CO-CREATING FOR Outotec FUTURE PLANTS Sustainability Report 2018 Contents

YEAR 2018 CASES

3 CEO’s message 37 Customer view on sustainable mining

5 This is Outotec 38 Urban infra revolution

7 Our strategy 39 Meeting the needs of the rising battery metals industry

OUR AGENDA DATA

8 Most significant topics 40 Data collection

10 Sustainability agenda 2020 41 Environmental impact of our own operations

14 Climate actions 46 Social data

15 Co-creation for future plants GRI 16 Stakeholder engagement 51 About this report

OUR PERFORMANCE 52 Management approach

21 Sustainable technologies and innovations 56 GRI, Global Compact, and SDG content index

23 Engaged experts 62 Assurance statement

26 Responsible supply chain CONTACTS 28 Health and safety

30 Financial performance and value creation

34 Ethics, compliance and governance

2 OUTOTEC / SUSTAINABILITY REPORT 2018 YEAR 2018 | CEO’S MESSAGE

Co-creating for future plants

Customers increasingly seek co-creation large-scale investments. At the same time, and trust Outotec to solve demanding small and medium-sized investments challenges together with them. As a signal continued at a good level. Towards the end of of this, customer visits to our research the year, the market activity picked up again, centers increased significantly during 2018. and we expect the demand for our products By working closely with customers from and services to be solid in 2019. as early in the project as possible, we can Brownfield investments of existing sites add significant value to the solution. By continued to dominate, as there are relatively sharing knowledge and combining forces few ongoing greenfield projects. The electric with customers, partners and the scientific car market, renewable energy generation and community, we create solutions that benefit storage generate projects involving copper, all parties. cobalt, nickel and lithium. The market for Customers show great interest in gold is active as well. We received orders efficiency and profitability improvements for process equipment, plants and services through digitalization and other measures. related to all these metals. Copper- and gold- Increasing the recovery of and cutting related projects account for 50% of our sales. emissions score high on our customers’ We proceeded well towards our agenda. The availability of energy, along profitability and growth targets, which, with reducing energy consumption, is a unfortunately, was overshadowed by the major topic. Water is an increasingly critical EUR 110 million provision we had to make in resource, too. A recent, tragic dam collapse the last quarter to cover the possible costs in Brazil highlights the importance of tailings relating to the ilmenite smelter project in management and dry stacking technologies. Saudi Arabia. Our order intake, sales, and cash flow improved. We were also pleased to YEAR OF TANGIBLE IMPROVEMENTS OVER- see customer satisfaction improve in 2018. SHADOWED BY ONE PROJECT PROVISION Although we achieved our general sustainability target to keep the share of Building on our mission, ‘Sustainable use of Environmental Goods and Services in our Earth’s natural resources’, our strategy is to order intake above 90%, we did not achieve provide customers with leading technologies, our targets related to commercialization of superior customer service and excellent new water treatment solutions and waste-to- execution. energy plants. We made significant progress in many In accordance with our strategy, our work areas in 2018. Market recovery continued at continues to further improve profitability, the beginning of the year, but macroeconomic customer satisfaction and supply chain uncertainty and reduced metal prices started management. We also seek growth in to impact customers’ readiness to implement services.

3 OUTOTEC / SUSTAINABILITY REPORT 2018 YEAR 2018 | CEO’S MESSAGE

EXCITING COLLABORATION AND We will also continue our target related to collaborate for the sustainable use of Earth’s INNOVATION increasing the number of female leaders. natural resources. Positive impacts spread and benefit societies at large. Thank you The European Commission appointed Outotec COMMITTED TO SUSTAINABILITY for being committed to sustainability. Our and Aalto University in Finland to co-ordinate pioneering work for helping our customers to research on recycling in the battery industry We respect The Universal Declaration meet their goals continues. Future plants are in Europe. In this report, we present the case of Human Rights. Likewise, Outotec is co-created. about battery metals, together with cases of committed to supporting and implementing urban infra revolution and our customer’s the principles of the UN Global Compact Markku Teräsvasara view on sustainable mining. All these cases concerning human rights, working life, President and CEO are great examples of co-creation. environmental affairs and anti-corruption. Leading technologies are our core We have also established science-based strength. We work closely with our customers targets to reduce the climate impacts of in R&D. We also innovate new ways to our operations. Our science-based targets, quantify and communicate the impacts of spanning until the year 2025, are part of the our technologies and services to customers. global initiative by CDP, UN Global Compact, We have started to use a tool to quantify the WRI and WWF. environmental impacts for the entire life-cycle At the beginning of 2019, Outotec was of Outotec’s technologies and offer life-cycle ranked 12th in the Global 100 Index of the support for customers. most sustainable companies in the world. We were included in the Index for the seventh VALUES CROWDSOURCED consecutive year. In October 2018, we achieved the EcoVadis Gold Certificate for our As a continuation of our strategy, vision and corporate responsibility practices. portfolio work, we updated the company’s We carried out a new materiality values utilizing crowdsourcing within the assessment with a view on company company. Nearly 700 participants took part strategy, stakeholder expectations, in the reshaping work. The work resulted current sustainability trends and relevant in the shared values Care for the customer, sustainability frameworks. As a result, our Take ownership, Foster renewal, and Perform key sustainability themes in this report together. and our sustainability work in general, are Our employee survey showed a small Sustainable technologies and innovations, improvement in 2018. We maintained the Engaged experts, and Responsible supply level reached in the previous year when chain. Fundamentals in all our work are the engagement index improved radically. Health and safety, Financial performance as We continue to find ways to simplify our well as Ethics, compliance and governance. working processes and improve employee Outotec’s 4,000 industry experts, engagement as well as project excellence. our customers, investors and partners

4 OUTOTEC / SUSTAINABILITY REPORT 2018 YEAR 2018

This is Outotec

Outotec develops leading technologies and or fresh water use. We deliver entire processes has 100% ownership of its subsidiaries. services for the sustainable use of Earth’s or plants, or a single piece of equipment, with There were no major changes in Outotec’s natural resources. Our comprehensive related engineering, sourcing, commissioning, company structure, the ownership, or supply offering creates the best value for our training and life-cycle services. New mining chain during 2018. The number of active customers in the mining, metal, energy, and or industrial plant investments involving suppliers reduced by 500 from 2017. The chemical industries. Our 4,000 top experts also Outotec technologies may be subject to company withdrew its businesses from Iran are driven by each customer’s unique stakeholder questions and public debate in the due to the United States trade sanctions challenges across the world. target countries. These questions are mainly and terminated its service workshop in the targeted to our customers. United Arab Emirates as part of organizational Outotec’s unique position as a leading We sell products and services to over 80 restructuring. technology and service provider for the countries through our market area network. Outotec’s legal entities and ownership mineral processing and metallurgical Outotec, headquartered in Espoo, Finland, structure are presented in our Financial industry is founded on a century of scientific operates globally with subsidiaries and branch Statements 2018 at www.outotec.com/ knowledge and operational experience of offices in 42 countries. The sustainability investors processing virtually all types of ores and issues covered in this report are relevant in minerals. The innovative research done at all the countries where Outotec is present. our in-house R&D centers and continuous Our major operations, each having over 200 development work realized together with employees, are in Finland, Australia, Germany, our customers have resulted in several South Africa, and Chile. Local customer breakthrough technologies that have become centers in nine market areas provide full industry benchmarks in sustainability. support for our customers’ businesses – both Our product portfolio includes hundreds of in the everyday running of their operations and various plant concepts, processes, and pieces when they make new investments. In addition, of equipment that are marketed under the we use sales agents in countries where we do Outotec brand. In addition, we have a variety of not have an established presence. service products related to the maintenance Our two reporting segments – Minerals and upgrade of the equipment and plants Processing and Metals, Energy & Water – delivered by Outotec. are dedicated to the creation of sustainable SALES EUR 1,276 MILLION, BY REGION PERSONNEL 4,012, BY REGION Our customers are large global mining technologies and life-cycle services for our companies, small and medium-sized mining, customers. metallurgical and energy companies in Outotec has been listed on the NASDAQ developed countries as well as local mining Helsinki since 2006, and the company was rated and metallurgical companies in emerging in the Mid Cap category in 2018. The company’s regions. Customers are investing either in new market capitalization at the end of 2018 was processing plants or modernizing their existing EUR 563 million. Outotec’s total capitalization plants to increase the profitability of their was EUR 377 million, of which EUR 227 million EMEA 54% EMEA 67% operations, improve their resource efficiency, was funded by equity and EUR 150 million by a Americas 27% Americas 19% or reduce their emissions, energy consumption hybrid bond. The parent company Outotec Oyj APAC 19% APAC 14%

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YEAR 2018

Sustainability highlights in 2018

5th 6.2 EcoVadis 1.9 Outotec Women’s most sustainable company million tonnes GHG Gold certification Lost Time Injury Rate to lead European research mentoring program in the world in Global 100 emissions avoided for battery recycling Index

Company 90% 61% 94% 51% 15% of order intake Environmental Employee Engagement Index of employees completed of electricity consumption of key suppliers audited Goods and Services values Code of Conduct training CO -free co-created with our people 2

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Our strategy

Outotec’s strategy is to serve customers with The key in our climate change strategy, leading technologies, superior customer made in 2016, is harnessing our technology service and excellent execution. for the transition to a low-carbon industry. We have complemented the estimated impacts In line with our mission - targeting the of megatrends with the opportunities and sustainable use of Earth’s natural resources risks defined in connection with our climate - Outotec is committed to protecting the change strategy work. Read more in Financial environment in all its activities. We strive to performance and value creation, p. 30. serve our customers using our wide range of Our short-term priority is to improve our leading minerals and metals processing tech­ profitability to achieve economic sustainability. nologies and life-cycle services. By 2020, we We also work to grow our service business to also aim to achieve superior customer service enhance our ability to create value over the and excellent execution. cycles. Our commitment to sustainability binds us to take a holistic view of our customers’ business. As countries start implementing the Paris climate agreement, we expect carbon emission controls to start playing an increasing role in addition to existing stringent restrictions on emissions of harmful substances to air or water. TO BE ABLE TO REACH OUR 2020 VISION, Megatrends such as urbanization, WE ARE WORKING ON FIVE DEVELOPMENT resource efficiency and sustainability, coupled AREAS with digitalization bring opportunities for Outotec. While safety has long been a top 1) Customer focus 3) Product competitiveness 5) Our people priority for our industry, environmental To deliver the best customer experience We work to improve the cost Engaged experts are key to our success. performance and social license to operate we will develop our account management, competitiveness of our products To improve employee engagement, we are are also increasingly at the forefront of our sales and leadership competences and by further differentiation through working to create an environment for our customers’ minds, not least because of improve responsiveness. digitalization and improvements in people to develop, succeed and find joy tightening regulation. We also see many energy and environmental performance. in their work. Leadership development is unused business opportunities and some 2) Service business By redesigning products, by changing one focus area in this work. threats in China, the country producing Services bring us a steady revenue flow, components without compromising on over half of the world’s metals and owning long-term customer relationships and quality, and by searching for lower cost an increasing share of the world’s mining sustained margins. We will increase supply alternatives we aim to reduce assets. Volatility and the cycli­cal nature of our local presence and focus on our existing sourcing costs. business is expected to continue, which drives customer relationships and installed us to further grow our service business. base to maximize customers’ return 4) Project excellence on investment. We aim to increase We work to improve the quality of our productivity by digitalization. project deliveries and bring flexibility to the cost base. 7 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR AGENDA

Most significant topics

Outotec conducted a new materiality validated the results of the materiality sustainability approach. Sustainable tech­ Outotec’s total impact on the Earth and assessment in 2018 engaging employees assessment and our new materiality nologies and innovations, Engaged experts, climate change. All these topics are reviewed and other stakeholders in the discussion. approach in October 2018. and ­Responsible supply chain together with in this report. As a result, three topics regarding Outotec our own environmental performance create operations were defined as having the most DEFINING THE REPORT CONTENT AND impact on the economy, environment and/or BOUNDARIES (GRI 102-46) society, and three topics that were defined our foundation for sustainability. The materiality principle was applied in the materiality assessment so that we In August-October 2018 our Sustainability considered the interests and expectations Working Group carried out a new materiality of stakeholders, Outotec values, policies, assessment, viewing first the company strategy, and targets. We also considered Sustainable strategy, stakeholder expectations, the externally assured measurements of our technologies current sustainability trends, and relevant positive indirect environmental impacts, the and innovations sustainability frameworks. Potential topics environmental regulation, which we assume C’S I that reflect Outotec’s major economic, to be tightening, and increasing emphasis on OTE MPA UT CT environmental and social impacts, or social license to operate, as well as the main O influence the decisions of stakeholders were topics and future challenges of the minerals first identified together with an external and metals processing sector. partner, based on previous materiality In December 2018, the core team of our assessments run in 2011 and 2014. Sustainability Working Group reviewed the Representatives of key stakeholder groups material topics against GRI Standards and and Outotec people were interviewed, and defined the boundaries for each material Responsible Engaged experts there was an online survey at company’s topic and related indicators that form the supply chain O N TH external website and in internal channels, so contents of this report. THE EAR that anyone having interest in the company could have a say about Outotec’s impacts MATERIAL TOPICS (GRI 102-47) and matters that affect his/her decisions regarding Outotec. We also asked feedback Based on the materiality assessment, and development ideas in the survey. Sustainable technologies and innovations, The Sustainability Working Group discussed Engaged experts, Responsible supply chain, and reviewed the results and Outotec’s key Health and safety, Financial performance, as stakeholders in a workshop, prioritized the well as Ethics, compliance and governance FUNDAMENTALS material topics and redefined the list of key were defined as the most material topics for stakeholders. Stakeholders were evaluated Outotec. Health Financial Ethics, compliance, and safety performance governance based on their significance to Outotec’s Health and safety, Financial performance business and on Outotec’s impact on the as well as Ethics, compliance and gover­nance stakeholder group. The Executive Board were considered as the foundation of our

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Material topic Material aspects Boundaries Customers and investors expect

Sustainable technologies • Energy The aspects cover the key impacts on our customers’ employees and operations, Outotec to show sustainability and innovations • Emissions either caused by Outotec, or which Outotec contributes to or is linked with: • Customer health and safety • Operation of customers’ plants leadership, even when times are • Environmental compliance • Health and safety of people • Local communities • Social acceptance not so good. • Resource efficiency • Customer satisfaction • Climate change • Biodiversity • Local environment • Financial performance

Engaged experts • Employment The aspects cover the key impacts on Outotec’s employees and operations at project • Labor/management relations sites, either caused by Outotec or which Outotec contributes to: • Training and education • Employee motivation and competences • Diversity and equal opportunity • Talent retention • Customer satisfaction • Financial performance

Responsible supply chain • Procurement practices The reporting covers our direct suppliers and supervised contractors. Key impacts • Supplier environmental assessment Outotec may be linked with are: • Supplier social assessment • Reputation • Quality • Respecting human rights • Compliance and ethical business practices • Employment and local development • Climate change • Financial performance

Health and safety • Occupational health and safety The reporting covers our employees, premises and project sites as well as supervised contractors. Outotec may cause or contribute to the impacts or be linked with them (e.g. unsafe act or condition): • Health, safety and security • Working environment • Injuries and lost working time • Occupational diseases

Financial performance • Economic performance The reporting covers all Outotec’s legal entities (as listed in Financial Statements • Indirect economic impacts 2018, p. 77 (www.outotec.com/investors). The key impacts caused by Outotec include: • Shareholder value • Employment and wealth • Local development • Long-term commitment of stakeholders These topics are also reported in the Ethics, compliance and • Anti-corruption The aspects cover Outotec’s employees, suppliers and contractors as well as sales Non-financial Statement published in the governance • Anti-competitive behavior representatives and agents. Key impacts caused by Outotec or to which the company Financial Statements 2018, • Non-discrimination may be linked with are: • Socio-economic compliance • Relationships with business partners www.outotec.com/investors • Legal compliance • Reputation and shareholder value Read also • Company culture • Employee relations • About this report, p. 51 • Gender equality • Engaging with stakeholders, p. 16 • Financial performance

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Sustainability agenda 2020

Our sustainability agenda and long-term and contamination of air, water and soil practices, thus enabling our clients to use We have integrated the most goals are aligned with Outotec’s strategy (SDG 3). natural resources sustainably (SDG 12). 2020. In line with the goals set by the UN Health and safety are is the foundation for relevant SDGs into our General Assembly, we upgrade our customers’ our work. Zero accidents is the ultimate high- sustainability agenda. Our agenda as such has not been changed operations to make them more sustainable level target for our development work, though although we conducted a new materiality (SDG 9), while also improving energy efficiency this very ambitious target is seldom achieved analysis in 2018. The redefined material topics (SDG 7). Through our technologies, we support by any company. Outotec’s management reflect very well the earlier most significant actions to combat climate change every day believes that this level of commitment to a topics which continue as the building blocks (SDG 13). We also increase the efficiency safe working environment is a necessity in the of our sustainability agenda with slightly of water use by reducing the amounts of challenging project circumstances in which different focus: Sustainable technologies and fresh water needed in our processes, and our employees, customers and suppliers innovations, Engaged experts, Responsible by increasingly recycling and safely re- work. supply chain, Health and safety, and Ethics, using water, thus decreasing the amounts Financial performance has a great compliance and governance. Based on of wastewater (SDG 6). With our solutions impact on our stakeholders and the stakeholder dialogue, Financial performance for renewable energy, we help to make cities company’s success. Outotec aims to achieve was added to the list of material topics. Our more sustainable by enhancing sustainable continuous profitable growth and balance the annual targets are linked to our 2020 goals. urbanization (SDG 11). In addition, we cyclicality of the mining and metals industries We also integrate the most relevant SDGs into have identified an indirect impact of our by developing and growing the service our sustainability agenda. partnerships with our customers, suppliers, business. We have analyzed Outotec’s impacts on and other business partners (SDG 17) towards In ethics, compliance and governance, SDGs in an internal workshop, with eleven two SDGs in connection with our business we aim to develop strong common values and SDGs identified as most relevant overall, and operations. We cooperate with universities a robust Code of Conduct, as well as a solid two SDGs where we have indirect impact. Our on R&D (SDG 4) and drive technological governance structure. An integral part of commitment and impact analysis of the SDGs upgrades and innovations that will improve this goal is to ensure that all our employees was approved by the Executive Board. resource efficiency in production (SDG 8). and suppliers know and act according to our Outotec’s business is dependent on Code of Conduct. We have zero tolerance DEVELOPMENT WORK DRIVEN engaged experts. We want to make Outotec for corruption. We continuously train our BY 2020 GOALS the most desirable place to work in our own employees on anti-corruption topics industry, and to keep great talent with us. We and require compliance from our business Sustainable technologies and innovations aim to achieve 70% employee engagement by partners (SDG 16). Outotec implements have a central role in our operations since 2020. non-discriminatory company policies and they represent the key means of improving Because the majority of Outotec’s practices globally (SDG 10). the resource efficiency of our customers’ manufacturing is outsourced, responsible operations. Our long-term goal relates to supply chain is highly important to us. By providing customers with even more sustain­ requiring sustainable practices along our able technologies and services, to help them supply chain, we also promote the wider reduce their ecological footprint, the pollution adoption of responsible management

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TARGETS FOR 2020 RELATED SDG Our 2020 sustainability goals are

SUSTAINABLE TECHNOLOGIES AND INNOVATIONS aligned with our strategy.

Share of Environmental Goods and Services in order intake permanently over 90%

Customers generate 20% less CO2 when using Outotec’s metals-related technologies compared to annual industry baselines

50% reduction in fresh water intake per tonne of ore in non-ferrous metal concentrators compared to 2012

Double the energy produced through our waste-to-energy solutions compared to 2013

ENGAGED EXPERTS

Employee engagement index 70% in the employee survey

RESPONSIBLE SUPPLY CHAIN

100% of our key suppliers audited regularly with supplier development actions drawn up according to audit findings

HEALTH AND SAFETY

Zero accidents

ETHICS, COMPLIANCE AND GOVERNANCE

Strong common values and Code of Conduct; solid governance structure Our long-term financial targets are presented on www.outotec.com/investors. FINANCIAL PERFORMANCE Our financial performance is reported in Financial Statements 2018, Continuous profitable growth www.outotec.com/investors

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Annual targets

Our annual targets are structured to support our 2020 goals and in the same way also reflect the SDGs. Financial performance is reported in Financial Statements 2018.

Not achieved Partly achieved Achieved

GRI indicator & relevant Target for 2018 Performance in 2018 Target for 2019 SDG

Sustainable technologies and innovations

• EGS to account for over 90% of order intake. EGS accounted for 90% of order intake. • EGS to account for over 90% of order intake. OWN

• 20% reduction in CO emissions to be achieved using Outotec’s • 20% reduction in CO emissions to be achieved using Outotec’s 2 The reduction in CO2 emissions was 15%. 2 metals-related technologies, compared to annual industry metals-related technologies, compared to annual industry baselines. Commercialization of the new water treatment solutions baselines. continued. However, no new orders were achieved • Successful commercialization of new water treatment solutions during 2018. • Receiving at least two new orders for closed water and receiving at least two new orders based on this technology. circuit solutions. The energy produced through waste-to energy plants was • Waste-to-energy plants delivered by Outotec reduce the use of less than the combined targets from the two previous years. • Receiving at least two new orders for waste-to-energy plants. fossil fuels to exceed our annual targets from two previous years combined.

Engaged experts

• Improvement of 4%-points in the employee engagement index Employee engagement improved by 1%-point. • Improvement of 4%-points in the employee engagement index OWN compared to the 2017 employee survey results. compared to the 2018 employee survey results. GRI 405-1

• 2% increase in the number of female leaders in senior The number of female leaders in senior leadership position did • 2% increase in the number of female leaders in senior leadership positions compared to 2016. not increase. leadership positions compared to 2017.

Responsible supply chain

• Auditing 25% of key suppliers globally. 15% of key suppliers were audited with supplier • Auditing 30% of key suppliers globally. GRI 414-1 development actions planned or implemented according to the audit findings.

12 OUTOTEC / SUSTAINABILITY REPORT 2018 Not achieved Partly achieved Achieved

GRI indicator & relevant Target for 2018 Performance in 2018 Target for 2019 SDG

Health and safety

• 5% reduction in lost time injury rate (LTIR). The LTIR was 1.9, slightly higher than in 2017. • To proactively identify and correct unsafe acts and conditions, GRI 403-9 the reporting of hazards at the following annual rates: - minimum 4 reports/person at sites, workshops & R&D locations; and - minimum 1 report/20 persons at offices.

Ethics, compliance and governance

• 80% of Outotec’s employees trained on Code of Conduct. 94% of employees with access to a computer completed • 90% of Outotec’s employees trained on Code of Conduct. GRI 205-2 Code of Conduct training.

• Global working conditions guidelines concerning blue-collar Working conditions guidelines were created, the implementation employees to be created and implemented. will take place in 2019.

We also had a target for our own environmental performance although the topic was not considered material for Outotec.

Environmental footprint of our own operations

• Maintain the same lower level of CO2 emissions from flights per The emissions from flights per EUR 1 million sales remained at • 2% reduction in CO2 emissions of Outotec’s own locations, GRI 302-4 EUR 1 million sales as recorded in 2016. the same level as recorded in 2016. mainly from purchased electricity and non-renewable fuels. GRI 305-3

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Our actions to address climate change

The key in our climate change strategy, REDUCTION OF ENERGY CONSUMPTION Our handprint in 2018 was 6.2 million made in 2016, is harnessing our technology (GRI 302-4) tonnes CO2-e avoided in total. for the transition to a low-carbon industry. In technology development, we focus Our handprint in 2018 was 6.2 million Policies relating to greenhouse gas We have a certified ISO 50001 Energy on increasing resource efficiency – aiming tonnes CO -e avoided in total. emissions in different parts of the world Management system in five locations in to reduce energy and water consumption, 2 are still evolving and we are following these Finland and four locations in Germany. To emissions, effluents and waste. In 2018, 80% changes, interacting with policy-makers support the achievement of the CO2 reduction of our R&D projects were related to initiatives as well as acting upon them in business targets in our own operations, we aim to targeting sustainability improvements. Our development. reduce our global energy consumption by 1% efforts to mitigate the environmental impacts annually until 2025. of our products and services are presented SCIENCE-BASED TARGETS In 2018, Outotec purchased 8,639 MWh in Sustainable technologies and innovations, Read also

of CO2-free electricity based on renewable page 19. • The GHG emissions avoided by In 2018, we have committed ourselves to the hydropower in Finland and Germany, equaling technology, p. 21 science-based targets to reduce our carbon 51% of our electricity consumption and 21% Digitalization is seen to play a major role • Our targets related to products and footprint and further enlarge our handprint. of total energy consumption. We are gradually in mitigating climate change. We are services, p. 10 Our science-based targets, spanning until moving to renewable energy in our major continuously investing in ICT to utilize the • Emissions & climate data, https://viz. 2025, are part of and have been validated by locations in Germany and Finland, excluding opportunities of digitalization. In 2018, our tools.investis.com/outotec-csr/dct/ the global Science Based Target Initiative, the Pori and Frankfurt research centers. investments amounted to EUR 21 million, review/index.html#environmental12/ a collaboration between CDP, the United consisting mainly of IT programs and direct-ghg-emissions42 Nations Global Compact (UNGC), World COMBATING CLIMATE CHANGE WITH OUR intellectual property rights. • Financial implications due to climate Resources Institute (WRI), and the World Wide PRODUCTS AND SERVICES (GRI 305-5) change, p. 32 Fund for Nature (WWF). PARTNERING WITH POLICY MAKERS Our target is to reduce absolute scope 1 The most significant environmental impact and scope 2 GHG emissions 13% by 2025 from of our business activities materializes • Meeting the needs of the rising battery a 2017 base-year. Outotec also commits to through our products and services that metals industry, p. 39 reduce absolute scope 3 GHG emissions 10% indirectly reduce various emissions, including • Commitment to external initiatives, by 2025 from a 2017 base-year. With these the global carbon dioxide emissions. We www.outotec.com/company/ actions we aim to limit global GHG emissions measure this positive impact to climate sustainability/commitment-to-external- to a level of decarbonization required to change, our handprint, by the emissions initiatives/ keep global temperature increase below 2 avoided by the metallurgical industry using degrees Celsius compared to pre-industrial six Outotec technologies, compared to annual temperatures. For Outotec, this means a industry baselines. These technologies are reduction of GHG emissions of 13% by the ferrochrome process, copper flash smelting, year 2025, translating to a yearly reduction of alumina calcination, ceramic filters, coated roughly 2%. titania anodes, and TankCell 300 flotation cells. The emission reductions are directly proportional to energy savings.

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Co-creation for future plants

Businesses across industries are examining materials projects of the European Institute SCIENCE AND BUSINESS GO HAND new ways to innovate. Product development of Innovation & Technology (EIT), with IN HAND is no longer carried out in isolation without participation from a variety of its customers, interaction with stakeholders. By sharing as well. In addition to customers, Outotec works knowledge and combining forces with closely with the scientific community to customers, partners and the scientific COOPERATION BOOSTS COMPETITIVENESS advance knowledge on metallurgy and ore community, technology companies can spark processing. Long-standing relationships creation: customers are increasingly fresh ideas and co-create solutions that By working closely with customers from as with e.g. Aalto University, University of Oulu, interested in operating in a more sustainable benefit all parties. early in the project as possible, a technology Lappeenranta University of Technology and way. Mining companies need a social company can add significant value to Åbo Akademi in Finland and with Technische license to operate from their surrounding Involving the customer and other external the solution. Close cooperation naturally Universität Darmstadt in Germany have yielded communities, and attention to the parties in product development means increases mutual trust, and the technology new knowledge that benefits both parties. environment and social aspects are integral widening the point of view. The customer has provider has an opportunity to get to know “From these partnerships and cooperation in getting it. the best information about the needs and the cus­tomer’s business needs in depth. This projects, Outotec seeks above all high “In this industry, productivity and demands that must be met. A technology calls for commitment and dedication. expertise – the best possible expertise, even. sustainability can go hand in hand. Our company such as Outotec has the expertise “Cooperative development is actually We work together with scientists throughout customers want the best possible yield from to engineer the most practical and efficient nothing new to Outotec, although it is their careers, combining our experience their ore – as much metals or minerals as solution. A partner can introduce a fresh trending in the world of technology and in in research cooperation and our process possible. This is sensible from a sustainability perspective about, for instance, end-of-life other industries, as well. We always engage knowhow with their continuously growing point of view, as well. When the processes possibilities. in close cooperation with customers, because wealth of knowledge,” says Kari Knuutila. are efficient, less valuable material is wasted. “It all comes down to sharing knowledge. all our solutions are customized to some “The research institutions learn about By optimizing processes, we can also reduce If you keep knowledge to yourself, it has extent to meet their specific needs and the industry and its challenges and stay water and energy use and help our customers no value and benefits no one. By sharing operating environment. It begins with the connected to the real-life applications of their to meet their sustainability goals,” says information within the organization and raw material: no two ores or concentrates research.” Knuutila. with external partners, it can be refined are alike, and the characteristics of the feed University cooperation has other “We at Outotec use the term ‘handprint’ to and applied to practice. This is essential material define the best processes to treat advantages, as well. The students get describe positive impacts on the surrounding at Outotec; we are increasingly working it,” says Juha Kemppainen, Vice President, practical knowledge of the industry and society and environment. Customers are in teams, in research projects as well Hydrometallurgy at Outotec. important personal connections, and Outotec part of these surrounding societies and as delivery projects and even customer First the feed material sample is ana­ gets skilled interns and employees. By must integrate into them. Their goal is good meetings. We invite customers to attend test lyzed and tested in a laboratory, often with the engaging in cooperation, Outotec also wants corporate citizenship, and in this we can help runs and, in turn, audit their processes to attendance of customer’s metallurgical and to ensure that subjects in its sector remain in them,” Juha Kemppainen continues. understand them better,” says Kari Knuutila, process experts. A suitable process solution the curriculum and on the research agenda. Chief Technology Officer at Outotec. is developed, and more extensive pilot tests MINE, YOURS OR OURS? Co-creation and mutual development are carried out, while continuously optimizing TOWARDS SUSTAINABLE EFFICIENCY projects are often partly publicly funded, the process. All these stages are necessary Co-creation is not without its challenges. with participating businesses investing some to ensure that the process yields the best and Sustainability is ingrained in Outotec’s Intellectual property rights, or IP rights, money as well. The EU is a particularly most efficient results with the specific raw operations, and the company wants to are perhaps the most significant one. When strong proponent of such projects. material. advance sustainable practices across the customers and technology companies work Outotec is currently involved in several raw industry. It is also fertile ground for co- together to create a significant innovation,

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Engaging with stakeholders who gets to use it and commercialize it? The We aim to enhance transparency by future employees, Industry associations and internal social media. customer may want exclusive rights, but it is maintaining continuous dialogue with our NGOs, and Media because of our regular To collect open feedback from our in the technology company’s interest to apply key stakeholders. engagement with them. stakeholders we have a form on our website the innovation more extensively. We have not identified any stakeholder at www.outotec.com/contacts/contact-infor­ “It is often the case that there are more Outotec defined its key stakeholders in groups that Outotec would not engage with. mation/feedback/ through which feedback parties involved in the beginning, in an open connection with the materiality analysis can be submitted anonymously. In 2018, all innovation phase, as it were. When the conducted in 2018. The material topics OUR KEY STAKEHOLDERS (GRI 102-40) feedback received through this form related development work proceeds, fewer partners and key stakeholders are reviewed at • Employees to operational issues. Further, we have a are left. IP matters can usually be solved approximately 2-3 years intervals by our • Customers compliance helpline available globally at in one way or another – for instance, with Corporate Responsibility function and • Suppliers and contractors www.outotec.com/company/about-outotec/ a defined exclusive rights period or shared Sustainability Working Group. • Investors, analysts and financiers compliance-helpline/. rights. They must, however, be considered and • Academia and students agreed on at an early stage to avoid problems IDENTIFYING AND SELECTING • Authorities, regulators and governments later in the project,” Kemppainen says. STAKEHOLDERS (GRI 102-42) • Potential future employees • Local communities CO-CREATION TOMORROW In the recent review of key stakeholders, the • Industry associations and NGOs Sustainability Working Group, complemented • Media It is safe to say that joint development by business unit representatives and external Stakeholder interviews gave projects will become more and more popular facilitators, discussed and evaluated the OUR APPROACH TO STAKEHOLDER in the future. Sharing expertise allows significance of stakeholder groups using a ENGAGEMENT (GRI 102-43) valuable feedback on Outotec’s different parties to concentrate on their core long list of stakeholders collected by the core areas and combine forces to complement team. Each stakeholder group was evaluated We collect feedback from our key sustainability work. their own deep knowledge. Juha Kemppainen by stakeholders through regular customer, believes – and hopes – that the future will 1) Outotec’s impact on the specific employee and investor surveys. bring a more comprehensive viewpoint to co- stakeholder group, and In 2018, we made a public web survey creation in the mining and refining industry. 2) that stakeholder group’s significance to for all stakeholders about the topics that are “I would like to see development projects the company’s business performance. most important and impact stakeholders’ that encompass the entire process chain, decision making regarding Outotec. We also CONCERNS RAISED BY STAKEHOLDERS from mine through beneficiation and Based on the mapping, the most significant interviewed representatives of employees, (GRI 102-44) metallurgical processes to metal. Often only a stakeholder groups overall were Employees, customers, suppliers, investors and part of this process gets optimized, separate Customers, Suppliers and contractors, academia. The material topics were selected In the recent materiality survey and related from the surrounding processes, but it would Investors, analysts and financiers as well as based on the survey and interview results. interviews, stakeholders had the opportunity be much more efficient to optimize the whole Academia and students. Local communities We have also discussed our sustainability to raise concerns or topics missing from chain. Co-creation projects could also involve arose as significant in terms of Outotec’s reporting with some investors, and their Outotec’s sustainability agenda. Topics several technology companies and several impact on the stakeholder group, and feedback has been considered when planning raised by employees included long-term customers working together to pool their Authorities, regulators and governments the report content. We have also asked our health impacts on local populations close to knowledge and ideas. This may be where were defined as having a large impact on employees for feedback about the report, customers’ sites, supply chain management, we’re headed.” Outotec’s business. Other stakeholder groups future themes and topics of interest in as well as a stronger focus on recycling defined as key stakeholders were, Potential sustainability communications, using our technologies, social responsibility and

16 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR AGENDA

STAKEHOLDER EXPECTATIONS AND OUR ENGAGEMENT TOOLS

Expectations Our engagement tools Expectations Our engagement tools

EMPLOYEES ACADEMIA AND STUDENTS

• Safe working environment • Regular briefings and info sessions • Relevant technological and scientific challenges for • Joint programs • Company values and a culture that enables • Regular meetings with employee representatives research • Seminars, lectures, visits professional development • Global intranet, collaboration tools and social • Feedback and encouragement from the industry • Thesis work and internships • Long-term economic perspective media • Operational data • Networking • Compliance and transparency • Performance development dialogues • Partnerships • Involvement in university courses (Sustainability • Fair and competitive compensation • Employee surveys • Thesis opportunities Master Class) • Proper communication and feedback channels • Compliance helpline and feedback channels AUTHORITIES, REGULATORS AND GOVERNMENTS • Young Professionals network • Compliance and transparency • Memberships and chairmanships in EU’s and CUSTOMERS • Employment national working groups • Creating value for customers • Regular meetings held by Outotec’s Account • Industry insights • Counseling on expert matters • Sustainable and safe products and services Management, and as part of Sell and Deliver • Seminars on sustainable mining and metals processes processing • Social license to operate • Customer satisfaction surveys • Quick reaction to requests POTENTIAL FUTURE EMPLOYEES • Joint R&D projects • Reliable technology • Asset walks, training, user meetings, workshops • Information of the company’s purpose, values, • Careers website and social media channels • Knowledgeable experts principles, learning and career opportunities and • Seminars, conferences, trade shows • Recruitment events • Long-term commitment leadership style • Newsletters, website, social media • Student cooperation and internships • Fair recruitment process • Hosting visitor groups SUPPLIERS AND CONTRACTORS • Solid financial performance

• Fair treatment • Contacts through Outotec’s Deliver process LOCAL COMMUNITIES • Long-term partnership • Supplier Policy and Code of Conduct • Transparency, engagement and proactivity • Joint social programs with customers • Economic sustainability • Supplier assessments and audits Employment opportunities • Support for local initiatives • Safe working conditions at sites • Training, joint continuous improvement of • Environmental and social responsibility • Employee volunteering programs • Proper communication processes • Outotec Supplier Days

INVESTORS, ANALYSTS AND FINANCIERS INDUSTRY ASSOCIATIONS AND NGOS

• Total shareholder value • Quarterly briefings and CEO’s mid-quarter Q&A • Transparency and proactivity • Active membership in industry associations • Long-term economic perspective sessions • Engagement in joint initiatives • Employee volunteering work • Compliance and transparency • Audited/assured reporting • Environmental and social responsibility • Dialogue on sustainability • Accurate, consistent and reliable information • Capital Markets Day, roadshows, one-on-one meetings, industry seminars MEDIA • Management’s views • Annual General Meeting • Transparency, reliable information • Interviews with Outotec managers and experts • Excursions to Outotec sites • Walk the talk • Quarterly media briefings, stories on website and • Annual surveys • Management views and interesting stories social media • Excursions to Outotec sites

17 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR AGENDA

working with local communities to achieve a OUR POLICIES RELATING TO EMPLOYEES (performance development dialogue and wider impact. STAKEHOLDERS compensation policy), travel safety, GDPR Customer feedback included social • Global Procedure for Stakeholder Competent and engaged employees are key and data privacy issues as well as employee responsibility topics, such as co-operation Engagement to Outotec’s success. We regularly measure engagement survey results. Close co- with schools and NGO’s to further local • HR policies employee engagement and monitor other operation with the German works council miners’ understanding of safety and business • Disclosure Policy, www.outotec.com/ people analytics such as attrition rate. In continued in 2018. ethics. company/investors/disclosure-policy/ the recent employee survey conducted in Many Outotec employees are also Financiers would like to see Outotec • Social media guidelines November 2018, the employee engagement shareholders through the Employee Share being more active in communicating • Donation and Employee Volunteering index further improved to 61%. 84% of the Savings Plan launched in 2013 and offered to the sustainability benefits of the offered Policy employees gave their feedback in the survey. employees globally except for Mozambique, technologies to customers, as this • Code of Conduct, www.outotec.com/ Outotec’s target is to achieve 70% employee Morocco, Qatar and Saudi Arabia due to information may affect their financing company/about-outotec/code-of-conduct/ engagement by 2020. legal, taxation or administrative restraints. decisions. Investors raised concerns about • Supplier Policy, www.outotec.com/ In 2018, we launched several development The Plan rewards employees for their risk management issues, for example about company/about-outotec/suppliers/ initiatives to simplify the organization, long-term commitment to the company. how Outotec will manage the supply chain processes and ways of working to enhance 760 employees, equaling 21% of eligible when sourcing in low-cost countries, and performance enablement. The full impact personnel, participated in this program in some of them were expecting new business of all initiatives might not be seen yet, but 2018. 966 employees who participated in the models to balance cyclicality. the positive trend is continuing also in Plan in 2015 and kept their shares until May Other stakeholder groups expect, for the performance enablement index in our 2018 received free shares. Outotec offered example, Outotec to communicate its wider employee survey. beneficiaries one free share (gross, with cash role in society, impact on global water Special attention has been paid to payments for taxes deducted) for each two systems, and action against plastic usage, to employee communications. In CEO’s quarterly shares bought with the 2015 savings. mention a few. internal briefings over Skype Broadcast These concerns and feedback were platform employees may comment and CUSTOMERS discussed in the Executive Board. We are ask questions, and a video recording of the already working with some of the concerns, discussion is available afterwards. To conduct Customer satisfaction is high on our such as supply chain management, recycling facilitated discussions on strategic programs agenda. We build up our understanding of of battery metals, and implementing a policy with employees, we continued strategy chats our customers’ needs and challenges by and programs regarding employee voluntary with a live video broadcast with selected top systematically collecting feedback. We have work with local communities. The feedback management representatives. Yammer is also also invested in internal feedback channels will also be considered when planning the increasingly used as in-house social media and feedback management to improve our next sustainability agenda. channel. products, services and operations. Two Outotec Round-Table events were We measure global customer satisfaction held during 2018, bringing together some with Net Promoter Score and Customer 20 personnel representatives from Europe Satisfaction ratings. We started our global and top management. The topics discussed survey program in 2015, and in 2017 we included our strategy, simplification of integrated our feedback surveys to our CRM organization, redefined values, rewarding to enable managing the feedback with other

18 OUTOTEC / SUSTAINABILITY REPORT 2018 customer activities. The main drivers for At the end of 2018, Outotec had 26,523 Hamburg and Freiberg as well as the University of Helsinki researchers. In the Outotec NPS are equipment, service and shareholders. Shares held in 11 nominee Helmholtz and Fraunhofer Institutes. The final pitch in April, the first prize was given delivery quality and expertise. Expertise has registers accounted for 38% of all Outotec scope of these partnerships varies, but they to the solution that enhances sustainability gained in frequency of mentions in the open shares, while private Finnish investors held are primarily related to process technology, among artisanal, small-scale miners, in recommendation comments, having the most 16%. Thirteen sell-side analysts and one resource efficiency, digitalization and IoT conflict areas. The solution was seen to have positive sentiment. credit analyst conducted research focusing on development, circular economy, hybrid a genuine positive impact on society and In our feedback survey, we request Outotec. materials and water issues. guide towards sustainability transformation. customers to comment on the most In addition to our quarterly investor Besides project-related research For the miners, it would increase their important factors behind the scores they briefings and annual financial statements cooperation, Outotec has permanent income, reduce the risk of injuries and give. This focus on open comments helps briefings, the CEO’s mid-quarter Q&A partnerships with many universities and other ensure a minimum standard of working. At us to tune into customers’ true feelings and sessions continued to be an important educational institutes. These partnerships the same time, investors would be able to hear their voice, and to plan for improvement channel for maintaining dialogue. These audio involve contributing to educational steering find a genuine solution for artisanal miners, actions. We have started several development casts aim to further clarify information that committees, guest lecturing, software increase the supply of responsible minerals, initiatives based on the analyses. In 2018, we has already been made public. In addition, we licensing, hosting student groups, and and lower reputational risks within the value collected feedback from over 700 individuals met frequently investors and analysts in one- collaborating on Bachelor’s, Master’s and chain. The solution is based on a network- representing nearly 300 customers and on-one discussions, at industry seminars and PhD theses. driven approach, including NGO and industrial received 3,367 customer comments to analyze road shows. partners. for actions. We continue our ambition to All our audio casts are recorded and Sustainability Master Class expand the sample going forward. available for on-demand viewing at Sustainability prizes in China We continuously cooperate with http://outotec.videosync.fi/archive/cmd. One example of educational cooperation was customers in technology and process the Sustainability Master Class, which was for We also award sustainability prizes to development. In joint R&D or delivery ACADEMIA, STUDENTS AND POTENTIAL the second time jointly run by the University encourage university students to apply their projects, both Outotec and the customers can, FUTURE EMPLOYEES of Helsinki and Outotec. The aim of this ideas for practical innovations. In Central for example, increase resource efficiency or program was to develop sustainable, hands- South University (CSU) in China Outotec has improve their digital competences. Partnerships and networks with universities on solutions to real-life challenges defined in awarded the ten best projects promoting and research institutions are an important cooperation by experts from the University of sustainable design since 2013. The fifth SUPPLIERS AND CONTRACTORS part of Outotec’s everyday business. In 2018, Helsinki’s Institute of Sustainability Science sustainability prize ceremony was held in we cooperated with more than 30 universities (HELSUS) and Outotec. The program focused May 2018. The 20 finalists were selected Our engagement with suppliers is described and research institutions worldwide. on developing interdisciplinary approaches from among 77 projects, which included in Responsible supply chain, page 26 In Finland, our closest research to sustainability challenges. 34 students also test and fieldwork as well as design partners in 2018 were Aalto University, VTT and professionals with diverse backgrounds and construction of pilot scale equipment. INVESTORS, ANALYSTS AND FINANCIERS Technical Research Centre of Finland Ltd, participated in the program. After a careful review, the jury consisting of Lappeenranta University of Technology, In 2018, the program focused on risk CSU professors and Outotec representatives Outotec’s approach to investor relations and University of Oulu, the Geological Survey management in natural resource intensive selected the top 10 projects. The winning communicating with the financial markets is of Finland and the University of Helsinki. global business when operating in very projects ranged from waste processing, based on Finnish law, EU directives, and our In Germany, where Outotec also has an in- different or challenging environments or recycling and energy conservation to own policies on corporate governance and house research center, we have had good transforming business models. The co- smart home applications. The top three disclosure, as well as stock exchange rules collaboration with technical universities in creation work was mentored by business innovative works were “A new technology for and regulations. Aachen, Erlangen, Darmstadt, Karlsruhe, and technology experts as well as the simultaneous desulfurization & denitrification

19 OUTOTEC / SUSTAINABILITY REPORT 2018 and resources recovery”, “Dust removal and Commission invited Finland to coordinate the LOCAL COMMUNITIES AND NGOS sustainability work. Our CEO’s quarterly desulfurization device for small household research related to recycling in the battery briefings provide basic information about chimney” and “An application named Emotion industry. Outotec will lead the project together Outotec aims to support local projects Outotec’s performance. We also organize for deaf-mutes”. with Aalto University’s Department of that benefit communities where our major interviews where journalists can discuss our Chemical and Metallurgical Engineering. The customers operate. These community goals, new products and newsworthy events Giving students insights into working life first task is to pilot new ways to collaborate projects are based on local needs and defined with our management representatives. We in research and innovations. Further, the through dialogue with local communities. publish case stories on our website for the We offer positions for interns, summer goal is to define a long-term vision, strategic We strive to realize community projects in media and aim to organize press trips to trainees and thesis workers. We also research agenda and action plans for battery collaboration with our customers, using joint Outotec’s R&D centers or reference plants at participate in several activities that give recycling in Europe. financing. We also aim to integrate voluntary customers’ sites, to show concrete examples students an opportunity to put their academic Also, Outotec participates in further work into community projects. All community of our work to journalists. knowledge to practical use, thereby providing EU Horizon 2020 projects in the fields of projects must bring measurable benefits to Our experts additionally meet trade them with an insight into working life. Industrial Leadership, Societal Challenges the local community. press representatives at exhibitions and We work with educational institutions and Excellent Science. We have ten Horizon In 2018, we revised our Donations Policy conferences and share the latest product of different levels with the aim of widening projects ongoing with industrial actors to include guidelines for employees’ voluntary news with them. the students’ knowledge of mining and and academic partners, with an overall work with local communities. Volunteering metallurgical industries and getting talented volume of nearly two million euros yearly. program was piloted in Brazil where the students interested in Outotec. Each year we This allows us to develop our technologies local offices organized for example a toy participate in several career fairs and other in close interaction with our customers, collection action for donation to a local charity student events. thus achieving a greater impact on real institution in Belo Horizonte and “Christmas environmental problems. Action” in Guarapari where community gifts AUTHORITIES, REGULATORS AND Outotec participates in the technical were delivered. GOVERNMENTS secretariat of the EU’s Operational Charitable financial donations were frozen Environmental Footprint Sectoral Rules for 2018, after Outotec’s Board of Directors Outotec is a core partner in the European (OEFSR), piloting for copper. proposed to the Annual General Meeting of Institute of Innovation and Technology’s (EIT) shareholders in April that there would be no Raw materials Knowledge and Innovation Read also budget for such donations for 2018. Community. This platform aims to make • Our representation in industry As the bulk of our operations involve raw materials into a major strength for associations and commitment to external engineering and business management, we Europe by boosting competitiveness and the initiatives, http://www.outotec.com/ have not conducted impact assessments attractiveness of the raw materials sector. company/sustainability/commitment-to- in local communities. Neither do we have Outotec participates in nearly 20 related external-initiatives/ any development programs. Regarding projects, aiming to create new business by project sites, these are normally done by our upscaling technologies, while also generating customers. new educational programs and strengthening Europe’s infrastructural network. The volume MEDIA of these projects in total is ca. one million euros yearly. We interact with media representatives In November 2018, the European both locally and globally to publicize our

20 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

Sustainable technologies and innovation

Leading technologies are our core strength. solutions for processing secondary resources measure this positive impact to combat OUR IMPACTS ON BIODIVERSITY (GRI 304-2) Our comprehensive offering enables and turning side streams into saleable climate change, our handprint, by the our customers to run environmentally products. Equipment upgrades, plant emissions avoided by the metallurgical We have included information on our impacts sound, prof­itable and socially acceptable modernization projects, and our long-term industry using Outotec metals-related on biodiversity in this report due to increased businesses. operation and maintenance services all technologies. Emission reductions are directly stakeholder interest. By describing our ensure that customers’ plants will always run proportional to energy savings and depend role and impacts we can better meet the Outotec’s key strength is the capability to smoothly, safely, and efficiently, with minimum on actual production rates by the industry. In information needs of investors, customers develop and deliver resource-efficient tech­ environmental impact. 2018, we calculated the positive impact of six and local communities. nologies and products. Our product portfolio Outotec’s products and services – if technologies. In 2018, our handprint was 6.2 In metallurgical industry, emissions and covers hundreds of various plant concepts, defectively manufactured, installed or used – million tonnes emissions avoided. eco-toxic substances can cause negative processes, pieces of equipment and services, have the potential to cause health and safety environmental impacts. If not appropriately and we continuously develop our offering problems for our employees, contractors, manufactured, used, or maintained, Outotec’s according to the principles of sustainable and customers as well as indirectly harm products also have the potential to harm EMISSIONS AVOIDED BY TECHNOLOGY, development. Although the processing the environment and local communities the biodiversity surrounding our customers’ of minerals and metals has negative surrounding our customers’ plants. Indirectly, TONNES OF CO2e plants. environmental impacts, through advanced Outotec’s products and services also have an Outotec’s direct impacts on biodiversity 3,000 technology the negative impacts can be impact on climate change. could be traced to the equipment manu- managed. For this reason, R&D has a central To mitigate these risks, we offer training 2,500 facturing sites and five assembly and role in Outotec’s business and developing and other services to our customers to help 2,000 service workshops globally. However, these sustainable technologies for our customers is them maintain safe and environmentally 1,500 workshops are in industrial parks (zoned for at the core of our sustainability­ work. sound operation. Furthermore, we train and 1,000 industrial use), in which the environmental audit our suppliers to ensure good product 500 permitting takes into consideration Read also quality. 0 biodiversity impacts and endangered species • Management approach (GRI 103-1, 103-2, Outotec continuously works to reduce 2016 2017 2018 already in the planning phase. 103-3), p. 53 the negative environmental impacts of its Coated titanium anodes When Outotec opens new sites, they technologies through R&D and product TankCell 300 are built with tight control over their IMPACTS OF OUR PRODUCTS development. Ceramic filters environmental impacts, and we check AND SERVICES However, the possibility remains that Alumina calcination whether the construction requires an information on indirect negative impacts Copper flash smelting environmental permit. In case the Ferrochrome process The most significant environmental impact of occurring after the completion of any project construction could have an impact on our business activities materializes through delivery may not have been disclosed to biodiversity, an environmental impact our products and services that indirectly Outotec by customers or local communities. assessment will be carried out (impacts reduce various emissions, including the on flora, fauna, endangered species, water global carbon dioxide emissions. OUR HANDPRINT, REDUCTION OF GHG Read also management, pollution or habitat conversion). Our solutions utilize primary resources EMISSIONS (GRI 305-5) • Our targets regarding products and However, Outotec’s impact to biodiversity is efficiently, reduce energy and water services, p. 11-12 materialized mainly through the entire value consumption, and produce less waste to By selling advanced technologies Outotec • Climate actions, p. 14 chain. landfill and emissions – while also cutting reduces the global CO2 emissions through • Financial performance and value creation, Our customers’ industrial sites, to which operating costs. We additionally offer its customers’ industrial processes. We p. 30 Outotec products and technologies are being

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delivered, can be in vulnerable areas, or CO2 is emitted during the manufacture of our procedures revised in 2017. customer surveys and through an external otherwise potentially have a heavy impact on products. We can already provide customers Compliance with all applicable legal feedback channel and Compliance Helpline biodiversity due to the nature of activities. solid data about the environmental impacts requirements is the prime concern in on our website. In 2018, no issues were raised In cooperation with customers, we design of the manufacturing phase, and hence Outotec’s product compliance management regarding Outotec products and services the processes in such a way, that they have assist them in their own carbon footprint work. We maintain an extensive database through external feedback channels. minimal effluents to water and emissions calculations. So far, we have made the of product compliance procedures and to the atmosphere, and ultimately require estimations for thickeners and fine grinding documents including the development, sales R&D AND INNOVATIONS less raw materials to be mined. Outotec’s mills and are currently preparing this data for and delivery of our products and services. technological know-how in this regard is further product systems. We provide relevant information to In technology development, we focus on mainly based on closed water loops, nutrient To capture the global warming potential our customers about the impacts of our increasing resource efficiency – aiming cycling, raw material efficiency, tailings of the full life cycle, we start preparing products and services, including their energy to reduce energy and water consumption, management and emissions management Environmental Product Declarations, consumption, emissions, metal recovery emissions, effluents and waste. In 2018, 80% systems. These have a positive impact which include – in addition to the product rates, and water usage, as well as safety of our R&D projects were related to initiatives on conserving natural habitats,­ reducing manufacture – also the estimations for full information provided according to industry targeting sustainability improvements. land use impacts, preventing pollution and life-cycle impacts, including the use phase. standards. Outotec manuals cover the The first two industrial references reducing groundwater consumption. Our long-term plan is not only to give entire life cycles of the products delivered of Outotec TankCell® e630’s were the customers the data they need about and contain information on transport, commissioned at the Buenavista del Cobre CALCULATING THE CARBON FOOTPRINT environmental impacts (including in addition installation, operation, maintenance and concentrator in Northern Mexico. The site FOR THE ENTIRE LIFE CYCLE OF OUR to global warming impacts also acidification, decommissioning. In addition, we offer has reported an increase of more than 3% in PRODUCTS eutrophication impacts, and water footprints), our customers maintenance services. overall recovery with a higher-grade copper but also to be able to use this data internally We also routinely provide safety training concentrate. In the metals value chain, 90-100% of its for finding the sources of competitive for our customers regarding the use and Outotec filed a patent application for climate impacts (i.e. carbon footprint) relate advantage or guide us in finding hotspots for maintenance of our products. a thermal leaching process to convert to the energy use of the sector. Throughout further development. Outotec’s customers can give feedback spodumene concentrate into battery grade the years, we have worked intensively to about our products and services in regular lithium hydroxide. The lithium hydroxide reduce the energy consumption of our PRODUCT SAFETY (GRI 416-2) technologies. Nevertheless, different stakeholders have started asking for exact Outotec has a Product Compliance numbers in terms of what a products’ carbon Management process in place to make sure Efforts to mitigate the environmental footprint is. that our products and services reliably meet impacts of our products and services 2018 2017 The carbon footprint estimation can be all applicable safety standards during all R&D expenditure, EUR million 57 56 roughly divided into two parts: phases of the product life-cycle. We follow R&D expenditure, % of sales 5 5 1) How much carbon is emitted in the negative impacts and incidents through our manufacture of our products (incl. QEHS management and product compliance Share of R&D projects targeting sustainability 80 79 equipment, processes or plants) management systems, as well as through improvements, % 2) How much carbon is emitted during their customer feedback collected after each major Number of new patent applications filed 26 38

use phase (or in the end-of-life phase). delivery and in customer surveys. In 2018, New national or regional patents granted 558 672 we continued implementing globally our new The first step is to calculate how much simplified product compliance management Number of patent families 761 763

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Engaged experts process has been piloted at the Outotec Outotec aims to employ the best experts in Dialogue with our people is at Research Center in Pori for Critical Elements the industry to serve customers with leading Corporation in Canada and Keliber Oy technology, superior customer service and the core of Outotec’s culture in Finland. excellent execution. Developing our people development. New Hybrid filter plates, which are 40% and our culture is an essential part of Outotec lighter, and thereby more competitive than strategy. conventional plates, were introduced to the spare and wear parts markets. The new Competent and engaged employees are key to EMPLOYMENT AND LABOR PRACTICES plates also improve the filtration capacity, Outotec’s success. We mitigate risks related provide low residual moisture in the cake, and to employee retention and competence gaps Outotec’s responsibility as an employer is reduce operational costs. via various competence development to provide decent working conditions, treat Outotec has designed a skid-mounted, programs, ongoing leadership and working our people in a fair manner, and follow the modular prefabricated sulfuric acid plant culture development, fair and competitive principle of equal opportunities. Our Code which significantly lowers the installation compensation as well as talent management of Conduct provides the basis for labor cost and time. In addition, the modular plant and internal job rotation. conditions, substantiated by HR policies and offers lower operation costs, increased We regularly measure employee HR Handbook that enable fair employment availability and maintainability, as well as engagement and monitor other people globally. Our HR practices are always environmentally sound and safe operation. analytics such as attrition rate. In the recent compliant with international labor standards The innovative plant concept is based on employee survey conducted in November and local legislation. Outotec’s technology and expertise gained 2018, the employee engagement index further Blue collar workers account for 16% of from 650 plants delivered globally. improved to 61%. 84% of the employees gave our employees. Based on the risk assessment their feedback in the survey. Outotec’s target regarding human rights risks in our service Read also is to achieve 70% employee engagement by and manufacturing sites, conducted in 2017, • Partnering with universities and research 2020. we created working conditions guidelines institutes, p. 19 In 2018, we launched several development regarding blue collar employees during 2018. initiatives to simplify the organization, These guidelines are aligned with the UN processes and ways of working to enhance Guiding Principles. The guidelines describe performance enablement. The full impact Outotec practices and principles regarding of all initiatives might not be seen yet, but fair working conditions, compensation and the positive trend is continuing also in recognition, employing migrant workers, the performance enablement index in our employee communication and grievance employee survey. mechanisms.

Read also GLOBAL MOBILITY • Management approach, p. 53 International assignments are an important part of Outotec’s business. In 2018, nearly 1,000 employees were working on project assignments abroad in 68 countries. Our

23 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

Global Mobility Policy provides the terms and conditions that apply to Outotec’s temporary and permanent cross-border employee transfers globally. The policy provides the CARE FOR THE TAKE FOSTER PERFORM framework for transparent, fair and equal treatment for global mobility. CUSTOMER. OWNERSHIP. RENEWAL. TOGETHER. We aim to provide competitive compensation and benefits for employees, considering different working conditions, and ensure equal and fair terms and conditions for all the international assignments as well as secure compliance in employment regulations, taxation and social security.

EQUAL OPPORTUNITIES AND DIVERSITY

Outotec is a global employer. For example, in Finland we have people representing 34 nationalities and in Germany 27 nationalities working either as expatriates or on local agreements. In total, our employees represent 72 nationalities. We continuously monitor diversity and equality within Outotec. As a company operating in a male- Most of the senior management in our and clarifying roles and responsibilities new values were crystallized and launched in dominated industry, gender equality is an major locations have been hired locally. to ensure smooth operations and equal November 2018. Building the Outotec culture important topic for Outotec, and special The percentage varies from 76% to 100%. treatment of our employees in global mobility based on the new values started in December emphasis is put on supporting career To enhance equal opportunities and cases, for instance. 2018. development of women. We have Equality plan transparency, all open positions are published in Finland and Sweden based on the local internally to enable all employees to apply for VALUES Outotec’s new values laws. In the 2018 employee survey, 79% of positions. Employees also have an opportunity • Care for the customer employees considered Outotec as a company to promote their career in the employee In 2018 we renewed our company values • Take ownership with equal opportunities. 20% of our Executive profile and let our organization know about in a transparent co-creation process; all • Foster renewal Board members and employees are female. their expertise. We encourage our employees employees globally were invited to provide • Perform together Our target for 2018 was to increase the share to be active in their own career development insight on our values and culture. During of women in senior leadership positions by and promote new tools to support this a 3-week virtual co-creation period, 676 2% from 2017. Unfortunately, this target was target (e.g. Outotec Career and Competence participants gave 133 ideas, 226 comments not reached in 2018. Women’s mentoring Framework). and 1,163 likes. In the next phase, 80 senior program was introduced in 2018 to support We have put a lot of emphasis on leaders further worked with the themes in a this target. implementing global policies and processes workshop. Finally, based on all that input the

24 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

PROGRAMS FOR UPGRADING EMPLOYEE metallurgists, and several new e-learning SKILLS (GRI 404-2) modules were launched globally for all employees, e.g. revised Code of Conduct In 2018 professional growth and competence training. We also trained our employees on development continued to be a key element the new General Data Protection Regulation. of Outotec’s people strategy. Our Career and In addition, more than 90% of all Competence Framework was further developed managers at Outotec have participated in and continuous dialogue about devel­opment leadership programs during 2017-2018. as an important leadership responsibility All our employees are in the scope of was promoted. In 2018, 99% of employees talent management, and development and had regular performance reviews including succession planning are key components of development discussions (GRI 404-3). The manager responsibilities. performance reviews of blue-collar workers To support both employees and managers have not been registered in the data system in career and talent development, we and not included in the percentage. launched two new e-learning courses, More than 90% of all employees Manager Guide and Career Guide. participated in training activities in 2018. Depending on local resources, we provide In addition, 6,950 persons, including both transition assistance to support employees employees and supervised contractors, who have been terminated or are retiring. received health and safety training. Our global These may include training, counseling or training programs are designed for key roles severance pay. and general onboarding modules for all employees. We report only global programs Read also that are administrated through our learning management system. In addition to global • Employee data, p. 46 trainings, a lot of training is delivered locally • Diversity data, https://viz.tools.investis. in different countries. com/outotec-csr/dct/live/index. Our largest competence development ini­ html#diversity110/executive-board- tiative in 2018 was the services certification members-by-age111 program. Approximately 350 service • Corporate Governance Statement 2018, professionals have completed the first or www.outotec.com/cg second level certifications including • Full employee and training data, technology training since the start of the https://viz.tools.investis.com/outotec- program in late 2017. 60 project managers csr/dct/live/index.html#employees44/ started a project manager certification employees-by-employment-type45 program in the second half of 2018, more than 300 sales employees attended a sales development program, a new development program was launched for ju­nior

25 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

Responsible supply chain SUPPLY SPEND BY CATEGORY Supply chain management affects our concerns related to corruption, human assessment is included in the audit, which is reputation, quality of products and services, rights or any unethical behavior in Outotec’s either performed by phone interview or site as well as local employment and businesses. business activities. In 2018, no issues were visit. Audit result and findings are reported The main challenge for our supply chain raised through these grievance mechanisms as an official audit report in our Supplier management concerns the need to improve regarding our suppliers or supply practices. Data Management system. Audit findings are cost efficiency without compromising on categorized to observations and deviations. product quality, safety and sustainability. Read also In our supplier audits, none of the • Management approach, p. 54 audited suppliers were identified as having As approximately 90% of Outotec’s manu- Machinery 50% significant negative environmental impacts. Renting of machinery, consultancy 18% facturing, based on monetary value, is OUR SUPPLIERS (GRI 102-9, 102-10) We evaluated supplier approach to waste Basic metals and fabricated metals 16% sourced from external suppliers, responsible Electrical and optical equipment 9% management and environmental controls. sourcing and supply chain management Outotec delivers large and complex solutions Rubber and plastic 3% The audit teams reported that the suppliers are highly important for Outotec. Our wide and services globally to a relatively small Textiles and textile products 1% are making strong efforts to minimize their product range and a high number of different number of customers, and typically the supply Others, such as chemicals, non-metallic negative environmental impact. delivery locations make our supply chain chain differs in each project. Most of our minerals etc. 3% development and management challenging. direct suppliers are either manufacturing THE CARBON FOOTPRINT OF OUR SUPPLY Standardization, harmonization and focusing workshops or component/equipment SUPPLIER ENVIRONMENTAL ASSESSMENT CHAIN (GRI 308-2) on fewer suppliers are key drivers in manufacturers. The rest are logistics, (GRI 308-1, 308-2) establishing a sustainable­ supplier base. engineering and construction companies, and The sustainability of our supply chain also In 2018, our revised Supplier Policy was other service providers. In addition, thousands Material toxicity and chemicals have been has an impact on climate change. The published and taken into use. We took our of our direct suppliers’ own suppliers form ranked as the greatest environmental risks methodology of calculating supply chain project risk assessment process and tool into part of Outotec’s supply chain. The allocation in the supply chain. If not appropriately emissions are based on Outotec’s spending use and trained 133 persons to use it. The risk of more business to fewer suppliers enables manufactured, used, or maintained, Outotec’s and carried out using a scope 3 screening assessments have provided our management better management and development products have the potential to harm the tool developed by GHG Protocol and Quantis. with important information about major risks partnerships, in turn enhancing delivery environment. To mitigate product quality To be able to use the scope 3 screening tool, and planned mitigation actions. excellence and cost competitiveness. related risks, we provide training to our Outotec’s spend on supply was converted All our key suppliers were committed In 2018, we had approximately 2,500 suppliers and audit them regularly. from EUR into USD. In 2018, the EUR to USD to Outotec’s Supplier Policy in 2018. active direct suppliers, of which 228 were Outotec screened 72 suppliers, equaling annual average exchange rate was 1.129 We define key suppliers as companies categorized as key suppliers. As product 11% of all new suppliers, using environmental (source: http://x-rates.com). that are categorized as important suppliers competitiveness is one of Outotec’s strategic criteria. Screening is a spot check on certain The carbon footprint of our supply chain, in financial, strategic and operational development areas, our work focused on the topics, and we select the companies for at 520,683 tonnes of CO2 equivalent, was dimension, or in terms of product quality supply base management with a target of environmental screening from the high and considerably larger than the footprint of and delivery time. All potential new direct having fewer suppliers and increasing best- medium risk categories based on information Outotec’s own operations, which amounted to suppliers are assessed through our Supplier cost-country sourcing in China, India, Eastern collected with supplier self-assessment 23,015 tonnes of CO2e. The biggest sources

Assessment and Approval Process before Europe and Mexico. questionnaire. It includes 12 questions of CO2e emissions in Outotec’s supply chain getting supplier status. Our total spend on customer-related related to environmental aspects, hazardous were machinery, representing 50% of the Outotec’s compliance helpline and an purchasing in 2018 was EUR 570 million. substances, and waste management. In total. In 2018, the carbon footprint of our external feedback channel on the company case any risks are identified based on the supply chain decreased by 4.3%. website are available for anyone to raise received information, detailed environmental

26 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

CHILD LABOR (GRI 408-1) AND FORCED OR operations. We have categorized our suppliers were identified as having significant potential Local sourcing covered 54% of our COMPULSORY LABOR (GRI 409-1) into three risk categories. Country risk is negative human rights or social impacts. one criterion in determining the scope of Suppliers that we do not normally screen are total supply spend. Outotec does not tolerate any child labor the supplier assessment. To mitigate social for example, one-time indirect suppliers, such or forced or compulsory labor as stated in sustain­ability related risks, suppliers are as consultants. Some of these non-screened Outotec. The calculation method was our Code of Conduct and Supplier Policy. required to commit to Outotec’s Supplier suppliers have, however, signed our Supplier changed in 2017 to fulfill the reporting According to our human rights self- Policy, which reflects the principles of the Policy. requirements. In our large delivery projects, assessment made in 2017, no notable risks company’s Code of Conduct. we prefer to use suppliers in the target related to the use of child labor, or forced In 2018, we audited 15% of our key NEGATIVE SOCIAL IMPACTS IN THE SUPPLY country. Normally we buy steel structures and or compulsory labor, have been identified in suppliers on quality, health and safety as well CHAIN (GRI 414-2) detail engineering, for example, in the target Outotec’s own manufacturing units. as human rights-related issues. Supplier country. The amount of such supply in the The main sustainability-related risks in development actions are drawn up according In our supplier audits, 4 suppliers, equaling country of the project site can be significant. the supply chain, identified in our internal to audit findings. The long-term target is to 12% of the audited suppliers, were identified This, in turn, creates local employment and workshop consisting of our global supply audit all key suppliers with these criteria as having potential negative health and benefits local businesses. team, include bribery and kickbacks, regularly with supplier development actions safety impacts. However, none of those were Our spending on suppliers that are local occupational safety, protecting information drawn up according to audit findings. considered significant and improvement to our major operations (Finland, Australia, and reporting misconduct. Child labor is In supplier selection, Outotec screened 85 measures were agreed with these suppliers. Germany, South Africa, and Chile) in 2018 a recognized risk in any supply chain, and suppliers, equaling 11% of all new suppliers, Audit findings were related to missing health amounted to EUR 266 million, equivalent to Outotec has taken steps to reduce the using human rights, and labor practices and safety practices and equipment, and 54% of our total supply spend. The remaining possibility that our approved suppliers utilize criteria. Screening is a spot check on certain wrong storage of chemicals causing potential supply spend was distributed among 43 child or forced labor. topics, and we select the companies from risk for employees. No relationships have countries. We have identified three countries in our the high and medium risk categories based been rejected because of health and safety The largest shares by country – each, supply chain, namely China, India and Mexico, on information collected with a supplier self- findings in our supplier audits. except Finland and Germany, amounting to with potential risks regarding child labor or assessment questionnaire. The questions There were no incidents filed through EUR 15–50 million – were spent in Australia, hazardous work. In 2018, 5% of our suppliers relate to social program accreditation, respect formal grievance mechanisms related to our China, Finland, Germany, USA, Sweden, were based in China, 2% in India, and 2% in for human rights of employees, prohibition suppliers’ human rights impacts, impacts on Switzerland, and South Africa. The remaining Mexico. To mitigate these risks, our dedicated of child labor, health surveillance, incident society or labor practices. spend was distributed among 35 countries. supply personnel in each of our Market Area management and occupational safety. In terms of spend in 2018, our largest offices assesses suppliers according to our In case any risks are identified based SPENDING ON LOCAL SUPPLIERS suppliers in alphabetical order were GIW approval process and make observations on the received information, a detailed (GRI 204-1) Industries Inc, Samyoung M-TEK Co and during audits and other visits. environmental assessment is included in the Swiss Tower Mills Minerals Ltd. audit conducted either by a phone interview Outotec’s supply chains often combine global SUPPLIER SOCIAL ASSESSMENT or a site visit. The audit result and findings project deliveries and purchases from local Read also (GRI 414-1) are reported as a formal audit report in our suppliers. Our most significant operations, • Historical supply data, https://viz. Supplier Data Management system. Audit based on the number of employees, are in tools.investis.com/outotec-csr/dct/ As the majority of Outotec’s manufacturing findings are categorized to observations and Finland, Australia, Germany, South Africa, review/index.html#supplier-data138/ is sourced from external suppliers, there deviations. and Chile. We report ‘local supply’ as the new-suppliers-screened-using-labor- are potentially more human rights-related All the screened companies qualified as percentage of our supply spend in these practices-human-rights-impacts-on- risks in the supply chain than in our own new suppliers, as none of the companies countries of the total procurement spend of society-criteria139

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Health and safety

Zero harm is the ultimate target for Outotec’s covers all Outotec’s 4,012 employees (100%), our employees are instructed to additionally Our hazard and incident reporting work on occupational health and safety. Our and 2,750 contractors (100%) working follow Outotec’s safety principles. In addition, main safety risks occur on roads in different under our direct supervision, as well as all there are risks for traffic accidents in different system is externally audited to driving cultures and when working at project locations and project sites. driving cultures. sites and manufacturing units. We have a We ensure the quality of our OHS Increasingly Outotec’s employees travel ensure the quality. track record of good safety performance in processes through internal and external and work in countries where security and large projects with several safety awards audits and training. We follow key medical risks have lately increased. In 2018, from customers. performance indicators set for safety, approximately 650 Outotec employees or lessons learned and positive observations in have regular management reviews to find supervised workers traveled in countries with our intranet and internal discussion groups. Health and safety were defined as root causes for hazards and incidents, do high medical risks and less than 10 persons In 2018, one incident causing lost working fundamentals for Outotec in the recent corrective actions and continuously improve in countries with high security risks. days happened in Mozambique during materiality analysis. Zero harm is the our performance. Risks are managed in each location maintenance of a crust breaker when a ultimate target for our development work and project site based on risk categories. person’s hand was retracted in a scrapper, on occupational health and safety. Outotec’s HAZARD IDENTIFICATION, RISK Regarding traveling, risks are managed leading to the amputation of several fingers. management is committed to continuously ASSESSMENT, AND INCIDENT based on country security risks, medical Another example of a high-consequence enhance safety performance throughout the INVESTIGATION (GRI 403-2) risks, and transportation risks. We prepare injury took place in Finland when a person company’s operations. a risk matrix to define the risk level, and the hit his own finger with a nail gun. To All employees and contractors working Our OHS management is based on risk responsibilities and mitigative actions are prevent similar future injuries, nail guns are under Outotec’s direct supervision have the assessments. We have assessed our defined according to the risk level in question. permanently adjusted to a single fire position. responsibility to work safely and follow our operations globally for health and safety The company follows incidents, hazards globally harmonized procedures and work risks and made mitigation plans. In addition, and development initiatives through its QEHS HEALTHCARE SERVICES (GRI 403-3) instructions. The company provides the each Outotec location continuously assesses management and product compliance necessary procedures, instructions, training risks for hazards and applies the so-called management systems, as well as through We have a global health insurance for our and personal protective equipment. We STOP protocol as the hierarchy of controls to customer feedback collected after each major employees covering business travel. In check annually our procedures and work eliminate hazards and minimize risks. Our delivery and in customer surveys. addition, in certain countries we have instructions for organizational and regulatory employees and contractors have a ‘Stop Work Our hazard and incident reporting more comprehensive health insurance to changes. Authority’ if they see that they cannot perform system for the identification and elimination complement national social security services. the required task safely. of hazards and minimization of risks is Each Outotec location has an external Read also Occupational health and safety related externally audited to ensure the quality. All partner for healthcare services who makes • Management approach, p. 54 risks are considerable in minerals and metals incidents, identified hazards, and unsafe workplace assessments to address ergonomics, processing plants due to chemicals, ecotoxic conditions must be reported with 24 hours and exposure to chemicals for example, and OHS MANAGEMENT SYSTEM substances, dusts and fumes that are typical and they require proper investigation, root proposes protective equipment to avoid work- (GRI 403-1, 403-8) in process industries. Outotec’s specialists cause analysis and corrective and preventive related diseases. Outotec has not identified follow customers’ safety regulations when actions. The local unit head or site manager any major risk of specific occupational In our health and safety work, we follow working on their sites. The greatest safety is responsible for managing the hazards in its diseases. the OHSAS18001 standard and Outotec’s risks arise in countries with low awareness of respective unit or project site. The statistics Outotec has a medical and security operations globally are externally certified safe working practices and underdeveloped are regularly shared with employees. We also services agreement with International against it. Our OHS management system occupational safety culture. In such countries, publish safety alerts of major incidents, SOS. This 24/7 service covers all Outotec

28 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

employees and provides guidance also for TRAINING (GRI 403-5), PROMOTION OF WORK-RELATED INJURIES (GRI 403-9) Read also our service providers and supervised workers HEALTH (GRI 403-6) AND MITIGATION OF • Social data, p. 46 in emergencies occurring during business HEALTH AND SAFETY IMPACTS (GRI 403-7) Most work-related injuries happen during • Product safety, p. 22 trips. Through the related Medical Alerts and service trips or at our own manufacturing or Travel Security Online service, travelers can We have a comprehensive, role-based training assembly workshops. Incidents with hand find information about endemic diseases and program for the use of OHS procedures tools, instruments, chemicals or machinery, other health, safety and security issues, as and instructions, and the training hours are as well as slips and road accidents cause well as country-specific security risk ratings. recorded in a training register. E-learnings most lost time injuries at Outotec. Before any trip, travelers should check risk are reported through the Learning We primarily measure our safety levels and find out what actions may be Management System. Classroom trainings performance through the lost time injury needed to reduce security and health risks. are collected to local training registers using rate (LTIR, lost time injuries per 1 million MS Excel sheets. The basic training for local work hours), while also collecting data on WORKER PARTICIPATION, CONSULTATION safety issues is mandatory for all employees near misses and hazards. In 2018, our LTIR AND COMMUNICATION ON OHS (GRI 403-4) and contractors and it is renewed from 1-5 was 1.9. including employees and supervised years’ intervals. Persons who participate in workers. We did not reach our target to Our entire workforce (100%) is duly high-risk work get more specific and frequent reduce the LTIR by 5% in 2018. represented in formal joint management- training. The main types of work-related injuries at worker health and safety committees to Employees and supervised contractors Outotec are hand tool or instrument injuries, monitor actions, collect feedback, and discuss working on project sites are regularly trained trip or slip injuries, machine or vehicle related health and safety issues in their respective in health and safety matters, the use of injuries, muscular stress, falls and road location or project. The safety aspects protective equipment, hazard identification, accidents. regarding contractors and visitors are also risk assessment and required control One employee died in a traffic accident discussed in these committees. actions. Our e-learning course about travel in Sub-Saharan Africa. This fatality was Outotec has a QEHS responsible person in safety is recommended to all employees and thoroughly investigated, and employees were each location with more than 10 employees. mandatory for all employees who travel for reminded about travel safety and the manda­ Units that have less than 10 people are business. tory e-learning for travelers. There will be represented in the health and safety Our local healthcare service partners a global campaign in 2019 for the safety of committee of their closest larger unit. The conduct regular health checks to ensure ground transportation. EHS Manager as employer’s representative that our employees are in good physical and is leading the local committee, and Safety mental condition. The focus is on preventive Lost time injuries per Officers as employees’ representatives follow healthcare. In addition, Outotec supports 1 million work hours, including employees and the health and safety matters and report of employees’ sports and well-being activities, supervised workers 2018 2017 his/her observations to the EHS Manager. The for example in Finland there are various HS committees meet at least quarterly. company-supported sports clubs organized LTIR 1.9 1.7 Health and safety topics are not covered by the personnel association. Number of employees and in formal agreements with trade unions, supervised workers 6,950 6,680 because they are duly addressed by statutory Total working hours 14,400,000 13,300,000 regulations and laws that Outotec complies with.

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Financial performance and value creation

Financial success is one of the fundamentals Outotec generates employment and wealth over 10%. Our long-term service contracts, SUPPORTING LOCAL BUSINESSES for being able to create value for in local communities as an employer and a as well as modernizations prolonging the stakeholders. Outotec’s long-term financial buyer of goods and services. The company lifetime of older equipment, counteract the As the majority of Outotec’s manufacturing is targets involve profitability and continuous also contributes to local communities through highly cyclical mining and metals industry. sourced from external suppliers, we play an growth. Good financial management is of key university cooperation and subcontracting At the end of 2018, Outotec’s market important role in supporting local businesses importance to Outotec’s success. R&D work. Outotec technologies often capitalization was EUR 563 million. The total and generating employment and wealth in improve the conditions of the environment wealth created by Outotec in 2018 was EUR local communities. In the recent review of material topics surrounding customers’ plants. 263 million. Due to the negative result in 2017, In large projects, our indirect impact can with stakeholders, financial performance In 2018, Outotec paid EUR 7 million in no dividend was paid to shareholders in 2018. be considered significant, as several hundred was raised a topic having a major impact current income taxes. Outotec neither paid As employees are Outotec’s key asset, the local engineers and other specialists, on stakeholders, a fundamental Outotec dividends nor contributions to charities in most significant economic value distributed is contractors and service providers work for must take good care of. The company’s 2018 due to negative earnings per share in wages and salaries, which amounted to EUR us. A single large project can consist of over financial performance has a direct impact 2017. To enhance its ability to create value 313 million in 2018. 10 million working hours at customer’s site. on employees’ wealth and commitment, over the cycle, Outotec aims to maintain its Long customer relationships and 2,500 Most of this work is done by local suppliers or stakeholder value, jobs available and tax leadership in sustainable technologies and active suppliers are also essential resources subcontractors. income of local communities. grow its service business. for Outotec, since some 90% of our In 2018, we spend EUR 266 million on Our financial performance and risk manufacturing (based on monetary value) is suppliers that are local to our major management is comprehensively covered DIRECT ECONOMIC VALUE GENERATED sourced from external suppliers. operations (Finland, Australia, Germany, in and, whereas this report focuses on the AND DISTRIBUTED (GRI 201-1) South Africa, and Chile). This represents 54% value creation, our impacts, and financial SIGNIFICANT INDIRECT ECONOMIC of our total supply spend. The remaining implications due to climate change. We made significant progress in several areas IMPACTS (GRI 203-2) supply spend was distributed among 43 in 2018. Our order intake increased 4%, sales countries. Read also increased 12%, and profitability continued to Large mines and processing plant • Management approach, p. 55 improve in the Minerals Processing segment. investments – built with Outotec technology Read also • Financial Statements 2018, The profitability turned negative due the EUR – considerably boost the development of • Our procurement practices, p. 26-27 www.outotec.com/investors 110 million provision for the ilmenite smelter the host country and its economy. They may • Corporate Governance Statement 2018, project booked in the fourth quarter of 2018. create hundreds or thousands of new jobs, TAX IMPACTS www.outotec.com/cg Excluding this provision, our adjusted EBIT while also leading to the establishment would have almost doubled from EUR 34 of new industrial plants and growth of In 2018, Outotec paid a total of EUR 6.2 VALUE CREATION million in 2017 to EUR 64 million. Our cash businesses along the value chain from natural million in corporate income taxes. The table flow strengthened and was EUR 70 million. resource extraction and secondary resources below lists the corporate income tax rates The key resources for value creation are the We simplified our organizational structure to finished products. In such plants delivered for Outotec in the countries where we were deep know-how of Outotec’s 4,012 experts, during the first half of the year to support our by Outotec, the indirect economic impacts are subject to corporate income taxation in 2018. 6,467 national technology patents, three long-term strategic targets. Our plan is also considered significant. In Finland, Outotec paid EUR 2.7 million research and development centers, as well as to strongly develop our service business to Outotec has been active in developing the in income taxes, and in other countries EUR the Outotec brand. In addition, long customer balance the cyclicality of the mining industry. resource-based industries in many developing 3.4 million. The effective tax rate was 11%. and supplier relationships are essential Our service sales in 2018 were EUR 497 countries, such as Mongolia, Kazakhstan, and The effective tax rate in 2018 was negatively resources for the company. million and our target is to grow it annually by Zambia, to mention a few. impacted by a EUR 7.6 million write-down

30 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

Our value creation

Customers • Sustainable products and services Sustainable use • Long-term support and partnership Intellectual of Earth´s natural • Social license to operate • Outotec brand and reputation recources • IPRs, 761 patent families • Tacit knowledge Business activities Planet Earth

• 2 R&D centers, 1 Dewatering technology center • Emissions avoided 6.2 million tonnes of CO2e, • R&D, raw material testing, product valued at EUR 96 million management, EUR 57 million Operational • Increased resource efficiency • Operations in 42 countries • Sales EUR 1,276 million • 2 manufacturing units, 7 assembly or • Marketing Employees service workshops, 1 ceramic plate • Engineering • Wages and salaries EUR 313 million production unit, several warehouses • Wealth and professional growth • Sourcing EUR 570 million • Safe workplace, LTIR 1.9 Natural • Manufacturing • Respecting human rights • ISO 14001 global certification for environmental • Delivery management • Installation and commissioning • Materials used Steel 3,481 t; Wood packaging 348 t Suppliers • Energy consumption: 155 TJ • Life-cycle support for customers • Long-term partnerships • Water withdrawal: 63,175 m³ • Economic sustainability, EUR 570 million spent on suppliers • Responsible business practices Human • 4,012 employees Academic community • Outotec culture • Subcontracted R&D work EUR 8 million • 2,750 supervised contractors • Thesis opportunities and internships for students

Social Local communities • Long customer relationships • Employment and wealth • 2,500 suppliers • EUR 266 million spent on local businesses • Relationships with the academic community • Current income taxes EUR 7 million ECONOMIC VALUE GENERATED • Community investments 0

Investors and financiers • Market capitalization EUR 563 million Financial Sales EUR 1,276 million ./. Operating costs EUR 1,014 million • Compliance and transparency • Capitalization EUR 377 million, of which • Net finance expenses EUR 7 million - EUR 227 million funded by equity and = Value generated EUR 263 million • Interest on hybrid bond EUR 11 million - EUR 150 million by a hybrid bond 0 retained in the company • Dividends 0

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of deferred tax assets relating to expiring sales, which in turn is affected by our product challenging to navigate; however, we are We are committed to be a tax losses. Without this one-time item, our mix and locations of customer projects. We committed to be a responsible, compliant tax effective tax rate would have been 21%. have transparent communication with the tax payer in each country where we operate. We responsible, compliant tax payer in Outotec also pays, collects and remits authorities in every country where we operate. pursue transparency and fairness in our tax each country where we operate. other taxes and tax-like payments, such as As a globally operating company, practices, and do not engage in aggressive tax value added and sales taxes, payroll taxes and Outotec engages in a variety of tax laws, planning. capital taxes. Our total tax contribution varies regulations, practices and interpretations. Outotec delivers large projects, and depending on the geographical distribution of The international tax environment is often there is only one project ongoing in a country. Due to the confidential nature of and subcontracting R&D work, which the information we cannot disclose country generates local jobs and enhances skills and specific financial information. Also, the knowledge development. Ongoing research Country Corporate income tax, % Country Corporate income tax, % destinations of our sales typically do not and development activities run together correspond with the places in which the work with our external partners received EUR 2.5 Australia 30 Namibia 32 and sales activities are performed, value million in public funding. We additionally Austria 25 Netherlands 20–25 created, and where the income must be subcontracted work packages out to Bahrain 0 New Caledonia 30 reported, and taxes paid. Providing country- universities and mainly small and medium Brazil 34 Norway 23 specific tax information would not give a sized enterprises for more than twice this Bulgaria 10 Panama 25 comprehensive picture of the fairness of the sum, over EUR 7.7 million. We also cooperate tax distribution in Outotec’s case. with local universities to enhance the skills Canada 25.8 Peru 29.5 and knowledge of students and decision- Chile 27 Philippines 30 Read also makers and train future plant operators and China 25 Poland 19 • Financial Statements 2018, service personnel. Finland 20 Qatar 10 www.outotec.com/investors FINANCIAL IMPLICATIONS DUE TO Germany 29.2 Russia 20 OTHER LOCAL IMPACTS CLIMATE CHANGE (GRI 201-2) Ghana 25 Saudi Arabia 20 Greece 29 Serbia 15 Where Outotec has long-term service The megatrends identified as impacting India 30.9 South Africa 28 contracts with customers, maintenance and Outotec’s business most are: Urbanization, Indonesia 25 Spain 25 service personnel are normally hired locally Resource efficiency, Sustainability, and we train them for their specific tasks Digitalization, and Volatility. Overall, Iran 25 Sri Lanka 28 after the plant has been built. these global megatrends appear to bring Kazakhstan 20 Sweden 22 Often Outotec technologies help to Outotec more opportunities than threats. Mexico 30 Turkey 22 improve the environmental conditions of In terms of climate change, Urbanization, Mongolia 10–25 United Arab Emirates 0 the communities surrounding customers’ Resource efficiency, Sustainability and plants, which improves the living conditions of Digitalization have the largest impact on our Morocco 10–31 United Kingdom 19 people, contributes to a healthier population key stakeholders, particularly customers, Mozambique 32 United States 25 and boosts agriculture and small businesses. employees, suppliers and investors. The Zambia 35 Outotec also contributes to local financial impacts for Outotec are estimated communities through university cooperation mainly to be changes in revenue due to

32 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

changing regulation, customer needs and reduce landfill while producing clean energy. FINANCIAL IMPACT OF EMISSIONS opportunities of digitalization. In 2018, our expectations of local communities. Carbon taxes favor our energy efficient AVOIDED investments amounted to EUR 21 million, technologies that fulfill even stricter future consisting mainly of IT programs and REGULATORY OPPORTUNITIES AND RISKS standards. In emission trading, customers The financial impact of the annual emissions intellectual property rights. can get positive cash flow which they can avoided by Outotec’s customers using six Most of Outotec’s opportunities and some use for new investments or buying services Outotec technologies is 6.2 million tonnes risks caused by regulation changes relate from us. Outotec’s advanced technologies CO2e in total. This amount of emissions to resource efficiency and sustainability. and inclusion in the Global 100 Index of most equals the annual CO2e emissions of a Eco-toxic substances from metallurgical sustainable companies help customers to city with one million inhabitants, such as operations can impact air quality, water, and gain social acceptance and financing for for example Helsinki. The CO2 European soils and cause health problems. If cus­tomers their projects. If we fail to keep our portfolio Emission Allowances Commodity Price do not fulfill the tightening environmental competitive, we may lose market share, which (https://markets.businessinsider.com/ regulation or gain social acceptance, they may may impact stakeholders’ decisions on us. commodities/historical-prices/co2- be forced to close their operations, which may emissionsrechte/euro/1.1.2018_31.12.2018) reduce our possibilities to sell technology and OTHER OPPORTUNITIES AND RISKS (accessed Feb 11, 2019) was EUR 15.46/ services in the long run. tonne CO2. By using this price, the value of the With declining ore grades and more Urbanization and digitalization offer mainly emissions avoided in 2018 was approximately complex ore bodies, together with stricter new business opportunities and revenues EUR 96 million. Using similar calculating environmental regulation, our customers will for Outotec. Our customers need greater method, the financial impact of our own need to replace inefficient processes with production capacity and sustainable emissions was EUR 177,000, and that of our new sustainable solutions, which provides technologies to fulfill the needs of the fast- supply chain EUR 8 million. business opportunities and revenues for us. growing middle-class consumers. As the concept of circular economy Digitalization offers new means to OUR WAYS TO MITIGATE CLIMATE gains ground, we can sell more solutions for combat climate change. Cost-efficient and CHANGE RELATED RISKS metals production from electronic waste, interactive partnership models support metallic scrap, battery paste or scrap, and performance-based earnings and new value We continuously develop our technologies, mining and metallurgy related wastes. The creation models using our unique process new business concepts and modular transition to electric vehicles will bring more technologies. Closer engagement with products. In 2018, we spent EUR 57 business opportunities for our technologies our customers, and the provision of timely million in R&D and product development for battery metals and chemicals processing data over entire product life cycles open to further improve the resource efficiency and recycling. opportunities for new products, systems and competitiveness of our products. Some The regulation and demand for closed and services. Advanced ICT systems offer 80% of our R&D projects were related to water cycles, tailings management and business benefits and cost efficiency for initiatives targeting improved metals recovery, renewable energy will increase. Our Outotec. energy saving, waste min­imization, emission tailings and water management solutions If more agile players are entering the reduction and/or safety improvement. enable mining companies to solve their market, especially in high-value digital Digitalization is seen to play a major environmental challenges. We also offer solutions, we may lose market share in our role in mitigating climate change. We are waste-to-energy solutions that significantly traditional areas. continuously investing in ICT to utilize the

33 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

Ethics, compliance and governance

We foster good governance and ethical substantiated in the HR policies, QEHS Policy a computer completed the Code of Conduct MECHANISMS FOR ADVICE AND CONCERNS business practices, value integrity in all and Supplier Policy. training. In addition, all Executive Board ABOUT ETHICS (GRI 102-17) contexts, and strive for protecting Outotec’s members and their direct reports have signed good reputation. MISSION, VALUES AND CODE a specific declaration of compliance related to Our SVP – Legal, Contract Management and OF CONDUCT (GRI 102-16) Outotec’s compliance program and policies. Corporate Responsibility, who is a member In the recent materiality review with Outotec also requires its new sales agents of the Executive Board, has the overall stakeholders, Ethics, compliance and In line with our mission, Sustainable use and representatives, as well as the existing accountability for corporate responsibility governance was regarded as one of the of Earth’s natural resources, Outotec is ones when their contract is renewed, to including mechanisms to seek advice about fundamentals constituting the foundation for committed to protecting the environment commit to Outotec’s principles. The company and report on unethical behavior. The Chief our sustain­ability. in all its activities. We strive to serve our also conducts compliance checks on new Compliance Officer reports unethical behavior Outotec endorses responsible business customers using our wide range of leading cus­tomers and project related third parties. and non-compliance cases – reported through practices and complies with national minerals and metals processing technologies All projects of a certain size or complexity Compliance Helpline or otherwise – and and international laws and regulations. and life-cycle services. Our commitment to are subject to a specific risk assessment actions taken quarterly to the Audit and Risk The company has zero tolerance against sustainability binds us to take a holistic view which includes various compliance and ethics Committee of the Board of Directors. There corruption, works against corruption in of our cus­tomers’ business. queries and escalations for the identified are no independent mechanisms for advice all its forms, and requires its suppliers Outotec’s values, as presented on p. 24, risks. They may involve more detailed and concerns about ethics in use. and business partners to follow the same were redefined during 2018 using virtual co- investigations internally, or through a third Outotec’s Compliance Helpline on the principles and fully comply with all applicable creation; all employees were invited to share party, and may result in Outotec declining to company website is available for anyone to anti-corruption laws. their thoughts and participate in shaping bid for certain projects. In addition, unknown raise concerns related to corruption, human the values that guide Outotec people going and potential risk customers, suppliers or rights or any unethical behavior. All concerns Read also forward. agents are regularly being assessed for raised are treated confidentially, and there • Management approach (GRI 103-1, 103-2, These values and Code of Conduct compliance risks using a dedicated external is a clear no-retaliation policy. More severe 103-3), p. 55 (www.outotec.com/company/about-outotec/ tool with escalation paths. compliance cases may be submitted to • Equal opportunities and labor practices, code-of-conduct/) define our common way Outotec’s Compliance Board, whose members p. 23 of working. Our Code of Conduct sets out ASSESSING HUMAN RIGHTS RISKS are the Chief Compliance Officer, the General the principles of business conduct and gives Counsel, the Chief Financial Officer and the ETHICS AND COMPLIANCE guidance to our employees and external Potential risks and human rights impacts in Head of Human Resources. In 2018, there stakeholders on ethics, compliance with Outotec’s business relate to project site work were in total 67 Compliance Helpline cases Outotec respects the internationally pro- laws and regulations, solid governance and in high-risk countries. Outotec has assessed investigated and received from all channels claimed human rights in line with the com- management of sustainability and risks. The the human rights risks in its own operations, (website, intranet, email, verbal etc.). pany’s commitment to the United Nations Code is approved by the Board of Directors, with the focus on service and manufacturing Guiding Principles on Business and Human and all employees and business partners are sites. As a result, no significant human OPERATIONS ASSESSED FOR RISKS Rights. The company has also joined the expected to follow it. rights risks were identified. Based on the RELATED TO CORRUPTION (GRI 205-1) United Nations Global Compact Initiative and Outotec’s target is that employees assessment, working conditions guidelines is committed to its Ten Principles, as well as participate in e-learning on the Code of regarding blue-collar workers have been Outotec’s strategic and operational risks are the principles of the Universal Declaration of Conduct or attend the related classroom created during 2018. These guidelines were described at www.outotec.com/investors, and Human Rights. These commitments are re- training on a regular basis. During 2018, 94% aligned with the UN Guiding Principles. the company’s risk management policies, iterated in Outotec’s Code of Conduct and of permanent employees with daily access to responsibilities and processes are set out in

34 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

our Corporate Governance Statement 2018 on available to all employees. Directors are described in our Corporate pages 9–10, www.outotec.com/cg. Governance Statement 2018. There is no We conduct specific compliance Our risk management is based on our CONFIRMED INCIDENTS OF CORRUPTION correlation between the compensation for checks in high-risk countries. Enterprise Risk Management Policy. AND ACTIONS TAKEN (GRI 205-3) Board members and Outotec’s social or Environmental, social and economic environmental performance. The Board of sustainability related risks are covered in the In 2018, six compliance investigations were Directors’ diversity principles are also detailed project risk assessment tool, which is used conducted related to corruption. These in Corporate Governance Statement. Based Health and Safety Policy define the basic to assess all new projects worth at least cases have been closed with appropriate on these principles, the Board members must requirements for Outotec’s environmental, one million euros. Appropriate follow-up actions implemented and they did not lead have the necessary knowledge and experience social and economic sustainability. We actions are defined based on these findings. to termination of any employment contracts. regarding the business, social, and cultural continuously train our employees and The assessments are project-specific, and Outotec has not been the subject of any conditions in the most significant markets suppliers on these principles. for this reason the number and percentage contract terminations or public legal cases to Outotec’s business; while they must also Outotec’s Executive Board reviews and of operations could not be reported. No against Outotec or its employees in 2018. constitute a fair and balanced combination approves our Sustainability Agenda as significant risks related to corruption were of professional experience, skills, gender, well as sustainability strategy, targets and identified and escalated from the project risk INCIDENTS OF DISCRIMINATION AND nationality, knowledge, and variety of opinions reporting. The Board of Directors approves assessment. CORRECTIVE ACTIONS TAKEN (GRI 406-1) and backgrounds considering Outotec’s our Statement on Non-financial Information, In 2018, specific internal audits were current and future needs. published as part of the Financial Statements, conducted in Mexico and Russia, and audits We monitor the number of filed, addressed Outotec’s long-term objective is to have covering the environment, social and concerning GDPR. Follow-up audits were and resolved grievances about labor a fair and balanced representation of both employees, anti-­corruption and human rights done in Brazil and for the Sell process. practices. Outotec’s compliance helpline and genders in the Board. When preparing for related topics. Our SVP – Legal, Contract Outotec also conducted specific compliance other feedback channels are available for nominations to the Board of Directors, Management and Corporate Responsibility, due diligence checks for identified high risk all employees and external stakeholders for Outotec’s Nomination Board aims to ensure who is a member of the Executive Board, countries. Such investigations led to five raising concerns. that these diversity principles are followed, has the overall accountability for corporate project opportunities from three customers In 2018, nine reported incidents of that the Board functions well as a whole, and responsibility. being declined due to compliance concerns. discrimination were filed through formal that the competence profile of the Board of Our corporate level Product Board is grievance mechanisms within Outotec. These Directors supports Outotec’s existing and responsible for the sustainability of our COMMUNICATION AND TRAINING ABOUT incidents were reviewed locally, in cooperation future businesses and is consistent with our products and services. It oversees and steers ANTI-CORRUPTION POLICIES AND with global Human Resources function and/ strategic goals. Outotec’s approach in product and technology PROCEDURES (GRI 205-2) or the Chief Compliance Officer and have development and the related innovation been closed with remediation action plans Read also ecosystem and consists of the Executive Outotec’s internal and external audit implemented and results reviewed through • Corporate Governance Statement 2018, Board members, Chief Technology Officer processes consider any corruption suspicions our routine management review processes. www.outotec.com/cg (chairman), and business unit representatives. and fraudulent acts that may occur. We train These incidents have led to the termination of • Product compliance, p. 22 Corporate Product board decides, among our employees in connection with audit one employment contract. other things, the sustainability measures and activities at our market area operations MANAGING SUSTAINABILITY development targets of Outotec’s products. regarding anti-corruption policies and GOVERNANCE STRUCTURE (GRI 102-18) In addition, each business unit has its own procedures for preventing misconduct and The Code of Conduct, Supplier Policy, HR poli­ Product Board to manage the sustainability of crimes. Virtual training, processes and The work, duties, composition, committees, cies, Donation and Employee Volunteering its products and services. guidelines on anti-­corruption are also and remuneration of the Board of Policy, as well as Quality, Environment, Sustainability is integrated into all relevant

35 OUTOTEC / SUSTAINABILITY REPORT 2018 OUR PERFORMANCE

organizational functions, such as Quality, Environment, Health and Safety; Supply;

Human Resources & Communications; Board of Legal & Contract Management and Finance Directors & Control. We have a Sustainability Working Group, whose core team coordinates sustainability work and meets frequently whenever needed. Sustainability-related personal targets are included in the annual bonus plans of the CEO Executive Executive Board members, QEHS managers, Board and environmental and sustainability managers. Inventors working with new, patentable solutions receive monetary rewards for their inventions. Furthermore, Outotec rewards all employees for making Head of Legal Product Board proposals that improve the sustainability of & CM & CR CTO the company’s internal processes.

Sustainability Working Group

Sustainability aspect

Strategy People Supply chain Governance Head of Head of Human Head of and compliance Strategy Resources Supply Head of Legal & CCO

QEHS Finance Investor Communications Head of Operational and tax Relations Head of Excellence CFO Head of IR Communications

36 OUTOTEC / SUSTAINABILITY REPORT 2018 CASES

Customer view on sustainable mining

In a world that is rightly showing increasing FUNDAMENTAL CHANGE THROUGH interest in the sustainable use of natural SUSTAINABILITY resources, mining companies are examining their ways of operating. Many – the leading Anglo American has in place a comprehensive ones in particular – have long realized that and ambitious approach to sustainability, and the sustainable mining is not one alternative company’s Board of Directors gives its full support to this transformation program. Anglo American among many: it is the only possible way does not claim to have all the answers yet, but it forward. Outotec’s customer Anglo American works hard to continuously develop the sustain­ has placed responsible operations and able management of energy, water and tailings, to ethical business at the top of the company’s name a few environmental examples. agenda. “We have a long history of providing people with healthcare, for instance retro-viral HIV medication. Tony O’Neill, Group Technical Director at Anglo We have traditionally had very strong local American, crystallizes the sustainability chal­ procurement, and we acquire goods and services lenges and opportunities of the mining industry from local businesses around mines, supporting into one word: community. Mining companies local economies, whenever possible. Recently we need to engage with host communities as an began developing a project in Peru and were able intrinsic part of how they do business. They need to gain public approval in an environment that to operate in collaboration in ways that contribute has historically been challenging. With active and to societal wellbeing – by providing employment, respectful dialogue, we can find common ground.” supporting local services, ensuring the safety of people, and protecting the environment. This way, LEADING THE WAY TO A SUSTAINABLE they can be welcome members of, indeed partners FUTURE in the community, and leave a positive and lasting handprint. Anglo American aspires to be a global leader “We have a role to play in changing the fabric of in sustainable mining. The big question is, “Is society in, for instance, countries with high poverty the industry ready to follow?” O’Neill thinks the rates so that we help improve people’s lives. This answer is “Yes”. A mining company that does means that the managers of the future should not operate sustainably does not have a future. be as much community leaders as engineers – a The forerunners, on the other hand, will be change that requires us to re-educate our people able to seize the opportunity to also reset some to cater to this need. But, we already have the will of the cost curves. After all, profitability and and the right mindset, and that is key to making a sustainability do go together – and efficiency difference,” O’Neill says. improves both. “Open platform cooperation with technology companies such as Outotec is critical to the sustainable development of the industry. With the right technological innovations, the already existing push – and pull for responsible mining, and the passion of people in the industry, we can see significant changes as soon as five years from now. All we need to do is pick up the pace and go for it, together.”

37 OUTOTEC / SUSTAINABILITY REPORT 2018 CASES

Revolutionizing urban infrastructure

Diminishing natural resources and the and character of existing industrial side streams construction. Other parties involved in the project UTILIZING EXISTING SIDE STREAMS disposal of industrial side streams to find new and recyclable urban construction include Saimaa University of Applied Sciences, FOR A LARGER REVOLUTION Imatra Regional Development Company, FIMAtec, pose a global challenge. This provides products. Products that could replace materials Nordkalk, Metsä Group, UPM, Stora Enso, such as cement, at least in part. Receiving an Outotec has been involved in the process planning opportunities for finding new ways to Totaldesign and Design Reform. 80% funding from the Urban Innovative Actions of the project, providing also equipment for the utilize existing raw materials. Relying Promising recipes have already been developed initiative, the project kicked off in late 2017. The refining process. Janne Kauppi, Director of on sustainable innovation, Outotec has from the gathered materials on Apila Group’s side. focus of the project is on South Karelia, where Minerals Processing at Outotec, says that from A geopolymer-based solution was selected as the developed a circular economy concept there is a significant base of key raw materials the perspective of sustainable development, cementing material and the solution that will be together with Lappeenranta University relevant for the project. the project is highly innovative. “Combining incorporated into 3D printing. Next steps include of Technology to revolutionize urban additive manufacturing with the characteristics adjusting the rheology of the materials for 3D infrastructure using existing industrial SEEKING SUSTAINABILITY THROUGH of geopolymer products creates great potential printing purposes, to be scalable. The materials for increasing construction speed, not to mention materials. SCALING will also be tested for their suitability for arctic decreasing waste.” conditions. The collaboration between the different players In the fall of 2016, representatives from Outotec Spanning until October 2020, thus far the “Everything we do on a small scale must involved in the project are in a crucial part, when and Lappeenranta University of Technology (LUT) work has revolved around the gathering and be executable on a large scale,” says Mervi it comes to supporting the green reality network were mulling over an idea. How to better tap into characterization of local side streams. Research Matilainen, CEO of Apila Group. “It also needs and urban infrastructure of South Karelia. “People existing industrial side streams and utilize them teams from Lappeenranta University of to adhere to sustainability and safety standards and collaboration are at the heart of this project, for urban infrastructure? Brewing into a larger idea Technology have gathered and analyzed over 20 all the way. No short-sighted decisions are made and they will determine its success,” says Kauppi and involving the City of Lappeenranta and circular different industrial side stream samples, primarily at any point – the end results will be entirely from Outotec. “So far, this has been an extremely economy expert Apila Group, the idea turned into a from the pulp and mining industries. Apila Group sustainable and executable.” successful application for EU funding. has tested the potential of these samples for gratifying revolution.” The project would approach the manufacture new and sustainable raw materials for urban

38 OUTOTEC / SUSTAINABILITY REPORT 2018 CASES

Meeting the needs of the rising battery metals industry

With the world’s natural resources diminishing, industrial players are looking at new ways to utilize existing raw materials and find recyclable solutions. Outotec’s long experience in hydrometallurgy as well as high-temperature- and pyro-metallurgy have resulted in several promising projects relevant for the growing battery industry.

In 2018, the European Commission appointed Finland as the country to co-ordinate research on recycling in the battery industry. Outotec and Aalto University will be two key players in the strategic planning of building this research area in Europe. Business Finland is also strongly involved in the project. Ilkka Kojo, Director of Sustainability at Outotec, is tasked with leading the battery recycling sub- group of the implementation working group (IWG). Battery metals and their recycling is a relatively new and highly important research area for Europe. “This is a significant project, and co-operation and co-creation between different players in this research area is an important factor driving our work,” Kojo says. According to Kojo, the production of primary production and further to battery chemicals hydroxide that is to be used in the production of significant circular economy aspect,” says Pertti materials is a high priority for Outotec, especially production and recycling. batteries. Lamberg, CEO of Keliber. “Our clients get high- when combined with the recycling of secondary “Finland has significant production levels Outotec has been involved in the Keliber project quality lithium chemical and the by-product is materials which integrates well into primary of relevant battery raw materials and mineral feasibility study, in planning and executing the utilized sensibly.” processes. resources that are exceptionally rich in metals,” pilot, and finally with Keliber incorporating the The tests were completed at the end of 2018, The implementation working group in recycling says Lundström. “Finland is in an excellent results of the feasibility study into an actionable and the results will be obtained during the is tasked with scoping the research and identifying position to be in the front line of industrial and lithi­um hydroxide production plant. first quarter of 2019. Based on the results, an the key players, competence areas and ongoing research solutions when battery recycling hits the The pilot program has involved a unique and evaluation of the feasibility of taking battery grade research projects in battery recycling, both in markets on a large scale.” alternative hydrometallurgical treatment of the lithium hydroxide into production will be made. Finland and Europe. Mari Lundström, Assistant spodumene concentrate containing the lithium. “Open platform cooperation with technology Professor of Hydrometallurgy at Aalto University, CIRCULAR ECONOMY SOLUTIONS FOR THE Outotec’s new alkaline leach process involves an companies such as Outotec is critical to the has established the BATCircle consortium BATTERY INDUSTRY economically viable new direct processing route sustainable development of the industry. With (Finland-based Circular Ecosystem of Battery from spodumene to lithium hydroxide. Unlike the right technological innovations, the already Metals), which investigates new technologies Another significant project for Outotec in battery the competing hydrometallurgical methods, this existing push – and pull for responsible mining, and business opportunities for improved metal metals production is the lithium hydroxide method is sulphate-free. As a result, the process and the passion of people in the industry, we can recovery from primary raw materials as well as program with mining company Keliber. The residue is environmentally-friendly, readily see significant changes as soon as five years from from recycled batteries. joint project between Outotec and its long-term neutralized and reusable. now. All we need to do is pick up the pace and go The focus is on all the steps of the battery collaborator partner Keliber is to develop, test “The residual from our soda pressure leach for it, together.” metals’ life time, from mine to metallurgical and design the production of high-purity lithium treatment is highly pure and usable, creating a

39 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

Data collection

ECONOMIC DATA leased assets are included in the reported SOCIAL DATA SIEVO spend management software. The figures. methodology of calculating supply chain The economic data in this report is based Performance data on environmental Data on our employees was collected applying emissions are based on Outotec’s spending on data collected through our enterprise aspects has been collected from our major a global master data system based on SAP and carried out using a scope 3 screening resource planning and management reporting business units for electricity use, district Human Capital Management. The system tool developed by GHG Protocol and Quantis. systems. The figures used in Outotec’s heating and cooling, owned and leased includes accurate data on Outotec employees To be able to use the scope 3 screening tool, consolidated Financial Statements 2018 have company cars, water use, material use, globally, covering all business units and Outotec’s spend on supply was converted been prepared according to the International recycled waste, and landfilled waste. The providing basic information on all employees. from EUR into USD. In 2018, the EUR to USD Financial Reporting Standard. In addition, report also includes information on the Data on performance development dialogues annual average exchange rate was 1.129 some data has been collected manually from combustion of fuels in company-owned (PDD) is compiled from the PDD tool based on (source: http://x-rates.com). Microsoft Excel spreadsheets. combustion sources (scope 1 emissions), and Success Factor system. To collect data on human rights and figures on hazardous wastes, which were Our Learning Management System compliance, a questionnaire in the form of Read also mainly generated in our research centers, provides information on Outotec’s own global Microsoft Excel sheets was sent to the • Financial performance and value manufacturing workshops, and ceramic plate training programs and e-learning modules persons responsible for human resources creation, p. 30 production plant. concerning vocational training and Code of in each location. Compliance data was also • Financial Statements 2018, Scope 3 emissions regarding business Conduct training. However, it is not possible collected from the feedback received through www.outotec.com/investors flights is received from our partner CWT to categorize training hours by gender, region Compliance Helpline and other feedback Travel. The partner changed their reporting or employment category in the current channels. ENVIRONMENTAL DATA system in 2018, and for this reason the data system. Local training data is collected with for 2017 has been restated. Microsoft Excel sheets from HR personnel Read also Environmental data has been collected In 2017, Outotec purchased a new in the market area offices. The training of • Social data, p. 46 through our Environment and Health and database for industrial data used in handprint blue-collar workers normally takes place in • Health and Safety, p. 28 Safety reporting platform. Each location’s data calculation. According to the new data, the classroom and those hours are not reported • Responsible supply chain, p. 26 is compiled on Microsoft Excel spreadsheets baselines for targets related to the emissions in the Learning Management System. • All historical data, https://viz.tools. and fed into our Lotus Notes database. The avoided had changed. Training hours on health and safety are investis.com/outotec-csr/dct/review/ data is then analyzed and combined into a Environmental data from Outotec’s project compiled from the Health and Safety index.html#invdct_navigation single file to facilitate calculations. site operations was excluded from the data reporting system and they cover both Outotec The environmental data is available for collection. All the local subsidiaries from employees and supervised contractors on Outotec’s largest business units. Our smallest which the data was collected are fully owned project sites. offices with typically fewer than 10 persons by Outotec, and for this reason, no allocations Outotec’s global health and safety were not able to report environmental data, to subsidiaries regarding the environmental reporting system is used for data collection because they are in large office premises indicators were made. and to map out and monitor progress towards together with other companies. They pay a common health and safety targets in all monthly lump sum to office space providers, Read also Outotec operations. Data about employees and therefore it is not possible to determine • Environmental impact of our own traveling in high-risk countries was collected their specific electricity, heat, or water operations, p. 41 from the Travel Tracker system used as part consumption. of our Global ISOS service. Our principle in collecting the Supply chain data is collected using environmental data is operational control, and the Global Supplier Database and from the

40 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

Environmental impact of our own operations

Although the environmental impact of 2018. This workshop is included in the 2018 hazardous materials need to be handled, maintenance workshops. our own operations is relatively modest environmental data. specialized contractors are commissioned to Our Finnish workshops in Lappeenranta, in comparison to our value chain, as the The management’s commitment to the dispose of these materials safely and in line Turula and Turku report the amount of work is mainly done in offices, we strive continuous improvement of our environmental with local legal requirements and customers’ packaging they use annually to Finnish to operate with minimum inputs of energy performance is reflected in both ambitious requirements at construction sites. Packaging Recycling Ltd (RINKI). Data from and materials. We closely monitor our target-setting and results. We evaluate other locations is reported and consolidated consumption of electricity, heating and the environmental aspects of our offices, MATERIALS USED (GRI 301-1) annually. water. Sustainability, pollution prevention research centers and manufacturing and sound environmental management are workshops, and set annual targets based on ENERGY CONSUMPTION WITHIN THE required in all our operations. this evaluation. Outotec operates according Materials used, tonnes 2018 2017 ORGANIZATION (GRI 302-1) to globally harmonized business processes. Paper 30 41 The bulk of our operations involve The company is globally certified to ISO 9001 Our total electricity and fuel consumption engineering and business management in (quality), ISO 14001 (environment) and OHSAS Steel 3,481 3,624 from non-renewable sources slightly declined subsidiaries and branch offices located in 18001 (safety) standards. In addition, the Ceramics 37 49 from 2017. We did not directly consume

42 countries. Only a few of them require locations in Finland and Germany are certified Cardboard packaging 25 17 any renewable fuels, or sell any electricity, an environmental permit, and the risks to ISO 50001 (energy). Our performance is heating, cooling or steam in 2018. However, related to these operations are managed followed-up regularly through internal and Plastic packaging 2 3 we purchased 8,639 MWh electricity based by certified environmental management external audits. Wood packaging 348 186 on renewable hydropower in Finland and systems. Approximately 90% of Outotec’s Environmental criteria are considered Germany. This corresponds to 51% of our Renewable materials 403 245 manufacturing is outsourced, and we report whenever we select new office premises. electricity consumption and 21% of total the carbon emissions of our supply chain Outotec’s two largest offices, in Espoo, Non-renewable materials 3,520 3,676 energy consumption. separately. Our reporting of environmental Finland, and Oberursel, Germany, fulfill Figures for energy consumption are data covers Outotec’s premises and LEED® Gold requirements regarding the We report the materials used globally by collected globally from our operations based employees, as well as supervised workers at construction. Leadership in Energy and Outotec operations, excluding the materials on the energy-related invoicing in each our project sites. Environmental Design (LEED) is a globally used by our equipment suppliers and location. The conversion factors between In 2018, we had research centers in recognized green building certification construction site operations. energy units are taken from Statistics Finland, Germany; a pilot plant and R&D unit program. The consumption of renewable materials Finland (www.stat.fi/tup/khkinv/khkaasut_ in Australia; a Dewatering Technology Center, At our research centers, we record (wood, paper and cardboards as packaging polttoaineluokitus.html). two manufacturing workshops and a ceramic monthly our consumption of electricity and materials) has increased mainly due to the plate production plant in Finland; assembly natural gas and other fuels used for test increased use of wood packaging in the ENERGY INTENSITY (GRI 302-3) shops in Brazil, Canada, China, and the USA; purposes. Lappeenranta manufacturing shop. However, spare parts and service workshops in Qatar, Our waste management system provides digitalization has enabled a decrease in the Our energy intensity calculations include fuel, United Arab Emirates, Mozambique and for the collection, sorting, storage and use of paper throughout the company. electricity, heating, cooling and steam South Africa; and several warehouses. None disposal of waste on our own premises. The use of non-renewable materials such consumed within Outotec. of these sites are in or adjacent to protected Outotec employees are instructed to separate as steel, ceramics and plastic packaging, areas or areas of high biodiversity value (GRI different types of waste for sorted collection. decreased in 2018. Steel is the single most 304-1). Outotec closed its service workshop Where hazardous wastes such as radioactive, used material and we mainly use it in our in the United Arab Emirates at the end of flammable, explosive, toxic, corrosive or bio- Brits and Lappeenranta manufacturing and

41 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

Energy consumption, TJ 2018 2017 REDUCTION OF ENERGY In 2018, we defined energy targets for CONSUMPTION (GRI 302-4) the third time in Germany: 2% reduction in Direct energy consumption: 51.1 50.4 electricity use by the end of 2019. 105% of Propane gas 8.4 11.4 To support the achievement of Outotec’s CO2 the reduction targets were met already in Light fuel oil and gasoline 27.4 24.2 reduction targets, Outotec has a global annual May 2018. For 2019, we expect an additional energy reduction target of 1% until 2025. reduction of energy consumption by Coal, coke, semi coke 0 0.03 Outotec implemented an Energy optimizing the building usage. The principles Natural gas 15.2 14.8 Management system based on ISO 50001 will be enlarged globally to other Outotec

Indirect energy consumption: 103.8 109.4 in five locations in Finland in 2017 and in locations in the coming years, and a full four locations in Germany in 2016. All certification will be considered case-by-case. Electricity (incl. cooling)* 60.6 62.9 these locations have been certified by TÜV The consumption figures include different District heating 42.1 45.4 Rheinland Cert GmbH in the respective years. types of fuels, purchased electricity, and In Finland, we renewed our official energy Steam 1.1 1.0 district heating. The conversion factors saving agreement which consists of short- between energy units were taken from Total energy consumption 154.9 159.8 term (4% savings until 2020) and long-term Statistics Finland (https://www.stat.fi/tup/

*) Converted to TJ from 16,837 MWh (7.5% savings until 2025) targets with year khkinv/khkaasut_polttoaineluokitus.html). 2016 as the base year.

Energy consumption in Energy, TJ / EUR 1 million sales 2018 2017 Finnish units, TJ 2018 2017 2016 Energy intensity 0.12 0.14 Pori research center and Turula works

The denominator for the energy intensity Energy consumption 36.0 35.7 38.3 calculations is our annual sales: Energy saved due to efficiency improvements, TJ compared to base year 0.5 1.0 base year Denominator 2018 2017 Lappeenranta works

Sales, EUR million 1,276 1,139 Energy consumption 15.4 17.2 18.8

Energy saved due to efficiency improvements, TJ compared to base year 1.4 0.7 base year

Turku works

Energy consumption 9.4 11.3 13.2

Energy saved due to efficiency improvements, TJ compared to base year 3.6 1.2 base year

Total

Energy consumption 60.8 64.2 70.3

Saving compared to 2016, % 7.8 4.2 base year

42 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

INTERACTIONS WITH WATER AS A WATER WITHDRAWAL BY SOURCE DIRECT GHG EMISSIONS (SCOPE 1) ENERGY INDIRECT GHG EMISSIONS SHARED RESOURCE (GRI 303-1) (GRI 303-3) (GRI 305-1) (SCOPE 2) (GRI 305-2)

Even though our direct impact on water We purchase water locally from municipal Scope 1 greenhouse gas (GHG) emissions Indirect GHG emissions, quality and availability is relatively low and water suppliers and channel wastewater into are calculated based on the consumption tonnes of CO2e 2018 2017 mainly constrained to municipal water municipal waste water systems. The water of non-renewable fuels in our locations supply, Outotec’s wider value chain can have volumes are calculated mostly based on globally, plus the carbon dioxide equivalent Scope 2 emissions (purchased electricity, a significant impact on water availability and invoices, except for certain locations in Africa (CO e) emissions released by company cars, 2 district heating and steam) 7,123 7,883 water-related environmental impacts. that use water from drill wells. Because our excluding vehicles used in site operations at The mining industry uses large amounts workshops are mainly assembly shops, no customers’ plants. The conversion factors for of water for minerals processing, which is process water is discharged. Our research the fuel specific CO2e emissions are taken In line with the Greenhouse Gas Protocol, we why water scarcity or excess water constitute center in Pori uses measured amounts from Statistics Finland (www.stat.fi/tup/ used the Corporate Accounting and Reporting risks for Outotec’s customers. For example, of river water for cooling purposes in test khkinv/khkaasut_polttoaineluokitus.html). Standard to calculate Scope 1 and Scope water cycles interconnect with the general facilities. After use, this water is channeled For the company cars, the CO2e emissions 2 emissions. The emissions are indicated hydrologic water cycle, due to which rain, back to the river. Outotec stores no rainwater; are calculated based on the reports of in CO2 equivalents, which also cover other surface run-off, evaporation, infiltration and neither do we use wastewater from other the leasing companies in Finland (annual greenhouse gases. The country specific seepage can have an unpredictable and often organizations. kilometers, CO2 emissions/km/car type). emission factors were retrieved from RE_DISS seasonal impact on the site’s water volumes For other locations, the CO2e emissions for the European countries (www.aib-net. and qualities. were calculated by using the reported fuel org/documents/103816/176792/AIB_2017_ Water consumption, Tailings areas and water ponds are of consumptions, kilometers and average CO2e Residual_Mix_Results_v11.pdf/8eb82c2b- special interest, since they cover large areas m3/year 2018 2017 emissions. The GHG emission calculations 0fe9-5786-6b21-03e8b6830a94), for the other and contaminated water can interact with the Municipal water 56,271 48,556 only relate to CO2, as we do not release countries from GaBi databases (http://www. environment. Also, mining operations can emissions of other greenhouse gases. The gabi-software.com/international/databases/ Surface water 2,458 5,521 change sites’ topographical and hydrological gas included in the calculations is CO2 from gabi-databases/) or for those not found in Ground water 4,447 23 conditions in the long run. Minerology and fossil fuel sources, excluding bio-based CO2 these, we used the Protocol’s calculation tool therefore water chemistry also differ by site Total water emissions. ‘GHG emissions from purchased electricity’. and by time. consumption 63,175 54,100 In calculations for Finland and Germany To tackle these problems, Outotec offers we used market based and ‘Residual mix technologies to reduce water consumption, The reported municipal water Direct GHG emissions, CO e emission’ factors (www.aib-net.org/ tonnes of CO e 2018 2017 2 increase water cyclability as well as monitor consumption has increased in the South- 2 documents/103816/176792/AIB_2017_ and predict water balances. In some of the East Asia and Australia region (+270%). The Scope 1 emissions (own fuel Residual_Mix_Results_v11.pdf/8eb82c2b- cases, we apply life-cycle assessment to locations in this region account for 94% of combustion, company cars) 4,346 4,287 0fe9-5786-6b21-03e8b6830a94). In terms of estimate the potential impacts and benefits. the fresh water use increase due to a better Company car emissions in consolidation, the figures include operations

We manage and monitor closely our own record keeping system. In addition, one site in Finland, g CO2e/km 103 110 in which Outotec has full financial control, water consumption and report it annually. Sub-Saharan Africa had an increase in water i.e. our own operations and offices, with site We also interact with other stakeholders consumption, since the workshop started to operations at customers’ premises excluded. in increasing sustainability in global water take on larger equipment, which required new In 2018, Outotec purchased 8,639 MWh of supplies. wash bays. CO2-free electricity from renewable energy sources in Finland and Germany, equaling

43 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

51% of our electricity consumption and 21% allowed. Thus, we have estimated that the Supply chain 2018 2017 2016 We use teleconferences and Skype of total energy consumption. We are gradually coverage of the travel agency report is higher for Business for internal meetings. Video GHG emissions, moving to renewable energy in our major than 98% but no extrapolation was made to conferencing systems are also available tonnes of CO2e 520,680 544,100* 479,840* locations in Germany and Finland, excluding cover the unknown share. The commuting in our major locations. After the Office365 the Pori and Frankfurt research centers. related emissions are estimated based on *) restated figures collaboration and information sharing tools Market-based Scope 2 emissions average numbers realized in Espoo and were taken into use in 2015, traveling to decreased by 10 %, mainly due to the extrapolated to cover the all employees. internal meetings has reduced. CO2 EMISSIONS BY SUPPLY CATEGORY increased share of renewable energy, but also Outotec strives to use responsible air due to reduced electricity consumption. Scope 3 GHG emissions, carriers and hotels. Lufthansa and Finnair, In 2018, Outotec set new GHG emission for instance, use relatively new fleets, tonnes of CO2e 2018 2017 targets for the combined Scope 1 and which generally produce lower emissions. Air transactions 10,090 10,170* Scope 2 emissions which are in line with In agreements with hotels, Outotec prefers the science-based targets requirements. Rail transactions 54 57* hotels with favorable social responsibility The science-based targets framework is Commuting 1,402 1,420 policies. based on climate science, according to Total Scope 3 emissions 11,546 11,647* which a global carbon budget is estimated Machinery 45% Total GHG emissions, to keep global temperature increase Basic metals and fabricated metal 31% *) restated due to change in calculation method by the tonnes of CO e 2018 2017 below 2 degrees Celsius compared to pre- service provider Electrical and optical equipment 9% 2 industrial temperatures. In Outotec’s Renting of machinery, consultancy 5% Total GHG emissions 23,015 23,759* Rubber and plastics 4% choice of methodology, the carbon budget Approximately 90% of Outotec’s Other non-metallic minerals 2% *) restated due to change in calculation method by the manufacturing is outsourced. We report is equated to global GDP and our share of Textiles and textile products 2% service provider emissions is determined by our gross profit, the carbon footprint of our supply chain Others, such as chemicals, that is our share of the global economy. In separately, and in 2018 it amounted to wood products etc. 2% practice, for Outotec this means a reduction 520,683 tonnes of CO e. The largest source GHG EMISSIONS INTENSITY (GRI 305-4) 2 of GHG emissions of 13% by the year 2025, of CO2e emissions was the category of Our travel-related emissions remained translating to a yearly reduction of roughly machinery, representing 50% of the total. approximately the same as in 2017. The

2%. The calculations are based on Outotec’s traveled kilometers increased slightly. Tonnes of CO2e / spending and carried out using the Scope 3 However, the related emissions remained EUR 1 million sales 2018 2017 OTHER INDIRECT GHG EMISSIONS screening tool developed by Quantis and GHG nearly unchanged because our personnel Scope 1+2 9.0 10.7 (SCOPE 3) (GRI 305-3) Protocol (https://quantis-suite.com/Scope-3- increasingly traveled in economy class, Relative total GHG emissions 18.0 20.8 Evaluator/). In 2018, the supply categorization which has a lower emission factor. The Relative flight emissions 7.9 8.9* We include business travel and commuting and data management system were improved CO2e emissions for flight and rail travel are in Scope 3 GHG emissions. The data about to better capture the nature of our supply reported directly by our travel agent Carlson *) restated due to change in calculation method by the business travels are received from our spend. This also had an impact on the Wagonlit Travel. A restatement for the year service provider globally centralized travel agency that calculation of our supply chain’s emissions, 2017 flight emissions needed to be done, covers all major locations. According to our which is why we recalculated the 2016 and since CWT’s new analytics tool has a higher Our relative flight emissions per one-million- Travel Policy, the preferred travel agency is 2017 emissions according to the new supply accuracy on the calculated kilometers. The euro sales decreased by 17.5% from 2016. to be used for all travel purchases, and no reporting methods to guarantee comparability greenhouse gas factors used for emissions purchases from local travel agencies are over the years. estimation have also been improved in CWT’s new tool. 44 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

The overall positive impact of Outotec’s TOTAL WEIGHT OF WASTE BY TYPE AND Read also business travel can be best illustrated by DISPOSAL METHOD (GRI 306-2) • Historical environmental data, https:// comparing our total annual GHG emissions viz.tools.investis.com/outotec-csr/dct/ in 2018, which were 23,015 tonnes CO e, with review/index.html#environmental12/ 2 Waste, tonnes 2018 2017 the emissions avoided by using six of our waste13 metals-related technologies, which amounted Waste recycled 415 599 to 6,181,892 tonnes of CO2e. Landfill waste and incinerated waste 429 609 NITROGEN OXIDES, SULFUR OXIDES, Hazardous waste 24 41 AND OTHER SIGNIFICANT AIR EMISSIONS (GRI 305-7) Total waste 867 1,249 Paper recycled 57 83 Volatile organic compounds (VOCs), tonnes 2018 2017 Waste handling is not centrally managed at VOC emissions from paint Outotec. We have instructed our locations to shops 5.8 8.8 sort waste according to local regulations and the guidelines provided by facility owners. We report only VOC emissions, as nitrogen Waste amounts declined significantly because and sulfur oxides as well as other air of lower sales volumes and the reduced emissions are not relevant in our operations. number of employees. We estimate the VOC emissions based on the paint consumption in our manufacturing, SIGNIFICANT SPILLS (GRI 306-3) assembly and service operations. The VOC emissions have been relative steady during No significant spills were reported in Outotec the years. We have used 300 g VOCs per operations and project sites in 2018. one-liter paint as the emission factor in our A small amount of hazardous waste is calculations. produced in the final surface treatment of filter presses in our Lappeenranta works. In addition, oily waste from lubricants used in the Turula works is classified as hazardous. Our research centers produce small amounts of different kinds of hazardous chemicals. These hazardous wastes are sent to local hazardous waste treatment facilities.

45 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

Social data

EMPLOYEES (GRI 102-8) Part-timers by region Employees by employment contract and gender 2018 2017 in 2018 Part-time Full-time

Outotec had 4,012 employees at year end permanent 3,028 3,176 female 28 510 2018, which was 134 employees fewer than Male EMEA the previous year-end. Temporary personnel temporary 182 175 male 22 2,130 accounted for about 6% of the total payroll. Male all 3,210 3,351 EMEA all 50 2,640 Some of the temporary employees are self- permanent 751 745 female 0 147 employed, typically retired Outotec experts Female Americas who work shorter periods in our customer temporary 51 50 male 3 587 projects. During annual vacation seasons, we Female all 802 795 Americas 3 734 hire students as trainees. all permanent 3,779 3,921 The average age of employees was 42.2 All employees female 13 104 years. temporary 233 225 APAC male 12 456 Total number of employees at year end 4,012 4,146 APAC all 25 560 Employees on average 4,095 4,149 EMPLOYEES BY CATEGORY Total 78 3,934

Employees by region 2018 2017

permanent 2,537 2,662

EMEA temporary 153 151

EMEA all 2,690 2,813

Senior management 6% permanent 704 723 Middle management 25% Americas temporary 33 35 Specialists 53% Blue-collar workers 16% Americas all 727 758

permanent 538 536

APAC temporary 47 39

APAC all 585 575

46 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVER (GRI 401-1) COMPENSATION (GRI 102-38) no bonuses were paid in 2018 for the 2017 result, in addition to bonuses already paid in The total compensation paid out to employees the previous year for the first quarter result New employee hires 2018 2018 2017 2017 in 2018 amounted to EUR 313 million. of 2017. The calculations do not include blue-

# % # % Outotec’s compensation policy is described collar workers, because their information is on www.outotec.com/cg. We define countries not included in our SAP Master data system. By gender with over 200 employees as significant 63 key employees were part of the Female 162 4 123 3 operations. In 2018, those countries were company’s share-based incentive program Male 504 13 599 13 Finland, Australia, Germany, South Africa and in 2018. In addition, 760 employees equaling Chile. 21% of eligible personnel participated in our By age group employee share savings plan. This plan was <30 238 6 227 5 not offered to employees in Mozambique, Compensation 2018 2017 31-50 349 9 392 9 Morocco, Qatar and Saudi Arabia due to legal Wages and salaries paid, restrictions. In May 2018, Outotec paid out a >51 76 2 63 2 EUR million 313 326 total of 166,571 shares and cash payments to By region Ratio of annual total cover estimated taxes to 966 employees who compensation of CEO to participated in the employee share savings EMEA 404 10 401 9 mean compensation of plan in 2015. employees 15.1 11.3* Americas 169 4 200 5 Outotec runs several pension plans in APAC 93 2 81 2 Finland 15.0 11.8 various countries. These plans are mainly classified as legally defined contribution Total 666 17 682 16 Australia 3.7 3.6 pension plans. Other post-employment Germany 2.3 2.4 benefits include medical arrangements for South Africa 4.0 3.5 retired employees in Germany. Employee turnover rate 2018 2018 2017 2017 Chile 4.6 4.1 # % # % COLLECTIVE BARGAINING AGREEMENTS Percentage increase in (GRI 102-41) By gender annual total compensation ratio, % 33 10 Female 122 3 96 2 60% of our employees are covered by Change in annual total Male 506 13 439 11 compensation of CEO, % 26.5 14.5 collective bargaining agreements. This information was collected with a separate By age group Change in annual mean questionnaire sent out to all our locations. compensation of employees, <30 70 2 92 2 % -4.8 0.2 Binding collective agreements are followed 31-50 400 10 311 8 in each country where they are applicable to n = 3,039, coverage 76% Outotec employees. >51 158 4 131 3 *) Restated due to an error in calculation

By region The ratio of annual total compensation EMEA 431 11 312 8 of CEO to mean compensation of employees Americas 116 3 162 4 was 15.1, which was 3.8 %-points higher APAC 81 2 61 1 than in 2017. The annual total compensation ratio is calculated for all employees globally. Total turnover rate 628 16 535 13 Employees’ compensation declined since

47 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

BENEFITS PROVIDED TO FULL-TIME OCCUPATIONAL HEALTH AND SAFETY EMPLOYEES (GRI 401-2) WORK-RELATED INJURIES (GRI 403-9)

Benefits by country, % Lost time injuries per 1 million work hours, P = permanent, including employees and supervised workers 2018 2017 TEMP = temporary Finland Australia Germany South Africa Chile LTIR 1.9 1.7 P TEMP P TEMP P TEMP P TEMP P TEMP Number of employees and Life insurance Yes Yes No No Yes Yes Yes No Yes No supervised workers 6,950 6,680

Health care Yes Yes No No Yes Yes No No Yes Yes Total working hours 14,400,000 13,300,000

Disability/invalidity coverage Yes Yes Yes Yes Yes Yes Yes No Yes Yes Work-related injuries, own employees (rate per 1,000,000 work hours) 2018, # 2018, rate 2017, # 2017, rate Parental leave Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Retirement provision Yes Yes Yes Yes Yes No Yes No Yes Yes Fatalities 1 0.1 0 0.0

Stock ownership Yes Yes Yes No Yes Yes Yes Yes Yes No High-consequence injuries (LTI) 21 2.6 19 2.4

n= 1,242 76 327 40 360 5 271 7 210 3 Recordable injuries 37 4.5 43 5.5 Number of hours worked 8,200,000 7,800,000

Number of employees 4,012 4,146

MINIMUM NOTICE PERIODS FOR notice periods range from two weeks to six SIGNIFICANT OPERATIONAL CHANGES months, and in other countries, the notice Work-related injuries, supervised (GRI 402-1) periods range from two weeks to one year. workers (rate per 1,000,000 work hours) 2018, # 2018, rate 2017, # 2017, rate Fatalities 0 0.0 0 0.0 The provisions for consultation and Read also High-consequence injuries (LTI) 7 1.1 4 0.7 negotiations with employees are included • Historical data, https://viz.tools.investis. in the collective bargaining agreements com/outotec-csr/dct/review/index. Recordable injuries 7 1.1 8 1.5 in some of the countries where Outotec html#invdct_navigation Number of hours worked 6,300,000 5,500,000 has operations. In Finland, the collective Number of supervised contractors 2,750 2,410 bargaining agreements include provisions for consultation and negotiations lasting from two to six weeks, in Australia four weeks, in Sweden four weeks, in Chile 30 days, and in Brazil 12 weeks. The minimum notice periods that must be observed in advance of significant operational changes depend on locations and national legislation, and therefore differ significantly. In Finland, the

48 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

AVERAGE HOURS OF TRAINING (GRI 404-1) Training hours 2018 2017 DIVERSITY AND EQUAL OPPORTUNITY (GRI 405-1) Our reporting of vocational, compliance Health and safety training and Code of Conduct training hours covers Number of employees and contractors 6,950 6,680 Employees by age group, % 2018 2017 Outotec’s employees. Human rights issues Hours 133,000 109,000 Executive Board are covered in the Code of Conduct e-learning Average hours of health and safety training per person 19 16 < 30 years 0 0 and classroom trainings. Only the training Vocational, compliance and code of Conduct training 31-50 years 40 44 provided by Outotec is included in this report. Data on training pursued by individual Outotec Number of employees 4,012 4,146 > 51 years 60 56 employees externally is not reported as data Hours 30,288 61,847 Senior management is not stored into our systems. Average hours of vocational, compliance < 30 years 0 0 Our learning management system and Code of Conduct training per employee 8 15 31-50 years 58 55 including vocational, compliance and Code of Average hours of training per employee 27 31 Conduct training does not provide information > 51 years 43 45 of the training hours by gender and employee Middle management category. It collects the information on PERCENTAGE OF EMPLOYEES RECEIVING < 30 years 1 1 Outotec’s own global training programs and REGULAR PERFORMANCE REVIEWS 31-50 years 66 65 e-learning modules. Local training data is (GRI 404-3) > 51 years 33 34 reported by HR persons in the market area offices. Specialists The health and safety training hours cover Performance reviews, % 2018 2017 < 30 years 17 13 employees and supervised workers on project by gender 31-50 years 62 67 sites. Training hours on health and safety are > 51 years 20 19 compiled from the health and safety reporting Female 99 99 Blue-collar workers system. Male 99 99 < 30 years 23 20 by employee category Read also 31-50 years 61 65 Senior management 98 100 • Historical training data, > 51 years 15 15 https://viz.tools.investis.com/outotec- Middle management 99 100 Board of Directors csr/dct/review/index.html#training132/ Specialists 99 100 health-and-safety-training-employees- < 30 years 0 0 and-contractors-number133 Blue-collar workers N/A* N/A* 31-50 years 0 0 > 51 years 100 100 n = 2018: 3,165, 2017: 3,290, coverage 79% Coverage 100% *) Performance reviews of blue-collar workers and casuals have not been registered in the data system, and they are not included in the above numbers.

49 OUTOTEC / SUSTAINABILITY REPORT 2018 DATA

Share of women RATIO OF BASIC SALARY AND by employee category, % 2018 2017 REMUNERATION OF WOMEN TO MEN Board of Directors 38 29 (GRI 405-2) Executive Board 20 22 Senior management 13 13 Ratio of basic salary of women to men by Middle management 15 13 employee category Female Female Female Female Female Specialists 28 28 (Male = 1) Australia Chile Finland Germany South-Africa

Blue-collar workers 3 3 2018

All employees 20 19 Senior management 0.75 * 0.92 1.07 *

Middle management 0.80 0.88 0.97 0.94 0.75 The share of men in the mining and Specialists 0.83 0.93 1.00 1.02 0.78 metallurgical industry has traditionally been high, which partly explains the current low Blue-collar workers N/A N/A N/A N/A N/A share of women. 2017 We have not identified any minority or Senior management 0.74 * 0.94 0.86 * vulnerable groups amongst our employees, and thus the topic is not relevant to Outotec Middle management 0.76 1.00 0.96 0.86 0.70 and not reported. Specialists 0.81 0.86 1.00 0.95 0.76

Blue-collar workers N/A N/A N/A N/A N/A PROPORTION OF SENIOR MANAGEMENT HIRED FROM THE LOCAL COMMUNITY *) No females in senior management (GRI 202-2)

When Outotec starts a new operation in a new Outotec uses KornFerry’s job evaluation Read also country, an expatriate employee is typically system when determining the demand of • Historical diversity data, assigned to integrate the new operation into each job. The average ratio is based on the https://viz.tools.investis.com/outotec- Outotec. Our goal is nevertheless that senior ratio of each job evaluation grade which are csr/dct/review/index.html#diversity107/ management should be hired locally. We then grouped together to more broader report executive-board-members-by-age108 define local as a person having the nationality categories. In 2018, the overall average of of the country of the location in question. Our the ratio of basic salary of women to men significant locations are defined as countries in significant locations of operations is 0.94 with over 200 employees. (2017: 0.92). Data is not available about blue-collar workers and 1,971 white collar % of locals in senior (2017: 2,158) employees are included to the management by significant locations of operation 2018 2017 calculation. Our significant locations are defined as Australia 84 84 countries with over 200 employees. Chile 83 67 Finland 96 96 Germany 76 76 South Africa 100 100

50 OUTOTEC / SUSTAINABILITY REPORT 2018 GRI

About this report

Our reporting meets the requirements GLOBAL COMPACT AND UN SUSTAINABLE improve comparability. Health and safety, Financial performance, as of the EU Directive on disclosure of non- DEVELOPMENT GOALS REPORTING well as Ethics, compliance and governance financial and diversity information, and the REPORT CONTENT AND BOUNDARIES are the most material topics for Outotec. changes made in the Finnish Accounting This report also describes how Outotec has (GRI 102-46) Health and safety, Financial performance Act. The required non-financial information progressed on the ten principles of the UN as well as Ethics, compliance and governance is disclosed in the Review by the Board of Global Compact initiative regarding human Outotec’s business is based on the company were considered as fundamentals that the Directors in Outotec Financial Statements rights, labor rights, environment and anti- mission, ‘sustainable use of Earth’s natural company must take good care of. Sustainable 2018, whereas this Sustainability Report is corruption principles, and the UN Sustainable resources’, which drives us to work towards technologies and innovations, Engaged prepared to meet the expectations of a wider Development Goals. The GRI index also shows overcoming the world’s environmental experts, and Responsible supply chain, audience and the requirements of several the indicators used by Outotec to evaluate the challenges and provides the wider context for together with the environmental impact of sustainability indices. progress in these areas. our sustainability work. We have also defined our own operations, create Outotec’s total our approach to global and local social and impact on the Earth and climate change. We report our performance on economic, REPORT COVERAGE (GRI 102-45) economic objectives and committed ourselves All these topics are reviewed in this report. environmental and social sustainability annually to the relevant UN Sustainable Development Management approaches for all the topics are in accordance with the Global Reporting We report on our global operations including Goals. presented on Management approach, p. 52. Initiative (GRI 102-52). Outotec Sustainability Outotec’s premises and employees in full, and The materiality principle was applied in Report 2018 is prepared in accordance with the partly include information on our contractors the materiality assessment (Most significant STAKEHOLDERS GRI Standards: Core option (GRI 102-54) and working under our supervision on project topics, p. 8) conducted in 2018 so that we covers the calendar year 2018 (GRI 102-50). sites, our products and services, the use of considered the interests and expectations As part of the recent materiality assessment, Some information relating to developments Outotec’s technologies by customers, and our of stakeholders, Outotec values, policies, we identified our key stakeholders, namely from January to March 2018 has also been supply chain. The legal companies, in which strategy, and targets, the externally assured Employees, Customers, Suppliers and included in the report. The General Disclosures Outotec has 100% ownership and are listed in mea­surements of our positive indirect contractors, Investors, analysts and financiers, as specified in the GRI Standards are presented the Financial Statements 2018 on page p. 77, environmental impacts, the regulation Academia and students, Authorities, in a wider scope than required by the Core www.outotec.com/investors, are covered by regarding social license to operate (assumed regulators and governments, Potential future option. Topic-specific Standards are reported this report. The information compiled for to be tightening) as well as the main topics employees, Local communities, and Industry with respect to the material topics defined in the report is collected from our local offices, and future challenges of the minerals and associations and NGOs, as the main users of 2018. We also report the environmental impact and some local environmental impacts are metals processing sector. this report. of Outotec’s own operations and some other described in addition to global data. In November 2018, the core team of our indicators that are not material to Outotec We continuously aim to improve our Sustainability Working Group reviewed the RESTATEMENTS (GRI 102-48) but are published to meet stakeholders’ internal processes as well as the completeness material topics against GRI Standards and expectations using the GRI indicators. A of data disclosure through developing our defined the boundaries for each material Our policy for restatements in case of comparison of the contents of the report and data collection systems and more accurate topic and related indicators that form the significant changes in our company structure, the GRI Standards is given in the GRI and Global explanation of omissions when the data is not contents of this report. or changes in the general validity of the data, Compact Index (GRI 102-55), p. 56. available. We also aim to describe both positive is that the data is recalculated for previous The report is published in English at and negative aspects of our performance. MATERIAL TOPICS (GRI 102-47) years if the changes have led to discrepancies www.outotec.com. Outotec has reported its In the online report, we use graphics to of more than 10%. sustainability performance annually since show trends in our performance and increase Based on the materiality assessment, 2010. The previous report for 2017 was clarity. We have also included the data from all Sustainable technologies and innovations, published in March 2018 (GRI 102-51). the previous reports in the tables and graphs to Engaged experts, Responsible supply chain,

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Management approach

In 2018, we made the following CONTACT PERSONS FOR QUESTIONS Outotec Management System defines for the material topics and aspects GRI restatements: REGARDING THIS REPORT (GRI 102-53) governance, management principles, 103-1, 103-2, 103-3, are presented in this • The supply categorization and data operational model, roles, responsibilities section according to GRI 2016 Standard. management system were improved • Contact information, p. 64 and authorities within Outotec. The The management approach for Health and to better capture the nature of our documentation, based on European Safety, GRI 403, is presented using GRI 2018 supply spend. This also had an impact ASSURANCE (GRI 102-56) Foundation for Quality Management (EFQM) Standard. on the calculation of our supply chain’s management system and processes emissions, which is why we recalculated This report has been verified by an framework criteria, defines the compatibility the 2016 and 2017 emissions according independent third-party assurance provider and fulfilment of Outotec systems to the new supply reporting methods to selected by the Sustainability Working Group. against such standards as ISO 9001 for guarantee comparability over the years. The scope, conclusions, observations and Quality Management and ISO 14001 for • Percentage of the reduction in emissions recommendations are presented in the Environmental Management. Outotec’s avoided was restated for 2017 because of assurance report. A member of Outotec’s Code of Conduct, approved by the Board more accurate calculation. Executive Board has commissioned the of Directors, sets the company’s business • Our service provider changed the assurance, and the Executive Board has conduct for all employees. calculation method for business travel approved the report. Outotec’s main impact to the environment related emissions in 2018, for this reason is created by our products and services. Our the 2017 figures for Scope 3 emissions • Assurance statement, p. 62 management approach to environmental were restated to ensure comparability. sustainability is described below in ‘Sustainable technologies and innovations’. CHANGES IN REPORTING (GRI 102-49) To a lesser degree, our environmental footprint arises from our own operations. Except for some adjustments in the material Outotec continuously aims to reduce the topics and topic boundaries made in impacts of its operations and has annual connection with the materiality analysis in targets related to CO2 emissions, energy 2018, there have been no major changes in consumption and waste production. The the reporting scope. During 2018, Outotec company also monitors its emissions withdrew its businesses from Iran and closed related to flights. Only a few of Outotec’s its service workshop in the United Arab operations require an environmental permit, Emirates, which, however, does not impact and the risks related to these operations the reporting scope. are managed by certified environmental management systems. The Code of Conduct, Supplier Policy, HR policies and Donation and Employee Volunteering Policy, as well as Quality, Environment, Health and Safety (QEHS) Policy, define the basic requirements for Outotec’s environmental, social and economic sustainability. The management approaches

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Sustainable technologies and innovations Engaged experts

Management Developing sustainable offering for our customers is at the core of our sustainability Management Competent and engaged employees are key to Outotec’s success and one of the most approach work. We continuously develop our offering according to the principles of sustainable approach material topics. Outotec aims to employ the best people in the industry and follows development. Through advanced technology the negative impacts of processing minerals the principle of equal opportunity. All employees are entitled to good leadership and and metals can be managed. For this reason, R&D has a central role in Outotec’s professional growth. Outotec respects and is committed to the principles of the Universal business. Our Product Compliance Management process ensures that our products meet Declaration of Human Rights and the Ten Principles of the UN Global Compact on human all applicable safety standards during the product lifecycle. We maintain an extensive rights, labor, environment and anti-corruption, wherever we operate. We see as our database of procedures and documents including the development, sales and delivery basic responsibility to provide decent working conditions and to treat our people in a fair of our products and services. We use a gated process as a precautionary principle or manner. Our Code of Conduct provides the basis for our labor conditions, substantiated by approach (GRI 102-11), in which the first phase of product development includes criteria HR policies and HR Handbook that enable fair employment globally. Our HR practices are related to risks and especially opportunities to mitigate climate change. always compliant with international labor standards and local legislation.

Reported topics • Energy (302-4) Reported topics • Employment (401-1, 401-2) and indicators • Emissions (305-5) and indicators • Labor/management relations (402-1) • Environmental compliance (307-1) • Training and education (404-1, 404-2, 404-3) • Local communities (413-1, 413-2) • Diversity and equal opportunity (405-1, 405-2) • Customer health and safety (416-2) • Employee engagement (own indicator) • Environmental Goods and Services in order intake (own indicator) Topic boundaries Our employees and operations at our own premises and project sites. • CO2 emissions avoided using Outotec’s metals-related technologies (own indicator) • Percentage of reduction of fresh water/tonne of ore by non-ferrous metals Goals and targets Key target is to achieve 70% employee engagement index by 2020. concentrators using Outotec technology (own indicator) • Increase of energy produced using Outotec waste-to-energy solutions (own indicator) Responsibilities SVP, HR and Communications is responsible for the human resources and the HR and Communications function globally and reports to the CEO. Topic boundaries Our customers’ employees and operations. Commitments • The Universal Declaration of Human Rights and policies • The UN Global Compact Goals and targets We measure the positive impact of our products and services on the environment (carbon • Code of Conduct www.outotec.com/company/about-outotec/code-of-conduct/

handprint), by the amount of CO2 emissions avoided using Outotec technologies. The • HR Handbook targets are presented in Our agenda, p. 10. • Competence Development Policy • Recruitment and Onboarding Policy Responsibilities Our business process Manage and Develop Products and Technologies guides all the • Compensation Policy activities from idea and product development to productization as well as technical and • Global Mobility Policy commercial product management. Outotec’s business lines are responsible for their • Job Description and Job Title Policy products and services and following the company’s business processes. • Grading Policy

Evaluation of The Human Capital Committee of the Board of Directors follows regularly that all Commitments, • Outotec Technology Policy the management employee related topics, such as ethics and values, resourcing, competence and policies and • Outotec IPR Policy approach performance management, and compensation arrangements support the strategic aims standards • ISO 12100 and IEC 62061 for the safety of machinery of Outotec. It also evaluates our performance regarding diversity. • All safety-related industrial standards applicable where they are utilized • Procedures for detecting hazards such as explosion, fire, and lightning, and related IEC 61882 HAZOP studies • SIL Allocation Assessments (mandatory at Outotec) • The SafExpert risk assessment tool, which ensures that equipment designed by Outotec fulfills all relevant safety standards.

Evaluation of We follow negative impacts and incidents through our QEHS management and Product the management Compliance Management systems, as well as through customer feedback collected after approach each major delivery and in customer surveys. The Corporate Product Board follows the development work to ensure that our offering is being developed in line with our mission ‘sustainable use of Earth’s natural resources’.

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Responsible supply chain Health and safety

Management As the majority of Outotec’s manufacturing is sourced from external suppliers, 403 (GRI 2018) According to Outotec’s QEHS Policy, safety is a priority in the company’s operations. approach responsible supply chain management is highly important for Outotec. Our Supply Policy Management Outotec’s management is committed to continuously enhance safety performance steers supply activities throughout the company, defines ways to enhance supply quality, approach throughout the company’s operations. We have globally harmonized procedures and and provides guidelines for everyone involved in supply-related activities. A parallel work instructions. Our OHS management system covers 100% of Outotec’s employees, Supplier Policy imposes strict requirements on Outotec’s suppliers. It sets out our contractors working under our direct supervision, locations and project sites. The OHS principles on ethical conduct, compliance with laws and regulations, respecting human management is based on risk assessments. The main health and safety risks for Outotec rights, environmental impacts, health and safety, labor, intellectual property and improper employees occur on roads in different driving cultures and when working at project sites benefits. Outotec does not tolerate any child labor or forced or compulsory labor as stated and manufacturing units. in our Code of Conduct and Supplier Policy. Suppliers are expected to ensure compliance with Outotec policy, identify any deviations, manage corrective actions, ensure the Reported topics • Occupational health and safety (403-1, 403-2, 403-3, 403-4, transparency of these actions, and communicate with us systematically on such issues. and indicators 403-5, 403-6, 403-7, 403-8, 403-9)

Reported topics • Supply chain (102-9, 102-10) Topic boundaries Outotec’s employees and premises, supervised contractors as well as project sites. and indicators • Procurement practices (204-1) Regarding health services, our reporting covers Outotec employees only, as these • Supplier environmental assessment (308-1, 308-2) services are typically covered by the employing company. Local Safety Committees are • Child labor (408-1) set up in Outotec’s permanent locations and largest project sites, and they cover Outotec • Forced or compulsory labor (409-1) employees and premises, contractors and visitors. • Supplier social assessment (414-1, 414-2) Goals and targets Zero harm in occupational health and safety. Topic boundaries Our direct suppliers and supervised contractors. Responsibilities The head of each permanent location has the responsibility of the persons working Goals and targets Standardization, harmonization and focusing on fewer suppliers are key drivers in there. Each location has a Safety Committee consisting of employees’ representative and establishing a sustainable supplier base. We measure our performance by the percentage company representative, and local Safety Committees report to head of location, who of new suppliers screened and key suppliers audited using labor practices, environmental reports to global business owners. If there are less than 10 people working in a location, and human rights criteria. they are represented in the closest larger location’s Safety Committee. Our site managers are responsible for the management of safety at project sites. Responsibilities SVP – Operational Excellence is acting Head of Supply. Our Global Supply function manages our supplier base and global sourcing. Operational Supply personnel are Commitments • Operations globally certified against OHSAS18001 standard involved in day-to-day supplier management during the delivery phase of customer and policies • Outotec QEHS Policy projects. Outotec’s Supplier Relationship Managers work with our most important global Evaluation of The global HSE Steering Group follows the state of OHS and sets targets and the roadmap or local suppliers. They facilitate collaboration between Outotec and the suppliers across the management for the future. The Executive Board reviews regularly the safety performance, and we and above individual projects. This procedure enhances visibility, alignment and the approach ensure the quality of our OHS processes through internal and external audits and training. management of supplier-related risks, while also improving overall collaboration between In 2018, external audits were successfully conducted by TÜV Rheinland Cert GmbH at our Outotec and individual suppliers. locations in Finland (Espoo), in Canada (Burlington), USA (Coeur d’Aleine, Jessup) and in Commitments • Outotec Supplier Policy, www.outotec.com/company/about-outotec/suppliers/ Germany (Oberursel, Frankfurt, Cologne), as well as a construction site in Bahrain. The and policies • Outotec Supply Policy certificates can be found on http://www.outotec.com/company/about-outotec/qehs/. • Code of Conduct, www.outotec.com/company/about-outotec/code-of-conduct/

Evaluation of The Executive Board reviews regularly the effectiveness of the supply chain management the management and the work is evaluated also in internal and external audits. Outotec audits its key approach suppliers on quality, health and safety as well as human rights-related issues regularly. Compliance Helpline and an external feedback channel are available for anyone to raise concerns related to corruption, human rights or any unethical behavior in Outotec’s business activities.

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Financial performance Ethics, compliance and governance

Management In the recent materiality assessment, financial performance was raised a topic having a Management In the materiality assessment, Ethics, compliance and governance were regarded as fun- approach major impact on employees’ wealth and commitment, stakeholder value, jobs available approach damentals for Outotec. Outotec’s management is based on the principles of good govern- and tax income of local communities. Our financial performance and risk management ance and transparency, as well as group-wide policies and globally harmonized business are covered in Financial Statements 2018 and Corporate Governance Statement 2018, processes. We follow the Finnish Corporate Governance Code issued by the Securities whereas this report focuses on the value creation, our impacts, and financial implications Market Association for listed companies. Our management system documentation is due to climate change. Outotec management annually evaluates the global megatrends compatible with and audited against such standards as ISO 9001 for Quality Management, that impact our business. Sustainability related risks are addressed in routine risk ISO 14001 for Environmental Management, and OHSAS 18001 for Safety Management. management processes. Our approach to economic sustainability is demonstrated by In addition, the locations in Finland and Germany are certified to ISO 50001 for Energy our long-term financial targets. We base our decisions on sound business reasons and Management. Outotec endorses ethical business practices and complies with all relevant commercial rationale. Outotec follows all applicable accounting and financial reporting national and international laws and regulations, which sets the minimum level in the way rules. Accurate and objective records and reports support our business decisions and we operate. The company works against corruption in all its forms. Outotec has zero help us meet our responsibilities towards stakeholders. Project risk management and tolerance against child labor, forced or compulsory labor, harassment or discrimination, project control are the key processes for providing information for financial control and anti-competitive behavior or other illegal or unethical business practices. Suppliers and reporting. Outotec is committed to being a responsible, compliant tax payer in each business partners, sales agents and representatives are required to follow the same prin- country where it operates. We strive for transparency in our operations and fairness in our ciples and fully comply with all applicable laws. All Executive Board members and their tax practices, and we do not engage in aggressive tax planning. Our tax management has direct reports have signed specific declarations of compliance and Outotec policies. a proactive approach. Reported topics • Anti-corruption (205-1, 205-2, 205-3) Reported topics • Key impacts, risks and opportunities (102-15) and indicators • Anti-competitive behavior (206-1) and indicators • Economic performance (201-1, 201-2) • Non-discrimination (406-1) • Indirect economic impacts (203-2) • Freedom of association and collective bargaining (407-1) • Socio-economic compliance (419-1) Topic boundaries Outotec’s legal entities with 100% ownership (Financial Statements 2018, p. 77, www.outotec.com/investors Topic boundaries Outotec’s employees, sales representatives and sales agents, suppliers and contractors.

Goals and targets Outotec’s long-term financial targets focus on continuous profitable growth: Goals and targets Outotec’s target is to have employees participate in e-learning on the Code of Conduct or • Sales growth faster than the market attend related classroom training on a regular basis. • Annual average service sales growth over 10% (previously 5-15%) • Profitability (adjusted EBIT) 10% of sales by 2020 Responsibilities The Chief Executive Officer is responsible for implementing the Code of Conduct with the • Gearing at maximum 50% support of the Executive Board and the Chief Compliance Officer. Our Board of Directors monitors and reviews implementation of the Code periodically. Outotec’s Legal, Contract Responsibilities The general governance principles and Outotec’s self-regulatory framework provide Management & Corporate Responsibility function is responsible for the compliance pro- the basis for Outotec’s operations. Finance & Control function headed by the Chief gram and related policies. The Chief Compliance Officer reports the issues raised through Financial Officer coordinates the financial management and control, maintains common grievance mechanisms to the Board of Directors. instructions for financial reporting and controls centrally the reporting platforms. The application and interpretation of accounting standards for group-wide purposes is done by Commitments • Universal Declaration of Human Rights Finance & Control and those principles are documented in the Outotec Accounting Policy and policies • UN Guiding Principles on Business and Human Rights and reporting manual, guiding the work of all units globally. • UN Global Compact • UN Sustainable Development Goals Commitments • UN Sustainable Development Goals • Outotec Corporate Governance Policy and policies • Outotec Corporate Governance Policy • Outotec Code of Conduct, http://www.outotec.com/company/about-outotec/ • Code of Conduct, www.outotec.com/company/about-outotec/code-of-conduct/ code-of-conduct/ • Outotec Disclosure Policy, www.outotec.com/company/investors/disclosure-policy/ • Outotec QEHS Policy • Outotec Risk Management policies • Outotec Supplier Policy, http://www.outotec.com/company/about-outotec/suppliers/ • Outotec Accounting Policy • Outotec Anti-Corruption Policy • Outotec Supply Policy • Outotec Anti-Money Laundering Policy • Outotec Export Control Policy • Outotec Agent Policy • Outotec Tax Policy • Outotec Enterprise Risk Management Policy • Outotec Operational Risk Management Policy Evaluation of The Board of Directors and its Audit and Risk Committee follow Outotec’s internal control • Outotec Data Protection Policy the management and risk management systems and efficiency of the control measures. Outotec’s monthly • Outotec Donation and Employee Volunteering Policy approach financial reviews forms the key mechanism when measuring the effectiveness of opera- tions and the development of the company versus the set financial targets. Special em- Evaluation of The Audit and Risk Committee of the Board of Directors reviews regularly the compliance phasis is put on related contractual risks, project provisions and financial performance. the management of the company and concerns raised through Outotec’s compliance helpline and internal approach and external feedback channels. The Chief Compliance Officer reports directly to the Audit and Risk Committee of the Board in issues raised through grievance mechanisms. Our performance is also followed-up regularly through internal and external audits. GRI

GRI, GLOBAL COMPACT, AND SDG CONTENT INDEX

Based on our own assessment, Outotec has Global self-declared this report to be prepared in GRI Comment/ Compact accordance with the GRI Standards: Core Standard Description Disclosure or link to related page Omissions Pinciple SDG option. Compliance has additionally been 101 Foundation checked by a third party, Ecobio Ltd. 102 GENERAL DISCLOSURES 102 Organizational profile In this table, we have applied General 102-1 Name of the organization This is Outotec, p. 5 Disclosures, Management Approach and 102-2 Activities, brands, products, and services This is Outotec, p. 5 topic specific GRI Standards and Disclosures There were no banned products in 2018. published in 2016, except for the Occupational 102-3 Location of headquarters Espoo, Finland Health and Safety (GRI 403) and Water and 102-4 Location of operations This is Outotec, p. 5 Effluents (GRI 303) for which we have applied 102-5 Ownership and legal form This is Outotec, p. 5 GRI Standard published in 2018. Indicators 102-6 Markets served This is Outotec, p. 5 in General Disclosures and Management 102-7 Scale of the organization This is Outotec, p. 5 Financial performance , p. 30 Approach comply with the European Directive Financial Statements 2018, on non-financial and diversity reporting. www.outotec.com/investors The table also indicates our progress on the 102-8 Information on employees and other workers Social data, p. 46 6 United Nations’ Global Compact principles 102-9 Supply chain Responsible supply chain, p. 26 and Sustainable Development Goals (SDG). 102-10 Significant changes to the organization and its supply This is Outotec, p. 5 Some indicators are reported and shown in chain the index although they are not material to 102-11 Precautionary principle of approach Management approach, p. 52 Outotec but reported to meet stakeholders’ 102-12 External initiatives www.outotec.com/sustainability expectations. 102-13 Memberships of associations www.outotec.com/sustainability Strategy 102-14 Statement from senior decision-maker CEO’s message, p. 3 102-15 Key impacts, risks, and opportunities Financial performance, p. 30 Ethics and integrity 102-16 Values, principles, standards, and norms of behavior Ethics, compliance and governance, p. 34 10 102-17 Mechanisms for advice and concerns about ethics Ethics, compliance and governance, p. 34 Governance 102-18 Governance structure Ethics, compliance and governance, p. 35 102-19 Delegating authority Corporate Governance Statement 2018, www.outotec.com/cg 102-22 Composition of the highest governance body and its Corporate Governance Statement 2018, committees www.outotec.com/cg 102-23 Chair of the highest governance body Corporate Governance Statement 2018, www.outotec.com/cg 102-24 Nominating and selecting the highest governance body Corporate Governance Statement 2018, www.outotec.com/cg

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Global GRI Comment/ Compact Standard Description Disclosure or link to related page Omissions Pinciple SDG 102-32 Highest governance body’s role in Ethics, compliance and governance, p. 35 sustainability reporting 102-35 Remuneration policies Corporate Governance Statement 2018, www.outotec.com/cg 102-38 Annual total compensation ratio Social data, p. 47 Blue-collar workers are not included in the calculation. 102-39 Percentage increase in annual total compensation ratio Social data, p. 47 Blue-collar workers are not included in the calculation. Stakeholder engagement 102-40 List of stakeholder groups Engaging with stakeholders, p. 16 102-41 Collective bargaining agreements Social data, p. 47 3 102-42 Identifying and selecting stakeholders Engaging with stakeholders, p. 16 102-43 Approach to stakeholder engagement Engaging with stakeholders, p. 16 102-44 Key topics and concerns raised Engaging with stakeholders, p. 16 17 Reporting practice 102-45 Entities included in the consolidated financial state- Financial Statements 2018, p.77, ments www.outotec.com/investors 102-46 Defining report content and topic boundaries About this report, p. 51 Most significant topics, p. 8 102-47 List of material topics Most significant topics, p. 8 102-48 Restatements of information About this report, p. 51 102-49 Changes in reporting About this report, p. 51 102-50 Reporting period Calendar year 2018 102-51 Date of most recent report March 2018 102-52 Reporting cycle Annually 102-53 Contact point for questions regarding the report Contacts, p. 64 102-54 Claims of reporting in accordance with About this report, p. 51 the GRI Standards 102-55 GRI content index GRI, Global Compact and SDG content index, p. 56 102-56 External assurance Assurance statement, p. 62 103 MANAGEMENT APPROACH 103-1 Explanation of the material topic and its boundary Management approach, p. 52 103-2 The management approach and its components Management approach, p. 52 103-3 Evaluation of the management approach Management approach, p. 52 TOPIC-SPECIFIC DISCLOSURES Sustainable technologies and innovations 302 Energy 302-4 Reduction of energy consumption Environmental impact of own 8, 9 13 operations, p. 41 Sustainable technologies and innovations, p. 21 305 Emissions 305-5 Reduction of GHG emissions Climate actions, p. 14 9, 13 Sustainable technologies and innovations, p. 21 57 OUTOTEC / SUSTAINABILITY REPORT 2018 GRI

Global GRI Comment/ Compact Standard Description Disclosure or link to related page Omissions Pinciple SDG 307 Environmental compliance 307-1 Non-compliance with environmental laws No identified non-compliance with and regulations environmental laws, regulations or voluntary codes. Outotec has not paid any fines in the environmental area. 413 Local communities 413-2 Operations with significant actual No identified significant negative impacts 1 11 and potential negative impacts on local communities of our operations, products or suppliers on local communities. No issues concerning the rights of indigenous people. 416 Customer health and safety 416-2 Incidents of non-compliance concerning the health No identified significant negative impacts and safety impacts of products and services of our products on customers’ health and safety. No fines imposed for non- compliance with laws and regulations or voluntary codes regarding the use of Outotec products. OWN Environmental Goods and Services in order intake Sustainable technologies and 9 innovations, p. 21 Sustainability agenda 2020, p. 10

OWN CO2 emissions avoided using Outotec’s Climate actions, p. 14 13 metals-related technologies Sustainable technologies and innovations, p. 21 Sustainability agenda 2020, p. 10 OWN Percentage of reduction of fresh water/tonne of ore Sustainability agenda 2020, p. 10 6 by non-ferrous metals concentrators using Outotec technology OWN Increase of energy produced using Outotec Sustainability agenda 2020, p. 10 7 waste-to-energy solutions Responsible supply chain 204 Procurement practices 204-1 Proportion of spending on local suppliers Responsible supply chain, p. 27 12 308 Supplier environmental assessment 308-1 New suppliers that were screened using Responsible supply chain, p. 26 8 environmental criteria 308-2 Negative environmental impacts in the supply Responsible supply chain, p. 26 8 chain and actions taken 408 Child labor 408-1 Operations and suppliers at significant risk Responsible supply chain, p. 27 5 for incidents of child labor 409 Forced or compulsory labor 409-1 Operations and suppliers at significant risk Responsible supply chain, p. 27 4 for incidents of forced or compulsory labor

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Global GRI Comment/ Compact Standard Description Disclosure or link to related page Omissions Pinciple SDG 414 Supplier social assessment 414-1 New suppliers that were screened using social criteria Responsible supply chain, p. 27 2 12 414-2 Negative social impacts in the supply chain Responsible supply chain, p. 27 2 and actions taken Engaged experts 401 Employment 401-1 New employee hires and employee turnover Social data, p. 47 401-2 Benefits provided to full-time employees that are not Social data, p. 47 provided to temporary or part-time employees 402 Labor/management relations 402-1 Minimum notice periods regarding operational changes Social data, p. 48 3 404 Training and education 404-1 Average hours of training per year per employee Social data, p. 49 Our learning management system 6 does not provide data by gender and employee category. 404-2 Programs for upgrading employee skills Engaged experts, p. 23 1 4 and transition assistance programs 404-3 Percentage of employees receiving regular Social data, p. 49 6 performance and career development reviews 405 Diversity and equal opportunity 405-1 Diversity of governance bodies and employees Social data, p. 46 Data of minority groups is not 5 relevant and thus not collected. 405-2 Ratio of basic salary and remuneration of women to Social data, p. 50 Data was not available about men blue-collar workers. OWN Employee engagement index Engaged experts, p. 23 Health and safety 403 Occupational health and safety (2018 Standard) 403-1 Occupational health and safety management system Health and safety, p. 28 Management approach, p. 52 403-2 Hazard identification, risk assessment, and incident Health and safety, p. 28 investigation 403-3 Occupational health services Health and safety, p. 28 403-4 Worker participation, consultation, and communication Health and safety, p. 29 on occupational health and safety 403-5 Worker training on occupational health and safety Social data, p. 46 Health and safety, p. 29 403-6 Promotion of worker health Health and safety, p. 29 403-7 Prevention and mitigation of occupational health and Health and safety, p. 29 safety impacts directly linked by business relationship 403-8 Workers covered by an occupational health and safety Health and safety, p. 28 1 management system 403-9 Work-related injuries Health and safety, p. 29 3 Social data, p. 48

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Global GRI Comment/ Compact Standard Description Disclosure or link to related page Omissions Pinciple SDG Ethics, compliance, governance 205 Anti-corruption 205-1 Operations assessed for risks related to corruption Ethics, compliance and governance, p. 34 Number and percentage of 10 operations not reported because we assess projects only. 205-2 Communication and training about anti-corruption Ethics, compliance and governance, p. 35 Anti-corruption communication 10 8 policies and procedures Social data, p. 49 not separately reported, it is part of Code of Conduct trainings. Our learning management systems does not provide information of the training hours by gender and employee category. 205-3 Confirmed incidents of corruption and actions taken Ethics, compliance and governance, p. 35 10 206 Anti-competitive behavior 206-1 Legal actions for anti-competitive behavior, Outotec was not subject to any legal anti-trust, and monopoly practices actions for anti-competitive behavior, anti-trust cases or monopoly practices. 406 Non-discrimination 406-1 Incidents of discrimination and corrective actions taken Ethics, compliance and governance, p. 35 Data of minority groups is not 6 relevant for Outotec and thus not collected. 419 Socio-economic compliance 419-1 Non-compliance with laws and regulations in the social Outotec did not have to pay any fines 8 and economic area or fulfill any non-monetary sanctions for non-compliance with anti-corrup- tion laws. We have not identified any non-compliance with laws and/or regula- tions or voluntary codes, neither has the company paid any fines in the social or economic area. Financial performance 201 Economic performance 201-1 Direct economic value generated and distributed Financial performance, p. 30 Country-specific tax information not fully reported as it would not give a comprehensive picture of the fairness of the tax distribution. 201-2 Financial implications and other risks and Financial performance, p. 32 7 opportunities due to climate change 202 Market presence 202-2 Proportion of senior management hired from Social data, p. 50 the local community 203 Indirect economic impacts 203-2 Significant indirect economic impacts Financial performance, p. 30

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Global GRI Comment/ Compact Standard Description Disclosure or link to related page Omissions Pinciple SDG Environmental footprint of Outotec’s own operations 301 Materials 301-1 Materials used by weight or volume Environmental impact of own operations, 7, 8 p. 41 302 Energy 302-1 Energy consumption within the organization Environmental impact of own operations, 7, 8 p. 41 302-3 Energy intensity Environmental impact of own operations, 8 p. 41 302-4 Reduction of energy consumption Environmental impact of own operations, 8, 9 13 p. 42 303 Water and effluents (2018 Standard) 303-1 Interactions with water as a shared resource Environmental impact of own operations, 7, 8 p. 43 303-3 Water withdrawal by source Environmental impact of own operations, p. 43 304 Biodiversity 304-1 Operational sites owned, leased, managed in, or Sustainable technologies and adjacent to, protected areas and areas of high biodiver- innovations, p. 21 sity value outside protected areas 304-2 Significant impacts of activities, products, and services Sustainable technologies and 13 on biodiversity innovations, p. 21 305 Emissions 305-1 Direct (Scope 1) GHG emissions Environmental impact of own operations, 7, 8 p. 43 305-2 Energy indirect (Scope 2) GHG emissions Environmental impact of own operations, 7, 8 p. 43 305-3 Other indirect (Scope 3) GHG emissions Environmental impact of own operations, 7, 8 p. 44 305-4 GHG emissions intensity Environmental impact of own operations, 8 p. 44 305-7 Nitrogen oxides, sulfur oxides, and other Environmental impact of own operations, Only VOCs are reported as the 8 significant air emissions p. 45 other emissions are not relevant in our operations. 306 Effluents and waste 306-2 Waste by type and disposal method Environmental impact of own operations, 8 p. 45 306-3 Significant spills Environmental impact of own operations, 8 p. 45

61 OUTOTEC / SUSTAINABILITY REPORT 2018 ASSURANCE STATEMENT

Independent Assurance Report – Outotec Sustainability Report 2018

TO THE MANAGEMENT OF OUTOTEC OYJ covered the Standard Disclosures in - Evaluating procedures for gathering, requirements set for reporting. In addition, accordance with the core-level option, analyzing, and aggregating quantitative the management approach has been Ecobio Oy (hereafter Ecobio) has been including the reported Environmental and data for the Sustainability Report 2018 developed in a structural manner enabling commissioned by Outotec Oyj (hereafter Social Performance Indicators. In addition, as well as performing cross-checks on better understanding of managing the Outotec) to perform a limited third-party the level of the consistency of the Economic a sample basis concerning the reported material topics. assurance engagement regarding the content Performance Indicators reported was sustainability data. of Outotec’s Sustainability Report for 2018. checked against the GRI Standards. - Checking the internal guidelines of the Report content Ecobio disclaims any liability or data collection. OUTOTEC’S RESPONSIBILITY responsibility for any third-party decision - Checking the sufficiency of the - The report presents the sustainability based upon this assurance report. documentation of the data gathering context of the company operations. It Outotec was responsible for the collection, process. could be further developed by presenting preparation and presentation of the METHODOLOGY - Checking the consistency of the the company performance in reference information in the Sustainability Report Sustainability Report 2018 compared to to broader sustainability goals and (hereafter Sustainability Information) Ecobio based the assurance process on the GRI Standards. context, e.g., by elaborating the long-term according to GRI Sustainability Reporting the following guidelines and standards: the perspective in terms of strategy, risks and Standards (GRI Standards) set up by the GRI Sustainability Reporting Standards, CONCLUSIONS goals. Global Reporting Initiative (GRI). Ecobio, as the International Standard on Assurance - Annual reviewing of megatrends improves an independ-ent assuror was not involved Engagements (ISAE) 3000 (Revised) Based on the work described in this report, the understanding of the impacts and the in the data gathering and preparation of the Assurance Engagements Other than Audits or nothing has come to our attention that would review process could also be elaborated in Sustainability Information, apart from the Reviews of Historical Financial Information, cause us to believe that the information the report. Independent Assurance. The Management and Outotec’s internal reporting guidelines. presented in Outotec’s Sustainability Report - Outotec has identified its key of Outotec has approved the information The assurance process was performed 2018 is not fairly stated, in all material stakeholders, their interests and provided in the Sustainability Report. utilizing Ecobio’s internally developed GRI respects, or that it would not comply with the expectations, and material topics, and assurance tool, covering the principles, Reporting Criteria stated before. has prepared the report taking them into PRACTITIONER’S RESPONSIBILITY standard disclosures and indicators of the account. GRI Standards. The Standard Disclosures OBSERVATIONS AND RECOMMENDATIONS - The challenges could be presented Ecobio’s responsibility was to present a were assessed based on a sampling plan in relation to their context so that the conclusion on the Sustainability Information composed by Ecobio. Based on our limited assurance engagement reader would understand the level of subject to the assurance performed by Concerning limited assurance we provide the following observations consideration and the magnitude of Ecobio. engagement, the evidence-gathering and recommendations related to GRI importance of the future challenges in the The scope of work included assurance of procedures are more limited than for a Sustainability Reporting principles. These materiality assessment. The materiality completeness and correctness of information reasonable assurance engagement, and observations and recommendations do not assessment could also be improved by presented by Outotec in the Sustainability therefore less assurance is obtained. This affect the conclusions presented earlier. linking the assessment to relevant laws, Report 2018. The assurance engagement assurance engagement was conducted from In general, Outotec has prepared the regulations and agreements as well as to was limited to the non-financial performance January 2019 to March 2019. The assurance Sustainability Report 2018 in accordance company values and policies. data disclosed in the Sustainability Report for process included: with GRI Reporting Principles. The report is the reporting period of January 1st 2018 to - Interviewing employees responsible for a balanced, consistent and comprehensive Report quality December 31st 2018. data collection and reporting at Outotec’s representation of the company operations The Sustainability Information assured group level. and performs well in terms of quality - Generally, Outotec provides explanations

62 OUTOTEC / SUSTAINABILITY REPORT 2018 of the data measurement techniques has conducted this assurance independently used and basis for calculations. To and objectively, and there has been no conflict improve the accuracy, the report could of interest. describe the data assumptions and the techniques used to produce the data estimates in more detail and could rethink Helsinki, 6th of March 2019 the places where the information of data Ecobio Oy assumptions can be found. - The report presents the information in an understandable manner and including prior years’ information. However, the comparability of annual reports could be improved by ensuring that at least Taru Halla the performance of the previous year is Managing Director (M.Sc.) compared to the one of the current year reported. Providing information over a longer period of time could also be added Leena Tähkämö to give the reader a better understanding Senior Consultant (D.Sc.) of the trend.

PRACTITIONER’S INDEPENDENCE AND Pia Välitalo QUALIFICATIONS Senior Consultant (M.Sc.)

Ecobio is an independent consulting company that specializes in environmental, health and safety management with 30 years of history. Ecobio provides corporate sustainability and environmental consultancy services, combined with training, modelling, research and planning, for companies in the infrastructure, industry and service sectors. Ecobio’s assurers are skilled and experienced within non-financial assurance and have good knowledge of industry-related sustainability issues. As an independent consultancy, Ecobio has no financial dependencies on Outotec beyond the scope of this engagement. Ecobio

63 OUTOTEC / SUSTAINABILITY REPORT 2018 Contacts

Tea Maasalo Director, Corporate Responsibility [email protected]

Susanna Horn Manager, Sustainability Development [email protected]

Saija Kinanen Director, Corporate Communications [email protected]

Outotec Oyj PO Box 1000, FI-02231 Espoo, Finland Tel. +358 20 529 211 www.facebook.com/Outotec www.linkedin.com/company/outotec www.twitter.com/outotec www.youtube.com/user/Outotec Oyj

Outotec develops leading technologies and services for the sustainable use of Earth’s natural resources. Our 4,000 top experts are driven by each customer’s unique challenges across the world. Outotec’s comprehensive offering creates the best value for our customers in the mining, metal, energy, and chemical industries. Outotec shares are listed on NASDAQ Helsinki. www.outotec.com

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