Outotec Sustainability Report 2016 Resource efficiency to the forefront Contents

YEAR 2016 3 CEO’s message 5 This is Outotec 6 Our strategy 7 Sustainability highlights in 2016 8 Direct and indirect financial impacts

OUR AGENDA 10 Impacts of megatrends on our business 12 Most significant topics 13 Sustainability Agenda 2020 14 Resource efficiency to the forefront 16 Commitment to SDGs 17 Engaging with stakeholders

REVIEWING OUR PERFORMANCE 20 Safety – our number one priority 21 Safe products for our customers 22 Sustainable offering for customers 24 Responsible business practices 27 Building a sustainable supplier base 28 Enhancing employee engagement Cases 30 Optimal water management for mines 31 Innovation for nutrient recycling 32 Flotation retrofit boosts performance Sustainability Master Class

GRI AND DATA 34 About this report 35 Annual targets 38 Data collection 38 Economic data 39 Environmental data 44 Social data

49 GRI, GLOBAL COMPACT AND SDG CONTENT INDEX 55 INDEPENDENT ASSURANCE

2 OUTOTEC / SUSTAINABILITY REPORT 2016 CEO’S MESSAGE

More from less with Outotec’s expertise

I have met many of Outotec’s customers since an ever more important role. Much has been taking on the position of CEO in October, done in these areas, but many opportunities and issues concerning productivity improve- still exist. ment come up in almost every conversation. In addition to the solutions needed in pri- Our customers often want also to discuss mary production, Outotec has the top class the challenges they face relating to the use expertise and technology to enable the effec- of raw materials and energy, the need to re- tive use of materials extracted earlier, such duce emissions, and water management, for as tailings, side streams and . This can example. In such contexts I am very happy result in more valuable materials, less waste to hear them describe Outotec as an expert and better efficiency. high tech company that can offer sustaina- Our work with our customer AMG in Bra- ble, resource-efficient solutions to improve zil provides a good example of this. Outo- their productivity and profitability. In addition tec helps AMG to process tailings and extract to investment costs, the entire life-cycle costs previously unutilized lithium from them. of facilities are now receiving more and more Lithium is a very important metal, for in- attention. stance in the manufacture of batteries. Outotec’s extensive positive ecological In many countries investments are cur- handprint is created when our customers use rently being made in plants. The the environmentally preferable technologies sulfur dioxide created during metallurgic and solutions we have developed. The nega- smelting processes can be almost fully recov- tive impacts of our own operations – our own ered and transformed into sulfuric acid. Each ecological footprint – are considerably small- new sulfuric acid plant is a very positive thing er than this handprint. for the environment, as well as for all the In 2016, Outotec earned one of the top po- people involved. sitions in the Corporate Knights’ index of the Global 100 most sustainable companies for WATER – A UNIQUELY the second time. This is welcome recognition PRECIOUS RESOURCE of the work we do and the results we have ac- The poor availability of process water and complished. the insufficient quality of untreated water are problematic in many areas. In some locations MORE EFFICIENT METAL RECOVERY fresh water must be created by extracting the As the metal content of mined ores decreas- salt from seawater, which is an expensive pro- es, and since in many places the best miner- cess. Outotec has a wealth of experience in al deposits have already been exhausted, re- solutions enabling the purification and recy- source efficiency and recycling are taking on cling of process water.

3 OUTOTEC / SUSTAINABILITY REPORT 2016 CEO’S MESSAGE

RECYCLED negative. We were therefore forced to cut supports the realization of the UN Agenda FOR USE down our expenses, reduce 650 jobs, and con- 2030, which promotes sustainability. The UN Phosphorus is a vital fertilizer for agriculture, tinue cost saving actions. aims for development that takes into account but global phosphorus reserves are dwin- Our focus was on improving profitability the environment, the economy, and people in dling. The recovery and recycling of phospho- and clarifying our modes of operation. Despite a balanced way. I hope you will enjoy reading rus is an important new area for Outotec. In many challenging years, our personnel and more in this report about how our goals are a pilot facility in Skellefteå, , for in- our investors have shown great commitment linked with those of the UN. stance, sludge from municipal sewage is effi- to the company. Finally, I would like to sincerely thank ciently dried using our technology, after which We are now building the future. This in- our personnel, our investors, our customers the remaining solid matter is used to produce volves striving to serve our customers even and our partners for their commitment to energy applying fluidized bed technology. Det- better, and develop our service portfolio with Outotec, and for the valuable feedback we rimental elements can then be removed from our new Services business unit, which begins have received through various forums. This the resulting ash, enabling the remaining ash, its operations in April 2017. Our task is to give greatly helps us to further develop our com- which is rich in phosphorus, to be used as a our customers insights into new possibilities, pany – with the sustainable use of natural re- fertilizer. and to keep one step ahead. sources as our common goal. Our skilled and talented people are mo-

CO2 EMISSION REDUCTIONS tivated by success. Excellence in workplace Markku Teräsvasara ON THE AGENDA safety is an example of what we can achieve President and CEO The Paris Climate Agreement has drawn the by working together. In our project site at an world’s attention to carbon dioxide emissions. smelter in Jazan, Saudi-Arabia, for For Outotec, this is a business opportunity – instance, more than 11 million hours have after all, our technologies are widely known now been worked without any accidents re- for minimizing environmental impacts. sulting in sick leave. The industry is actively striving to re- I place great importance on promoting duce emissions around the world, with help diversity and equality. More than 60 differ- from Outotec. Completely CO2-emission-free, ent nationalities are represented in our per- hydrogen-based direct reduction is a techno- sonnel. We strive to promote teamwork that logical vision that could reshape the industry’s brings together colleagues from different future. However, getting there will require ex- parts of the world. We have also set a goal to tensive development work. increase the share of women in management positions. PROFITABILITY AND DIVERSITY AT OUTOTEC WORKING TOWARDS THE UN’S 2016 was a challenging year for Outotec. Al- SUSTAINABLE DEVELOPMENT GOALS though order volumes in our Minerals Pro- Outotec is committed to support and imple- cessing segment began to grow, and profit- ment the principles of the UN Global Com- ability was good thanks also to cost savings; pact concerning human rights, working life, order volumes in the Metals, Energy & Water environmental affairs, and anti-corruption. segment remained weak, and results were Through our own actions the company also

4 OUTOTEC / SUSTAINABILITY REPORT 2016 This is Outotec

Outotec designs and delivers sustainable technology and service solutions for processing minerals and metals, for water treatment, and for producing energy from biomass and wastes. The company has a strong position along the entire value chain from ores to metals.

Outotec’s unique position at the forefront of of their operations and when they make new the and metallurgical in- investments. Our two business units – Miner- Key figures 2016 2015 2014 dustry is founded on a century of scientific als Processing; and Metals, Energy & Water Sales, EUR million 1,058 1,201 1,403 knowledge and operational experience, which – are dedicated to the creation of sustainable Adjusted operating profit*, EUR million -23 56 56 have resulted in a wide range of applications, technology solutions and life-cycle services R&D expenses, EUR million 55 61 57** particularly for processing virtually all types of for our customers. As of April 1, 2017, a third ores and minerals. business unit, Services, will focus on devel- Priority applications 57 93 62 Our customers include businesses who oping our service offering and competences Average number of employees 4,344 4,855 4,845 are investing in new processing plants or as well as delivering services for our custom- Employee engagement index, % 42 56 - modernizing their existing plants to increase ers. Our product portfolio covers hundreds of Wages and salaries, EUR million 329 353 363 the profitability of their operations, improve various plant concepts, processes, pieces of their resource efficiency, or reduce their equipment and services. Share of environmental goods and services in order intake, % 90 90 90 emissions, energy consumption or fresh wa- Outotec has been listed on the NASDAQ GHG emissions avoided through the use of Outotec technologies, 5,870 5,469** 5,067** thousand tonnes of CO e ter use. In line with our mission targeting the Helsinki since 2006, and the company was 2 sustainable use of Earth’s natural resourc- rated in the Mid Cap category in 2016. There Lost time injury rate (LTIR) per 1 million working hours 1.8 2.8 1.5 es, Outotec works to optimize customers’ re- were no major changes in Outotec’s company Total GHG emissions, tonnes of CO e per EUR 1 million sales 24.7 28.2 24.8 turn on investment with minimal ecological structure or the ownership during 2016. 2 Total energy consumption, TJ 165.5 164.5 152.9 impact. The innovative research done at our Read about Outotec’s financial perfor- in-house R&D centers and our continuous mance, legal entities and shareholders in our *) excluding restructuring and acquisition-related costs and purchase prize allocation amortizations development work realized together with our Financial Statements 2016 at **) restated figure customers have made us the leading develop- www.outotec.com/investors. er of technology in our field. Outotec operates globally, with offices or operative units in 34 countries, including our headquarters in . We sell products and We create a significant services to over 80 countries. Our customer centers provide full support for our custom- positive handprint ers’ businesses – both in the everyday running

5 OUTOTEC / SUSTAINABILITY REPORT 2016 Our strategy

Outotec’s strategy is to provide customers up these strengths requires broad expertise, our responsiveness and focusing on busi- b) reductions in product costs, which with the best tools for improving their so we must purposefully hire and retain peo- nesses, specific projects and geographies can be achieved by redesigning products ple with the right process knowledge. where we can really make a difference for specifically to reduce sourcing costs, by productivity, by using our leading our customers. changing components without compro- technologies combined with life-cycle CHALLENGES – IMPROVING COST COMPET- mising on quality, and by searching for services that enhance the performance of ITIVENESS AND EXPANDING SERVICES 2) Service business lower cost supply alternatives. One current challenge is the subdued level of Reigniting the growth of our service busi- our customers’ plants and processes. investment in our industry, coupled with in- ness is the key to achieving profitability 4) Profitability creased competition. After a prolonged min- over the cycle. Our services are based on We have taken stringent action in recent With our mission aiming for the ‘sustaina- ing and metals boom, which lasted until 2012, our technological knowledge. They span years to improve our fixed cost efficien- ble use of Earth’s natural resources’ we strive we have seen investment levels coming down, from spare parts and technical mainte- cy, leading to significant improvements. to meet our customers’ needs and priorities. finally leveling off and turning upwards during nance services through to plant shut- We now aim to continue spreading a cost While safety has long been a top priority for 2016, but current levels are still low. At the downs and full scale modernizations. conscious attitude within our company, so our industry, environmental performance and same time, the recent boom encouraged sev- Outotec has a very long history, and with as to limit fixed cost increases as much as social license to operate are also increasingly eral new competitors to enter our markets. In thousands of plants and pieces of equip- possible as volumes start to grow. at the forefront of our customers’ minds, not tighter markets, customers typically prioritize ment delivered to customers worldwide, least because of tightening regulation. upfront CAPEX costs and payback times rath- our own installed base is our primary fo- 5) Our people As countries start implementing the Paris er than full life-cycle costs, where we have cus. At the same time, as technologies Since we are an expertise-based compa- climate agreement, we expect carbon emis- our competitive edge. have evolved, we still have work to do to ny, people are our most valuable asset. In sion controls to start playing an increasing As is typical for cyclical industries, low- productize our offerings, so as to improve recent years we have unfortunately seen role in addition to existing stringent restric- ered investment levels have had a significant responsiveness and achieve economies a dip in our employee satisfaction and en- tions on emissions of harmful substances to impact on our profitability. We have recent- of scale. Our newly established Services gagement. We are working to fix this first- air or water. These trends, coupled with a pro- ly had to adjust our operating model and re- business unit, due to start up on April 1, ly by creating a clearer organization to en- longed decline in the industry’s productivity, sourcing accordingly. In December 2016, we 2017, is being shaped to provide sufficient able people to work more effectively. We as well as declining ore grades, all mean that finalized a new EUR 70 million cost structure management focus for developing our are also examining our leadership culture. there is a clear market for a premium tech- program, which led to a reduction of 650 em- service offering and delivering the growth This involves stepping up internal job rota- nology provider like Outotec. ployees globally. necessary to improve our profitability and tion further and promoting more open and In 2016, we also defined our own strate- customer intimacy. transparent decision-making. The safe- gic approach to climate change, which will GOING INTO THE NEXT CYCLE, WE HAVE ty of our employees has long been a top henceforth be an important part of Outotec’s FIVE STRATEGIC FOCUS AREAS 3) Competitiveness of our products priority, and we are able to show ever-im- wider strategy. With fewer opportunities in the mar- proving results on that front. We have led the industry in terms of en- 1) Customers ket, competition is fierce. We have two vironmental efficiency in most of the mar- Due to increased competition, we need to primary methods of improving our Read also about long-term financial targets, kets we serve for decades – with many of our act in a customer-centric way to differ- competitiveness: page 13. products being industry benchmarks. We now entiate. This requires developing our own a) further differentiation through digital- increasingly need to develop digital offerings competences to even better understand ization and improvements in energy and to further improve productivity. Together with our customers’ needs, by ensuring that environmental performance with a spe- our customers we are already realizing sever- we measure and actively manage custom- cific focus on carbon emissions, for in- al interesting related pilot projects. Building er satisfaction. It also means improving stance;

6 OUTOTEC / SUSTAINABILITY REPORT 2016 Sustainability Q4 highlights in 2016 Q2 Q3 Mar 11 New strategic technology Q1 development partnership launched with Newcrest Jul 15 Health, Safety and Environment Oct 10 Outotec celebrated 10 years as an Award received for our independent company, publishing Mar 29 Customer award received from Cajamarquilla Project in a history book 150 years’ evolution Jan 21 Outotec ranked the world’s 3rd most Ma’aden Phosphate Company for towards a greener future - the sustainable company on the Global our support work and high customer Outotec story 100 index of Corporate Knights communications standards Jul 18 Outotec awarded by Hydro Alunorte for achieving 1.3 million work hours with zero accidents in a red mud Oct 20 Customer seminar on sustainable Apr 7 Working for resource efficiency – filtration project mining and held in Outotec’s sustainability report 2015 Mongolia published Sep 7 30th anniversary meeting of the Chinese-Finnish Joint Working Nov 2 Internal workshop held on May 4 Outotec’s DeBugger technology Group for Non-Ferrous Metals Sustainable Development Goals won the first place in the Nutrient Industry hosted by Outotec (SDG) related to Outotec’s business Recycling Challenge in Helsinki, Finland Sep 15 New partnership signed by Outotec Dec 12 Sustainability Master Class May 18 Students from Central South and Thermo-System to deliver launched in cooperation with the University in China granted thermal processing solutions for the University of Helsinki sustainability awards by Outotec nutrient recycling

Dec 20 Outotec announced lower May 27 Employee engagement pulse profitability guidance for 2016 survey run

Dec 30 EUR 70 million cost structure Jun 7 Outotec’s Capital Markets Day program completed, resulting in the held in Outotec House reduction of 650 jobs globally

Jun 22 Markku Teräsvasara appointed as Outotec’s new CEO

7 OUTOTEC / SUSTAINABILITY REPORT 2016 Direct and indirect financial impacts

Our long-term financial targets involve targeted savings were achieved, and the pro- profitability and continuous growth. The gram was closed in December 2016. However, cost saving actions will continue, particularly challenging market environment in 2016 in the Metals, Energy & Water business unit, has, however, weakened our financial to improve profitability. performance. We strive for transparency in The total wealth created by Outotec in 2016 was EUR 344 million (2015: 456 million) our operations, and we base our decisions (G4-EC1). Our total procurement spend was on sound business reasons and commercial EUR 714 million (746 million). Outotec provides employment for approxi- rationale. mately 4,200 people in 34 countries. Wa- ges and salaries in 2016 amounted to EUR Outotec’s approach to economic sustainabili- 329 million (353 million). In 2016, Outotec had ty is demonstrated by our long-term financial to reduce 650 jobs globally due to weakened targets involving profitability and continuous market situation, which had negative direct growth. Our approach is also reflected in our impacts on the communities concerned. three material themes: As the company’s result before taxes was negative, no dividends were paid to share- • Responsible business practices holders from 2015. Neither were there any • Sustainable supply chain contributions to charities. • Stakeholder dialogue At the end of 2016, Outotec’s market capi- talization was EUR 914 million (623 million). DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED Read also about impacts of megatrends Outotec’s financial performance deteriorated on our business on page 10. in terms of order intake, sales and profitabil- ity in 2016. Our order intake in the Minerals INDIRECT ECONOMIC IMPACTS (G4-EC8) Processing segment started to increase from As a large-scale buyer of goods and services, the second quarter, which together with relat- we play an important role in supporting local ed cost savings contributed to the segment’s businesses. This generates employment and good profitability. Our Metals, Energy & Wa- drives socio-economic development in local ter segment’s order intake remained weak, communities. In large projects, as many as sev- however. A lack of major orders and increased eral hundred local engineers and other special- risk provisions especially in one large project ists, contractors and service providers may work significantly weakened the segment’s result. for us as suppliers or subcontractors. To adapt our operations to the weak mar- Outotec’s project implementation can con- kets, Outotec launched a new cost structure sist of over 10 million working hours at cus- program in November 2015, aiming to reduce tomer’s site. Most of this work is done by local fixed costs by EUR 70 million during 2016. The suppliers or subcontractors. Where Outotec

8 OUTOTEC / SUSTAINABILITY REPORT 2016 has long-term service contracts with custom- development activities run together with our which the work and sales activities are per- ers, maintenance and service personnel are external partners received EUR 2.3 million formed, value created and where the income normally hired locally and trained for their (3.0 million) in public funding. We additionally must be reported and taxes paid. Providing specific tasks after the plant has been built. subcontracted work packages out to univers- country-specific tax information would not Large mines and processing plant invest- ities and mainly small and medium sized en- give a comprehensive picture of the fairness ments – built with Outotec technology – con- terprises for more than twice this sum (over of the tax distribution in Outotec’s case. siderably boost the development of the host EUR 5 million). This generates many local country and its economy. They may create jobs, while also enhancing skills and knowl- hundreds or thousands of new jobs, while edge development. OUR POLICIES also leading to the establishment of new in- • Outotec Corporate Governance Policy dustrial plants and growth of businesses Fair and non-discriminatory tax policy • Code of Conduct along the value chain from natural resource As a globally operating company, Outotec fac- • Outotec Risk Management Policies extraction to finished products. In such green- es a variety of tax laws, regulations, practices • Supplier Policy field plant deliveries by Outotec, the indirect and interpretations. The international tax en- • Supply Policy economic impacts are considered significant. vironment is sometimes challenging to navi- • Tax Policy In 2016, although we received fewer large gate, but we are committed to being a respon- plant orders than previous years, Outotec sible and compliant taxpayer in each country used approximately the same amount of sub- where we operate. We pursue transparency contractors, over 2,200, working under our and non-discrimination in our tax practices, Country Effective income tax, % Country Effective income tax, % supervision at the project sites. and do not engage in aggressive tax plan- 30.0 Netherlands 20.0 – 25.0 The fact that Outotec’s financial result ning. Our tax management has a proactive was negative had indirect negative impacts approach. 25.0 New Caledonia 30.0 on societies in the form of less taxes paid. As In 2016, Outotec paid a total of EUR 6.4 34.0 Norway 25.0 some customers postponed their new invest- million in corporate income taxes (3.3 mil- Bulgaria 10.0 Peru 28.0 ments, there were lower local employment lion). The table below lists the tax rates af- 25.8 Philippines 30.0 rates in those locations. The reduction of 650 fecting us in the countries where we were 35.0 jobs globally by Outotec had indirect negative subject to corporate income taxation in 2016. Poland 19.0 impacts, which, however, were not considered In addition to local corporate income tax- China 25.0 Qatar 10.0 significant in any of Outotec’s locations. es, we pay, collect and remit many other taxes Finland 20.0 20.0 80% of Outotec’s manufacturing calculat- and tax-like payments, such as value added 29.2 20.0 ed by value is sourced from external suppli- and sales taxes, payroll taxes and capital tax- Ghana 25.0 Serbia 15.0 ers. Most of our suppliers in 2016 were based es. Our total tax contribution varies depend- in Finland, Germany, Brazil, Australia, and ing on the geographical distribution of sales, Greece 29.0 South Africa 28.0 South Africa; though Outotec has also devel- which in turn is affected by our product mix 30.9 Spain 25.0 oped best-cost-country sourcing in China, In- and locations of customer projects. We pro- Indonesia 25.0 Sri Lanka 28.0 dia, Eastern Europe and . Our spending mote open communication with the local tax Kazakhstan 20.0 Sweden 22.0 on local suppliers contributes to local em- authorities wherever we operate. ployment and regional development. In 2016, Outotec delivers large projects, and in Mexico 30.0 20.0 64% (43%) of our customer-related purchases some countries there may be only one pro- Mongolia 10.0 – 25.0 United Arab Emirates 0.0 were sourced locally (G4-EC9). ject ongoing. For this reason, we cannot dis- Morocco 10.0 – 31.0 United Kingdom 20.0 close country-specific financial information Mozambique 32.0 United States 38.0 R&D activities generate jobs and as it could breach our commitments concern- 32.0 Zambia 35.0 enhance skills ing access to project-related confidential in- Outotec also contributes indirectly to society formation. Also, the destinations of our sales through R&D activities. Ongoing research and typically do not correspond with the places in

9 OUTOTEC / SUSTAINABILITY REPORT 2016 Impacts of megatrends on our business MEGATREND IMPACT ON OUTOTEC ( RISKS – / OPPORTUNITIES +)

Three billion new middle-class consumers URBANIZATION AND THE GROWING MIDDLE CLASS Outotec’s cost structure may be too high for emerging countries will need vital resources such as metals Growing demand for minerals and metals to satisfy the needs of the new middle class requires greater processing capacity and New interest for Outotec’s technologies; efficient ore processing, and water in the coming decades. This more resource efficient methods. higher yields and advanced process control makes it essential to optimize resource usage. Greater production capacity and Increased cost-competitiveness with modular products, local suppli- ers and best-cost-country sourcing more resource-efficient, sustainable technologies will be needed. We feel that RESOURCE EFFICIENCY IMPERATIVE Ores become more complex and difficult to process technology can change everything. Valuable metals and minerals must be more effectively recovered, and and the tailings and the waste must be recycled and processed Tighter regulation affects customers’ operations Our management annually evaluates the better to enhance the efficient use of resources. global megatrends that impact Outotec’s Changes in the availability or price of water, fossil fuels, power and business, examining related risks and oppor- mineral resources affect customers’ operations tunities to create the basis for our strategic planning. Sustainability-related risks and op- Increased demand for Outotec’s new energy and water-efficient portunities are addressed in Outotec’s routine solutions risk management processes. The megatrends with the greatest impact Increased demand for new production of metals from end-of-life on Outotec today, as set put below, were first secondary materials; electronic waste, metallic scrap, cabling, and listed in our 2014 evaluation. In our 2016 re- battery paste or scrap. view, the previously listed megatrend Decou- pling wealth and ecological footprint has been Requirements for the efficient use of biomass and waste increase included in the Resource efficiency impera- tive, as they both relate to growing demand for metals and minerals, and the excessive DRIVE FOR SOCIAL SUSTAINABILITY resource use that is causing some of the most To maintain their social license to operate, our customers are pay- Customers’ disregard for social acceptability and regulation serious problems in the world, such as the ing more attention to health, safety and social responsibility with concerning the hazardous emissions climate change. regard to their employees and the local communities. Other megatrends identified as impact- Outotec’s strong track record as a responsible partner helps ing Outotec’s business are: Urbanization and customers gain social acceptance and financing for their projects the growing middle class, the Drive for social sustainability, the Digitalization of the world, Possibilities for Outotec’s modern and safe technologies to solve the and a More volatile macroeconomy. environmental challenges in mining Overall, these global megatrends appear to bring Outotec more opportunities than Customer and supplier collaboration provide new possibilities for threats (G4-EC2). improving the well-being of local communities

10 OUTOTEC / SUSTAINABILITY REPORT 2016 MEGATREND IMPACT ON OUTOTEC ( RISKS – / OPPORTUNITIES +)

DIGITALIZATION OF THE WORLD Digitalization will impact on how business is conducted, how groups Increasing competition and new players breaking the traditional of people function, and what we offer our customers. The world is market boundaries due to the development of digital services increasingly driven and characterized by connectivity, data, and soft- ware. Cloud computing, combining big data sets, advanced analytics Increasing possibilities for product and service development methods, new ways of interactions with machines, user experience requirements drawn from consumer applications and autonomous New possibilities for cost-efficient, flexible and highly responsive systems will also become a commonplace in our business. partnership models and closer engagement with customers

New business benefits with advanced ICT systems and data man- agement throughout Outotec’s international network

MORE VOLATILE MACROECONOMY Customers minimizing or postponing investments during down- Volatile investment activity rates, the speed of global GDP growth, trends metal consumption rates, and the balance or imbalance between supply and demand, capacity utilization rates and metal prices all Significant changes in commodity prices, currency rates or the greatly influence Outotec’s business. availability of financing

Volatile resource planning

72% of Outotec’s business comes from the cyclical mining and met- als industry

Business opportunities during uptrends

Outotec’s global operations and solution offering for virtually all types of minerals and metals reduces dependence on any single commodity or geographical market

Outotec’s wide range of long-term service contracts balance the risks posed by the highly cyclical markets

11 OUTOTEC / SUSTAINABILITY REPORT 2016 Most significant topics

Based on stakeholder dialogue, and pects was complemented, and some indica- 5 Development of our people considering the economic, environmental, tors were left out from reporting to improve 6 Equal opportunities and diversity compliance with the G4 guidelines for the 7 Stakeholder dialogue and social impacts of our operations, we ‘core’ level reporting framework. 8 Community involvement have defined nine sustainability topics that 9 Minimizing our own environmental impact we see as important for Outotec in relation Based on the materiality assessment, the topics that matter most for Outotec are: The first five of these nine most material top- to risk management or value creation. 1 Safety ics, together with the below G4 aspects iden- 2 Sustainable offering for customers tified as material, were chosen as the most Outotec conducted a wide-ranging review of 3 Responsible business practices significant issues for Outotec’s business. material sustainability topics in 2014. Poten- 4 Sustainable supply chain These topics are all reviewed in this report. tial topics were first identified together with an external partner, based on a previous ma- teriality assessment run in 2011, as well as Topics material to Outotec G4 material aspects Aspect boundaries management interviews, a review of sus- tainability trends impacting the industry, and 1 Safety Occupational health and safety Outotec’s premises and employees, Contractors working under Outotec’s supervision, Outotec’s project sites stakeholder feedback. Next, we mapped all of the relevant economic, environmental and so- 2 Sustainable offering for customers Products and services, Customer health and Outotec’s premises and employees, Outotec’s products and safety, Energy, Emissions services at customers’ operations cial impacts that can influence stakeholders’ perceptions of Outotec. 3 Responsible business practices Economic performance, Indirect economic Outotec’s premises and employees, Outotec’s products and Our Sustainability Working Group impacts, Compliance, Environmental services, Suppliers prioritized the identified significant topics in grievance mechanisms, Labor practices a workshop, which were then validated by the grievance mechanisms, Human rights grievance mechanisms, Freedom of Outotec Leaders’ Forum, where about 100 of association, Non-discrimination, Anti- Outotec’s leaders shared their views on the corruption, Anti-competitive behavior topics. The results of the materiality assess- 4 Sustainable supply chain Procurement practices, Supplier Suppliers’ operations, Contractors working under Outotec’s ment were also reviewed and verified by environment, Supplier assessment for labor supervision,Outotec’s project sites Outotec’s Sustainability Advisory Council, practices, Supplier assessment for impacts representing our key stakeholders. on society, Child labor, Forced or compulsory labor, Supplier human rights Outotec’s sustainability specialists evalu- ated the scope and aspect boundaries for the 5 Development of our people Training and education, Employment Outotec’s employees material topics, and chose the relevant GRI 6 Equal opportunities and diversity Diversity and equal opportunity Outotec’s employees, Suppliers indicators. Finally, the Executive Board vali- dated the results of the materiality assess- 7 Stakeholder dialogue Product and service labelling, Labor/ Outotec’s key stakeholders management relations, Local communities ment in 2015. At the end of 2016, the core team of the 8 Community involvement Grievance mechanisms for impact on society Outotec’s premises and employees,Outotec’s project sites, Outotec’s stakeholders Sustainability Working Group reviewed the material aspects and related GRI indicators 9 Minimizing our own Materials, Energy, Water, Emissions, Outotec’s premises and employees, Contractors working against G4 guidelines. The list of material as- environmental impact Effluents and waste under Outotec’s supervision at project sites

12 OUTOTEC / SUSTAINABILITY REPORT 2016 Sustainability Agenda 2020

Our Sustainability Agenda is built on project circumstances in which our employ- We have also integrated the ing for the first time the theme Equal oppor- the five most material topics to our ees, customers and suppliers work. most relevant UN Sustainable tunities and diversity. Our technologies and R&D have a central stakeholders and Outotec’s business. We role in our operations, since they represent Development Goals into our LONG-TERM FINANCIAL TARGETS measure our sustainability performance the key means of improving the resource ef- In addition to the long-term goals related Sustainability Agenda with regard to long-term targets set for ficiency of of our customers’ operations. For to our Sustainability Agenda, Outotec aims this reason, developing sustainable offering to achieve continuous profitable growth. each theme. for our customers is also at the core of our Outotec’s Board of Directors set the following sustainability work. Our second long-term long-term financial targets for the company in We have partially revised our Sustainability goal relates to providing customers with even tation. The key motivation for many experts June 2016: Agenda and long-term goals, as we reached more sustainable technologies and services, today is a sense of fulfillment. • Sales growing faster than the market our supply chain goals ahead of time. A new to help them reduce their ecological footprint. As an enabling and engaging culture is a • Annual average service sales growth long-term target was approved by the Exec- The baseline year for our long-term technolo- key differentiating factor for Outotec, we aim 5–15% utive Board in February 2017. Five of the nine gy-related targets is 2012. to achieve a five per cent improvement in the • Reach 10% adjusted EBIT margin by 2020 most material areas remain as the building In the area of responsible business prac- employee engagement and performance ena- • Gearing at maximum 50% blocks of our Sustainability Agenda: safety, tices, we aim to develop strong common val- blement indices calculated on the basis of our our offering, business practices, supply chain, ues and a robust Code of Conduct, as well as employee surveys. The figures will be com- and our people. Our annual targets are linked a solid governance structure. An integral part pared with results from the base year 2013, to both our long-term goals and the nine of this goal is to ensure that our Code of Con- when our employee engagement index was 69 most material topics. Based on an internal duct is also implemented in accordance with percent, and our performance enablement in- evaluation, we have also integrated the most our values. dex was 67 percent. relevant UN Sustainable Development Goals Because the majority of Outotec’s manu- We see engagement as a combination of We reached our supply chain goals into our Sustainability Agenda, as well as our facturing is outsourced, sustainability along perceptions that have a positive impact on own annual targets. our supply chain is highly important to us. behavior, such as satisfaction, commitment, ahead of time Global supply chain management has been a pride, loyalty, a strong sense of personal re- DEVELOPMENT WORK DRIVEN BY LONG- prioritized development area for Outotec since sponsibility, and a willingness to be an advo- TERM GOALS 2010. In 2015, we defined a new long-term cate for the organization. Safety arose as the most material theme in goal for our supply chain: to have all our ma- Another key element is performance ena- our recent materiality analysis, partly as a re- jor suppliers committed to Outotec’s Suppli- blement, which focuses on customer service sult of deeper stakeholder dialogue, and part- er Policy by 2020. We reached this long-term and quality, involvement, training and team- ly because our top management saw a need goal already in 2016, and have now set a new work. Performance enablement is a good pre- to improve our safety performance and cul- long-term and annual target for supply chain dictor of customer satisfaction and business ture. Zero accidents was set as the ultimate development and auditing. performance in the form of sales growth, high-level target for our development work, Outotec’s business is dependent on our market share, productivity, and profitabili- though this is a very ambitious target that is people. We want to make Outotec the most ty. These parameters are measured at least seldom achieved by any company. Outotec’s desirable place to work in our industry, and every second year in our employee surveys. management believes that this level of com- to keep great talent with us. This means we Our annual targets are linked to our Sus- mitment to a safe working environment is need to offer opportunities for continuous tainability Agenda. We have set annual targets nevertheless a necessity in the challenging professional growth through job and task ro- for all nine identified material themes, includ-

13 OUTOTEC / SUSTAINABILITY REPORT 2016 LONG-TERM TARGETS FOR 2020 RELATED SDG Resource efficiency SAFETY: to the forefront Zero accidents

Three billion new middle-class consumers industry. Primary production chains must be- SUSTAINABLE OFFERING: will need vital resources such as metals come much more efficient; while more metals must be recovered from residues, scrap and EGS in order intake permanently over 90% and clean water in the coming decades. To products at the end of their life-cycle. cope with these global challenges related At Outotec, we have the right expertise for both these developments. Using our technol- to resources, we offer technologies and Customers generate 20% less CO2 when using Outotec’s ogy mix and our deep knowledge, we can tai- metals related technologies compared to annual baselines services that reduce the consumption lor systemic solutions to treat a wide range of energy and water by increasing of feed materials, including both primary min- erals from geological mines, and secondary 50% reduction in fresh water intake per tonne of ore in non- material efficiency, recycling metals and materials containing minerals sourced from ferrous metal concentrators compared to 2012 reprocessing tailings and wastes. urban mines. We can help our customers to maximize metal yields by using advanced Outotec’s technologies have always been technologies that involve digitalization, auto- Double the energy produced through our waste-to-energy known for their resource efficiency, and this is mation, closed material loops, efficient water solutions compared to 2013 what gives the company its competitive edge. management and paste backfill solutions. In today’s market environment, characterized One of Outotec’s recent developments is by declining ore grades and increased oper- the introduction of a rigorous analysis frame- RESPONSIBLE BUSINESS PRACTICES: ating costs, our customers are increasingly work of Outotec’s solutions. This framework emphasizing resource efficiency among their can be adapted to each customer’s process Strong common values and Code of Conduct; requirements. requirements, enabling us to assess resource solid governance structure For this reason, Outotec is focusing more efficiency and specific flows of raw materi- than ever before on improving the system- als, water, energy and wastes in the context ic resource efficiency of its technologies, of the circular economy and and focusing SUSTAINABLE SUPPLY CHAIN: and also to enable economically viable met- on the direct and indirect environmental im- al production in smaller capacity plants. Our pacts of Outotec’s solutions. Customers can 100% of our key suppliers audited regularly with supplier offering encompasses favorable solutions use this information in their decision-mak- development actions drawn up according to audit findings for resource extraction, primary production, ing, enabling them to choose the most envi- the processing of secondary raw materials, ronmentally sound option and understand the waste-to-energy schemes, and renewable en- tradeoffs between different process options. DEVELOPMENT OF OUR PEOPLE: ergy production. Although mining companies typically invest in large equipment and processing units, us- 5% improvement in employee engagement and performance MINED METALS ing the economics of scale to seek profitabili- enablement indices compared to 2013 Ore grades are becoming more complex and ty and low unit costs, they are still increasingly more difficult to process. Although raw min- putting resource efficiency and environmental erals are non-renewable resources, metals – sustainability high on their agenda. The cur- FINANCIAL PERFORMANCE: once mined and processed – are 100 per cent rent business environment does not encourage Continuous profitable growth recyclable. Moving towards the circular econ- companies to make large investments to in- omy has two essential implications for our crease their metal processing capacities.

14 OUTOTEC / SUSTAINABILITY REPORT 2016 In response to this trend, Outotec has Creating greater value MUNICIPAL AND INDUSTRIAL WASTES can suggest services and alterations that will launched alternative, modular plant concepts. from less input Resources that can be recovered from munic- improve their performance, recommending Such plants are mainly small in scale, but at ipal waste water treatment sludge include en- models that include novel ways of capturing the same time flexible and resource efficient. ergy, a range of metals, nutrients, and other value. Such changes can enable customers to Our recently launched modular solvent ex- of alloys in different physical forms, as well salts and chemicals. A state-of-the-art Sew- reduce the amounts of energy, chemicals and traction and flotation plants are very agile. as electronics, plastics, oil, fluids, textiles, age Sludge Incineration Plant typically oper- other inputs they use, for instance. They can easily be adjusted to various produc- metals, glass, sand etc. Outotec has plenty of ates through a self-sustaining process, with Outotec is a member of many international tion volumes by adding further modules, and experience integrating several different tech- no need for adding external fuel. Such plants organizations who are working to create initi- they can also be reused in other sites with nologies intelligently to maximize the eco- can produce a surplus of heat or even electri- atives that can replace ‘end-of-pipe’ solutions relatively light additional structures after pro- nomically viable recovery of multiple materi- cal power or heat, and comply with all emis- with more systemic processes promoting re- duction ceases at their original site. Simpli- als, and to utilize the energy contained in the sion standards. In addition, Outotec can help source efficiency and clean technologies. fied design and modularization gives products feed in the processing. In secondary smelting, communities and companies to move on from This report introduces several busi- a longer life-cycle and a higher end-of-life it is also essential to capture emissions gen- merely cleaning water to minimizing of waste- ness cases demonstrating how we can help value. erated during the process, and Outotec has water streams and establishing of practical our customers to improve their resource several alternatives for cleaning gases before resource recovery concepts. efficiency. BY-PRODUCTS releasing them into the atmosphere. A wide range of fuels, such as agricultur- • Optimal water management for mine By-products from metallurgical processes, al waste, municipal solid waste, wood waste, sites, page 30 such as minority metals, acids, salts, chem- WATER industrial and municipal sludge, plastic, and • Innovative technologies for nutrient icals and slag, can be recovered to create Clean fresh water is a scarce resource in tires, may be used for energy production with recycling, page 31 saleable products usable as raw materials in many parts of the world. Demand and sup- Outotec technologies. Such processes can • Flotation retrofit boosts performance other industries. Another type of by-product ply can be brought into a sustainable balance close critical metal and nutrient cycles by at Yamana , page 32 is energy recovered from the processes, typi- only by changing the pattern of demand or by turning waste ash into a raw material or even • Sustainability Master Class, page 33 cally in the form of steam, which can be used introducing new sources of supply. Above all, a ready product such as phosphate or ferti- in the process itself, in other processes, or water losses should be minimized, and water lizer. even in electricity generation. It is essential to must be used much more efficiently. find ways to use such surplus energy in order Outotec’s solutions can optimize wa- NEW BUSINESS FROM RESOURCE to reach high energy efficiency. The heat gen- ter management in entire mines, including EFFICIENCY erated in processes should be recovered and concentrator sites. The target is to minimize One of the key drivers behind resource effi- used in other processing phases. fresh water consumption by implementing ciency is the notion that it plays an important water reuse, recycling and cleaning practices. role not only from an environmental perspec- SECONDARY RAW MATERIALS Our paste plant technology for mineral tive, but also by securing a competitive advan- Metals are different from other materials in concentrators and effluent treatment of met- tage. that they are inherently recyclable. Metals allurgical processes are proven solutions. An- During the prevailing market situation, have already been recycled for thousands of other viable solution for waste material stor- when companies are looking for all possible years. In addition to providing environmental age is the dry stacking of concentrator sand, ways to boost profits without making large benefits, recycling is often also less costly. which is a far safer method than the tailings capital investments in new plants, we have However, the challenge of using second- dams that are still widely used. For waste wa- found new business opportunities in the quest ary raw materials is the complexity of the ter treatment, we have developed a process to improve resource efficiency. After analyzing raw material, which may include a mixture for managing sulfate, which is a common and each link of our customers’ operations, we growing challenge in the industry. 15 OUTOTEC / SUSTAINABILITY REPORT 2016 Committing to Sustainable Development Goals

We have defined our most significant the Executive Board, who approved our com- enabling our clients to use natural resources By developing and delivering our impacts with regard to the UN Sustainable mitment. efficiently (Goal 12). We have zero tolerance technologies we take action to for corruption and continuously train our own Development Goals. Our environmentally OUR CONTRIBUTION employees on anti-corruption topics, while combat climate change every day sound technologies can make our Outotec’s most significant impacts on the also requiring compliance from our business customers’ operations more sustainable, SDGs are created by our technologies. By put- partners (Goal 16). ting safety first, we reduce the risk of acci- In addition to the above, we have identified and we take action every day to combat dents relating to the use of our technologies. an indirect impact of our partnerships with climate change. We have integrated the Applying our technologies also reduces the our customers, suppliers, and other business pollution and contamination of air, water and partners (Goal 17) towards two SDGs in con- SDGs into our Sustainability Agenda 2020 soil (Goal 3). nection with our business operations. Further, and GRI Index. In line with the goals set by the UN Gen- Outotec is firmly committed to the principle of eral Assembly, we upgrade our customer’s equal opportunities, and implements non-dis- In September 2015, the United Nations operations to make them more sustainable criminatory company policies and practices launched the 2030 Agenda for Sustainable (Goal 9), while also improving energy efficien- globally (Goal 10) Development as a framework for shared ac- cy (Goal 7), keeping resource efficiency at the tion for all countries, companies, NGOs and forefront. Through our offering and the de- OUR TARGETS TOWARDS SDGS other stakeholders. The Agenda includes 17 velopment of our technologies, we support To measure our commitment and contribution Sustainable Development Goals (SDGs), which actions to combat climate change every day to the SDGs, we have integrated the SDGs into set out a global development agenda for 2030, (Goal 13). We also increase the efficiency of our own Sustainability Agenda. Our long-term with objectives for social, economic and en- water use by reducing the amounts of fresh targets reflect our core value ‘Commitment vironmental dimensions. As part of our com- water needed in our processes and by in- to sustainability’, and we have found that our mitment to the Agenda 2030 and the SDGs, creasingly recycling and safely re-using water, most material topics also closely reflect the we have identified the most relevant goals for thus decreasing the amounts of wastewa- goals set in the UN’s global 2030 Agenda for us and examined our impacts on them. ter (Goal 6). With our solutions for renewable Sustainable Development: energy, we help to make cities more sustain- • Safety (Goal 3) DEFINING OUR IMPACTS able by enhancing sustainable urbanization • Offering (Goal 9) Outotec’s impacts on the SDGs were ana- (Goal 11). With equal opportunities as one of • Responsible business practices (Goal 8) lyzed through an internal workshop, involv- our most material topics, our sustainability • Supply chain (Goal 12) ing members of our extended Sustainability targets aim to increase women’s opportuni- • Our people (Goal 4) Working Group. The team identified the most ties for leadership to promote gender equality important SDGs for each of Outotec’s most (Goal 5). We plan to update our Sustainability material topics. The core Sustainability Work- We also cooperate with universities on Agenda 2020 in 2017 to include longer-term ing Group summarized the results based on R&D (Goal 4) and drive technological up- goals in line with the SDGs. the aggregated outcome and voting at the grades and innovations that will improve re- In addition, we have integrated SDGs into workshop. Eleven of the SDGs were identi- source efficiency in production (Goal 8). By our Annual Targets, which are structured to fied as most relevant overall, with two SDGs requiring sustainable practices along our support our long-term goals and in the same where we have indirect impact. The analysis supply chain, we promote the wider adoption way also reflect the SDGs. and approach to the SDGs were presented to of sustainable management practices, thus

16 OUTOTEC / SUSTAINABILITY REPORT 2016 Engaging with stakeholders

Stakeholder dialogue was identified as one We have also asked our employees’ feed- some 1,400 individual comments. These com- oration tools were taken in full use in 2016. of the important topics in our materiality back about the report and topics of interest ments form the basis for actions designed to The new internal social media tool Yammer in sustainability communication in internal achieve improvements at all levels from indi- was quickly adopted for discussion and dia- analysis. We aim to enhance transparency social media. The other forms of stakeholder vidual accounts to the global level. logue. At the end of 2016, over 3,400 employ- by maintaining continuous dialogue with engagement were not undertaken specifically ees were sharing their opinions in Yammer in our key stakeholders. as part of the report preparation process. ENGAGING WITH EMPLOYEES over 400 discussion groups. To collect open feedback from our stake- The year 2016 continued to be challenging in Two Outotec Round Table events were We have defined the following groups as our holders we have published a form on our terms of employee relations. Due to our cost held during 2016 to bring together 21 person- key stakeholders: website savings, restructuring and related reduc- nel representatives and top management. The • Customers tions in our workforce, our employee engage- topics discussed included our strategy, acqui- • Employees LISTENING TO CUSTOMERS ment index further declined[link to Towards sitions, rewards, organizational changes, and • The academic community Customer satisfaction is high on our agenda. employee engagement], as measured in the internal development programs. • Investors and financiers We build our understanding of our custom- Pulse employee survey conducted in May. • Suppliers ers’ needs and challenges by systematical- To deploy our changed operating model, Employees as owners • NGOs and media ly collecting feedback. We have also invested ‘Outotec ’16’ events were held in each market Many Outotec employees are also sharehold- in internal feedback channels and feedback area office. Employees were invited to a ‘town ers through O’Share, Outotec’s Employee We also consider our planet and future management to improve our products, servic- hall meeting’ to discuss Outotec’s overall plan Share Savings Plan, which was launched in generations as stakeholders when evaluating es and operations. for the present market situation, and work- 2013. O’Share rewards employees for long- whether Outotec’s offering and operations are Key parameters used by Outotec to meas- shops were held to clarify how we work to- term commitment to the company. Approxi- future-proof. ure global customer satisfaction are our Net gether in the new organization. The feedback mately 27% (2015: 27%) of employees partici- To measure our success in engaging with Promoter Score (NPS) and Customer Satis- gathered from each market area about these pated in this program in 2016. stakeholders, we have set targets related to faction ratings. Our NPS has shown an up- events was very positive. The approximately 1,600 employees, who customer surveys, employee engagement and ward trend since global surveys started in We continued the CEO’s quarterly inter- participated in O’Share during 2013, and kept local community engagement initiatives. 2015. The key drivers behind customer rec- nal briefings. Employees have the opportuni- the shares bought with their savings until May Outotec’s Sustainability Advisory Coun- ommendations (NPS) and satisfaction include ty to ask questions during briefings, and they 2016, received the first free shares as a re- cil, established at the end of 2014 to advise our state-of-art technologies, product reli- can also watch a video recording afterwards. ward for their commitment and investment the company on sustainability trends, strate- ability and expertise. Our customers tend to Markku Teräsvasara was appointed Outotec’s in Outotec. Outotec offered beneficiaries one gies and reporting, gives input on how stake- be more critical concerning our response and new CEO in June, and he joined the compa- free share (gross, with cash payments for tax- holders view the economic, social and envi- delivery time. Our focus on service develop- ny in October. To minimize uncertainty during es deducted) for each share bought with the ronmental impacts of our decisions. The six ment is something our customers clearly ap- the transition period, internal video commu- 2013 savings. Council members represent customers, in- preciate (G4-PR5). nication was increased on the Outotec News vestors, suppliers, NGOs and academia. In In 2016, we introduced a shorter and sim- Channel and more town hall meetings were Enhancing feedback culture 2016, the Sustainability Advisory Council was pler feedback survey. Customers are asked to organized in various locations to introduce the In November, we launched a new portal for consulted twice in e-mail correspondence for comment on the most important factors be- new CEO to our employees. internal feedback internal feedback such as feedback on our Sustainability Report and for hind the scores they give. This focus on open Our global intranet serves as a platform improvement requests and ideas, reported views on Outotec’s sustainability agenda with comments helps us to tune in to customers’ for day-to-day information sharing. To com- non-conformities and other observations to respect to the challenging business environ- true feelings and hear their voices. The 355 plement it, Outotec News Channel for video be submitted and processed smoothly. The ment. feedback records sent to us in 2016 included communication and the new Office365 collab- portal will be deployed step by step. In the

17 OUTOTEC / SUSTAINABILITY REPORT 2016 Stakeholder expectations and our engagement tools

Expectations Our engagement tools Expectations Our engagement tools

CUSTOMERS INVESTORS AND FINANCIERS

• Creating value for customers • Regular meetings according to Outotec Account • Return on investment • Quarterly briefings • Sustainable and safe products and services Management, Sell and Deliver processes • Long-term economic perspective • CEO’s mid-quarter Q&A sessions • Social license to operate • Customer satisfaction surveys • Compliance and transparency • Capital Markets Day • Joint R&D projects • Roadshows, one-on-one meetings, industry • Training, user meetings, workshops seminars • Seminars, conferences, trade shows • Annual General Meeting • Excursions to Outotec sites EMPLOYEES • Annual surveys • Company values and a culture that enables • Regular briefings and info sessions NGOS AND LOCAL COMMUNITIES professional development • Global intranet, collaboration tools and social • Long-term economic perspective media • Transparency and proactivity • Joint social programs with customers • Compliance and transparency • Performance development dialogues • Engagement and local presence • Support for local initiatives • Outotec Round Table • Social responsibility and respect • Joint seminars and events • Employee surveys • Active use of social media • Compliance helpline and feedback channels MEDIA • Young Professionals network • Transparency and access • Media briefings and interviews SUPPLIERS • Interesting stories • Success stories and blog postings on website • Fair treatment • Working according to Outotec’s Deliver process • Walk the talk • Active use of social media • Long-term partnership • Supplier Policy • Excursions to Outotec sites • Economic sustainability • Supplier assessments and audits • Joint continuous improvement of processes • Outotec Supplier Days

ACADEMIC COMMUNITY

• Relevant technological and scientific challenges for • Joint programs research • Seminars, lectures, visits • Feedback and encouragement from industry • Thesis opportunities • Operational data for students • Partnerships • Internships • Networking

18 OUTOTEC / SUSTAINABILITY REPORT 2016 first phase, people can give general feedback promoting sustainable design in an annu- ucts and newsworthy events with our man- by Salvation Army – bringing in gift and food related to global issues, processes and ap- al competition run since 2013. In 2016, agement representatives. We publish case items to help needy families over the Christ- plications or propose local initiatives relat- a decision was made to continue this stories on our website for the media, and mas period. ed to facilities, wellbeing and culture. During cooperation for at least four more years. aim to organize press trips to Outotec’s R&D Outotec continued to support the Baltic November and December, altogether 31 ob- • The University of Melbourne, Australia centers or reference plants at customers’ Sea Action Group’s initiatives for the rehabil- servations and suggestions for improvements • The South African Institute of Mining sites, in order to show concrete examples of itation of the Baltic Sea, and sponsored the were received through the new portal. and Metallurgy’s Mineral Processing our work to journalists. Millennium Technology Prize. We also see the Symposium Our experts additionally meet trade press Sustainability Awards we give to students in COOPERATION WITH THE ACADEMIC representatives at exhibitions and conferences, South Africa, China and Australia as a means COMMUNITY REGULAR DIALOGUE WITH INVESTORS and share the latest product news with them. of engaging with local communities. Partnerships and networks with universities Outotec’s approach to investor relations and Charitable financial donations were frozen and research institutions are an important communicating with the financial markets is WORKING WITH NGOS AND after Outotec’s Board of Directors proposed part of Outotec’s everyday business. In 2016, based on Finnish law, EU directives, and our LOCAL COMMUNITIES to the Annual General Meeting of sharehold- Outotec cooperated with more than 30 univer- own policies on corporate governance and Outotec contributes to community wellbeing ers in April that there would be no budget for sities and research institutions worldwide. disclosure, as well as stock exchange rules by paying taxes, providing direct and indirect such donations for 2016. The scope of these partnerships varies, and regulations. employment, and cooperating with education- In 2016, 24% (33%) of our operations ran but they are primarily related to technolo- At the end of 2016, Outotec had 29,686 al institutions. We also participate in local in- local community engagement programs (G4- gy development, digitalization and IoT de- (33,830) shareholders. Shares held in 10 nom- itiatives to increase welfare in the countries SO1). Such activities had to be reduced due to velopment, systems integration, the circular inee registers accounted for 30.6% (27%) of where we operate. the weak financial performance of the com- economy, hybrid materials, and water issues. all Outotec shares, while private Finnish in- Outotec aims to support local projects pany. We did not make impact assessments in Outotec’s closest research partners in 2016 vestors held 25.6% (30.9%). Fifteen analysts that benefit communities where our major these programs or development plans due to were Aalto University, the Technical Research conducted research focusing on Outotec. customers operate. These community pro- reduced resources. Center of Finland, Lappeenranta University of The annual Capital Markets Day event was jects are based on local needs and are Our target for 2016 was to start one Technology, Oulu University, and the Geologi- held on June 7 at Outotec House in , defined through dialogue with local commu- new community project. This was achieved cal Survey of Finland. Finland. nities. We strive to realize community projects through our involvement in the Sustainabili- Partnering with universities or other ed- In addition to our interim reports and an- in collaboration with our customers, using ty Master Class program at the University of ucational institutes also involves contribut- nual financial statements, the CEO’s Q&A joint financing. We also aim to integrate vol- Helsinki in Finland. ing to educational steering committees, guest sessions continued to be an important chan- untary work into community projects – both lecturing, software licensing, hosting student nel for maintaining dialogue. These audio during and outside working hours. All com- OUR POLICIES RELATING groups, and collaborating on master’s and casts aim to further clarify information al- munity projects must bring measurable bene- TO STAKEHOLDERS: PhD theses. ready made public. fits to the local community. • Disclosure Policy One example of educational coopera- In order to serve the capital market ef- One such project was run at Westbury • Social media guidelines tion during 2016 is the Sustainability Master ficiently, to ensure equal access to compa- Youth Center in Johannesburg, South Africa, • Donation Policy Class program, run for students, young re- ny-related information, and to comply with in collaboration with several other compa- • Code of Conduct searchers and professionals interested in new disclosure requirements, all our audio casts nies. Outotec donated a freight container and • Supplier Policy approaches to innovation. The four-month are recorded and available for on-demand steel structures to be used in building en- multidisciplinary program is organized to- viewing at the webcast center. tertainment facilities at the center. In addi- gether with the University of Helsinki. Read tion, Outotec employees donated their time to also the Case: Sustainability Master Class. COLLABORATION WITH THE MEDIA participate in a community activation day at Outotec has also established sustainabil- We interact with media representatives both the youth center, designed to empower young ity prizes to encourage university students to locally and globally to publicize our sustaina- people by encouraging creative and entrepre- apply their ideas to create practical innova- bility work. Our CEO’s quarterly briefings pro- neurial engagement. tions at: vide basic information about Outotec’s per- Another example of local community en- • Central South University in China, where formance. We also organize interviews where gagement is in Australia: Our employees in Outotec has awarded the ten best projects journalists can discuss our goals, new prod- Sydney and Perth took part in an initiative

19 OUTOTEC / SUSTAINABILITY REPORT 2016 Safety – our number one Hydro Alunorte recognized Outotec for achieving priority 1.3 million hours with zero accidents in the company’s Red Mud Filtration Project in Brazil

Zero accidents is the ultimate target for dents. The new system makes it easy to fol- safety practices at our permanent units and Outotec’s employees often travel in high- Outotec’s work on occupational health and low up corrective actions. It already operates main site activities. Safety performance was risk countries. In 2016, 175 Outotec employ- in combination with a company-level feed- found to be generally at a good level. Safety ees or persons working under our supervi- safety, as well as product safety. Our lost- back management system, and further com- systems at construction sites duly follow best sion traveled in countries with high medical or time injury rate improved in 2016. plementary measures will be realized during international practices. security risks (G4-LA7). Outotec has a medi- 2017. External audits were successfully con- cal and security services agreement with the Safety has been chosen as the most material Outotec’s certified, globally harmonized ducted in 2016 by TÜV Rheinland Cert GmbH global service provider International SOS. This theme for Outotec, partly as a result of deep- quality, environment, health and safety (QEHS) at our locations in Espoo, Lappeenranta, 24/7 service covers all Outotec employees and er stakeholder dialogue and partly because management system covers our 40 main lo- , , Suzhou, Cologne, Oberursel and service providers for emergencies occurring our top management saw a need to improve cations (38). It includes procedures, work in- Frankfurt, and at our construction sites in Du- during business trips. Through the related our safety performance and culture. structions and form templates to be used bai and Abu Dhabi. The relevant documenta- Medical Alerts and Travel Security Online ser- Outotec’s management remains commit- throughout our global business processes. tion on all of our certified locations was also vice our employees can find information about ted to continuously enhance safety perfor- Key elements in our QEHS management sys- audited. endemic diseases and other health, safety mance throughout the company’s operations. tem include: and security issues, as well as country-spe- We enable all employees and subcontrac- • compliance with legislation SAFETY IN FIELD OPERATIONS cific risk ratings. Before any trip, employees tors working under our responsibility to work • identifying and minimizing health and The safety of our employees and contractors should check risk levels and find out what ac- safely by providing the necessary procedures, safety risks is an important aspect of Outotec’s field oper- tions may be needed to reduce security and instructions, training and personal protective • preventing incidents ations at customers’ sites. Our project man- health risks. equipment. • recording and investigating incidents agers are responsible for the site activities Our reporting on health and safety cov- • personnel training of Outotec and our sub-contractors, includ- OUR POLICIES ers Outotec’s premises and employees, con- • continuous improvement of our QEHS ing the management of environmental issues, • Code of Conduct tractors working under our supervision, and performance safety, systematic practices, and cleanliness. • Quality, Environment, Health and Safety Outotec’s project sites. It also encompasses Outotec’s specialists also follow our cus- (QEHS) Policy Outotec products and services, with regard A global QEHS committee including mem- tomers’ own safety regulations when work- to compliance issues and incidents over their bers from the top management was estab- ing on site. The greatest safety risks arise in entire lifetime. We primarily measure our lished in 2015, but it did not convene in 2016, countries where awareness of safe working safety performance through the lost-time in- due to various organizational and manage- practices is low, and occupational safety cul- jury rate (LTIR), while also collecting data on ment changes. Instead, targets and devel- ture is underdeveloped. In such countries, our near misses and hazards. Our LTIR in 2016 opment agenda were defined by our global employees are instructed to additionally fol- was 1.8 (2015: 2.8) (G4-LA6, see also So- QEHS team. It has been decided that a new low Outotec’s own safety principles. cial data). This significant improvement was Global Health & Safety committee will be es- Outotec has a good track record of QEHS achieved mainly thanks to active safety train- tablished in 2017. performance in large customer projects, and ing, intensified risk management for high-risk Our local health and safety committees the company has received several safety-re- work, and the wider identification and elimi- monitor actions, collect feedback and discuss lated awards from customers. nation of unsafe conditions and procedures. health and safety issues in their respective Employees working on site operations are In 2016, we created a new lost-time inci- locations or projects. Our entire workforce trained regularly in health and safety matters, dent management system, which documents (100%) is duly represented in these commit- the use of protective equipment, hazard iden- incident investigations and the actions re- tees (G4-LA5). tification, risk assessment and required con- quired to remove the root causes of the inci- During 2016, Outotec internally audited trol actions.

20 OUTOTEC / SUSTAINABILITY REPORT 2016 Safe products for our customers

Outotec’s mandatory Product Compliance processes, entire plants and services. Equip- eration, maintenance and decommissioning. Management process ensures that all ment and services delivered by Outotec fulfill In addition, we offer our customers mainte- safety-related industrial standards such as: nance services as part of a wider package. We products engineered and delivered by • ISO 12100 and IEC 62061 for the safety of also routinely provide safety training for our the company meet all applicable safety machinery customers as part of our product training ser- standards during each phase of their life- • All safety-related industrial standards ap- vices. plicable where they are utilized The majority of our offices already use cycle. • Procedures for detecting hazards such as harmonized product compliance manage- explosion, fire, and lightning, and related ment procedures. Our target for 2016 was to Outotec has a Product Compliance Manage- IEC 61882 HAZOP studies take such procedures into use globally. We ment process in place to make sure that the • SIL Allocation Assessments (mandatory at continued to replace existing local procedures products and services designed and supplied Outotec) with harmonized ones (G4-PR1), but we did by the company worldwide reliably meet all • The SafExpert risk assessment tool, which not fully achieve our target. In 2017, we plan applicable safety standards during all phas- ensures that equipment designed by Out- to review and simplify our harmonized prod- es of the product life-cycle. We follow nega- otec fulfills all relevant safety standards. uct compliance management procedures, and tive impacts and incidents through our QEHS implement the new procedures globally. management system and product compliance We provide relevant information to our Outotec has not identified any significant management system, as well as through cus- customers about the impacts of our prod- negative impacts of its products on employ- tomer feedback collected after each major ucts and services, including their energy con- ees’ or suppliers’ health and safety (G4-PR2) delivery and in customer surveys. sumption, emissions, metal recovery rates, or local communities. No fines were imposed Compliance with legal requirements is the and water usage, as well as safety informa- in relation to non-compliance with laws and prime concern in Outotec’s product compli- tion provided according to industry standards. regulations regarding the use of Outotec ance management work. We maintain an ex- Safety issues form an integral part of our products in 2016. tensive database of product compliance pro- operational manuals for industrial process- However, the possibility remains that in- cedures and documents used during business es. Outotec manuals cover the entire life-cy- formation on indirect negative impacts occur- processes, including the development, sales cles of the products delivered, in line with the ring after the completion of any project deliv- and delivery of our products and services. IEC 82079-1 standard. This means they con- ery may not have been disclosed to Outotec by Outotec’s products include equipment, tain information on transport, installation, op- customers or local communities.

21 OUTOTEC / SUSTAINABILITY REPORT 2016 Sustainable offering for customers

Our contribution towards overcoming the environment. We measure our efforts to plants, with targets of 60 MWe and steam In 2016, Outotec also continued build- the world’s environmental challenges is mitigate the impacts of our products and ser- boilers that equal 60 MWth. The plants or- ing seven new waste-to-energy plants in the vices by our R&D work and the proportion of dered in 2015 were under design and con- United Kingdom and Canada, based on bub- made through our products and services, recognized Environmental Goods and Services struction in 2016 but not yet in operation. bling fluidized bed combustion technology. which enable our customers to run (EGS) in our order intake (G4-EN27). Our re- This method is a proven solution for turning environmentally sound, profitable and porting related to our offering covers Outo- REDUCTION OF ENERGY waste into energy and disposing of solid or tec’s premises and employees as well as our CONSUMPTION (G4-EN6) liquid by-products. To ensure that strict emis- socially acceptable businesses. products and services at customers’ opera- In 2016, Outotec partnered with Thermo-Sys- sion limit values set by municipal and federal tions. tem GmbH, whose low-energy drying meth- governments are met, we can apply a com- Outotec’s customers are increasingly looking We also used four additional indicators od will be used with our waste-to-energy and bination of gas cleaning measures adjusted for safe solutions to produce more with less. of our own to measure our achievements in sludge incineration technologies in Outotec’s according to the fuel designated in the overall Our solutions utilize primary resources effi- 2016: thermal processing solutions. process design. ciently and minimize ecological impacts by • The share of Environmental Goods and Municipal energy and sewage treatment reducing energy and water consumption, and Services (OECD criteria) in our order in- companies will benefit from Outotec’s ther- ENHANCING OUR OFFERING producing less waste to landfill and emissions take, where we have reached our target mal processing solutions because instead of R&D plays a central role in reducing the en- – while also cutting operating costs. We addi- (over 90%) for several consecutive years. composting the sludge, they can recover valu- vironmental impacts of our customers’ oper- tionally offer solutions for processing second- • 20% reduction in CO2 emissions achieved able nutrients and sell the resulting materi- ations. In technology development, Outotec ary resources and turning side streams into through the use of Outotec’s metals-re- als to fertilizer producers. Low-energy dry- particularly focuses on increasing resource saleable products. Our ecological handprint lated technologies compared to industry ing technology is typically used to pre-dry the efficiency – aiming to reduce energy and wa- which we define as our positive overall impact averages. These technologies include: our sewage sludge or wet peat before incinera- ter consumption, emissions, effluents and in terms of sustainability – is considerably ferrochrome process; flash smelt- tion, using waste heat from district heating as waste. bigger than the ecological footprint of our own ing; alumina calcination; ceramic filters; an energy source. Part of the pre-dried sludge Our R&D activity describes the extent of operations and our suppliers’ operations. the co-generation of electricity in the fer- will be mixed with the incineration ashes to mitigation of environmental impacts of our A plant’s sustainability can be signifi- rochrome process; and as of 2016 also produce valuable raw material rich in phos- product and services (G4-EN27). Some 66% of cantly enhanced through life-cycle services coated titania anodes; and TankCell 300 phorus, nitrogen and potassium for the ferti- our R&D expenditure was related to initiatives and technological improvements. Based on flotation cells. Emission reductions are lizer industry. targeting improved metals recovery, energy site-specific performance assessments, Ou- directly proportional to energy savings. In totec identifies areas for improvement and 2016, the emissions avoided by the met- Efforts to mitigate the environmental offers solutions that will optimize plant per- allurgical industry through the use of sev- impacts of our products and services 2016 2015 2014 formance and return on investment. Equip- en Outotec technologies amounted to 5.9 R&D expenditure, EUR million 55.2 61.2 56.9* ment upgrades, plant modernization projects, million tonnes of CO2 equivalent (2015: 5.5 and our long-term operation and mainte- million) (G4-EN19). This equals 27% re- R&D expenditure, % of sales 5.2 5.1 4.1* nance services all ensure that plants will run duction. Number of new patent applications filed 57 93 62 smoothly, safely and efficiently, with minimum • Implementation and commercialization environmental impact at all times. of our water recycling concepts. In 2016, New national or regional patents granted 630 531 370 Our long-term targets (link) relate closely we piloted our first electrochemical water Number of patent families 786 824 749 to our handprint – we aim to offer more sus- treatment and recycling solution. Proportion of EGS in order intake, % 90 90 90 tainable technologies and services to our cus- • Reductions in the use of fossil fuels re- tomers, resulting in less harmful impacts on sulting from Outotec waste-to-energy *) restated figure

22 OUTOTEC / SUSTAINABILITY REPORT 2016 Our handprint – which we define as our positive overall effect in terms of sustainability – is considerably bigger than our ecological footprint saving, waste minimization, emission reduc- Progress on product development concept, aiming to minimize harmful local en- tion and/or safety improvement. In 2016, Outotec successfully delivered a new vironmental impacts. Special attention was Outotec is a core partner in the European type of mine backfill system together with op- paid to isolating process waters from adjacent Institute of Innovation and Technology’s (EIT) erational, maintenance and management ser- water systems, thus closing industrial water Raw materials Knowledge and Innovation vices to OZ Minerals for their Prominent Hill cycles. Community. This platform aims to make raw copper-gold mine in South Australia. Another focus area for our R&D work has materials into a major strength for Europe We also introduced a cost-effective been the development of monitoring, con- by boosting competitiveness and the attrac- modular product for water treatment – the trolling and optimization capabilities for com- tiveness of the raw materials sector. Outotec Outotec® EWT-40. This Electrochemical Water plex industrial processes, together with digital participates in 20 related projects, aiming to Treatment process is highly automated, and platform development, through several pro- create new business by upscaling technolo- able to handle contaminated wastewater and grams run in collaboration with various re- gies, while also generating new educational effluents even in remote mining and metallur- search partners. programs and strengthening Europe’s infra- gical operations. structural network. Outotec also participates Our recently published Outotec Flotation OUR POLICIES in the technical secretariat of the EU’s Opera- Modernization Guidebook reveals how Outotec’s • Outotec Technology Policy tional Environmental Footprint Sectoral Rules services can improve grade and recovery, en- • Outotec Intellectual Property Rights Policy (OEFSR), piloting for copper. hance process stabilization and process control, Outotec took over the Presidency of the boost capacity, reduce maintenance costs, in- European Sustainable Phosphorus Platform crease availability, cut energy consumption, ex- (ESPP) in December. tend wear life, and enhance safety. Partnerships and networks with univer- Read more about our representation in indus- sities and research institutes also form an try associations and commitment to external important part of Outotec’s product develop- initiatives at www.outotec.com/sustainability. ment. In 2016, such cooperation focused on developing a minimum impact concentrator

23 OUTOTEC / SUSTAINABILITY REPORT 2016 Responsible business practices

In line with our core value, ‘committed ing against corruption in all its forms. We totec was not subject to any legal actions for they must also constitute a fair and balanced to sustainability’, we aim to incorporate similarly expect our suppliers and business anti-competitive behavior, anti-trust cases or combination of professional experience, partners to follow the same principles and to monopoly practices (2015: one reported case) skills, gender, nationality, knowledge, and va- social, economic and environmental fully comply with all applicable anti-corrup- (G4-S07). riety of opinions and backgrounds considering sustainability into all aspects of our tion laws. Outotec’s current and future needs. operations. We foster good governance and PRODUCT COMPLIANCE Outotec’s long-term objective is to have a CODE OF CONDUCT Read about how our products comply with all fair and balanced representation of both gen- ethical business practices through thick Our Code of Conduct summarizes our key relevant regulations in Safe products for our ders in the Board. When preparing for nom- and thin, valuing integrity in all contexts, corporate policies. All Outotec employees are customers, page 21. inations to the Board of Directors, Outotec’s expected to know and follow the Code. Nomination Board will aim to ensure that and striving to protect Outotec’s good We reviewed our Code of Conduct during OUR BOARD OF DIRECTORS these diversity principles are followed, that reputation. 2016, and its revised version was approved by A knowledgeable and engaged Board of Di- the Board functions well as a whole and that the Board of Directors in February 2017. The rectors is a significant resource that can help the competence profile of the Board of Direc- focus of the revised code remains largely the us to reach our short- and long-term goals, tors supports Outotec’s existing and future Outotec’s governance is based on the princi- same: commitment to responsible business and create sustainable increases in the val- businesses and is consistent with Outotec’s ples of good governance and transparency, as practices, compliance with laws and regu- ue of the company for its shareholders. The strategic goals. well as our own group-wide policies and pro- lations, solid governance, and the effective work, duties, composition and committees of cesses. We follow the Finnish Corporate Gov- management of sustainability and risks. the Board of Directors are described in our COMPLIANCE HELPLINE ernance Code issued by the Securities Market The Code of Conduct has been designed Corporate Governance Statement 2016. FOR RAISING CONCERNS Association for listed companies. Outotec’s to give everyone at Outotec ethical guidance The remuneration of Board members is Outotec’s Chief Compliance Officer (CCO) re- management system documentation is com- on various issues. Line managers are re- described in Outotec’s Corporate Governance ports directly to the Board’s Audit and Risk patible with and audited against such stand- sponsible for ensuring that their team mem- Statement on pages 13-15. There is no cor- Committee on a quarterly basis regarding ards as ISO 9001 for Quality Management and bers know the Code of Conduct and receive relation between the compensation for Board any material compliance cases and develop- ISO 14001 for Environmental Management. any necessary e-learning or classroom train- members and Outotec’s social or environ- ments. Outotec’s corporate governance is described ing. In 2016, a total of 1,223 employees com- mental performance. Outotec’s compliance helpline is availa- in more detail in our Corporate Governance pleted Code of Conduct training, correspond- ble to both internal and external stakehold- Statement 2016 [www.outotec.com/cg]. Our ing to 30% of our personnel. In addition, a New principles on diversity ers. This helpline enables anyone to raise reporting covers Outotec’s premises and em- total of 131 employees completed virtual for the Board of Directors concerns or seek advice regarding ethical ployees, our products and services, and our training on anti-corruption topics (G4-SO4). During 2016, the Board of Directors defined behavior or Outotec’s Code of Conduct. All suppliers’ operations. Outotec was not subject to any corrup- a new set of principles on diversity. Based on of the concerns raised are treated confiden- Outotec’s values and Code of Conduct tion-related investigations in 2016 (G4-SO5), these principles, the members of our Board of tially, and there is a clear no retaliation policy define our common way of working. Outo- nor did we have to pay any fines, or fulfil any Directors must have the necessary knowledge against anyone raising a question or concern tec endorses ethical business practices and non-monetary sanctions for non-compliance and experience with regard to the business, in good faith. More severe compliance cases complies with national and international laws with anti-corruption laws (G4-S08) or envi- social and cultural conditions in the most sig- may be submitted to Outotec’s Compliance and regulations. We are committed to work- ronmental laws (G4-EN29). Furthermore, Ou- nificant markets to Outotec’s business; while Board, whose members are the Chief Compli-

24 OUTOTEC / SUSTAINABILITY REPORT 2016 ance Officer, the General Counsel, the Chief waste minimization, improved metals recov- In 2016, we reviewed our Code of Conduct Financial Officer, and the Head of Human Re- ery and safety improvement (G4-14). including the human rights perspective. We sources. also initiated a human rights assessment of EQUAL OPPORTUNITIES our own operations at the end of 2016. As the INTERNAL AUDIT AND RISK MANAGEMENT AND LABOUR PRACTICES first phase of this assessment, our compa- Outotec’s strategic and operational risks are Our approaches to equal opportunities and la- ny policies and guidelines relating to human described at www.outotec.com/investors, and bor practices are described in Enhancing em- rights were examined in comparison with the the company’s risk management policy, re- ployee engagement, page 28. UN Guiding Principles on Business and Hu- sponsibilities and processes are set out in man Rights (UNGP) by an external consult- our Corporate Governance Statement 2016 on RESPECTING HUMAN RIGHTS ant. This analysis resulted in policy-specific pages 9–10. Outotec is committed to support and respect recommendations that will help us to further In 2016, a company-wide sales process the protection of internationally proclaimed align our policies with the UNGP. The results audit was conducted. In addition, specific au- human rights. This commitment is reflect- will be taken into consideration in our future dits were conducted in China and in Brazil as ed in our revised Code of Conduct and in our policy revisions. We plan to continue the hu- well as follow-up audits of the market areas company policies. We remain committed to man rights assessment of our own operations Sub-Saharan Africa and Middle East. treat all people with dignity, and we recog- in 2017. Outotec’s internal and external audit pro- nize that every individual is equally entitled to Furthermore, as a new annual target with cesses take into account any corruption sus- enjoy human rights. We do not provide goods the theme Responsible business practices, picions and fraudulent acts that may occur. or services that we know will be used to car- we will conduct working condition assess- Training sessions are held in connection with ry out human rights abuses, and we work ments in our main manufacturing and servic- audit activities at our market area operations towards the effective abolition of the use of es sites. These will include audits of physical to train employees in anti-corruption policies compulsory, forced or child labor. working conditions as well as certain labor and procedures for the purpose of preventing Outotec joined the United Nations Glob- rights topics. misconduct and crimes. Virtual training ses- al Compact Initiative back in December 2010, Outotec has not identified, through formal sions on anti-corruption are also available to and we remain committed to its principles grievance mechanisms or in its risk assess- all employees. and the principles of the Universal Declara- ments, any significant negative impacts of its Outotec uses a project risk assessment tool tion of Human Rights. These commitments operations, products or suppliers with regard to assess project-related risks within 10 key are restated in our revised Code of Conduct. to health and safety (G4-PR2), or local com- categories, including compliance, ethics and In 2016, two reported incidents of discrim- munities (G4-SO2). During 2016 no issues sustainability. Risk assessments must be car- ination were filed through formal grievance emerged concerning the rights of indigenous ried out for all projects worth at least one mil- mechanisms within Outotec (G4-HR3, G4- people. lion (G4-SO3). Identified risks and mit- HR12). These incidents were reviewed locally, In product management, we utilize a igation measures are documented in the risk in cooperation with Global Human Resourc- Stage Gated Product development process, in assessments, and appropriate follow-up actions es function and the Chief Compliance Officer. which the first phase includes business risk are duly defined on the basis of these findings. Remediation action plans were implement- and opportunity checks. It also includes crite- In product management, we utilize a ed and results reviewed through our routine ria, which are related to a new product’s risks Stage Gated Product development process, in management review processes. These inci- and especially opportunities to precaution- which the first phase includes business risk dents are no longer subject to action. ally mitigate the climate change, i.e. energy and opportunity checks. It also includes crite- There were no incidents filed through for- savings, emissions reduction, water savings, ria, which are related to a new product’s risks mal grievance mechanisms related to our waste minimization, improved metals recov- and especially opportunities to precaution- suppliers’ human rights impacts (G4-HR11), ery and safety improvement (G4-14). ally mitigate the climate change, i.e. energy impacts on society (G4-SO11), or labor prac- savings, emissions reduction, water savings, tices (G4-LA16).

25 OUTOTEC / SUSTAINABILITY REPORT 2016 MANAGING SUSTAINABILITY Outotec’s Sustainability Advisory Coun- Outotec’s Executive Board is responsible for cil, established at the end of 2014, advises our sustainability agenda (G4-34). The Execu- the company regarding sustainability trends, Board of Directors tive Board additionally approves our sustain- strategies and reporting, and gives input on ability strategy, targets and reporting. Our how stakeholders view the economic, social General Counsel, who is a member of the Ex- and environmental impacts of our decisions. ecutive Board, has overall accountability for The Council is not part of Outotec’s formal corporate responsibility. Responsibility for the governance, however. In 2016, the Sustainabil- CEO sustainability of our products and services ity Advisory Council was consulted in e-mail Executive lies with the Technology and Product Board, correspondence for feedback on our Sustain- Board chaired by the CTO. Related decisions, actions ability Report and for views on Outotec’s sus- and commitments are duly reported to the tainability agenda and focus, with respect to Board of Directors. the challenging business environment. Sustainability is integrated into all rele- Sustainability-related personal targets are Head of Legal Sustainability Technology and vant organizational functions, such as Qual- included in the annual bonus plans of Outo- & CR Advisory Council Product Board CTO ity, Environment, Health and Safety (QEHS), tec’s Executive Board members, QEHS man- Supply, Human Resources & Communica- agers, and environmental and sustainability tions, and Legal & Contract Management. We managers. Inventors working with new, pa- have a Sustainability Working Group, whose tentable solutions receive monetary rewards core team coordinates sustainability work and for their inventions. Furthermore, Outotec Working group meets frequently whenever needed. rewards all employees for making proposals that improve the sustainability of the compa- ny’s internal processes. Sustainability aspect

OUR POLICIES Governance • Code of Conduct Strategy People Supply chain Head of Head of Human Head of and compliance • Donation Policy Strategy Resources Supply Head of Legal & CCO • Supplier Policy • Risk Management Policy • Disclosure Policy QEHS Investor Communications Economic Head of Relations Head of CFO QEHS Head of IR Communications

26 OUTOTEC / SUSTAINABILITY REPORT 2016 Building a sustainable supplier base

Our wide product range and a high measure our performance by calculating the impacts (G4-EN32), human rights (G4-HR10), We strive to improve cost number of different delivery locations percentage of new suppliers screened using and labor practices (G4-LA14, G4-LA15). The efficiency without compromising criteria on labor practices, environmental im- remaining potential new suppliers were in make our supply chain development and pacts and human rights. categories that we do not normally screen, on product quality, management challenging. Standardization such as one-time indirect suppliers who are safety and sustainability and harmonization are key drivers in OUR SUPPLIER BASE normally approved by default. Some of these Our manufacturing facilities are relatively non-screened suppliers have, however, also establishing a sustainable supplier base. small. They all have local quality, health and signed our Supplier Policy. No potential new safety systems in place, and they duly man- suppliers were screened using criteria for im- pliers. They are responsible for facilitating Our supply chain management covers Out- age, sort and process their wastes. Since pacts on society (G4-SO9). collaboration between Outotec and our sup- otec’s own operations and often also those some 80% of Outotec’s manufacturing is Human rights impacts were assessed as pliers across and above individual projects. of our suppliers. Our Global Supply function sourced from external suppliers (by monetary part of the screening of potential new suppli- This procedure enhances visibility, alignment manages our supplier base and global sourc- value), supplier selection is of key importance ers. All the screened companies qualified as and the management of supplier-related ing. Operational Supply personnel are involved to our business. new suppliers as none of them were identified risks, while also improving overall collabora- in day-to-day supplier management during Outotec had approximately 3,300 (3,400) as having significant potential negative hu- tion between Outotec and individual suppliers. the project delivery phase. active direct suppliers in 2016. Most of our man rights impacts (G4-HR11). The main challenge for our supply chain Outotec has two main policies serving as suppliers were based in Finland, Germany, Outotec has not identified any significant management in 2016 concerned the need to the basis for collaboration with suppliers. Our Brazil, Australia, and South Africa. Outotec actual or potential negative impacts with re- improve cost efficiency without compromising Supply Policy steers supply activities through- has also developed best-cost-country sourc- gard to labor practices in its supplier screen- on product quality, safety and sustainability. out the company, defines ways to enhance ing in China, India, Eastern Europe, and Mex- ing (G4-LA15). The allocation of more business to fewer sup- supply quality and provides guidelines for ico. In addition to screening new suppliers, pliers enables better management and devel- everyone involved in supply-related activities. The majority of our direct suppliers are Outotec audited over 20 major suppliers opment partnerships, in turn enhancing deliv- Our parallel Supplier Policy imposes either manufacturing workshops or compo- during 2016. In our supplier audits, 8% of ery excellence and cost competitiveness. strict requirements on Outotec’s suppliers, nent/equipment manufacturers. The rest are the audited suppliers were identified as During 2016, we continued to train our by clearly setting out our principles on ethi- logistics, and construction com- having negative environmental impacts sales and project implementation personnel cal conduct, compliance with laws and reg- panies, and other service providers. In addi- (G4-EN33). These impacts were relatively on our project risk assessment process and ulations, environmental impacts, health and tion, thousands of our direct suppliers’ own small and related to operational eco-efficien- tool, which were then tested in larger sales safety, labor, intellectual property and improp- suppliers form part of Outotec’s supply chain. cy, and none of these impacts were consid- cases. The resulting risk assessments have er benefits. Suppliers are expected to ensure Our total spend on customer-related pur- ered as potentially significant in Outotec’s as- provided our management with important in- compliance with Outotec policy, identify any chasing in 2016 was EUR 586 million (629 mil- sessment. Common development topics and formation about major risks and planned mit- deviations, manage corrective actions, en- lion). Total spend decreased due to declining improvement measures were subsequently igation actions. sure the transparency of these actions and order intake and sales. discussed and agreed with these suppliers. communicate with us systematically on such No relationships have been terminated as a SPENDING ON LOCAL SUPPLIERS issues. As all of our major suppliers (2015: SELECTING NEW SUPPLIERS result of our supplier audits. Outotec’s supply chains often combine glob- 92%) were committed to Outotec’s Supplier AND SUPPLIER AUDITS al project deliveries and purchases from local Policy in 2016, we achieved our annual target. Of the potential 1,435 new suppliers in 2016, WORKING TOGETHER WITH suppliers. We define ‘local suppliers’ as sup- Our reporting covers our suppliers’ op- Outotec screened 164 suppliers, correspond- OUR SUPPLIERS pliers who we do not manage globally from erations, contractors working under Outo- ing to 11% of all potential suppliers (2015: 70; Outotec’s Supplier Account Managers work our offices in Finland, Germany, and Swe- tec’s supervision, and our project sites. We 18%), using criteria related to environmental with our most important global or local sup- den. However, even in projects that are man-

27 OUTOTEC / SUSTAINABILITY REPORT 2016 Enhancing employee engagement

aged globally, the supply defined as ‘glob- countries are China, India, and Mexico. After several years of restructuring, HIGHLIGHTS IN RELATION al’ includes some local subcontracting in the In 2016, 5% (3%) of our suppliers were based employee engagement continues to be the TO DEVELOPING OUR PEOPLE countries concerned. in China, 2% (2%) in India, and 1% (2%) in Our spending on local suppliers in 2016 Mexico. To mitigate these risks, our dedicated key theme for developing our people. Strategy shaped with employee participation amounted to EUR 310 million (EUR 270 mil- supply personnel in each of our Market Area Employees from our Market Areas and Busi- lion), equivalent to 64% of our total supply offices perform Supplier Assessment and Ap- The market situation continued to be very ness Lines participated in strategy revision spend (G4-EC9). The largest shares by coun- proval Processes carefully and make obser- challenging for Outotec, although the market work realized in spring 2016. The implemen- try – each amounting to EUR 10–50 million – vations during audits and other visits. Forced picked up towards the year end. As a result of tation of the strategy was supported by the were spent in the USA, China, Australia, the or compulsory labor has not been identified our EUR 70 million cost structure program, Outotec 2016 roadshow in major locations, UAE, Sweden, South Africa, Mexico, Chile, and as a potential risk in Outotec’s supply chain simplifying our operating model and strength- where leaders were engaged in change man- the UK. The remaining local spend was dis- (G4-HR6). ening our focus on customers and servic- agement planning, and employees had a tributed among 45 countries. es, Outotec also had to reduce altogether 650 chance to hear about the strategy and discuss The carbon footprint of our supply chain jobs in 2016. it with their leadership. ACTUAL AND POTENTIAL NEGATIVE An analysis of the carbon footprint of our sup- Despite actions taken after the previous IMPACTS IN THE SUPPLY CHAIN ply chain conducted in 2016 showed that the employee engagement survey, results in both Strong focus on leadership development

No notable risks related to the use of child biggest sources of CO2 emissions in Outotec’s employee engagement and performance en- A global leadership program for 100 lead- labor (G4-HR5) or forced or compulsory la- supply chain were metal products, represent- ablement continued to weaken. In the Pulse ers was kicked-off in November. The program bor (G4-HR6) have been identified in Outotec’s ing 27% (25%) of the total. In 2016, the car- survey conducted in May 2016, the employee consists of face-to-face modules, bench- own manufacturing units. bon footprint of our supply chain, at 360,000 engagement index fell to 42% (2015: 56%) and marking group work, 360° feedback and

The main sustainability-related risks in tonnes of CO2 equivalent (345,000) (G4-EN33), the performance enablement index declined coaching (G4-LA10). the supply chain, identified in our internal was considerably larger than the footprint of to 54% (2015: 63%). In addition, local leadership programs workshops, include bribery and kickbacks, Outotec’s own operations, which amounted to Based on the survey results and related have been developed in each country, and all occupational safety, protecting information, 24,847 tonnes of CO2e (33,584) (G4-EN16, G4- feedback from our employees, concrete ac- Outotec managers and leaders will have an and reporting misconduct. With regard to EN17). tions that would help to re-build trust and en- opportunity to join a development program by environmental issues, material toxicity and Calculations were based on Outotec’s gagement among employees should include: the end of 2017. chemicals were ranked as the greatest risks spending and supply chain emission factors • Communicating a clear strategy and (G4-EN33, G4-SO10). as defined by the UK Department for Environ- translating it into concrete actions at all Continuous support for professional growth In addition, we have identified three coun- ment, Food and Rural Affairs (DEFRA). levels to benefit our employees A total of 2,391 employees participated in tries in our supply chain with potential risks • Creating clarity and simplifying our ways training activities during 2016. We delivered regarding child labor (G4-HR5), hazardous OUR POLICIES of working in order to allow our people to 6,467 training instalments in total, most of work, or rights to exercise freedom of associ- • Supplier Policy focus more on customers which consisted of online courses focusing on ation or collective bargaining (G4-HR4). These • Supply Policy • Ensuring strong leadership presence technical issues; quality, environment, health • Empowering and engaging our people to and safety (QEHS); or legal and compliance make Outotec a better place to work issues. In total 5,855 online courses were completed, of which 1,533 related to QEHS

28 OUTOTEC / SUSTAINABILITY REPORT 2016 and 260 to technical issues. Technology-re- gets for improvements in these areas. As a numbers of employees who underwent reg- lated classroom training was provided for 423 company operating in a male-dominated in- ular performance and career development Outotec employees during 2016. dustry, gender equality is a very important reviews during 2016, but the available data Cases Meanwhile, work started on the devel- topic for Outotec. We already have a relatively indicates that coverage is about 95 per cent opment of a certification program for our good representation of women in senior lead- (G4-LA11). demonstrating technical service experts who work with our ership positions (16% of senior leadership po- Our Human Resources (HR) function products and technologies. This certifica- sition are held by women, compared to 18% has put a lot of emphasis on implementing our approach to tion process features a multi-level training of all Outotec employees), and we are taking global policies and processes and clarifying resource efficiency program designed to allow people to develop active measures to improve this ratio. We also roles and responsibilities, in order to ensure their technical skills and apply them in on- monitor the number of filed, addressed and smooth operations and the equal treatment On the following pages we show- the-job situations at a Basic, Advanced, and resolved grievances about labor practices. In of our employees in global mobility cases, case our approach by describing Master level. 50 people were nominated as 2016, two reported incidents of discrimination for instance. To align HR practices globally some concrete cases that illustrate pilot participants to start the program. were filed through formal grievance mecha- and drive our One Outotec culture, a new HR how we put resource efficiency Several groups started their mentoring nisms within Outotec (G4-HR3, G4-HR12), but handbook was launched for the HR commu- to the forefront in our work with programs in the areas of solution sales, pro- no registered cases regarding labor practices nity. This initiative was supported by extensive customers. cess, and metallurgy. The program will con- (G4-LA16). Our reporting related to equal op- communications. tinue to expand in 2017, with engineering and portunity and diversity covers Outotec’s em- contract management as new topics. ployees and suppliers. OUR POLICIES A Value Selling training program was de- A decision was made in 2016 that all open • Code of Conduct veloped to enhance our sales force’s compe- positions will be published internally to ena- • HR Handbook tences in customer interfaces. Through this ble all Outotec employees to apply for posi- • Competence Development Policy highly interactive and role-play-based train- tions through a fully transparent recruitment • Recruitment and Onboarding Policy ing we are striving to build, communicate and process. We also launched a new employee • Compensation Policy coach value propositions that can be offered profile to allow employees to promote their • Global Mobility Policy to the customers based on their identified career and let our organization know about • Job Description and Job Title Policy needs and values. their expertise. We encourage our employees • Grading Policy to take an active role in their own career de- PROMOTING EQUAL OPPORTUNITY velopment, and we aim to promote new tools AND DIVERSITY to support this target. As an international company with a glob- al presence, Outotec values diversity at the FOCUSING ON EMPLOYEES’ EXPERIENCES workplace. We treat people in an equal and Outotec’s annual Performance Development fair manner regardless of their ethnic origin, Dialogue (PDD) process went through a ma- nationality, religion, political views, gender, jor renewal in 2016, based on feedback re- sexual orientation, disability, family status or ceived from our managers and employees. A age. We follow the principle of equal oppor- new concept to be launched in 2017 will bet- tunities. ter support value-adding development dis- We continuously monitor diversity and cussions at Outotec. Due to these system- equality within Outotec, and we have set tar- ic changes, we do not have exact data on the

29 OUTOTEC / SUSTAINABILITY REPORT 2016 CASE: Optimal water management for mine sites

Water plays a key role in the mining ness-critical information and spot potential Above all, our service concept water balance monitoring. This scalable ser- industry. Our customers face challenges issues in good time. enables our customers to focus vice has three modules: Monitor, Manage and Lower effluent volumes mean that cus- Predict & Evaluate including the need to meet business tomers also save on operating costs and re- on their core operations Outotec’s Dynamic Water Balance with performance targets and reduce their water duce risks. Dynamic and real-time water bal- HSC Chemistry is an automatically updated consumption. Outotec’s solutions offer ance simulations, risk analyses and forecasts thermodynamic calculation software system, of future scenarios allow our customers to SCALABLE CONCEPT often used in metallurgical modeling, which flexible options for the management of stay more than one step ahead, and tackle OPTIMIZES WATER FOOTPRINT can also be applied in dynamic water balance complex, site-specific water streams. challenges related to excess water and flood- Outotec has unique industry-relevant water modeling. ing. and process expertise which we combine with “We also send out our experts to support our online sensing, modeling and automation SECURE DATA MANAGEMENT Water has a central role in mineral process- customers throughout their daily operations know-how. Outotec’s customers always retain ownership ing. However, the availability of water can be a by assessing their water management peri- “We know what types of water our cus- of their data. The information collected by Ou- major concern for mine operators. Mines are odically, and then giving recommendations,” tomers’ plants need, and how this water totec’s sensors to support customers’ daily often in remote locations with highly limited says Susanna Horn, Life Cycle Manager. “Our needs to be treated to stabilize production, operations is managed securely: only the ex- natural water reserves. Tightening regula- dedicated Operations Support Center is avail- reduce water-related business risks, and perts working on the project have access to tions and increased environmental awareness able around the clock to provide optimiza- achieve a sustainable balance of water sup- the customer’s data. have recently made it increasingly important tion and decision-making support within the ply consumption,” says Kaj Jansson, Director, Our information security management to monitor and manage water balances effec- agreed response time.” Mineral Processing Concentrator. and practices are based on the ISO/IEC 27001 tively. Above all, our service concept enables our Our scalable water management concept and 27002 standards. Already today, Outotec’s customers are customers to focus on their core operations. combines online measurement with dynamic facing resource scarcity, particularly when it comes to minerals. As the metal content IMPROVED VISIBILITY of ores decreases, more ore must be exca- THROUGH DIGITALIZATION Monitor Manage Predict & Evaluate vated and processed to produce the desired By using advanced hardware and software Real-time information on Forecasts and scenarios for Scenarios to facilitate amounts of metals and end-products. This solutions provided by Outotec, it is now possi- water quantities and quality operational conditions evaluations of best investment alternatives and options for in turn increases the need for water in these ble to monitor water quantities and qualities Based on physical Able to use customer’s water process optimization processes. in real time. We can also calculate scenari- instrumentation and online balance and KPIs, as well as All this is pushing mine operators to seek os to illustrate the development of the water visibility data from various sources The highest level of service new, digital ways to optimize their water us- balance in the coming weeks, or map out the Visualizes the results HSC software age. effects of potential process changes on water HSC software quantities and quality. MORE EFFICIENT AND “These digital capabilities form the core SUSTAINABLE ORE RECOVERY of Outotec’s offering for water management,” With proper monitoring, we can ensure that says Eija Saari, Service Product Manager, De- ore grades and recovery rates are not reduced watering Solutions. “It’s our ability to simulate by poor quality water. The chance to keep an changes and evaluate scenarios that sets us eye on water-related KPIs in real time ena- apart from our competitors.” bles our customers to stay informed on busi-

30 OUTOTEC / SUSTAINABILITY REPORT 2016 CASE: Innovative technologies for nutrient recycling

Dwindling deposits of mineral phosphorus tion of sewage sludge also produces electric- hani Anhava, Director, Energy & Environment Scalable modules are ideal and eutrophication are major challenges ity and heat usable for district heating. Com- Business Development. “The goal is to de- for diverse customer needs bustion also produces ash, from which we can velop a thermal treatment plant for sewage that affect Outotec’s customers – and also recover phosphorus. In addition to turning sludge. The project is currently in the con- our whole planet. Outotec offers a wide- waste into new raw materials or even direct- struction phase, and expected to become op- ® ranging portfolio of comprehensive sludge ly into products, ASH DEC can also reduce erational in the first quarter of 2017.” provides the customer with VSF X technology, hazardous landfill volumes and ash-handling a license, equipment for crud treatment, and treatment solutions for energy production costs. SUPPORT FOR CHALLENGING CONDITIONS a cooling tower. and nutrient recycling, complemented by In 2016, Outotec secured a contract with the Outotec will also deliver two sulfuric acid PARTNERSHIPS FOR DRIVING Italian engineering company Desmet Ball- plants for the same project. The technology partnerships. NUTRIENT RECYCLING estra S.p.A Milano, to design and deliver a offered by Outotec improves the sustainability In 2016, Outotec partnered with Thermo-Sys- solvent extraction plant to purify fertilizer of NCIC’s fertilizer plant by: The phosphorus currently used in tem GmbH, a German based global leader phosphoric acid before evaporation. • Minimizing fugitive emissions of agriculture today are a non-renewable re- in low-energy drying technology. Such tech- The customer’s operations in a desert sulfur dioxide from the acid plant source mined from finite mineral deposits. nology is mainly used for pre-drying sewage area in Egypt face several challenges af- • Generating carbon-free energy by apply- Mineral phosphorus is becoming increasing- sludge or wet peat before incineration. Part fecting the viability of fertilizer production, ing our HEROS heat recovery technology ly rare, and the food supply in some regions of of the resulting pre-dried sludge can now be including: • Reducing the plant’s consumption the world is already completely dependent on mixed with incineration ash to produce valu- • The isolated location of the plant of raw water imported phosphorus. able raw materials rich in phosphorus, nitro- • The low phosphate content of the ore body We believe that nutrient recycling will help gen and potassium. • The relatively large throughput of the to combat eutrophication and shortages of In May 2016, Outotec and Ecolan, the plant phosphorus. By using the right technology, it leading Finnish forest and organic fertilizer • Impurities created in the process is now possible to recover phosphorus from producer, won the first prize in a Sitra compe- sewage sludge for use as a fertilizer. tition looking for solutions for nutrient recy- Outotec’s basic design for the solvent ex- “When municipal energy and sewage cling. The companies’ solution, Fullrec, com- traction facility is based on scalable modules, treatment companies can recover valuable bines three technical processes: Outotec’s making it ideal for application to diverse cus- nutrients and sell them to fertilizer produc- DeBugger and ASH DEC processes, and Ecol- tomer needs. Such a modular solution ena- ers, this benefits society as a whole,” says an’s granulation process. Through this tested bles the creation of a closed system, reduc- Tanja Schaaf, Senior Product Engineer, Ther- and proven approach, digested sludge is not ing emissions of volatile organic compounds mal Processing. burned, but dried and mixed with ash. The re- (VOCs). The modules are easy to transport sulting mixture is then granulated to create and install, which reduces the total delivery OLD TECHNOLOGY – FOR A NEW PURPOSE a product that can be transported cost-effi- time dramatically, and also brings safety ben- The basic ASH DEC technology is a thermo- ciently. efits. As the life-cycle of the plant comes to its chemical process for separating heavy metals “Together with Ecolan, we have been de- end, the modules can be transported to other from ash generated during the combustion of veloping this concept in the new industry zone locations, avoiding the expenses that char- industrial and municipal waste. The combus- ECO 3 in the Finnish city of Nokia,” says Ju- acterize conventional plant closures. Outotec

31 OUTOTEC / SUSTAINABILITY REPORT 2016 Resource efficiency has CASE: Flotation retrofit boosts resulted in concrete benefits performance at Yamana Gold’s mine at Yamana Gold

At Yamana Gold’s gold and copper mine, ble material was being continuously lost due OPERATOR TRAINING necks, which will further improve the perfor- the identification of flotation issues led to a to inefficiencies in flotation, and recovery was PROVIDES ADDED VALUE mance of the entire facility. unsatisfactory. By modernizing the equip- In addition to the retrofit, Yamana needed a “The close cooperation between Outotec turnkey retrofit project that has generated ment, Outotec was able to improve both the dependable partner who could help the com- and Yamana has helped us to plan and imple- significant improvements in recovery rates, productivity and the energy efficiency of the pany improve its operations on a continuous ment the retrofit project in an atmosphere of while also reducing energy consumption. flotation process.” basis, and Outotec was happy to step forward. mutual trust, creating a solid base for con- Outotec provided Yamana with advanced op- tinued partnership,” explains Miika Tirkkonen. SAVINGS FROM MINIMIZED erator training, using its Virtual Experience Yamana Gold is a Canadian-based gold pro- SHUTDOWN TIME process to familiarize the mine operators with ducer with mines and operations in Cana- The project scope included: the technology and instructing them in its ef- da, Mexico, Brazil, Argentina and Chile. The • Computational Fluid Dynamics ficient use. Yamana Gold retrofit project company’s Chapada open pit gold and copper (CFD) studies “Outotec is best known for its technolog- Customer Yamana Gold mine in Brazil began production in 2007. • Basic and detailed engineering ical solutions, but we also give great impor- When it comes to the efficient mining of • Shutdown planning tance to our service offering,” says Annami Project site Chapada open pit gold and copper mine in Brazil precious metals, flotation performance is • Delivery of proprietary equipment Toukoniitty, Director, Services Business De- of the utmost importance. Outotec’s role in • Turnkey installation, commissioning velopment. “The skilled operation of a mine’s Challenges unsatisfactory flotation improving Yamana Gold’s operational effi- • Assisted operation technological assets can have a profound ef- performance; repeated ciency began with the delivery of a Courier • Advanced training of on-site personnel fect on its profitability as well as its main- disruptions due to sanding on-stream analyzer, which Yamana’s person- tenance needs. By offering elated training Solution retrofit of 10 flotation cells nel used to assess the performance of their Customized steel works were manufac- services we can give added value to our cus- with Outotec technology processes. Their analysis showed that con- tured in Brazil, which enabled short deliv- tomers.” Results improved flotation siderable amounts of gold and copper had ery times, contributing to the flexibility and performance, availability and been ending up in tailings. The flotation cells, overall efficiency of the project. Outotec also COOPERATION CONTINUING recovery provided by another supplier, were prone to provided all installation and commissioning Yamana Gold’s flotation issues were success- sanding, which caused repeated disruptions personnel, except for certain locally contract- fully resolved, creating major benefits for the in the flotation circuit. ed electrical specialists. In total, more than 80 mine, including: Yamana conducted a thorough evalua- Outotec experts took part in the moderniza- • Greater stability and control of flotation tion of alternative courses of action, and then tion, working in two shifts to ensure the effi- cells, allowing for increased process opti- turned to Outotec, whose metallurgical and cient use of the available time. mization mechanical assessments showed large po- Minimizing shutdown time and production • Significantly reduced energy consumption, tential for improvement in the flotation pro- loss was naturally vital to the customer. Ou- thanks to the use of Outotec cells (40%) cess. In March 2016, a turnkey retrofit project totec was able to answer this challenge with • Minimized sanding, and increasing flota- of 10 non-Outotec flotation cells with Outotec a tailored concept that took the project’s total tion circuit availability TankCell® and FloatForce® technology was in- cost and return of investment into consider- • Improved flotation performance, enhanc- itiated. ation. The second bank shutdown took only ing the recovery of both copper and gold “The Yamana Gold case is a great example six days, instead of the planned eleven, saving of the benefits of paying attention to resource valuable time and allowing Yamana to restart Cooperation between Yamana Gold and efficiency,” says Miika Tirkkonen, Senior Man- operations sooner than anticipated. Outotec is now continuing with the identifi- ager, Service Product Management. “Valua- cation and removal of other potential bottle-

32 OUTOTEC / SUSTAINABILITY REPORT 2016 CASE: Sustainability Master Class - Diving into customers’ operating environment

Launched in December 2016, the The University’s entrepreneurial commu- tional risks and their water and energy con- structure, but locals remain concerned about Sustainability Master Class is jointly nity Helsinki Think Company and the Demos sumption,” adds Horn. “This means consid- the environment,” explains Uoti. Helsinki think tank are facilitating the pro- erable economic savings for them as well as Technology leapfrogging may help in many run by the University of Helsinki and cess. environmental benefits. We at Outotec hope ways, but it cannot alone be the solution Outotec to fuel innovation by activating this group will grow in the future.” where problems include the social impacts of an interdisciplinary group of 45 young FROM COMPLIANCE TO At the other end of the spectrum there are business activities, such as low wages, child STRATEGIC SUSTAINABILITY players – especially in developing countries – labor or political issues. researchers and professionals. When defining themes for the program, who operate at the lowest possible costs, and Could the Master Class participants find Two of Outotec’s mentors involved in the Outotec chose to approach the entire value sustainability may not be their first priority ways to build a new kind of stakeholder dia- chain – from minerals to refined metals. when dealing with water and tailings, for in- logue? Knowing the complexity of these is- program, Susanna Horn, Sustainability “Focusing only on our own operations and stance. Local communities may consequent- sues, Outotec is looking forward to fresh ide- Development Manager, and Markku Uoti, their sustainability might lead only to limited ly suffer from environmental impacts such as and out-of-the-box thinking to challenge Senior Manager – Risk Management, improvements in comparison to the greater as bursting dams and contaminated drinking the status quo. The value of fresh and inter- potential along our entire value chain,” says water. disciplinary thinking on sustainability issues explain the background and goals behind Susanna Horn. “This is why we broadened the This gap leads to the concept of leapfrog- has been a major factor behind our participa- the program. horizon to cover the customer’s perspective ging, which is one of the challenges being ad- tion in this program. as well. The participants will become familiar dressed by the Sustainability Master Class: with the sustainability of the whole industry.” Could there be ways to accelerate the devel- SUSTAINABILITY FROM DISRUPTIONS? The Sustainability Master Class is mentored Many of Outotec’s customers today face opment of such negligent operations by ena- The best ways to improve sustainability could by business and technology experts who de- sustainability-related concerns, from exces- bling them to skip less efficient and more pol- consist of strategic changes and innovations fine real-life business challenges and oppor- sive water and energy consumption to envi- luting technologies and move directly to more that may be disruptive in operational terms. tunities for the class to consider and con- ronmental hazards. According to Markku Uoti, advanced solutions? The Master Class participants were therefore stantly support participants’ co-creation work. who works with risk management issues at One commonly used leapfrogging example assigned to think about potentially disruptive Themes including social license to oper- Outotec, companies in the mining and met- is energy production: countries with low de- business opportunities that could positive- ate (SLO), technology leapfrogging and dis- al processing industries are characterized by velopment levels should not imitate developed ly shake up the relatively conservative metals ruptive business models create the backbone different maturity levels and attitudes when it countries by constructing expensive energy and mining industry. for the four-month program, as risks and op- comes to handling these risks. infrastructure based on the use of fossil fuels. Disruptive business models are innova- portunities that characterize our industry. The most advanced companies do not only Instead “jump” directly into a modern energy tions that create new markets or make ex- “Outotec’s legacy is widely understood seek to comply with regulations, since they infrastructure, enabling a wider diversity of isting ways of doing business obsolete, by as an equipment supplier,” explains Markku also want to be forerunners and redeem their energy sources to be used. being safer, more efficient or less costly, for Uoti. “However, in recent years our strategy SLO – while at the same time benefiting from instance. has heavily underlined customer-centricity resource efficiency, and thereby gaining a OPPORTUNITIES FOR LEAPFROGGING In Outotec’s field of business, digitali- and service business, so our customers’ daily competitive advantage. SLO and leapfrogging often go hand in hand. zation can loosely be considered disruptive: operating challenges are now our challeng- “These customers expect us to be their “Mining companies often justify their invest- Plants can be operated remotely without peo- es too.” trusted partners, who can lower their opera- ments by promising wealth, jobs and infra- ple, and resource efficiency can be increased

33 OUTOTEC / SUSTAINABILITY REPORT 2016 About this report

by following the production process automat- Our reporting corresponds to the ‘Core’ spective page references are included in the ically in real time. This already enhances both level of the GRI G4 reporting framework, report’s GRI index. efficiency and operational safety. But the in- The GRI index also shows which indica- dustry is also anticipating further benefits. and describes our progress in addressing tors have been used by Outotec to evaluate In early 2017, the program has already the UN Global Compact principles, as well our progress on the 10 principles of the Glob- continued with a science camp. It will next as our commitment to the UN Sustainable al Compact initiative, regarding human rights, move on into a phase of experimentation and labor rights, environment principles and an- ultimately to the pitching phase, where chal- Development Goals. ti-corruption principles, as well as the related lenge outcomes will be presented in sev- Sustainable Development Goals. en-minute sessions in early April. The out- Outotec’s Sustainability Report 2016 has been comes will be reported in our Sustainability prepared according to the to the “Core” lev- MATERIALITY ASSESSMENT Report 2017. el of the GRI G4 reporting framework and the The material aspects identified as most rele- “I have been delighted to see how well UN Global Compact principles. However, vant to the company and our stakeholders by participants have embraced these topics, and General Standard Disclosures as specified in a materiality assessment conducted in 2014 I can’t wait to see the outcomes,” says Horn. the GRI G4 guidelines are presented in a wid- continue to form the basis for our sustaina- er scope than required by the Core option. bility management and reporting. As part of Challenges: Specific Standard Disclosures, consisting of the materiality assessment, we identified our • Create a new solution (a practice or a management approach and indicators, are customers, employees, suppliers, investors model) that will enable companies to earn made with respect to the material aspects de- and financiers, the media, NGOs and local their social license to operate (SLO) in dif- fined as applicable to Outotec. Indicators are communities as the main users of this re- ferent contexts. reported with a somewhat wider scope than port. In a review of key stakeholders conduct- • Develop a new sustainable business mod- required by the Core option. ed during 2016, the academic community was el that would disrupt the mining industry The reporting period is the calendar year added as a key stakeholder group. • Develop a model, practice or service that 2016. Some information relating to develop- supports or enables leapfrogging to clean ments from January to March 2017 has also REPORT COVERAGE technology in the mining industry in devel- been included in the report. We report on our own operations including oping countries. This report has been verified by an inde- Outotec’s premises and employees in full, and pendent third-party assurance provider. The partly include information on our contrac- The Sustainability Master Class can also be report is available in English and published tors working under our supervision on project followed through a blog published at: http:// online only. sites, our products and services, the use of blogs.helsinki.fi/sustainability-master-class/ Outotec’s technologies by customers, and our DISCLOSURE ON OUR supply chain. MANAGEMENT APPROACH Outotec’s generic management approach to sustainability covers all of the aspects of the G4 framework identified as material to our operations. We also report on our manage- ment approach with regard to specific aspects in the relevant sections of this report. Re-

34 OUTOTEC / SUSTAINABILITY REPORT 2016 Annual targets

GRI indicator Target for 2016 Performance in 2016 Target for 2017 & relevant SDG

1. SAFETY

New lost-time incident management system implemented Partly achieved. The lost-time incident management system to be integrated G4-LA6 globally in major locations The system was developed and piloted in 2016 but not into our existing global reporting tools implemented globally.

Harmonized product compliance management procedures in Partly achieved. Reviewed and simplified harmonized product compliance G4-PR1 use globally Harmonized procedures have been implemented in many management procedures to be implemented globally locations to replace previous local procedures.

2. SUSTAINABLE OFFERING

Environmental goods and services (EGS) to account for over Achieved. EGS to account for over 90% of order intake G4-EN27 90% of order intake EGS accounted for 90% of total order intake

20% reduction in CO2 emissions achieved through the use of Achieved. 20% reduction in CO2 emissions to be achieved through the G4-EN27 Outotec’s metals-related technologies, compared to industry 27% reduction in CO2 emissions achieved through the use of use of Outotec’s metals-related technologies, compared to averages Outotec’s metals-related technologies industry averages

Implement recently developed water recycling concepts, and Partly achieved. The piloting of the water treatment solution to be completed G4-EN27 start their commercialization Our first new water treatment solution based on and our offering expanded to encompass the entire water electrochemistry, which enables water recycling, was piloted management of a mine site. with a customer. Our offering included improved water The safety benefits of our dry stacking alternative to be recycling solutions in 15 cases. emphasized.

Reductions in the use of fossil fuels by Outotec waste-to- Not achieved. Reductions in the use of fossil fuels by Outotec’s renewable G4-EN27 energy plants, amounting to 60 MWe, and by steam boilers Plants ordered in 2015 were under design and construction in energy solutions amounting to 12 MWe and/or by steam boilers amounting to 60 MWth 2016 but not yet in operation. amounting to 60 MWth

35 OUTOTEC / SUSTAINABILITY REPORT 2016 GRI indicator Target for 2016 Performance in 2016 Target for 2017 & relevant SDG

3. RESPONSIBLE BUSINESS PRACTICES

Review Outotec’s Code of Conduct, including its coverage and Achieved. Working conditions to be assessed at Outotec’s main G4-SO4 human rights perspectives Code of conduct reviewed and human rights perspectives manufacturing and service sites, including Code of Conduct assessed. training for blue-collar employees

4. SUSTAINABLE SUPPLY CHAIN

95% of major suppliers committed to Outotec’s Supplier policy Achieved. Audits to be run globally to cover 10% of key suppliers where G4-EC9 All major suppliers committed to Outotec’s Supplier policy. a purchase order has been placed recently, for product quality, G4-HR10 with supplier development actions planned (or implemented) according to the audit findings All key suppliers not certified under ISO 14000 and/or ISO 18000 to be audited on health, safety, environmental and social aspects

5. DEVELOPMENT OF OUR PEOPLE

1% improvement in employee engagement and performance Not achieved. Index improvements of 6% in employee engagement and 4% G4-26 enablement indices compared to the 2013 baseline A Pulse survey was conducted, but no improvements in in performance enablement, compared to Pulse survey results employee engagement or performance enablement indices from 2016 were recorded.

100% of employees to go through performance development Partly achieved. - G4-LA11 discussions (PDDs) Due to system changes, no exact data is available for 2016. According to the available data, PDD coverage is estimated to be 95% of employees.

6. EQUAL OPPORTUNITIES AND DIVERSITY

- - 2% increase in the number of female leaders in senior G4-LA12 leadership positions compared to 2016

36 OUTOTEC / SUSTAINABILITY REPORT 2016 GRI indicator Target for 2016 Performance in 2016 Target for 2017 & relevant SDG

7. COMMUNITY INVOLVEMENT

One new community project started Achieved. One new community project to be started G4-SO1 A new Sustainability Master Class program, run jointly by Outotec and the University of Helsinki, was launched.

8. STAKEHOLDER DIALOGUE

Based on customer feedback, realize corrective actions Partly achieved. Continue with existing feedback surveys to measure our G4-PR5 and publicize these actions among customers, while also Short-term corrective actions were specified after each performance per customer relationship and initiate a new communicating successes through customer cases. round of quarterly customer surveys. Corrective actions and transactional feedback survey for field service. communications with customers were mostly realized through customer interfaces at local level; follow-up data not fully available.

9. MINIMIZE OUR OWN ENVIRONMENTAL IMPACT

New energy-saving concept implemented in 5 locations Achieved. ISO 50001 energy management systems, including energy G4-EN6 ISO 50001 energy management systems including saving saving concepts, to be implemented in all locations in Finland concepts were implemented in 4 locations in Germany. In and a new harmonized quarterly global energy consumption Finland, Outotec’s energy saving agreement was renewed, with reporting concept to be created and implemented. new targets set.

A 5% decrease in CO2 emissions from flights per EUR 1 million Achieved. Maintain the same lower level of CO2 emissions from flights G4-EN19 sales, to be achieved by increasing virtual working methods A 22% decrease in CO2 emissions from flights per EUR 1 per EUR 1 million sales as recorded in 2016. million sales, compared to 2015.

Outotec’s metals-related A 22% decrease in

technologies reduce CO2 emissions from flights

CO2 emissions by 27% per EUR 1 million sales

37 OUTOTEC / SUSTAINABILITY REPORT 2016 Data collection Economic data

In 2016 there were no changes in the mainly generated in our research centers, tool based on SuccessFactor system. Chang- Our approach to economic responsibility and reporting scope because Outotec did manufacturing workshops, and ceramic plate es were made to this tool in 2016, and for that our related impacts are described in: production plant. A new database was em- reason we could not get the exact number of • Direct and indirect financial impacts, page 8 not make any mergers, acquisitions or ployed to help us compile environmental data employees who conducted PDDs in 2016. • Sustainability agenda 2020, page 13 divestments. Our policy for restatements in on location-specific data sheets. Training data covers Outotec’s glob- • Impacts of megatrends on our business, case of significant changes in our company Data from Outotec’s project site opera- al training programs and it has been com- page 10 tions was excluded from the data collection. piled from different reporting systems. Data • Responsible business practices, page 24 structure, or changes in the general validity All the local companies from which the data on global training programs has been col- • Building a sustainable supplier base, page 27 of the data, is that the data is recalculated was collected are fully owned by Outotec, and lected from a learning management system, • Engaging with stakeholders, page 17 for this reason no allocations to subsidiaries our e-learning platform, and local human re- for previous years if the changes have led to regarding the environmental indicators were sources personnel. Safety training data has Our financial performance in 2016 is discrepancies of more than 10% (G4-22). made. been collected from the health and safe- described in: Environmental data was readily availa- ty reporting system. In addition, name lists • Financial Statements 2016 ble for Outotec’s largest business units. Our were collected in Code of Conduct class-room at www.outotec.com/investors ECONOMIC DATA smallest offices, which mainly have fewer trainings organized for blue-collar workers, • Direct and indirect financial impacts, page 8 The financial data in this report is based on than 10 persons, were not able to report en- and the number of participants was added in data collected through our enterprise re- vironmental data because they are located the final calculation when preparing this re- Our procurement practices are described in: source planning and management reporting in large office premises together with other port. The learning management system was • Direct and indirect financial impacts, page 8 systems. The figures used in Outotec’s con- companies. They typically pay a monthly lump renewed in 2016, which is expected to improve • Building a sustainable supplier base, page 27 solidated financial statements have been pre- sum to office space providers, and therefore the coverage and quality of our training data pared according to the International Financial it is not possible to determine their specific as of 2017. Reporting Standard. In addition, some data electricity, heat or water consumption. Outotec’s global health and safety report- has been collected manually from Microsoft As of 2016, environmental data has been ing system is used for data collection and to Excel spreadsheets. collected through our health and safety re- map out and monitor progress towards com- porting system. Each location’s data is com- mon health and safety targets in all Outo- ENVIRONMENTAL DATA piled on Microsoft Excel spreadsheets and fed tec operations. It also covers subcontractors Performance data on environmental aspects into a SAP BO database. The data is then ana- on construction sites. Data about employees has been collected from our major business lyzed and combined into a single file to facili- traveling in high-risk countries was collected units for electricity use, heating, owned or tate calculations. from the Travel Tracker system used as part leased company cars, flight emissions, water of our Global ISOS service. use, paper use, recycled waste, and landfill SOCIAL DATA Supply data is collected using the Global waste. Some environmental indicators have Data on our social performance was collected Supplier Database and from the SIEVO spend been be recalculated for previous years, be- applying a global master data system based management software. cause there were significant changes in the on SAP Human Capital Management. The sys- To collect data on human rights and com- general validity of the data. tem includes accurate data on Outotec em- pliance data, a questionnaire in the form of Mi- The report also includes information on ployees globally, covering all business units crosoft Excel sheets was sent to the person re- the combustion of fuels in company-owned and providing basic information on all em- sponsible for human resources in each location. combustion sources (scope 1 emissions), and ployees. Data on performance development figures on hazardous wastes, which were dialogues (PDD) is compiled from the PDD

38 OUTOTEC / SUSTAINABILITY REPORT 2016 Environmental data

In line with our strong focus on resource well as contractors working under our super- MATERIALS efficiency, we strive to operate with vision at project sites. Our management’s commitment to the Materials used (G4-EN1) minimum inputs of energy and materials continuous improvement of our environmen- The materials used globally by Outotec oper- and to closely monitor our consumption tal performance is reflected in both ambi- ations: of electricity, heating and water. tious target setting and results. We evalu- ate the environmental aspects of our offices, Materials used, research centers and manufacturing work- tonnes 2016 2015 2014 The bulk of Outotec’s operations involve en- shops, and set annual targets based on this Paper 49.6 70.4 70.9 gineering and business management in of- evaluation. Steel 2,097 5,600 6,200 fices located in 34 countries. Our operations To help reduce our primary energy con- also include research centers in Finland and sumption, we are piloting an energy manage- Ceramics 31 109 113 Germany; a Dewatering Technology Center, ment system based on ISO 50001 in Germany. Cardboard 18.3 12.9 13.8 two manufacturing workshops and a ceram- Environmental criteria are taken into account packaging ic plate production plant in Finland; assembly whenever we select new office premises. Ou- Plastic 3.3 1.1 1.7 shops in Brazil, Canada, China, and the USA; totec’s two largest offices, in Espoo, Finland, packaging spare parts and service workshops in Qa- and Oberursel, Germany, fulfill LEED® Gold Metal 1.2 1.2 1.6 tar, United Arab Emirates, Mozambique and requirements. Leadership in Energy and Envi- packaging South Africa; and several warehouses. Ap- ronmental Design (LEED) is a globally recog- Wood packaging 238.7 210.6 230.1 proximately 80% of Outotec’s manufacturing nized green building certification program. is outsourced. At our research centers, we record our In 2016, Outotec did not make any acquisi- consumption of electricity and natural gas tions. The operations of Sinter Plant Services, used for test purposes on a monthly basis. We The use of paper has probably declined a service company we acquired in December also have local or unit-specific targets for the due to lower business volumes and digital- 2015 in South Africa, have now been included energy efficiency of other operations. ization. Steel consumption has significantly for the first time in our reporting. Our waste management system provides dropped since we received fewer large plant The environmental impact of office work is for the collection, sorting, storage and dispos- orders and had fewer projects under con- relatively small and is managed through our al of waste on our own premises. Outotec em- struction in 2016. quality, environment, health and safety (QEHS) ployees are instructed to separate different We manufacture high-tech ceramics in management system. Sustainability, pollution types of waste for sorted collection. Where Turku, Finland, for use in Outotec filters. The prevention and sound environmental man- hazardous wastes such as radioactive, flam- consumption of ceramics decreased from 2015 agement are required in all of our operations. mable, explosive, toxic, corrosive or bio-haz- because of lower sales of ceramic filters. We strive to operate with minimum inputs of ardous materials need to be handled, special- Outotec’s Finnish workshops in Lappeen- energy and materials, and we record our con- ized contractors are commissioned to dispose ranta, Turula and Turku report the amount of sumption of electricity, heating and water an- of these materials safely and in line with local packaging they use annually to Finnish Pack- nually. Our reporting of environmental data legal requirements and customers’ require- aging Recycling Ltd (RINKI). covers Outotec’s premises and employees as ments at construction sites.

39 OUTOTEC / SUSTAINABILITY REPORT 2016 ENERGY for energy consumption are collected globally Reduction of energy All our Finnish manufacturing units and from our operations based on the energy-re- consumption (G4-EN6) our Pori research center remained commit- Energy consumption within lated invoicing in each location. The conver- Our target for 2016 was to implement a new ted to the Federation of Finnish Technolo- the organization (G4-EN3) sion factors between energy units are taken energy-saving concept in five locations. To gy Industries’ energy efficiency agreements Figures for our total global electricity and fuel from Statistics Finland. In 2016, we chose reduce our primary energy consumption, we for 2008-2016, aiming to save 9% in energy consumption from non-renewable sources 2015 as a new base year for future compari- implemented a new Energy Management Sys- consumption compared to the baseline year are shown in the table below. We did not con- sons since we entered into new energy saving tem (EMS) based on ISO 50001 to be applied 2006. The total savings in energy consumption sume any renewable fuels or sell any electric- agreements in 2016. in four locations in Germany. This system achieved in these units amounted to 15%, as ity, heating, cooling or steam in 2016. Figures was certified by TÜV Rheinland Cert GmbH shown in the below table. The data was col- in 2016. Following the piloting of this EMS in lected from each location in the Motiva data Energy consumption, TJ 2016 2015 2014 Germany, other Outotec locations will imple- collection system used in the Finnish scheme. ment the system in the coming years. Our The consumption figures include different Direct energy consumption: 47.8 48.5 38.8 Finnish units are due to be certified during types of fuels, purchased electricity, and dis- Propane gas 10.5 11.2 7.9 2017. In Finland, Outotec renewed its official trict heating. The conversion factors between energy saving agreement, adding new targets. energy units are taken from Statistics Finland. Light fuel oil 0.7 0.3 0.3

Coal, coke, semi coke 0.1 0.4 0.2 Energy consumption in Natural gas 15.9 23.5 22.7 Finnish units, TJ 2016 2015 2014 Diesel and gasoline 20.5 13.3 5.7 Pori research center and Turula works Indirect energy consumption: 117.6 116.0 116.1 Energy consumption 38.3 33.4 38.5 Electricity (incl. cooling)* 71.4 73.7 71.8 Energy saved due to efficiency improvements, District heating 45.2 40.8 43.2 TJ compared to base year 9.6 14.4 9.4

Steam 1.0 1.5 1.1 Lappeenranta works

TOTAL energy consumption 165.5 164.5 152.9 Energy consumption 18.8 18.0 18.3

*) to TJ from converted to TJ: 19,837 (2015: 20,482) MWh Energy saved due to efficiency improvements, TJ compared to base year 1.2 2.1 1.8

Energy intensity (G4-EN5) Turku works Our energy intensity calculations include fuel, Energy consumption 13.2 13.0 11.0 electricity, heating, cooling and steam con- Energy saved due to efficiency improvements, sumed within Outotec. TJ compared to base year 3.6 3.8 5.8

Energy, TJ/EUR 1 million sales 2016 2015 2014 In 2016, Outotec entered into a new ener- A new energy efficiency plan was made in Energy intensity 0.16 0.14 0.11 gy efficiency agreement in Finland, commit- Germany in 2016, including about 20 meas- ting to reduce the energy consumption of our ures to be implemented during 2016-2019. The denominator for the energy intensity Finnish units by 4% by 2020, and 7.5% by 2025 The first results will be reported in 2017. calculations is: compared to the new base year 2015.

Denominator 2016 2015 2014

Sales, EUR 1 million 1,059 1,201 1,403

40 OUTOTEC / SUSTAINABILITY REPORT 2016 WATER emissions released by company cars, exclud- Energy indirect greenhouse gas emissions In 2016, Outotec purchased 5,983 MWh of

ing vehicles used in site operations at cus- (Scope 2) (G4-EN16) CO2-free electricity from renewable ener- Water withdrawal (G4-EN8) tomers’ plants. The conversion factors for the gy sources in Finland and Germany. We are Indirect GHG We purchase water locally from municipal wa- fuel specific CO2e emissions are taken from gradually moving to renewable energy in our ter suppliers, and channel waste water into Statistics Finland. For the company cars, the emissions, major locations in Germany and Finland, ex- tonnes of CO2e 2016 2015 2014 municipal waste water systems. The water vol- CO2e emissions are calculated based partly cluding the Pori research center. umes are calculated mostly based on invoic- on the reported gasoline and diesel consump- Scope 2 Market-based Scope 2 emissions de- es, except for certain locations in Africa that tion, and partly on the reports of the leasing emissions creased by 23%, mainly due to the increased (purchased heat use water from drill wells. Because our work- companies. Calculations only relate to CO2, as and electricity), share of renewable energy, but also due to re- shops are mainly assembly shops, no process we do not release emissions of other green- location-based 7,270 7,646 8,746 duced electricity consumption. From 2016 on- water is discharged. Outotec’s research center house gases. wards the base year will be 2015. Scope 2 in Pori uses river water for cooling purposes emissions in test facilities. After use, this water is chan- (purchased heat neled back to the river. We also monitor water Direct GHG emis- and electricity), market-based 7,483 9,669 * consumption at our premises. sions, tonnes of CO e 2016 2015 2014 2 *) In 2014, the market-based and location-based Water con- Scope 1 calculation methods were not applicable sumption, emissions (own m3/year 2016 2015 2014 fuel combustion, company cars) 3,910 4,431 3,774 Drinking In line with the Greenhouse Gas Protocol, we water 65,138 61,348 53,506 Company car used a Corporate Accounting and Report- emissions in ing Standard to calculate Scope 1 and Scope River water Finland, g CO2e/ for cooling 4,186 2,628 9,548 km 119 121 123 2 emissions. The calculations only relate to CO as we do not release emissions of other Total water Reduction from 2 usage 69,320 63,976 63,054 2008, % 38 37 35 greenhouse gases. Country-based emission factors were retrieved from the Protocol’s cal- Our total water usage increased due to more culation tool ‘GHG emissions from purchased accurate reporting on consumption at loca- SCOPE 1 EMISSIONS, TONNES OF CO2E electricity’. For the market-based approach, tions recently acquired in Southern Africa. calculations using ‘Residual mix based CO e 5,000 2 emissions’ were applied for Finland, Germany 4,000 and Sweden (Source: http://www.reliable-dis- EMISSIONS closure.org/documents/, 161-RE-DISS_2014_ 3,000 Residual_Mix_Results_2015-05-15_correct- Direct greenhouse gas emissions ed2.pdf, European Residual Mixes 2014). In 2,000 (scope 1) (G4-EN15) terms of consolidation, the figures include Scope 1 greenhouse gas (GHG) emissions 1,000 operations in which Outotec has full financial are calculated based on the consumption of control, i.e. our own operations and offices, non-renewable fuels in our locations global- 0 with site operations at customers’ premises 2014 2015 2016 ly, plus the carbon dioxide equivalent (CO2e) excluded.

41 OUTOTEC / SUSTAINABILITY REPORT 2016 Other indirect greenhouse gas emissions is CO2 from fossil fuel sources, excluding bio- The CO2e calculations for flight emissions GHG emissions intensity (G4-EN18)

(Scope 3) (G4-EN17) based CO2 emissions. From 2016 onwards the are based on guidelines produced in connec- base year will be 2015. tion with DEFRA’s GHG Conversion Factors. Tonnes of CO e/ Other GHG emis- Economy class flights result in lower emis- 2 EUR 1 million sions, tonnes of sions per kilometer than business class travel. CO e 2016 2015 2014 sales 2016 2015 2014 2 Supply chain Video conferencing systems are available GHG emissions, Scope 3 Relative flight tonnes of CO e 2016 2015 2014 in all of our major locations. We also use tel- 2 emissions 12.8 16.4 14.6 emissions (air econferences and Skype for Business for in- travel, train 360,000 345,000 386,000 Relative total journeys and ternal meetings. In 2015, Outotec took a new GHG emissions, commuting) 14,952 21,762 22,267 set of collaboration and information sharing market- based 24.7 28.2 24.8 tools, known as Office365, into use, which sig- nificantly increased our use of virtual meet- Relative total SCOPE 3 EMISSIONS, TONNES OF CO E CO EMISSIONS BY SUPPLY CATEGORY ings and reduced the need for traveling. GHG emissions, 2 2 based on Outotec actively strives to use responsible country-specific 25,000 air carriers and hotels. Lufthansa and Finnair, electricity mixes for instance, use relatively new fleets, which in Finland and 20,000 Germany 24.9 28.9 * generally produce lower emissions. In agree- 15,000 ments with hotels, Outotec prefers hotels with *) In 2014, the market-based and location-based favorable social responsibility policies. calculation methods were not applicable 10,000

5,000 Total GHG emis- sions, tonnes of 0 CO e 2016 2015 2014 2014 2015 2016 2 Total GHG We report Scope 3 emissions only from our emissions, location-based 26,131 33,839 34,768 own operations and do not include the supply chain since project sites remain outside our Total GHG reporting scope. However, we have calculated emissions, market-based 26,344 35,862 * that the carbon footprint of our supply chain *) In 2014, the market-based and location-based amounts to 360,000 tonnes of CO2 equiva- lent (345,000), where metal products was the Within Scope 3, emissions from air travel calculation methods were not applicable biggest source of CO2 emissions, represent- are the biggest single source at Outotec (G4- ing 27% (25%) of the total. Calculations were EN30). These emissions decreased by 31% based on Outotec’s spending and supply chain in 2016, due to a decline of 27% in the total emission factors as defined by the UK Depart- length of business-related flights and be- ment for Environment, Food and Rural Affairs cause our personnel increasingly traveled in (DEFRA). The gas included in the calculations economy class on long-haul flights.

42 OUTOTEC / SUSTAINABILITY REPORT 2016 Our relative flight emissions per one million Emissions avoided by technology, Total waste produced, tonnes tonnes of CO e sales decreased by 22% from 2015. Our 2 target for 2016 was to achieve a 5% decrease 4,000 2,500 in CO emissions from flights per EUR 1 mil- 2 3,000 lion sales, by favoring virtual ways of work- 2,000 ing. The relative reduction was, how­ever, 2,000 smaller than the actual reduction of Scope 3 1,500 emissions because Outotec’s sales in 2016 1,000 decreased by 12%. The gas included in the 1,000 calculations is CO from fossil fuel sources, 0 2 500 2014 2015 2016 excluding bio-based CO2 emissions. The overall positive impact of Outotec’s 2014 2015 2016 business travel can be best illustrated by Waste amounts declined significantly because comparing our total annual GHG emissions of lower sales volumes and the reduced num- in 2016 (market-based), which were 26,344 ber of employees. tonnes CO2e (2015: 35,862), with the emis- No significant spills were reported in sions avoided by using seven of our key tech- Outotec operations and project sites in 2016 nologies, which amounted to 5,870,000 tonnes (G4-EN24). of CO2e (5,469,000). A small amount of hazardous waste is produced in the final surface treatment of fil- Emissions avoided WASTE ter presses in our Lappeenranta works. In Waste handling is not centrally managed at addition, oily waste from lubricants used in Emissions avoid- Outotec. We have instructed our locations to the Turula works is classified as hazardous. ed, thousand sort waste according to local regulations and These hazardous wastes are sent to local tonnes of CO e 2016 2015 2014 2 the guidelines provided by facility owners. hazardous waste treatment facilities. GHG emissions For more information see: avoided through Total weight of waste by type and disposal • Initiatives to mitigate the environmen- the use of method (G4-EN23) tal impacts of our products and services, seven Outotec 5,870 5,469 5,067 technologies (6,600)* (5,900)* Waste, tonnes 2016 2015 2014 page 22 • Grievances and non-compliance with *) Updated calculations included seven Outotec tech- Waste recycled 766 1,013 1,346 environmental laws and regulations, in nologies: Copper , Ferrochrome process, Landfill waste Responsible business practices, page 24 Alumina calcination, Ceramic filters, Co-generation, and incinerated waste 597 1,484 1,482 Coated titania anodes and TankCell 300 flotation cells. OUR POLICIES In early 2017, Outotec purchased a new database for Hazardous waste 42 261* 98 • Quality, Environment, Health and Safety industrial data, according to which the baseline had Total waste 1,405 2,758 2,926 (QEHS) Policy changed, and we consequently recalculated the figures • Travel Policy for 2015 and 2014. Our policy is to recalculate previous Paper recycled 97 120 151 years’ data when discrepancies exceed 10%. *) A large amount of hazardous waste was removed from a workshop acquired in Mozambique.

43 OUTOTEC / SUSTAINABILITY REPORT 2016 Social data

Our commitment to the United Nations’ on customer projects. During annual vacation Employees by region seasons, we hire students as trainees. Global Compact’s principles on human Employees by In addition to employees, Outotec had region 2016 2015 2014 rights, environment, labor, and anti- 330 (2015: 405) full-time equivalent contract- corruption, and our recognition of the ed persons working under our supervision. EMEA 2,824 3,159 2,627 UN’s Guiding Principles on Business and These contractors are not reported in the em- Americas 801 1,012 1,214 ployee data. Human Rights demonstrate our desire to APAC 577 688 730 Total 4,192 4,855 4,859 further advance social responsibility in our Employees by business. employment type 2016 2015 2014 Employees at Employees by gender year end 4,192 4,859 4,571 Our approach to social responsibility is Employees by described in connection with our material Employees on gender, % 2016 2015 2014 average 4,340 4,855 4,776 themes: Share of Permanent • Safety women among employees 3,978 4,534 4,187 • Responsible business practices employees 18.7 18.4 18.8 • Development of our people Temporary Share of employees, as % • Equal opportunities and diversity men among of total 5 8 8 • Stakeholder dialogue employees 81.3 81.6 81.2 • Community involvement n = 4,192 (2015: 4,859), coverage 100% Share of women among EMPLOYEES management* 13.2 13.3 13.1 Outotec had 4,340 employees on average Share of Employees by category in 2016 (G4-10). At the end of 2016, Outotec men among had 667 employees fewer than the previous management* 86.8 86.7 86.9 year-end, due to cost saving actions, relat- *) n = 1,264 management-level employees, according to ed redundancies and job terminations. Our Outotec grading temporary personnel have at the same time been reduced to about five per cent of the to- Average age of employees tal payroll, and the number of full-time equiv- alent contracted persons working in project 2016 2015 2014 execution and services was reduced to 330. 42.0 41.3 41.0 We could not report the share of part-time employees of the total workforce because the Senior management 6% information has not been included in our HR Middle management 24% master data system. Some of the temporary Specialists 53% employees are self-employed, typically retired Blue-collar workers 17%

Outotec experts who work for shorter periods

44 OUTOTEC / SUSTAINABILITY REPORT 2016 LABOR PRACTICES AND DECENT WORK Employee turnover rate by region 2016 2016 2015 2015 2014 2014 Total number and rates of new employee hires and employee turnover by age group, # % # % # % gender and region (G4-LA1) Finland 181 14 132 9 120 9

Germany 47 9 68 12 42 8 New employee hires by gender 2016 2016 2015 2015 2014 2014 Rest of Europe 86 26 72 19 133 35

# % # % # % The Americas 367 46 324 32 216 18 Women 101 16 169 18 N/A* N/A* Australia 70 19 74 18 70 15 Men 545 84 783 82 N/A* N/A* Rest of the world 228 27 128 13 89 14 *) data is not available due to system change The higher employee turnover in 2016 Outotec runs several pension plans in Employee turnover rate compared to 2015 is partly the result of per- various countries. These plans are mainly by age group 2016 2016 2015 2015 2014 2014 sonnel reductions due to cost saving pro- classified as legally defined contribution pen- grams. sion plans. Other post-employment benefits # % # % # % Approximately 50% of our employees are include medical arrangements for retired em- <25 68 48 68 27 66 24 covered by collective bargaining agreements. ployees in Germany 26–30 138 27 101 16 104 16 Binding collective agreements are followed in each country where they are applicable to Ou- 31–35 174 22 121 14 118 14 Compensation 2016 2015 2014 totec employees. 36–40 133 19 144 19 92 13 Wages and salaries paid, 41–45 137 23 109 16 76 13 COMPENSATION EUR million 329.1 353.4 362.8 Total compensation paid out to employees by 46–50 94 19 82 15 67 13 Outotec in 2016 amounted to EUR 329 million Ratio of 51–55 86 19 85 17 41 9 (353). Outotec’s compensation policy is de- annual total compensation of 56–60 59 19 39 12 33 10 scribed on www.outotec.com/cg. CEO to median 142 key employees were part of the com- compensation of >60 86 43 49 20 71 31 pany’s share-based incentive program in employees 7.9* 10.3 9.7 Total 979 23 798 16 668 15 2016 (168). In addition, 933 (1,211) employees Change in equaling 27% (27%) of eligible personnel par- annual total ticipated in our employee share savings plan. compensation of Employee turnover rate CEO, % -20.2* -2.9 -40.9 by gender 2016 2016 2015 2015 2014 2014 This plan was not offered to employees in Mo- zambique, Morocco, Qatar, and Saudi Arabia, Change in # % # % # % due to legal restrictions or because opera- annual median compensation of Women 164 21 147 16 127* 15 tions were only acquired during the year. In employees, % 4.2 -2.9 4.4 Men 815 24 651 16 543* 15 May 2016, Outotec paid out a total of 233,160 shares and cash payments to cover estimated n = 4,192 (2015: 4,859), coverage 100 % taxes to 1,417 employees who participated in *) In 2016, Outotec’s CEO changed and the compensa- the employee share savings plan in 2013. tion covers three different CEOs, one of them acting. CEO’s compensation does not include severance pay- ment, compensation for unused vacation, salary for notice period or relocation costs due to the change of CEO.

45 OUTOTEC / SUSTAINABILITY REPORT 2016 Benefits provided to full-time employees Injury rates and types, occupational diseases, lost days, absen- in 2016 (G4-LA2) teeism, and work-related fatalities (G4-LA6)

Benefits provided to full-time employees, Type of injury and rates of injury, occupational diseases, but not provided to temporary, % lost days and absenteeism, and total number of work-related fatalities 2016 2015 2014 FT = Full-time, TEMP = Temporary EMEA Americas APAC Total Non-fatal injuries arising from or in the course of work 23 41 33 FT TEMP FT TEMP FT TEMP FT TEMP Fatal injuries arising from or in the course of work 0 0 0 Life insurance 70 42 100 38 0 0 67 36 Lost-time injury rate (LTIR –per 1 million working hours) 1.8 2.8 1.5 Health care 84 65 100 38 7 7 77 53 Occupational diseases 1 0 0 Disability/invalidity coverage 93 64 100 38 20 0 85 52 Occupational disease rate (per 1 million working hours) 0.0 0 0 Maternity/paternity leave 100 95 100 38 100 0 99 75 Lost days because of occupational accidents or disease 304 512 173 Retirement provision 36 0 100 38 36 0 49 4 Lost day rate (per 1 million working hours) 24.5 35.1 7.6 Stock ownership 96 0 100 0 64 0 93 0 Absentee rate, % 1.8 1.2 0.9 n= 2,634 149 780 21 521 29 3,935 199

coverage 99 98 100 100 97 71 99 93 n = 6,450 (7,157) including Outotec’s employees and subcontractors working under our control on project sites

Minimum notice periods for significant The entire workforce (100%) is represent- Total recordable injury rate (TRIR) by region Read about workers with high incidence operational changes ed in formal joint management-worker health in 2016 (G4-LA6) or high risk of diseases related to their occu- The minimum notice periods that must be and safety committees that help to monitor pation in Safety, page 20. observed in advance of significant operation- and provide advice on occupational health and Market area LTIR TRIR Health and safety topics are not covered al changes depend on locations and national safety programs (G4-LA5). Units that have in formal agreements with trade unions (G4- North & Central America 1.3 8.0 legislation, and therefore differ significantly. less than 10 people are represented in the LA8) since they are duly addressed by statuto- Notice periods range from two weeks to one health and safety committees of the closest South America 0.8 1.2 ry regulations and laws that Outotec complies year (G4-LA4). larger units. Europe & North Africa 1.9 6.9 with. We have found out that there are cultural Eurasia 0 4.7 OCCUPATIONAL HEALTH AND SAFETY differences and variation in the categorization TRAINING AND EDUCATION The reporting of health and safety covers Ou- between lost time injuries and total record- Sub-Saharan Africa 4.7 10.4 Our reporting of training hours covers Outo- totec’s premises and employees, contractors able injuries in certain countries. To improve Middle East and India 0 1.4 tec’s employees. Our learning management working under our supervision and our pro- transparency we have also reported total re- system provides information of Outotec’s China 15.1 18.9 ject sites. cordable injury rates (TRIR) for 2016. global training programs excluding blue-col- SEAP 0.8 6.7 lar workers. Training hours on health and Outotec total 1.8 5.7 safety are compiled from the health and safe- ty reporting system. Average hours of train- ing per year by gender and employee category

46 OUTOTEC / SUSTAINABILITY REPORT 2016 (G4-LA9) is partly reported. It includes voca- Vocational training by gender in 2016 DIVERSITY AND EQUAL OPPORTUNITY tional training only due to different data man- agement systems in other types of training. Composition of governance bodies and breakdown of employees per category according to For health and safety training, externally pur- gender, age group, minority group membership, and other indicators of diversity (G4-LA12) sued training and Code of Conduct classroom Share of women by employee category, % training, the information of gender and em- Employees by ployee category has not been collected. age group 2016 2015 2014

Executive Board, % 100 Training 2016 2015 2014 < 30 years old 0 0 0 80 Vocational training and instruction 30-50 years old 25 31 57 60 Number of MEN 85% > 50 years old 75 69 43 employees 2,391 2,444 1,301 WOMEN 15% 40 Senior management, % Hours 12,612 31,788 27,521 20 < 30 years old 0 0 0 Training or education pursued externally and paid Vocational training employee category for in whole or in part by Outotec 0 N N N N N N in 2016 30-50 years old 56 59 60 N N N N N N Number of > 50 years old 44 41 40 ME ME ME ME ME ME employees 500* 500* 807 WOME WOME WOME WOME WOME WOME Middle management, % Hours 2,850* 3,000* 6,877 Board of Directors by gender % < 30 years old 1 3 2 Training on health and safety Executive Board by gender % 30-50 years old 66 64 66 Senior management by gender % Hours 60,365 55,986 93,843 Middle management by gender % > 50 years old 33 33 32 Training on human rights issues** Specialists by gender% Specialists, % Blue collar workers by gender% Number of

employees 1,223 954 1,104 < 30 years old 26 22 19 Hours 673 1,431 3,139 30-50 years old 70 59 61 Senior management 22% > 50 years old 23 19 20 Total training Middle management 32% hours 76,500 95,499 131,380 Specialists 46% Blue-collar workers, % Blue-collar workers 0% Number of < 30 years old 28 30 31 employees 4,192 4,859 4,571 30-50 years old 54 54 52 All types of Read about programs for skills manage- training hours/ ment and lifelong learning that support the > 50 years old 19 16 15 employee 18.3 19.7 28.7 continued employability of employees and as- Board of Directors, % *) Training on MS Office365 tools started in sist them in managing career endings (G4- < 30 years old 0 0 0 December 2015. LA10) on page 28. **) Human rights issues were covered in Code of Con- 30-50 years old 25 0 0 Read about percentage of employees re- duct e-learning and classroom training. In 2016 the > 50 years old 75 100 100 number of hours of training declined, even though ceiving regular performance and career de- more employees underwent training, because in previ- velopment reviews, by gender and by employ- n = 4,192, coverage 100% ous years there were more classroom training sessions ee category (G4-LA11) on page 29. with a longer duration than e-learning sessions.

47 OUTOTEC / SUSTAINABILITY REPORT 2016 The share of men in the mining and met- Supply spend by category allurgical industry has traditionally been high which partly explains the current low share of women. When Outotec starts a new operation in a new country, an expatriate employee is typi- cally assigned to integrate the new operation into Outotec. Our goal is nevertheless that senior management should be hired locally. In 2016, 50% (63%) of our market areas had local leaders. The decrease is due to the fact that a permanent leader for one market area has not yet been appointed and the position is temporarily held by an expatriate.

SUPPLIERS Outotec had approximately 3,300 (3,400) ac- tive direct suppliers in 2016. Our total spend on customer-related purchasing in 2016 was For more information, see also: EUR 486 million (629 million). The total spend • Building a sustainable supplier base, page 27 decreased as the company’s order intake and • Responsible business practices, page 24 sales declined due to the weaker market sit- • Safe products for our customers, page 21 uation. • Sustainable offering for customers, page 22 The share of indirect spend decreased in • Surveys measuring customer satisfaction, 2016 because external services were used page 17 less than in the previous year, in line with our cost saving program. Our spending on local suppliers in 2016 amounted to EUR 310 million (EUR 270 mil- lion), equivalent to 64% of our total supply spend (G4-EC9). The largest shares by coun- try – each amounting to EUR 10–50 million – were spent in the USA, China, Australia, the UAE, Sweden, South Africa, Mexico, Chile, and the UK. The remaining local spend was dis- tributed among 45 countries.

48 OUTOTEC / SUSTAINABILITY REPORT 2016 GRI, GLOBAL COMPACT, AND SDG CONTENT INDEX

Based on our own assessment, Outotec has Global compact declared this report to be compliant with Code Description Related webpage and omissions principle SDG the GRI G4 guidelines in accordance with General Standard Disclosure Strategy and analysis the core level. Compliance has additionally G4-1 CEO’s statement CEO’s message, p. 3 been checked by a third party, Ecobio Ltd. Organizational profile G4-3 Name of the organization This is Outotec, p. 5 G4-4 Primary brands, products, and/or services This is Outotec, p. 5 In our sustainability reporting for 2016, we G4-5 Location of organization’s headquarters This is Outotec, p. 5 have applied the Global Reporting Initiative G4-6 Number of countries where the organization operates This is Outotec, p. 5 (GRI) G4 Guidelines’ specific standard dis- G4-7 Nature of ownership and legal form This is Outotec, p. 5 closure indicators, as presented in the table G4-8 Markets served This is Outotec, p. 5 below. The table also indicates our progress G4-9 Scale of the reporting organization This is Outotec, p. 5 on the United Nations’ Global Compact prin- Direct and indirect financial impacts, p. 8 ciples and Sustainable Development Goals G4-10 Breakdown of workforce Social data, p. 8 6 (SDG). G4-11 Coverage of collective bargaining agreements Social data, p. 44 3 G4-12 Organisation’s supply chain Building a sustainable supply chain, p. 27 G4-13 Significant changes during the reporting period regarding This is Outotec, p. 5 size, structure, or ownership Data collection, p. 38 G4-14 Precautionary approach or principle Responsible business practices, p. 24 G4-15 Externally developed sustainability charters, principles or other Commitment to external initiatives initiatives which the organization endorses at www.outotec.com G4-16 Memberships of associations Commitment to external initiatives at www.outotec.com Identified material aspects and boundaries G4-17 All entities included in the organization’s consolidated financial Financial Statements 2016 at www.outotec.com/investors statements G4-18 Process for defining report content and the aspect boundaries Most significant topics, p. 12 Engaging with stakeholders, p. 17 G4-19 Material aspects Most significant topics, p. 12 G4-20 Aspect boundary within the organisation About this report, p. 34 Most significant topics, p. 12 G4-21 Aspect boundary outside the organization About this report, p. 34 Most significant topics, p. 12 The carbon footprint of our supply chain, p. 42 G4-22 Explanation of re-statements Data collection, p. 38 G4-23 Significant changes from previous reporting periods in the scope This is Outotec, p. 5 and aspect boundaries About this report, p. 34

49 OUTOTEC / SUSTAINABILITY REPORT 2016 Global compact Code Description Related webpage and omissions principle SDG Stakeholder engagement G4-24-27 Stakeholder engagement Engaging with stakeholders, p. 17 OWN Employee engagement and performance enablement indices Enhancing employee engagement, p. 28

Report profile G4-28-31 Report profile About this report, p. 34 G4-32 ‘In accordance’ option chosen About this report, p. 34 G4-33 External assurance Independent assurance, p. 55 Governance Governance structure and composition G4-34 Governance structure Responsible business practices, p. 24 Ethics and integrity G4-56 Organization’s values, principles and codes Values at www.outotec.com 10 Responsible business practices, p. 24

DISCLOSURES ON MANAGEMENT APPROACH DMA Management approach Responsible business practices, p. 24

ECONOMIC RESPONSIBILITY DMA Management approach to economic responsibility Direct and indirect financial impacts, p. 8 Economic performance G4-EC1 Direct economic value generated and distributed Direct and indirect financial impacts, p. 8 G4-EC2 Risks and opportunities due to climate change Impacts of megatrends on our business, p. 10 7 Partly reported, taxes by country not reported. Indirect economic impacts G4-EC8 Significant indirect economic impacts Direct and indirect financial impacts, p. 8 Procurement practices G4-EC9 Proportion of spending on local suppliers at significant locations Building a sustainable supplier base, p. 27 of operation Direct and indirect financial impacts, p. 8

ENVIRONMENTAL RESPONSIBILITY DMA Management approach to environmental responsibility Environmental data, p. 39 Materials G4-EN1 Materials used Environmental data, p. 39 7,8

50 OUTOTEC / SUSTAINABILITY REPORT 2016 Global compact Code Description Related webpage and omissions principle SDG Energy G4-EN3 Energy consumption within the organization Environmental data, p. 40 7,8 G4-EN5 Energy intensity Environmental data, p. 40 8 G4-EN6 Reduction of energy consumption Environmental data, p. 40 8,9

Water G4-EN8 Water withdrawal Environmental data, p. 41 7,8 Emissions G4- Greenhouse gas emissions (Scope 1, 2, 3) Environmental data, p. 41-42 7,8 EN15– Building a sustainable supplier base, p. 27 G4-EN17 G4-EN18 Greenhouse gas emissions intensity Environmental data, p. 42 8 Effluents and waste G4-EN23 Waste by type and disposal method Environmental data, p. 43 8 G4-EN24 Total number and volume of significant spills Environmental data, p. 43 8 Products and services G4-EN27 Extent of impact mitigation of environmental impacts of Sustainability agenda 2020, p. 13 7,8,9 products and services Sustainable offering for customers, p. 22 Safe products for our customers, p. 21 OWN Environmental Goods and Services in order intake Sustainability agenda 2020, p. 13 Sustainable offering for customers, p. 22

OWN Percentage of CO2 emissions avoided through the use of Outotec’s Sustainability agenda 2020, p. 13 metals-related technologies Environmental data, p. 43

OWN Percentage of reduction of fresh water/tonne of ore Sustainability agenda 2020, p. 13 by non-ferrous metals concentrators using Outotec technology Sustainable offering for customers, p. 22

OWN Increase of energy produced using Outotec Sustainable offering for customers, p. 22 waste-to-energy solutions Sustainability agenda 2020, p. 13

Compliance G4-EN29 Compliance with environmental laws Responsible business practices, p. 24 8 G4-EN30 Significant environmental impacts of transporting products/ Environmental data, p. 41 workforce

51 OUTOTEC / SUSTAINABILITY REPORT 2016 Global compact Code Description Related webpage and omissions principle SDG Supplier environment G4-EN32 Percentage of new suppliers that were screened using Building a sustainable supplier base, p. 27 8 environmental criteria

G4-EN33 Significant actual and potential negative environmental CO2 emissions of our supply chain, p. 42 8 impacts in the supply chain Environmental grievance mechanisms G4-EN34 Number of grievances about environmental impacts Responsible business practices, p. 24 8

SOCIAL RESPONSIBILITY DMA Management approach to social responsibility Social data, p. 44 Labor practices and decent work Employment G4-LA1 Total number and rates of new employee hires and employee Social data, p. 44 turnover by age group, gender and region G4-LA2 Benefits provided to full-time employees that are not provided to Social data, p. 46 temporary or part-time employees Labor / management relations G4-LA4 Minimum notice period(s) regarding significant Social data, p. 46 3 operational changes Occupational health and safety G4-LA5 Percentage of total workforce represented in formal joint Safety, p. 20 management-worker health and safety committees that help monitor and advise on occupational health and safety programs G4-LA6 Rates of injury, occupational diseases, lost days and absenteeism, Social data, p. 46 and total number of work-related fatalities by region

G4-LA7 Workers with high incidence or high risk of diseases Safety, p. 20 related to occupation G4-LA8 Health and safety topics covered in formal Social data, p. 46 1 agreements with trade unions Training and education G4-LA9 Average hours of training per year per employee category Social data, p. 47 6 Partly reported, data does not cover blue-collar workers and classroom trainings G4-LA10 Programs for skills management and lifelong learning Enhancing employee engagement, p. 28 1 G4-LA11 ercentage of employees receiving regular performance and Enhancing employee engagement, p. 28 6 career development reviews

52 OUTOTEC / SUSTAINABILITY REPORT 2016 Global compact Code Description Related webpage and omissions principle SDG Diversity and equal opportunity G4-LA12 Composition of governance bodies and breakdown of employees Social data, p. 47 per category according to gender, age group, minority group membership, and other indicators of diversity

Supplier assessment for labor practices G4-LA14 Percentage of new suppliers that were screened using labor Building a sustainable supplier base, p. 27 practices criteria G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken Labor practices grievance mechanisms G4-LA16 Number of grievances about labor practices Responsible business practices, p. 24 Enhancing employee engagement, p. 28 Human rights Non-discrimination G4-HR3 Total number of incidents of discrimination Responsible business practices, p. 24 6 and actions taken Freedom of association G4-HR4 Operations and suppliers identified in which the right to exercise Building a sustainable supplier base, p. 27 3 freedom of association and collective bargaining may be at signifi- Responsible business practices, p. 24 cant risk Child labor G4-HR5 Operations and suppliers identified as having significant Building a sustainable supplier base, p. 27 5 risk for incidents of child labor Forced or compulsory labor G4-HR6 Operations and suppliers identified as having significant Building a sustainable supplier base, p. 27 4 risk for incidents of forced or compulsory labor Supplier human rights G4-HR10 Percentage of new suppliers that were screened Building a sustainable supplier base, p. 27 2 using human rights criteria

G4-HR11 Significant actual and potential negative human rights Building a sustainable supplier base, p. 27 2 impacts in the supply chain Human rights grievance mechanisms G4-HR12 Number of grievances about human rights impacts Responsible business practices, p. 24 1 Society Local communities G4-SO1 Local community engagement, impact assessments, Engaging with stakeholders, p. 17 1 and development programs. Partly reported, impact assessments and development plans are missing

53 OUTOTEC / SUSTAINABILITY REPORT 2016 Global compact Code Description Related page and omissions principle SDG G4-SO2 Operations with significant negative impacts Responsible business practices, p. 24 1 on local communities Anti-corruption G4-SO3 Total number and percentage of operations assessed Responsible business practices, p. 24 10 for risks related to corruption G4-SO4 Communication and anti-corruption training Responsible business practices, p. 24 10

G4-SO5 Confirmed incidents of corruption and actions taken Responsible business practices, p. 24 10 Anti-competitive behaviour G4-SO7 Total number of legal actions for anti-competitive behavior, Responsible business practices, p. 24 anti-trust, and monopoly practices Compliance G4-SO8 Monetary value of significant fines and total number of non-mon- Responsible business practices, p. 24 etary sanctions for non-compliance with laws and regulations Supplier assessment for impacts on society G4-SO9 Percentage of new suppliers that were screened using Building a sustainable supplier base, p. 27 criteria for impacts on society G4-SO10 Significant actual and potential negative impacts Building a sustainable supplier base, p. 27 on society in the supply chain Grievance mechanisms for impacts on society G4-SO11 Number of grievances about impacts on society Responsible business practices, p. 24 Product responsibility Customer health and safety G4-PR1 Percentage of significant product and service categories for Safe products for our customers, p. 21 which health and safety impacts are assessed for improvement Annual targets, p. 35 G4-PR2 Total number of incidents of non-compliance with regulations and Safe products for our customers, p. 21 voluntary codes concerning the health and safety impacts of products and services Product and service labeling G4-PR5 Results of surveys measuring customer satisfaction

Compliance G4-PR9 Monetary value of significant fines for non-compliance with laws Responsible business practices, p. 24 and regulations concerning the provision and use of products and services

54 OUTOTEC / SUSTAINABILITY REPORT 2016 Independent Assurance Report – Outotec Sustainability Report 2016

TO THE MANAGEMENT OF OUTOTEC OYJ The Sustainability Information assured was conducted from December 2016 to March recommendations related to GRI Sustainabil- Insinööritoimisto Ecobio Oy (hereafter Ecobio) covered the Standard Disclosures in accord- 2017. The assurance process included: ity Reporting principles. These observations has been commissioned by Outotec Oyj (here- ance with the core-level option, including the • Interviewing employees responsible for and recommendations do not affect the con- after Outotec) to perform a limited third party reported Environmental and Social Perfor- data collection and reporting at Outotec’s clusions presented earlier. assurance engagement regarding the content mance Indicators. In addition, the level of the group level. • In general, the report is comprehensive, of Outotec’s Sustainability Report for 2016. consistency of the Economic Performance • Evaluating procedures for gathering, well-structured and claims are reported Indicators reported was checked against the analyzing, and aggregating quantitative in a clear and reasonable fashion. OUTOTEC’S RESPONSIBILITY GRI G4 Sustainability Reporting Guidelines. data for the Sustainability Report 2016 • Outotec presents a good understanding of Outotec was responsible for the collection, Ecobio disclaims any liability or responsi- as well as performing cross-checks on sustainable development conditions and preparation and presentation of the informa- bility for any third party decision based upon a sample basis concerning the reported the reported strategy and performance tion in the Sustainability Report (hereafter this assurance report. sustainability data. relate to the understanding of these Sustainability Information) according to the • Checking the internal guidelines of conditions. Sustainability Reporting Guidelines (GRI G4) METHODOLOGY the data collection. • The materiality assessment is set up by the Global Reporting Initiative (GRI). Ecobio based the assurance process on the • Checking the sufficiency of the comprehensive taking into account Ecobio, as an independent assuror was not following guidelines and standards: the Glob- documentation of the data gathering different dimensions of sustainability. The involved in the data gathering and preparation al Reporting Initiative Sustainability Report- process. process for defining the report content of the Sustainability Information, apart from ing Guidelines GRI G4, the International Stan- • Checking the consistency of the could though be described more in detail. the Independent Assurance. The Management dard on Assurance Engagements (ISAE) 3000 Sustainability Report 2016 compared • All relevant topics are covered in the of Outotec has approved the information pro- (Revised) Assurance Engagements Other than to the GRI G4 Sustainability Reporting report and a shift to a more focused vided in the Sustainability Report. Audits or Reviews of Historical Financial In- Guidelines. content has been made for the 2016 formation and Outotec’s internal reporting report. However, if omissions are made PRACTITIONER’S RESPONSIBILITY guidelines. The assurance process was per- CONCLUSIONS they should be clearly stated and Ecobio’s responsibility was to present a con- formed utilizing Ecobio’s internally developed Based on the work described in this re- preferably on indicator level. clusion on the Sustainability Information sub- GRI assurance tool, covering the principles, port, nothing has come to our attention that • Stakeholder dialogue is active and ject to the assurance performed by Ecobio. standard disclosures and indicators of the GRI would cause us to believe that the informa- relevant topics are well identified. We The scope of work included assurance of G4 Guidelines. The Standard Disclosures were tion presented in Outotec’s Sustainability Re- recommend keeping an active dialogue completeness and correctness of informa- assessed based on a sampling plan com- port 2016 is not fairly stated, in all material with stakeholders to maintain a high level tion presented by Outotec in the Sustainability posed by Ecobio. respects, or that it would not comply with the on inclusivity in future reporting periods Report 2016. The assurance engagement was Concerning limited assurance engage- Reporting Criteria stated before. and to ensure that also future reports limited to the non-financial performance data ment the evidence-gathering procedures are responds to stakeholder expectations disclosed in the Sustainability Report for the more limited than for a reasonable assur- OBSERVATIONS AND RECOMMENDATIONS and interests. The report could also reporting period of January 1st 2016 to De- ance engagement, and therefore less assur- Based on our limited assurance engagement support the interactivity between cember 31st 2016. ance is obtained. This assurance engagement we provide the following observations and stakeholders and the reporting

55 OUTOTEC / SUSTAINABILITY REPORT 2016 organization more by offering means to be As an independent consultancy, Ecobio in contact with the organization. has no financial dependencies on Outotec be- • Outotec has made further progress on yond the scope of this engagement. Ecobio including the whole value chain within the has conducted this assurance independently, reporting boundary, which is consistent and there has been no conflict of interest. with the work done during previous reporting periods. This could still be Helsinki, 27th of March 2017 enhanced to even more comprehensively Insinööritoimisto Ecobio Oy cover impacts outside the organization, as most of the impacts are identified to happen there. This would improve the completeness of the report. • The documentation of the work processes and the internal guidelines for data gathering has been further improved. Taru Halla This is of importance as to maintain Managing Director (M.Sc.) consistency in data gathering and compilation as well as accuracy and reliability in the reporting over time also when organizational changes occur.

PRACTITIONER’S INDEPENDENCE Thomas Andersson AND QUALIFICATIONS Senior Consultant (M.Sc.) Ecobio is an independent consulting compa- ny that specializes in environmental, health and safety management with over 25 years of history. Ecobio provides corporate sustaina- bility and environmental consultancy services, combined with training, modelling, research and planning, for companies in the infrastruc- ture, industry and service sectors. Ecobio’s assurers are skilled and experienced with- in non-financial assurance and have good knowledge of industry related sustainability issues.

56 OUTOTEC / SUSTAINABILITY REPORT 2016 CONTACT INFORMATION

Tea Maasalo Director - Corporate Responsibility [email protected]

Eila Paatela Vice President - Corporate Communications [email protected]

Saija Kinanen Communications Manager [email protected] www.outotec.com/sustainability www.facebook.com/Outotec www.linkedin.com/company/Outotec www.twitter.com/Outotec www.youtube.com/user/OutotecOyj

Outotec Oyj PO Box 1000 FI-02231 Espoo Finland Tel. +358 20 529 211

Outotec provides leading technologies and services for the sustainable use of Earth’s natural resources. As the global leader in minerals and metals processing technology, we have developed many breakthrough technologies over the decades for our customers in metals and mining industry. We also provide innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. Outotec shares are listed on . www.outotec.com

Copyright © 2017 Outotec Oyj. All rights reserved.