Stora Enso

The Board and the President and CEO are responsible for the management of the Company. The duties of the various bodies within Stora Enso Oyj are determined by the laws of Finland and by the Company's corporate governance policy, which complies with the Finnish Companies Act and the Finnish Securities Market Act. The decision-making bodies responsible for managing the Company are the Board and the CEO, while the Group Leadership Team (GLT) supports the CEO in managing the Company. The day-to-day operational responsibility rests with the GLT members supported by divisional and function teams. The Board of Directors convenes a shareholders' meeting by publishing a notice of the meeting at the Company's website not more than three months before the last day for advance notice of attendance mentioned in the notice of the meeting and not less than three weeks before the date of the meeting.

Shareholders may exercise their voting rights and take part in the decision-making process of Stora Enso by participating in shareholders' meetings. Shareholders also have the right to ask the Company's management and Board of Directors questions at shareholders' meetings. Major decisions are taken by the shareholders at Annual or Extraordinary General Meetings. At a shareholders' meeting, each A share and every ten R shares carry one vote. Shareholders may also exercise their decision-making rights by means of pre-voting, which has been offered by the Company as a means of exercising voting rights since 2020.

The Stora Enso group prepares Consolidated financial statements and interim reports conforming to International Financial Reporting Standards (IFRS Accounting Standards). The Company's sustainability statement is prepared in accordance with the European Sustainability Reporting Standards. The annual financial statement, the Report of the Board of Directors including the sustainability statement and interim reports are published in Finnish and English. Stora Enso prepares its financial statements in accordance with the Finnish Accounting Act. Stora Enso has one statutory auditor elected by the shareholders at the Annual General Meeting. The governance bodies include Internal Audit, Risk management, Internal control, Ethics and Compliance functions.

As a leading provider of renewable packaging, biomaterials, and wooden construction, and one of the largest private forest owners globally, we actively contribute to the circular bioeconomy focusing on climate change, circularity, and biodiversity. Our low-carbon and recyclable fiber-based products support our customers in choosing renewable options. The forest is at the heart of Stora Enso and we believe that everything made from fossil-based materials today can be made from a tree tomorrow. Our value creation has its foundation in the forest, where wood represents the largest part of our raw material. The forest is a value accretive real asset and functions as a long-term fiber supply for our products. Sustainable forest management ensures that new generations of trees replace those that are harvested. We are positioned in the following growing segments: Renewable packaging – is driven by high demand for circular packaging. We hold leading global market positions in consumer board segments with high barriers-to-entry. Sustainable building solutions – is driven by a growing wooden buildings market. We are a leading global supplier of building solutions, offering alternatives to fossil-intense construction materials. Biomaterials innovation – our agenda targets new applications in fiber products, lignin and biochemicals, focusing on novel products that replace fossil-based materials.

Close relationships and engagements with both our customers and employees are crucial, and I am pleased that we continue to attain high scores in customer satisfaction and employee engagement, reflecting the strengths of Stora Enso. Our annual employee engagement survey, conducted in November 2024, had both a high response rate and an overall strong engagement rate, exceeding the industry benchmark. We prioritise open and transparent relationships with stakeholders to discuss the impact of our operations, build trust, and address concerns. We have a long history of engaging with local communities in diverse settings and cultures. The form and frequency of our engagement vary based on the local context. This may involve interaction through community representatives or direct and inclusive contact. With over 20,000 contractors, sub-contractors and suppliers, we prioritise responsible raw material sourcing and foster long-term relationships with key partners. Our investments in energy, raw material efficiency, and product development enable customers to achieve their climate and circularity goals. By partnering with customers and other stakeholders, we create sustainable, valuable products that enhance our customer relationships and market share.

Our market for sustainable packaging is growing, fuelled by increasing environmental concerns and changes in consumer behaviour. Market uncertainties, along with fluctuations in demand and pricing, persisted throughout 2024. We faced several challenges in the market, including weak demand for consumer board, overcapacity in corrugated board, a volatile pulp market, a persistently weak construction sector, and continued tightness in wood markets. The biggest challenge has been the continued volatility and market weakness. However, our Group-wide cost-saving measures will continue to deliver results. The growing demand for bio-based materials, along with external factors such as climate change and geopolitical instability, may limit Stora Enso's access to wood-based raw materials. However, these challenges also create opportunities to innovate and identify alternative sources, potentially driving greater sustainability and efficiency in the industry. Climate change could pose challenges to Stora Enso's forests and operations, impacting resource availability. However, it also presents opportunities to innovate and adapt, leading to advancements in sustainable forestry practices. All the businesses in which we operate are in growing segments, driven by strong sustainability trends. Stora Enso holds leading market positions in renewable packaging, biomaterials, and sustainable construction segments, all of which are positioned for long-term growth.

During 2024, we continued to make progress on our sustainability targets, achieving reductions in carbon emissions across all three Scope categories. Our commitment to circularity involves reducing, reusing, and recycling materials in both production and consumption. We integrate circularity into our product development and collaborate with customers and partners to promote product recycling. Our biodiversity initiatives aim for a net positive impact, with action programmes in place until 2030 to enhance biodiversity at the species, habitat, and landscape levels. Stora Enso's Sustainability statement provides a comprehensive overview of the risks and opportunities arising from social, environmental, and governance issues, and on the impact of our activities on people and the environment.

Stora Enso's Sustainability statement provides a comprehensive overview of the risks and opportunities arising from social, environmental, and governance issues, and on the impact of our activities on people and the environment. The sustainability statement is prepared in accordance with the Corporate Sustainability Reporting Directive.

As part of our long-term commitment to sustainability, we have set ambitious science-based targets aligned with the 1.5-degree scenario. We are also committed to achieving a 50% reduction in our Scope 3 emissions by 2030, which include indirect emissions from activities such as purchased goods and the processing of sold products.

By the end of 2024, we achieved a 53% reduction in our Scope 1 and 2 emissions from 2019. This surpasses our target of a 50% reduction by 2030 and underscores our commitment to proactive climate action. We are also committed to achieving a 50% reduction in our Scope 3 emissions by 2030. Both active measures to reduce emissions and the closure of sites and production lines contributed to a 53% decrease in Scope 1 and 2 emissions and a 39% decrease in Scope 3 emissions compared to the 2019 baseline.

Biodiversity refers to the variability of life at genetic, species, and habitat levels. Globally, biodiversity is declining, and more action is needed to reverse this trend. As one of the world's largest private forest owners, we have a responsibility to protect biodiversity across all our operations. Sustainable forest and plantation management ensures the long-term availability of wood while preserving ecosystems and biodiversity, crucial for forest resilience. Our biodiversity initiatives aim for a net positive impact, with action programmes in place until 2030 to enhance biodiversity at the species, habitat, and landscape levels. Stora Enso has developed a science-based framework using technology and data to forecast and enhance biodiversity impacts. The company's partnership with the International Union for Conservation of Nature (IUCN) will offer expert insights to further refine and validate this framework. 99% of the land we own or manage was covered by forest certification schemes.

Our commitment to circularity involves reducing, reusing, and recycling materials in both production and consumption. We integrate circularity into our product development and collaborate with customers and partners to promote product recycling. By the end of 2024, 94% of our products were technically recyclable. We support the cascading use of wood, which means that all parts of harvested trees, forestry residuals, and industrial side streams are used in the most efficient way. Our biological assets, primarily standing trees, serve as raw materials for pulp and mechanical wood production, while wood residues are used as biofuels, mainly in our own operations.

Stora Enso is committed to offering an inclusive and equitable workplace where we respect and value individual differences. We have a zero-tolerance policy for discrimination, harassment, or bullying. Our commitment to a safe, diverse, and inclusive working environment is outlined in our People Promise and Expectations. We value diversity and inclusion as they boost competitiveness, improve decision-making, and encourage job satisfaction, innovation, and agility. Across all our operations and offices, we encourage all our people to actively participate in continuous safety improvement. We promote mental health awareness and physical safety through webinars and discussion forums.

Stora Enso strives to understand employee perspectives and measure progress on our People Promise. We continuously adjust and refine our approach to support teams growth and improve through the all-employee survey, Engage. In year 2024 we ran a global survey as well as several divisional surveys to support the development of our decentralised operating model. The global survey conducted in 2024, had a response rate of 79%. The engagement score was 7.8, slightly above the industry benchmark. We regularly monitor employee feedback and perspectives on our diversity and inclusion efforts through engagement surveys. In 2024, we introduced a new Inclusion Index in our global employee engagement survey, which scored 8.4, placing Stora Enso in the average rank among the manufacturing sector.

To foster a positive performance culture, we introduced the concept of 4As at the end of 2023. Ambition, Agility, Analytical Approach and Accountability guide us in developing high-performing teams and building a strong, transparent company culture. We are raising the bar by challenging ourselves and creating an active feedback culture. Our focus is on enhancing efficiency by raising a high clock speed. We utilise new forums to facilitate quicker problem-solving and connecting performance management processes across the organisation. Additionally, we are committed to embedding a culture of continuous improvement as our standard way of working, to encourage ongoing development and progress.

19,000 employees. Employees by country: Finland, 27%; Sweden, 18%; China, 12%; Poland, 10%; Czech Republic, 6%; Austria, 5%; Other Europe, 16%; Brazil and Uruguay, 4%; Other countries, 1%.

24% share of women among all managers. Employees representing 80 different citizenships. Reflecting the diverse societies in which we operate is essential to achieving our strategic goals. Diversity and inclusion drive improved performance, collaboration, and innovation. We appreciate diversity of thought and encourage employees to share their views. While we have set key performance indicators (KPIs) related to gender balance, we acknowledge that diversity includes more than just gender. It also includes age, ethnicity, national origin, and other aspects of identity. Stora Enso ranked top leader in the Financial Times Diversity Leaders index.

We encourage all employees to drive their growth, set high ambitions, and embrace development opportunities to enhance their knowledge, skills, and networks. Our strategic workforce planning ensures the organisation has the necessary capabilities to meet market demands. We focus on recruitment and talent initiatives to address workforce gaps and support employee development. We enhance managers' skills, agility, capabilities, and build expert partnerships through various training programmes, workshops, webinars, and conferences. Our Sales Academy is designed to drive value and performance in the marketplace for sales teams and other functions.

Across all our operations and offices, we encourage all our people to actively participate in continuous safety improvement. We promote mental health awareness and physical safety through webinars and discussion forums.

With its strong global presence, Stora Enso depends on thriving and resilient communities. Our Purpose 'Do Good for the People and the Planet' and our Values 'Lead' and 'Do What's Right' underline our commitment to conducting business responsibly in the communities in where we operate. Our operations depend on local communities for a skilled workforce and the supply of our primary raw material, wood. In turn, we contribute to local employment, income generation, and infrastructure development. Additionally, our community development programmes and employee volunteering initiatives are designed to further enhance the livelihoods of these communities.

We prioritise open and transparent relationships with stakeholders to discuss the impact of our operations, build trust, and address concerns. We have a long history of engaging with local communities in diverse settings and cultures. The form and frequency of our engagement vary based on the local context. This may involve interaction through community representatives or direct and inclusive contact. Active cooperation with forest owners and stakeholders near our harvesting sites helps to promote sustainable sourcing, share knowledge, and gain social acceptance. We are a significant private forest owner in Sweden and a key forestry operator in Finland. We acknowledge our responsibilities to the indigenous Sámi people who reside near the lands where we operate or source our wood. Our forestry planning team engages in ongoing dialogue with the local Sámi communities in Sweden, including discussions about forestry and reindeer herding, and identifying opportunities and challenges together. Before commencing any forestry operations, we consult with the Sámi communities. Annual evaluation meetings assess the year's activities and consultations, ensuring continuous communication and collaboration. The Pataxó and Tupinambá communities, comprising nearly 25,000 indigenous people, live near Veracel, our joint venture in Brazil. In cooperation with indigenous communities, Veracel's community liaison team plans activities to foster dialogue and preserve traditional culture. Community consultations are held before logging operations begin and after activities near harvesting sites are completed to avoid or mitigate any potential impact.

We are committed to managing our actions responsibly, minimising adverse impacts on the environment and people while maximising positive outcomes. Our approach to engaging with local communities and indigenous peoples, as well as managing our impact, is further described in the Sustainability Statement.

Stora Enso complies with the Finnish Corporate Governance Code 2025 issued by the Securities Market Association. Stora Enso also complies with the Swedish Corporate Governance Code, with certain deviations due to differences between Swedish and Finnish legislation, governance code rules and practices. The duties of the various bodies within Stora Enso Oyj are determined by the laws of Finland and by the Company's corporate governance policy, which complies with the Finnish Companies Act and the Finnish Securities Market Act. The corporate governance policy is approved by the Board of Directors. Our Purpose 'Do Good for the People and the Planet' and our Values 'Lead' and 'Do What's Right' underline our commitment to conducting business responsibly. We have a zero-tolerance policy for discrimination, harassment, or bullying.

With over 20,000 contractors, sub-contractors and suppliers, we prioritise responsible raw material sourcing and foster long-term relationships with key partners. Active cooperation with forest owners and stakeholders near our harvesting sites helps to promote sustainable sourcing, share knowledge, and gain social acceptance. In addition to sourcing wood from its own forests and tree plantations, Stora Enso purchased wood from approximately 21,000 private forest owners during the year.

The governance bodies include Internal Audit, Risk management, Internal control, Ethics and Compliance functions.