APSA_Non-financial_information_CSR_2023

SUSTAINABILITY

REPORT 2023

ARCTIC PAPER SA CAPITAL GROUP

disclosure on non-nancial information

We ensure sustainability from forest to paper

TABLE

OF CONTENTS

This is Arctic

Paper / 8

Company

sustainability / 26

Sustainable supply

chain for client

satisfaction / 45

Environment

and climate / 54

1.1 Company Overview / 09

1.2 Business ethics / 20

1.3 Governance structure and management

on sustainability topics / 24

2.1 Materiality assessment / 27

2.2 Our contribution to the Sustainable

Development Goals / 32

2.3 Responsible business / 34

2.4 Principal risks and their management / 35

2.5 Arctic Paper’s partnerships / 38

2.6 Key business performance indicators / 41

3.1 Responsible supply chain / 46

3.2. Environmental assessment of suppliers

and responsible sourcing / 48

3.3 Transportation / 51

3.4. Commitment to client satisfaction / 53

4.1 Management approach / 55

4.2 Energy and emissions / 59

4.3. Sustainable circular production

and waste / 65

4.4 Water / 68

4.5 Biodiversity / 70

SUSTAINABILITY REPORT 2023

People / 73 About the

report / 104

5.1 Working at Arctic Paper –

Management approach / 74

5.2 Our employees' well-being

and satisfaction / 76

5.3 Human rights / 81

5.4 Health and safety / 83

5.5 Diversity, Equity and Inclusion / 84

Taxonomy / 86

7.1 Reporting period / 105

7.2 Contact / 105

7.3 ESG fact sheet / 106

7.4 ESG fact sheet

– Rottneros Group / 112

GRI Index / 116

6.1 Taxonomy compliance

assessment process / 89

6.2 Compliance verication with

the technical screening criteria / 90

6.3 Compliance verication

with minimum safeguards / 91

6.4 Accounting principles / 94

Arctic Paper has prepared its 2023 consolidated annual nancial statement in the European Single Electronic

Format (ESEF) which is the electronic reporting format in which issuers on EU regulated markets shall prepare

their annual nancial reports from 1 January 2020 based on Commission Delegated Regulation (EU) 2019/815

of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with

regard to regulatory technical standards on the specication of a single electronic reporting format as amended.

This abbreviated PDF version of consolidated nancial statement of Arctic Paper Capital Group 2023 has been

prepared solely only for the convenience of digital reading.

Despite all the efforts devoted to the conversion of XHTML le into PDF format, certain discrepancies, omissions

or approximations may exist. In case of any differences between the PDF and the XHTML versions, the XHTML

version is the only one legally binding and shall prevail.

Arctic Paper, its representatives and employees decline all responsibility in this regard.

MANAGEMENT

FOREWORD

It is with pleasure that we present to

you Arctic Paper’s latest CSR-report,

reecting our commitment to sustain-

able practices and responsible corporate

citizenship. As we navigate a changing

business landscape, it is crucial to be

transparent about our efforts to minimize

our environmental footprint.

As part of our commitment to climate

change mitigation, we have taken

signicant steps in enhancing energy

efciency, optimizing water usage, and

increasing the share of renewable energy

in our production. Arctic Paper’s goal is

to transition to fully fossil-free energy

production, accompanied by a substan-

tial reduction in GHG emissions, aiming

for zero emissions in Scope 1 and 2 by

2035. To achive this we actively invest in

renewable energy sources.

Following the principles of the circular

economy, we are committed to deliv-

ering sustainable wood ber solutions

and renewable products. Arctic Paper’s

focus is to create business opportunities

by replacing fossil-based materials with

bio-based, renewable alternatives. It’s

our responsibility to also actively safe-

guard biodiversity in conservation areas

and regenerative forests, with focus

on supplier network. Commitment to

responsible sourcing extends beyond our

operations, to ensure a positive impact

throughout our value chain.

Collaboration is key as we work with

partners to enhance sustainability bene-

ts. To uphold the highest standards of

governance, Arctic Paper has introduced a

new Code of conduct in the value chain of

Arctic Paper Group. It’s designed to rein-

force ethical practices and ensure compli-

ance with our values. We are also actively

working to create organizational resilience

in the face of changing environments and

climate conditions.

Dedication to the development and well-

being of employees is our priority. Arctic

Paper is committed to achieving zero inju-

ries, promoting diversity and inclusion, and

increasing the proportion of women at

various management levels.

Finally, we would like to express warm

thanks to all employees in the Group

for their great efforts during the year to

achieve good results both in terms of nan-

cial and ESG performance.

Sincerely,

Michal Jarczyski

CEO of Arctic Paper SA

SUSTAINABILITY REPORT 2023

Arctic Paper’s commitment to climate

change mitigation stands rm.

THIS IS

ARCTIC

PAPER

SUSTAINABILITY REPORT 2023

1.1

COMPANY OVERVIEW

Arctic Paper SA is a leading European producer of high-quality graphic paper

listed on the stock exchanges in Warsaw (Giełda Papierów Wartościowych –

GPW) and Stockholm (NASDAQ). We produce numerous types of uncoated and

coated wood-free paper, as well as wood-containing uncoated paper for printing

houses, paper distributors, book and magazine publishing houses, the adver-

tising industry and packaging producers.

POLAND

THE PAPER MILL IN KOSTRZYN NAD ODRĄ

The mill has a production capacity of about 315,000 tonnes of paper

per year and mainly produces uncoated wood-free paper for printing

books, brochures and forms, and for producing envelopes and other

paper products.

SWEDEN

THE PAPER MILL IN MUNKEDAL

The mill has a production capacity of about 160,000 tonnes per year

and mainly produces ne uncoated wood-free paper, used primarily

for printing books and high-quality brochures.

SWEDEN

THE PAPER MILL IN GRYCKSBO

The mill has a production capacity of about 220,000 tonnes per year

and produces coated wood-free paper used for printing maps, books,

magazines, posters and advertising materials.

As of December 31, 2023, Arctic Paper employs 1223 people.

Our business activities are based on the operations

of three mills:

1. THIS IS ARCTIC PAPER

SALES OFFICES

Arctic Paper Papierhandels GmbH, Austria

Arctic Paper Benelux N.V., Belgium

Arctic Paper Danmark A/S, Denmark

Arctic Paper France SAS, France

Arctic Paper Deutschland GmbH, Germany

Arctic Paper Italia Srl, Italy

Arctic Paper Baltic States, Latvia

Arctic Paper Norge AS, Norway

Arctic Paper Polska Sp.zo.o., Poland

Arctic Paper Espana S.L., Spain

Arctic Paper Sverige AB, Sweden

Arctic Paper Schweiz AG, Switzerland

Arctic Paper UK Ltd., United Kingdom

MILLS

Arctic Paper Kostrzyn SA, Poland

Arctic Paper Munkedals AB, Sweden

Arctic Paper Grycksbo AB, Sweden

We manage sales organisations across Europe, which support

our activities and contacts with customers. The company is

registered in Kostrzyn nad Odra (Poland).

SUSTAINABILITY REPORT 2023

Arctic Paper SA is also a majority owner (in possession of 51.0 % of the shares as

of December 31. 2023) of the Rottneros group. Rottneros AB is a pulp producing

company, registered on the Nasdaq stock exchange in Stockholm. Mills owned

and operated by Rottneros AB are located in Sweden and have aggregate

production capacities of about 440,000 tonnes of pulp annually. Arctic Paper

SA has nancial control over Rottneros AB, as it holds the majority of shares,

yet operational control belongs to Rottneros AB, including responsibility for the

company’s performance and sustainability matters.

Rottneros data for 2023 is not fully available in the format presented by Arctic

Paper SA. However we present selected data in Chapter 7 ESG fact sheet.

Broader description of the impact on sustainable development and results will be

presented in a separate report of the subsidiary.

Arctic Paper SA discloses information on the EU Taxonomy of environmentally

sustainable activities at consolidated level, including data from Rottneros AB.

Rottneros AB's report is available on web page:

https://www.rottneros.com/sustainability/sustainability-reporting/

Starting from the 2024 annual reporting period, Arctic Paper will include

Rottneros AB's non-nancial data to the extent required by the

new European Sustainability Reporting Standards (ESRS).

1. THIS IS ARCTIC PAPER

OUR HERITAGE AND VALUES

Arctic Paper is a company

based upon Swedish roots.

We have been manufacturing

paper with craft and dedication

since 1740. Today we run some

of the most eco-friendly mills

worldwide and are constantly

improving our sourcing,

production, sale processes

and energy management.

We try to optimise our daily

business processes to be a part

of circular bioeconomy.

Our reputation in the high-quality graphic

paper market is built on a long tradition

of exceptional work with the help of our

brands, executed by the most demanding

customers who value the proven quality of

our products.

We are clear, open-minded and follow

a long-term plan in the way we act, think

and appear. We are sensitive towards

nature and positive towards the future.

We protect natural resources and

constantly create a sound balance between

people, production and regions. We run

our business in a stable, long-term and

trustworthy manner. We are a forerunner

in the protection of nature and the devel-

opment of new products for core markets

as well as for new markets and segments.

We offer distinctive products and services

built on inventiveness and reliable quality,

crafted for the most demanding creative

ideas and using new technologies.

Our business operations are based on

well-established and trusted relation-

ships with different stakeholders. Thus,

we need to ensure that all of our busi-

ness operations are transparent – from

sustainable sourcing, the production and

delivery of our products, to the commu-

nication of our results to external stake-

holders. We are transparent and ethical

in everything we do.

Our cooperation with suppliers has been

based on Code of conduct in the value

chain of Arctic Paper Group. Our goal is

to work with suppliers who can and are

willing to assure us that they respect our

values regarding People and the Envi-

ronment. In 2021 we elaborated a new

Sustainability policy for the entire Arctic

Paper Group.

In order to face new challenges and to

address all signicant topics relevant

for our stakeholders, we implemented a

new Code of conduct for the entire value

chain of Arctic Paper Group in the begin-

ning of 2024.

SUSTAINABILITY REPORT 2023

OUR BRANDS

For decades, we have been one of the leading European

producers of premium graphic paper products, superior

packaging grades and services for the most demanding

creatives and technologies valuing the superb, reliable

and eco-friendly quality of our paper brands.

We are known for new solutions and products, as well as the continuous exten-

sion of our product ranges in step with the latest developments in printing tech-

nology for both the graphical and the packaging segments.

The graphical paper market consists of two segments: wood-free ne paper and

wood-based paper, both divided into the sub-segments of uncoated and coated

paper, while the packaging segment is served by wood-free grades. Our mills in

Munkedal and Kostrzyn produce uncoated wood-free and wood-based paper,

while the mill in Grycksbo produces coated wood-free paper.

1. THIS IS ARCTIC PAPER

KEY BRANDS

Uncoated wood-free paper, in particular – Munken Design,

Munken Book, Amber

• High-quality graphic paper with a very smooth surface, used for various kinds of

advertising and marketing materials. It is produced under the Munken brand.

• Bulky book paper, produced under the Munken brand, used primarily for

printing books.

• White offset paper, produced and distributed primarily under the Amber brand.

It’s one of the most versatile types of paper.

Uncoated wood-based paper, in particular – Munken Print

• Premium bulky book paper, produced and distributed under the Munken

brand, specially developed for colour- and monochrome-printing of books.

Coated wood-free paper, in particular – Arctic Volume, G

• Manufactured under the brand names Arctic Volume and G, used primarily

for printing books, magazines, catalogues, maps and personalised direct mail

correspondence.

Packaging paper – Munken Kraft, G-Flexmatt

The packaging paper portfolio manufactured in Munkedal, Kostrzyn and

Grycksbo has been established since 2020 in chosen markets and segments.

The combined offer from the two uncoated mills is called Munken Kraft and

covers a grammage range from 38 g/m2 to 150 g/m2 in two shades.

Since 2021, the coated packaging paper is a one-sided coated matt grade,

called G-Flexmatt.

SUSTAINABILITY REPORT 2023

OUR BRANDS AND

THE CIRCULAR ECONOMY

Arctic Paper paper grades are produced with an aim to

enhance the circular economy. We use methodologies and the

experience of third parties to create new ways to produce our

different paper ranges, based on chemical hazard identication

and qualitative exposure considerations during manufacturing,

use, and end-of-use of a product. It means that products are

made using chemicals that are as safe as possible for humans

and the environment.

Chosen Arctic Paper products, like Munken Design, Amber Graphic, G and

Arctic Volume white, have been inspected and approved to be used in for Nordic

Ecolabel certied products.

1. THIS IS ARCTIC PAPER

History of our Munken Agenda collaborations:

2019 – NABA (Nuova Accademia di Belle Arti), Milan, Italy;

2020 – École Estienne in Paris, France;

2021 – Universities in London, England;

2022 – Academy of Fine Arts in Warsaw, Poland;

2023 – Forsbergs Design and Advertising School in Stockholm, Sweden;

2024 – Kristiania University College, Oslo, Norway.

OUR BRANDS AND

THE DESIGN INDUSTRY

At Arctic Paper, we learn from students and students learn from working

with us. The Munken Agenda is our unique annual design project, which

started in 1996. For over a decade, Arctic Paper has collaborated with

different European Design Universities in creating an artistic platform for

exchanging our passion for providing high-quality products having an

eco-friendly and sustainable footprint with creativity and conceptual ideas

by artists and designers.

The Munken Agenda is perceived as an interesting design reference by art

directors, designers and agencies around Europe and the world.

SUSTAINABILITY REPORT 2023

MARKETS SERVED

AND OUR SCALE

OF OPERATIONS

99% of Arctic Paper products

are delivered to European

markets. Which, in times of

global transportation problems

and supply chain crisis, helps

us to create a relatively secure

distribution and delivery

reliability. For years our biggest

markets have been Germany,

Poland, the Nordic countries,

the Baltics, followed by France,

BeNeLux, UK and Central and

Eastern European countries.

Germany 22%

Poland 17%

UK & IE 12%

Austria and

Central Europe 10%

The Nordics 10%

France 9%

The Baltics 6%

Benelux 4%

Outside Europe 1%

Rest of Europe 9%

1. THIS IS ARCTIC PAPER

OUR MAIN ACHIEVEMENTS

AND PROJECTS IN 2023

Arctic Paper works towards business expan-

sion and revenue diversication, creating a

solid future for our stakeholders and using

natural renewable resources. We are focused

on developing our products while making a

positive contribution toward environmental

protection in our day-to-day operations.

Each year we plan and

implement innovative

and efcient solutions among

all our areas of operation.

• Joint investment of Arctic Paper and

Rottneros – conclusion of a joint-ven-

ture agreement to build a production

facility of packaging from moulded

cellulose bre.

• Kostrzyn mill was awarded with

an Employee-Friendly Employer

certicate granted by President

of Poland.

• Grycksbo mill launched a project of

pellet production installation, see Case

Study page no 62.

• Kostrzyn mill is expanding its solar

panels installation.

• Grycksbo mill switched to non-fossil

bio diesel as a fuel for internal trans-

port vehicles.

• We implemented new Code of conduct

in the value chain and

Whistleblowing policy. We also created

the Sponsorship policy.

• Grycksbo and Munkedals mills – im-

plemented Pulse meetings – short and

frequent mills’ teams meetings as an

implementation of lean methodology to

gather information about the results of

current projects.

• Munkedals mill created a ower

meadow on the mill site.

• Kostrzyn mill celebrated its 30

anni-

versary.

• Grycksbo mill celebrated its 280

anni-

versary.

SUSTAINABILITY REPORT 2023

BUSINESS MODEL

Below we present information about our business

model – key inputs and outputs, as well as business

activities and results.

INPUTS BUSINESS ACTIVITIES OUTPUTS RESULTS

HUMAN CAPITAL:

∙ 1,223 employees

all over Europe

MANUFACTURING

CAPITAL:

∙ One mill in Poland

and two mills in Sweden

∙ Total production capacity

of over 700,000 tonnes

of paper per year

NATURAL CAPITAL:

∙ Pulp

∙ Pigments

∙ Chemical additives

∙ Water

∙ Energy

FINANCIAL CAPITAL:

∙ Cash

PURCHASING:

∙ Sustainable and

ethical sourcing

∙ Compliance with

the Code of conduct

in the value chain

INNOVATION:

∙ Eco-friendly products,

innovative and efcient

production processes

PRODUCTION:

∙ Responsibility for

the health and safety of

employees, the environ-

ment and product quality

SALES:

∙ Compliance with

the Code of conduct

TRANSPORTATION

AND LOGISTICS:

∙ Sustainability and lower

footprint in deliveries

RECYCLABLE AND

DEGRADABLE PRODUCTS:

∙ Sheets and reels

∙ Coated and uncoated,

wood-free and wood-

based paper

SERVICE OFFER:

∙ Availability of standard

products

∙ Production on demand

(adjustable time frame,

quality, quantity)

∙ Delivery

∙ Product-specic training for

customers and suppliers

EMISSIONS AND WASTE:

∙ Affecting air,

water and land

ENERGY:

∙ The mill in Kostrzyn

sells heat and electricity

∙ Solar power plant

in Kostrzyn, Grycksbo

and Munkedals

∙ Hydropower plant

in Munkedals

∙ Continued investments

and working on develop-

ment of energy efciency

and independence

CUSTOMER:

∙ Customer satisfaction

∙ Brand loyalty

∙ Few customer complaints

EMPLOYEES:

∙ Stable employment and

safe working conditions

∙ Equal opportunities

to grow within the

organisation

∙ Few accidents

∙ Good relationship

with trade unions

∙ Low employee turnover

SOCIETY:

∙ Taxes from employees

and company

∙ Provision of local

employment

∙ Participation in and

support for local initiatives

∙ Commitment into

health programmes

and initiatives to support

employees, their families

and local communities

FINANCERS

AND SHAREHOLDERS:

∙ Interest and dividends

1. THIS IS ARCTIC PAPER

1.2

BUSINESS ETHICS

We value transparency in internal

and external relations, as any

unethical behaviour may expose

us to risks of reputational damage

and nancial loss. Our new

Code of conduct in the value

chain contains clear guidelines

regarding the business behaviour

of our employees and other

stakeholders, including zero-

tolerance for bribes, corruption

and other unethical acts.

We are aware of the fact that

our sales ofces and purchasing

and logistics departments are

where the risks of corruption

and bribery exposure are most

signicant. Our approach to

anti-corruption measures in these

areas is structurally embedded in

our processes.

We have a 7-step approach to procure-

ment, which limits the scope for unethical

behaviour. First, we divide item purchases

into sourcing groups. Then, we gather

information about the sourcing groups

and the market. Subsequently, we create

a portfolio of potential suppliers and

choose a strategy for each sourcing

group. We then negotiate with a selection

of suppliers and integrate further with our

chosen suppliers. Lastly, we continuously

monitor the procurement market to make

sure our contracts remain competitive.

As all decisions made during this process

are never dependent on one person, the

risk of bribery or corruption is reduced.

For large investment projects, decisions

regarding investment purchases are

made by a dedicated committee, and we

are considering extending this practice

to other large purchases. The logistics

department has a similar purchasing

system in place.

Our price lists, approved by our manage-

ment, are communicated to members of

our sales teams. Bonuses to members of

the sales teams are not tied exclusively

to their individual sales performance, but

also to the overall nancial performance

of the company. We offer bonuses to

our clients on a semi-annual and annual

basis; however, these are linked to sales

volumes, e.g., through sales volume

brackets, which are strictly monitored.

Arctic Paper does not offer other bonuses

(for example in-kind) to clients.

To us, business ethics is very much a ques-

tion of awareness. A part of the induction

programme for new employees includes

topics such as laws and regulations, anti-

bribery and anti-corruption measures,

human rights and environmental responsi-

bility. Since 2018, the programme covers

all units within the group. Thus, our key

performance indicator in this respect is

the number of our employees who have

attended such training.

SUSTAINABILITY REPORT 2023

KEY PERFORMANCE INDICATOR 2023

Number of employees who participated in the Business ethics training programme (per year) 81

LEGAL AND REGULATORY COMPLIANCE

Arctic Paper SA is a publicly listed company, which obliges us to comply with the

rules set out in the document “Best Practice of GPW Listed Companies 2021”.

A statement on current compliance with the corporate governance principles

of GPW is published on the Arctic Paper corporate webpage. We comply with

and adhere to all applicable laws and regulations in the European Union coun-

tries where we operate. Although a large part of them is uniform throughout the

Union, we are sensitive to any differences between individual countries.

Legal and regulatory compliance is a business necessity, but also a way for us to

ensure the sustainability of our operations.

We monitor the number of open legal cases where Arctic

Paper was found guilty of a breach of law or regulation.

We separate them into business and non-business related, as

well as into nes bigger and smaller than PLN 2 million.

With regards to legal and regulatory compliance, our target

is to minimise risk of lawsuit.

*Business related legal cases are from customers. All others are dened as non-business.

KEY PERFORMANCE INDICATOR BUSINESS RELATED* NON-BUSINESS RELATED*

2023

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

We aim for our employees to sign declarations that they have familiarised them-

selves with our Code of conduct. Our employees are participating in nano-learning

in the area of business ethics, which mainly covers corruption and bribery topics.

In 2023 all new employees received training during the onboarding process.

1. THIS IS ARCTIC PAPER

TRANSPARENCY

AND COMMUNICATION

ARCTIC PAPER GROUP IS OPEN AND TRANSPARENT IN DECISIONS AND

ACTIVITIES THAT HAVE AN IMPACT ON SOCIETY AND THE ENVIRONMENT.

• We are accountable for our actions.

• We always comply with applicable laws and regulations, and we respect,

consider and respond to the needs of our stakeholders.

• We behave ethically and actively promote ethical behaviour based in the values

of honesty, equity and integrity.

• We believe in fair and free trade. We shall refrain from any kind of bribes

and corrupt business

• All employees of Arctic Paper, regardless of their functions, are obliged to apply

the ethical principles and rules of conduct collected in the Code of conduct

in the value chain of Arctic Paper Group. It is a set of key principles and values

reecting the organizational culture of the Arctic Paper Group, the purpose

of which is to build trust and lasting loyalty of employees, customers,

shareholders and local communities

• Members of the corporate bodies of Arctic Paper should refrain from profes-

sional or other activities which might cause a conict of interest or adversely

affect their reputation as members of the corporate body, and where a conict

of interest arises, they should immediately disclose it.

SUSTAINABILITY REPORT 2023

CUSTOMERS EMPLOYEES SUPPLIERS SHAREHOLDERS

Environment

and Climate

∙ EMAS report

∙ “Paper Proles”

∙ Sustainability policy

∙ EMAS report

∙ Sustainability policy

∙ EMAS report

∙ Code of conduct in

the value chain and

Sustainability policy

∙ “Paper Proles”

∙ EMAS report

∙ “Paper Proles”

∙ Sustainability policy

People ∙ Direct communication

through sales ofces

∙ Code of conduct in

the value chain and

Sustainability policy

∙ Whistleblowing

reporting system

∙ Intranet, widely acces-

sible to all employees

∙ Meetings, both

one-on-one

and in groups

∙ Training and

education

∙ Whistleblowing

reporting system

∙ Diversity policy

∙ Direct communication

through purchasing

departments

∙ Code of conduct in

the value chain and

Sustainability policy

∙ Whistleblowing

reporting system

∙ Code of conduct in

the value chain and

Sustainability policy

∙ Whistleblowing

reporting system

∙ Sponsorship policy

Business

operations

∙ Direct communication

through sales ofces

∙ Press releases

∙ Meetings

∙ Periodic

and annual reports

∙ Annual meetings and

investors meetings

∙ Press releases

∙ Code of conduct in

the value chain and

Sustainability policy

We strive to maintain a transparent busi-

ness climate and a high level of business

ethics. A number of policies, internal

requirements, laws, rules and routines

governs the operations of Arctic Paper.

Our aim is to act with transparency and

we want our employees and other stake-

holders to experience participation in

the business. The Whistleblower system

gives anyone the opportunity to report

suspected serious misconduct that is

inconsistent with the Code of conduct and

Arctic Paper's values.

This service is intended for all our internal

and external stakeholders and publicly

available on-line. It is worth remembering

that using it can have a huge impact on

the entire organization or the life and

health of a specic person.

Apart from transparency in inter-

nal and external relations, we

value constant and transparent

communication with our stake-

holders, as explained in our Sus-

tainability policy. Our communi-

cation matrix shows that we use

different communication channels

which help us to communicate

issues regarding our material

themes to different stakeholders.

We understand that different

topics have varying degrees of

importance to our stakeholders.

A commonly used communication channel

in Arctic Paper is our Investors Relations

mailbox. Upon receiving a query, the

message is forwarded to the person most

competent to answer it.

1. THIS IS ARCTIC PAPER

Management Board

Sustainability Team

Group Executive Team

Managing Director

Arctic Paper

Munkedals AB

Managing Director

Arctic Paper

Grycksbo AB

Managing Director

Arctic Paper

Kostrzyn SA

Managing Director

Sales Ofces

Managers Managers Managers Managers

Supervisory Board

1.3

GOVERNANCE STRUCTURE

AND MANAGEMENT ON

SUSTAINABILITY TOPICS

SUSTAINABILITY REPORT 2023

Engagement of the Management Board and the Supervisory

Board in the economic, environmental, and social topics

• Arctic Paper Group strives in its operations to

promote environmental protection, an effi-

cient utilisation of resources and energy, and

sustainable development.

• The Arctic Paper Management Board together

with the Supervisory Board and its Risk

Committee are responsible for overseeing the

process of identifying and managing risks in

each country where Arctic Paper operates. The

Management Board is supported and advised

by the Managing Directors of the mills and

Managing Directors of sales units.

• The Group Executive Team consists of exec-

utive vice presidents responsible for various

areas of activity, including strategy and sustain-

able development, procurement, human

resources, sales and marketing.

• The Supervisory Board is composed of five

members elected by the Shareholders Meeting

for a joint three-year term of office. Two of the

members are independent.

• The Management Board is composed of three

members elected by the Supervisory Board for

a joint three-year term of office.

• The Sustainability Team, consisting of

employees representing various functions and

positions within Arctic Paper, holds an advi-

sory role in the process.

• At least every two years Arctic Paper conducts

a materiality assessment, which defines the

most important topics it should contribute to.

• The demands we place on ourselves, we pass

on to our suppliers. As far as possible, our

environmental principles should also apply

outside our company. Every step in the chain,

from sourcing of raw materials to suppliers,

must live up to our high demands.

• Each company in the Arctic Paper Group

must work to maintain a friendly internal and

external environment. Paper mills are required

to make continuous efforts in this area - of

course, within what is technically and economi-

cally justified.

• At each stage of the process, from the

purchase of raw materials for manufacturing,

through quality development, marketing and

distribution to end customers, we try to mini-

mise our environmental impact on water, air,

climate, ground and noise levels.

• Before a decision is made as to new invest-

ments or major changes in the manufacturing

process, issues relating to the working envi-

ronment and the external environment must

be assessed in the form of an environmental

impact analysis, including energy consumption

and evaluated in collaboration with manage-

ment, authorities and employees. Environ-

mental factors are taken into consideration

when marketing the Group’s products.

• Arctic Paper Group undertakes long-term

environmental planning and monitors devel-

opment in these matters, both in Sweden and

Poland and on an international scale, as well

as monitoring and participating in research

projects in this area. Arctic Paper Group must

have an open, objective approach to internal

and external environment information.

1. THIS IS ARCTIC PAPER

COMPANY

SUSTAINABILITY

SUSTAINABILITY REPORT 2023

2.1

MATERIALITY

ASSESSMENT

Arctic Paper’s key focus is sustainable develop-

ment in all areas where our business activities

have a signicant impact. This means that we

aim to create value for shareholders, but not at

the expense of opportunities for future genera-

tions. In sustainability reporting, materiality is the

principle that determines which relevant topics

are so important that it is essential to report

on them. Not all material topics are of equal

importance, and the emphasis within a report is

expected to reect their relative priority. Thus,

the reporting organization should conduct a

materiality assessment.

Our three key sustainability aspects are: the

Environment, People and Business Operations

We constantly review and internally validate the

list of material aspects, from which we arrived at

our materiality mix. The materiality mix continues

to be the basis of Arctic Paper's sustainability

work and reporting structure.

At the end of 2020, we conducted a survey

in which we asked our stakeholders to

share their opinions and recommendations

regarding our future CSR activities and

areas of involvement. Three main groups of

our stakeholders took part in it: employees

(491 respondents), customers (24 respond-

ents) and other stakeholders (20 respond-

ents), including:

• suppliers,

• NGO representatives,

• authorities,

• local communities,

• universities,

• schools and representatives

of creative industries.

All topics were assessed against the following criteria: importance to

the company and importance to the stakeholders, using a scale from

1 (low importance) to 20 (high importance). Their opinions help us

to decide which aspects of our responsibilities should be our priority

for the future. We have analysed the results and prepared new

Arctic Paper Materiality Matrix based on environmental, social and

governance (ESG) criteria.

2. COMPANY SUSTAINABILITY

ARCTIC PAPER MATERIALITY MATRIX

The results of the stakeholder survey and management valuation of sustainability

factors are shown in condensed form in the materiality matrix below.

11 12 13 14

10 15 16 17 18 19 20

7 TOP MATERIAL ESG TOPICS

Health and safety

of the employees

S2 Customer satisfaction 39

E1 Climate change 38

Water consumption manage-

ment and minimising water

pollution

Sustainable circular

production system

and waste management

Working conditions and

employee satisfaction

Business ethics: legal

& regulatory compliance,

anti-corruption measures,

transparency

OTHER ESG TOPICS

Training and development

possibilities

Human rights protection in

the workplace and in the

supply chain

Inuence of COVID-19

pandemic on business –

company resilience

Offering more eco-friendly,

certied products

S6 Diversity and inclusion 30

S5 S4

E3 E2

E4 G2

IMPORTANCE AND IMPACT ON STAKEHOLDERS

IMPORTANCE AND IMPACT ON ARCTIC PAPER

SUSTAINABILITY REPORT 2023

KEY FINDINGS

The fact that Arctic Paper engages in sustainable development activities is impor-

tant or very important for stakeholders.

All groups stated that Arctic Paper has made progress regarding sustainable

development.

According to more than half of Arctic Paper's clients, the company is one of the

leaders in sustainable development.

Almost 80% of clients state that Arctic Paper cares about customer satisfac-

tion, and as research shows, this topic should be one of the most crucial for

Arctic Paper.

Reducing the impact on climate change should be a priority for the next 3 years

according to stakeholders.

85% of representatives of the group of "other stakeholders" declared that it

is important to them and their organisation to understand the goals and plans

of Arctic Paper.

2. COMPANY SUSTAINABILITY

BASIS FOR SELECTION IMPORTANT SUBJECTS ARCTIC PAPER ACTIONS

Customers

Main source of value creation ∙ Environmental impact of produc-

tion and ways of improving its

efciency

∙ Preventing deforestation:

pulp sourced from sustainably

managed forests

∙ Compliance with laws and

regulations

∙ Meeting sustainability goals while

offering competitive prices

∙ Offering more ecofriendly,

certied products and packaging

solutions

∙ Customer satisfaction and

managing consumer complaints

∙ Effective transport and logistics

∙ Workplace ethics and principles

∙ Communication with customers

regarding sustainable develop-

ment activities

∙ Support and education for clients

and end-users

∙ Transparent presentation of envi-

ronmental performance, such as

in the EMAS-report

∙ Using pulp manufactured from

suppliers certied by FSC

PEFC™

∙ Development of new sustainable

and renewable products and

services

∙ Effective claim handling system

∙ Reduction of the share of trans-

port with the use of engines with

standards lower than EURO 5

∙ Business ethics training for

employees

∙ Meetings with customers, trial

printing new products

Employees

Key capital for our ability

to produce and sell our products

∙ Environmental impact of produc-

tion and ways of improving its

efciency

∙ Initiatives to improve the well-

being of employees

∙ Health and safety

∙ Training and development possi-

bilities within organisation

∙ Communication with employees

∙ Human rights protection in the

workplace

∙ Company involvement in local

communities

∙ Mill-specic action plans

for health and safety

∙ Training programmes

∙ Remuneration routines

∙ Financial participation in health

and well-being initiatives and

activities, supporting employees

and their families

∙ Partnerships and sponsorships

with local cultural and sports

associations

Suppliers

Signicant impact on

our production capabilities

∙ Responsible approach

towards our supply chain

∙ Business ethics

∙ Human rights protection

in the supply chain

∙ Audit of a major pulp supplier

using a detailed form

∙ Following the Arctic Paper

Code of conduct for suppliers

∙ Looking for more efcient

and sustainable ways

of transportation

SUSTAINABILITY REPORT 2023

BASIS FOR SELECTION IMPORTANT SUBJECTS ARCTIC PAPER ACTIONS

Authorities / NGO’s /

Local communities

Compliance with legal obligations ∙ Compliance with

legal requirements

∙ Minimising the negative impact

of business operations

∙ Human rights protection

in the supply chain

∙ Human rights protection

in the work place

∙ Transparent reporting and

communication both for nancial

and non-nancial performance

∙ Active participation

in sectoral initiatives

∙ Following Arctic Paper’s Code

of conduct and Diversity policy

Shareholders

Expectations of return on

investments

∙ Support for Arctic Paper’s

sustainability work

∙ Potential business risks related

to sustainability issues

∙ Sustainable circular production

system and waste management

∙ Providing information

regarding its approach

to environmental issues

∙ Transparent reporting and

communication, both for nancial

and non-nancial performance

∙ Strategy publication

∙ Meetings and dialogue

with investors

In 2023, there were no changes to the busi-

ness model of the Arctic Paper Group, nor

were there any events in the environment

that would signicantly affect this model

and the nature and scale of the social, envi-

ronmental or economic impact of Arctic

Paper Group.

The above-described aspects are the

subject of a broader annual discussion

within our organization, which aim to

better understand the current and future

nature of relations with the environment in

the context of possible changes, including

regulatory, and observed social trends.

As a result, it allows us to understand the

current and future nature of our impact.

The internal verication of the assess-

ment of the signicance of the impact of

individual areas and the prioritization of

important aspects carried out in recent

years led to the conclusion that there have

been no signicant changes in this respect

compared to the previous year. As a result,

they became the starting point for deter-

mining the current content of the report.

In the last quarter of 2023, we conducted

another edition of our stakeholder survey.

We have started the process of double

materiality assessment related to the new

European Sustainability Reporting Stand-

ards - ESRS, which are applicable to the

Arctic Paper Group from the reporting year

2024. The study results will allow us to revisit

important topics and estimate the impact of

our activities. The results of the dual mate-

riality assessment will be presented in our

2024 Sustainability Report.

2. COMPANY SUSTAINABILITY

PEOPLE

2.2

OUR CONTRIBUTION

TO THE SUSTAINABLE

DEVELOPMENT GOALS

In 2015, the United Nations published a comprehensive list of 17 Sustainable

Development Goals (SDGs). As sustainability is deeply integrated into the daily

operations of Arctic Paper, we decided to match the material themes described

above with the SDGs. We have identied eleven SDGs that we nd are the most

relevant to our operations and to which Arctic Paper can best contribute.

• Systematic approach to health and safety at each mill

• Annually approved action plans for health and safety

• Occupational healthcare service at all sites

• Rehabilitation services on offer

• Keeping a register for analysis and prevention

of accidents

• Whistleblowing system and interactive training for

employees across the entire organisation

• Diversity policy - workshops and launch of development

work of an action plan and education program in the eld

of diversity and inclusion

• Regular performance audits for employees (salary

mapping)

• Cooperation with local and international schools and

universities in Europe

• Regular IT trainings

WHAT ARCTIC PAPER IS DOING

% IMPACT ON ARCTIC PAPER'S

CORE OPERATIONS

% IMPACT ON ARCTIC PAPER'S

VALUE CHAIN

SUSTAINABILITY REPORT 2023

ENVIRONMENT

• State-of-the-art water treatment facilities at all sites

• Plans in place to improve water efciency

• Measurement and monitoring of indicators of water inow

and outow

• Employee education with regards to environmental

behaviours

• Improvements in energy efciency

• Measurement and monitoring of emission indicators

• All mills are ISO14001 certied and full EU EMAS

regulations

• Grycksbo mill is ISO 50001 certied (Energy management

system) and certcation of mill in Munkedal is completed

• Measurement and monitoring of waste management

indicators

• Restoring sh breeding habitat in the Munkedal river

WHAT ARCTIC PAPER IS DOING

BUSINESS

OPERATIONS

• Responsible supply chain practices

4P Strategy – Power, Paper, Pulp, Packaging

• Strong focus on measuring and minimising the

environmental impact of our business operations

• Cooperation with local communities, industry

associations

• Sharing knowledge and experience with institutional

partners

WHAT ARCTIC PAPER IS DOING

% IMPACT ON ARCTIC PAPER'S

CORE OPERATIONS

% IMPACT ON ARCTIC PAPER'S

VALUE CHAIN

% IMPACT ON ARCTIC PAPER'S

CORE OPERATIONS

% IMPACT ON ARCTIC PAPER'S

VALUE CHAIN

2. COMPANY SUSTAINABILITY

2.3

RESPONSIBLE BUSINESS

For Arctic Paper Group, sustainability is the foun-

dation of our business: we believe that you can't

run a business without considering the organi-

sation’s impact on the environment and society.

We want to leave the smallest possible footprint,

while having the greatest possible positive

impact on our stakeholders. This is our respon-

sibility as a company which employs more than

thousand employees around Europe, supplies

its products to customers around the world, and

whose production process is based on the use

of renewable raw materials. This is manifested in

our Sustainability policy which we implemented

at the end of 2021.

Our approach to sustainable development

is based on ESG (Environmental, Social and

Corporate Governance) factors, and therefore

focuses on three pillars: Environment, Social and

Corporate Governance. Thanks to it, we make

a positive contribution to the implementation of

the UN Sustainable Development Goals.

Our Sustainability policy aims to dene the

general principles of approach to ESG issues

and sustainable development. Sets out the

framework for managing these topics within the

Arctic Paper Group.

The policy recognizes the importance of topics

related to sustainable development for the Arctic

Paper Group, its business model, long-term

goals and daily operations. The principles of

managing ESG issues, which include the Sustain-

ability policy, are the basis for implementing

a sustainable development approach that

supports the goals of our company policy has an

educational dimension.

In Arctic Paper Group, we make every effort

to ensure that everyone knows the rules and

follows them in everyday work. To this end, we

put emphasis on educating managers and top

management.

We are a responsible organization,

which is why we undertake numerous

activities contributing to sustainable

development.

Arctic Paper SA regularly conducts a materiality

assessment dening the most important topics it

should positively contribute to.

The Sustainability policy is

supplemented by the following

policies in place at Arctic

Paper Group:

• Code of conduct in the value chain of Arctic

Paper Group,

• Diversity policy,

• Sponsorship policy,

• Whistleblowing policy.

The implementation of policies is supported by

guidelines and instructions from the management,

which help everyone within the organisation to

understand their impact and obligations.

SUSTAINABILITY REPORT 2023

2.4

PRINCIPAL RISKS

AND THEIR MANAGEMENT

In order to sustainably create value over the short and long-term,

we periodically identify, analyse and mitigate the risks facing

our organisation. In our business model we have to take into

consideration a number of risks, dependencies and opportunities

in the whole value chain, from raw material to transportation of

our products to the customers. Increasingly important is to value

the risks and opportunities related to climate.

Since 2019, we have expanded our report by reporting CO

emissions not only

from our own mills, but also from our major suppliers of raw materials, energy and

transportation companies.

We describe the potential threats related to climate change, which represent an

opportunity for our company, as we can contribute to solving these problems by

offering products based on renewable sources that can replace products based on

fossil fuels.

Since 2020, the COVID-19 pandemic has become a major public health emer-

gency and has created a new kind of global risk factor for the business environment

around the world. We assessed and managed the risks as a possible serious threat

to our daily business operations, which may have a signicant impact on the nan-

cial condition of the Arctic Paper Group. Both currently and in the future.

2022 was an unprecedented year due to the outbreak of the war in Ukraine. Mili-

tary conicts have devastating effects, mainly from a social perspective. Such

events are unpredictable and affect larger groups of companies, societies and the

entire economy. The war in Ukraine forced the acceleration of development and

the transition to renewable, safe and stable energy sources.

At Arctic Paper, we pay attention to the development of the conict in Ukraine, also

due to possible disruptions in the supply chain that could affect the continuation of

production. We haven't noticed that kind of disruptions so far.

2. COMPANY SUSTAINABILITY2. COMPANY SUSTAINABILITY

Our principal risks are explained in the table below, together

with an overview of actions taken to mitigate them. More detailed

information with regards to specic mitigation plans can be found

in later sections of the report, categorised by theme.

RISK IMPLICATIONS MITIGATING ACTIONS TAKEN

Environment and climate

Not meeting national or EU-wide

legal requirements with regards to

environmental standards

∙ Fines from authorities

∙ Reputational damage

∙ Possible personal responsibility

∙ Disruptions in operations

∙ Careful monitoring of environ-

mental standards and indicators

∙ Early reaction system

to changes in regulation

∙ Introducing efciency-improving

technologies

Unintentional damage

to the environment

∙ Careful monitoring of environ-

mental standards and indicators

∙ Compliance with regulations

and procedures

The impact of climate change

on the physical conditions

of production

Disruptions in operations due to:

∙ Drought

∙ Flooding

∙ Landslide

∙ Malfunction in electrical

equipment

∙ Reputational damage

∙ Raw materials sourcing

∙ Energy sourcing

∙ Reducing water consumption

∙ Increasing water by-pass capacity

∙ Improving drainage

∙ Plans for supply allocation

∙ Increasing of cooling capacity

for sensitive electric equipment

∙ Allocation of raw materials

to core products and markets

∙ Reducing specic energy

consumption

∙ Investing in renewable

energy sources

People

Lack of competent employees

(e.g., due to competition or dif-

culties in nding new employees

to replace an ageing workforce)

∙ Disruptions in operations

(insufcient quantity or quality

of products)

∙ Financial loss – money

invested in training is lost

∙ Creating an attractive and ethical

workplace to attract and retain

employees

∙ Training and talent accquisition

Accidents at work ∙ Disruptions in operations

∙ Departure of qualied personnel

∙ Need for new investments at

production sites if the damage

is extensive

∙ Fines from authorities

∙ Health and safety training

performed on a regular basis

∙ Detailed analysis of all incidents –

from risk observation to injuries

∙ Improvement plans in place

for all our mills

∙ Dedication to a zero-injury

environment

SUSTAINABILITY REPORT 2023

RISK IMPLICATIONS MITIGATING ACTIONS TAKEN

People and Business operations

Limited visibility over suppliers

and their human rights practices

∙

Disruptions in operations

∙

Disruptions in value chain

∙

Reputational damage

∙

Financial loss

∙

Raw materials and energy

sourcing limitations

∙

Scrutiny over actions of suppliers

in the form of signed declarations

∙

Implementation Code

of conduct in the value chain

∙

Implementation of policies,

building awareness and routines

throughout the entire organi

sation in order to protect our

employees and operations

∙

Keeping and promoting high

health standards among

employees and contractors

Global pandemic (i.e., COVID-19)

Outbreak of war

Environment and Business Operations

Shortage of pulp on the market,

inability to buy certied pulp

∙

Disruptions in operations

∙

Financial loss

∙

Loss of customer credibility

∙

Careful monitoring of the market

∙

Building long-term relationships

with qualied suppliers

∙

Diversication of sources

of energy, seeking new

energy investments

Disruptions in the energy market

(e.g., lack of energy access or

poor fuel quality)

∙

Continuity plans developed

for mills

∙

Careful monitoring of world

affairs of the global business

environment

∙

Building long-term relationships

with qualied suppliers

Poor weather conditions

(e.g., ooding) (see also “climate”)

∙

Country-specic risks – linked

to the supply chain, production,

and distribution

∙

Risk due to climate change

∙

Disruptions in operations

∙

Financial loss

∙

Increased regulatory burden

∙

Reputational damage

∙

Raw materials sourcing

∙

Energy sourcing

2. COMPANY SUSTAINABILITY

At Arctic Paper we value our partnerships with

external partners and we see the positive impact

of such cooperations on our company and our

employees. We are eager to share our experience

and knowledge as a business partner, as well as

want to learn from and support our partners.

We cooperate with local communities and

organisations, as well as industry organisations.

2.5

ARCTIC PAPER’S

PARTNERSHIPS

SUSTAINABILITY REPORT 2023

SOME OF OUR PARTNERSHIPS

• The Munkedals mill has established

a very close and long-term (20-year)

cooperation with a high school focusing

on the technology of the production

process. The school is located on the

premises of our mill, so we can offer

students easy access to the work prac-

tice.The mill sponsors one teaching

post with extensive knowledge in paper

manufacturing. In return, the school is

one of the mill’s most important recruit-

ment sources. Each year, Arctic Paper

Munkedals also grants a scholarship to

the student with the best exam result.

• The paper mill in Kostrzyn cooperates

with vocational schools and supports

future printing students. School students

visit the factory and thus expand their

knowledge of paper production technol-

ogy for printing applications.

• Arctic Paper Grycksbo and Arctic Paper

Munkedals are members of the Swedish

Forest Industry Association (Skogsindus-

trierna), which acts as a forest industry

employer association working with

labour unions and other authorities. It

also acts as a technical institution with

a focus on supporting the industry by

sharing knowledge within such areas as

the environment, energy product safety,

standardisation and forestry manage-

ment; presenting this knowledge and

the industrial perspective to politicians

and authorities.

We actively participate in the work of

the association. In 2023, Arctic Paper

was represented in three committees:

energy, environment and products.

Arctic Paper has served as chairman of

the environmental committee for over

a decade.

• In Poland, Arctic Paper Kostrzyn is an

active member of The Association of

Polish Papermakers - an organisation

of scientic, technical and managerial

qualities with individual and corpo-

rate members, whose activities are

connected with the paper and paper

converting industries.

2. COMPANY SUSTAINABILITY

• Dalarna Science Park in Sweden –

a non-prot regional organization

supporting local enterprises and

innovations projects with the mission

to promote regional growth and

development.

• UTIPULP – Group of European Market

Pulp Users, a non-prot association

created in 1979. UTIPULP brings

together consumers of market pulp,

whose members are formally national

associations. In the case of Poland, it is

The Association of Polish Papermakers,

which freely shapes its representation in

the structures of UTIPULP. Arctic Paper,

as the initiator of this membership,

actively participates in the work of the

association through its representatives.

UTIPULP's task are: developing a

common position and represent the

interests of customers of market pulp,

standardization, certication of trade,

arbitration, ensuring the security of

the entire supply chain. UTIPULP also

gathers its members around oppor-

tunities to inuence the shape of EU

legislation and responds to challenges

related to the transformation of the

economy towards climate neutrality, an

environmentally sustainable develop-

ment model and economical manage-

ment of raw materials. Additionally, it

strengthens the negotiating position of

European partners and improves the

quality of pulp available on the market,

thanks to the dissemination of certica-

tion systems: FSC, PEFC, ISO, EUTR.

• Our paper mills are also members

of regional chambers of commerce,

which allows us to establish contacts

with professionals from other indus-

tries. Thus, both individual and entire

companies develop fruitful partnerships

through informal learning and exchange

of experiences.

• Arctic Paper supports local communities.

We sponsor activities for sport and

cultural events, including: uni-hokey

team, a football team, oorball team

and a table tennis team. We donate an

annual supply of free scrap paper to

schools, kindergartens and clinics in the

vicinity of the city of Kostrzyn nad Odrą.

SUSTAINABILITY REPORT 2023

2.6

KEY BUSINESS

PERFORMANCE

INDICATORS

Arctic Paper’s approach to corporate responsibility is centred on sustainability of op-

erations, in particular with regard to the mills. We have therefore established a set of

key business performance indicators, which are periodically measured and reported to

management. These indicators allow us to better understand our impact on the en-

vironment and our employees, as well as better understand our business operations.

Following this assessment, we can react accordingly.

Arctic Paper reviewes its main key business

performance indicators on a regular basis.

Below we present some examples of KPI we measure. More detailed KPI’s are shown in

the following chapters and historical data are included in tables at the end of the report.

During 2024, Arctic Paper will review and update all KPIs and set a new time perspec-

tive for the targets after nishing double materiality assessment process according to

the ESRS - European Sustainability Reporting Standards.

ENVIRONMENT

& CLIMATE

Energy consumption: Total net energy consumption

(MWh/tonne of paper)

We are committed to improving the energy efciency of our operations. Investments in

this area will have a positive effect on the environment, due to decreased emissions of

pollutants, and on our nancial performance.

2. COMPANY SUSTAINABILITY

2023 turned out to be a difcult year due to high volatility in energy prices

and availability. The graphic paper market was subject to equally strong uc-

tuations, with short order lead times and a large number of changes in the

types of paper produced, and consequently scattered production with many

starts and stops of paper machines, resulting in lower energy efciency and

higher specic energy consumption.

TOTAL NET ENERGY CONSUMPTION*

(MWh/tonnes of paper)

Target 2025 2023

1.9

2.5

OF WHICH FROM INTERNAL

ENERGY PRODUCTION BASED

ON RENEWABLE SOURCES**

(MWh/tonnes of paper)

Target 2025 2023

1.1

0.33

TONNES OF PAPER PRODUCED Target 2025 2023

695,000

423,817

*Energy sold to external partners not included. Target of 2025 and gures for 2016-2020 are recal-

culated by including purchased heat.

**Biomass and hydropower

SUSTAINABILITY REPORT 2023

SHARE OF PULP SUPPLIERS

WHO ARE FSC

AND/OR PEFC™ CERTIFIED

Target 2025 2023

100%

ENVIRONMENT

& BUSINESS OPERATIONS

Value chain: % of pulp suppliers who are FSC

and/or PEFC™ certied

We are aware of the fact that the environmental integrity of our business relies in part

on our suppliers. As we source pulp for our production from a number of suppliers, we

expect them to share our values with respect to environmental sustainability. Our aim is

to be sourced by responsible and sustainable pulp suppliers who possess FSC

and/or

PEFC™ certications.

PEOPLE

Injuries per million work hours

We have a systematic approach to safety. We train our employees on an annual basis

and ensure that our management is well-equipped to handle safety emergencies. We

also have programmes for risk assessment. When problems are identied during the

production process, targeted continuous action plans are put into place. In addition,

we have trained rescue teams at all of our mills. We are committed to minimising the

number of injuries at our workplaces.

2. COMPANY SUSTAINABILITY

BUSINESS

OPERATIONS

Value of complaints as share of annual turnover

We want our customers to be satised with our approach to sustainability and our

products. All complaints are carefully categorised and evaluated by our sales team

and management. We aim to minimise the cost of claims, keeping in mind that not all

complaints may be substantiated.

LOST TIME INJURIES

PER MILLION WORK HOURS

Target 2025 2023

9.2

VALUE OF COMPLAINTS

AS SHARE (%) OF SALES REVENUE

SALES REVENUE (IN PLN M) 2,460

Target 2025 2023

0.50

0.41

In 2023, the number of injuries unfortunately increased. We have imple-

mented safety procedures and expanded cooperation between production

units with common experience and knowledge and need to pay more atten-

tion to changing the work culture. Injuries occur mainly as a result of human

errors. Therefore, it is very important to change behavior and create a culture

of a safe workplace and build employee awareness of possible threats at

production positions.

SUSTAINABILITY REPORT 2023

SUSTAINABLE

SUPPLY CHAIN

FOR CLIENT

SATISFACTION

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

Our business operations are based on well-established and

trusted relationships with different stakeholders. Therefore,

we need to ensure that all our business operations are

transparent – from sustainable sourcing, production and

delivery of our products, to the communication of our results

to external stakeholders.

Arctic Paper cooperates with a wide network of suppliers from around the world.

They provide us with raw materials, chemicals, energy, logistics and other services

that enable us to serve our customers. Aside from the sustainability of our oper-

ations, it is crucial that we consider the approach taken by suppliers. We aim to

choose suppliers who can and are willing to assure that they respect our values

with regards to People and the Environment. Our suppliers have to follow the

Code of conduct in the value chain of Arctic Paper.

In addition, we want to be transparent and ethical in everything we do. We have

established and follow a Code of conduct and Sustainability policy. However, we

are aware of the need to raise awareness of these topics among our employees.

3.1

RESPONSIBLE

SUPPLY CHAIN

Arctic Paper is deeply integrated into the global value chain. We have over

200 suppliers of materials, 30 of whom cover more than 90 percent of the

purchased value and are considered core suppliers.

In our paper mills, we have procedures to help us produce paper with the

smallest possible direct impact in terms of pollutants to water, air and land

(waste). As the environment has no borders, the impact of our suppliers is of high

importance, hence we gather information regarding their environmental perfor-

mance so that we may make informed purchase decisions based on product

specications and environmental performance.

SUSTAINABILITY REPORT 2023

To ensure that our core suppliers take a responsible approach to their business,

they are required to provide us with the environmental declarations in a form

of specic written reports documenting their environmental performance with

regards to energy consumption, pollutants to air, water and raw materials – in

particular wood. Information from these reports helps us to perform a life-cycle

analysis for our products. We also ask the core suppliers for information as to

whether a code of conduct and a sustainability policy are in place. At the same

time, we expect them to take note of our Code of conduct and Sustainability

policy. We wish to follow a similar approach towards the rest of our suppliers.

Arctic Paper expects its suppliers to comply with the high

standards and values represented by our organisation.

Since 2019 we started a procedure by which all our suppliers

are required to comply with our Code of conduct either

by signing our Code or by the supplier providing us with

an equivalent document.

Our Code of conduct in the value chain of Arctic Paper covers the most important

areas: Laws and Regulations, Human and Labour Law, Corruption and Bribery, the

Environment. This document is attached to each contract and is expected to be

signed alongside the contract. Suppliers are also expected to follow the require-

ments set forth in this document. The Code of conduct applies to all Arctic Paper

suppliers as well as all third parties contracted by our suppliers.

Those suppliers who have their own Code of conduct or sustainability policy which

are compatible with the Arctic Paper values described in our Code of conduct in the

value chain, are asked to provide us with a copy of the appropriate documentation.

This is equivalent to signing the Arctic Paper Code of conduct.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

3.2 ENVIRONMENTAL

ASSESSMENT OF SUPPLIERS

AND RESPONSIBLE SOURCING

Due to the nature of our business, we

devote special attention to our pulp

suppliers. We additionally expect them

to full the demands of the FSC

and

PEFC™ certication, and hence be

audited by a third party in relation to forest

management.

If we believe that our partner

does not comply with our

ethical requirements, we aim to

confront and challenge them to

change their behaviour, whereby

Arctic Paper may offer guidance

specifying which issues need

to be improved. The supplier is

then expected to take corrective

actions, within a reasonable

time, in order to meet the

requirements in question. In the

event that we are unsuccessful,

we are prepared to end the

cooperation.

We nd it important to verify the state-

ments of our pulp suppliers, which is why

products delivered by our suppliers are

subject to a three-step verication proce-

dure. First, we ask our suppliers to submit

an environmental declaration, safety data

sheets (following REACH EU Regulation)

and the technical parameters of their

products. Second, we test small samples

of the products in our laboratories, to

see if they possess the stated properties.

Third, we conduct mill trials to see how

the products behave in the production

environment. Similar procedures are used

for other suppliers. We also perform yearly

checks into the validity of certicates

possessed by our suppliers. In this way,

we are able to certify the quality of our

products. In this spirit, we also perform

audits of our suppliers, to conrm their

compliance with our Code of conduct in

the value chain of Arctic Paper Group.

SUSTAINABILITY REPORT 2023

SHARE OF CORE SUPPLIERS

PROVIDING EXISTING SIGNED

ENVIRONMENTAL DECLARATIONS

Target 2025 2023

100%

90%

SHARE OF CORE SUPPLIERS WHO

SIGNED OUR CODE OF CONDUCT

OR HAVE THEIR OWN CODE OF CONDUCT

Target 2025 2023

90%

NUMBER OF SUPPLIERS WHO ARE SUBJECT

TO AUDITS PERFORMED BY ARCTIC PAPER

TO CONFIRM COMPLIANCE WITH THE

CODE OF CONDUCT

Target 2025 2023

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

Since 2019, in cooperation with the Book

Chain Project, we have been evaluating

Arctic Paper Kostrzyn’s processes for

responsible sourcing. The outcome of the

evaluation helps us to improve our shared

best practices and processes at the mill and

see the new opportunities and challenges

which we face when managing responsible

sourcing. We demonstrate a deep under-

standing for the sourcing countries of raw

materials and the sustainability issues at

forest level and have put strong, formal

processes in place to keep up to date with

new developments relating to forest chal-

lenges. We follow industry analysts from

Brian McClay, Hawkins Wright and Fast

Markets RISI. We also work with NEPCon,

who share information and suggestions on

sourcing countries. Each time we request

a written report on environmental perfor-

mance from our suppliers, and gather exten-

sive data on energy, air and water pollutants

and raw materials.

Arctic Paper Munkedals and Grycksbo are

also sharing their data with Book Chain

database.

Arctic Paper’s purchasing policy includes

requirements to establish bre traceability,

to ensure no product contains controversial

sources dened as:

• Illegally harvested forest, or harvesting

not approved by the authority in

question;

• Wood harvested in opposition to tradi-

tional or citizen’s rights;

• Wood from high conservation-value

forests;

• Wood harvested in areas being changed

from naturally occurring forest into

plantations;

• Wood harvested in an area where geneti-

cally modied trees have been planted;

• Wood harvested in violation of ILO prin-

ciples (International Labour Conference

1998 – ILO Declaration on Fundamental

Principles and Rights at Work)

We believe that the strength of our supply chain is based on

reliable, long-term relationships with our suppliers. We make

changes in our supplier portfolio to improve standards in all respects

– economic, ethical and environmental. If a correction is necessary,

we are open to re-establish relations with previous suppliers.

SUSTAINABILITY REPORT 2023

3.3

TRANSPORTATION

Effective and sustainable transport was one of the subjects

underlined by our stakeholders as a result of Arctic Paper’s

stakeholders survey. The impact of transport on pollution

and the overall condition of our environment is undeniable.

When deciding on which companies we can entrust with

transporting our products, we announce bids for particular

routes. Factors we take into consideration when deciding on

transportation services are the quality of the documentation

provided, the price offered and the impact a given transport

operator has on the environment.

Transport operations cause noise, emissions to air and consumption of fuels

(mainly fossil fuels). Truck engines are divided into various EURO classes, in which

higher gures represent engines with lower emissions, especially of nitrogen

oxides and carbon monoxide. We keep track of transportation statistics, which

cover the transport of ready goods from our mills to their places of destination.

We are focused on increasing the percentage shares of operations of EURO 5

and EURO 6 classes.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

The large transportation companies that are our main suppliers of transportation

services are focused on high transportation efciency combined with an envi-

ronmental prole, thus they are continuously renewing their vehicle eets, which

moves the density point towards the higher EURO classes.

Understanding the huge environmental effect of transportation, we want to

increase the efciency of our transport chain while reducing CO

emissions by

implementing intermodal transport into our logistics process.

Since 2020, around 39% of deliveries to our customers have

been transported as multimodal transport. We intend to

develop intermodal transport share in the future, however

high energy prices, accuracy and issues of timely delivery of

intermodal scheme are still challenging.

SHARE OF EURO 5 ENGINE CLASS

Target 2025 2023

13%

30%

SHARE OF EURO 6 ENGINE CLASS

Target 2025 2023

87%

70%

OUR TARGET FOR THE FOLLOWING

YEARS IS TO EMPLOY ONLY TRUCKS

WITH ENGINE CLASS EURO 5 AND

ABOVE.

SUSTAINABILITY REPORT 2023

3.4

COMMITMENT TO

CLIENT SATISFACTION

Our customers are among the main stakeholders of Arctic Paper. Customer satis-

faction is one of the top material aspects of maintaining the integrity of our oper-

ations. We want to be sure that our customers are satised with the way we carry

out business and with the products and services we provide to them. We know that

our customers pay attention to our efforts to manage Arctic Paper as sustainable

business and their feedback is of high importance to us. This way we can grow and

evolve while meeting their expectations and needs. Our customers value high-

quality products and innovative attitude when providing new eco-friendly products

and solutions. For this reason, we carefully monitor all customer complaints and

listen to their opinions about our products and operations.

We categorise and evaluate all submitted complaints.

Evaluation is primarily done by our sales teams and, when

necessary, by management. We make sure that every

complaint is addressed and resolved. Our goal is to minimize

the value of complaints, but we realize that not all of them

are justied.

Actions are continuously taken to diminish the risk of complaints. Our tech-

nical teams from three mills work based on common procedures and General

Recommendations for handling and accepting complaints. We aim to create,

a predictable, consistent, time- and cost-efcient process.

VALUE OF COMPLAINTS

AS SHARE (%) OF SALES REVENUE

SALES REVENUE (IN PLN M) 2,460

Target 2025 2023

0.41

0.50

KEY PERFORMANCE INDICATOR

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

ENVIRONMENT

AND CLIMATE

SUSTAINABILITY REPORT 2023

4.1

MANAGEMENT

APPROACH

Arctic Paper has a long-standing commitment

to environmental and social sustainability.

We are proud of creating positive value by enabling and encour-

aging customers to use and recycle products made mainly using

renewable resources. At the same time, we try to minimize the

negative impact of our production activities and transport services

by applying pro-ecological practices at every stage of the paper

production cycle. In addition to complying with environmental laws

and regulations, we want to make sure that we work together with

our major stakeholders to understand the forces driving sustainability

within our industry. This, together with our internal follow-up work,

is the basis for the development and evaluation of our products,

processes and routines.

Combating climate change through products

and solutions based on renewable materials and

renewable energy, while replacing plastic and fossil

materials, is a natural part of Arctic Paper's strategy.

4. ENVIRONMENT AND CLIMATE

CERTIFICATIONS,

POLICIES AND

PROCEDURES

The ISO 14001 management system is in place

at all of our mills. It is a guide for us in the

eld of environmental responsibility and work

on continuous improvement of production

processes. All certicates are widely available on

our website.

In this report, we present the consolidated

environmental performance of our three mills.

Each of them publishes its own EMAS report,

where more information on individual environ-

mental performance is available. In addition,

more environmental data regarding our prod-

ucts can be found on our website, in the form

of product-specic environmental declarations

called “Paper Proles”. Importantly, each of

these documents describes the environmental

impact across the entire supply chain, as our

business operations are highly dependent on

our suppliers.

SUSTAINABILITY REPORT 2023

The overarching goal of our Sustainability

policy is to mitigate the adverse impact of

our mills’ processes on the environment.

We are committed to doing so both by

introducing new solutions and improve-

ments to the operations of our mills and by

educating our employees about ways to

protect the natural environment.

The environmental management system

at all three mills is guided by ISO 14001.

Arctic Paper is proud not only to have

introduced routines and procedures to

improve the environmental performance of

our mills, but also to have efciently inte-

grated these routines and procedures into

our daily operations.

Our mills are also EMAS-registered, which

means that they full additional require-

ments, over and above ISO 14001. Among

others, these include stricter rules on how

to measure and evaluate environmental

performance. The certication also means

that we need to present detailed informa-

tion on our environmental performance in

EMAS reports, available on our website.

Our mills in Grycksbo and

Munkedal have certied systems

for energy management

(ISO 50001). This means that the

energy management system at

the mills follows a systematic

approach aimed at continuously

improved energy efciency.

Arctic Paper does not have any

forest land, hence we do not have

a direct impact on forest manage-

ment and global deforestation.

We can have an indirect impact

through our pulp suppliers.

Our mills in Grycksbo, Kostrzyn, and

Munkedal holds a chain of custody

certicates for FSC

(Forest Steward-

ship Council

) and the corresponding for

PEFC™ (Programme for the Endorsement

of Forest Certication™). This means that

we can guarantee customers that our

products come from well managed, certi-

ed forests. Below we present the logos

and licence code numbers for our mill at

Munkedal.

We extensively train our employees on

PEFC™ and FSC

product origin control

systems. Our training is based on NEPCon

materials - a non-prot organisation that

supports better land management and

business practices that benet people,

nature and the climate. We assess specic

risks including unclear ownership structures

and risk of bribery.

4. ENVIRONMENT AND CLIMATE

Arctic Paper is aware of the environmental regulations affecting our industry, and

we carefully monitor the regulatory environment in Poland and Sweden, as well

as at the European Union level. Apart from legal requirements, we are also inter-

ested in best practices within our business, and carefully follow developments

in these areas. As an example, in the EMAS reports we benchmark our envi-

ronmental gures on emissions to water to the Best Available Techniques (BAT)

reference gures, prepared by the European Commission in collaboration with

industry experts. These lead us to conclude that our environmental performance

is aligned with the best practices within the industry.

Environmental activities related to the production process focus on four key

areas, selected during the materiality analysis. These are: energy consump-

tion, CO

emissions, water consumption and waste management. These issues

are described in detail later in this chapter. In our opinion, the targets we have

dened in terms of production volume clearly demonstrate our commitment to

progress in the area of environmental sustainability.

SUSTAINABILITY REPORT 2023

4.2 ENERGY

AND EMISSIONS

ENERGY

Climate change requires a

revision of the entire industry’s

social and economic attitude. As

a company which is committed

to environmental and social

sustainability, we are focused

on seeking new possibilities to

improve our business activities

and production processes by

implementing new energy

sources and increasing our

energy efciency.

The transition from fossil to non-fossil

energy sources is one of the major chal-

lenges facing our civilization. We are

taking measures to create this future.

Behind our power pillar stands the clear

vision to make this change possible.

Hydropower, solar panels and other forms

of green energy in combination with intel-

ligent waste/bio energy plants - all based

on renewable sources.

Arctic Paper purchases energy as fuel

(biomass and natural gas),electricity (from

the local power grid) and heat (steam) in

form of surplus heat from nearby industries

and as primary heat from an external waste

incineration plant. We also produce elec-

tricity at our mills using hydropower plants

(Arctic Paper Munkedals), back-pressure

steam turbines (Arctic Paper Grycksbo and

Arctic Paper Kostrzyn) and gas turbines

(Arctic Paper Kostrzyn), which we also

sell to the market when appropriate. The

most energy-intensive processes in paper

production are the generation of steam,

which is used in the drying of paper and

the operation of motors used in paper

machines, reners and pumps.

Energy efciency is one of the most

important aspects of the paper produc-

tion process, which is why we aim to

reduce energy use at every stage. We

run projects leading to an increase in the

share of energy from renewable sources.

Our activities in this area help us reduce

greenhouse gas emissions, decrease

demand for energy imports and reduce

production costs.

Each year we initiate various types of

energy efciency programmes at all three

of our mills with the aim of reducing their

environmental impact. We optimise and

trim all installations and machinery. As well

as continuously evaluate our processes to

identify future investments.

4. ENVIRONMENT AND CLIMATE

Good examples of our efforts to reduce

our environmental impact are two

vacuum systems projects in Grycksbo and

Munkedal:

• In Grycksbo, redeploying the vacuum

system enabled the factory to close one

of the vacuum pumps on paper machine

PM 10, saving approximately 1,000 MWh

per year.

• In the case of Munkedals, adjusting the

speed of three vacuum pumps resulted in

annual savings of 700 MWh, a reduction

of approximately 10% of the energy used

in the paper machine.

During the year, energy mapping of all

Munkedal operations was carried out and a

number of potential energy saving projects

were identied.

At the same time, the increase in the

variety of products offered and the gradual

increase in the share of packaging papers

with higher strength requirements resulted

in higher energy consumption.

An energy mapping of the total operation in

Munkedal has been done over the course of

the year and a number of potential energy

saving projects has been presented.

At the same time, the expansion of the

range of products offered and the gradual

increase in the share of packaging papers

with higher durability requirements resulted

in an increase in energy consumption.

One of the projects

completed in 2021 in

Kostrzyn was the launch

of a solar panel farm with

a capacity up to 1 MWp,

which increased the share

of renewable energy in

the mill's total energy

consumption. In Grycksbo, a

number of energy projects

completed in recent years

altogether contribute an

energy saving comparable

with the energy consumption

of 480 regular households in

the Nordic region. Another

important project was the

replacement of old reners

with modern energy-

efcient machines. Also in

Munkedals, a smaller solar

panel installation with an

installed power of 0.1 MW

was launched during 2022.

SUSTAINABILITY REPORT 2023

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Total net specic energy consumption (MWh/tonne paper) 1.9 2.5

Total net energy consumption (GWh/year) 1,320 1,079

Total production of paper (in tonnes) 695,000 423,817

Below can be found the latest gures on our energy consumption, one of our key

performance indicators regarding environmental sustainability. The specic energy

consumption reported in the table below is expanded compared to the previous

reporting year (also by historical data) by including purchased heat.

4. ENVIRONMENT AND CLIMATE

CASE STUDY

New energy solution for Arctic Paper Grycksbo mill

In 2023, Arctic Paper decided to start investing in the construction of an installa-

tion for drying biomass and producing pellets. Currently, the factory in Grycksbo

can use wood pellets, grid electricity or pitch oil to generate steam necessary

for the paper production process. However, the market for these energy sources

is increasingly volatile, both in terms of price and availability. We believe that

this problem should be solved by focusing on the creation of renewable energy

sources, therefore a natural step is to decide to invest in expanding the range of

energy sources to include biofuels with high moisture content.

The investment will ensure more sustainable fuel acquisition and will reduce

energy costs of approximately SEK 50 million per year. In addition to electricity

and steam, the installation will produce approximately 50,000 tons of wood

pellets annually.

The main raw materials for the production of wood pellets will be sawdust and

wood chips. The raw material will be obtained in Sweden and transported to

Grycksbo.

The total estimated cost of the investment will be approximately EUR 28.5 million,

and its completion is planned for the rst half of 2025.

SUSTAINABILITY REPORT 2023

EMISSIONS

Carbon neutrality of business operations is

one of the main determinants of a sustain-

able approach by industries.

Pollutants created during the energy

production process leave our mills through

chimneys as air pollutants, and biomass

ash. Air pollutants, in particular CO

, accu-

mulate in the atmosphere, contributing to

climate change. Emission levels are moni-

tored by our management. Emissions carry

an environmental cost, and they can also

be associated with considerable nan-

cial, legal and commercial costs for our

business.

By denition - carbon neutral

means “if something such as an

organisation or activity is carbon

neutral, it removes the same

amount of carbon dioxide from

the environment as it releases

into the environment”.

We have been committed to reducing

emissions for many years. One of

our most important activities in this area

was undertaken in paper mill in Kostrzyn

in 2007. It consisted in replacing a coal-

red boiler with a state-of-the-art natural

gas boiler, equipped with gas turbines

and back-pressure steam turbines. In

2008, Grycksbo also made a signicant

investment in a biomass boiler, making

the steam generation process at the mill

fossil-free. Our 4P Strategy is a signpost

for us, which will help us achieve the goal

of carbon neutrality and increase the

diversication of energy sources based on

renewable sources, such as solar collec-

tors, hydroelectric power plants and wind

turbines.

One of the most recent projects in this

area implemented at the Kostrzyn mill is

modernisation of the PM1 recuperation

system with an effective reduction of

heat consumption and CO

emissions by

2,784 tonnes per year. The upgrade of the

venting system at PM1 and PM2, which

allows heat recovery, has resulted in a

reduction of heat consumption and CO

emissions by 1,575 tonnes per year and

by 3,725 tonnes per year, respectively.

We also encourage our employees

to contribute to the common goal of

achieving carbon neutrality. We believe

that every small effort or single change

to daily routine can reduce our carbon

footprint, which will have a signicant

impact on the climate. One such action

is the installation of charging stations

for employees' electric cars at the paper

mills in Grycksbo and Munkedal. The

employees at the Grycksbo mill utilising

bio energy for domestic heating can also

benet from a rebate agreement with a

local supplier.

Cambridge Business English Dictionary © Cambridge University Press)

4. ENVIRONMENT AND CLIMATE

Figures describing the average CO

load for the national grid in Poland and Sweden.

Covering >90% of the purchased raw materials (calculated as purchase value).

Figure based on average delivery points in Europe.

KEY PERFORMANCE INDICATOR (KG CO

/TONNE PAPER) TARGET 2025 2023

Direct CO

emissions 215 236

Indirect specic CO

emissions from external electricity suppliers

– 44

Indirect specic CO

emissions from our major supplier of raw material

60 88

Indirect specic CO

emissions from our transporters

35 34

Total indirect specic CO

emissions 115 166

Total specic CO

emissions – 402

Total CO

emissions (k tonnes / year) – 171

Total production of paper (in tonnes) 695,000 423,817

Below we present our greenhouse gas emissions levels based on Greenhouse Gas

Protocol (GHG Protocol) accounting and reporting standards to measure, quantify

and manage greenhouse gas emissions.

The GHG Protocol Corporate Standard classies a company’s

GHG emissions into three ‘scopes’.

Scope 1:

Direct emissions from sources owned or controlled by the company.

Scope 2:

Indirect emissions from the generation of purchased energy consumed by the

company.

Scope 3:

All other indirect emissions (not included in scope 2). Includes emissions that occur in

the value chain of the reporting company, including both upstream and downstream

emissions, which occur from sources not owned or controlled by the company. We have

divided this group into two sections, relative to the most relevant participants in our

supply chain: suppliers of raw materials (including pulp, llers, coating pigment, totally

covering >90% of purchased raw material value) and transportation companies.

SUSTAINABILITY REPORT 2023

Compared to 2022, the steam supply for the Munkedals mill

in 2023 was covered to a greater extent by imported heat

from waste combustion, replacing steam from the electric

boiler. The waste burned consists of approximately 45% fossil

materials. This explains the increase in indirect CO

emissions.

The below table presents CO

contribution from energy sold (heat and electricity)

to external consumers.

2023

Exported energy (GWh/year) 129

Tonne CO

per GWh 227

Tonne CO

per year 29,230

It should be noted that the CO

gures from our external sources are based on

the most recently available data. In most cases, we used data from 2022 as not

all of our external partners were able to provide us with 2023 data at the date of

publication of this report.

4.3

SUSTAINABLE CIRCULAR

PRODUCTION AND WASTE

Arctic Paper is a part of industry that largely uses wood from sustainably

managed forests. We are proud of being part of a sustainable circular production

system. This means that resources are used, reused and recycled with little or no

waste. In our case, the circular system starts with the raw material wood.

4. ENVIRONMENT AND CLIMATE

1. RAW MATERIAL

Arctic Paper only buys pulp based on

raw material from sustainably managed

forests. This is ensured by the FSC and

PFSC certications. Pulpwood is a renew-

able raw material that comes from thin-

ning and felling, and consists of wooden

parts that can't be used as timber.

2. PULP MILL

Artic Paper purchases pulp from various

suppliers and owns 51% of the Swedish

pulp manufacturer Rottneros AB, with

two ISO 14001 certified mills. Rottneros

has its own sustainability report at

www.rottneros.com

3. PAPER MILL

Three Arctic Paper mills are ISO 14000

and EMAS certied. To minimize CO

emissions, Arctic Paper invests in

1. RAW MATERIAL 2. PULP MILL 3. PAPER MILL

6. BIOMASS FUEL 5. PAPER RECYCLING 4. CONSUMER

The base in the circular system is the ever growing forest

and the renewable raw material that is fetched therefrom.

sustainable energy. Grycksbo paper

mill has an energy solution completely

free of fossil fuels. The paper mill in

Munkedal commissioned a biomass boiler

and expanded the hydropower plant,

increasing its capacity from 12 to 24 GWh.

4. CONSUMER

Arctic Paper is a premium manufacturer

of graphic paper and kraft paper. For

customers, renewable, circular and recy-

clable raw material, as well as sustainable

production, are important factors in the

choice of supplier.

5. PAPER RECYCLING

All Arctic Paper’s paperboards are recy-

clable and part of a circular system. A large

part of all packaging as well as graphic

paper is recycled and reused, for example,

for the production of newsprint and tissue.

SUSTAINABILITY REPORT 2023

6. BIOMASS FUEL

The by-products from the pulp and

paper mill, such as logging resi-

dues, tall oil, pitch oil and bark are

further rene into biomass fuel.

The combustion of biomass fuel emits

carbon dioxide, which is balanced by

reabsorption from the air by forests

as a step in the photosynthesis cycle.

Fuel derived from waste (waste to

energy) consist of both biogenic

(typical 60%) and fossil (typical 40%)

material. By utilising waste as an

energy source, which otherwise

would have ended up at a landll, we

contribute to circular economy with

a minimum of losses.

Most of the waste emanating from

our plants is sorted and sent to

external recycling. Comparably

smaller volumes of waste are used

for energy recovery or are sent to

landlls, and even smaller volumes

of hazardous waste are sent

for controlled destruction by third

party contractors.

All our mills use certied

handlers of waste. The

volumes of different kinds

of waste are appropriately

reported to the handlers

and the authorities. We

closely monitor these values

to ensure we maintain our

waste management balance

year-on-year and constantly

improve waste recycling

efciency.

Waste volume may vary from one year to another as the volume and kind of generated

waste to some extent is dependent on (re)construction and/or scrapping projects.

WASTE

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Recycling or energy extraction (tonne/year) 6,950 5,191

Recycling or energy extraction (kg/tonne of paper) 10 12.2

Hazardous waste (tonne/year) 139 164.5

Hazardous waste (kg/tonne of paper) 0.2 0.39

Landll (tonne/year) 139 200.9

Landll (kg/tonne of paper) 0.2 0.47

Total production of paper (tonnes) 695,000 423,817

4. ENVIRONMENT AND CLIMATE

4.4

WATER

Water is an indispensable resource in the paper production process. It is used to

slush the pulp into bre stock, and then to transport bres to the paper machine

headbox. Since the stock is dewatered once it is placed in the paper machine,

most of the water can be reutilised in the mill. Water that is not recirculated is

puried on-site, before being released back to the rivers from which it came –

Warta, Munkedalsälven and Grycken. Internal efuent treatment plants conduct

mechanical, biological and chemical treatments. At the same time, the separated

deposit from the efuent treatment is mixed and dewatered, and then recycled

as soil improver or raw material for coverage of historically polluted areas such as

old deposits.

We carefully monitor the quality of our water outputs; most notably, we focus

on Chemical Oxygen Demand (COD). COD indicates the effect the discharged

water will have on the receiving environment; in our case the three rivers: Warta,

Munkedalsälven and Grycken. It measures organic compounds that consume

oxygen during decomposition, since very high levels of oxidisable organic mate-

rial may be detrimental to aquatic life forms. As good practise, we also monitor

the quality of our water inputs, exceeding the requirements set by regulators.

SUSTAINABILITY REPORT 2023

We have implemented a programme to reduce our emissions

to water at our mill in Munkedal. Part of the programme was

the installation of a separate water purication system for the

power supply station in order to improve our opportunities for

water recycling.

Our mill in Grycksbo has participated in a project organised by the Swedish

Forest Industries Federation regarding the environmental impact of old sedi-

ments. The main objective of this project was to improve the current monitoring

programmes in order to be able to evaluate the impact and ecological signif-

icance of sludge emissions. In order to assess the degree of environmental

impact, a selected group of sh, perch, was tested. Using sh for environmental

impact studies is a method that has been used for decades by the Swedish

environmental monitoring system. One of the goals of the project was to

also collect historical data and compare it with current data. In addition, the

harvested sh were used to assess their health and reproductive capacity, and

to develop a standardised procedure that could be included as part of future

environmental monitoring programmes.

Paper production requires a lot of water. Most of this resource is recycled

multiple times at mills installations. Typically the dry content in the head box of

the paper machine is around 1%, meaning that for the production of 1 tonne

of paper, 99 m

of water passes the head box. We care about water efciency

at our mills. Each drop of water is recirculated an average of 27 times before it

leaves the mill through the wastewater treatment plant.

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Water consumption (m

/year) 4,865,000 4,568,670

Specic water consumption (m

/tonne of paper) 7.0 10.8

Emissions of COD to water (tonne per year) 292 198

Specic emissions of COD to water (kg/tonne paper) 0.42 0.47

Total production of paper (in tonnes) 695,000 423,817

Specic water consumption in 2023 slightly increased as compared to 2022. This

is due to the difcult market situation with much lower demand than the produc-

tion capacity of our mills, which resulted in more starts and stops of production

machines due to lack of orders, and consequently lower efciency of water

consumption.

4. ENVIRONMENT AND CLIMATE

4.5

BIODIVERSITY

FISH HABITAT IN MUNKEDAL

In 2021, Munkedals mill launched a project for sh habitat restoration. The

project focuses on restoring the river to its original state prior to its adaption for

oating timber, by placing large stones back, thereby recreating breading areas

for salmon and trout.

Every summer we have now continued this works (it can only be done when the

ow in the river is at low level) and we can now, through test shing, see that

the project has contributed to the increase in the sh population.

SUSTAINABILITY REPORT 2023

FLOWER MEADOW IN MUNKEDAL

Our new project aims to increase the biodiversity of plants

and insects.

On Swedish pastures, there can be as many as 50 different species of plants in

one square meter. Over 1,300 species on the The Red List endangered species

can be found naturally in the grasslands. When biodiversity is threatened, it also

has consequences for us humans. Several endangered species are the so-called

pollinators, and we humans are completely dependent on them, including for

food production.

The planned ower meadow is a pilot project with an area of 160 m

. We will

plant various varieties of wild owers and plants there.

We have carried out preparatory work so that the owers got well adjusted to

the soil. Once the ower meadow grows and owers bloom, it will be populated

by wild and domesticated bees, which play a major role in pollinating plants and

fruit trees near the test area. The ower meadow is located on the Munkedals mill

site, adjacent to our aerated lagoon (part of our hydroelectric plant), where we

have introduced many plants and wildlife (birds, insects, frogs).

4. ENVIRONMENT AND CLIMATE

Viewpoint in The Warta

Mouth National Park

Arctic Paper Kostrzyn has co-nanced

building a viewpoint in The Warta

Mouth National Park. The Warta

Mouth National Park was established

in 2001 and occupies the area of 8,074

hectares protecting unique in Europe

wetland areas located in the lower

valley of Warta River. The Warta Mouth

National Park was established to

protect exceptional ood-land habi-

tats vital for water and marsh birds. In

the Park, about 280 bird species have

been recorded, including 170 breeding

species. The park’s signicance for

maintaining the environment of so

many bird species has been conrmed

by it being included in the Ramsar

convention and Natura 2000 network.

SUSTAINABILITY REPORT 2023

PEOPLE

4. ENVIRONMENT AND CLIMATE

5.1

WORKING AT ARCTIC PAPER –

MANAGEMENT APPROACH

EMPLOYMENT STRUCTURE

OF ARCTIC PAPER IN 2023

TOTAL MEN WOMEN AGE<30 AGE 30-50 AGE>50

Blue-collar 799 665 134 159 327 313

White-collar 424 250 174 23 204 197

Arctic Paper takes responsibility for our employees, other

people working for us and the societies in which we operate.

Our employees are one of the most important stakeholders

in Arctic Paper.

We consider employees as our most valuable resource. We believe each one

should be treated with respect. This is also declared in our Sustainability policy

and in our Code of conduct in the value chain. We strive to make our units safe

workplaces, where employees have equal opportunities for development. We are

aware of the fact that continuous dialogue with our employees is benecial for

both sides: for employees – by giving them an opportunity to express their needs

and concerns, and for us – to understand what is important to them, and thus

what should be important to all of us. We believe in observing our social respon-

sibilities and being a partner in the development of the society in which we are

located. By doing this we create an environment which is attractive to live and

work in.

SUSTAINABILITY REPORT 2023

2023

Number of permanent unlimited contracts 1,223

Number of temporary contracts 28

EMPLOYEE TURNOVER RATE

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Turnover <10%/year 6.6

New Hires – 81

Resigned – 60

Retired – 26

Denition how we calculate this KPI

Annual employee

turnover rate %

Number of employees (with permanent contracts)

who left the company during the year

(Employees at the beginning

+ at the end of the year)/12

× 100

Arctic Paper’s intention is to offer employees standard, permanent, unlimited

employment agreements in our operations for the purpose of providing employ-

ment security and stable work conditions. Only substitutes for vacancies and

project-hired persons have limited employment agreements.

5. PEOPLE

5.2 OUR EMPLOYEES'

WELL-BEING AND

SATISFACTION

The well-being of our employees is of crucial importance

to our company. Well-being is strongly associated with

engagement. Working conditions and employee satisfaction

are the top material topics emphasised by our employees in

our Materiality Matrix research.

Surveys carried out among our employees show that the opinion on well-being

has changed due to the recent pandemic situation. In order to meet the needs

of our employees, we have to redesign our future attitude to well-being.

We want to be more responsive by widening the range of well-being activities

and preventative by redesigning work and people processes and the work

environment. We need put more effort into understanding of well-being needs,

and encouraging employees to seek new activities that can be safer and more

valuable in the new work environment.

We promote an empathetic management attitude and want to provide exibile

work conditions whenever it’s possible, something that can help to improve the

working conditions.

We are committed to

• Identify underlying drivers of poor employee wellness and redesigning of work

and people processes in order to prevent future problems.

• Offer a exible work environment – not just exibility as to when and where

individuals get to work, but exibility in all aspects, helping employees feel

autonomy in making decisions about what works best for them.

• Train and provide our managers with clear guidance on what to do, and

more importantly, what not to do, in order to effectively support employees’

emotional health.

SUSTAINABILITY REPORT 2023

BENEFITS AND INITIATIVES

INFLUENCING OUR EMPLOYEES',

AND THEIR FAMILIES', WELL-BEING

Our mills support employees and their

families by granting them extended social

benets programmes. We encourage

good habits and healthy lifestyles. We

organise and support different health

programmes, such as non-smoking and

eating healthy food. We also provide

regular medical examinations for our

employees. We offer wellness allowances

that employees can choose how to use

according to their needs and interests.

We sponsor events and different activi-

ties in the local community, in which our

employees and their families are able to

participate.

We sponsor events and different

activities in the local community,

in which our employees and

their families are able to

participate.

OUR ACTIONS

• Maintaining tness centre for employees

at Grycksbo mill.

• Supporting local sport clubs and cultural

events such as a donation for the devel-

opment and promotion of wrestling

association in Kostrzyn, or the Grycksbo

mill sponsoring IBF Falun – a champion-

ship oor-ball club and ice hockey club

in Sweden;

• Organising sports competitions for

employees e.g. shing competitions;

• Donating paper to schools and

kindergartens;

• Sponsoring health benet programmes

and insurance for employees at mills;

• Funding Christmas vouchers and organ-

ising Christmas celebrations with gifts for

mill employees’ children;

• Offering discounts for vacations in

summer cottages in Sweden;

• Supporting our retired employees’ organ-

isation by co-nancing summer camp and

organising regular events.

The foundation of every

organization are its employees,

they determine its structure,

operation and, above all, its

successes. Even the most

modern machine park or the

development of technology

cannot replace the work

performed by a human being.

5. PEOPLE

OUR EMPLOYEES' SATISFACTION

Since 2016, every other year we have measured our employees' satisfaction and

set our targets using benchmarks from similar industries in Europe. Over the years

we have implemented activities to increase both the number of participants and

the engagement capital.

In 2023 a survery was conducted with a new partner and therefore recent results

are not comparable with previous years’ results.

67% of employees participated in the survey, which is above the industry bench-

mark of 65%.

Commitment capital was rated 3.9 on a scale from 1 to 5.

We started to measure the employee net promoter score (eNPS).

The employee net promoter score is a metric used to measure employee

engagement and loyalty towards a business. The eNPS is directly correlated to

the short-medium term intentions of an employee. It is a score that is often meas-

ured as part of a wider study looking at employee satisfaction.

The best way to measure your employee NPS is through eNPS surveys with the

question “How likely are you to recommend us as a place to work for your family

and friends?”

Employee net promoter score can range from -100 to 100,

in order to determine the group of ambassadors in our

organization and the loyalty of our employees.

Based on the results, three categories of employees are distinguished (from the

lowest to the highest):

• Promoters − employees who are extremely committed to their organization

and enthusiastically share positive opinions about their workplace. People

who commits to their work and enjoy their role. Promoters actively support the

company by providing positive recommendations.

• Neutral − a group of employed people who do not demonstrate a high degree

of commitment to work and loyalty to the employer. It is assumed that they are

generally satised with their work, but they are distinguished by a low tendency

to express either positive or negative opinions about their employer among

friends and family. People who are passive towards the employer's brand also

have a high risk of changing it if such an opportunity arises.

SUSTAINABILITY REPORT 2023

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Employee survey response rate 65% 67%

Overall engagement capital >4 3,9

• Critics − a group of employees who are characterized by a low level of satis-

faction and commitment to work. Not only will critics not recommend the

company, but they may also negatively inuence its development by spreading

unfavorable opinions.

The Arctic Paper's employee loyalty score is 14. A score in the range of 0-20 is

considered a good score because it indicates that the majority of employees in

our organization are promoters and have a positive opinion of the company.

The next survey of the level of loyalty of Arctic Paper employees will be

conducted in 2025.

RECRUITMENT AND TALENT

ACQUISITION

At Arctic Paper we know that employees are our organisation’s most valuable asset.

Our goal is to recruit, develop and educate our employees, so they can support

the organisation with their talents and personal skills, and thus ensure the effec-

tive management of Arctic Paper today and in the future.

Our key principles

• We treat internal and external applicants with the same professionalism and

respect for the individual.

• Our recruitment processes are open and clear in communication with the

applicants, as well as fair and uniform throughout the company.

• We promote and offer equal opportunities for applicants for same positions.

• We focus on competences and value personal interests and ambitions.

• We create opportunities of promotion for current employees while recruiting

for a new position

5. PEOPLE

KEY PERFORMANCE INDICATOR TARGET 2025 2023

Percentage of employees interviewed 100% 76%

Development and training of our employees

• We believe in equality of opportunity when it comes to development. Mill-level

procedures are in place to guide our recruitment and remuneration processes;

• We remunerate employees according to their qualications and the value they

create for the company. Adjustment to local conditions necessitates the use

of slightly different systems between our mills. Our employees’ remuneration

depends on their results at work, the agreement between the trade unions and the

company’s economic situation. All conditions are documented and communicated

accordingly. We also have a separate remuneration policy for management at the

group level. We annually make regular payroll overviews at all our units;

• We provide the possibilities for employee development in accordance with the

company's needs and the development of the company's environment;

• We create interpersonal relationships in the company in accordance with our

company’s principles;

• We create a exible organisation with minimal hierarchy;

• We inform employees correctly and promptly about important company matters;

• We pay attention to work-life balance;

• We mainly focus on development connected to improving the H&S work environ-

ment, which means a focus on legal certicates and training in those positions. A

crucial part of this strategy is the on-boarding process to make sure that employees

can perform their tasks safely.

Performance conversations

We intend that every employee should have a yearly performance conversation. This

will help them understand how they can contribute towards the company goals and

to develop their skills and abilities. We believe that this will create a synergy effect

which will positively impact the work environment and bring tangible benets to our

business.

SUSTAINABILITY REPORT 2023

5.3 HUMAN RIGHTS

Arctic Paper Group respects and promotes international

human and labour rights. We expect the same commitment

from our suppliers and subcontractors, to which we refer in the

Code of conduct in the value chain of Arctic Paper Group.

• We do not accept discrimination or harassment of any kind directed at any

group of our stakeholders: employees, customers, suppliers.

• Our employees have the right to organise themselves, join associations and to

negotiate with the company.

• We do not accept forced or child labour, neither in our mills nor on the part of

our suppliers.

• We always comply with local laws related to human rights.

• We offer our employees decent working conditions and care about their

wellbeing.

• We expect our suppliers to respect their workers’ right to form or join associa-

tions; refrain from any form of discrimination toward employees or their contrac-

tors and to provide a safe and healthy work environment.

We have put measures in place to report situations where human rights are

violated in any way because of Arctic Paper Group operations. In 2020, we

implemented a whistleblower system, which enables our employees and busi-

ness partners to report situations or behaviours which are not in line with Arctic

Paper Group values and ethical principles, and can seriously affect our organisa-

tion or a person's life or health. In 2023, no incidents were reported.

5. PEOPLE

Overall, we are committed to protecting the human rights

among our employees. At the same time, we know that this

issue also involves external actors in our value chain.

This aspect is further explained in the “Responsible

supply chain” chapter.

OUR ANNUAL BUDGETS FOR

SPONSORSHIPS AND CHARITY

ACTIVITIES IN 2023:

AP Grycksbo

SEK 200,000

AP Kostrzyn

PLN 309,000

AP Munkedals

SEK 1.3 million (including sponsorship to the school, without school support

abt. SEK 300,000)

SUSTAINABILITY REPORT 2023

Health and safety are top

priority issues for us. We are

creating a work environment

which prevents and minimises

the risk of injuries. The systemic

approach to safety in our

paper mills minimizes the

risk of accidents. In 2019, we

implemented a common health

and safety policy and started

cooperation between the mills

in H&S issues. Each mill has

also implemented its own site-

specic health and safety policy,

complemented by appropriate

routines and procedures.

Our mills have an occupational health

service, as well as rescue teams trained

to react in case of emergency. Some of

our employees are also members of the

local re brigade, trained to respond to

both internal and external incidents and

accidents.

We carefully analyse all health and safety

incidents raised by our employees and take

actions to avoid serious consequences in

the future.

NUMBER OF LOST TIME INJURIES (LTIR)

PER MILLION WORKING HOURS

Target 2025 2023

9.2

KEY PERFORMANCE INDICATOR

• We maintain a register of “near

misses” and accidents, where all

incidents are recorded, investigated

and analysed.

• We propose action plans to miti-

gate the risk that a near-miss could

become a serious accident.

Today, very few accidents are caused

by equipment malfunctions.

A signicant risk factor is human

errors, hence the focus within work

safety is becoming more and more

oriented towards creating a safety

culture based on the basic idea of

“think rst, then do”.

Risk assessment before any new

machinery is put into operation or

working method implemented is the

most important tool for increased

safety. Our target in this area is to

create a zero-injury environment.

We are very concerned about the

number of injuries, and thus we will

increase our focus on behavioural

safety and on preventive activities in

order to further develop our safety

culture.

5.4 HEALTH AND SAFETY

5. PEOPLE

5.5 DIVERSITY, EQUITY

AND INCLUSION

GENDER EMPLOYMENT STRUCTURE

IN ARCTIC PAPER IN 2023

Men Woman

25%

75%

Management approach

and initiatives

Arctic Paper Group promotes a culture of

openness, and we see diversity as a strength

that helps the organisation grow. It is a

source of new ideas and innovation. The

key principle for us is respect for diversity.

There is no place in organization for discrim-

ination against anyone because of gender,

origin, age, religion, political or religious

views, disability or other factors. Each of our

employees has the chance to develop within

the organization and we try to offer them as

many opportunities as possible to use their

talents and skills.

In 2021, we implemented a

Diversity policy that is applicable

to all employees of Arctic Paper,

regardless of the position they

hold.

As a company we commit that:

• when looking for new employees and

conducting the hiring process, we

focus on the candidate's skills and

accomplishments;

• we pay employees according to their

position, assessment, qualications,

experience and performance, regardless

of diversity factors;

• that each of our employees is entitled to

respect and equal treatment is the basis

for organisational performance;

• we enable our employees to report

(anonymously or not) any complaints

about possible mobbing or unequal

treatment;

• we will train managers on how to manage

a diverse team and make the most of its

potential.

• we provide a work environment suitable

for both men and women to work in.

SUSTAINABILITY REPORT 2023

DIVERSITY AMONG EMPLOYEES

AND WITHIN THE BOARD

As explained in our Code of conduct, Sustainability policy

and Diversity policy, we do not accept any discrimination in

our business operations. Arctic Paper Management Board

has been striving to employ competent, creative people,

holding appropriate qualications, professional experience

and education, and who respond to the company’s needs.

Arctic Paper sees diversity as a strength and a source of new ideas and innova-

tion. We want Arctic Paper to mirror the societies in which it operates, and we

want to make sure we promote and integrate people of diverse backgrounds.

Arctic Paper Management Board is made up of a Chief Executive Ofcer, Chief

Financial Ofcer and President of Sales & Marketing.

Candidates are evaluated in accordance with the principles of independence,

merit and diversity criteria. We strive to ensure that the persons selected are

of diverse educational background, experience, knowledge and skills, diverse

gender and age.

The functions of members of the Management Board and the Supervisory

Board have been entrusted to specic persons, regardless of their gender, but

according to the substantive preparation and experience of these persons. The

composition of the Company's corporate bodies largely depends on the deci-

sions of the Company's shareholders.

2023

Total count of Management Board 3

% of women on the Management Board 33.3

% of men on the Management Board 66.6

THE SUPERVISORY BOARD OF ARCTIC PAPER SA

CONSISTS OF FIVE MEMBERS

2023

Total count of Supervisory Board 5

% of women on the Supervisory Board 40

% of men on the Supervisory Board 60

5. PEOPLE

TAXONOMY

SUSTAINABILITY REPORT 2023

The EU Taxonomy is a

classication system,

establishing a list of

environmentally sustainable

economic activities. It plays

an important role and helps

to scale up sustainable

investment and implement

the European Green Deal.

The EU Taxonomy provides

companies, investors

and policymakers with

appropriate denitions

for which economic

activities can be considered

environmentally sustainable.

In this way, it creates

security for investors,

protect private investors and

helps companies become

more climate-friendly.

The Taxonomy Regulation of the European

Parliament and of the Council (2020/852) was

published in the Ofcial Journal of the European

Union on June 22. 2020, and entered into force

on July 12. 2020.

It establishes the basis for the EU Taxonomy

by setting out 4 overarching conditions that an

economic activity has to meet in order to qualify

as environmentally sustainable. An economic

activity shall qualify as environmentally sustain-

able where that economic activity:

• contributes substantially to one or more of the

environmental objectives;

• does not signicantly harm any of the environ-

mental objectives;

• is carried out in compliance with the minimum

safeguards;

• complies with technical screening criteria that

have been established by the Commission.

The Taxonomy Regulation establishes six

environmental objectives:

1. Climate change mitigation;

2. Climate change adaptation;

3. The sustainable use and protection of water and marine resources;

4. The transition to a circular economy;

5. Pollution prevention and control;

6. The protection and restoration of biodiversity and ecosystems.

6. TAXONOMY

According to the Regulation on Taxonomy, Arctic Paper

Group discloses in its annual report:

• Percentage of turnover derived from related products or services associated

with environmentally sustainable economic activities.

• Percentage of capital expenditures (CapEx) corresponding to assets or

processes associated with environmentally sustainable economic activities.

• Percentage of operating expenses (OpEx) corresponding to assets or processes

associated with environmentally sustainable economic activities.

In this 2023 Sustainability Report, Arctic Paper Group discloses the percentage

of turnover, capital expenditure and operating expenditure eligible for the EU

Taxonomy as well as veries criteria for environmentally sustainable economic

activities specied in article 3 of Regulation of the European Parliament and

Council 2020/852, to determine what percentage of these three values is associ-

ated with environmentally sustainable activities.

SUSTAINABILITY REPORT 2023

6.1

TAXONOMY COMPLIANCE

ASSESSMENT PROCESS

We have divided the assessment process in 4 stages:

The process was conducted by a team of representatives companies

of Arctic Paper Group.

IDENTIFICATION

a review of all activities carried out by all units of Arctic Paper Group and

determination whether and, if so, which activities qualify as eligible activities.

The review covered Arctic Paper Group revenues, capital expenditures and

operating expenses. To identify individual activities, their descriptions dened

in the Annexes to the Commission Delegated Regulation (EU) 2021/2139

were used to compare to actual activities.

ALLOCATION

assigning to specic activities, identied in the rst stage, the value of turn-

over, capital expenditures and operating expenses.

VERIFICATION

for all identied activities, examination of the criteria for substantial contri-

bution and no signicant harm using technical screening criteria referred to

in the Annexes to the Commission Delegated Regulation (EU) 2021/2139.

Details of the assessment are presented in section 8.2 Compliance verica-

tion with technical screening criteria. Next step was to assess whether the

minimum safeguards were met.

CALCULATION

this stage was based on the use of information obtained in the second and

third stage, to prepare tables containing the required information and the

development of this supplementary information as required by Annexes I

and II to Commission Delegated Regulation (EU) 2021/2178, as amended

by Annex V of Commission Delegated Regulation (EU) 2023/2486.

6. TAXONOMY

Verication of compliance with the technical screening criteria was carried out

for activities qualifying for the EU Taxonomy and consisted of the analysis of

the individual criteria of signicant contribution and no signicant harm, as well

as to check check to what extent a given type of activity is compliant with the

technical screening criteria set out in Annexes I and II to Commission Delegated

Regulation (EU) 2021/2139, extended by Commission Delegated Regulation (EU)

2022/1214, Commission Delegated Regulations (EU) 2023/2485 and 2023/2486.

The main activities conducted in Arctic Paper Group are

production and selling of paper and pulp. These activities

are not included in the EU Taxonomy. Arctic Paper Group

expects that these activities will be included in the EU

Taxonomy in subsequent EU delegated acts.

6.2

COMPLIANCE

VERIFICATION WITH

THE TECHNICAL

SCREENING CRITERIA

SUSTAINABILITY REPORT 2023

According to Art. 18 of EU Regulation 2020/852: "The minimum guarantees (…),

shall be procedures implemented by an undertaking that is carrying out an economic

activity to ensure the alignment with the OECD Guidelines for Multinational Enter-

prises and the UN Guiding Principles on Business and Human Rights, including the

principles and rights set out in the eight fundamental conventions identied in the

Declaration of the International Labour Organisation on Fundamental Principles and

Rights at Work and the International Bill of Human Rights”.

The test of compliance with the minimum safeguards was carried

out in accordance with the recommendations described in Final

Report on Minimum Safeguards by Platform on Sustainable

Finance.

According to the recommendations, failure to meet the minimum safeguards is one of

the following four conditions:

• Inadequate or non-existent human rights due diligence processes, including labour

rights, corruption, taxation and fair competition.

• The company or its top management was held accountable or found to be in breach

of labour law or human rights law in certain types of labour law or human rights

lawsuits.

• Lack of cooperation with the OECD National Contact Point (hereinafter referred to as

the OECD NCP) on the notication accepted by the OECD NCP.

• The Business and Human Rights Resource Center (BHRRC) made an allegation

against the company and the company did not respond to them within 3 months.

6.3

COMPLIANCE

VERIFICATION WITH

MINIMUM SAFEGUARDS

6. TAXONOMY

In the verication process in Arctic Paper Group,

non-compliance with the above-mentioned premises has

been tested in the following way:

1. As a result of the internal analysis, it was determined that Arctic Paper Group

has a due diligence process in place and in operation.

• The Arctic Paper Group has a system for reporting irregularities

- Whistleblowing;

• Mandatory training for all employees on counteracting corruption and

anti-competitive practices is conducted;

• Arctic Paper Group implements a system for assessing the sustainable develop-

ment of suppliers;

• The Code of conduct in the Arctic Paper Group value chain, the Sustainable

Development policy and the Diversity policy were implemented.

2. As a result of the verication, whether in relation to the persons mentioned in

the content of the premise, during the period to which the verication relates,

no legally valid convictions were made.

3. Verication of the database of notications of the OECD NCP (National

Contact Points) was carried out, which showed that there were no notications

in relation to the Arctic Paper Group in the period covered by the verication:

https://mneguidelines.oecd.org/database/

4. Verication of the Business and Human Rights Resource Center (BHRRC) appli-

cation database was carried out which showed that there were no notications

in relation to the Arctic Paper Group in the period covered by the verication:

https://www.business-humanrights.org/en/companies/

SUSTAINABILITY REPORT 2023

6. TAXONOMY

6.4

ACCOUNTING

PRINCIPLES

The following principles were used to calculate the

percentage of turnover, capital expenditure (CapEx) and

operational expenditure (OpEx) eligible for the taxonomy:

TURNOVER

with regard to the turnover, the basis was the total consolidated revenues of

Arctic Paper Group in 2023, disclosed in the consolidated nancial statement

under the item "Revenue from the sale of paper and pulp" described in note

10. The numerator is assigned to the revenue from activities eligible for the

EU Taxonomy.

SUSTAINABILITY REPORT 2023

In 2023, Arctic Paper Group obtained key revenues eligible for the

taxonomy from services provided by Rottneros in the eld of forest manage-

ment and transmission and distribution of electricity in Kostrzyn mill.

CAPEX

with regard to capital expenditures (CapEx), the basis was capital expendi-

tures settled in the Arctic Paper Group in individual mills and in the

headquarter.

IN PLN THOUS DECEMBER 31, 2023

Revenue from eligible activities 85,457

Consolidated revenue 3,549,153

Turnover KPI for eligible activities 2.41%

IN PLN THOUS DECEMBER 31, 2023

Capital expenditure associated with eligible activities 53,153

Total capital expenditure 200,173

CapEx KPI for eligible activities 26.55%

The proportion of turnover associated with eligible activities is 2.41%.

The proportion of capital expenditure associated with eligible activities is 26.55 %.

In 2023, Arctic Paper Group's key investment eligible for the EU Taxonomy

were related to the installation of a photovoltaic farm in Kostrzyn, as well as

renovation of existing buildings in Kostrzyn mill (including replacement of

the chemical-resistant oor in the production hall) and in Grycksbo.

6. TAXONOMY

Arctic Paper Group’s crucial eligible operating expenditures in 2023 include

costs related to renewal of water collection, treatment and supply systems

in paper mills and cogeneration of heat and power from bioenergy in

Rottneros.

The entire amount of CapEx is included in the consolidated nancial state-

ments in the increases of the following items:

• xed assets – note 16;

• intangible assets – note 19;

• investment properties.

The numerator has that part of CapEx that is for eligible activities for the EU

Taxonomy.

OPEX

with regard to operating expenses (OpEx), the basis was constituted by all

costs for the day-to-day servicing of the company's assets and for keeping

them in a proper condition. They include such costs as: personnel costs of

persons responsible for maintenance and repairs, costs related to repairs and

renovations of devices / installations. The part of the OpEx which relates to

the activities qualifying for the EU Taxonomy is assigned to the numerator.

IN PLN THOUS DECEMBER 31, 2023

Operating expenditure associated with eligible activities 49,494

Total operating expenditure 164,298

OpEx KPI for eligible activities 30.12%

The proportion of operating expenditures associated with eligible activities is 30.12%.

SUSTAINABILITY REPORT 2023

At the stage of identifying the types of activities eligible for the

Taxonomy and the accompanying activities, it was made sure

that none of them qualies for more than one type of activity,

i.e. no investment project meets the denition of more than one

type of activity. In practice, individual types of activities eligible

for Taxonomy and activities related to them concern separate

areas, which eliminates the risk of double counting.

At the stage of preparation for the process of identifying types

of activities, and then allocation and verication, persons respon-

sible for individual business areas were informed about such a

theoretical risk and instructed that if a given activity complies

with more than one denition of activity, they should assign it to

the denition of the type of activity that best reects the speci-

city and nature of the activity.

At the same time, no activity was identied that would meet

the criteria for a signicant contribution to more than one goal

at the same time.

Thus, the risk of taking them into account twice did not exist.

The data used for the calculations came from the nancial and

accounting system of Arctic Paper Group operating units.

The analysis showed that there is no need for detailed disag-

gregation of key performance indicators between Arctic Paper

Group operating units in accordance with point 1.2.2.3. Annex I

to Commission Delegated Regulation (EU) 2021/2178.

No activity of Arctic Paper Group has been recognised as eligible

economic activity contributing to the environmental objectives

covering sustainable use and protection of water and marine

resources and pollution prevention and control.

6. TAXONOMY

1. Proportion of turnover from products or services

associated with EU Taxonomy-aligned economic activities

Arctic Paper Group generates revenues mainly from the

production and sale of paper and pulp. These activities are

not included in the EU Taxonomy.

In 2023 Arctic Paper Group identied 4 business areas, the

revenues from which are aligned with EU Taxonomy.

IN PLN THOUS DECEMBER 31, 2023

Revenue from aligned activities 15,171

Consolidated revenue 3,549,153

Turnover KPI for eligible activities 0.43%

0.43% of total consolidated turnover is of environmentally sustainable activities,

Taxonomy aligned. A small percentage of activities aligned with Taxonomy is

primarily due to the small share of eligible activities.

0.43% of the total revenue comes from environmentally sustainable activities,

aligned with EU Taxonomy in terms of the rst and second environmental objec-

tives, i.e. climate change mitigation and adaptation to climate change, which

mainly consists of turnover from the activities of:

• 1.3 - forest management and management of forested areas by Rottneros,

which are partially certied (PEFC, FSC), hence the revenues of this activity are

partially shown as aligned with EU Taxonomy and as eligible for EU Taxonomy,

but not aligned;

• 4.5 - production of electricity from hydropower at the Munkedals hydro-power

plant.

TABLE LEGEND

The Code constitutes the abbreviation of the relevant objective to which

the economic activity is eligible to make a substantial contribution, as

well as the section number of the activity in the relevant Annex covering

the objective, i.e.:

CCM – Climate Change Mitigation

CCA – Climate Change Adaptation

WTR – Water and Marine Resources

CE – Circular Economy

PPC – Pollution Prevention and Control

BIO – Biodiversity and ecosystems

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the

relevant environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant

environmental objective.

Non-nancial undertakings shall also report the extent of eligibility and alignment per environmental

objective, that includes alignment with each of environmental objectives for activities contributing

substantially to several objectives:

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective

Proportion of turnover/Total turnover

Taxonomy aligned per

objective

Taxonomy eligible per

objective

CCM 0,25% 1,98%

CCA 0,17% 0,00%

WTR 0,00% 0,00%

CE 0,00% 0,00%

PPC 0,00% 0,00%

BIO 0,00% 0,00%

SUSTAINABILITY REPORT 2023

Substantial contribution criteria

DNSH criteria

('Does Not Signicantly Harm')

Economic activities (1)

Code(s) (2)

Absolute turnover (3)

PLN thous

Proportion of turnover (4)

Climate change mitigation (5)

Climate change adaptation (6)

Water (7)

Pollution (8)

Circular economy (9)

Biodiversity (10)

Climate change

mitigation (11)

Climate change

adaptation (12)

Water and marine

resources (13)

Pollution (14)

Circular economy (15)

Biodiversity (16)

Minimum

safeguards (17)

Proportion of Taxonomy- aligned

(A.1.) or -eligible (A.2.) turnover,

2022 (18)

Category (enabling activity) (19)

Category (transitional activity) (20)

ths zł %

Y; N; N/

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy-eligible activities

A.1. Environmentally sustainable activities

(Taxonomy-aligned)

Forest management CCM 1.3 8 988 0,25% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Electricity generation using solar photovoltaic technology CCA 4.1 11 0,0003% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,004%

Electricity generation from hydropower CCA 4.5 6 169 0,17% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,10%

Installation, maintenance and repair of charging stations

for electric vehicles in buildings (and parking spaces attached

to buildings)

CCM 7.4 4 0,0001% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,005% E

Turnover of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

15 171 0,43% 0,25% 0,17% 0,00% 0,00% 0,00% 0,00% 0,11%

Of which enabling 4 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,005% E

Of which transitional 0 0,00% 0,00%

A.2 Taxonomy-Eligible, but not environmentally sustainable

activities (not Taxonomy-aligned activities)

EL; N/EL

EL; N/

Forest management CCM 1.3 60 153 1,69% EL N/EL N/EL N/EL N/EL N/EL 1,44%

Transmission and distribution of electricity CCM 4.9 10 033 0,28% EL N/EL N/EL N/EL N/EL N/EL 0,17%

Renewal of water collection, treatment and supply systems CCM 5.2 46 0,001% EL N/EL N/EL N/EL N/EL N/EL 0,001%

Renewal of waste water collection and treatment CCM 5.4 54 0,002% EL N/EL N/EL N/EL N/EL N/EL 0,001%

Turnover of Taxonomy-eligible, but not environmentally

sustainable activities (not Taxonomy-aligned activities) (a.2)

70 286 1,98% 1,98% 0,00% 0,00% 0,00% 0,00% 0,00% 1,61%

Turnover of taxonomy-eligible activities (A.1 + A.2) 85 457 2,41% 2,23% 0,17% 0,00% 0,00% 0,00% 0,00% 1,72%

B. Taxonomy-non-eligible activities

Turnover of Taxonomy-non-eligible activities (B) 3 463 696 97,6%

Total (A+B) 3 549 153 100,0%

6. TAXONOMY

Capital expenditure (CapEx) qualifying for the taxonomy are related to the imple-

mentation of future investment projects resulting from the adopted strategy of

the Arctic Paper Group.

2. Proportion of CapEx from products or services associated

with EU Taxonomy-aligned economic activities

Capital expenditure incurred in accordance with the EU Taxonomy was identied

in the course of work as contributing to the implementation of the rst, second

and sixth environmental objectives, i.e. climate change mitigation, climate

change adaptation and biodiversity and ecosystems, which mainly consist of

capital expenditures related to activities:

• 4.1 - expenditure on the construction of photovoltaic installations in paper mills

and Rottneros mill; and

• 7.2 - renovation of existing buildings to improve energy efciency in Kostrzyn

and Grycksbo mills.

Detailed plans and time perspective of incurring capital expenditures were

presented in the Arctic Paper 4P Strategy published on October 4th, 2021.

INCREASES IN TERMS OF VALUE '000 PLN NOTE

Tangible xed assets without assets without the right of use 203,172 16.1

Right-of-use assets 9,607 16.2

Intangible assets 16,100 19

Investment properties – –

228,879 –

TABLE LEGEND

The Code constitutes the abbreviation of the relevant objective to which

the economic activity is eligible to make a substantial contribution, as

well as the section number of the activity in the relevant Annex covering

the objective, i.e.:

CCM – Climate Change Mitigation

CCA – Climate Change Adaptation

WTR – Water and Marine Resources

CE – Circular Economy

PPC – Pollution Prevention and Control

BIO – Biodiversity and ecosystems

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the

relevant environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant

environmental objective.

Non-nancial undertakings shall also report the extent of eligibility and alignment per environmental

objective, that includes alignment with each of environmental objectives for activities contributing

substantially to several objectives:

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective

Proportion of CapEx/Total CapEx

Taxonomy aligned per

objective

Taxonomy eligible per

objective

CCM 19,66% 6,76%

CCA 0,04% 0,00%

WTR 0,00% 0,00%

CE 0,00% 0,00%

PPC 0,00% 0,00%

BIO 0,09% 0,00%

IN PLN THOUS DECEMBER 31, 2023

Capital expenditure associated with aligned activities 39,619

Total capital expenditure 200,173

CapEx KPI for aligned activities 19.79%

The KPI of CapEx associated with aligned activities is 19,79%.

100

SUSTAINABILITY REPORT 2023

Substantial contribution criteria

DNSH criteria

('Does Not Signicantly Harm')

Economic activities (1)

Code(s) (2)

Absolute Capex (3)

Proportion of CapEx (4)

Climate change mitigation (5)

Climate change adaptation (6)

Water (7)

Pollution (8)

"Circular

economy (9)"

Biodiversity (10)

"Climate change

mitigation (11)"

"Climate change

adaptation (12)"

"Water and marine

resources (13)"

Pollution (14)

"Circular

economy (15)"

Biodiversity (16)

"Minimum

safeguards (17)"

Proportion of Taxonomy- aligned

(A.1.) or -eligible (A.2.) CapEx,

2022 (18)

Category (enabling activity ) (19)

Category (transitional activity) (20)

ths zł %

Y; N; N/

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y; N;

N/EL

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy eligible activities

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Conservation, including restoration, of habitats, ecosystems and species BIO 1.1 186 0,09% N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y Y 0,00%

Electricity generation using solar photovoltaic technology CCM 4.1 26 454 13,22% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 1,95%

Electricity generation using solar photovoltaic technology CCA 4.1 11 0,01% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y

Electricity generation from hydropower CCA 4.5 74 0,04% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Cogeneration of heat/cool and power from bioenergy CCM 4.20 2 932 1,46% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,66%

Infrastructure for rail transport CCM 6.14 27 0,01% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Renovation of existing buildings CCM 7.2 7 824 3,91% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Installation, maintenance and repair of energy efciency equipment CCM 7.3 555 0,28% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 1,83% E

Installation, maintenance and repair of charging stations for electric

vehicles in buildings (and parking spaces attached to buildings)

CCM 7.4 664 0,33% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,85% E

Installation, maintenance and repair of charging stations for electric

vehicles in buildings (and parking spaces attached to buildings)

CCM 7.6 891 0,45% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00% E

CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 39 619 19,79% 19,66% 0,04% 0,00% 0,00% 0,00% 0,09% 5,29%

Of which enabling 2 110 1,05% 1,05% 0,00% 0,00% 0,00% 0,00% 0,00% 2,68% E

Of which transitional 0 0,0% 0,00% 0,00%

A.2 Taxonomy-Eligible, but not environmentally sustainable

activities (not Taxonomy-aligned activities)

EL; N/EL

EL; N/

Transmission and distribution of electricity CCM 4.9 1 814 0,91% EL N/EL N/EL N/EL N/EL N/EL 0,00%

District heating/cooling distribution CCM 4.15 646 0,32% EL N/EL N/EL N/EL N/EL N/EL 0,00%

Renewal of water collection, treatment and supply systems CCM 5.2 1 182 0,59% EL N/EL N/EL N/EL N/EL N/EL 0,20%

Renewal of waste water collection and treatment CCM 5.4 1 287 0,64% EL N/EL N/EL N/EL N/EL N/EL 0,12%

Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 104 0,05% EL N/EL N/EL N/EL N/EL N/EL 0,00%

Construction, extension and operation of waste water collection and

treatment

CCM 7.2 2 432 1,21% EL N/EL N/EL N/EL N/EL N/EL 6,59%

Installation, maintenance and repair of energy efciency equipment CCM 7.3 4 969 2,48% EL N/EL N/EL N/EL N/EL N/EL 0,00%

Data processing, hosting and related activities CCM 8.1 1 101 0,55% EL N/EL N/EL N/EL N/EL N/EL 3,22%

CapEx of Taxonomy-eligible, but not environmentally sustainable

activities (not Taxonomy-aligned activities) (a.2)

13 535 6,76% 6,76% 0,00% 0,00% 0,00% 0,00% 0,00% 10,13%

CapEx of taxonomy-eligible activities (A.1 + A.2) 53 153 26,55% 26,42% 0,04% 0,00% 0,00% 0,00% 0,09% 15,42%

B. Taxonomy-non-eligible activities

Turnover of Taxonomy-non-eligible activities (B) 147 019

73,4%

Total (A+B) 200 173 100,0%

101

6. TAXONOMY

3. Proportion of OpEx from products or services associated

with EU Taxonomy-aligned economic activities

The operating expenditure (OpEx) eligible for the taxonomy related to activities

such as the repair and renovation of equipment, installations and buildings.

Operating expenditure incurred in accordance with the EU Taxonomy was iden-

tied in the course of work as contributing to the implementation of the rst,

second and fth environmental objectives, i.e. climate change mitigation, climate

change adaptation and circular economy, which mainly consist of operating

expenditures related to activities:

• 4.20 - Cogeneration of heat and power from bioenergy from biomass in pulp

mill in Vallvik; and

• 14.2 - Flood risk prevention and protection infrastructure related to the mainte-

nance of the Munkedals dam.

IN PLN THOUS DECEMBER 31, 2023

Operating expenditure associated with aligned activities 26,798

Total operating expenditure 164,298

OpEx KPI for aligned activities 16.31%

The KPI of OpEx associated with aligned activities is 16.31%.

TABLE LEGEND

The Code constitutes the abbreviation of the relevant objective to which

the economic activity is eligible to make a substantial contribution, as

well as the section number of the activity in the relevant Annex covering

the objective, i.e.:

CCM – Climate Change Mitigation

CCA – Climate Change Adaptation

WTR – Water and Marine Resources

CE – Circular Economy

PPC – Pollution Prevention and Control

BIO – Biodiversity and ecosystems

Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the

relevant environmental objective

N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the

relevant environmental objective

N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant

environmental objective.

Non-nancial undertakings shall also report the extent of eligibility and alignment per environmental

objective, that includes alignment with each of environmental objectives for activities contributing

substantially to several objectives:

EL – Taxonomy-eligible activity for the relevant objective

N/EL – Taxonomy-non-eligible activity for the relevant objective

Proportion of OpEx/Total OpEx

Taxonomy aligned per

objective

Taxonomy eligible per

objective

CCM 12,94% 13,81%

CCA 3,33% 0,00%

WTR 0,00% 0,00%

CE 0,04% 0,00%

PPC 0,00% 0,00%

BIO 0,00% 0,00%

102

SUSTAINABILITY REPORT 2023

Substantial contribution criteria

DNSH criteria

('Does Not Signicantly Harm')

Economic activities (1)

Code(s) (2)

Absolute OpEx (3)

Proportion of OpEx (4)

Climate change mitigation (5)

Climate change adaptation (6)

Water (7)

Pollution (8)

Circular economy (9)

Biodiversity (10)

Climate change mitigation (11)

Climate change adaptation (12)

Water and marine resources (13)

Pollution (14)

Circular economy (15)

Biodiversity (16)

Minimum safeguards (17)

Proportion of Taxonomy- aligned

(A.1.) or -eligible (A.2.) OpEx,

2022 (18)

Category (enabling activity) (19)

Category (transitional activity) (20)

ths zł %

Y; N; N/

Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. Taxonomy eligible activities

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Forest management CCM 1.3 683 0,42% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Treatment of hazardous waste CE 2.4 68 0,04% N/EL N/EL N/EL N/EL Y N/EL Y Y Y Y Y Y Y 0,00%

Electricity generation using solar photovoltaic technology CCA 4.1 5 0,003% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,01%

Electricity generation from hydropower CCA 4.5 586 0,36% N Y N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,12%

Storage of thermal energy CCM 4.11 31 0,02% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Installation and operation of electric heat pumps CCM 4.16 10 0,01% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,003%

Cogeneration of heat/cool and power from bioenergy CCM 4.20 13 589 8,27% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 10,15%

Production of heat/cool from bioenergy CCM 4.24 83 0,05% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,35%

Construction, extension and operation of water collection, treatment and supply systems CCM 5.1 48 0,03% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,05%

Renewal of water collection, treatment and supply systems CCM 5.2 2 442 1,49% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Construction, extension and operation of waste water collection and treatment CCM 5.3 1 027 0,63% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,09%

Collection and transport of non-hazardous waste in source segregated fractions CCM 5.5 1 180 0,72% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 2,31%

Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 741 0,45% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Infrastructure for rail transport CCM 6.14 1 040 0,63% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Renovation of existing buildings CCM 7.2 385 0,23% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

Installation, maintenance and repair of charging stations for electric vehicles in buildings

(and parking spaces attached to buildings)

CCM 7.4 3 0,002% Y N N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,03% E

Flood risk prevention and protection infrastructure CCA 14.2 4 878 2,97% N T N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0,00%

OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 26 798 16,31% 12,94% 3,33% 0,00% 0,00% 0,04% 0,00% 13,11%

Of which enabling 3 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,00% 0,002% E

Of which transitional 0 0,00% 0,00%

A.2 Taxonomy-Eligible, but not environmentally sustainable activities (not Taxon-

omy-aligned activities)

EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL

Forest management CCM 1.3 4 571 2,78% EL

N/EL N/EL N/EL N/EL N/EL 2,67%

Transmission and distribution of electricity CCM 4.9 550 0,33% EL N/EL N/EL N/EL N/EL N/EL 0,00%

Renewal of water collection, treatment and supply systems CCM 5.2 8 572 5,22% EL N/EL N/EL N/EL N/EL N/EL 4,87%

Collection and transport of non-hazardous waste in source segregated fractions CCM 5.4 4 126 2,51% EL N/EL N/EL N/EL N/EL N/EL 1,98%

Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 83 0,05% EL N/EL N/EL N/EL N/EL N/EL 0,00%

Data processing, hosting and related activities CCM 8.1 4 794 2,92% EL N/EL N/EL N/EL N/EL N/EL 2,02%

OpEx of Taxonomy-eligible, but not environmentally sustainable activities (not

Taxonomy-aligned activities) (a.2)

22 695 13,81% 13,81% 0,00% 0,00% 0,00% 0,00% 0,00% 11,54%

OpEx of taxonomy-eligible activities (A.1 + A.2) 49 494 30,12% 26,75% 3,33% 0,00% 0,00% 0,04% 0,00% 24,65%

B. Taxonomy-non-eligible activities

OpEx of Taxonomy-non-eligible activities (B) 114 804 69,9%

Total (A+B) 164 298 100,0%

103

6. TAXONOMY

ABOUT

THE REPORT

104

SUSTAINABILITY REPORT 2023

7.1

REPORTING PERIOD:

THE CALENDAR YEAR 2023

REP

ORT PUBLISHED ON MAY 21, 2024.

Sustainability Report 2023 is the seventh report presenting the

impact of our organization on environmental, social and economic

issues and describing our management practices. The report covers

the period from 01/01/2023 to 31/12/2023, unless otherwise stated

in the content of the report. We publish reports on an annual basis.

We published previous Sustainability Report for year 2022 on March 28th, 2023.

This report is prepared in line with the international GRI Standards at the CORE level (with

reference to TCFD - Task Force on Climate-related Financial Disclosures recommenda-

tions) and is not a subject to additional external audit.

The report presents the most important information from the point of view of investors,

regulators and the European Union. These include: ESG (Enviromental, Social, Govern-

ance) indicators, European Commission guidelines on disclosing non-nancial information

related to climate impact.

7.2

CONTACT

Arctic Paper SA

ul. Fabryczna 1, 66-470 Kostrzyn nad Odrą

ir@arcticpaper.com

105

7. ABOUT THE REPORT

7.3

ESG FACTSHEET

PAPER PRODUCTION 2023 2022 2021 2020 2019

Production (tonne/year) 423,817 626,472 636,613 587,364 601,564

ENERGY 2023 2022 2021 2020 2019

Electricity from grid (GWh/year) 219.3 317.10 329.3 391.0 230.8

Electricity from internal sources: hydro-

power, windpower, solar power (GWh/year)

25.2 18.8 20.6 0.3 3.4

Natural gas (GWh/year) 621.3 844.3 722.4 752.1 862.6

Bio fuels (GWh/year) 114.6 198.6 207.8 91.4 216.0

Purchased thermal energy (GWh/year) 213.4 212.2 241.3 193.9 186.5

Sold thermal energy (GWh/year) 43.4 46.8 53.1 46.7 44.7

Sold electricity (GWh/year) 85.5 77.2 49.6 71.1 71.4

Total net energy consumption (GWh/year) 1,079.4 1,393.5 1,419.7 1,311.6 1,380.1

Net energy from renewable internal

sources (GWh/year)

140 217 228 91 219

Total net energy consumption

(MWh/tonne paper) – energy sold

to external partners not included

2.5 2.3 2.2 2.2 2.3

Of which from internal energy production

based on renewable sources – biomass

and hydropower (MWh/tonne)

0.33 0.35 0.36 0.16 0.36

Net energy consumption for total

energy export (thermal and electric energy)

(GWh/year)

143 124 103 118 109

106

SUSTAINABILITY REPORT 2023

EMISSIONS TO WATER AND AIR 2023 2022 2021 2020 2019

Fossile CO

(tonne/year) from our

own steam and electricity production

129,085 160,962 149,941 156,605 178,803

Fossile CO

(tonne/year) from our

own steam and electricity production,

dedicated for paper production

99,863 132,844 126,556 129,796 152,354

Direct CO

emissions kg/tonne – SCOPE 1 236 212 199 221 253

emissions from energy sold

(heat and electricity) to external

consumers (tonne CO

/year)

29,230 28,118 23,385 26,809 24,948

emissions from energy sold

(heat and electricity) (tonne/GWh)

227 228 228 228 228

Fossile CO

(tonne/year)

from purchased electricity

67 3,014 7,067 6,005 5,218

emission factors for electricity

from grid (kg CO2/MWh) (Sweden /Poland)

0/666* 9.0/750 8.8/709.8 8.0/719 13.3/773

Indirect CO

– emissions from purchased

heat (tonne per year) (SCOPE 2)

18,785 – – – –

Indirect CO

emissions from all external

energy suppliers (electricity and heat) –

SCOPE 2

18,852 – – – –

Indirect specic CO

emissions from

external energy suppliers – SCOPE 2 (kg/

tonne)

44 5 11 10 9

Indirect CO

emissions emanating from our

major supplier of raw material (tonne/year)

37,356 53,273 49,668 43,003 43,826

Indirect specic CO

emissions from our

major supplier of raw material – SCOPE 3

(kg/tonne of paper)

88 85 78 73 73

Indirect CO

emissions emanating from our

transporters (tonne/year)

14,321 21,050 20,941 20,861 21,894

Indirect specic CO

emissions emanating

from our transporters (kg/tonne of paper)

SCOPE 3

33.8 33.6 32.9 35 36

WATER 2023 2022 2021 2020 2019

Water consumption m

/year 4,568,670 5,233,104 5,218,369 5,023,811 4,997,543

Specic water consumption (m

/tonne of

paper)

10.8 8.4 8.2 8.6 8.3

Emissions of COD to water (tonne/year) 198 280 308 283 276

Specic emissions of COD to water (kg/

tonne of paper)

0.47 0.45 0.48 0.48 0.46

* Only fossile free electricity purchased in Sweden

107

7. ABOUT THE REPORT

WASTE 2023 2022 2021 2020 2019

Recycling or energy extraction (tonne/year) 5,191 3,184 5,697 6,663 5,851

Recycling or energy extraction (kg/tonne of paper) 12.2 5.1 8.9 11.3 9.7

Hazardous waste (tonne/year) 164.5 191 85.5 269.7 117

Hazardous waste (Specic) (kg/tonne of paper) 0.39 0.30 0.13 0.46 0.20

Landll (tonne/year) 200.9 114 156 113.4 149.6

Landll (specic) (kg/tonne of paper) 0.47 0.18 0.25 0.19 0.25

SUPPLIERS 2023 2022 2021 2020 2019

Share(%) of core suppliers providing existing

signed environmental declaration

90 90 90 83 98

Share(%) of core suppliers who signed

the Code of conduct

90 90 90 83 85

Numbers of suppliers who are subject to audits

performed by Arctic Paper to conrm compliance

with the Code of conduct

2 2 1 3 4

Share(%) of pulp suppliers who are PEFC

and/or FSC certied

100 100 100 100 100

MATERIALS USED BY WEIGHT OR VOLUME 2023 2022 2021 2020 2019

Raw material for paper manufacturing

from external supplier (tonnes per year)*

406,181 585,663 n/a n/a n/a

Renewable raw material for paper manufacturing

from external supplier (tonnes per year)*

279,731 407,058 n/a n/a n/a

Non -renewable raw material for paper manufac-

turing from external supplier (tonnes per year)*

126,450 180,593 n/a n/a n/a

Renewable fraction of raw material

for paper manufacturing (%)*

68.9 69,5 n/a n/a n/a

Non-renewable fraction of raw material

for paper manufacturing (%)*

31,1 30,5 n/a n/a n/a

Total consumption of packaging material

(tonnes per year)

18.312 15,263 n/a n/a n/a

Total consumption of renewable

packaging material (tonnes per year)

16,761 13,719 n/a n/a n/a

Total consumption of non renewable

packaging material ( tonnes per year)

1,551 1,544 n/a n/a n/a

Renewable fraction of packaging material (%) 91.5 89,9 n/a n/a n/a

Non-renewable fraction of packaging material (%) 8.5 10,1 n/a n/a n/a

*Value covering more than 97% of used raw materials

108

SUSTAINABILITY REPORT 2023

TRANSPORTATION 2023 2022 2021 2020 2019

Share of Euro 3 engines class (%) 0 0 0 0 1

Share of Euro 4 engines class (%) 0 0 0 1 3

Share of Euro 5 engines class (%) 13 22 34 44 47

Share of Euro 6 engines class (%) 87 78 66 55 49

Indirect CO

emissions emanating from

our transporters (ton per year)

14,321 21,050 20,941 20,861 21,894

Specic indirect CO

emissions emanating

from our transporters (kg/ton)

34 34 33 35 36

CUSTOMER SATISFACTION 2023 2022 2021 2020 2019

Value of complaint as % of sales revenues 0.41 0.24 0.36 0.48 0.47

Sales revenues PLN M 2,460 3,580 2,431 2,016 2,309

HUMAN RESOURCES 2023 2022 2021 2020 2019

Worked Hours 1,947,506 1,896,657 1,770,249 1,755,076 1,835,225

Number of Lost time injuries 18 15 20 12 16

Lost time injuries per million worked hours 9.2 7.9 11.3 6.3 7.8

Total number of white collar employees 424 411 401 407 413

Total number of blue collar employees 799 790 764 774 770

Total number of white collar men employees 250 249 242 246 247

Total number of white collar women employees 174 162 159 161 166

Total number of blue collar men employees 665 660 639 655 652

Total number of blue collar women employees 134 130 125 119 118

Numbers of employees who participated

in business ethics training during the year

81 98 381 32 20

Average hours of training during the year 44 41 n/a n/a n/a

Employee survey response rate (absolute) 816 n/a 745 n/a 855

Employee survey response rate (%) 67 n/a 65 n/a 74

Overall engagement capital 3.9* n/a 51% n/a 46%

*change in reporting value due to change of engagement study methodology

109

7. ABOUT THE REPORT

EMPLOYMENT STRUCTURE TOTAL MEN WOMEN AGE<30 AGE 30-50 AGE>50

2019

Blue-collar 770 652 118 110 315 345

White-collar 413 247 166 13 215 185

2020

Blue-collar 774 655 119 114 333 327

White-collar 413 246 161 16 212 179

2021

Blue-collar 764 640 125 128 320 317

White-collar 401 242 159 19 204 179

2022

Blue-collar 790 660 130 149 326 315

White-collar 411 249 162 17 209 185

2023

Blue-collar 799 665 134 159 327 313

White-collar 424 250 174 23 204 197

2023 2022 2021 2020 2019

Number of permanent unlimited contracts 1,223 1,201 1,166 1,181 1,183

Number of temporary contracts 28 30 35 1.17 31

Percentage of total employees covered

by collective bargaining agreements

96 93 n/a n/a n/a

Total number of employees that took

parental leave during reporting period

117 113 n/a n/a n/a

EMPLOYEE TURNOVER RATE 2023 2022 2021

Turnover 6.6 6.7 5.8

New Hires 81 98 53

Resigned 60 58 37

Retired 26 27 31

NUMBER OF EMPLOYEES BY REGION 2023 2022

Poland 498 484

Sweden 681 650

Others 44 67

Total 1,223 1,201

110

SUSTAINABILITY REPORT 2023

2023 2022 2021 2020 2019

Total count of Management Board 3 2 2 2 2

% of Women on the Management Board 33 0 0 0 0

% of Men on the Management Board 66 100 100 100 100

2023 2022 2021 2020 2019

Total count of Supervisory Board 5 5 5 5 5

% of Women on the Supervisory Board 40 40 40 20 0

% of Men on the Supervisory Board 60 60 60 80 100

LEGAL AND REGULATORY COMPLIANCE BUSINESS-RELATED* NON-BUSINESS-RELATED*

2023

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

2022

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

2021

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

2020

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

2019

Fine bigger than PLN 2M 0 0

Fine smaller than PLN 2M 0 0

111

7. ABOUT THE REPORT

7.4

ESG FACT SHEET

– ROTTNEROS GROUP

The Rottneros Group is one of

the world's leading suppliers of

top-class pulp to selected niche

markets.

The Rottneros Group also

develops and produces

sustainable packaging solutions.

The Rottneros Group consists of:

– Rottneros mill and Vallvik mill –

two pulp production plants;

– Rottneros Packaging AB – a

factory producing molded ber

packaging;

– Nykvist Skogs AB and SIA

Rottneros Baltic – which supply

the raw material.

In 2023, Arctic Paper SA and Rottneros

AB concluded an agreement to establish

a joint-venture company under the name

Kostrzyn Packaging Sp. z o.o. The subject

of the company's activity is the production

of packaging made of molded cellulose

ber as well as development research

and technical analysis of manufactured

products.

The Rottneros Group is listed on the

Nasdaq stock exchange in Stockholm and

employs approximately 290 employees.

The corporate governance of the

Rottneros Group is based on the Swedish

Companies Act, the regulatory frame-

work of the Swedish Stock Exchange, the

Swedish Annual Financial Report Act and

the Swedish Corporate Governance Code.

112

SUSTAINABILITY REPORT 2023

Main facts about the Rottneros Group:

• offers a very wide range of different types of bers from two pulp mills in Sweden with a

production capacity of 225-250 kt per year - Vallvik, and 120 kt per year - Rottneros;

• The Vallvik plant produces long-ber chemical sulphate pulp and is a leading supplier of

cellulose E, which is used as an insulating material in electrical applications;

• The Rottneros plant focuses on the development and production of high yield bleached

mechanical pulp (CTMP);

• is the world's leading supplier of cellulose for the production of air and liquid lters;

• all wood used in the Rottneros Group is traceable and all pulps are available with PEFC or

FSC® certication;

• all Rottneros cellulose pulp is certied for the production of paper and cardboard

intended for contact with food and marked with Nordic Swan and EU Ecolabel;

• food trays manufactured by Rottneros Packaging are certied for food contact and are

available with the FSC® certicate;

The main ESG goals of the Rottneros Group:

ENVIRONMENTAL GOALS:

• production without the use of fossil fuels within GHG Scopes 1 and 2 by 2030 - Carbon

dioxide emissions in 2023 from fossil fuels within GHG Scope 1 are reduced to 8,979 tons

(including emissions from internal transport and company cars), compared to 9,982 tons in

2022. Scope 2 GHG emissions are reduced to 98,809 tonnes from 114,383 tonnes in 2022;

• reduction of COD level (chemical oxygen demand) – from 15.8 kg/tonne of cellulose in

2022 to 4.9 kg/tonne of cellulose in 2023;

• 100% share of FSC

or PEFC certied wood material - the result for 2023 was 68%. The

access to certied raw material was not enough to achieve the ambition. All purchased

wood fulls the requirements according to FSC

controlled wood.

SOCIAL GOALS:

• 30% share of women in the number of employees by 2025 - in 2023 the share of women

was 18%;

• 10.2 LTIFR – the number of accidents with sickness absence in 2023 increased to 10.2

LTIFR (number of accidents with sickness absence per million hours worked) compared to

7.4 LTIFR in 2022. The goal is to reduce the LTIFR rate every year .

113

7. ABOUT THE REPORT

2023 2022 2021 2020 2019

Production (tonnes per year) 351,657 397,112 395,286 412,600 393,600

Electricity from grid (GWh/year) 130 118 134 146 138

Electricity from internal sources: hydro-

power, windpower, solar power (GWh/year)

74 69 78 83 79

Fossil fuels (GWh/year) 28 39 51 53 68

Bio fuels (GWh/year) 1,716 1,705 1,714 1,771 1,754

Fossile CO

(tonne/year), from own steam

and electricity production

7,220 8,982 11,606 12,903 18,712

Direct CO

emissions kg/tonne – SCOPE 1 21 23 29 31 46

Fossile CO

(tonne/year), from purchased

electricity

98,809 114,383 107,687 100,504 75,505

emission factors for electricity from

grid (kg CO

/MWh) (residual calculation)

468 372 365 338 251

Indirect specic CO

emissions from

external electricity suppliers kg/tonne –

SCOPE 2

281 288 272 244 186

2023 2022 2021 2020 2019

Emissions of COD to water (tonne/year) 5,238 6,270 5,990 6,992 7,124

Specic emissions of COD to water (kg/

tonne of pulp)

15 16 15 17 18

114

SUSTAINABILITY REPORT 2023

2023 2022

Worked Hours 476,513 514,418

Number of Lost time injuries 5 4

Lost time injuries per million worked hours 10.2 7.4

Total number of white collar employees 107 104

Total number of blue collar employees 186 204

Total number of white collar men employees 75 72

Total number of white collar women employees 32 32

Total number of blue collar men employees 164 180

Total number of blue collar women employees 22 24

Employee survey response rate (absolute) 237 of 307 na

Employee survey response rate (%) 77 na

2023 2022

Employee Total Turnover 17% 18%

New hires 14% 8%

Resigned 11% 6%

Retired 8% 11%

2023 2022

% of Women on the Group Management 25 25

% of Men on the Group Management 75 75

2023 2022

% of Women on the Board of Directors 33 33

% of Men on the Board of Directors 67 67

115

7. ABOUT THE REPORT

GRI INDEX

116

SUSTAINABILITY REPORT 2023

DISCLOSURE

NUMBER

GRI STANDARD

TITLE

DISCLOSURE

NAME

ADDITIONAL

INFORMATION

LOCATION

IN THE REPORT

ESG

TOPIC

1. The organization and its reporting practices

GRI 2-1

General

Disclosures 2021

Organizational details –

Front page

1.1 Company

Overview

–

GRI 2-2

General

Disclosures 2021

Entities included in

the organization’s

sustainability reporting

–

1.1 Company

Overview

–

GRI 2-3

General

Disclosures 2021

Reporting period,

frequency and

contact point

01.01.2023 – 31.12.2023 7. About the report –

GRI 2-4

General

Disclosures 2021

Restatements

of information

No signicant changes

in the reporting period

– –

GRI 2-5

General

Disclosures 2021

External assurance

Assurance only to the

extent required by the

Act on statutory audi-

tors and article. 49b

paragraph. 9 of the

Act about accounting

7. About the report –

2. Activities and workers

GRI 2-6

General

Disclosures 2021

Activities, value

chain and other

business relationships

–

1 This is

Arctic Paper

3 Sustainable

supply chain for

client satisfaction

–

GRI 2-7

General

Disclosures 2021

Employees – 5 People –

3. Governance

GRI 2-9

General

Disclosures 2021

Governance structure

and composition

–

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-10

General

Disclosures 2021

Nomination and

selection of the highest

governance body

–

1.3 Governance

structure and

management on

sustainability topics

5.5 Diversity, Equity

and Inclusion

–

GRI 2-11

General

Disclosures 2021

Chair of the highest

governance body

–

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-12

General

Disclosures 2021

Role of the highest

governance body

in overseeing

the management

of impacts

–

1.3 Governance

structure and

management on

sustainability topics

2.1 Materiality

assessment

2.4 Principal

risks and their

management

–

117

8. GRI INDEX

GRI 2-13

General

Disclosures 2021

Delegation

of responsibility for

managing impacts

–

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-14

General

Disclosures 2021

Role of the highest

governance body in

sustainability reporting

–

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-15

General

Disclosures 2021

Conicts of interest – 1.2 Business ethics –

GRI 2-16

General

Disclosures 2021

Communication

of critical concerns

No critical concerns

in the reporting period

1.2 Business ethics

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-17

General

Disclosures 2021

Collective knowledge

of the highest

governance body

–

1.3 Governance

structure and

management on

sustainability topics

2.1 Materiality

assessment

2.2 Our contribution

to the Sustainable

Development Goals

–

GRI 2-18

General

Disclosures 2021

Evaluation

of the performance

of the highest

governance body

–

1.3 Governance

structure and

management on

sustainability topics

–

GRI 2-19

General

Disclosures 2021

Remuneration policies

Remuneration policy

together with annual

Remuneration report

for Members of the

Management Board

and Members of the

Supervisory Board are

available as sepa-

rate documents on

webpage

– –

GRI 2-20

General

Disclosures 2021

Process to determine

remuneration

Remuneration policy

together with annual

Remuneration report

for members of the

Management Board

and members of the

Supervisory Board are

available as sepa-

rate documents on

webpage

– –

118

SUSTAINABILITY REPORT 2023

4. Strategy, policies and practices

GRI 2-22

General

Disclosures 2021

Statement

on sustainable

development strategy

–

Interview with

President of the

Management Board

1.3 Governance

structure and

management on

sustainability topics

2.1 Materiality

assessment

2.2 Our contribution

to the Sustainable

Development Goals

–

GRI 2-23

General

Disclosures 2021

policy commitments –

1.3 Governance

structure and

management on

sustainability topics

2.2 Our contribution

to the Sustainable

Development Goals

2.3 Responsible

Business

4 Environment

and Climate

–

GRI 2-24

General

Disclosures 2021

Embedding policy

commitments

–

1.3 Governance

structure and

management on

sustainability topics

2.2 Our contribution

to the Sustainable

Development Goals

2.3 Responsible

Business

4 Environment

and Climate

–

GRI 2-25

General

Disclosures 2021

Processes to remediate

negative impacts

–

2.1 Materiality

assessment

2.4 Principal

risk and their

management

–

GRI 2-26

General

Disclosures 2021

Mechanisms for

seeking advice and

raising concerns

– 1.2 Business ethics –

GRI 2-27

General

Disclosures 2021

Compliance with

laws and regulations

– 1.2 Business ethics –

GRI 2-28

General

Disclosures 2021

Membership

associations

–

2.5 Arctic Paper’s

Partnerships

–

5. Stakeholder engagement

GRI 2-29

General Disclo-

sures 2021

Approach to stake-

holder engagement

–

1.2 Business ethics

2.1 Materiality

assessment

–

GRI 2-30

General Disclo-

sures 2021

Collective bargaining

agreements

– 7.3 ESG Factsheet –

119

8. GRI INDEX

Material Topics

GRI 3-1

Material

Topics 2021

Process to determine

material topics

–

2 Company

sustainability

–

GRI 3-2

Material

Topics 2021

List of material topics –

2 Company

sustainability

–

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

Specic disclosures: Anti-Corruption

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 205-2

Anti-corruption

2016

Communication

and training about

anti-corruption policies

and procedures

Business ethics

training includes

also anti-corruption/

anti-bribery topics

1.3 Governance

and Business ethics

2.3 Responsible

business

GRI 205-3

Anti-corruption

2016

Conrmed incidents

of corruption

and actions taken

No incidents conrmed – G1

Own measure –

Number of employees

completing the busi-

ness ethics program

–

1.2 Governance

and Business ethics

Specic disclosures: Materials

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 301-1 Materials 2016

Materials used by

weight or volume

–

4.3. Sustainable

circular production

and waste

GRI 301-2 Materials 2016

Recycled input

materials used

–

4.3. Sustainable

circular production

and waste

GRI 301-3 Materials 2016

Reclaimed products

and their packaging

materials

–

4.3. Sustainable

circular production

and waste

Own measure –

Value of complaints as

share of sales revenue

–

3.4. Commitment

to client satisfaction

120

SUSTAINABILITY REPORT 2023

Specic disclosures: Energy

GRI 302-1 Energy 2016

Energy consumption

within the organization

–

4.2 Energy

and emissions

–

GRI 302-4 Energy 2016

Reduction of energy

consumption

–

4.2 Energy

and emissions

–

Specic disclosures: Water and Efuents

GRI 3-1

Material

Topics 2021

Process to determine

material topics

–

2 Company

sustainability

–

GRI 3-2

Material

Topics 2021

List of material topics –

2 Company

sustainability

–

GRI 303-1 Water 2018

Interactions with water

as a shared resource

– 4.4 Water E2

GRI 303-2 Water 2018

Management of water

discharge-related

impacts

– 4.4 Water E2

GRI 303-3 Water 2018 Water withdrawal – 4.4 Water E2

GRI 303-4 Water 2018 Water discharge – 4.4 Water E2

GRI 303-5 Water 2018 Water consumption – 4.4 Water E2

Specic disclosures: Biodiversity

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 304-1

Biodiversity

2016

Operational sites

owned, leased,

managed in, or adja-

cent to, protected

areas and areas of

high biodiversity value

outside protected areas

–

4.3.Sustainable

circular production

and waste

GRI 304-3

Biodiversity

2016

Habitats protected

or restored

– 4.5 Biodiversity E3

Specic disclosures on material topics: Emissions

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 305-1 Emissions 2016

Direct (Scope 1) GHG

emissions

–

4.2 Energy

and emissions

GRI 305-2 Emissions 2016

Energy indirect (Scope 2)

GHG emissions

–

4.2 Energy

and emissions

GRI 305-3 Emissions 2016

Other indirect (Scope 3)

GHG emissions

–

4.2 Energy

and emissions

121

8. GRI INDEX

Specic disclosures: Efuents and waste

GRI 3-3

Material Topics

2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 306-1 Waste 2020

Waste generation

and signicant

waste-related impacts

–

4.3. Sustainable

circular production

and waste

GRI 306-2 Waste 2020

Management

of signicant

waste-related impacts.

–

4.3. Sustainable

circular production

and waste

GRI 306-3 Waste 2020 Waste generated –

4.3. Sustainable

circular production

and waste

GRI 306-5 Waste 2020

Waste directed

to disposal

–

4.3. Sustainable

circular production

and waste

Specic disclosures: Supplier Environmental Assessment

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 308-1

Supplier

Environmental

Assessment

2016

New suppliers that

were screened using

environmental criteria

–

3.2. Environ-

mental assess-

ment of suppliers

and responsible

sourcing

Specic disclosures: Employment

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 401-1

Employment

2016

New employee hires

and employee turnover

–

5.1 Working

at Arctic Paper

GRI 401-2

Employment

2016

Benets provided to

full-time employees

that are not provided

to temporary or part-

time employees

–

5.2 Our employees'

well-being and

satisfaction

GRI 401-3

Employment

2016

Parental Leave – 7.3 ESG Factsheet S3

Own measure – Engagement capital –

5.2 Our employees'

well-being

and satisfaction

122

SUSTAINABILITY REPORT 2023

Specic disclosures: Occupational Health and Safety

GRI 3-3

Material

Topics 2021

Management of mate-

rial topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 403-1

Occupational

Health and

Safety 2018

Occupational health

and safety manage-

ment system

–

5.4 Health

and safety

GRI 403-2

Occupational

Health and

Safety 2018

Hazard identication,

risk assessment, and

incident investigation

–

5.4 Health

and safety

GRI 403-3

Occupational

Health and

Safety 2018

Occupational health

services

–

5.4 Health

and safety

GRI 403-4

Occupational

Health and

Safety 2018

Worker participation,

consultation, and

communication on

occupational health

and safety

–

5.4 Health

and safety

GRI 403-5

Occupational

Health and

Safety 2018

Worker training on

occupational health

and safety

–

5.4 Health

and safety

GRI 403-6

Occupational

Health and

Safety 2018

Promotion of worker

health

–

5.4 Health

and safety

GRI 403-7

Occupational

Health and

Safety 2018

Prevention and

mitigation of occu-

pational health and

safety impacts directly

linked by business

relationships

–

5.4 Health

and safety

GRI 403-8

Occupational

Health and

Safety 2018

Workers covered by

an occupational health

and safety manage-

ment system

All workers are covered

by an occupational

health and safety

management system

5.4 Health

and safety

GRI 403-9

Occupational

Health and

Safety 2018

Work-related injuries –

5.4 Health

and safety

123

8. GRI INDEX

Specic disclosures: Training and Education

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 404-1

Training and

Education 2016

Average hours

of training per year

per employee

– 7.3 ESG factsheet S4

GRI 404-2

Training and

Education 2016

Programs for

upgrading employee

skills and transition

assistance programs

–

1.2 Business ethics

5.2 Our employees’

well-being and

satisfaction

GRI 404-3

Training and

Education 2016

Percentage of

employees receiving

regular performance

and career develop-

ment reviews

–

1.2 Business ethics

5.2 Our employees’

well-being and

satisfaction

Specic disclosures: Diversity and Equal Opportunity

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 405-1

Diversity

and Equal

Opportunity

2016

Diversity of governance

bodies and employees

–

5.5 Diversity

and Inclusion

Specic disclosures: Non-discrimination

GRI 3-3

Material

Topics 2021

Management

of material topics

–

1.3 Governance

structure and

management on

sustainability topics

2 Company

sustainability

–

GRI 406-1

Non-discrimina-

tion 2016

Incidents of discrimi-

nation and corrective

actions taken

No incidents conrmed – S6

Specic disclosures: Local communities

GRI 413-1

Local

communities

2016

Operations with

local community

engagement, impact

assessments, and

development programs

–

2.5 Arctic Paper’s

Partnerships

4.5 Biodiversity

5.2 Our employees'

well-being and

satisfaction

–

124

SUSTAINABILITY REPORT 2023

125