degree warming target. The commitment was fulfilled after the reporting year in early 2025. With this commitment, the company will set short-term science-based climate targets for the entire value chain. The company plans to develop a climate change mitigation transition plan by the end of 2026, after receiving validation from the SBTi organization, which will confirm that the targets are in line with the Paris Agreement. According to the company's assessment, the validation is expected to be completed by the end of 2026.

Scope of the plan

The company's operational emissions are minimal, due to the nature of its business and the planned reduction of operational emissions in accordance with the target set in 2021 to reduce operational emissions (Scope 1 and 2) to zero (0 tCO₂) by the end of 2025.

The commitment covers the entire value chain, including scope 3 emissions. The company is primarily exploring setting SBTi engagement targets, entailing a commitment to requiring that a certain portion of suppliers and partners, measured by emission volumes, set their own science-based climate targets.

Target years and milestones

Scope 1 and 2 targets:

• Reduce the company's own operational emissions (Scope 1 and 2) to 0 tCO₂ by the end of 2025
• Target time horizon: 2021-2025
• Baseline year: Not explicitly stated

Scope 3 targets:

• Reduce the entire value chain's emissions in accordance with science-based climate targets (SBTi): 78% of suppliers and partners, measured by emissions, are committed to SBTi climate targets by the end of 2030*
• Target time horizon: 2024-2028 (suppliers in upstream value chain and partners globally)
• *The formulation of the target is preliminary. The final formulation requires validation by the SBTi organization to ensure that the target is sufficient from the perspective of the 1.5-degree climate scenario.

Alignment with 1.5°C and SBTi validation status

• Commitment to the 1.5-degree warming target of the Paris Agreement
• SBTi commitment made at the end of 2024, fulfilled after the reporting year in early 2025
• SBTi validation expected to be completed by the end of 2026
• Climate change mitigation transition plan to be developed by the end of 2026 after receiving SBTi validation

Key decarbonization levers

Own operations (Scope 1 and 2):

• Investing in energy efficiency
• Purchasing only electricity produced from renewable energy
• Renewable heating and cooling energy when possible
• Challenging landlords to increase the supply of renewable energy and solutions in properties where the company is a tenant
• All electricity used in the company's operations is produced from renewable energy, except for the company's office in Shenzhen, China
• Switch to energy-efficient LED technology at Helsinki, Pirkkala, and Raisio locations
• Energy management software implemented in Helsinki operations in 2023 to optimize heating and cooling
• Emission-free renewable district heating at Helsinki (since 2021), Raisio and Oulu (since April 2024) locations
• Geothermal heating at Pirkkala store (since 2019)
• Solar power plants on roofs at Oulu and Raisio stores

Value chain (Scope 3):

• Collaborating with suppliers and partners to reduce indirect emissions in the value chain
• Encouraging suppliers to set their own emission reduction targets and improve the availability of emission data
• Environmental practice requirements for suppliers, including requirements to reduce energy consumption and greenhouse gas emissions, favor renewable energy, provide emissions data, and consider environmental aspects in the supply chain
• Reducing logistics emissions in collaboration with freight and distribution partners
• Minimizing air freight shipments
• Transitioning to the use of renewable fuels in freight transport where possible
• Automation and route optimization
• Solutions and business models aimed at extending product lifecycles
• Offering energy-efficient products
• Guiding customers in selecting and using energy
• Environmental requirements for suppliers expressed in the company's supplier Code of Conduct

CapEx and investment commitments

Work to prevent and mitigate the negative environmental impacts of the value chain is carried out as part of procurement, logistics planning and facility services, with time allocated to these functions within the purchasing, logistics and sustainability organizations. The company has allocated resources for acquiring renewable energy and improving energy efficiency, as well as for emission calculations. In the short and medium terms, the company is prepared to implement a project to set science-based climate targets (SBTi) and to develop emission calculations as part of the company's data capabilities development. The company yet to identify the need to allocate significant human or financial resources specifically for climate change mitigation. It is planned to specify medium-term resources in conjunction with the preparation of the climate change mitigation transition plan.

Locked-in emissions and stranded assets

The company does not have significant greenhouse gas or energy-intensive assets that would cause greenhouse gas emissions lock-in and transition risk for achieving emissions reduction targets.

Use of carbon credits and removals

No information disclosed on the use of carbon credits or removals. ESRS E1-7 (GHG removals and carbon credits) is marked as "Not material" in the disclosure requirement index.

Current emissions baseline (2024)

Policies related to climate change mitigation and adaptation

The company has adopted policies to address climate change mitigation. Climate change adaptation has not been identified as a material topic and is therefore not addressed in the company's policies.

Environmental policy

Key content and principles:

• Commitment to the goals of the international climate conference to limit global warming to 1.5°C
• Commitment to reduce emissions in accordance with short-term science-based climate targets
• Commitment to develop a climate change mitigation transition plan for the entire value chain
• Commitment to conduct a comprehensive carbon footprint calculation for the entire value chain annually and develop emission calculation practices to achieve readiness for setting absolute emission reduction targets
• Commitment to reducing operational emissions by:
  • Investing in energy efficiency
  • Purchasing only electricity produced from renewable energy
  • Purchasing renewable heating and cooling energy when possible
  • Challenging landlords to increase the supply of renewable energy and solutions in properties where the company is a tenant
• Commitment to collaborate with suppliers and partners to reduce indirect emissions in the value chain
• Commitment to encourage suppliers to set their own emission reduction targets and improve the availability of emission data
• Commitment to reduce logistics emissions in collaboration with freight and distribution partners
• Commitment to minimize air freight shipments
• Commitment to transition to the use of renewable fuels in freight transport where possible

Adoption and timing: The company's principles related to climate change mitigation were recorded in the Environmental policy during the reporting year (2024).

Relationship to commitments: At the end of 2024, the company decided to commit to the Science Based Targets initiative (SBTi) and to reduce its greenhouse gas emissions in line with the Paris Agreement's 1.5-degree warming target. The commitment was fulfilled after the reporting year in early 2025.

Scope: The policy applies to own operations and the entire value chain, including suppliers and partners.

Public availability: The scope, responsibilities, and availability of the company's policies are presented in the "Policies adopted to manage material sustainability matters" section (referenced but not included in the excerpts provided).

Supplier Code of Conduct

Key content: Environmental requirements for suppliers are expressed in the company's supplier Code of Conduct.

Scope: Applies to suppliers in the value chain.

Actions and resources in relation to climate change policies

Summary table of actions

Actions to reduce indirect emissions (Scope 3)

In the reporting year, the company developed an Environmental policy that complements the Code of conduct, especially regarding the identified significant indirect climate impacts. The Environmental policy includes guidelines on climate actions and energy use.

The company surveyed the climate commitments of its suppliers and partners. As a result of the survey, the company decided to commit to science-based climate targets (SBTi), which the company believes will accelerate its ability to engage suppliers and partners in reducing emissions. The actual commitment occurred after the reporting period.

The company prepared to build data capabilities for collecting information about suppliers and partners. The company has identified the need to develop the collection of emission data to improve emission calculations and to set, monitor, and demonstrate absolute emission targets.

The company did not monitor reductions in indirect greenhouse gas emissions during the reporting year or prior, as the calculations are currently largely based on estimates.

Actions to reduce emissions from own operations (Scope 1 and 2)

The company is committed to reducing its operational emissions through:

Energy source selection:

• All electricity used in the company's operations is produced from renewable energy, except for the company's office in Shenzhen, China
• Electricity purchased for Helsinki operations was EPD-certified renewable energy
• Stores in Oulu and Raisio switched to emission-free renewable district heating in April 2024
• The property of the Pirkkala store has utilized geothermal heating as part of its heating since 2019
• Helsinki operations have used emission-free renewable district heating since 2021
• Emission-free cooling is produced with district cooling
• Committed to purchasing solar power in locations where it is implemented (solar power plants on shopping center roofs in Oulu and Raisio)

Energy efficiency improvements:

• Switch to energy-efficient LED technology implemented at Helsinki, Pirkkala, and Raisio locations
• In 2023, implemented energy management software in Helsinki operations to optimize heating and cooling, which has reduced energy consumption

The company's operational emissions were low in 2024, at 38 tCO2. The company anticipates that the developments achieved during the reporting year will further decrease its operational emissions in 2025.

Resources for climate change mitigation

Work to prevent and mitigate the negative environmental impacts of the value chain is carried out as part of procurement, logistics planning and facility services, with time allocated to these functions within the purchasing, logistics and sustainability organizations.

The company has allocated resources for acquiring renewable energy and improving energy efficiency, as well as for emission calculations.

In the short and medium terms, the company is prepared to implement a project to set science-based climate targets (SBTi) and to develop emission calculations as part of the company's data capabilities development.

The company has not yet identified the need to allocate significant human or financial resources specifically for climate change mitigation. It is planned to specify medium-term resources in conjunction with the preparation of the climate change mitigation transition plan.

The company does not have significant greenhouse gas or energy-intensive assets that would cause greenhouse gas emissions lock-in and transition risk for achieving emissions reduction targets.

Science Based Targets initiative (SBTi) commitment

At the end of 2024, the company decided to commit to the Science Based Targets initiative (SBTi) and is thus committed to setting science-based climate targets for its entire value chain by December 2026 at the latest. The company is primarily exploring setting SBTi engagement targets, entailing a commitment to requiring that a certain portion of suppliers and partners, measured by emission volumes, set their own science-based climate targets.

Targets related to climate change mitigation and adaptation

Climate targets overview

Verkkokauppa.com has committed to science-based climate targets (SBTi) after the reporting period (early 2025) to reduce greenhouse gas emissions in line with the Paris Agreement's 1.5-degree warming target.

Target 1: Scope 1 & 2 emissions reduction (Own operations)

Target 2: Scope 3 emissions reduction (Value chain)

Total GHG emissions baseline (2024)

• Scope 1: 1 tCO2eq
• Scope 2 (market-based): 38 tCO2eq
• Scope 3: 194,885 tCO2eq
• Total (market-based): 194,923 tCO2eq

Additional context

The company states: "With the SBTi commitment, the company will set science-based climate targets to reduce indirect emissions (scope 3) in the value chain." The Scope 3 target formulation is preliminary and requires validation by the SBTi organization to ensure alignment with the 1.5-degree climate scenario. Validation is expected to be completed by the end of 2026. The company plans to develop a climate change mitigation transition plan by the end of 2026.

Energy consumption and mix

Verkkokauppa.com reports energy consumption for all its locations, excluding the Hong Kong office (three employees, considered immaterial). The company does not itself produce electricity, heat, or cooling.

Energy consumption by source (2024)

Energy intensity

Scope and methodology: The company reports purchased electricity, heating, and cooling for all locations except Hong Kong office. Data is collected from meters, supplier web portals, property managers' reports, and invoices for China operations. Where energy consumption pertains to entire properties or shopping centers with the company renting only part, consumption is calculated based on rented square meters.

All electricity used in operations is produced from renewable energy except for the Shenzhen, China office, which uses non-renewable electricity. Purchased electricity for Helsinki operations was EPD-certified renewable energy. Oulu and Raisio stores partially use solar power from roof installations.

District heating in Helsinki, Raisio, and Oulu is from renewable sources. Pirkkala uses geothermal heating partially, with remaining from non-renewable district heating. District cooling in Helsinki is emission-free.

Renewable energy share is based on guarantee of origin certificates. If origin is not specified or cannot be verified, no renewable electricity is assumed.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 GHG emissions

*Reporting starts in 2025.

**The reporting schedule and monitoring of emission targets are presented in the Targets related to climate change mitigation and adaptation section.

Scope 2 GHG emissions

*Reporting starts in 2025.

**The reporting schedule and monitoring of emission targets are presented in the Targets related to climate change mitigation and adaptation section.

Scope 3 GHG emissions

*Reporting starts in 2025.

**The reporting schedule and monitoring of emission targets are presented in the Targets related to climate change mitigation and adaptation section.

Total GHG emissions

*Reporting starts in 2025.

**The reporting schedule and monitoring of emission targets are presented in the Targets related to climate change mitigation and adaptation section.

GHG intensity per net revenue

Biogenic emissions and regulated emissions

The company does not have biogenic Scope 1 or Scope 2 carbon dioxide emissions.

Carbon dioxide and other greenhouse gas emissions from emissions trading systems are not included in Scope 1 emission calculations, as the company does not have such operations.

Reporting scope and methodology

Scope of reporting: The company's greenhouse gas emissions are calculated in accordance with the Greenhouse Gas (GHG) Protocol. The reporting scope is based on operational control and includes all the Group's locations, except for the Hong Kong office, which has three employees and is considered insignificant. Reporting covers direct greenhouse gas emissions (Scope 1), indirect emissions from the purchase of electricity, heating, and cooling (Scope 2), and indirect emissions that occur in the value chain (Scope 3).

The company reports emissions in carbon dioxide equivalents (CO₂e). A carbon dioxide equivalent is a common unit that refers to the different greenhouse gases included in the GHG Protocol (CO₂e, CH₄, N₂O, HFCs, PFCs, SF₆, and NF₃).

The company does not have a separate reporting system for calculating Scope 1, 2, or 3 emissions.

Scope 1: Direct carbon dioxide emissions occur only at the Helsinki location, which has a backup generator and sprinkler system that require fuel replenishment approximately every other year (stationary combustion). Emissions are calculated by multiplying the amount of fuel purchased during the year in liters by the emission factor specific to the type of fuel. The emission factor is based on the emission factor for light fuel oil according to the fuel classification of Statistics Finland.

Scope 2: The regional emissions of purchased electricity are calculated using the average emission factor for electricity produced in Finland (Fingrid) and the emission factor for electricity produced in Guangdong province for the China office. Purchased electricity is produced 100% from renewable energy at all locations in Finland. Purchased heat energy is district heating produced from renewable energy at the Helsinki, Raisio, and Oulu locations. Only the Pirkkala location has part of its heat production from conventional district heating. For heating and cooling calculations, regional emission factors provided by energy companies or municipalities are used as needed, corresponding to the heating method used at the location.

Scope 3 category-by-category methodology:

Category 1: Emission calculations are based on the Average-data method defined by the GHG Protocol, where the quantity or mass of products at the combined category level is multiplied by the product-specific emission factor. The quantities and masses of sold products are based on data from the Group's internal systems. Additionally, emissions from packaging materials are considered in this category. Emissions from packaging materials are calculated by multiplying the kilograms of materials by material-specific emission factors. Packaging material data from the largest suppliers is obtained from supplier reports. Emissions from smaller suppliers are estimated based on costs using a general plastic emission factor.

Category 2: This category includes greenhouse gas emissions from the procurement of materials for physical capital investments during the reporting year. In 2022–2024, the company did not make significant investments, so emissions in this category have been insignificant. The materiality of this category is reviewed annually, taking significant investments made during the year into account.

Category 3: Calculations are based on fuel and energy-related activities, including the extraction, production and transport of energy sources used by the organization. Emissions are calculated using actual fuel consumption and heating consumption (collected for Scope 1 and 2 emissions). The company uses the electricity emission factor from the International Energy Agency (IEA) database, directly utilizing kg CO₂e/kWh for transmission losses.

Category 4: Calculations are based on the delivery date, and reported emissions are primarily based on emission reports provided by the largest suppliers. Emission calculations consider all transport carried out under the company's own transport contracts. Emissions from supplier-responsible transport are estimated based on transport costs. Calculations do not cover supplier-responsible transport in cases where the share of transport is not itemized in the invoice. The 2024 emissions are largely calculated using emission factors that follow the well-to-wheel (WtW) principles.

Category 5: Emissions from the company's waste are primarily based on data from portals maintained by external operators and reports from property managers. If emission data is unavailable from a location, it is calculated by multiplying the generated waste amounts (in metric tons) by waste category-specific emission factors.

Category 6: Emissions are calculated based on flights, train and taxi trips, mileage reimbursements and hotel stays recorded in the company's travel expense system. Emissions are determined by multiplying the distances traveled and the number of hotel stays by the emission factors from Defra (the UK Department for Environment, Food & Rural Affairs).

Category 7: Calculations are based on estimates of the distance traveled and the mode of travel (e.g., car, bus, or metro). Data is collected through an annual survey of all employees, and the data is extrapolated to cover all employees, taking the proportion of the workforce that has the opportunity to work remotely into account. In 2024, emissions from car trips were calculated using Defra's emission factors, which follow the well-to-wheel (WtW) principles.

Category 9: Primarily based on emission reports from the largest suppliers. The 2024 emissions are largely calculated using emission factors that follow the well-to-wheel (WtW) principles.

Category 11: Calculations are based on estimates of the annual electricity consumption and lifecycle (3–10 years) of sold consumer electronics products. Emissions are calculated using the emission factor for electricity produced in Finland (Fingrid). This category includes only electronic devices with significant electricity consumption.

Category 12: Calculations are based on the estimated disposal and recycling of sold products (in kilograms) during the reporting year. Various emission factors are used for different waste categories: energy; WEEE (Waste Electrical and Electronic Equipment); paper; cardboard; and plastic.

Based on the materiality assessment of Scope 3 emissions conducted in 2022, subcategories 8, 10 and 13–15 are not material to the company. The company does not have owned or leased assets that are not included in Scope 1 and Scope 2 calculations. The company's products are ready for use without additional processing or refining. The company does not have franchising operations. The company does not own investments that should be included in the scope of category 15.

Uncertainties: Due to the nature of greenhouse gas emission calculations and long supply chains, estimates based on the company's internal estimation methods are used when primary data is unavailable. The company acknowledges that this results in uncertainties, particularly in the calculation of Scope 3 emissions. The company's goal is to primarily use first-hand data from suppliers, such as emission reports, and secondarily internal reporting systems.

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in exemption applied

The company has applied the phase-in exemption for ESRS E1-9, as indicated in the disclosure requirements index.

Assessment of material financial risks

Material financial risks related to climate change were not identified and the company has not therefore conducted a detailed analysis of its climate-related physical or transition risks. However, financial risks identified through the resilience analysis are monitored and evaluated as part of ongoing risk management. The company plans to deepen and review its climate resilience and scenario analysis as part of the double materiality analysis update in the 2025 fiscal year. At the end of 2024, the company decided to commit to the SBTi initiative. This commitment supports the company's efforts to align its operations with the 1.5-degree climate scenario.

Physical risks

Physical risks related to climate change were deemed non-material for the company's operations. However, extreme weather events can pose physical risks to the production and transportation of products sold at the upstream end of the value chain.

Transition risks

Transition risks identified include suppliers' challenges in adapting to emission reduction targets and changing legislation. These risks were not considered material due to the company's broad product range and extensive supplier and partner network spread across different geographical areas. Additionally, the company's risk management has prepared for supply chain disruptions by ensuring alternative partners and transport routes in case of potential disruptions.

Policies related to pollution

Verkkokauppa.com has identified pollution of air, water and soil in its value chain as a material sustainability issue. The company has established two policies that address pollution:

Environmental policy

Key content / principles:

• Commitment to environmental protection and preventing air, water, and soil pollution in the upstream and downstream value chain
• Substitution and minimization of substances of concern in accordance with EU chemical legislation
• Managing and limiting impacts on people and the environment regarding environmental impacts
• The pollution-related impacts concern the upstream and downstream value chain, not the company's own operations

Scope:

• Own operations and value chain globally

Governance:

• Approved by the Board of Directors
• The Chief Marketing, Communications and Sustainability Officer is responsible for implementation and compliance

Public availability:

• Available on the company's website in Finnish and English
• Note: The Environmental policy was added to the company's website after the reporting period in early 2025

Links to international standards:

• Based on the amfori BSCI Code of Conduct, which involved stakeholders in its development

Supplier Code of Conduct

Key content / principles:

• Requirements for suppliers regarding chemicals and hazardous substances
• Requirements regarding emissions and wastewater
• Requirement to commit to the environmental requirements of the amfori BSCI Code of Conduct
• Requirement to consider environmental aspects in the supply chain

Scope:

• Entire value chain globally

Governance:

• Approved by the Board of Directors
• The Chief Commercial Officer is responsible for implementation and compliance

Public availability:

• Available on the company's website in English

Monitoring implementation:

• The company monitors the implementation of environmental requirements set for suppliers through audits of its private label suppliers
• Audits are essentially social responsibility audits but include an overview of environmental practices, such as procedures for identifying environmental impacts, compliance with local environmental legislation, environmental permits and licenses, water use, and waste management

Note on policy limitations: The company's pollution-related principles do not specifically mention the elimination of substances of very high concern or the avoidance of incidents and emergencies. The principles do not include detailed information about specific impurities or substances.

Actions and resources related to pollution

Actions table

Additional context

In the reporting year, the company identified air, water, and soil pollution occurring in the value chain as a new material sustainability issue and developed an Environmental policy that includes guidelines for preventing pollution.

The company recognizes that negative environmental impacts, such as pollution, occur at the upstream end of its value chains. They need to be addressed by raising awareness and finding ways to influence them.

The company has not developed an action plan and does not currently plan actions to prevent pollution. Instead, the company focuses its resources on advancing other environmental targets.

Resources allocated

Procedures to prevent and mitigate the value chain's negative environmental impacts is carried out as part of procurement and logistics planning, with time allocated to these functions within the purchasing, logistics and sustainability organizations.

The company has yet to allocate significant human or financial resources specifically to pollution control.

Monitoring activities

The company monitors the implementation of environmental requirements set for suppliers through audits of its private label suppliers that are essentially social responsibility audits but which include an overview of environmental practices, such as:

• Procedures for identifying environmental impacts
• Compliance with local environmental legislation
• Environmental permits and licenses
• Water use
• Waste

Pollution of air, water and soil

Not disclosed.

The company has identified pollution-related impacts in its value chain but states in its disclosure requirement index (page 31) that E2-4 is "Not material" and provides "N/A" as additional information.

The company acknowledges that:

• Hazardous chemicals and heavy metals used during the procurement and production of raw materials can contaminate air, water, and soil (negative actual impact in upstream value chain)
• Toxic substances in electrical and electronic waste in the downstream value chain can increase the release of hazardous materials into water and soil (negative actual impact in downstream value chain)

However, no quantified emissions to air, water, or soil are reported. The company states it has not developed an action plan for pollution prevention and instead focuses resources on advancing other environmental targets. No E-PRTR data or other quantified pollution metrics are disclosed.

Substances of concern and substances of very high concern

Not disclosed.

The company has identified E2-5 (Substances of concern and substances of very high concern) as not material according to its double materiality assessment. In the disclosure requirements table on page 30, E2-5 is explicitly marked as "Not material".

While the company's Environmental policy includes principles that "generally consider mitigating, preventing and limiting the negative impacts of air, water and soil pollution in the upstream and downstream value chain, including the substitution and minimization of substances of concern in accordance with EU chemical legislation," no quantitative data on tonnes of substances of concern (SoC) or substances of very high concern (SVHC) are provided. The company's supplier Code of Conduct defines requirements for suppliers regarding "chemicals and hazardous substances," but no specific monitoring data, REACH compliance details, or tonnage figures are disclosed for this indicator.

Policies related to resource use and circular economy

Verkkokauppa.com has adopted two policies governing resource use and circular economy:

Environmental policy

Approval and timing:

• Approved at the end of 2024

Scope:

• Manages the company's material sustainability issues related to resource inflows (including resource use) and resource outflows related to products and services

Key content and principles:

Packaging and material choices:

• Environmental impacts are considered in packaging solutions for online and in-store purchases and internal transportation
• Packaging materials use is minimized and over-packaging is avoided while ensuring product protection
• Renewable materials are preferred to plastic and recycled materials to virgin materials
• Responsibly certified paper and cardboard are favored
• Commitment to reducing plastic shopping bags; PVC plastic is not used
• Materials used are recyclable and sorting instructions are developed

Circular economy and extending product lifecycles:

• Offering products and services that promote the circular economy is an important part of the company's vision
• Product lifecycles are extended through maintenance, repair, and buyback services, spare parts, and refurbished products as alternatives to new products
• Primary resources are replaced with secondary resources
• Goal to move circular economy activities online

Eco-design:

• Eco-design principles are considered in product selection, including product durability, reparability, energy efficiency, resource use, proportion of recycled materials, and recyclability

Waste minimization and steering towards reuse:

• Waste management is optimized according to the waste hierarchy
• Customers are helped to properly recycle end-of-life devices to reuse valuable materials and safely handle hazardous waste

Public availability:

• Not explicitly disclosed in the excerpts

Supplier Code of Conduct

Key content relevant to resource use and circular economy:

• Environmental requirements for suppliers regarding product packaging
• Requirements for suppliers regarding eco-design and lifecycle thinking

Public availability:

• Not explicitly disclosed in the excerpts

---

Note: The excerpts indicate that the scope, responsibilities, and availability of the company's policies are presented in a separate section titled "Policies adopted to manage material sustainability matters," which is not included in the provided excerpts.

E5-4 Resource inflows

Description of material resource inflows

The company's reported resource inflows are minor. The company's core business is retail, and it does not have its own manufacturing operations, so the company does not report resource inflows related to the production of the products it sells. The company's material resource inflows are only packaging materials, which are primarily used for packaging online purchases, and paper, which is used for the company's advertising leaflet, which has a large distribution. The company's material resource inflows do not include biological materials.

Resource inflows (packaging materials and advertising leaflet)

The proportion of certified packaging material (FSC certification) was 3%. The company received information about the proportion of certified material from only one supplier.

Use of recycled components

The proportion of recyclable raw materials in packaging materials is 100%.

Data collection methodology

The data on packaging materials (in metric tons) is collected from the company's largest suppliers, covering an estimated 99% of all packaging materials used. The data includes the amounts of materials reported by the suppliers and the proportions of recycled materials.

The consumption of recycled materials in metric tons is calculated based on the percentages reported by the suppliers from the total material consumption for each material. If the supplier has not provided information about the proportion of recycled materials, it is assumed that the material does not contain recycled material.

The proportion of materials certified through packaging material certification systems is based on information provided by the suppliers.

Potential limitations

The underlying assumption in the calculations is that the information provided by the largest suppliers is comprehensive and realistically represents the company's use of packaging materials. In cases where third-party data is unavailable, the missing information is primarily estimated based on the data from the preceding or following month to ensure comprehensive data. The company continuously strives to improve the coverage and accuracy of data collection.

Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities

Phase-in exemption applied

The company has applied the phase-in exemption for E5-6 (Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities).

As stated in the ESRS disclosure index:

Waste

Total waste generated

All waste generated at the company's premises is recycled, reused or directed to energy recovery. No waste is sent to landfill.

Waste diverted from disposal by recovery operation, in metric tons

Hazardous waste:

Non-hazardous waste:

Summary:

Waste streams and management approach

Waste streams relevant to the company's industry or operations include wood waste, cardboard, and electronic waste. Wood waste consists of pallets used in transport, which are directed for reuse but appear as a significant waste stream due to their weight.

The company's Waste management policy follows the waste hierarchy, where the primary goal is to prevent waste generation, followed by promoting the reuse and recycling of materials. The company's main waste streams consist of:

• Ordinary waste generated at the premises (cardboard and packaging materials)
• Pallets used for transportation
• Electronic waste (WEEE) and batteries collected from all premises, consumers, and maintenance operations, which are classified as hazardous waste

All waste generated at the company's premises is recycled, reused or directed to energy recovery. No waste is sent to landfill. The company does not produce or handle radioactive waste.

Waste minimization and steering towards reuse

In accordance with its Environmental policy, the company optimizes its waste management according to the waste hierarchy and helps its customers properly recycle devices that have reached the end of their life to reuse valuable materials and safely handle hazardous waste.

Potential limitations in waste accounting

Waste data is collected from portals maintained by external operators and based on supplier reports. The weights of property waste, hazardous waste, and WEEE (Waste Electrical and Electronic Equipment) are based on actual weight measurements. Pallets are reported in units, with their weight estimated in metric tons according to different pallet types. In cases where third-party data is unavailable, missing information is primarily estimated based on the data from the preceding or following month to ensure comprehensive waste data reporting.

Hazardous waste is overseen in accordance with applicable laws and environmental regulations.

The company's total amount of non-recycled waste includes ordinary waste directed to incineration for energy recovery. The company's recycling rate includes all other waste categories, including pallets. Wooden pallets used in transport can be reused multiple times, and as heavy material, they have a significant impact on the company's recycling rate.

The underlying assumption in the company's waste calculation is that the data collected from portals and suppliers regarding property waste, pallets, hazardous waste, and WEEE is comprehensive and realistically represents the company's waste accumulation. However, the company acknowledges that there may be uncertainties associated with the data.

Policies related to own workforce

Verkkokauppa.com's principles for managing material sustainability issues related to its own workforce are documented in two main policies:

Code of Conduct

Policy name: Code of Conduct

Scope: Applies to own workforce and management. Compliance is also required from the company's suppliers and partners globally.

Governance and approval:

• Approved by the Board of Directors
• The CEO is responsible for implementation and execution
• The CEO delegates responsibilities to Management Team members if necessary
• The legal unit assists the CEO in updates and changes to the Code of Conduct

Key content: The Code of Conduct covers the company's way of operating in relation to:

• Personnel and corporate culture
• Human rights and labor rights
• Compliance with laws
• The reporting channel
• Customer-oriented activities, communication, marketing, disclosure
• Cooperation with partners
• Prevention of corruption and bribery
• Data security and protection
• Environment

In accordance with the Code of Conduct, the company:

• Respects and promotes internationally recognized human rights
• Does not tolerate human trafficking or the use of child labor or forced labor
• Upholds the right to fair working conditions, a healthy and safe working environment, reasonable working hours, and adequate compensation for work
• Respects employees' freedom of association and the right to collective bargaining
• Does not tolerate any form of discrimination, harassment, or unequal treatment based on race or ethnic origin, skin color, gender, sexual orientation, gender identity, gender expression, disability, age, religion or belief, political opinions, trade union activity, national or social origin, educational background, nationality, language, economic status, health, appearance, family relationships, family responsibilities, or any other personal reason

International standards linkage: The company's operations are guided by international declarations, agreements, and recommendations:

• UN Universal Declaration of Human Rights
• Convention on the Rights of the Child
• ILO Convention on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• UN Guiding Principles on Business and Human Rights

The company's Code of Conduct related to its own workforce are derived from internationally recognized standards and the UN Guiding Principles on Business and Human Rights and, in the company's interpretation, are in line with them.

Public availability: Available on the company's website in Finnish and English

Monitoring implementation: The Management Team monitors the implementation of the policy. Annual mandatory Code of Conduct training is required for all employees, covering all sections including topics related to human rights and labor rights.

Personnel Policy

Policy name: Personnel policy

Scope: Own operations

Governance and approval:

• Approved by the Management Team
• The Chief HR Officer is responsible for implementation and compliance

Key content: The Personnel policy details operating principles concerning the own workforce regarding:

• Identification, prevention, and mitigation of potential and actual negative impacts on personnel
• Compliance with human rights
• The principle of avoiding causing or contributing to negative human rights impacts
• A model for addressing harassment and inappropriate behavior is in place
• Principles for creating a safer space to ensure that everyone can feel mentally and physically safe without fear of discrimination, harassment or bullying

The policy was updated in 2024 based on identified impacts, risks, and opportunities.

International standards linkage: As outlined in the Personnel policy, the company avoids causing or contributing to adverse human rights impacts and addresses any potential impacts, in alignment with the UN Guiding Principles on Business and Human Rights.

Public availability: Available on the company's website in Finnish and English (added to the website after the reporting period in early 2025)

Monitoring implementation:

• The experience of diversity and equality is monitored as part of employee surveys (conducted 3-4 times per year)
• Cases of harassment or inappropriate behavior are addressed immediately on discovery
• All reports are handled fairly, impartially, and confidentially
• An annual internal personnel development plan is prepared, covering the entire staff, defining annual targets and actions for developing and maintaining staff skills and well-being
• Employee representatives participate in the preparation of the development plan
• An annual equality and non-discrimination plan describes actions and goals for promoting equality and non-discrimination

Occupational Safety Program

The company has an occupational safety program with the main target of preventing workplace accidents and developing occupational safety work, including an annual assessment of risks and hazards in all operations. These plans and programs are developed in collaboration with employee representatives.

Monitoring: The company monitors sick leave, regularly assesses occupational safety risks and hazards in cooperation with occupational safety representatives, and utilizes data in data-driven management.

Taking action on material impacts on own workforce

Verkkokauppa.com has disclosed two main action programmes to address material impacts on its own workforce, both running from 2024-2028 across global own operations.

Action 1: Promoting working conditions and safety

Time horizon: 2024–2028

Scope: Own operations globally

Expected outcomes:

• Improving employee well-being by 0.1 points annually
• Improving employee engagement to exceed benchmark by 2028

Key activities and measures (2024):

Health and safety focus:

• Long-term activities promoting health and safety
• Sick leave monitoring
• Regular occupational safety risk and hazard assessments in cooperation with occupational safety representatives
• Data-driven management
• Prevention-focused occupational health services
• Mental health support investment to reduce mental health-related sick leave, aiming for less than two workdays per person per year
• Measures included increasing supervisors' skills, targeted training, and communication about mental healthcare and available support options
• Personal advancement plans for employees with identified reduced work capacity

Management and cultural measures:

• Coaching leadership
• Supporting mental well-being
• Early intervention discussions
• Zero tolerance of harassment and inappropriate behavior
• Communicating about occupational safety
• Preventing work-related retirement risks

Resources allocated:

• Non-financial: Well-being and occupational safety specialist in HR department covering operational and strategic tasks, close cooperation with stakeholders, collaboration with occupational safety representatives and interdepartmental cooperation
• Resources primarily allocated to supervisory work, training and time used for daily management
• Annual internal personnel development plan prepared covering entire staff, with employee representative participation

Action 2: Promoting equal opportunities, equal treatment for all and skill development

Time horizon: 2024–2028

Scope: Own operations globally

Expected outcomes:

• Improving employee well-being by 0.1 points annually
• Improving employee engagement to exceed benchmark by 2028

Key activities and measures (2024):

Skill development:

• Extended regular goal and development discussions to entire own workforce (offered to all employees with employment contract in 2024)
• Various employee training sessions
• Internal mentoring program (approximately thirty participants in reporting year)
• Career path development
• Blended learning combining online learning, self-study and classroom training
• Online learning with special focus on customer experience, safety, and diversity

Equality and non-discrimination:

• Developing equal and anti-discrimination practices
• Communicating and training staff through classroom training and online courses
• Diversity group activities to raise awareness of diversity and equality through communication
• Continued training for supervisors on role classification system (introduced 2023) to promote pay equality and equal career advancement
• Planned survey on experiences of minority groups regarding vulnerability and developing practices to improve treatment if necessary

Resources allocated:

• Non-financial: Learning culture manager in HR department with responsibilities including promoting skill development and diversity work, covering operational and strategic tasks (planning and implementing training, developing equality programs, strengthening learning culture)
• Diversity group advancing and promoting diversity work alongside regular duties
• Annual internal personnel development plan prepared covering entire staff with employee representative participation
• Annual equality and non-discrimination plan describing actions and goals

Link to policies:

• Both actions support the company's policies on non-discrimination, equal treatment, and Code of Conduct
• Application of collective agreement between retail employers' association and service sector union
• Collective agreement dialogue model applied to entire staff

Characteristics of the undertaking's employees

Total headcount and employment contract types

Headcount by country

Employee turnover

In 2024, the number of employees who left the company was 162, and the turnover rate was 25.5%.

Comparative data

The main reasons for fixed-term employment are seasonality (28%) and substitution (58%). On average, fixed-term employees accounted for about 9% of the company's workforce, which is significantly below the national level (21%). Source: Statistics Finland's Labour Force Survey 2009–2023.

Non-employee workers

As of 31 December 2024, there was a total of 156 non-employees, which included seven independent contractors and 146 workers primarily from companies engaged in employment activities. Additionally, there were three interns.

Reporting principles

The figures presented are exact numbers. The figures come from the company's continuously maintained HR system, and the numbers are reported as the number of personnel at the end of the reporting period (31 December 2024). All figures provided match the financial statement figures. The number of non-employees does not change significantly during the period.

Characteristics of non-employees in the undertaking's own workforce

Number of non-employee workers

As of 31 December 2024, there was a total of 156 non-employees, which included:

• 7 independent contractors
• 146 workers primarily from companies engaged in employment activities
• 3 interns

Breakdown by type

Reporting principles

The figures come from the company's continuously maintained HR system and the numbers presented are reported as the number of personnel at the end of the reporting period. The number of non-employees does not change significantly during the period. A significant number of non-employee workers are provided by employment agencies and are utilized as required, particularly to manage unexpected workload increases.

Collective bargaining coverage and social dialogue

Collective bargaining coverage and social dialogue arrangements

European Works Council

The company has not established agreements with a European Works Council (EWC), a Societas Europaea (SE) Works Council, or a Societas Cooperativa Europaea (SCE) Works Council.

Reporting principles for metrics

The figures presented in the table are exact numbers. The figures come from the company's continuously maintained HR system, and the numbers presented in the table are reported as the number of personnel at the end of the reporting period.

Diversity metrics

Top management gender distribution

Age distribution of workforce

Reporting principles

The definition of top management is one level below the administrative and supervisory bodies (the Group Management Team). The figures presented in the table are exact numbers. The figures come from the company's continuously maintained HR system, and the numbers presented in the table are reported as the number of personnel at the end of the reporting period.

Adequate wages

Benchmark used: Collective bargaining agreement (retail sector)

The company states: "All employees are paid wages that meet or exceed the terms of the collective agreement."

Compensation practices:

• Pays wages above the retail sector's collective agreement rates
• Includes the company's own 6.67% bonus
• Pays the capital city wage level throughout Finland
• Practices favorable to employees regarding annual raises and training

Coverage: 100% of employees (all employees are paid wages that meet or exceed collective agreement terms)

Geographic scope: Finland

Value chain: A living wage is mentioned as a requirement for suppliers ("Implementation of labor rights and human rights, such as safe working conditions, adequate rest, a living wage, prohibitions of harassment, discrimination, forced labor, and child labor" for "Workers in value chain"), but no specific benchmark or assessment methodology is disclosed for value chain workers.

Methodology: No living wage benchmark or methodology disclosed for own workforce. The disclosure is limited to compliance with and exceeding collective bargaining agreement terms.

Targets: No specific targets disclosed regarding adequate wages.

Social protection

All the company's employees are covered by social protection against income loss due to major life events, either through public programs or benefits provided by the company. These life events include: illness, unemployment, work-related injury and disability, parental leave, and retirement.

Coverage

Percentage of employees covered: 100%

Type of coverage: Public programs or benefits provided by the company

Life events covered:

• Illness
• Unemployment
• Work-related injury and disability
• Parental leave
• Retirement

Geographic scope

The company employs 597 employees in Finland and 18 employees in China (total 615 employees as of end 2024).

Reporting principles

The company complies with Finnish law, which mandates that occupational health services are provided to all employees.

Training and skills development metrics

Performance and career development reviews

Training hours

Reporting principles: The number of training hours is partly based on an estimate, assuming that the number of hours is the same for both genders. Where exact data was available, the gender distribution was balanced.

Training delivery methods: Blended learning, which combines online learning, self-study and classroom training, was preferred for skill development in 2024. Specific focus areas included coaching leadership, work efficiency, communication skills, product knowledge, and formal education (apprenticeship degrees in the retail sector). Online learning focused on customer experience, safety, and diversity. Approximately thirty people participated in the company's internal mentoring program in the reporting year.

Governance: Goal and development discussions were extended to the entire workforce in 2024, with discussions offered to all employees with an employment contract. An annual internal personnel development plan covering the entire staff is prepared each year, defining annual targets and actions for developing and maintaining staff skills and well-being, with employee representative participation.

Health and safety metrics

Coverage: 100% of employees with employment contracts are covered by occupational health services. The company complies with Finnish law, which mandates that occupational health services are provided to all employees.

Methodology: Figures come from the company's continuously maintained HR system, the occupational health system, and the work accident insurance provider's system. The accident frequency is calculated per 1,000,000 hours worked.

Work-life balance metrics

Family-related leave

Share of employees entitled to take family-related leave who took parental leave

Reporting principles for metrics

The figures presented in the table are exact numbers. The figures come from the company's continuously maintained HR system, and the numbers presented in the first table are reported as the number of personnel at the end of the reporting period. The number of employees with employment contracts who took parental leave is presented for the entire reporting period.

Compensation metrics (S1-16)

Pay gap

The company reports an unadjusted gender pay gap of 1.7% for 2024.

*The gender pay gap figure contains uncertainty for 2024 because the calculation method was refined from Q3 onwards to be more accurate and in line with ESRS guidelines.

The gender pay gap is mainly explained by certain high-paying roles.

Remuneration ratio

The ratio of the highest paid individual to the median annual remuneration for all employees is 12.1:1.

Methodology

S1-16 Reporting principles for metrics:

The figures presented in the table are exact numbers. The figures come from the company's continuously maintained HR system, and the numbers presented in the table have been calculated using the total wages for the reporting period.

Incidents, complaints and severe human rights impacts

Incidents, complaints and severe human rights impacts

No concerns were reported through the company's reporting channel in 2024. The company has not identified any serious human rights cases during the reporting period and no related fines, penalties, or compensations were paid.

Reporting principles for metrics

The figures include reports received through the reporting channel. All forms of harassment, bullying, or discrimination are prohibited, as defined in the Code of Conduct and Personnel policy. Employees are instructed to raise any potential cases by contacting their supervisor, a shop steward, the HR department, or management, for example. Cases are addressed immediately on being raised, and confidential hearings are arranged to resolve the situation. Cases are primarily resolved by supervisors, and only some cases come to the attention of the HR department, so there is no precise tracking of the number of cases. During the reporting year, some harassment cases were handled in accordance with the company's processes.

Policies related to value chain workers

Verkkokauppa.com addresses workers in the value chain primarily through two interconnected policies: the supplier Code of Conduct and the company's Code of Conduct. An Environmental policy also includes relevant commitments.

Supplier Code of Conduct

Scope: Entire value chain globally. The company requires all its suppliers to comply with the company's Code of Conduct and to commit to the supplier Code of Conduct, which is part of the contract terms. The supplier Code of Conduct covers all the company's suppliers, regardless of geographical location.

Key content and principles:

• Human rights, social and environmental responsibility, and risk materials
• Social responsibility topics include:
  • Governance practices and supply chain management
  • Employee engagement and protection
  • Right to organize and negotiate
  • Prohibition of discrimination, violence, and harassment
  • Fair remuneration
  • Reasonable working hours
  • Occupational health and safety
  • Prohibition of child labor
  • Special protection for young workers
  • Prohibition of precarious employment
  • Prohibition of forced labor, human trafficking and smuggling
  • Environmental protection
  • Ethical business practices
• Incorporates the amfori BSCI principles
• Requirements for suppliers regarding chemicals and hazardous substances, emissions and wastewater
• Requirement to commit to the environmental requirements of the amfori BSCI Code of Conduct
• Requirement to consider environmental aspects in the supply chain

Governance: The Chief Commercial Officer is responsible for implementation and compliance. The supplier Code of Conduct is approved by the Board.

Public availability: On the company's website in English.

Links to international standards:

• Amfori BSCI principles
• UN Universal Declaration of Human Rights
• UN Convention on the Rights of the Child
• ILO Convention on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• UN Guiding Principles on Business and Human Rights

The company states it is committed to identifying, preventing and mitigating potential adverse human rights impacts related to business operations according to these standards.

Monitoring implementation:

• Due diligence in supplier selection and long-term partnerships
• Membership in the amfori BSCI program since 2021, promoting sustainable trade
• Social responsibility audits for suppliers manufacturing the company's private label products, particularly those operating in high-risk countries
• Suppliers must provide evidence or consent to an amfori BSCI audit or another reliable third-party social responsibility audit before placing an order
• Corrective action plans required for all significant audit findings
• Zero-tolerance model for critical violations (child labor, forced labor, inhumane treatment, immediate health/safety dangers, unethical behavior)
• Monitoring through amfori BSCI membership and audit data
• Centralized oversight on product quality, compliance, and sustainability

Code of Conduct

Scope: The Code of Conduct applies to the company's entire own workforce and management. It specifies that the company respects and promotes internationally recognized human rights, including workers in the value chain.

Key content relevant to value chain workers:

• Human rights and labor rights
• Cooperation with partners in countries where human rights and labor rights are not sufficiently protected by law
• Commitment to international declarations, agreements, and recommendations

Governance: Approved by the Board. The CEO is responsible for implementation and compliance, supported by the Management Team. The legal unit assists the CEO in updates and changes to the Code of Conduct.

Public availability: On the company's website in Finnish and English.

Links to international standards: Same as listed under Supplier Code of Conduct (UN Universal Declaration of Human Rights, UN Convention on the Rights of the Child, ILO Convention on Fundamental Principles and Rights at Work, OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights).

Environmental Policy

Scope: Own operations and value chain globally.

Key content relevant to value chain workers: The Environmental policy includes guidelines on climate actions, environmental protection, pollution prevention, and circular economy. While primarily environmental, these requirements apply to suppliers and thus affect working conditions in the value chain.

Governance: The Chief Marketing, Communications and Sustainability Officer is responsible for implementation and compliance. Approved by the Management Team.

Public availability: On the company's website in Finnish and English (added to website in early 2025 after the reporting period).

Policy Update Plans

The company plans to update its procurement practices and supplier Code of Conduct during 2025 to support data collection and reporting on sustainability targets related to value chain emissions and employee working conditions, and to ensure that the Code of Conduct fully corresponds to the impacts, risks, and opportunities identified through the double materiality assessment across the entire value chain.

Stakeholder Engagement

The company leverages stakeholder insights in its policy development. Amfori BSCI has involved stakeholders in drafting the amfori BSCI Code of Conduct, which is part of the company's supplier Code of Conduct. The BSCI Code of Conduct is available to value chain workers in all manufacturing factories subject to BSCI audits.

Policies related to consumers and end-users

Verkkokauppa.com has identified one policy relevant to consumers and end-users under ESRS S4-1.

Code of Conduct

Scope:

• Applies to own workforce and management
• Compliance is also required from the company's suppliers and partners globally

Key content / principles: The Code of Conduct addresses:

• Customer-oriented activities
• Communication, marketing, disclosure
• Personnel and corporate culture
• Cooperation with partners
• Prevention of corruption and bribery
• Human rights and labor rights
• Data security and protection
• Environment
• Compliance with laws
• Reporting channel

Approval and oversight:

• Approved by the Board
• The CEO is responsible for implementation and delegates responsibilities to the Management Team members if necessary
• The legal unit assists the CEO in updates and changes to the Code of Conduct
• The company's Management Team monitors the implementation of policies

Public availability: Available on the company's website in Finnish and English

Link to international standards: The policy addresses human rights and labor rights. The company's cross-reference table indicates that S4-1 disclosure relates to non-respect of UNGPs on Business and Human Rights and OECD guidelines.

Stakeholder input: The views of key stakeholders have been taken into account in the formulation of policies.

Business conduct policies and corporate culture

Verkkokauppa.com's approach to business conduct is anchored in several policies that define the company's way of operating. The company fosters a bold, agile and transparent organizational culture and invests in a communal atmosphere. One of the themes of the sustainability program is to strengthen a responsible and inclusive work culture and community.

Code of Conduct

Scope: Applies to own workforce and management globally. Compliance is also required from the company's suppliers and partners globally.

Key content: The Code of Conduct defines the company's way of operating in relation to:

• Customer-oriented activities
• Communication, marketing, and disclosure
• Personnel and corporate culture
• Cooperation with partners
• Prevention of corruption and bribery
• Human rights and labor rights
• Data security and protection
• Environment
• Compliance with laws
• Reporting channel

The Code of Conduct states that the company respects and promotes internationally recognized human rights. The company's operations are guided by international declarations, agreements, and recommendations, including:

• UN Universal Declaration of Human Rights and Convention on the Rights of the Child
• ILO Convention on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• UN Guiding Principles on Business and Human Rights

Governance: The Board of Directors approves the Code of Conduct. The CEO is responsible for implementation and delegates responsibilities to the Management Team members if necessary. The legal unit assists the CEO in updates and changes to the Code of Conduct.

Availability: On the company's website in Finnish and English.

Monitoring: The Code of Conduct is covered in annual mandatory online training targeting the entire workforce, including the company's Management Team and CEO. Training covers all sections including topics related to the Anti-corruption and anti-bribery policy and the whistleblowing procedure. The company does not currently monitor the effectiveness of its Code of Conduct in relation to material sustainability impacts, risks and opportunities concerning pollution.

Supplier Code of Conduct

Scope: Entire value chain globally.

Key content: The Supplier Code of Conduct covers:

• Respect for human rights
• Social and environmental responsibility
• Risk materials

It includes the amfori BSCI principles and is part of contract terms. The company requires all its suppliers to comply with the company's Code of Conduct and to commit to the Supplier Code of Conduct. Social responsibility topics covered include governance practices, employee engagement and protection, right to organize and negotiate, prohibition of discrimination, violence and harassment, fair remuneration, reasonable working hours, occupational health and safety, prohibition of child labor, special protection for young workers, prohibition of precarious employment, prohibition of forced labor, human trafficking and smuggling, environmental protection, and ethical business practices.

The Supplier Code of Conduct states that the company's operations are guided by:

• UN Universal Declaration of Human Rights and Convention on the Rights of the Child
• ILO Convention on Fundamental Principles and Rights at Work
• OECD Guidelines for Multinational Enterprises
• UN Guiding Principles on Business and Human Rights

Governance: The Board approves the Supplier Code of Conduct. The Chief Commercial Officer is responsible for implementation and compliance.

Availability: On the company's website in English.

Monitoring: Suppliers of private label products operating in high-risk countries must provide evidence or consent to an amfori BSCI audit or another reliable third-party social responsibility audit before placing an order. Suppliers must prepare a corrective action plan for all significant findings in audits. The company monitors compliance through audits and is a member of the amfori BSCI program.

Anti-Bribery and Anti-Corruption Policy

Scope: Own operations and value chain globally.

Key content: The policy establishes:

• Zero tolerance for bribery, corruption, and other unethical influence
• Identification and prevention of corruption and bribery
• Regulations concerning gifts, hospitality, product loans, discounts
• Participation in company trips and sales competitions
• Approval process related to these activities
• Practices to avoid conflicts of interest
• Interactions with authorities
• Sponsorship and charitable donations

The company's Anti-corruption and anti-bribery policy covers the key requirements of the UN Convention against Corruption and, in the company's view, is in accordance with the convention. The company complies with applicable sanctions legislation.

Governance: The Board approves the Anti-Bribery and Anti-Corruption Policy. The CEO is responsible for implementation and compliance supported by the Management Team.

Availability: The company's internal document.

Monitoring: The training program covers 100% of the functions assessed as susceptible to corruption (procurement and corporate sales). Corruption-related risks are assessed annually by each department as part of risk management. The company's legal unit regularly reports potential violations of principles to the Audit Committee and the Board of Directors, as well as to the Audit Committee regarding corrective actions and ongoing investigations.

Whistleblowing Policy

Scope: Own operations and value chain globally.

Key content: The policy describes:

• The principles of the reporting channel available for all stakeholders
• How concerns can be reported
• How the process proceeds after a concern is reported
• Protection of whistleblowers

The company has whistleblower protection principles in place. Retaliation against employees who report potential violations in good faith is strictly prohibited.

Governance: The Board approves the Whistleblowing Policy. The CFO is responsible for implementation and compliance. The Whistleblowing team is responsible for all processes related to handling and investigating reports.

Availability: On the company's website in Finnish and English.

Monitoring: The Whistleblowing team monitors reported concerns and the effectiveness of the channel. The team's operations are based on guidelines that ensure investigators operate independently and are separate from the related chain of command. The whistleblowing team regularly reports on received reports and ongoing investigation processes to the Board's Audit Committee.

Risk Management Policy

Scope: Applies to own workforce and management.

Key content: The company's risk management framework for ensuring:

• Achievement of business objectives
• Operational continuity
• Disruption-free functioning
• Security

Covers the company's operating environment, processes, services, projects, and procurement.

Governance: The Board approves the Risk Management Policy. The Chief Information Officer is responsible for reporting identified risks to the Audit Committee and Board. The CEO is responsible for compliance.

Availability: On the company's website in Finnish and English.

Data Security Policy

Scope: Applies to all employees and management.

Key content: A comprehensive information security management system that ensures:

• Confidentiality, integrity and availability of information
• A secure environment for customers and employees

Governance: The Management Team approves the Data Security Policy. The Chief Information Officer is responsible for implementation and compliance.

Availability: On the company's website in Finnish and English (added after the reporting period in early 2025).

Additional information

Corporate culture: In line with values defined with the personnel, the company fosters a bold, agile and transparent organizational culture and invests in a communal atmosphere. The goal of the company's HR team is to enable the creation of a good employee experience and corporate culture that is visible even to the customer.

Reporting channel: The company has a reporting channel that allows employees, customers, and other stakeholders to report concerns that may violate the company's Code of Conduct or other guidelines. Reports can concern suspicions of corruption or bribery cases or violations of financial market or anti-money laundering laws. Stakeholders can make reports anonymously. The channel is available in Finnish and English.

No confirmed incidents: In 2024, the company was unaware of any cases, legal actions or investigations related to corruption involving the company. No lawsuits or judgments related to violations of competition law regulations, cartels, or abuse of a dominant market position occurred in 2024.

Prevention and detection of corruption and bribery

Anti-Bribery and Anti-Corruption Policy

• Scope: Own operations and value chain globally
• Approval and oversight: Approved by the Board. The CEO is responsible for implementation and compliance, supported by the Management Team
• Key content: Zero tolerance for bribery, corruption, and other unethical influence; identification and prevention of corruption and bribery; regulations concerning gifts, hospitality, product loans, discounts, participation in company trips and sales competitions, as well as the approval process related to these; practices to avoid conflicts of interest, interactions with authorities, sponsorship, and charitable donations
• Public availability: The company's internal document (not publicly available)
• Link to international standards: The company's Anti-corruption and anti-bribery policy covers the key requirements of the UN Convention and, in the company's view, is in accordance with the convention

Training and awareness

The company's principles for combating corruption and bribery are covered in the annual mandatory online training on the Code of Conduct, which targets the entire workforce, including the company's Management Team and CEO. Training was not provided to board members by the company. The company has identified procurement and corporate sales as the functions most susceptible to corruption and bribery. The training program covers 100% of the functions assessed as susceptible to corruption. The sustainability and legal units are responsible for keeping the training content up to date. The goal of the training is for the entire workforce to understand and recognize the risks of corruption and bribery related to their work and to commit to the company's Code of Conduct.

Risk assessment and monitoring

Corruption-related risks are assessed annually by each department as part of risk management. The company's legal unit regularly reports potential violations of principles to the Audit Committee and the Board of Directors, as well as to the Audit Committee regarding corrective actions and ongoing investigations.

Whistleblowing mechanism

The company has a reporting channel that allows employees, customers, and other stakeholders to report concerns that may violate the company's Code of Conduct or other guidelines. Reports can concern suspicions of corruption or bribery cases or violations of financial market or anti-money laundering laws. The Whistleblowing team monitors reported concerns and the effectiveness of the channel. The whistleblowing team is responsible for all processes related to handling and investigating reports and regularly reports on received reports and ongoing investigation processes to the Board's Audit Committee.

Compliance with sanctions legislation

The company complies with applicable sanctions legislation and has established internal special guidelines to ensure proper wholesale and traveler sales.

Incidents of corruption or bribery

Confirmed incidents

In 2024, the company was unaware of any cases, legal actions or investigations related to corruption involving the company.

Convictions and fines

In 2024, there were no lawsuits or judgments related to violations of competition law regulations, cartels, or abuse of a dominant market position. No fines, penalties, or compensations related to corruption or bribery incidents were paid during the reporting period.

Investigation and speak-up procedures

The company has a reporting channel that allows employees, customers, and other stakeholders to report concerns that may violate the company's Code of Conduct or other guidelines. Stakeholders can make reports to the reporting channel anonymously. The channel is available in both Finnish and English.

The company's CFO is responsible for the operation of the channel. Reports can concern suspicions of corruption or bribery cases or violations of financial market or anti-money laundering laws. All reported concerns are taken seriously and handled promptly.

The whistleblowing team is responsible for all processes related to handling and investigating reports. The team's operations are based on guidelines that ensure investigators operate independently and are separate from the related chain of command. The whistleblowing team regularly reports on received reports and ongoing investigation processes to the Board's Audit Committee.

The company protects whistleblowers by ensuring that retaliation against employees who report potential violations in good faith is strictly prohibited.

Anti-corruption training and prevention

The company's principles for combating corruption and bribery are covered in the annual mandatory online training on the Code of Conduct, which targets the entire workforce, including the company's Management Team and CEO. The training covers topics related to the Anti-corruption and anti-bribery policy, as well as the whistleblowing procedure. The company has identified procurement and corporate sales as the functions most susceptible to corruption and bribery. The training program covers 100% of the functions assessed as susceptible to corruption.

Payment practices

The average time it takes the company to pay an invoice from the date the contractual or statutory payment term begins is 55 days. The average is calculated based on the number of days from the document date of all invoices for the year to the actual payment date.

The standard payment term in the company's general purchasing terms is 60 days net, but this is assessed on a case-by-case basis for example, for smaller suppliers.

The company has no ongoing legal proceedings related to payment delays.