ESG Presentation

Metsä Board Corporation

February 2021 Contents

• From sustainably managed northern forests to ecological high-quality paperboards • Fresh fibre paperboards offer solutions to global challenges • Mitigating climate change: Metsä Board’s own actions and sustainability targets for 2030 • Commitments in sustainability and external recognitions • Contact information From sustainably managed northern forests to ecological high-quality paperboards Metsä Board in brief Sales split by product Other operations Market 5% Strong market position pulp 12% in folding boxboard and white kraftliners in Europe 2020: #1 in coated white kraftliners globally EUR White 1,890m kraftliners Long-term customerships 25% Folding boxboard Our customers include brand owners, 59% converters, manufacturers of corrugated products and merchants Sales split by region

APAC 9% Paperboard capacity Pulp surplus* Americas 23% 2020: 2,000,000 400,000 EUR EMEA tonnes/year tonnes/year 1,890m 68% *) includes the 24.9% holding in Metsä Fibre

4 Metsä Board benefits from Metsä Group’s value chain • High availability of Northern wood – 100,000 Finnish forest owners as our owner base • Good control of wood raw materials from forests to pulp and board production • Consistent quality of fibres that are tailor-made for the end products

METSÄ GROUP METSÄLIITTO COOPERATIVE, Group’s parent company owned by 100,000 Finnish forest-owners

METSÄ FOREST METSÄ WOOD METSÄ FIBRE METSÄ BOARD METSÄ TISSUE WOOD SUPPLY AND WOOD PRODUCTS PULP AND PAPERBOARD TISSUE AND FOREST SERVICES SAWN TIMBER GREASEPROOF PAPERS Holding Holding Holding Holding Holding Metsäliitto Cooperative 100% Metsäliitto Cooperative 100% Metsäliitto Cooperative 50.1% Metsäliitto Cooperative 48% Metsäliitto Cooperative 100% Metsä Board 24.9% share of votes 67% Itochu Corporation 25.0% Listed on Nasdaq Helsinki

METSÄ SPRING INNOVATION COMPANY

From 2021 onwards Metsä Board's annual net pulp balance shows 400,000 tonnes surplus. We focus on premium fresh fibre paperboards and z a high level of sustainability

FOCUS We are the leader in sustainability, focusing on premium VISION fresh fibre products for consumer and retail packaging. The high performance of our products is based on Preferred supplier of innovative and technical excellence and tailor-made, high-quality, Nordic sustainable fibrez-based packaging pulps. solutions, creating value for customers globally GROWTH We grow globally together with our existing and new customers by offering sustainable,z safe and high- MISSION performing products. Our growth is based on skilled people, industry-leading products and innovative packaging solutions. Packaging solutions that respect nature PROFITABILITY Our profitability is based on the efficiency of our operations and prioritisation of businesses that benefit from the high performance of our products and services. Each part of the tree is used for the purpose that creates most value – nothing goes to waste

Bark, branch and top • Metsä Group’s value chain ensures that each part of the felled tree to renewable energy is being used production Pulpwood • For every harvested tree new seedlings are planted to pulp production and by-products • All wood sourced is 100% traceable and comes from sustainably managed northern forests ensuring the biodiversity and recreational use of forests

• 80% of wood sourced is certified and 20% originates from controlled Sawlogs forest sources to wood products

• All parties in our wood fibre supply chain have PEFC™ and FSC® Chain of Custody certificates (PEFC™02-31-92, FSC®-C001580) Wood is Metsä Board’s main raw material

• Wood represents roughly 27% out of Metsä Board’s total costs (including the wood cost of pulp purchased from Metsä Fibre) • Sourcing function is centralized in Metsä Forest • Majority of wood sourced in Finland comes from the members of Metsäliitto Cooperative • In 2020 Metsä Board sourced 8.2 million m3 wood – This includes the wood bought to Metsä Board pulp/BCTMP mills (5.3 Mm3) and the wood used in pulp that Metsä Board buys from Metsä Fibre (2.9 Mm3) Metsä Board’s wood sourcing areas • Certified wood fibre accounted for Russia 80% of wood fibre procurement in 10%

2020 Baltic countries 11% Finland 51%

Sweden 28% 8 Finland – the most forested country in Europe

The area of Finland

5% Cities, villages and roads Annual growth of Finnish forests is 10% Fields and agricultural use 100+ over 100 million m3 – more than ever MILLION M3 10% Lakes and rivers Forests grow more than they are used, annual harvesting 73 million m3 (2019)

Four seedlings are planted for each harvested tree 75% Forest

Over 20% of the Finnish export comes from forest-based products Fresh fibre paperboards offer solutions to global challenges Fresh fibre paperboards offer solutions to support circular economy and mitigate climate change

Increased waste Replacing fossil- Reducing carbon Ensuring product generation due to based materials, i.e. footprint safety urbanization plastics The solution: The solution: The solution: The solution: lightweight pure and safe fresh Paperboard is renewable and packaging, fibres recyclable and biodegradable renewable energy, fibres are recycled wood fibre efficient energy and several times water usage Paperboard is widely collected for recycling and returned to the recycling loop

Recycling rates (% of materials collected for recycling)

83% 42% 81% 14%

Sources: Eurostat and EPA

12 Fresh fibre keeps the recycling loop going Fresh fibres are needed to ensure strength and purity, and PAPERBOARD IS HIGHLY to keep the RECYCLED BUT 100% recycling loop RECOVERY IS NOT RENEWABLE POSSIBLE ongoing FRESH FIBRE from sustainably managed forests Not all paper and board are recyclable e.g. toilet paper, stained packaging

CIRCULATION 3.6 times on average / year Sorting based on quality Source: CEPI results in rejecting part of material

RECOVERED FIBRE from communities

FIBRE QUALITY Fibre loss in de-inking process deteriorates in recycling

THE QUALITY OF COLLECTED PAPER CONSTANTLY DECLINES Less office and graphic papers 13 Recycled fibre Fresh fibre

• While recycled fibre packaging is suitable • Fresh fibres are traceable, naturally pure for certain goods, migration of mineral oils and free from unknown chemical from recycled fibre based packaging into substances foodstuffs may pose a health hazard → Ideal for high-end branded products and → Many countries restrict the use of food end-uses, where consumer safety is a recycled fibres in direct food contact priority • Wood fibre can on average be reused 5–7 • Without a continuous inflow of fresh fibre times before it becomes too degraded for into the recycling loop, very soon there further material use would not be any recycled fibre available Safety – consumers and Legislation and various legislators react to health country-specific risks recommendations increasingly limit the use of recycled fibres in food packaging.

Consumers today are more aware of chemicals contained in recycled fibres Recycling is of utmost importance and their health and recycled fibres are excellent raw effects on humans materials – but not for packing food. Fresh fibres are the safest choice. Potential from circular economy

• Several brand owners, retailers, organisations and governments have made own commitments to switch to recyclable, compostable or reusable packaging

• The EU’s Circular Economy Action Plan, as part of the Green Deal, strives for • reducing packaging waste • driving design for re-use and recyclability • considering reducing the complexity of packaging materials to improve collection, sorting and recycling

• Metsä Board’s lightweight paperboards are designed to be recycled. In addition, all Metsä Board paperboards, excluding PE coated grades, hold industrial compostability certificates (DIN EN 13432, ASTM D6400), and some grades are certified also for home compostability (NF T 51-800) Metsä Board’s plastic-free eco-barrier paperboard: • Medium barrier for grease and moisture

16 • Can be recycled in paper or paperboard streams or can be composted Fresh fibre paperboard is an alternative to plastics Consumers regard paperboard as a more sustainable choice than plastic packaging*

Why do we package? The size of total packaging market is USD 920 billion • The most important function of packaging is to calculated from the value of finished packaging article ensure a product’s safety to consumer and to reduce Source: Smithers Pira wastage in the value chain Glass • The carbon footprint of packaging is usually minimal 6% compared to the packaged product Metal Paperboard 13% 33% *Consumer research company Sense N Insight’s study for Metsä Board

Most suitable replacement options are Plastic in rigid plastics and food packaging 36% Other fibre-based 12%

17 High-yield pulp makes the difference in folding boxboard Metsä Board’s folding boxboard can be up to 30% lighter compared to recycled fibre or solid bleached board (WLC, SBS) with an equivalent stiffness.

Light weight Three-layer structure of folding boxboard → better yield and sustainability High strength and bending stiffness → secure protection High brightness and smoothness → excellent printability Consistent quality → improved production efficiency Better with less – same stiffness but less weight

Weight of 50,000 sheets in size 28” x 40” (B1) to gain CD stiffness of 120 gf-cm & MD Stiffness of 230 gf-cm

11.1 t Metsä Board folding boxboard 280 gsm 12.9 t Solid bleached board (SBB) 324 gsm 13.8 t Coated natural kraft(CNK) 347 gsm 15.0 t Coated recycled board (CRB) 376 gsm Lighter MetsäBoard Pro FBB Bright Thanks to reduces carbon footprint by 53% the strength and bulk of fresh fibre

Carbon Footprint * boards, lighter kg CO2 eq./200 000 cartons basis weights can be used.

WLC

MetsäBoard 53% Lower Pro FBB Bright carbon footprint

GaBi is a Life Cycle Assessment (LCA) modelling and reporting software. It contains databases of various industrial processes such as material and energy production and transports.​ GaBi LCA follows the standard ISO 14040 and ISO14044.​ Production of folding boxboard needs less wood and leave more trees standing

Metsä Board folding boxboard = (70% BCTMP, 30% chemical pulp)

3.4 m3 of wood per tonne of pulp

Solid bleached board (100% chemical pulp) 5 m3 of wood per tonne of pulp Lightweight paperboards help to reduce environmental footprint across the value chain

Less energy, water and raw material consumed

Less waste generated

Less transport weight Metsä Board’s Examples of Excellence Centre innovation areas combines packaging design and R&D to boost the development Identifying new of paperboard and

possibilities for packaging packaging solutions of solutions Developing with technology the future. developers

Wood-based 3D fibre products to be developed Creating new barrier by Metsä Spring and Valmet solutions to reduce plastic

Continuing development Improving recyclability of lightweight materials Mitigating climate change: Metsä Board’s own actions and sustainability targets for 2030 INDUSTRY-LEADING TARGET: ZERO FOSSIL CO2 EMISSIONS Fossil free mills and raw materials by 2030 Metsä Board’s emissions reduction targets meet the most ambitious goals of the Paris Agreement

• Metsä Board’s targets are approved by the Science Based Targets initiative and in line with reductions required to limit global warming to 1.5°C, including: – Scope 1 and Scope 2: to reduce our absolute GHG emissions by 100% by 2030 – Scope 3: 70% of Metsä Board’s non-fibre suppliers and downstream transportation suppliers by spend will set science-based targets by 2024

The Science Based Targets initiative (SBTi) is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). We exceeded our previous reduction targets and have set new targets for 2018-2030

3 CO2 emissions per product tonne (kg/t) Process water use per product tonne (m /t) (Scope 1 and 2 market-based) Target -100% Target -30%

Targel level in 2030

Energy efficiency improvement +2,1% in 2018-2020 – Target at least +10% in 2018-2030 83% of our total energy used is fossil free Total energy used in 2020 Used energy (total 11.8 TWh as primary energy) • Target of 100% fossil free mills by 2030 (scope 1 and 2) Fossil- based • Husum pulp mill renewal will be a big contributor fuels Renewable 17 % energy, • Replacing peat with biomass and natural gas with biogas/fossil free mainly wood- based side electricity in our Finnish mills streams 48 % • Energy efficiency improvement target of >10% in 2018–2030 Nuclear power 35 % Sourced electricity

• Metsä Board’s self-sufficiency in electricity is 58% Electricity sourced in 2020 • Self-sufficiency includes own generation and (total 2.4 TWh) electricity purchased through PVO holding or from Metsä Fibre Own generation 16 % • After OL31) starts up, Metsä Board is nearly self-sufficient in electricity in Finland Purchased 3) electricity • Self-sufficiency in Husum integrate increases from 40% to 80% after the first 52 % Purchased phase of renewal through PVO 2) shareholding 1) Olkiluoto Nuclear Power Plant 32 % 2) Metsä Board’s shareholding in PVO (a non-listed public limited liability company, supplying electricity and heat for its shareholders at cost price) is 3.2%,

3) The 52% share of purchased energy comprises of ~11% from Metsä Fibre and ~42% other purchased energy Roadmap to fossil free mills 2018–2030 Planned key investments subject to the final investment decisions presented timelines are indicative Target is to have all mills fossil free by 2030 Climate change creates risks

According to TCFD* Risk Impacts Metsä Board’s response

Transition risks • Increased regulation EU regulation may steer the future use of Metsä Board sources wood from sustainably managed arising from the • Requirements for forests forests, where annual growth clearly exceeds the removal. transition into a new technology For every harvested tree new seedlings are planted low-carbon economy • Market and Energy regulation reputation risk Emissions allowances A transition to the use of 100% fossil free energy in Carbon pricing production, replacing fossil oil -based raw materials and increasing the efficiency of energy and water use The supply and demand of products in a low-carbon economy may differ from what Developing new products that comply with the circular it is currently economy and have a lower carbon footprint

Physical risks • Global warming Weakened availability of wood: Metsä Board has high availability of Northern wood through such as changes in • Extreme weather • mild winters complicate harvesting its unique value chain and owner base temperatures and phenomena • increase of insects precipitation • damage caused by storms Sustainable forest management support the growth of forests Reduced availability of the process water needed by mills resulting to production Resource efficiency in the use of wood, water and energy breaks All Metsä Board’s mills are located in northern areas with ample water resources *) The Task force on Climate-related Financial Disclosures Our mills are located in areas with rich water resources

• 100% of the process and cooling water we use is surface water

• 99% of the water used in production is returned to waterways. Process waters are always carefully purified • We recycle water several times in our processes to reduce the need for water intake • Efficient use of water helps reduce energy

use and, in turn, costs and CO2 emissions Safety continues to be our priority TARGET: Zero accidents

TRIF LTA1 total recordable injury frequency lost-time accident frequency per million hours worked per million hours worked 20 10 17,5 9,0 15,1 8 7,5 15 12,6 6,4 5,5 5,7 10,2 6 10 8,4 4

5 2

0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Equality targets were launched in 2020

• By the year 2025, 25% of Metsä Group’s leaders* are women – *Vice President or higher – The performance in 2020 was 19% • There are no unjustifiable pay gaps between women and men • Metsä Group develops equality through a training programme targeted at all employees Sustainability targets for 2030

• Our sustainability themes and targets are aligned with reaching the Sustainable Development Goals (SDGs) set by the United Nations.

• We focus especially on seven goals to which we contribute the most through our operations. Sustainability targets for 2030 and performance

Target Target 2030 2020 2019 2018 WE BRING THE FOREST TO YOU

Share certified wood fibre, % >90% 80% 76% 79%

WE OFFER SUSTAINABLE CHOICES

Share of fossil free raw materials and packaging materials, % 100% 99,3 % 99,4 % 99,4 % of dry tonnes Share of traceable raw materials, % of total purchasing (in 100% 97% 93% - euros), % Commitment to Supplier Code of Conduct, % of total 100% 96% 95% 94% purchasing (in euros), % Know your supplier check completed, % of total purchasing (in 100% 84% 77% - euros) Sustainability evaluation completed, % of total purchasing (in 100% 54% 49% 41% euros) Sustainability targets for 2030 and performance

Target Target 2030 2020 2019 2018 WE WORK FOR A BETTER CLIMATE AND ENVIRONMENT

Share of fossil free energy (0 t CO2 Scope 1 and 2), % 100% 83% 83% 82%

Share of fossil-free energy, own generation (0 t CO2 Scope 1), % 100% 83% 82% 82%

Share of fossil-free energy, purchased (0 t CO2 Scope 2), % 100% 83% 85% 81%

Energy efficiency improvement, change from the 2018 level, % >+10% +2,1% -0,7% -

Process water use per produced tonne, change from the 2018 -30% -7,7% -11% - level, % Utilisation of side streams, % 100% 99,3 % 99,4 % 99,4 %

WE CREATE WELL-BEING

Ethics barometer 100% 85% - -

Total Recordable Injury Frequency (TRIF) per million hours 0 8,4 10,2 12,6 worked Commitments in sustainability and external recognitions We are committed to the UN Global Compact

HUMAN RIGHTS ENVIRONMENT Principle 1: Businesses should support and Principle 7: Businesses should support a respect the protection of internationally precautionary approach to environmental proclaimed human rights; and challenges; Principle 2: make sure that they are not complicit Principle 8: undertake initiatives to promote in human rights abuses. greater environmental responsibility; and Principle 9: encourage the development and LABOUR diffusion of environmentally friendly technologies. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; ANTI-CORRUPTION Principle 4: the elimination of all forms of forced Principle 10: Businesses should work against and compulsory labour; corruption in all its forms, including extortion and bribery. Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. External recognition and commitments

Metsä Board is on the CDP Climate A In 2020, Metsä Board received a Metsä Board scored ‘Platinum’ in In ISS ESG Corporate Rating Metsä and Water A Lists for the fifth year in rating of AAA (on a scale of AAA- EcoVadis’ CSR ranking in 2020 and is Board has a ‘Prime’ status. 2020. In Forest Programme Metsä CCC) in the MSCI ESG Ratings included in the top 1% of companies Board has the Leadership level A-. assessment. assessed in the manufacture of corrugated paper and paperboard and Metsä Board is also recognised as a Link to MSCI Terms and Conditions Supplier Engagement Leader in of containers of paper and paperboard 2020. industry.

Metsä Board as a part of Metsä Group In September 2020, Metsä Board Metsä Board’s ESG performance was Metsä Board’s GHG emission is committed to the UN Global received an overall ESG Risk rated “Advanced” in Vigeo Eiris ESG reduction targets are approved by the Compact corporate responsibility Rating score of 16.7 and is assessment in November 2020. Science Based Targets initiative. initiative and its principles in the areas considered by Sustainalytics to be of human rights, labour, environment at low risk of experiencing material and anti-corruption. Metsä Board also financial impacts from ESG factors. supports the UN’s Sustainable Development Goals, the SDGs. Contact information

Katri Sundström Vice President, Investor relations Tel +358 10 462 0101 [email protected]

Metsä Board Corporation P.O. Box 20 02020 Metsä, Finland www.metsaboard.com