Sustainability Report 2019

SUSTAINABILITY REPORT 2019

TABLE OF CONTENTS

CEO’S FOREWORD 3 KEY STRENGTHS, WEAKNESSES, RISKS AND OPPORTUNITIES 20 CLIMATE 35 HIGHLIGHTS OF 2019 4 TOWARD CARBON NEUTRAL OUR STRATEGY TOWARDS KEY SUSTAINABILITY TOPICS 5 VEHICLE MANUFACTURING 37 CLEAN MOBILITY 21 VALMET AUTOMOTIVE IN SHORT 7 WE BOOST THE USE LEADING SUSTAINABILITY OF ENERGY AND RESOURCES 40 FROM RESOURCES TO PRODUCTS 9 THROUGHOUT THE ORGANIZATION 22 NEW SUPPLIER REQUIREMENTS OUR 5 COMMITMENTS 11 CASE – HOW CO2 NEUTRALITY FOR PROTECTING ENVIRONMENT COMMITMENTS PUT INTO PRACTICE 12 BECAME OUR STRATEGIC GOAL 23 & HUMAN RIGHTS 42

ETHICAL PRINCIPLES 13 PEOPLE 25 TOGETHER 43 OUR SKILLED AND ENGAGING WITH STAKEHOLDERS 45 SUSTAINABILITY DEVELOPING PERSONNEL 27 COOPERATION WITH

STRATEGY 15 CASE – FROM CAR PAINTER EDUCATIONAL INSTITUTIONS 46 KEY SUSTAINABILITY TARGETS 17 TO ENGINEER 29 BATTERY PLANT WAS SUSTAINABILITY PROGRAM HEALTH AND SAFETY OF OUR OPENED IN SALO 47 FOR 2020–2027 18 PERSONNEL 30

THE SUSTAINABLE A NEAR MISS SITUATION DEVELOPMENT GOALS 19 IN THE LOADING AREA 32 GRI & DATA 49

DIFFERENT BUT EQUAL 33 3

WELCOME TO READ THE FIRST SUSTAINABILITY REPORT OF VALMET AUTOMOTIVE

Dear Reader, tainability, whether it concerns our per- welcome to read a brand-new publication sonnel, shareholders, customers or the en- by Valmet Automotive Group – our first vironment. Sustainability Report. With this annual re- Sustainability is deeply rooted in the port, we want to give you a deep insight Valmet Automotive culture. The key topics view of sustainability management in our of our sustainability concept – Sustainabil- company and how we continuously im- ity, Governance, Environment, Health and prove the economic, environmental and Safety, and People – are aligned with the social impact of our activities. 5 commitments of our corporate culture We are extending our reporting so you – Respect, Always Learn, Lead at all Levels, may participate in what we have accom- Show Entrepreneurial Spirit, and Deliver. plished, what we are pursuing and what is The Valmet Automotive Sustainabili- our future in sustainability. We explain our ty Report is a result of comprehensive in- operations in detail to give you a clear idea ternal company work. Previously, this work of the internal and external factors affect- has produced accomplishments and doc- ing our business, the challenges we face uments related to our commitments and and the solutions we implement. corporate culture for our personnel and With this report, we want to establish our partners. Now we take the next step a basis for constant, trust-based dialogue and present the Sustainability Report to with all our interest groups. We recognize the public. the importance of a sustainable approach in all of our operations, and as a service Enjoy reading provider for automotive industry, we have always complied to the strict requirements Olaf Bongwald of our customers. The same applies to sus- CEO, Valmet Automotive 4 HIGHLIGHTS OF 2019

Governance Environmental Social

We opened The relative number of FINLAND'S FIRST We set a ACCIDENTS AT WORK* high volume CO2 NEUTRALITY TARGET at the Uusikaupunki plant production capacity for the Uusikaupunki car DECREASED BY 30% BATTERY PLANT plant by the end of 2021. compared to 2018. in Salo in October 2019.

* The number of accidents at work per million working hours.

We released a The environmental We introduced SUPPLIER management system of the Zary plant, which , THE 5 COMMITMENTS CODE OF CONDUCT manufactures roof and to build one uniform which defines the conditions kinematic systems, was corporate culture for for the responsibility Valmet Automotive Group. of our partners. ISO 14000 CERTIFIED. 5

KEY SUSTAINABILITY TOPICS – IDENTIFICATION AND SELECTION The focus areas of this report are based on material assessment conducted on group-level with the emphasis on Finland operations. With the assessment and the related stakeholder survey, we identified and prioritized the most relevant economic, social, and environmental sustainability topics.

Ensuring well-being of the personnel and The two-part e-survey included ques- economic continuity are essential to stake- tions related to both automotive industry holders. Active mitigation of Valmet Auto- in general and Valmet Automotive’s op- ESSENTIAL SUSTAINABILITY TOPICS FOR KEY STAKEHOLDERS motive’s environmental impact is also con- erations. The survey was then conduct- sidered very important. ed in December 2019. The interviews, sur- GOVERNANCE The stakeholders shared their views vey and analysis were carried out by a • Ensuring business profitability about the most significant sustainability third-party partner. • Identifying driving forces in the industry and adapting to change themes, and the high response percent- The vast majority of the 360 answers • Close cooperation with municipalities and educational institutions age and several feedback comments indi- came from the Valmet Automotive per- • Attracting subcontractors to the area in cooperation with municipalities cate that stakeholders want to contribute sonnel and the rest of them mainly from to developing Valmet Automotive in sus- external stakeholders, such as service pro- SOCIAL tainability issues. viders and public authorities in Finland. • Continuous improvement of work safety Most respondents were from Uusikaupun- • Motivating employees, supporting coping at work and extending careers FROM INTERVIEWS TO ki, where the majority of the Valmet Auto- • Ensuring equal and fair treatment at workplace E-SURVEY motive personnel work. • Planning and predictability in employment Before defining the themes for the survey, Finland was chosen as the starting we first identified and selected the- inter point for this assessment because of its ENVIRONMENT nal and external key stakeholders. The sus- central importance to the company’s busi- • Profiling globally as a forerunner in environmental issues tainability themes for the survey were then ness operations. For the next year’s re- • Development of energy and material efficiency, identified from relevant documents and port, the survey will be expanded to give a reduction of energy consumption interviews of the key stakeholders. group-wide perspective. • Active reduction of environmental impacts in operations • Utilizing high technology and investments in new, greener processes and practices 6 7 VALMET AUTOMOTIVE – THE FAST LANE TO FUTURE VEHICLES

The Valmet Automotive story began in the head office location and the view to cation of mobility is the strategic view all hicles reality. Around 4,000 of them work 1968, when Finland had more horses than the future – has changed. Valmet Automotive business lines share, in Finland – most of them at the car plant cars. At the time, a government-owned and actively promote. The most tangible in Uusikaupunki and battery plant in automotive company represented an in- ELECTRIFICATION sign of this took place in November 2019, Salo. Valmet Automotive’s locations and vestment into future technology. The plant TRANSFORMS BUSINESS when Valmet Automotive launched its personnel in Germany, Poland and Spain started with the car assembly but expand- Valmet Automotive Group services rest first large-scale automotive battery pro- complete the company portfolio. Around ed into engineering services. today on four pillars: Vehicle Manufactur- duction plant in Salo. 1,000 of the employees work in research During the company history of over 50 ing, Engineering Services, Roof & Kine- Valmet Automotive’s around 5,000 and development. years, practically everything – except for matic Systems and EV Systems. Electrifi- employees work to make the future of ve-

OUR HISTORIC LANDMARKS

1968 1969 1986 1991 1992 1995 1997 1999 2005 2009 2010 2011 2013 2015 2017 2018 2019

Expansion in Founded as Saab-Valmet Expansion in Engineering Became Joint Venture between Roof Systems through company Launching independent from Renamed Valmet merged New shareholders Metso acquisition of battery Saab-Scania and Valmet, to Valmet with Rauma to through (beside Metso): Saab, fully owned stepped plant in Salo, construction of car plant Automotive establish Metso company Tesi and Pontos by Valmet out Finland in Uusikaupunki, Finland acquisition CATL as a new shareholder 8

2019 LOCATIONS

FINLAND VALMET AUTOMOTIVE GROUP Uusikaupunki – Vehicle Manufacturing, Engineering Services, EV Systems manufacturing • Established in 1968 Turku – Engineering Services • Head office in Uusikaupunki, Finland Vantaa – Group Corporate functions • Parent company Valmet Automotive Inc. (Finland) Salo – EV Systems manufacturing • The main operational companies Valmet Automotive Engineering GmbH (Germany), GERMANY Valmet Automotive Sp zoo (Poland) and Osnabrück – Roof & Kinematic Systems engineering Valmet Automotive EV Power Oy (Finland) Munich – Product development • Around 5,000 employees Sindelfingen – Product development • Has delivered annually over 100,000 cars in recent Ingolstadt – Product development and testing years to world-wide markets Wolfsburg – Product development, • Net sales 651.5 (2018: 662.6) MEUR, testing and wire harness production operating profit 18.1 (2018: 17.8) MEUR Bad Friedrichshall – Product development, testing, small series production, prototyping and

group corporate functions SHAREHOLDERS POLAND • Pontos (38.46%) Zary – Roof & Kinematic • Tesi (38.46%) Systems manufacturing • CATL (23.08%)

SPAIN Antas – Testing

MANAGEMENT TEAM • Olaf Bongwald, CEO • Charlotte Caswell, Remigiusz Grzeskowiak, Robert Hentschel, Minna Huhtaniska, Christian Kleinhans, René Kohl, Jyrki Nurmi, Pasi Rannus, Juha Torniainen, Hans-Joachim Vogt 4 BUSINESS AREAS 9 FROM RESOURCES TO PRODUCTS, SERVICES AND OTHER OUTPUTS Valmet Automotive provides ENGINEERING ROOF AND KINEMATIC SYSTEMS • Engineering for new kinds • Developing and delivering services for automotive industry of mobility, prototype building convertible roofs, active spoilers in four business areas. Our and other kinematic systems extensive history in car production, combined with world-class expertise in engineering and manufacturing of electric vehicles, battery and kinematic systems makes us a preferred strategic partner for OEMs.

We strive to maximize outputs for our customers, employees and society while minimizing our impacts on the environment. CAR MANUFACTURING ELECTRIC VEHICLE SYSTEMS • Over 50 years of world-class contract • EV Systems engineering and testing manufacturing • Battery and other EV Systems manufacturing CREATING VALUE FOR SOCIETY 10 RESOURCES OUTPUTS

PERSONNEL ENGINEERING TO PERSONNEL 4 664 employees* EUR 197 million total wages 4 398 permanent* EUR 39 million employee social security 266 temporary* and pension

FACILITIES PRODUCTS & SALES 3 production plants EUR 651,5 million net sales 9 product development & testing locations ROOF AND KINEMATIC SYSTEMS 114 000 cars Thousands of batteries INNOVATION AND INVESTMENTS ~50 000 roofs and kinematic systems EUR 0,8 million R&D expenses ~1 000 prototypes EUR 1 million investments in personnel IPR portfolio of 200 patent families development ~100 student trainees & thesis students NEW BUSINESS Battery Ecosystem collaboration (EU) ELECTRIC VEHICLE SYSTEMS Battery test center (GER) National Battery Strategy Working Group (FI) Establishment of high-volume automotive Batteries from Finland program (FI) Battery manufacturing operation (FI)

FINANCIAL TO OWNERS AND FINANCIERS EUR 20 million total equity EUR 18,1 million operating profit

PARTNERS CAR MANUFACTURING TO SOCIETY Network of almost 4 000 suppliers globally EUR 2,9 billion export value (from Finland) EUR 9,6 million income taxes NATURAL RESOURCES Water 159 541 m3 ENVIRONMENT Electricity 71 020 Mwh CO2-emissions 43 526 tCO2 Energy 408 708 MWh Waste 7028 tn *Status December 31, 2019 11

5 COMMITMENTS AND VALMET AUTOMOTIVE’S CORPORATE ALWAYS LEARN We are never too busy or too good not to CULTURE learn and improve us and the company continuously. The willingness to open up To build one uniform corporate new fields, to explore and to listen, is shap- culture for the group of companies, ing us more than ever. Continuous training Valmet Automotive has defined 5 and increased awareness are the keys to engage our employees to sustainability. We commitments – always learn, show are actively informing and training employ- entrepreneurial spirit, deliver, lead ees on issues related to protecting the envi- at all levels and respect – that serve ronment, conserving natural resources and as a benchmark for every Valmet occupational health and work safety. Automotive employee across all levels. They guide and help us to SHOW ENTREPRENEURIAL SPIRIT live to our values. RESPECT We are innovative, curious, open. And Respect is the core of all our operations. when we have almost reached our goal, We value our own work as well as that of we passionately take that last step. We our colleagues’, customers, partners and love what we do. We are characterized by other stakeholders. We value and take a clear strategic discipline of the Group pride in the environment where we oper- as a whole to be economically successful. ate. This paves the way to continuously im- We are committed to ambitious targets in prove sustainable economic growth and sustainability, and the corporate rules and the performance level of our business. processes support achieving them. 12 5 COMMITMENTS PUT INTO PRACTICE In 2019, Valmet Automotive started a train- trepreneurial spirit were sometimes un- ing program for all employees on how the derstood as being able to lead a team. In- 5 commitments can be applied to every- stead, they mean leading your own work day work life. and having initiative, Caswell explains. Meanwhile most people have been In 2019, we conducted a “Pulse Check” trained and know about the fundamental survey to ask all our employees to what DELIVER norms and values linked with our commit- extent Valmet Automotive already meets We want to be the best in everything we de- ments. However, the development of our and supports the achievement of the velop, manufacture, plan, test and offer our corporate culture is an ongoing process. commitments. The results were encour- customers as a service provider. We nev- The 5 commitments were defined by aging, and now the Commitment training er deliver “just like that”. Our systems and the top management team, but it was im- will be continued. processes that are used globally are just as portant to involve the employees in the – To continuously develop the commit- best-in-class as our employee and process discussions as early as possible. In March ments, we have launched a Commitment management. We have set highly ambi- 2019 we started a series of Diagonal Slices Ambassador campaign to honor the em- tious targets in a carbon neutral manufac- Meetings across all our locations to elabo- ployees who live the commitments in a turing process. We keep our promises and rate on our commitments in small groups. particularly convincing way. We also devel- deliver results, in sustainability as in other This was very exciting for all of us. op objectively measurable criteria to review fields of our operations. – In these meetings we developed a what we have achieved. At the end of the common understanding of the commit- day, you can’t command a corporate cul- LEAD AT ALL LEVELS ments. Now the Management Team has a ture. Commitments must be lived by every- It takes place at all levels, from the smallest clearer picture of the gaps on our way to one at all levels, says Charlotte Caswell. unit to the Group Management Team. Only ONE Valmet Automotive, says Charlotte the willingness to lead enables us to make Caswell, SVP, Group HR. decisions and take responsibility for the big picture. Leadership is essentially person- PART OF PERFORMANCE REVIEW al responsibility for one’s own actions and Caswell points out that majority of the feed- decisions. Risk management and safety of back on the workshops was positive. Howev- work environment are issues, to which every er, she was surprised at how two of the com- employee at Valmet Automotive can and mitments were sometimes interpreted. must contribute. – Leading at all levels and showing en- 13

As part of our compliance program, we We support fair competition and ETHICAL also built a reporting channel where an- a free market and refuse to discuss or yone can report anonymously if they sus- agree with competitors on pricing, mar- pect a violation of our Code of Conduct. ket shares or suchlike activities. We do PRINCIPLES AND In addition, we updated our guidelines on not accept any form of corruption, such data protection and security. as bribery or embezzlement. We refrain from business relationships that may re- AN ANONYMOUS ETHICAL PRINCIPLES GUIDE sult in conflicts of interest. EVERYONE Valmet Automotive is committed to REPORTING In our principles, we undertake to comply the principles of sustainable development with national and international laws, reg- of the International Chamber of Com- ulations and generally accepted practices, merce (ICC). We strive to streamline our CHANNEL and we also require this from our business business and prevent our environmental partners. impact, and we actively train our employ- In 2019, along with the 5 We are committed to international ees in environmental protection. commitments, we renewed standards on human rights, working con- Valmet Automotive’s common ditions, the fight against corruption and SUSPECTED VIOLATIONS MAY the environment. Our activities are guid- BE REPORTED ANONYMOUSLY ethical operating principles, ed by the UN Global Compact initiative Each of our employees attends an online which are binding for all and the fundamental rights of the worker training on ethical principles, in which employees. Our employees as defined by the International Labour Or- the application of the Valmet Automotive have completed an online ganization (ILO), which include freedom principles to everyday life is highlighted training on the principles of association, the right to organize, the through practical examples. and their application. right to collective bargaining, the prohibi- We encourage our employees to re- tion of forced labour and equal opportu- port any suspected violations of the Code nities and treatment. We do not use child of Conduct primarily to their own supervi- labour or deal with subcontractors or sup- sor. In 2019, we introduced the Whistle B pliers who use it. reporting channel, where anyone can also In our principles, we are committed to report, any abuse they notice, anonymous- monitoring our working conditions and ly. The online training also teaches about taking care of the occupational safety and this channel. health of our employees. It is also impor- An outsourced whistleblowing sys- tant to us that all our employees are devel- tem ensures the anonymity of the whis- oped within a clear code of conduct. tleblower and protects the sensitive infor- 14

mation of both the organization and the individual. The WhistleB system complies with the ISO 27001 standard for data security management and the ISO 27018 standard for the protection of personal data in cloud services. For each notification received through the notification channel, a notification is received by the team responsible for the notification channel. In each case, a - con tact person from the corresponding business line is invited to participate in the pro- cessing, in order to form an overall picture. The aim is to respond to the notifier within 10 calendar days. In 2019, we received 15 notifications through WhistleB, the majority of which came from employees at the Uusikau- punki plant and were related to, for example, to unequal treatment of employees in the workplace. 15 SUSTAINABILITY STRATEGY

KEY SUSTAINABILITY TARGETS . . . . . 17 OUR STRATEGY TOWARDS CLEAN MOBILITY ...... 21 SUSTAINABILITY PROGRAM FOR 2020–2027 ...... 18 LEADING SUSTAINABILITY THROUGHOUT THE ORGANIZATION . . . . . 22 THE SUSTAINABLE DEVELOPMENT GOALS ...... 19 CASE – HOW CO2 NEUTRALITY BECAME OUR STRATEGIC GOAL ...... 23 KEY STRENGTHS, WEAKNESSES, RISKS AND OPPORTUNITIES ...... 20 SUSTAINABILITY STRATEGY 16 SUSTAINABILITY STRATEGY 17

KEY We started building a group-wide sustain- The third theme is raising sustainabil- SUSTAINABILITY ability strategy and targets for 2020–27 in ity awareness, transparency and reliabili- 2019. Until then, each business line had ty by ambitious reporting of climate im- their own targets for work safety, energy pacts for CDP, strengthening stakeholder TARGETS consumption, and reuse rate of waste. collaboration and its management, and increasing sustainability awareness by The core of Valmet Automotive’s DEFINING SUSTAINABILITY communication and training. In 2019, sustainability work consists of PROGRAM FOR 2020–27 we started negotiating a strategic coop- building a systematic sustainability Defining detailed sustainability and social eration with Turku University of Applied responsibility programs and targets is the Sciences in Finland. The cooperation will strategy and management, goal for the group sustainability work for start in 2020. reducing environmental impact 2020. The group-wide sustainability pro- Continuous improvement of work and improving work safety. gram has five strategic themes that corre- safety, profitability and sustainable late with the megatrends shaping the au- growth are in the core of the sustainabili- tomotive industry, the expectations of our ty program. We are already following and stakeholders, and the themes that are rel- measuring the number of employees’ evant for improving the business. safety notes as well as the rate of work- The first strategic theme is reduction place accidents. In recent years, consist- of operations’ environmental impacts. ent development work in work safety has This means reaching CO2 neutrality in our significantly lowered the accident rate. production facilities and minimizing CO2 The target in Finland and Poland, with emissions through the value chain. The our main manufacturing operations, is second core theme is corporate citizen- to receive at least one safety note from ship, which includes targets for equal and each employee annually, and thereby to fair treatment at the workplace, motivat- encourage employees to pay attention to ing employees and supporting coping at their surroundings. work. For example, we have already start- Concrete actions and key performance ed measuring the rate of positive feedback indicators for social responsibility and sus- given by employees. tainability will be defined in 2020. SUSTAINABILITY STRATEGY 18

SUSTAINABILITY PROGRAM FOR 2020–2027

PROFITABILITY AND CITIZENSHIP SUSTAINABLE GROWTH

Systematic Social Ability to adapt Responsibility CORPORATE to changes in the approach and industry REDUCTION OF OPERATIONS’ management Minimize CO2 Ensuring equal and emissions through fair treatment at workplace Governance value chain – – Motivating employees, CO2 neutral emissions supporting coping at work from own production SUSTA IN and extending careers A facilities (scope 1&2) B

I L

People T Environment

Y ENVIRONMENTAL IMPACTS ENVIRONMENTAL

RAISING SUSTAINABILITY AWARENESS, More ambitious CDP-reporting TRANSPARENCY AND RELIABILITY – Improvement of energy Strenghten internal and external and material efficiency sustainability awareness and reduction of Health and – Safety energy consumption Stakeholder collaboration management

Strive for continuous improvement of work safety culture

CONTINUOUS IMPROVEMENT OF WORK SAFETY SUSTAINABILITY STRATEGY 19

HOW VALMET AUTOMOTIVE CONTRIBUTES TO THE SUSTAINABLE DEVELOPMENT GOALS The United Nations have created the Sustainable Development Goals to help governments, companies and citizens to navigate into a more sustainable world by 2030. There are 17 main goals of which 4 are centrally linked to Valmet Automotive’s strategy and operations.

DECENT WORK AND INDUSTRY, INNOVATION RESPONSIBLE CONSUMPTION ECONOMIC GROWTH AND INFRASTRUCTURE AND PRODUCTION CLIMATE ACTION The 5 Commitments of Valmet Automo- Goal 9 concerns building resilient infra- Sustainable development goal 12 strives Goal 13, taking climate action, encourag- tive are closely connected to the sustain- structure, promoting inclusive and sus- for mitigating the impacts of global con- es us to see our position in the big picture. able development goal 8, achieving high- tainable industrialization and fostering sumption and production on the planet. This means expanding environmental reer levels of economic productivity through innovation by 2030. The future of Valmet Both the global population and the mate- sponsibility throughout our supply chain, innovation and creating decent work for all Automotive will be increasingly based on rial footprint per capita are growing, so it but also understanding our positive con- in a safe and secure environment. utilizing new technologies, improving our is increasingly important for companies to tribution to the vehicle carbon footprint We are committed to this goal by con- plants’ energy-efficiency and implement- produce their goods in a sustainable way. throughout the lifecycle. tinuously improving our business and creating environmentally sound technologies We contribute to this goal by using We have issued a Supplier Code of Con- ing jobs, also for people in a vulnerable sit- and processes. Around 1,000 of our em- natural resources efficiently. Responsible duct, which we are implementing in our uation. We focus on protecting labor rights ployees work in engineering services for management of chemicals and waste, as partnerships. We are part of an industry and promoting safe working environments. products and manufacturing. well as substantially reducing waste, are facing especially high demands to combat In addition to promoting sustainable in our focus. Furthermore, we want to pro- climate change. CO2 neutrality and reduc- industrialization and upgrading our infra- vide people with relevant information to tion of greenhouse gases are included in structure and technologies, we contribute make environmentally sound decisions. our sustainable development goals. to this goal by promoting research and education. SUSTAINABILITY STRATEGY 20

KEY STRENGTHS, WEAKNESSES, RISKS AND OPPORTUNITIES RELATED TO SUSTAINABILITY Key risks and opportunities related to sustainability are closely linked to Valmet Automotive’s strategic direction toward electrification.

From the sustainability point of view, Val- tunities, and the international company met Automotive features several strengths. footprint enables exploiting these to the We are developing a holistic sustainability full. Lean and skillful personnel is our as- strategy and management system and fo- set, with leadership practices developed cus on measuring the employee well-be- both on location and group level. Further- ing regularly. Furthermore, we have set more, Valmet Automotive is a key player in a clear strategic target on CO2 neutrali- the national project to create and foster a ty, considering this an asset in company Finnish battery ecosystem. Yet, the change competitiveness. On the other hand, large- may also contain risks. The future of private ly due to the nature of business, we often motoring is uncertain, and the competi- have difficulties in predicting the need of tion in automotive industry is becoming labor force, and the employee turnover is harder with low-cost countries develop- perceived high. ing expertise in new technologies. With The global automotive industry is in an the change, will automotive industry and historical change. For Valmet Automo- Valmet Automotive remain an attractive tive, the rapid transition toward e-mobili- employment alternative for skilled labor ty opens remarkable new business oppor- force in the future? SUSTAINABILITY STRATEGY 21

OUR STRATEGY TOWARDS CLEAN MOBILITY

Sustainability plays a key role in the strat- only produce, but also carry out the devel- more sustainable than ever before, and so egy of Valmet Automotive. We intend to opment. In roof and kinematic systems we is manufacturing them. We are system- deliver a substantial contribution to a new, are already growing as Tier-1 supplier, espe- atically developing solutions to make car clean mobility and to ensure that the prod- cially in the kinematic systems. production more energy efficient with less ucts are manufactured complying with the environmental impact. A primary example principles of sustainability at all levels. This is our project to make the Uusikaupunki is important for us, our customers, and the plant CO2 neutral already by 2022 and the consumers. Sustainability is a fundamen- Valmet Automotive Group by 2024. tal issue for the future of our company. “For us, The employees are the greatest asset Valmet Automotive’s brand promise a service provider like Valmet Automotive is “The Fast Lane to Future Vehicles”. For future can have. This is the core of our 5 Commit- us, future vehicles mean electromobility, ments and company policies. We are and and we position ourselves for electric vehi- we will be doing our utmost for the safety cles in all our business lines. Strategically, vehicles and well-being of our employees. e-mobility offers us huge potential, mak- All in all, sustainability is a ubiquitous ing sales of more than 1 billion Euros pos- mean part of Valmet Automotive’s strategy, sible in a few years. Although all business plans and implementations. It affects our lines will contribute, the growth will focus company image, competitiveness, recruit- on our new products – battery and kine - e-mobility. ments – everything. For this reason, we are matic systems. ” taking sustainability very seriously. It is ulti- Valmet Automotive is a service provider, Achieving all this requires aligning with mately our way to become “The Fast Lane both in terms of engineering and as a con- the industry trends. Automotive industry to Future Vehicles”! tract manufacturer for vehicles and battery is a forerunner in environmental issues, systems. Battery systems are our growth as is evident from the current e-mobility Olaf Bongwald drivers. We are expanding our expertise to trend. Valmet Automotive has focused on CEO become a Tier-1 system supplier – we not e-mobility since 2008. The new cars are Valmet Automotive SUSTAINABILITY STRATEGY 22

LEADING SUSTAINABILITY THROUGHOUT THE ORGANIZATION

In late 2019, we began systematically to build a common sustainability vision and governance structure into our business. GOVERNANCE STRUCTURE FOR SUSTAINABILITY With a common group-wide vision, the BOARD AND GROUP MANAGEMENT TEAM define sustainability goals are implemented into group-level sustainability policies, goals and programs, and all four business lines. BOARD GMT approve the annual Sustainability Report. It is important that our business and sustainability move in the same direction. THE SUSTAINABILITY STEERING GROUP ensures Valmet Automotive’s sustainability strat- SUSTAINABILITY STEERING GROUP corporate common vision, formulates and develops strategy is based on the 5 Commitments our egy, policy, guidance and goals. It is responsible for devel- business leans on. In the process, we mir- opment and follow-up of defined programs, goals and ac- rored our business strategy with the key SUSTAINABILITY tions. Also, it follows trends and stakeholder expectations. sustainability topics and stakeholder ex- PROJECT TEAM pectations to make sure we prioritize the SUSTAINABILITY PROJECT TEAM contains represent- right issues. atives from all business lines and ensures the implementation of Valmet Automotive’s common strategy and goals GROUP MANAGEMENT TEAM MBL ENG ROOF EV at local level and is responsible for development and fol- MAKES THE FINAL DECISIONS low-up of local programs, goals and actions. Our business and sustainability policies and goals are defined by the Group Man- agement Team. Led by the CEO, the team goals and actions, and ensures the whole are implemented locally and keeps track of GMT = Group Management Team is ultimately in charge of the sustainability group shares the same vision. the progress. The project team is led by the MBL = Manufacturing strategy. Valmet Automotive has four business Sustainability Manager. ENG = Engineering The sustainability strategy is developed lines: Vehicle Manufacturing, Engineering The business lines define the time- ROOF = Roof & Kinematic Systems in the Sustainability Steering Group, which Services, Roof & Kinematic Systems and EV frames and measures needed to meet the EV = EV Systems is led by the the Director of Sustainablity Systems. The Sustainability Project Team goals. The process of an internal auditing & Environment. With their expertise, the consists of members from each of these. system for sustainability and its govern- group develops sustainability programs, The project team ensures that the goals ance is being developed. SUSTAINABILITY STRATEGY 23

CASE – HOW CARBON NEUTRALITY BECAME THE COMPANY’S STRATEGIC GOAL In 2019, Valmet Automotive set a goal of carbon neutrality at the Uusikaupunki car plant by the end of 2021. Jaana Hänninen, Director of Sustainability & Environment, explains where the goal originated and how it will be achieved.

mitment to common sustainability goals To achieve our goal, we strengthened creates added value for our customer rela- our company’s sustainability and environ- tionships and at the same time an opportu- mental expertise and created a broad- nity for us as a contractual partner to devel- er organization that guides sustainability op our own operations. work for all of Valmet Automotive’s operations. Its task is to systematically develop HOW DID IT PROGRESS AS A and promote corporate sustainability work STRATEGIC GOAL AND HOW throughout the Valmet Automotive Group. WILL IT BE ACHIEVED? The goal of carbon neutrality has thus ac- In 2019, the Group Management Team de- celerated progress in other areas of sus- cided that we will start promoting carbon tainability as well. neutrality in our own operations At this stage, the CO2 neutrality target 1 We started the work by organizing a covers our plant’s direct CO2 emissions as workshop with the client, where we clarified well as indirect emissions from the con- what CO2 neutrality means, through which sumption of the electricity and energy we stages our work will progress and what kind purchase. Our primary goal is to influence HOW WAS THIS GOAL BORN? of common accounting principles will we emissions by reducing and improving en- Carbon neutrality is currently on the agen- have. During the process, we will regularly ergy and electricity consumption. In addi- da of every major vehicle manufacturer monitor the progress of the measures and tion, we have examined which fossil-free and is shaping the entire automotive in- share information on good practices with electricity and energy production meth- dustry. Our customers see the importance each other, as our challenges are very sim- ods we could utilize. The emissions that we of involving the entire supply chain and ilar. Cooperation will also increase our relia- cannot avoid in this way will be offset in or- partners to bring about the change. Com- bility and transparency of operations. der to achieve our goal.

1 The baseline level of CO2 emissions (scope 1 & 2) has been calculated according to the 2018 emissions. SUSTAINABILITY STRATEGY 24

HOW IS THIS GOAL COMING as part of the mapping of energy saving ALONG IN THE VARIOUS measures. It resulted in a list of proposals DEPARTMENTS AND HOW IS that we can use to reduce the plant’s ener- THE PROGRESS MONITORED? gy consumption and lower CO2 emissions. The goal is promoted in all our business A significant, concrete step towards the lines through sustainability project teams. vehicle plant’s carbon neutrality is the new However, we will initially focus on vehicle electricity contract, thanks to which the manufacturing, as it is our largest unit and plant has only used fossil-free electricity has the greatest impact on our company’s generated by wind and hydropower since- emissions. March 2020. With this measure alone, we The carbon neutrality target for 2022 has reduced our CO2 emissions by almost 50%. been set to apply to our vehicle production in Uusikaupunki, which also has the great- WHAT KIND OF RECEPTION est impact on our company’s emissions. HAS THE GOAL RECEIVED? The goal will also apply to our other busi- Carbon neutrality is a strategic goal for the ness lines in the coming years. The achieve- entire automotive industry and is shaping ment of the goal is monitored monthly at the industry-wide value chains. By promot- the management team level. Practical work ing this goal for our part, we are demon- and measures are monitored in the energy strating our ability to respond to changes group, which includes representatives from and challenges in the industry, and our de- the manufacturing organization. sire to advance the goals of sustainable de- An energy audit was carried out at the velopment at the forefront of the automo- vehicle plant in Uusikaupunki in early 2020 tive industry. 25 PEOPLE

OUR SKILLED AND HEALTH AND SAFETY DEVELOPING PERSONNEL . . . . . 27 OF OUR PERSONNEL ...... 30 CASE – FROM CAR PAINTER A NEAR MISS SITUATION TO ENGINEER ...... 29 IN THE LOADING AREA ...... 32

DIFFERENT BUT EQUAL ...... 33 PEOPLE 26 PEOPLE 27

OUR SKILLED AND DEVELOPING PERSONNEL

In 2019, the people of Valmet Automotive tention to a high employee turnover rate in consisted of nearly 5000 employees and Finland, and started looking into the rea- over 70 nationalities located in 4 countries. sons. In addition to exceptionally high em- 71% OF OUR 4 664 EMPLOYEES WORK Our people have skills that are needed to ployment rate in the Uusikaupunki area, IN MANUFACTURING IN FINLAND* produce a vehicle from scratch – from en- leadership was not always up to the expec- gineering all the way to manufacturing. The tations, for example, the employees feel a majority of our employees are in Finland, lack of positive feedback. and most of them work in manufacturing of To some extent, the lack of positive cars and batteries. feedback may be a culture-related issue, 4 Typically to the industry, around 75% of as it was not found in other countries. In 10 the group’s employees are men, and almost Germany, for example, the employee turn- 60% of the personnel is 20–39 years old. over rate was around 10%, which is significantly lower than in the previous years. IDENTIFYING THE GAPS However, giving positive feedback is one 15 Wellbeing of our employees is the core of of the points that we will develop in our our business as our people are our great- corporate culture. For 2020, the target is % est asset. Therefore, it is essential to get to increase the share of positive employee and evaluate the feedback from our peo- feedback to 70%. ple on how to improve our performance. 71 Reliability, diversity, flexibility, teamwork ANSWERING OUR PEOPLE’S and dynamic working environment were NEEDS recognized as our key strengths. In the The honest feedback has helped us both big picture, our people like working with in identifying the challenges we are facing one another. today and in finding solutions for them. On the other hand, lack of communi- Introducing the 5 commitments is one of Manufacturing (3 305) cation, processes, leadership and depart- our answers: the commitments support us Engineering (690) mental silo mentality were identified as in building one uniform corporate culture Roof & Kinematic Systems (489) challenges. Many of these gaps are likely to with consistent leadership and processes. EV Systems (180) derive from recruiting a lot of new people In addition to developing leadership in a short period of time. We also paid at- practices, we aim to increase the balance In all 4 664 * Status December 31, 2019 PEOPLE 28

between home and work by providing op- individual development plan, our employ- As electrification is the direction of the employees only in ultimate situations, as portunities to do sports and other recrea- ees are provided with opportunities to take company, key people in the future will be temporary layoffs can be necessary. tional activities, especially at the Uusikau- training courses from languages to man- the ones with knowledge in electric vehi- In Finland our employees are covered punki plant, where almost 3,000 of our agement or expert programs. cles, batteries etc. The challenge will be by the Technology Industries of Finland’s people work. To bring variation to the work, our as- to update the skills and knowledge of our collective agreement. The collective agree- sembly workers are encouraged to be current personnel with expertise in electric ment binds companies to have at least one PLENTY OF OPPORTUNITIES trained to master diverse work stages. vehicle systems. health and safety representative appointed TO DEVELOP As part of a wider development program by the personnel. Valmet Automotive has We respect everyone’s contribution and “From car builder to engineer” at the COLLECTIVE AGREEMENTS five HSE representatives just in Finland. give opportunities for our employees to Uusikaupunki plant we offer opportuni- The automotive industry is sensitive to In Germany, the four engineering sites progress in their career and find use of ei- ties for assembly workers to apply for more economic fluctuations, and such changes are covered by the trade union IG Metall’s ther their social skills in managing posi- challenging positions. Annually over 20 are often deeply felt by contract manufac- company wage structure (Haustarif). For tions or technical skills in expert positions. persons join this program. In our locations turers of original equipment manufactur- our locations in Poland, there is no specific We encourage our employees to get crea- in Germany and Poland, talented employers. Possible consequences of fluctuations collective agreement. tive and educate themselves on a daily ba- ees are offered project and technical train- are primarily handled by contract negoti- sis. Depending on the job description and ing, for example. ations with clients. The effects reach our

STAFF TURNOVER RATE 2017–2019 58% OF PERSONNEL 94% PERMANENT 20–39 YEARS OLD * EMPLOYEES Office personnel 2017 2018 2019 1,2 Engineering 14,7% 10,8% 11,1% 3,1 6 Manufacturing 15,3% 11,4% 13,1% 18,1 31 EV Systems - - 0% Roof & Kinematic 4,5% 6,7% 2,6% % % Employees 20 Engineering - - - 26,7 94 Manufacturing 23,7% 23,0% 20,3% EV Systems - - 0,8% 20–29 30–39 40–49 Permanent Temporary 50–59 60–69 <20 Roof & Kinematic 2,3% 0,4% 1,5%

* Status December 31, 2019 PEOPLE 29

FROM CAR PAINTER TO ENGINEER Marko Aulin, who has progressed from a car painter to a project engineer in 15 years, feels that Valmet Automotive offers many opportunities for career advancement. Now Aulin talks about what has helped him on his career path.

1. BEING OPEN technology department. The department 4. HAVING INITIATIVE “Whenever I have been given a chance, I was familiar to me, as those who worked “Here you are given challenges when you have taken it and wanted to show that I there assisted us in designing the tools to do not wait for someone to pick you up can. I came to work at the plant in 2005 un- be crafted in the workshop. Even though I from the production line. The employer der a permanent contract as a car paint- only have a vocational school degree as my constantly encourages and offers oppor- er. Even at Christmas break, my colleague education, I applied for a place and got in. tunities for self-education starting from asked me to work in the equipment main- And I have not regretted it.” language courses. If I had not been select- tenance department I showed that I was ed for my current position, I would proba- doing my job well and when the paint shop 3. FOLLOWING MY INTEREST bly have applied for the program “From a work was robotized, I was asked to work in “You should apply for the jobs you are in- mechanic to an engineer”, which gives the maintenance. In the same style, I left for terested in. That way you can learn some- employees without basic training an op- Norway for a month in 2010 to dismantle a thing new. My current work is challenging, portunity for a job as an engineer via prac- plant that was being moved to Finland. Af- and I am constantly facing new situations, tical training.” ter that, I got to make tools in Valmet Auto- but I like it when my palms sweat a little. I motive’s own engineering workshop.” have learned 3D modelling of clamps from 5. BEING SOCIAL the start and studied it both at work and “It’s important to get in touch with differ- 2. HAVING PERSEVERANCE at home. My job includes giving directions ent people. Be humble, but don’t humble My own guideline is that whatever I do, I on how to procure and use the clamps yourself rather make yourself visible. As I strive to be the best at it. We have so many needed for each new project. It has a big still worked in the engineering workshop, I skilled employees that no-one will be the responsibility, because as a contract man- also worked as a visitor train driver. I trans- best in a year or two. I had worked in the ufacturer, we are, for example, responsible ported guests along the workshop and engineering workshop for seven years for the firmness of seat belts and steering got a lot of contacts that have definitely when I heard that engineering positions wheel bolts for 20 years. been helpful in my career. Never forget to had become vacant in the production hold on to your contacts!” PEOPLE 30

HEALTH AND SAFETY OF OUR PERSONNEL Taking care of the health and safety of our employees belongs to our most important tasks of social responsibility and our continuous development.

At Valmet Automotive, improving occupa- operating environment. In 2019, the acci- ing truck is easier to spot, for example at tional health and safety means continuous dent rate for absences of at least one day at junctions. Among other things, these im- monitoring and systematic development. the factory was 23.4, i.e. about 20 per cent provements’ strategic goal is to reduce ac- Occupational safety began to be sys- below the average for the Finnish industrial cidents at the Uusikaupunki plant by 30 tematically developed at the Group lev- sector. In 2018, the accident frequency rate percent annually. el at the beginning of 2019. Among other was still 34.6, so the relative number of ac- Occupational safety is also improved, things, reporting and safety practices were cidents has decreased by about 30 percent for example, by encouraging employees to harmonized, for example, regarding plant during the year. At the plant in Poland, the actively observe safety issues routes, areas and rescue safety marking corresponding figure was 9.5 in 2019. and to report their findings standards. The Uusikaupunki plant is the largest in to the common system at the the group and has the most employees and factories. At the plants both in OCCUPATIONAL SAFETY IS busy internal traffic. Accidents happen most Finland and Poland, the goal We encourage IMPROVING RAPIDLY commonly when moving either on trucks or is to obtain from personnel at “ In 2019, Valmet Automotive Group had on foot. An employee may stumble in the least one observation per em- 17.2 accidents at work per million hours stairs or a forklift and an employee may col- ployee per year. In 2019, ob- employees to worked. All accidents resulting in an ab- lide. In some tasks, the handling of metal servations were made at the sence of at least one day have been report- parts can cause scratches or cuts, despite Uusikaupunki plant 0.7 per observe safety ed in the accident frequency rate. The goal the protective equipment, if the grip slips. employee, i.e. a total of 2,700. is to reduce the accident rate during 2020 At other sites, clearly fewer to 12.1. Absences of more than 4 days due EMPLOYEES OBSERVE safety observations were re- issues. to an accident were reported at 6.5 per mil- SAFETY ISSUES corded, a total of 473. ” lion hours worked, and the relative num- To avoid collisions at the Uusikaupunki Safety findings are handled by the ber of serious accidents in particular has plant, the routes have been clarified and managers of that function, and they are decreased significantly. new safety fences and mirrors have been assisted by HSE experts of the production Safety risks and accidents occur most installed. New electric trucks use a blue departments. An average of two safety ob- at the Uusikaupunki car plant, which is ex- spot safety light, which reflects an indicator servations per month are processed per plained by the plant’s large size and diverse light to the floor up, so that an approach- manager. The development target is to PEOPLE 31

INJURY RATE DECREASING update the reporting system used for reg- The Uusikaupunki plant has its own istration to be suitable for group-level use health station on duty during office hours, TARGET 2017 2018 2019 2020 and mobile reporting methods. where occupational health nurses, a phys- The Valmet Automotive plants are mov- iotherapist and a doctor work. The health Injury rate, Manufacturing (>1 days) LTIF 26,1 34,6 23,4 ing from OHSAS 18001 certification to the station not only conducts pre-employment, Injury rate, Engineering (>1 days) n/a n/a 3,9 new ISO 45001 occupational health and employment and periodic medical exam- Injury rate, EV Systems (>1 days) - - 0 safety standard, which emphasizes stake- inations, but also assists with health con- holder and personnel cooperation. In Po- cerns and minor accidents. At Uusikaupun- Injury rate, Roof & Kinematic Systems n/a n/a 9,5 land, the transition was made in 2019, and ki plant with 4,000 employees, the health of (>1 days) in Finland at the Uusikaupunki and Salo the employees is also taken care of proac- plants the certification is planned to take tively by organizing leisure activities in the Injury rate, group n/a n/a 17,2 12,1 place in spring 2021 at the latest. plant’s own club-house and gym. (>1 days absences /1 000 000 hours worked) Other locations do not have as com- Injury rate, group THE PLANT HAS ITS OWN prehensive occupational health care con- n/a n/a 6,5 (>4 days absences /1 000 000 hours worked) HEALTH STATION tracts or their own health centres. Medical The most frequent causes for Valmet Auto- services are purchased mainly for recruit- Total Recordable Incident Rate (TRIR) n/a n/a 32,5 22 motive employees’ and white-collar work- ment and periodic inspections, for exam- Amount of injuries (group) n/a n/a 152 ers’ sickness absence is musculoskeletal ple for job surveys and consulting for other Occupational diseases 1 0 2 0 disorders and seasonal influenzas in spring special needs. and autumn. Production workers’ sickness The Valmet Automotive plants in Fin- Work-related fatalities 0 0 0 0 absence hours in relation to working hours land, Poland and Spain have their own oc- Safety observations 341 818 3 187 was 6.2% in 2019, while the absence rate of cupational health and safety committees, Safety observations (/employee) - - 0,62 1 white-collar workers was 1.9%. The physical- which meet regularly. The committees ity and shift work of production work pose monitor the development of occupational more challenges than office work. Every safety and health and their key figures, and SLIGHT RISE IN ABSENCE RATES year, among Valmet Automotive’s employ- discuss development measures. In Uusikau- ees a few occupational diseases are found, punki, each department has its own HSE of- 6,64 % 5,78 % and they are usually some kind of allergies ficer, whose job is to act as an occupational 6 4,89 % In order to improve occupational safety expert in the department. 5,78 % health, the company is preparing an er- In Finland, employees are covered by 5,18 % 4,49 % gonomics guide suitable for production. the Technology Industry’s collective agree- 3,78 % 3,92 % 3,27 % Employees Ergonomics are also improved with a job ments. In other countries, national agree- 2 rotation, which means that working posi- ments are followed. 1 All tions and movements are variable Office personnel 2017 2018 2019 PEOPLE 32

A NEAR MISS SITUATION IN THE LOADING AREA – AND WHAT WE LEARNT FROM IT In May 2019, a near miss situation occurred in the Uusikaupunki car plant’s loading area. As a result, instructions, lighting and cameras were updated.

On the first night of May, there was a rou- because the truck driver and the person ty- tine loading going on, in which the loader ing the load did not see each other. The driv- was about to have a serious accident at the er’s field of vision was covered by the load, Uusikaupunki plant. and the person handling the lashing straps The driver of the freight trailer was was working with his/her back to the truck. moving the load lashing straps away from The shift supervisor reported the inci- the upcoming load, when dent to the system. In simi- the truck that came to un- lar serious cases, the Occu- load the goods set off and pational Safety and Health hit the loader in the back, The Manager takes responsibility pushing him against the “ for investigating the incident, trailer. The driver had time and the matter is reported to stop the truck by shout- truck even all the way to the CEO. ing just before any serious After the accident, each consequences. hit the truck driver was instruct- An ambulance and po- ed to keep the helpers con- lice were called out to the stantly in sight and the trail- scene and the injured was loader. er drivers to keep a safety examined. He survived with ” distance of five meters from minor injuries and continued to work the the loading site. In addition, the situation very next day. was simulated and recorded as a video, and after careful assessment, additional IN-DEPTH AFTERCARE lightning was mounted in the loading area Accidents rarely occur in the loading area, and additional security cameras were in- but when they do occur, they are often ex- stalled at critical points. tremely dangerous. The incident occurred PEOPLE 33

EMPLOYEES FROM MORE CONTINUOUS IMPROVEMENT DIFFERENT THAN 70 NATIONS The multicultural work community re- Diversity and heterogeneity are one of Val- quires development of communication met Automotive’s characteristics and at and leadership Instructions and commu- BUT EQUAL the same time a major asset. Our employ- nication is also given in English, and in the ees represent more than 70 different na- factory environment also partly visually. At Valmet Automotive equality tionalities. In 2019, Valmet Automotive launched a means that every employee We are committed to valuing each oth- large-scale development program related can feel he or she is treated er. Everyone is treated equally, regardless to the management of the production en- of language or origin. vironment in Finland, in which supervisors fairly and valued as an Equality also applies to recruitment. discuss management-related challenges individual, regardless of age, Age, citizenship or gender do not matter in small groups. The task of one group is to gender, organizational level, in recruitment. The official language at discuss how to manage multiculturalism department, education, job Valmet Automotive is English. There are in the work community, where half speak title, ethnic origin, religion, positions where knowledge of the local Finnish and half speak English. Similar opinions, or individual language, e.g. Finnish of German, is also training will be provided to all supervisors. required. For each task, it is considered We encourage our employees to high- characteristics. whether the proficiency in English alone light potential grievances in equality and is sufficient to perform it. In this way, Eng- non-discrimination, primarily through their lish-speaking employees are given more nearest supervisor or staff group represent- opportunities for advancement and ca- ative. Since 2019, the company has also had reer development. In addition, there are WhistleB, a reporting tool, that allows griev- health-related conditions for production ances to be reported anonymously. workers, as their work is physically strenu- ous shift work: for example, diabetics can- MORE WOMEN IN THE not work shifts. INDUSTRY We actively cooperate with various stake- Promoting diversity is important from the holders, so that the combination of work and perspective of equality, capacity and lead- everyday life is as uncomplicated as possible ership. In the last years’ recruitments Val- for all. For example, the tax authorities regu- met Automotive has paid special attention larly visit the Uusikaupunki car plant to pro- to attracting women to positions in the au- vide help and advice. This helps the everyday tomotive industry. life of our employees, as the services are pro- In Finland, campaigns aimed at wom- vided for them in the workplace. en have been utilized in the recruitment. PEOPLE 34

The goal is to change the general percep- pany that regularly employs more than 30 at least by the history of the industry. Pro- tion that work in a car plant would only be people to have an equality and non-dis- duction management, which has been suitable for men. crimination plan. The background to the part of the industry for a long time, is still In 2019, the marketing campaign plan is a comparison of gender and nation- male-dominated, as reflected in wage sta- prompted the Finnish Parliament’s Om- ality differences in pay. tistics. budsman for Equality to investigate According to statistics, the wages of In Finland, the implementation of whether Valmet Automotive’s recruitment Finnish production employees are about equality and non-discrimination and the discriminated against men. The survey 11 per cent higher than of other nation- content of the plan, as well as possible up- provided showed that the distribution of alities. The difference is explained by the dating needs, are assessed at least once a applicants (75% men, 25% women) was the fact that most workers with an immigrant year in a joint meeting of shop stewards, same as that of those recruited. The final background have started in 2017 or since, production director, human resources di- statement of the Equality Ombudsman when wage developments based on ex- rector and manager. praised the implementation of recruit- perience and skills have not yet had time The promotion of equality and non-dis- ment “exceptionally on an equal footing”. to rise to the level of those who worked at crimination is part of the Group’s policy, the plant for decades. and their promotion will be developed as THE EQUALITY AND NON- For about 170 senior office employ- part of our sustainability program in 2020. DISCRIMINATION PLAN IN FINLAND ees, women’s salaries are about 10 percent The Finnish legislation requires each com- lower. The difference is probably explained

75% OF PERSONNEL MEN TWO WOMEN IN THE ALL 6 BOARD MEMBERS MEN MANAGEMENT TEAM

100 25 20 % % % 72 NATION- 75 80 ALITIES

Female Men Female Men Men 35

CLIMATE

TOWARDS CARBON NEUTRAL NEW SUPPLIER REQUIREMENTS VEHICLE MANUFACTURING . . . . . 37 FOR PROTECTING ENVIRONMENT & HUMAN RIGHTS ...... 42 WE BOOST THE USE OF ENERGY AND RESOURCES ...... 40 CLIMATE 36 CLIMATE 37

Valmet Automotive aims to reduce CO2 EMISSIONS FROM OWN TOWARDS emissions from vehicle manufacturing so OPERATIONS AND that the car plant in Uusikaupunki will be PURCHASED ENERGY carbon neutral by 2022. The Uusikaupunki Valmet Automotive’s carbon neutrality tar- CARBON car plant is the company’s largest unit and get covers emissions from own operations has the largest impact on the company’s and purchased energy (scope 1 and 2). We emissions. also aim to reduce other emissions in our NEUTRAL Emissions from our operations are supply chain, and we will also require our mainly generated by the energy used, i.e. suppliers to commit to reducing CO2 emis- VEHICLE heating and electricity, so we promote the sions in the Supplier Code of Conduct. carbon neutrality target primarily by re- In 2019, Valmet Automotive’s total emis- ducing and improving energy consump- sions were approximately 40,000 tonnes, MANUFACTURING tion. In addition, we are checking up on of which our largest production unit, the which sources of electricity and heat en- Uusikaupunki car plant, accounted for more Valmet Automotive’s car plant ergy can be replaced by fossil-free alterna- than 37,000 tonnes. The carbon-neutral car in Uusikaupunki aims to achieve tives. We compensate for emissions that plant significantly reduces our emissions – carbon neutrality by the end of we cannot avoid. the amount of emissions to be reduced cor- According to the international calcu- responds to the emissions generated dur- 2021. The target will be extended lation method of the GHG Protocol, CO2 ing the entire life cycle of almost a thousand to all Valmet Automotive Group emissions are divided into three catego- new petrol-powered passenger cars. operations by 2024. ries according to where they are generat- Emissions from Scope 1 include emis- ed in the company’s value chain. Scope 1 sions from Valmet Automotive’s own heat includes emissions that result directly from production in the Uusikaupunki and Zary the company’s own activities, such as ener- plants. Scope 2 includes emissions from gy production and vehicles owned by the energy consumption at all sites. company. The Scope 2 includes emissions A comprehensive inventory of Valmet from purchased energy, such as emissions Automotive’s emissions began in 2019. from the production of electricity and heat The emission calculation was performed purchased from another company. Scope 3 in accordance with the international GHG includes value chain emissions, which cov- Protocol, and the calculation also includes er all other emissions in the company’s val- emissions in 2018, which were almost at ue chain, such as emissions from the use of the 2019 level. purchased services and products, employee travel, investments, and products. CLIMATE 38 EMISSIONS WE REPORT

CH4 HFCs SF6 CO2 N2O PFCs DIRECT DIRECT SCOPE 2 SCOPE 1 INDIRECT INDIRECT SCOPE 3 SCOPE 3 We aim CO2 to mitigate These emissions were not yet We aim0 to cut out all emissions from included in the direct emissions the supply chain reporting. EMPLOYEE TRANSPORTATION (scope 1 & 2)*. COMMUTING & DISTRIBUTION (scope 3).

BUSINESS TRAVEL COMPANY LEASED ASSETS FACILITIES

WASTE FROM PURCHASED OPERATIONS END-OF-LIFE TREATMENTS OF ELECTRICITY, STEAM, GAS & OIL SOLD PRODUCTS HEATING & COOLING WASTE FROM FOR OWN USE OPERATIONS USE OF SOLD COMPANY PRODUCTS FRANCHISES INVESTMENTS RELATED TRANSPORTATION VEHICLES PURCHASED GOODS CAPITAL FUEL & DISTRIBUTION & SERVICES GOODS & ENERGY

PRODUCTION & PROCUREMENT VALMET AUTOMOTIVE SALES, DISTRIBUTION & USE

*The emissions that cannot be eliminated, will be compensated. CLIMATE 39

STRONG MOMENTUM VALMET AUTOMOTIVE’S EMISSIONS IN 2019 TOWARDS THE GOAL Both the roof and kinematic solutions and 43 526 TONS OF CO2 the manufacturing business lines set pro- = duction records in 2019. Despite this, both LIFETIME EMISSIONS OF AROUND 1 000 CARS reduced their energy consumption some- DURING THEIR USE what, driven by the divestment of the production hall in Osnabrück and the reduction in production days in Uusikaupunki. In order to find out more about the = x 1000 emission reduction targets, we commissioned an energy audit in 2019 at both the Uusikaupunki car plant and our engineering offices in Germany, on the basis of which the emission reduction targets will be looked for. In Poland, a similar review of MAJORITY OF CO2 Over 85% OF CO₂ the production of roof and kinematic solu- EMISSIONS FROM ENERGY EMISSIONS FROM tions will be carried out in 2020. CONSUMPTION IN 2019 MANUFACTURING IN 2019 At the Uusikaupunki car plant, we 3 8 switched to fossil-free, hydropower-gen- 3,4 erated electricity from March 2020, which 25,6 will reduce our CO2 emissions in 2020 by almost 50 percent. Emission reductions were also achieved % % when, in 2018, it was decided to replace diesel trucks at the Uusikaupunki car plant 74,4 85,6 with electric ones. Most of the more than 100 electric trucks were commissioned in early 2019. The change means a reduc- Scope 1** 11 162 tCO2 Manufacturing (Uusikaupunki, Finland) 37 262 tCO₂ tion in CO2 emissions of more than 1,000 Scope 2** 32 365 tCO2 EV Systems*** (Salo, Finland) 1 301 tCO₂ tonnes per year. Engineering (Germany) 3 481 tCO₂ *By the end of 2021 in manufacturing business line **Scope 1 includes emissions from own energy production. Roof & Kinematic Systems (Poland & Germany) 1 482 tCO₂ Scope 2 includes emissions from purchased energy. ***Production started in October 2019. CLIMATE CLIMATE40 WE BOOST THE USE OF ENERGY AND RESOURCES In particular, we strive to reduce and improve our energy use and minimize the amount of waste.

In our operations, electricity is especially utilizing the heat generated by the pro- needed in the paint shop, body shop and duction process and switching to LED assembly processes, as well as in ventila- lighting. As we move towards carbon-neu- tion in our largest unit at the Uusikaupunki tral vehicle manufacturing, we are explor- plant. A significant part of the heating en- ing fossil-free alternatives to current forms ergy is consumed in the car factory’s paint of energy, and in March 2020, the Uusikau- shop and pre-treatment plant, especial- punki plant switched to renewable wind ly in ventilation for supply air heating and and hydropower. heating drying ovens. The specific consumption of both elec- THE AMOUNT OF WASTE WAS tricity and heat energy per car has de- REDUCED BY 30% CONSUMPTION OF ENERGY ON SLIGHT DECREASE creased over the last three years. In 2019, The amount of non-hazardous waste gen- the car plant set a production record, but erated by our operations has decreased sig- MW W with long-term energy efficient measures, nificantly from 2017–2018 – by more than 30 479 898 479 790 , we managed to reduce our total energy percent compared to 2018 – although pro- 443 365

consumption by about one percent from duction volumes have increased. Non-haz- , 2018. This was also affected by the reduc- ardous waste includes all other waste com-

tion in production days. In addition, the ponents except hazardous waste. , roof and kinematic solutions business line Our car plant in Uusikaupunki is our larg- 386 920 414 960 408 770 reduced energy consumption by approxi- est unit, and thus the majority of the com- , mately 13 percent from 2018, as part of the pany’s waste is also generated there. The hall used as production technology prem- amount of waste has been reduced, for ex- Electricity consumption (MWh) , ises was decommissioned. ample, by changes in unit packaging and by Other energy consumption (MWh) In the future, energy consumption can switching to recyclable packaging options. 56 445 64 938 71 020 be made more efficient, for example, by More than half of the conventional waste Energy efficiency (KWh/e)

MW W

MW W CLIMATE 41 ,

3 WATER CONSUMPTION ON DECREASE , was recycled or reused. The rest was utilized 2017–2018. This is explained by the fact that 169 147 168 199 159 541 for energy, and a small portion was com- the total water consumption of the car plant , posted. No waste is delivered to the landfill. decreased by about 6%, as there were few- Total consumption of water Our operations generate paint and er production days than in previous years. At , chemical surpluses that are classified as the Uusikaupunki plant, water consumption Roof & Kinematic Systems hazardous waste, especially in the paint in the production averages 550–565 cubic Manufacturing shop and pre-treatment plant at the meters per a full production day. , EV systems (2019: 948) Uusikaupunki plant. The amount of haz- In the Polish operations, water con- ardous waste in the entire company was in- sumption has remained at approximate- creased in 2019 by the maintenance of acid ly the same level in 2017–2018. In addition THE AMOUNT OF NON-HAZARDOUS WASTE DECREASED tanks at the Uusikaupunki plant, which re- to sanitary facilities, water is needed at the BY 30% COMPARED TO 2018 curs every 2–3 years. In 2019, the amount of Zary plant in component cutting processes. 7 392 hazardous waste was also increased by the waste generated from the washing of the MOST OF THE WASTE wastewater pool of the ED plant, emptied NON-HAZADOUS IN 2019 at the end of 2018, which was delivered for treatment in 2019. The ED plant is part of a 5 912 surface treatment plant where car bodies are treated before delivery to the paint shop. 26,7 5 151 3 995 Hazardous waste is delivered to For- tum’s treatment plant, where the waste is % incinerated and utilized as district heating. 2 882 Some of the paint shop’s solvents are re- 2 710 73,3 generated and re-supplied for use. In Poland, more than 80% of the waste generated at the Zary plant is recycled. Waste by disposal method Only textile waste is delivered to the land- Hazardous waste Non-hazardous waste fill, for which there are currently no other Recycling 2 914 Recovery, including treatment options. 2 358 1 825 energy recovery WATER USE IS MEASURED WASTE BY TYPE (TN) 2017 2018 2019 Composting ACCURATELY Reuse Hazardous waste 1 383 1 519 1 877 Valmet Automotive’s water consumption 402 422 Incineration (mass burn) Non-hazardous waste 5 912 7 392 5 151 412 decreased by approximately 5 percent from Landfill For exact amounts, see page 56.

CLIMATE 42

NEW SUPPLIER REQUIREMENTS FOR PROTECTING ENVIRONMENT & HUMAN RIGHTS Along with the new commitments and internal Code of Conduct, we introduced a novel Supplier Code of Conduct at the end of 2019.

Suppliers play an important role in Valmet There are specific requirements also for Compliance with the Code will be Automotive’s value chain. Our most signif- environmental protection, resource effi- monitored by supplier’s self-assessment icant procurements are services, energy, ciency and responsible purchasing of raw and targeted audits. In addition, we will in- investments in production infrastructure materials. The Supplier is obliged to fol- crease cooperation and provide training such as assembly lines. As a Tier-1 suppli- low OECD Due Diligence guidelines with on implementing the Code for both our er for OEMs, we also make direct procure- respect to sourcing, extraction and han- personnel and suppliers. ments of vehicle components and logistical dling of tantalum, tin, tungsten, gold and – The Code is and will be a significant services, for example. In other projects, vehi- cobalt. Striving to reduce CO2 emissions by change for us. Especially the requirement to cle components are procured according to increasing the use of renewable energies, move towards CO2 neutrality will be a chal- client’s requirements and Code of Conduct. reducing water and energy consumption, lenge for many of our small-scale suppliers. I The Supplier Code of Conduct intro- more efficient use of raw and packaging hope they are motivated to move with us to- duced in 2019 covers all Valmet Automo- materials and minimizing waste, is also ex- wards a more sustainable future, Vesa Hyy- CO2 tive’s direct procurements. pected from the supplier. tiä, Head of Sourcing in Finland, adds. The Supplier is obliged to ensure that Valmet Automotive will do regular on- RESPECTING HUMAN RIGHTS the Code is complied with throughout its site audits to make sure the Code is com- AND REDUCING EMISSIONS own and also its suppliers’ organization. plied with. In case the supplier notices any Valmet Automotive’s Supplier Code of non-compliance with the Code, the suppli- Conduct requires suppliers to commit to IMPLEMENTING THE CODE er is instructed to report about it as soon as not allowing or using child or forced labor, The Supplier Code of Conduct was pub- possible to find a common resolution. creating an environment free from dis- lished in late 2019, and it will cover all sup- crimination and harassment, respecting pliers of Valmet Automotive Group. The employees’ rights to associate and bargain code is an ethical guideline that will be an collectively, and anti-corruption, for exam- integral part of our procurement practices, ple. The supplier shall comply with all ap- and all our approximately 4000 suppliers plicable laws and regulations. are expected to comply with it. 43

TOGETHER

ENGAGING WITH STAKEHOLDERS . . . 45 FINLAND’S FIRST HIGH VOLUME BATTERY PLANT COOPERATION WITH WAS OPENED IN SALO ...... 47 EDUCATIONAL INSTITUTIONS ...... 46 TOGETHER 44

44 TOGETHER 45

ENGAGING WITH STAKEHOLDERS We engage and communicate with our most important stakeholders on a regular basis: clients, employees, owners, suppliers, local societies, authorities, educational and local institutions.

For us as an international service provider associations. We are a member of the Bat- for automotive industry, collaboration with tery Ecosystem Collaboration in Finland, our stakeholders is a key issue. which aims to gather all important play- According to the stakeholder survey ers within the battery and related fields to conducted in Finland, our internal and build up battery and circular economy ex- external stakeholders have almost identi- pertise in Finland. cal concerns related to sustainability. The We also participate in various associa- most important stakeholder sustainabili- tions and sustainability initiatives. Global ty themes are adaptation of our business automotive industry is strongly commit- to change, ensuring of business profita- ted to decrease its climate impact. As a bility, and motivating and treating em- partner of the global automotive industry ployees equally. supply chain, we will be participating in the CDP climate reporting on an annual MEMBERSHIPS IN basis from 2020 to increase transparency ASSOCIATIONS AND of our climate-related activities. EXTERNAL INITIATIVES Furthermore, partnerships with educa- Valmet Automotive is a member of major tional institutions are one of our strategic industrial associations and most relevant focuses. You can read more about it on the international automotive and professional next page. TOGETHER 46

CLOSER COOPERATION WITH EDUCATIONAL INSTITUTIONS – FUTURE EXPERTS FROM LOCAL UNIVERSITIES Future vehicles will be manufactured by the experts of the future, and therefore Valmet Automotive will intensify its cooperation with local universities.

Already for several years, educational coop- we are perceived as an interesting employ- – If we know that we need more exper- eration has meant theses, university train- er, says Ira Silvendoin from Valmet Auto- tise on a topic, a thesis is a good way to ees, course papers and expert lectures for motive’s HR department. train new specialists as experts in that top- Valmet Automotive. Since the beginning Valmet Automotive is also one of three ic, says Mika Kinnunen, Manager, Business of 2019, co-operation has been systemat- companies that participate in the adviso- Development EV. ically built and measured in Finland. An ry board of the Faculty of Technology to be Kinnunen has launched several theses example of this is the agreement on stra- established at the University of Turku on 1 in recent years and has seen their authors tegic co-operation with Turku University January 2021. In addition, Valmet Automo- be employed by Valmet Automotive al- of Applied Sciences, the aim of which is to tive is involved in supporting, for example, most without exception. commit both parties in the long term. Finland’s first professorship specializing Thesis workers are applied for regular- From Valmet Automotive’s point of in battery technology for the University of ly, and students’ own proposals for thesis’ view, the main goal of educational cooper- Turku’s Master of Science in engineering themes are equally accepted. Most com- ation is to increase students’ awareness of education. monly, students specialize in mechani- Valmet Automotive as a workplace, to pro- cal engineering, logistics, production eco- vide students with pathways to working life TRAINING NEW SPECIALISTS nomics or engineering. and to find the right kind of experts for the One of the goals of educational coopera- – Usually they want to come to us to company. Last year, Valmet Automotive tion is to increase research cooperation. develop future vehicle technology or their employed 40 summer trainees, more than During 2019, Valmet Automotive super- manufacturing process, Kinnunen sums up. a third of whom still work for the company, vised and supported the completion of 13 In addition to Finnish theses, last year either in addition to their studies, as an ex- theses. The topics of the theses were relat- five German students from the Universi- pert or doing their diploma work. ed to process or product development, the ty of Bochum also did their theses at the – We are receiving more and more ap- utilization of new technology or the devel- Uusikaupunki plant. International cooper- plications for summer internships, and the opment of logistics. Last year, theses were ation with educational institutions is also level of applicants has risen. This says that also written on the development of waste being built in the field of deeper research the awareness of us has already grown and management and equality. with the Fraunhofer Institute. TOGETHER 47

FINLAND’S FIRST HIGH VOLUME BATTERY PLANT WAS OPENED IN SALO Valmet Automotive launched the Salo battery plant with the mass production of 48-volt batteries in October 2019. By the end of the year, the plant had already produced thousands of batteries used in internal combustion engines to reduce emissions.

Located between the capital Helsinki and in advance, and production was launched Besides Valmet Automotive received the former capital Turku, Salo was a natural on a fast schedule. The lines had already support from Business Finland for the devel- choice for the location of the battery plant. been ordered in early 2019, when suitable opment of the factory’s production systems With more than 50,000 inhabitants, premises were still being sought in both and investment support for new production Salo has a long history of technological Finland and Central Europe. The choice technology from the Ministry of Economic know-how: the city became known as the was strongly influenced by the fact that Affairs and Employment of Finland. centre of mobile phone manufacturing for dealing with the City of Salo and the IOT By the end of 2019, the plant had about a couple of decades. After Nokia 100 hard-working employees, and its successor Microsoft left, and by the beginning of 2020, the mobile phone plant was left the number had doubled. Half empty and experts in the field of the plant’s employees work on The facilities Jyrki Nurmi missed the employers. the lines of the battery assem- – In terms of a skilled workforce, “ bly, a quarter in quality and logis- Salo was a reasonable location. In were optimal. tics positions, and the rest in the addition, Nokia’s old facilities were office. Future plans include - ex optimal for the battery plant. The lines need- campus, which rents out the plant premis”- panding production to hybrid and electric ed to assemble the batteries are well suited es, proved to be very flexible. vehicle batteries, increasing product devel- for a lengthy plant building, explains Jyrki – The space was partially leased, but opment and developing automation. Nurmi, SVP EV Systems. other suitable premises were arranged – We also see market potential in indus- for the tenant. Discussions about the pos- trial and work machine batteries. Batteries PRODUCTION STARTED IN sible need for additional space were also can replace internal combustion engines HALF A YEAR taken seriously immediately, if the cur- either in whole or in part and thus reduce The strategic decision to move into the bat- rent 18,000 m2 become cramped in the emissions, says Esa Saarinen, Vice Presi- tery business had already been made well future, Nurmi says. dent, Operations Salo. Esa Saarinen TOGETHER48 49

GRI & DATA

ABOUT COLLECTING ENVIRONMENTAL DATA ...... 51 ENERGY & WASTE ...... 56

GRI CONTENT INDEX ...... 52 ABOUT THIS REPORT ...... 57 DIVERSITY OF PERSONNEL & GOVERNANCE STRUCTURES . . . 55 GRI & DATA 50 GRI & DATA 51

ABOUT COLLECTING ENVIRONMENTAL DATA

The CO2 emission calculations presented In the Manufacturing Business Line Other emission factors are based on infor- in this report are based on the Greenhouse (Uusikaupunki plant, Finland), greenhouse mation from Polish energy and environ- Gas Protocol company standard and guid- gas sources are use of vehicles, mainly mental authorities. For purchased ener- ance. Emission calculations are divided leased (scope 1), use of fossil fuels at site gy the factor is 765 gCO2/kWh and district into two main categories, scope 1 and 2. (scope 1) and use of purchased energy heat 180 gCO2/kWh. Scope 1 includes direct emissions from (scope 2). Fossil fuels at site are light fuel oil In the Engineering Business Line (all the company's own operations. Direct and LPG (propane). Energy is purchased office sites in Germany), GHG calculations GHG emissions occur from sources that for electricity and district heat (2018 & 2019). are based on an energy survey conducted are owned or controlled by the compa- Other emission factors are mainly based by local authorities. The emissions for 2019 ny, for example, emissions from combus- on information provided annually by Sta- were calculated on the basis of the year's tion in owned or controlled boilers, furnac- tistics of Finland. For purchased electric- energy consumption and using the emis- es, vehicles, etc.; emissions from chemical ity the emission factor is 291 gCO2/kWh sion factors of 2018. Energy is purchased production in owned or controlled process (2020), LPG (propane) 3.005 kgCO2/kg, and for electricity and district heat. equipment. Direct CO2 emissions from the 2.634 kgCO2/l. The emission factor for dis- In the EV Systems Business Line (Fin- combustion of biomass shall not be in- trict heat is calculated on the basis of the land), the emissions were calculated from cluded in scope 1 but reported separately. share of fuels and boiler efficiency (90%). March 2019 on, as the battery plant was Scope 2 accounts for GHG emissions The office sites in Turku and Vantaa are not launched in Salo. from the generation of purchased electric- included in the emission calculation. The testing center in Spain is not includ- ity consumed by the company. Purchased In the Roof & Kinematic Systems Busi- ed in the calculations because of the com- electricity is defined as electricity that is ness Line (manufacturing and office sites paratively small scale of the site’s operations. purchased or otherwise brought into the in Poland), GHG sources are use of vehi- The data on waste amounts and pro- organizational boundary of the company. cles, mainly leased (scope 1) and use of cessing methods was compiled by Valmet Scope 2 emissions physically occur at the purchased energy (scope 2). Energy is Automotive’s service provider of waste facility where electricity is generated. purchased for electricity and district heat. management. GRI & DATA 52

GRI CONTENT INDEX PAGE NUMBER, COMMENTS GRI GRI DESCRIPTION AND EXLUDED INFORMATION

GRI 102 – GENERAL DISCLOSURE 102-1 Name of the organization 7–8 102-2 Activities, brands, products, and services 7–9 102-3 Location of headquarters 8 102-4 Location of operations 8 102-5 Ownership and legal form 8 102-6 Markets served 8 102-7 Scale of the organization 8 102-8 Information on employees and other workers 8, 27–28 102-9 Supply chain 10, 42 102-10 Significant changes to the organization and its supply chain 42 102-11 Precautory Principle or approach 13 102-12 External initiatives 19, 45 102-13 Membership of associations 45 102-14 Statement from senior decision-maker 3, 21 102-15 Key impacts, risks and opportunities 20 102-16 Values, principles, standards, and norms of behavior 11–14 102-17 Mechanisms for advice and concerns about ethics 13–14 102-18 Governance structure 22 102-40 List of stakeholder groups 45 102-41 Collective bargaining agreements 28 102-42 Identifying and selecting stakeholders 5, 45 GRI & DATA 53

PAGE NUMBER, COMMENTS GRI GRI DESCRIPTION AND EXLUDED INFORMATION GRI 102 – GENERAL DISCLOSURE 102-43 Approach to stakeholder engament 45 102-44 Key topics and concerns raised 5, 45 102-45 Entities included in the consolidated financial statements 8 102-46 Defining report content and topic boundaries 5 102-47 List of material topics 5 102-48 Restatements of information 57 102-49 Changes in reporting 57 102-50 Reporting period 57 102-51 Date of most recent report 57 102-52 Reporting cycle 57 102-53 Contact point for questions regarding the report 57 102-54 Claims of reporting in accordance with the GRI standards 57 102-55 GRI content index 52–54 102-56 External assurance 57

GRI 103 – MANAGEMENT APPROACH 103-1 Explanation of the material topic and its boundary 5, 17 103-2 The management approach and its components 22 103-3 Evaluation of management approach 22 GRI & DATA 54

PAGE NUMBER, COMMENTS GRI GRI DESCRIPTION AND EXLUDED INFORMATION GRI 200 – ECONOMICAL IMPACTS

201-1 Direct economic value generated and distributed 10 201-2 Financial implications and other risks and opportunities due to climate change 21 203-1 Infrastructure investments and services supported 10, 47 205-2 Communication and training about anti-corruption policies and procedures 13–14

GRI 300 – ENVIRONMENTAL IMPACTS

302-1 Energy consumption within the organization 40, 56 303-1 Interaction with water as a shared resource 41 305-1 Direct (Scope 1) GHG emissions 37–39, 51 305-2 Energy indirect (Scope 2) GHG emissions 37–39, 51 306-2 Waste by type and disposal method 41, 56

GRI 400 – SOCIAL IMPACTS 401-1 New employee hires and employee turnover 28 403-1 Workers representation in formal joint management– worker health and safety committees 30–31 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, 30–31 403-2 and number of work-related fatalities 403-3 Workers with high incidence or high risk of diseases related to their occupation 30–31 403-4 Health and safety topics covered in formal agreements with trade unions 31 404-2 Programs for upgrading employee skills and transition assistance programs 28, 29 405-1 Diversity of governance bodies and employees 33–34, 55 405-2 Ratio of basic salary and remuneration of women to men 34 GRI & DATA 55

DIVERSITY OF PERSONNEL & GOVERNANCE STRUCTURES

GENDER 2017 2018 2019 AGE NATIONALITIES PCS. 2017 2018 2019 STRUCTURE 2017 2018 2019 Office personnel (OP) OP 32 32 29 OP 1 402 1 434 1 473 Female 351 368 379 EMP. 49 68 72 <20 0 3 1 Male 1 051 1 066 1 094 20–29 205 234 213 Employees (EMP.) 30–39 486 485 477 Female 732 785 792 EMPLOYMENT 2017 2018 2019 40–49 335 337 364 Male 2 443 2 585 2 399 Permanent 3 907 4 581 4 398 50–59 306 311 351 Management Temporary 670 403 266 60–69 71 64 67 Female 2 1 2 EMP. 3 175 3 370 3 191 Male 7 8 8 <20 61 61 56 Board 20–29 1 261 1 328 1 231 Female 0 0 0 30–39 753 818 769 Male 6 6 6 40–49 551 579 567 50–59 474 503 493 AVERAGE AGE 2017 2018 2019 60–69 75 81 75 All 4 577 4 804 4 664 OP 41,42 40,77 41,41 <20 61 64 57 EMP. 35,32 35,64 35,69 20–29 1 466 1 562 1 444 All 37,19 37,17 37,5 30–39 1 239 1 303 1 246 40–49 886 916 931 50–59 780 814 844 60–69 146 145 142 GRI & DATA 56 ENERGY & WASTE

302-1 ENERGY CONSUMPTION WITHIN THE ORGANIZATION 2017 2018 2019

a. Total fuel consumption within the organization from non-renewable sources/liters 3 106 630 3 271 830 3 214 737 Fuel types used light fuel oil light fuel oil light fuel oil Produced Energy (GWh) 310 327 321 a. Total fuel consumption within the organization from non-renewable sources, (in tonnes) 118 Produced Energy (MWh) 1 516 LPG (liquid Fuel type used petroleum gas) b. Total fuel consumption within the organization from renewable sources/Liters 0 0 0 i. Electricity consumption/MWh 56 445 64 938 71 020 ii. Heating consumption/MWh 76 877 88 430 86 427 iiii. Steam consumption/m3 211 170 e. Total energy consumption within the organization GWh 443 480 480

306-2 WASTE BY TYPE AND DISPOSAL METHOD 2017 2018 2019 a. Total weight of hazardous waste, with a breakdown by 1 383 1 519 1 877 the following disposal methods where applicable: IN TONS (tn) b. Total weight of non-hazardous waste, with a breakdown by 5 912 7 392 5 151 the following disposal methods where applicable: IN TONS i. Reuse 402 45 135 ii. Recycling 2 882 3 995 2 710 iii. Composting 223 412 422 iv. Recovery, including energy recovery 2 358 2 914 1 825 v. Incineration (mass burn) 9 10 45 vii. Landfill 48 30 31 GRI & DATA 57

ABOUT THIS REPORT

This is the first sustainability report of with the emphasis on Finland operations. Valmet Automotive Group. The report With the assessment and the related covers all operations in the group’s four stakeholder survey, we identified and pri- business lines and locations in Finland, oritized the most relevant economic, so- Poland and Germany. Testing operations cial, and environmental sustainability top- in Spain are excluded due to the small ics. For the next year’s report, the survey scale of the operation. will be expanded to cover all Valmet Auto- The report has been compiled in ac- motive locations. cordance with the GRI Standards’ core We will publish a sustainability report option. annually. The information in this report The selected topics are based on mate- has not been assured externally. rial assessment conducted on group-level

CONTACT INFORMATION ISTÖM ÄR ER P K Jaana Hänninen M K Y I Director, Sustainability & Environment [email protected]

M Mikael Mäki I T LJÖ ÄRK Manager, Corporate Communications M Painotuote [email protected] 4041 0992

VALMET-AUTOMOTIVE.COM