Raport

SUSTAINABILITY

REPORT 2022

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 / 24

Sustainable supply

chain for client

satisfaction / 42

Environment

and climate / 51

1.1 Company Overview / 09

1.2 Business ethics / 18

1.3 Governance structure and management

on sustainability topics / 22

2.1 Materiality assessment / 25

2.2 Our contribution to the Sustainable

Development Goals / 30

2.3 Responsible business / 32

2.4 Principal risks and their management / 33

2.5 Arctic Paper’s partnerships / 36

2.6 Key business performance indicators / 38

3.1 Responsible supply chain / 44

3.2. Environmental assessment of suppliers

and responsible sourcing / 45

3.3 Transportation / 48

3.4. Commitment to client satisfaction / 50

4.1 Management approach / 52

4.2 Energy and emissions / 56

4.3. Sustainable circular production

and waste / 62

4.4 Water / 65

4.5 Biodiversity / 67

SUSTAINABILITY REPORT 2022

People / 68 About the

report / 98

5.1 Working at Arctic Paper –

Management approach / 69

5.2 Our employees' well-being

and satisfaction / 71

5.3 Human rights / 78

5.4 Health and safety / 81

5.5 Diversity, Equity and Inclusion / 82

Taxonomy / 84

7.1 Reporting period:

the calendar year 2022 / 99

7.2 Contact / 99

7.3 ESG factsheet / 100

GRI Index / 106

6.1 Taxonomy compliance

assessment process / 87

6.2 Compliance verication with

the technical screening criteria / 88

6.3 Compliance verication

with minimum safeguards / 89

6.4 Accounting principles / 91

What were the most

important events in 2022?

The Russian invasion of Ukraine has funda-

mentally changed many things in the

markets in which we operate. Arctic Paper

immediately discontinued all business

with Russia and Belarus. We have also

contributed to the Ukrainian cause, as well

as helped refugees eeing from the war.

The tragic events also triggered cost ina-

tion and made the availability and afforda-

bility of energy a more challenging task.

How would you summarize

the year for Arctic Paper?

We saw an increase in demand, as the

societies in which we operate eased the

restrictions related to the coronavirus and

gradually returned to normal life, triggering

growth in our business. Simultaneously, cost

ination necessitated/required several price

increases during the year. In this new busi-

ness environment, we managed to defend

our margins and grow our business. Closing

the books for 2022, we summarize a record

year, providing nancial resources to invest

in the strategic diversication towards pack-

aging and energy, while maintaining our

strong positions in paper and pulp.

How has Arctic Paper

handled the energy challenge?

We have long held a strong position

with local sources of energy at our mills,

for example, biomass energy and hydro

power. Investing in renewable energy is

also a priority in the 4P strategy that was

launched in 2021. During 2022, we have

taken further steps with investments in

a solar park in Kostrzyn and we have also

commissioned a multifuel boiler, built and

operated by our partner Adven at our mill

in Munkedal. This is an example of smart

cooperation within the circular economy.

More investments will follow in the elds of

solar and wind, with the goal of becoming

a net producer of green energy and thus

contributing to combating climate change.

What are you doing

to prevent climate change?

Transforming Arctic Paper to a CO

neutral

Group by 2035 is our ultimate goal and

it requires, among other things, major

investments in renewable energy. But it is

also a question of keeping the business

running, maintaining our competitiveness,

and creating the prots needed to invest,

which in turn demands the availability

MICHAŁ JARCZYSKI

CEO ARCTIC PAPER S.A.

SUSTAINABILITY REPORT 2022

of affordable and clean energy. We have

decided on several other targets that are

described in this report. The three most

important aspects of our materiality analysis

are the health and safety of employees,

customer satisfaction and climate change.

We have connected these focus areas with

the UN Sustainable Developments Goals

(SDG), which you also will nd in the report.

Starting with health and safety,

how are you progressing?

I am happy to say that the number of

work-related injuries has decreased during

2022, but we still need to do more to reach

our goal. This is one of the main priorities

for 2023. Good working conditions are

a prerequisite if we are to retain our staff

and recruit future talents.

Do you have any other

examples of progress?

In Munkedal, where the mill is already one

of the best in the world when it comes

to using as little water as possible and to

ensure clean water, we have invested in

making the Munkedal river more acces-

sible for sh. And the measures that were

implemented in 2021 have already shown

a remarkable effect on underwater life.

Last year we could see a major recovery

of the sh stocks in the river.

Looking forward, what

do you expect from 2023?

The outlook for the economy is uncertain,

but Arctic Paper is well-prepared with

stable nances. We will continue to invest

in our strategic diversication as well as

in new and better technology to reduce

our footprint – and that of our customers.

We are working with eco-friendly and

renewable products that are attractive

to customers who want to shift from

fossil-based to bio-based products.

THIS IS

ARCTIC

PAPER

SUSTAINABILITY REPORT 2022

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 31 December 2022, Arctic Paper employs

about 1,201 people. Our business activities are based

on the operations of three mills:

ONETWOTHREE

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 S.A., 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 Odrą (Poland).

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

December 31, 2022) of the Rottneros group. Rottneros AB is a pulp producing

company, registered on the Nasdaq stock exchange in Stockholm. The Pulp 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 oper-

ational control belongs to Rottneros AB, including responsibility for the company’s

performance and sustainability matters.

Data for 2022 for Rottneros AB are not available in the format presented by Arctic

Paper SA However, 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 report isavailable on web page:

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

SUSTAINABILITY REPORT 2022

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 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 development 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 relationships

with different stakeholders. Thus, we need to ensure that all of our business oper-

ations are transparent – from sustainable sourcing, the production and delivery

of our products, to the communication of our results to external stakeholders.

We are transparent and ethical in everything we do. Since 2018 our cooperation

with suppliers has been based on Code of Conduct for Suppliers of Arctic Paper.

We aim to choose suppliers who can and are willing to assure us that they respect

our values with regards to People and the Environment. In 2021 we elaborated

a new Sustainability Policy for the entire Arctic Paper Group. In 2023, we plan to

start working on a new code of conduct for the entire value chain of Arctic Paper.

1. THIS IS ARCTIC PAPER

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 superior, 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.

SUSTAINABILITY REPORT 2022

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, ARCTIC

• Manufactured under the brand names Arctic Volume, G and Arctic.

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 covers a grammage range

from 38 g/m2 to 150 g/m2 in two shades and is called Munken Kraft. Since 2021

the coated packaging paper is a 1 side coated matt grade, called G-Flexmatt.

1. THIS IS ARCTIC PAPER

OUR BRANDS AND

THE CIRCULAR ECONOMY

The full product range of Munken papers produced by

Arctic Paper Munkedals and papers produced by Arctic

Paper Grycksbo, as well Amber Graphic and Munken Kraft

produced by Arctic Paper Kostrzyn were awarded a C2C

Certied Material Health Certicate™at the Silver level

by the Cradle to Cradle Products Innovation Institute.

The Cradle to Cradle Certied

Material Health Assessment Methodology is

a contextual assessment based on chemical hazard identication and qualitative

exposure considerations during a product’s manufacture, use and end-of-use.

It means that products are made using chemicals that are as safe as possible for

humans and the environment by leading designers and product developers.

OUR BRANDS AND

THE DESIGN INDUSTRY

At Arctic Paper, we learn from students and students learn from working with us.

The Munken Agenda is a unique annual design project that 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 with an eco-friendly and sustainable foot-

print 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. In 2019, the creative idea and

concept for the Agenda were created by ve graphic design students from NABA

(Nuova Accademia di Belle Arti) in Milan, Italy. For 2020, the concept was created

by graphic design students from École Estienne in Paris, France, followed by

Universities in London, England, for 2021 and by the Academy of Fine Arts in

Warsaw in 2021 for the year 2022. The latest Munken Agenda 2023 was created

by Forsbergs Design and Advertising School in Stockholm, Sweden.

SUSTAINABILITY REPORT 2022

MARKETS SERVED

AND OUR SCALE

OF OPERATIONS

98% of Arctic Paper products

are delivered to European

markets. Which, in times of

global transportation problems

and supply chain crisis, helps

us to assure relatively secure

distribution and reliability of

deliveries. For years our biggest

markets have been Germany,

Poland, Nordic countries,

the Baltics, followed by France,

Benelux, UK and Central and

Eastern European countries.

Germany 22%

Poland 17%

UK & IE 11%

Austria and

Central Europe 11%

The Nordics 9%

France 9%

The Baltics 5%

Benelux 5%

Outside Europe 2%

Rest of Europe 11%

1. THIS IS ARCTIC PAPER

OUR MAIN ACHIEVEMENTS

AND PROJECTS IN 2022

Arctic Paper works towards business expansion and revenue diversica-

tion, 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.

New exible multifuel boiler in Munkedals went into operation in

September 2022. It will provide the mill with another stable source

of energy – see page 59 – Case study – Energy and Emissions.

Continued project for improvement of biodiversity by restructuring the

conditions in the Munkedal river – see page 67 – Case Study – Biodiversity.

Start-up of solar panels in Grycksbo and Munkedal with an installed

capacity of 0.5 and 0.1 MW respectively.

Start of the transition process into electric mobility.

Workshops and launch of development work of an action plan

and education program in the eld of diversity and inclusion.

Lanuch of new product within the G range – G-Flexmatt – paper for a wide

range of exible packaging applications, i.e. chocolate and coffee wrappers

pouches, bags or polymer coating as an sustainable and environmentaly

friendly alternative for plastic packaging.

EACH YEAR WE PLAN AND IMPLEMENT INNOVATIVE

AND EFFICIENT SOLUTIONS IN ALL OUR AREAS OF OPERATION.

SUSTAINABILITY REPORT 2022

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:

∙ 1,201 employees

around 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

for Suppliers

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 Code of Conduct contains

clear guidelines regarding the business behaviour of our

employees, including zero-tolerance for bribes, corruption and

other unethical acts. We are aware of the fact that our sales

ofces. As well as 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 procurement, 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 depart-

ment has a similar purchasing system in place.

Our price lists are approved by our management which are communicated to

members of our sales teams. Bonuses to members of the sales team 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 question of awareness. A part of the induc-

tion programme for new employees includes topics such as laws and regula-

tions, anti-bribery and anti-corruption measures, as well as human rights and

environmental responsibility. 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 2022

KEY PERFORMANCE INDICATOR 2022

Number of employees who participated in the Business ethics training programme (per year) 98

LEGAL AND REGULATORY COMPLIANCE

Arctic Paper SA is a stock 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 2 million PLN.

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*

2022

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 2022, 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 function, are obliged to apply

the ethical principles and rules of conduct collected in the "Code of Conduct".

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. Our Code of

Conduct is reviewed annually.

• 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 2022

CUSTOMERS EMPLOYEES SUPPLIERS SHAREHOLDERS

Environment

and Climate

∙ EMAS report

∙ “Paper Proles”

∙ Sustainability Policy

∙ EMAS report

∙ Sustainability Policy

∙ EMAS report

∙ Code of Conduct and

Sustainability Policy

∙ “Paper Proles”

∙ EMAS report

∙ “Paper Proles”

∙ Sustainability Policy

People ∙ Direct communication

through sales ofces

∙ Code of Conduct 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

and Sustainability

Policy

∙ Whistleblowing

reporting system

∙ Code of Conduct and

Sustainability Policy

∙ Whistleblowing

reporting system

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 and

Sustainability Policy

We strives 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 incon-

sistent with Arctic Paper's Code of Conduct

and values. This service is intended for all

our internal and external stakeholders. 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.

The whistle-blower system can be used to

provide information that something is not

in line with Arctic Paper values and ethical

principles, and can seriously affect our

organization or a person's life or health.

Apart from transparency

in internal and external relations,

we value constant and trans-

parent communication with our

stakeholders, as explained in our

Sustainability policy. Our commu-

nication 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

1.3

GOVERNANCE STRUCTURE

AND MANAGEMENT ON

SUSTAINABILITY TOPICS

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

SUSTAINABILITY REPORT 2022

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 efcient

utilisation of resources and energy, and sustain-

able 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

every 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 executive

vice presidents responsible for various areas

of activity, including strategy and sustainable

development.

• The Supervisory Board is composed of

ve members elected by the Shareholders

Meeting for a joint three-year term of ofce.

Two of the members are independent.

• The Management Board is composed of

two members elected by the Supervisory

Board for a joint three-year term of ofce.

• The Sustainability Team, consisting of

employees representing various functions

and positions within Arctic Paper, holds an

advisory role in the process.

• At least every two years Arctic Paper conducts

a materiality assessment, which denes 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 economically justied.

• 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 minimiseour 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 2022

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 organisation 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. The three main groups

of our stakeholders took part in it were:

employees (491 respondents), customers

(24 respondents) and other stakeholders

(20 respondents), 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 RESPONSIBIL-

ITIES 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 2022

KEY FINDINGS

The fact that Arctic Paper engages in sustainable development activities

is important 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 satis-

faction, 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 production 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 environmental performance,

such as in the EMAS report

∙ Using pulp manufactured from

suppliers certied by FSC

or PEFC™

∙ Development of new sustainable

and renewable products

and services

∙ Effective claim handling system

∙ Reduction of the share

of transport 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 production and ways

of improving its efciency

∙ Initiatives to improve

the well-being of employees

∙ Health and safety

∙ Training and development

possibilities 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 2022

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 2022, there were no changes to the business 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, environmental, or economic impact

of Arctic Paper Group. Although, COVID-19 pandemic or the unprecedented

Russian attack on Ukraine in February 2022, affected the social and economic life,

especially in Poland, but also in Europe and the rest of the world, they did not, in

the company's opinion, cause changes that would signicantly change the very

specicity of the impact of the environment on the Company or the Company on

the environment.

These aspects became the subject of a broader discussion

within our organization, which aimed to better understand

the current and future nature of relations with the environment

and interaction with it, in the context of possible changes,

including regulatory changes, and observed social trends.

As a result, it allowed us to understand the current and future nature of our

impact. Internal verication of the earlier assessment of the signicance of the

impact of individual areas and the prioritization of signicant aspects made in

recent years, led to the conclusion that there were no signicant changes in this

respect. As a result, they remained unchanged compared to the previous year and

became the starting point for dening the present content of the report. We plan

to conduct next survey of our stakeholders at the end of 2023. Based on the

results of this study, we will re-examine the materiality and impact of our business.

2. COMPANY SUSTAINABILITY

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.

PEOPLE

• Systematic approach to health and safety in each mill

• Annually approved action plans for health and safety

• Occupational healthcare service on 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 2022

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 Munkedals is ongoing

• Measurement and monitoring of waste management

indicators

• Restoring sh breeding habitat in the Munkedal river –

(see page 67 for Case Study)

WHAT ARCTIC PAPER IS DOING

∙ Impact on Arctic Paper's core operations

∙ Impact on Arctic Paper's value chain

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

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 new Sustainability Policy which we imple-

mented at the end of 2021.

Our approach to sustainable development is

based on ESG (Environmental, Social and Corpo-

rate Governance) factors, and therefore focuses

on three pillars: Environment, Social and Corpo-

rate Governance. Thanks to it, we make a positive

contribution to the implementation of the UN

Sustainable Development Goals. Our Sustaina-

bility Policy aims to dene the general principles

of approach to ESG issues and sustainable devel-

opment. it 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

Sustainability Policy, are the basis for imple-

menting a sustainable development approach

that supports the goals of our company.

Policy has an educational dimension.

In the 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.

THE SUSTAINABILITY POLICY IS SUPPLE-

MENTED BY THE FOLLOWING POLICIES

IN PLACE AT ARCTIC PAPER GROUP:

• Code of Conduct,

• Code of Conduct for Suppliers,

• Diversity Policy.

The implementation of policies is supported by

guidelines and instructions from the management,

which helps everyone within the organisation to

understand their impact and obligations. In 2023,

we plan to start working on a new code of conduct

for the entire value chain of Arctic Paper.

SUSTAINABILITY REPORT 2022

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. It is increasingly

important 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 emergency

and has created a new kind of global risk

factor for the business environment around

the world. We assessed and managed the

risks of COVID-19 as a possible serious

threat to our daily business operations,

which may have a signicant impact on the

nancial condition of the Arctic Paper Group,

both currently and in the future.

2022 has been an unprecedented year due

to the outbreak of war in Ukraine. Military

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 has 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 contin-

uation of production. So far, we haven't

noticed these kinds of disruptions.

2. 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, ooding, landslide

and 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 2022

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 for Suppliers

∙

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

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

∙

Careful monitoring of world

affairs of the global business

environment

∙

Building long-term relationships

with qualied suppliers

2. COMPANY SUSTAINABILITY

2.5

ARCTIC PAPER’S

PARTNERSHIPS

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 and also want

to learn from and support our partners. We cooperate with local

communities and organizations, as well as industry organisations.

SUSTAINABILITY REPORT 2022

SOME OF OUR PARTNERSHIPS

• The Munkedal 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 internships.

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. Arctic Paper Munkedals

also grants a scholarship to the student

with the best exam result each year.

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 knowl-

edge within such areas as the environ-

ment, energy product safety, standardisa-

tion and forestry management; presenting

this knowledge and the industrial perspec-

tive to politicians and authorities.

We actively participate in the work of the

association sitting on different committees.

During 2021 Arctic Paper was represented

in two committees: the energy committee

and the environmental committée.

For over a decade Arctic Paper has held

the position of chairman of the environ-

mental committee. In 2022, we increased

our engagement by participating in the

product safety committee as well.

• 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 corporate

members, whose activities are connected

with the paper and paper converting

industries.

• 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 associ-

ations. 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: development of

a common position and representation

of 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

2. COMPANY SUSTAINABILITY

2.6

KEY BUSINESS

PERFORMANCE

INDICATORS

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

of operations, 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 environment 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.

legislation and responds to challenges

related to the transformation of the

economy towards climate neutrality, an

environmentally sustainable development

model and economical management 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cation systems:

FSC, PEFC, ISO, EUTR.

• Our paper mills are also members of

regional chambers of commerce, which

allows us to establish contacts with profes-

sionals from other industries. Both individ-

uals and entire companies thus develop

fruitful partnerships through informal

learning and exchange of experiences.

• Arctic Paper supports local communi-

ties. We sponsor activities for sport and

cultural events, including: a football

team, oorball team and a table tennis

team. We donate an annual supply of

free scrap paper to schools, kindergar-

tens and clinics in the vicinity of the city

of Kostrzyn nad Odrą.

SUSTAINABILITY REPORT 2022

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.

BELOW WE PRESENT SOME EXAMPLES OF KPI WE MEASURE.

MORE DETAILED KPI’S ARE SHOWN IN FOLLOWING CHAPTERS AND

HISTORICAL DATA ARE INCLUDED IN TABLES AT THE END OF THE REPORT.

Due to ongoing work on new reporting standards, prepared by the European

Commission – European Sustainability Reporting Standards (ESRS), which are

to come into force in the reporting year 2024, Arctic Paper plans to review and

update all KPIs and set a new time perspective for the targets after adoption

nal version of the ESRS.

SHARE OF PULP SUPPLIERS

WHO ARE FSC

AND/OR PEFC™ CERTIFIED

Target 2025 2022

100%

2. COMPANY SUSTAINABILITY

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.

During the last quarter of 2022, the market situation changed signicantly,

causing shorter production cycles with a higher frequence of changes

of produced grade, in turn causing lower energy efciency.

TOTAL NET ENERGY CONSUMPTION*

(MWh/tonnes of paper)

Target 2025 2022

1.9

2.3

* Energy sold to external partners not included.

Target of 2025 and gures for 2016-2020 are recalculated by including purchased heat.

**Biomass and hydropower.

OF WHICH FROM INTERNAL

ENERGY PRODUCTION BASED

ON RENEWABLE SOURCES**

(MWh/tonnes of paper)

Target 2025 2022

1.1

0.35

TONNES OF PAPER PRODUCED Target 2025 2022

695,000

626,472

SUSTAINABILITY REPORT 2022

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 emer-

gencies. We also have programmes for risk assessments. 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.

During 2022 number of injuries has decreased.. This year we implemented new

safety routines and expanded collaboration of production units sharing common

experience and knowledge. Accidents are caused mainly due to human errors.

That is why we continue training and health and safety procedures programs.

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. The high increase in sales reve-

nues is mainly due to price increases triggered by the rapid and substantial price

increases in pulp, the major raw material.

LOST TIME INJURIES

PER MILLION WORK HOURS

Target 2025 2022

7.9

VALUE OF COMPLAINTS

AS SHARE (%) OF SALES REVENUE

SALES REVENUE (IN PLN M) 3,580

Target 2025 2022

0.50

0.24

2. COMPANY SUSTAINABILITY

SUSTAINABLE

SUPPLY CHAIN

FOR CLIENT

SATISFACTION

SUSTAINABILITY REPORT 2022

Our business operations are based on well-established and

trusted relationships with different stakeholders. Therefore,

we need to ensure that all of our business operations are

transparent – from sustainable sourcing, the 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.

These suppliers provide us with raw materials, chemicals, energy, logistics and

other services that enable us to serve our customers. Aside from the sustaina-

bility of our own operations, it is crucial that we consider the approach taken

by our suppliers. We aim to choose suppliers who can and are willing to assure

us that they respect our values with regards to People and the Environment.

Our suppliers have to follow the Code of Conduct for Suppliers 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. In 2023, we plan to start working on a new Code of Conduct

across for the entire value chain of Arctic Paper.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

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. Today, the supplier with an excess

of 90 percent of purchased value provides us with environmental declarations,

which helps us to perform a life-cycle analysis for our products.

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

we ask them to submit a specic written report. This report is meant to detail their

environmental performance with regards to energy consumption, pollutants to air,

water and raw materials – in particular wood. We also ask them for information as to

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

we expect our suppliers to take note of our Code of Conduct and Sustainability

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

Arctic Paper expects its suppliers to comply with the high

standards and values represented by our organisation.

In 2019, we started a procedure by which all our suppliers are

required to comply with our Code of Conduct for Suppliers

either by signing our Code or by the supplier providing us

with an equivalent document. We managed to achieve 90%

compliance by the end of 2021, with the long term target

of all our suppliers complying with the above.

SUSTAINABILITY REPORT 2022

3.2. ENVIRONMENTAL

ASSESSMENT OF SUPPLIERS

AND RESPONSIBLE SOURCING

Our Code of Conduct for Suppliers 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 for Suppliers 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 that

are compatible with the Arctic Paper's values described in our Code of Conduct for

Suppliers are asked to provide us with a copy of the appropriate documentation.

This is equivalent to signing the Arctic Paper Code of Conduct for Suppliers.

Due to the nature of our business, we devote a lot of attention to our pulp

suppliers in particular. 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 unsuc-

cessful, we are prepared to end the cooperation.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

We nd it important to verify the statements of our pulp suppliers, which is why

the products delivered by our suppliers are subject to a three-step verication

procedure. 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 laborato-

ries 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 for Suppliers.

Our ambition to audit a certain number of suppliers in their

production facilities failed again in 2022 due to unfavourable

travel restrictions caused by Covid-19 and worsened by

the war in Ukraine. As soon as circumstances allow us, we’ll

adopt an annual standard policy to audit randomly selected

suppliers representing main areas of interest: pulp, chemicals,

wrapping materials and services.

SHARE OF CORE SUPPLIERS

PROVIDING EXISTING SIGNED

ENVIRONMENTAL DECLARATIONS

Target 2025 2022

100%

90%

SHARE OF CORE SUPPLIERS WHO SIGNED

THE CODE OF CONDUCT FOR SUPPLIERS

OR HAS THEIR OWN CODE OF CONDUCT

Target 2025 2022

90%

NUMBER OF SUPPLIERS WHO ARE SUBJECT

TO AUDITS PERFORMED BY ARCTIC PAPER

TO CONFIRM COMPLIANCE WITH THE CODE

OF CONDUCT FOR SUPPLIERS

Target 2025 2022

SUSTAINABILITY REPORT 2022

Since 2019, in cooperation with the Book

Chain Project, we have been evaluating

Arctic Paper Kostrzyn’s processes for respon-

sible sourcing. The outcome of the evalu-

ation 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 of our suppliers, and gather

extensive data on energy, air and water

pollutants and raw materials.

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 traditional or citizens' 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-establishing relations with

previous suppliers once the correction has taken place.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

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.

SUSTAINABILITY REPORT 2022

The large transportation companies, who are our main supplier 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.

Having regard to 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 20% of deliveries made from our mills

to our customers were transported as intermodal transport.

We intend to develop intermodal transport share in the future,

however high energy prices, as well as accuracy and time

issues of delivery of intermodal scheme are still challenging.

SHARE OF EURO 3

AND EURO 4 ENGINE CLASS

Target 2025 2022

0% 0%

SHARE OF EURO 5 ENGINE CLASS

Target 2025 2022

22%

30%

SHARE OF EURO 6 ENGINE CLASS

Target 2025 2022

78%

70%

OUR TARGET FOR NEXT YEARS IS TO

EMPLOY ONLY TRUCKS WITH ENGINE

CLASS EURO 5 AND ABOVE.

3. SUSTAINABLE SUPPLY CHAIN FOR CLIENT SATISFACTION

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. In 2019, our

technical teams from three mills drafted a new Complaint handling procedures

and policy and issued General Recommendations for handling and accepting

complaints. These documents aim to create, from the perspective of the sales

company and customers, a predictable, consistent, time and cost-efcient

claims handling process.

VALUE OF COMPLAINTS

AS SHARE (%) OF SALES REVENUE

SALES REVENUE (IN PLN M) 3,580

Target 2025 2022

0.24

0.50

SUSTAINABILITY REPORT 2022

ENVIRONMENT

AND CLIMATE

4. ENVIRONMENT AND CLIMATE

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 encouraging 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.

SUSTAINABILITY REPORT 2022

CERTIFICATIONS

The ISO 14001 management sys-

tem 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 cer-

ti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 indi-

vidual environmental performance is avail-

able. In addition, more environmental data

regarding our products can be found on

our website, in the form of product-specic

environmental declarations called “Paper

Proles”. Importantly, each of these docu-

ments describes the environmental impact

across the entire supply chain, as our

business operations are highly dependent

on our suppliers.

Product

Company

Mill

Information gathered from

gathe

Certified environmental management system at the M ill since Aprill 2000

Environmental Management

Company systems ensure traceability of the origin of wood

yes

100% recovered paper

Environmental parameters

Product composition

The figures are based on methods and procedures

of measurement approved by the local (or national)

environmental regulators at the production site.

The figures include both paper and pulp production.

Water

COD

kg/tonne

AOX

kg/tonne

Tot

kg/tonne

Tot

kg/tonne

Air

kg/tonne

(fossil)

kg/tonne

Solid waste landfilled

BDkg/tonne

/tonne of final product

kWh

Purchased electricity consumption

E-mail

Phone

(Address)

Contact

More information

Date of issue

More information about Paper P rofile ca n be found on www.paperprofile.com

This product contains biomass carbon equivalent

Arctic Paper Kostrzyn S.A.

PL 66-470 Kostrzyn nad Odrą

0048 95 72 10 219

grzegorz.marianczyk@arcticpaper.com

ARCTIC PAPER KOSTRZYN S.A.

ARCTIC PAPER S.A.

AMBER GRAPHIC

6,09

ISO 14001:2000

0,13

0,024

467

0,04

0,097

1,81

47,7

5.07.2022

31.12.2021

1.01.2021

33,3

Enviromental aspects of wood procurement 45% of FSC and 55% of PEFC

Grzegorz Mariańczyk

Paper Mill Information

Arctic Paper Kostrzyn S.A.

Paper Mill Environmental Declaration

Product information: Amber Graphic

Amber Graphic is a white, uncoated fine paper which is used for books, dictionaries, manuals, advertising

material, brochures and catalogues, in mono and full colour. Available in grammages from 50 to 170 g/m

The environmental data below reports only emission from the paper production and not

emission in the total production chain from forest to customers.

Mill Environmental Parameters 2021

Mill Environmental Objectives 2022

Product

BAT1

Description2

Water

Quantity3

10,7

< 20

m3/t

Water (kg/t)

COD

0,29

< 1,5

kg/t

Ntot

0,063

< 0,1

kg/t

P tot

0,002

< 0,012

kg/t

Air

SO2

0,04

kg/t

NO2

0,51

kg/t

CO2

374

kg/t

Energy

Steam

2121

kWh/t

Process

539

kWh/t

Waste

Reuse

10,47

BDkg/t

Landfill

0,5

BDkg/t

Mill Environmental Objectives 2022

Minimizing water consumption by

modernizing the water supply system.

Maintaining high efficiency of the water

treatmenet plant

Reducing consumption of natural

resources by reducing specific electricity

use - replacement of light sources with

LEDs

Increase in efficiency of the MP

ventilation system - reduction in specific

energy

BAT = Best available technique according IPPC.

All figures expressed per ton of paper

Effluent water from waste water treatment plant

For more information about environmental

o objectives see EMAS environmental

report

Technical Support Team

Arctic Paper Kostrzyn S.A.

PL-

66 470 Kostrzyn nad Odrą, Poland

Phone: +48 95 721 556

+48 95 721 558

Mill contact:

Arctic Paper Kostrzyn S.A.

PL-66 470 Kostrzyn nad Odrą,

Poland

Phone: +48 95 721 600

Fax: +48 95 7524 133

4. ENVIRONMENT AND CLIMATE

We extensively train our employees

on PEFC™ and FSC

product origin control

systems. Our training is based on materials

provided by NEPCon, a non-prot organisa-

tion 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 the risk of bribery.

POLICIES

AND PROCEDURES

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, as well

as 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

integrated 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.

The mill in Grycksbo has an ISO 50001

certied energy management system

which aims to continuously improve

energy consumption and energy efciency.

The paper mill in Munkedal is also applying

for the same certication.

Arctic Paper does not have any forestland,

hence we do not have a direct impact on

forest management and global deforest-

ation. 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 Stewardship 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.

SUSTAINABILITY REPORT 2022

Arctic Paper is aware of the environmental

regulations affecting our industry, and we

carefully monitor the regulatory environ-

ment in Poland and Sweden, as well as

at the European Union level. Apart from

legal requirements, we are also interested

in best practices within our business, and

carefully follow developments in these

areas. As an example, in the EMAS reports

we benchmark our environmental gures

on emissions to water to the Best Avail-

able 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 prac-

tices within the industry.

Environmental activities related to

the production process focus on four key

areas, selected during the materiality anal-

ysis. These are: energy consumption, 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.

4. ENVIRONMENT AND CLIMATE

Grycksbo and Arctic Paper Kostrzyn) and

gas turbines (Arctic Paper Kostrzyn), which

we also sell to the market when appro-

priate. 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 and

continuously evaluate our processes to

identify future investments.

The year 2022 was very difcult, due

to the outbreak of the war on Ukraine,

which caused rapid global increase in

energy demand and an increase in prices.

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 challenges 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 intelligent waste/bio energy plants – all

based on renewable sources.

Arctic Paper purchases energy both as

fuel (biomass and natural gas) and as

electricity (from the local power grid). We

also produce electricity at our mills using

hydropower plants (Arctic Paper Munkedal),

back-pressure steam turbines (Arctic Paper

SUSTAINABILITY REPORT 2022

Energy consumption levels increase

signicantly during starts and stops of the

machines without any saleable production.

Due to shorter lead times, it was also neces-

sary to change the type of paper produced

more often, which resulted in increased

energy consumption.

In 2020, the construction phase for

a new hydro powerplant in Munkedal was

nished. The plant will double the hydro-

power production at the mill from 12 GWh

to 25 GWh per annum. Regular energy

production has been taking place since

January 2021.

During 2021, the erection of solid fuel

boiler was started. The boiler came into

trial operation in September 2022 and

in 2023, the boiler is expected to reach its

design capacity of 30 MW. The new boiler

is designed to be able to handle a broad

spectrum of different solid fuels, such as

bark, peat, branches, demolition wood

and sorted burnable waste such as plastic,

scrap wood, paper, textiles.

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 listed.

On the other hand, the product variety

at the mills has gradually changed

into the direction of packaging grades

with higher demands for strength, thus

demanding more rening energy.

One of the projects completed in 2021

in Kostrzyn was the launch of a solar

panel farm with a capacity up to 1MWp,

which increased the share of renew-

able 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 consump-

tion 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

Munkedal, a smaller solar panel installation

with an installed power of 0.1 MW was

launched during 2022.

One of the buildings at Grycksbo mill has been nominated for the

Solar Energy Award 2023 – Solenergipriset in the Building/Facility

of the Year category awarded by the organization Svensk Solenergi

(Swedish Solar Energy). The goal of the organization is to disseminate

knowledge about solar energy and to increase the energy mix in

Sweden. The award recognizes projects that are innovative and drive

the development of technology, or standardized projects that make

technology cheaper and more accessible.

4. ENVIRONMENT AND CLIMATE

KEY PERFORMANCE INDICATOR TARGET 2025 2022

Total net specic energy consumption (MWh/tonne paper) 1.9 2.3

Total net energy consumption (GWh/year) 1,320 1,269.4

Total production of paper (in tonnes) 695,000 626,472

Below there are presented 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.

SUSTAINABILITY REPORT 2022

CASE STUDY

Waste to energy- the new exible

multifuel boiler in Arctic Paper Munkedals

During the autumn of 2022, a new boiler designed for producing steam from

sorted waste fuels was started up in Munkedals mill to support Arctic Paper's

energy transition towards 100% usage of renewable and recycled energy.

The so called ‘exible multifuel boiler’ is designed to handle any solid fuel.

The main fuel source for the time being will be RDF (Refuse Derived Fuel)

or sorted waste.

RDF is a fuel that consists of various fractions of industrial and municipal

sorted waste, which, with the current best available technology, cannot be

used to recycle materials and therefore is destined to either fuel or landll,

therefore also in line with the ideas of circular production.

RDF contains fossil materials. Currently, around 39% of the RDF consists

of fossil-derived materials, which, when burned, result in fossil CO

emis-

sions. Since RDF replaces natural gas CO

emissions are however noticeably

reduced (see below*). Compared to oil, coal or natural gas, the use of RDF

as a fuel means that the energy needs of the mill are met by using waste

that would otherwise end up in landll.

At the end of 2022, the new boiler was operating at a maximum of 50%

of its design capacity. At the beginning of 2023, tuning of the boiler continued

in order to reach full designed capacity by 3rd quarter of 2023 at the latest.

When the boiler is operating at full capacity, steam production corresponds

to the consumption of 23,900 m

of heavy fuel oil (equivalent to 72 kton

of CO

emissions) or almost 23 mm

of natural gas (equivalent to 50 kton

of CO

emissions). Compared to year-round LNG-based steam production,

the new power plant reduces mill’s CO

emissions* by 55-60%.

If, in the future, recycling of RDF will be possible, the alternative fuel

for the exible boiler could be a virgin biomass (wood and bark residues),

making it 100% renewable.

4. ENVIRONMENT AND CLIMATE

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

, accumu-

late in the atmosphere, contributing to the

climate change. Emission levels are moni-

tored by our management. Emissions carry

an environmental cost, and they can also be

associated with considerable nancial, 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 CO

emissions for many years. One of our most

important activities in this area was under-

taken 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-pres-

sure steam turbines. In 2008, Grycksbo

also made a signicant investment in a

Cambridge Business English Dictionary © Cambridge University Press)

biomass boiler, making the steam genera-

tion process at the mill fossil-free. Our 4P

Strategy is a signpost for us that will help

us achieve the goal of carbon neutrality

and increase the diversication of energy

sources based on renewable sources, such

as solar collectors, hydroelectric power

plants and wind turbines.

One of the most recent projects in this area

implemented at the Kostrzyn mill is modern-

isation of the PM1 recuperation system with

an effective reduction of heat consumption

and CO

emissions by 2,784 tonne/year.

The upgrade of the venting system at PM1

and PM2 that allows heat recovery has

resulted in a reduction of heat consumption

and CO

emissions by 1,575 tonne/year and

by 3,725 tonne/year, respectively.

We also encourage our employees

to contribute to the common goal of

achieving carbon neutrality. We believe

that every small effort or a single change

to our 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

mill in Grycksbo. Employees utislising

bio energy for domestic heating can also

benet from a rebate agreement with

a local bio energy supplier.

SUSTAINABILITY REPORT 2022

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 CLASSIFIES 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 electricity 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.

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 2022

Direct CO

emissions 215 212

Indirect specic CO

emissions from external electricity suppliers

– 5

Indirect specic CO

emissions from our major supplier of raw material

60 85

Indirect specic CO

emissions from our transporters

35 34

Total indirect specic CO

emissions 115 124

Total specic CO

emissions – 336

Total CO

emissions (k tonnes / year) – 212

Total production of paper (in tonnes) 695,000 624,472

4. ENVIRONMENT AND CLIMATE

4.3.

SUSTAINABLE CIRCULAR

PRODUCTION AND WASTE

Compared to the year 2021, possibilities to import excess

heat from an external company, close to our production site

in Kostrzyn, was lower, hence a larger fraction of the needed

energy was produced based on natural gas, in turn resulting

in a slight increase of specic emissions of CO

As we are not in full control of the amount of surplus heat from our neighbour,

we have set the target based on an average external heat delivery. Due to

the market situation with a higher preassure for short lead times, intermodal

transport was less used during 2022 compared to 2021.

THE BELOW TABLE PRESENTS CO

CONTRIBUTION FROM ENERGY SOLD

(HEAT AND ELECTRICITY) TO EXTERNAL CONSUMERS

2022

Exported energy (GWh/year) 124

Tonne CO

per GWh 228

Tonne CO

per year 28,118

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 2021 as not

all of our external partners were able to provide us with 2022 data at the date

of publication of this report.

A sustainable circular production system Arctic Paper is part of an industry that

is to a large extent based on wood from rationally 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 raw material wood.

SUSTAINABILITY REPORT 2022

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.

Pulp wood is a renewable raw material that comes from thinning 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 certied 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 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 recyclable raw material,

as well as sustainable production, are important factors in the choice of supplier.

5. PAPER RECYCLING All Arctic Paper’s paperboards are recyclable 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.

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.

4. ENVIRONMENT AND CLIMATE

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 2022

Recycling or energy extraction (tonne/year) 6,950 3,184

Recycling or energy extraction (kg/tonne of paper) 10 5.1

Hazardous waste (tonne/year) 139 191

Hazardous waste (kg/tonne of paper) 0.2 0.30

Landll (tonne/year) 139 114

Landll (kg/tonne of paper) 0.2 0.18

Total production of paper (tonnes) 695,000 626,472

6. BIOMASS FUEL The by-products from the pulp and paper mill, such as

logging residues, 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 reab-

sorption 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 a 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 dangerous 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.

SUSTAINABILITY REPORT 2022

4.4

WATER

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

to slush the pulp into a 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 which is not recir-

culated 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 a 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 which 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.

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.

4. ENVIRONMENT AND CLIMATE

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 envi-

ronmental monitoring system. One of the goals of the project was to also collect

historical data and compare them with current data. In addition, the harvested

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

a standardised procedure for this, which could be included as part of future envi-

ronmental monitoring programmes.

Results of the project are described in scientic publication pubished by Springer,

a leading global scientic, technical and medical portfolio, providing researchers

in academia, scientic institutions and corporate R&D departments, with quality

content through innovative information, products and services. Springer is part

of Springer Nature, a global publisher that supports the research community.

You can nd this publication here:

https://link.springer.com/article/10.1007/s00244-022-00968-x

KEY PERFORMANCE INDICATOR TARGET 2025 2022

Water consumption (m

/year) 4,865,000 5,233,104

Specic water consumption (m

/tonne of paper) 7.0 8.4

Emissions of COD to water (tonne per year) 292 208

Specic emissions of COD to water (kg/tonne paper) 0.42 0.45

Total production of paper (in tonnes) 695,000 626,472

SUSTAINABILITY REPORT 2022

4.5

BIODIVERSITY

CASE STUDY

In 2021, Arctic Paper Munkedals has started implementation of habitat improve-

ments in the Munkedal river. The project was continued in 2022. The project

focuses on restoring the river to its original state prior to its adaptations made for

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

salmon and trout. In 2021, 5 areas were restored, with two additional areas in 2022.

In the latest shing made in 2022, average result was

100 sh per 100m

(when the population is higher than 65 sh

per 100 m

, the situation is considered as good), showing that

the project has been benicial for the sh population.

4. ENVIRONMENT AND CLIMATE

PEOPLE

SUSTAINABILITY REPORT 2022

5.1

WORKING AT ARCTIC PAPER –

MANAGEMENT APPROACH

Arctic Paper takes responsibility for our employees, other

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

Our employees are some of the most important stakeholders

at Arctic Paper.

We consider our employees as our most valuable resource. We believe every

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

Policy and in our Code of Conduct. 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 responsibilities 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.

EMPLOYMENT STRUCTURE

OF ARCTIC PAPER IN 2022

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

Blue-collar 790 660 130 149 326 315

White-collar 411 249 162 17 209 185

5. PEOPLE

2022

Number of permanent unlimited contracts 1,201

Number of temporary contracts 30

EMPLOYEE TURNOVER RATE

KEY PERFORMANCE INDICATOR TARGET 2025 2022

Turnover <10%/year 6.7

New Hires – 98

Resigned – 58

Retired – 27

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.

SUSTAINABILITY REPORT 2022

5.2 OUR EMPLOYEE

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 preventa-

tive 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

• Understanding the reasons why employees currently do not participate

in well-being programmes and helping them to nd new opportunities.

• Identifying underlying drivers of poor employee wellness and redesigning

of work and people processes in order to prevent future problems.

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

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

feel autonomous in making decisions about what works best for them.

• Training and providing our managers with clear guidance on what to do,

and more importantly, what not to do, in order to effectively support

employees’ emotional health.

5. PEOPLE

BENEFITS AND INITIATIVES

INFLUENCING OUR EMPLOYEES,

AND THEIR FAMILIES, WELL-BEING

Our mills support employees and their families by granting them extended

social benet 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 their needs and interests.

We sponsor events and different activities in the local

community, in which our employees and their families

are able to participate.

OUR ACTIONS

• Starting construction work for a new tness centre for employees

in Grycksbo. The facility will be inaugurated in the beginning of 2023.

• Supporting local sport clubs and cultural events, such as a donation for

the development and promotion of wrestling association in Kostrzyn,

or the Grycksbo mill sponsoring IBF Falun – a championship 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ts programmes and insurance for employees at mills.

• Funding Christmas vouchers and organising Christmas celebrations

with gifts for mill employees’ children.

• Offering discounts for vacations at summer cottages in Sweden.

• Supporting our retired employees’ organisation by co-nancing

summer camps and organising regular events.

SUSTAINABILITY REPORT 2022

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.

The majority of employees in our factories are men, which is why, in accordance

with the principle "prevention is better than cure", in November, the factory in

Kostrzyn joined the international "MOVEMBER" campaign. The campaign aims

to draw attention to the role of prevention in the incidence of prostate and testic-

ular cancer. We decided to invite our employees for a free testicular ultrasound

examination. The examination was performed by specialists from the Depart-

ment of Urology and Urological Oncology of the Clinical Hospital 2 in Szczecin

(Poland). In addition, men over 40 received a free PSA test cassette to perform

on their own as part of prostate cancer prevention. We also invited men working

in companies that have their facilities in the Arctic Paper factory in Kostrzyn to

participate in the study. We are socially responsible and we also take responsi-

bility for the health of employees in our value chain. In previous years, we organ-

ized breast ultrasound examinations for women. We are already planning further

free preventive examinations for our employees.

In our mills we provide our employees with free menstrual protection packages

(PeriodPack) which are located in restrooms.

5. PEOPLE

OUR EMPLOYEES' SATISFACTION

Since 2016, we have been measuring our employees satisfaction every other year

and set our targets using benchmarks from similar industries in Europe. The next

survey will be in 2023. Over the years we have implemented activities to increase

both the numbers of participants and the engagement capital. After the 2019

results, we faced problems in engaging and implementing activities among our

employees. Despite the pandemic situation in 2020 and 2021, 2021 results show

an increase in the engagement capital.

Our greatest strengths, when compared to the benchmark where we also see

an increase of satisfaction over the years, are job search behaviour and agility

factors. Our employees seem to want to stay with the company, which is also

shown by the turnover rate. We continuously improve our organization and adopt

quickly to new working methods and work conditions.

We see an overall positive increase when we measure employee perceptions

of how well the organization has established corporate values. We will also

implement updated corporate values in our 4P strategy framework and continue

to strive for overall recognition among our employees. In compensation and

rewards factors we measure employees’ perception of pay fairness and recogni-

tion. We are aware of our weakness in this area, and we will put more efforts in

communication of performance levels in the company.

ENGAGEMENT METRIC ARCTIC PAPER 2021 ARCTIC PAPER 2019 BENCHMARK

Culture and corporate values 42% 31% 53%

Compensation and rewards 21% 43% 68%

ENGAGEMENT METRIC ARCTIC PAPER 2021 ARCTIC PAPER 2019 BENCHMARK

Job-Search Behavior* 76% 72% 63%

Agility** 45% 44% 36%

* Job search behavior refers to employees’ desire to stay with the organization, based on whether they intend to look

for a new job within a year, whether they frequently think of quitting, whether they are actively looking for a job, or

have begun to take tangible steps like sending out resumes. Responses for the job search behavior questions are

reversed scored as a result, the percentage of employees scoring favorably equals the percentage of employees

who “intend to stay” or have no intention of leaving the organization.

** The organization’s ability to sense and respond to change. Work today is multi-directional, reporting lines are more

complex and markets are less predictable. Agile organizations that adapt to this new work environment through

effective change management can increase the probability of change success. Firms with high levels of agility have

better nancial outcomes because they are able to sustain engagement over time despite change.

SUSTAINABILITY REPORT 2022

KEY PERFORMANCE INDICATOR TARGET 2025 2021*

Employee survey response rate 65% 65%

Overall engagement capital 55% 51%

* The next survey will be conducted in 2023

Facing newer and newer technologies, which not only

facilitate work but also create opportunities for faster access

to the necessary employee information, we decided to launch

two multimedia self-service information points in Kostrzyn

mill, the so-called "Infokiosks".

It is an extremely functional solution that allows the employees to get accesss

to information, which is particularly important for them in the production area.

Infokiosk gives the opportunity to use HR tool such as TETA ME, our internal

AP Insight newsletter, as well as access to the global website of Arctic Paper S.A.

5. PEOPLE

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

effective 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.

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 docu-

mented and communicated accordingly. We also have a separate remuner-

ation policy for management at the group level. We annually make regular

payroll overviews at all our units.

SUSTAINABILITY REPORT 2022

PERFORMANCE CONVERSATIONS

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

This will help them to 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.

KEY PERFORMANCE INDICATOR TARGET 2025 2022

Percentage of employees interviewed 100% 92%

• 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 a 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 environment, 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.

5. PEOPLE

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 for Suppliers of Arctic Paper.

• 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 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 do not allow any form of forced labour or other abuses.

• We offer our employees decent working conditions and care

about their well-being.

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

associations; refrain from any form of discrimination toward employees

or their contractors 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 business

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

Group's values and ethical principles, and can seriously affect our organisation

or a person's life or health. In 2022, no incidents were reported.

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.

SUSTAINABILITY REPORT 2022

OUR CHARITY INVOLVEMENT

A heart of paper – a smile and joy has many names

For a year we have been witnessing an unprecedented and dramatic situation

in our neighbor's country across our eastern border, which is caused by the

outbreak of war. Military operations in Ukraine led to many unfavorable changes

in the political, economic and social arenas. Unfortunately, the war brings not

only nancial and military consequences, but above all affects the fate and further

life of millions of people living in the occupied territories. Children are the most

affected and it is to them that Arctic Paper decided to direct its help once again.

At Arctic Paper, we know how important access to

science is and what a huge role it plays in the lives of the

youngest. That is why, as a leading paper manufacturer,

we produced over 160,000 notebooks that were donated

to Ukrainian children. Specially designed covers in the colors

of the Ukrainian ag are a tribute to the entire Ukrainian

community ghting for their country.

With the help of the Viktor Leschynski Charity Foundation from Kiev, they were

safely delivered to selected schools in Ukraine.

5. PEOPLE

OUR ANNUAL BUDGETS FOR SPONSORSHIPS

AND CHARITY ACTIVITIES IN 2022

APGrycksbo

SEK 240 thousand

APKostrzyn

PLN 600 thousand (including nancial aid in relation to war on Ukraine)

APMunkedals

SEK 1 million (including school sponsorship, without school support abt. SEK 200K)

We have granted nancial aid in the amount of PLN 500,000 to ve non-gov-

ernmental organizations helping refugees from Ukraine, especially the youngest

ones. The factory in Kostrzyn has started cooperation with the Polish Humani-

tarian Action, the Polish Medical Mission, the SOS Children's Villages Association,

the Polish Center for International Aid and UNICEF. In addition to the nancial

aid, we also donated over 1,000 copies of books in Ukrainian to refugee children

accommodated in the Gorzów Wielkopolski center.

Our employees, across entire Arctic Paper group

organized an additional campaign to collect material aid,

which we donated to different charity organizations.

After closing the emergency station at the factory in Grycksbo, we handed over

two fully functional re engines and re equipment to the Ukrainian re department.

SUSTAINABILITY REPORT 2022

5.4

HEALTH AND SAFETY

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 part 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.

• We maintain a register of “near misses” and accidents, where all incidents

are recorded, investigated and analysed.

• We propose action plans to mitigate 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 of the number of injuries, thus we will increase our focus on behavioural

safety and on preventive activities in order to further develop our safety culture.

NUMBER OF LOST TIME INJURIES (LTI)

PER MILLION WORKING HOURS

Target 2025 2022

7.9

5. PEOPLE

5.5 DIVERSITY, EQUITY

AND INCLUSION

GENDER EMPLOYMENT STRUCTURE

IN ARCTIC PAPER IN 2022

Men Woman

24%

76%

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 imple-

mented Diversity Policy which is applicable

to all employees of Arctic Paper, regardless

of the position they hold.

At the end of 2022, we started work-

shop for key management personnel and

launched development work of an action

plan and education program in the eld

of diversity and inclusion. We have been

working on action plan for 2023 with a goal

to start education training for all Arctic

Paper employees.

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;

• 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 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 2022

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 and

a Chief Financial Ofcer. Candidates are evaluated in accordance with the princi-

ples of independence and 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 decisions of the Company's shareholders.

WE ARE AIMING FOR THE SHARE OF WOMEN IN THE COMPANY’S

CORPORATE BODIES TO BE NO LOWER THAN 30%.

2022

Total count of Management Board 2

% of women on the Management Board 0%

% of men on the Management Board 100%

THE SUPERVISORY BOARD OF ARCTIC PAPER S.A.

CONSISTS OF FIVE MEMBERS.

2022

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 2022

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 sustain-

able. In this way, it creates security for investors, protects private investors and

helps companies to 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 22 June 2020, and entered into force on 12 July 2020.

It establishes the basis for the EU Taxonomy by setting out 4 overarching condi-

tions that an economic activity has to meet in order to qualify as environmentally

sustainable. An economic activity shall qualify as environmentally sustainable

when that economic activity:

• contributes substantially to one or more of the environmental objectives

• does not signicantly harm any of the environmental 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 2021 Sustainability Report, Arctic Paper Group disclosed information

on the EU Taxonomy of environmentally sustainable activities for the rst time.

Pursuant to Commission Delegated Regulation (EU) 2021/2178, in the rst

year of application, Arctic Paper Group disclosed the percentage of turnover,

capital expenditure and operating expenditure of activities eligible for the EU

Taxonomy, without the need to verify the technical screening criteria, i.e. to

determine what percentage of these three values are associated with environ-

mentally sustainable activities.

In this 2022 Sustainability Report, Arctic Paper Group discloses the percentage

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

Taxonomy, and veries criteria for environmentally sustainable economic activi-

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

2020/852 to determine what percentage of these three values is associated

with environmentally sustainable activities.

Presented data includes data from Rottneros AB.

SUSTAINABILITY REPORT 2022

1. Identication – 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 activ-

ities, their descriptions dened in the Annexes to the Commission Dele-

gated Regulation (EU) 2021/2139 were used to compare to actual activities.

2. Allocation – assigning to specic activities, identied in the rst stage,

the value of turnover, capital expenditures and operating expenses.

3. Verication – for all identied activities, examination of the criteria for

substantial contribution and no signicant harm using technical screening

criteria referred to in the Annexes to the Commission Delegated Regula-

tion (EU) 2021/2139. Details of the assessment are presented in section 8.2

Compliance verication with technical screening criteria. Next step was to

assess whether the minimum safeguards were met.

4. Calculation – this stage was based on the use of information obtained in

the second and third stage, to prepare tables containing the required infor-

mation and the development of this supplementary information as required

by Annexes I and II to Commission Delegated Regulation (EU) 2021/2178.

6.1

TAXONOMY COMPLIANCE

ASSESSMENT PROCESS

We have divided the assessment process into 4 stages:

The process was conducted by a team of representatives companies

of Arctic Paper Group.

6. TAXONOMY

6.2

COMPLIANCE

VERIFICATION WITH

THE TECHNICAL

SCREENING CRITERIA

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 and 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.

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 in the

scope of Annexes I and II to Commission Delegated Regulation (EU) 2021/2139.

Arctic Paper Group expects that these activities will be included in the EU

Taxonomy in subsequent EU delegated acts.

SUSTAINABILITY REPORT 2022

6.3

COMPLIANCE

VERIFICATION

WITH MINIMUM

SAFEGUARDS

According to Art. 18 of 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 Multina-

tional Enterprises 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 Funda-

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

The test of compliance with the minimum safeguards was carried out in accord-

ance with the recommendations described in Final Report on Minimum Safe-

guards 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. TAXONOMY

In the verication process in the Arctic Paper Group,

non-compliance with the above-mentioned premises

has been tested in the following way:

• as a result of the internal analysis, it was determined that Arctic Paper Group

has a due diligence process in place and in operation

• 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

• 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/

• 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/

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 the Arctic Paper Group in 2022, 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 qualifying for the Taxonomy.

SUSTAINABILITY REPORT 2022

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

expenditures settled in the Arctic Paper Group in individual mills and

in the headquarter.

The entire amount of CapEx is included in the consolidated

nancial statements 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 consti-

tuted by all costs for the day-to-day servicing of the company's assets

and for keeping them in 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 that relates to the activities qualifying for the Taxonomy is assigned

to the numerator.

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 responsible 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 disaggregation 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.

6. TAXONOMY

1. Proportion of turnover from products or services

associated with 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 of

Annexes I and II to Commission Delegated Regulation (EU) 2021/2139.

In 2022, Arctic Paper Group identied 13 business areas, the revenues from

which qualify for systematics. 0.19% of total turnover is of environmentally

sustainable activities, EU Taxonomy aligned, which consist mainly of turnover

from activities connected to transfer and selling of energy from photovoltaic

installations and hydropower plant in Munkedals.

Turnover of EU Taxonomy-non-eligible activities in 2022 constitutes 98.19%.

Turnover of EU Taxonomy-non-eligible activities in 2021 accounted 99.86%.

The main difference is the activity item 1.3 Forest management, eligible for

EU Taxonomy, but environmentally not sustainable, related to sale of wood

products and forest services.

SUSTAINABILITY REPORT 2022

Substantial contribution criteria

DNSH criteria

('Does Not Signicantly Harm')

Economic activities (1)

Code(s) (2)

Absolute turnover (3)

Proportion of turnover (4)

Climate change mitigation (5)

Climate change adaptation (6)

"Water and marine

resources (7)"

Circular economy (8)

Pollution (9)

"Biodiversity and

ecosystems (10)"

"Climate change

mitigation (11)"

"Climate change

adaptation (12)"

"Water and marine

resources (13)"

"Circular

economy (14)"

Pollution (15)

"Biodiversity and

ecosystems (16)"

"Minimum

safeguards (17)"

"Taxonomyaligned proportion

of turnover, year N (18)"

"Taxonomyaligned proportion

of turnover, year N-1 (19)"

Category (enabling activity /

transitional activity) (20)

Category (transitional activity) (21)

PLN K % % % % % % % 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)

Electricity generation using solar photovoltaic technology 4.1 189 0.004% 0.004% 0% Y Y Y Y Y Y Y 0.004%

Electricity generation from hydropower 4.5 4 688 0.10% 0.10% 0% Y Y Y Y Y Y Y 0.10%

Installation and operation of electric heat pumps 4.16 7 0.0001% 0.0001% 0% Y Y Y Y Y Y Y 0.0001%

Production of heat/cool using waste heat 4.25 469 0.01% 0.01% 0% Y Y Y Y Y Y Y 0.01%

Collection and transport of non-hazardous waste

in source segregated fractions

5.5 594 0.01% 0.01% 0% Y Y Y Y Y Y Y 0.01%

Composting of bio-waste 5.8 860 0.02% 0.02% 0% Y Y Y Y Y Y Y 0.02%

Installation, maintenance and repair

of energy efciency equipment

7.3 2 127 0.04% 0.04% 0% Y Y Y Y Y Y Y 0.04% E

Installation, maintenance and repair of charging stations

for electric vehicles in buildings (and parking spaces

attached to buildings)

7.4 234 0.005% 0.005% 0% Y Y Y Y Y Y Y 0.005% E

Turnover of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

9 167 0.19% 0.19% 0% 0% 0% 0% 0% 0.19%

A.2 Taxonomy-eligible, but not environmentally

sustainable activities (not Taxonomy-aligned activities)

Forest management 1.3 70 576 1.44% 0% 0% Y 0%

Transmission and distribution of electricity 4.9 8 120 0.17% 0% 0% Y 0%

Renewal of water collection, treatment and supply systems 5.2 64 0.001% 0% 0% Y 0%

Renewal of waste water collection and treatment 5.4 61 0.001% 0% 0% Y 0%

Sea and coastal freight water transport,

vessels for port operations and auxiliary activities

6.10 441 0.01% 0% 0% Y 0%

Turnover of Taxonomy-eligible, but not environmentally

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

79 263 1.62% 0% 0% 0% 0% 0% 0% 0%

Total A (A.1 + A.2) 88 430 1.81% 0.19% 0% 0% 0% 0% 0% 0.19%

B. Taxonomy-non-eligible activities

Turnover of Taxonomy-non-eligible activities (B) 4 805 845.74 98.19%

Total (A+B) 4 894 275.85 100.00%

6. TAXONOMY

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

mentation of future investment projects resulting from the adopted strategy

of the Arctic Paper Group. The majority of the indicated capital expenditures

in 2022 relate to projects aimed to improve energy efciency of buildings,

machines, devices and installations, as well as diversifying energy sources, which

helps to reduce energy consumption, such as:

• lubricity measurement system and ber analysis installed at mill in Kostrzyn,

• installation of photovoltaic farms in Kostrzyn, Munkedals and Grycksbo,

• installation of exible multifuel boiler in Munkedals,

• renovation of bleach plant building, port facility and ventilation baling line

and recovery of boiler in Rottneros.

2. Proportion of CapEx from products or services

associated with 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 envi-

ronmental objective, i.e. mitigation of climate change. Detailed plans and time

perspective of incurring capital expenditures were presented in the Arctic Paper

4P Strategy published on October 4th, 2021.

CapEx of environmentally sustainable activities – EU Taxonomy aligned constitutes 12,29%.

CapEx of EU Taxonomy-non-eligible activities in 2022 constitutes 73,43%.

CapEx of EU Taxonomy-non-eligible activities in 2021 accounted 65,52%.

The main difference is higher capital expenditures incurred in 2021 under the

activity item 4.5 Production of electricity from hydropower, 4.8 Production of elec-

tricity from bioenergy and expenditures incurred in connection with the expansion

of the wastewater collection and treatment system under the activity 5.3 Construc-

tion, extension and operation of waste water collection and treatment.

INCREASES IN TERMS OF VALUE '000 PLN NOTE

Tangible xed assets without assets without the right of use 144,773 16.1

Right-of-use assets 8,829 16.2

Intangible assets 21,910 19

Investment properties – –

175,512 –

SUSTAINABILITY REPORT 2022

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 and marine

resources (7)"

Circular economy (8)

Pollution (9)

"Biodiversity and

ecosystems (10)"

"Climate change

mitigation (11)"

"Climate change

adaptation (12)"

"Water and marine

resources (13)"

"Circular

economy (14)"

Pollution (15)

"Biodiversity and

ecosystems (16)"

"Minimum

safeguards (17)"

"Taxonomyaligned proportion

of CapEx, year N (18)"

"Taxonomyaligned proportion

of CapEx, year N-1 (19)"

Category (enabling activity /

transitional activity) (20)

Category (transitional activity) (21)

PLN K % % % % % % % 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)

Electricity generation using solar photovoltaic technology 4.1 3 013 1.95% 1.95% 0% Y Y Y Y Y Y Y 1.95%

Cogeneration of heat/cool and power from bioenergy 4.20 1 015 0.66% 0.66% 0% Y Y Y Y Y Y Y 0.66%

Production of heat/cool from bioenergy 4.24 838 0.54% 0.54% 0% Y Y Y Y Y Y Y 0.54%

Production of heat/cool using waste heat 4.25 9 375 6.05% 6.05% 0% Y Y Y Y Y Y Y 6.05%

Transmission and distribution of electricity 4.9 647 0.42% 0.00% 0.42% Y Y Y Y Y Y Y 0.42%

Installation, maintenance and repair

of energy efciency equipment

7.3

4 969 3.21% 1.83% 0% 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)

7.4 1 315 0.85% 0.85% 0% Y Y Y Y Y Y Y 0.85% E

CapEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1)

21 172 13.67% 11.87% 0.42% 0% 0% 0% 0% 12.29%

A.2 Taxonomy-eligible, but not environmentally

sustainable activities (not Taxonomy-aligned activities)

Construction, extension and operation of water collection,

treatment and supply systems

5.1 3 396 2.19% 0% 0% Y 0%

Renewal of water collection, treatment and supply systems 5.2 316 0.20% 0% 0% Y 0%

Construction, extension and operation

of waste water collection and treatment

5.3 882 0.57% 0% 0% Y 0%

Renewal of waste water collection and treatment 5.4 191 0.12% 0% 0% Y 0%

Renovation of existing buildings 7.2 10 203 6.59% 0% 0% Y 0%

Data processing, hosting and related activities 8.1 4 994 3.22% 0% 0% Y 0%

CapEx of Taxonomy-eligible, but not environmentally

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

19 984 12.90% 0,00% 0% 0% 0% 0% 0% 0,00%

Total A (A.1 + A.2) 41 155 26.57% 11.87% 0.42% 0% 0% 0% 0% 12.29%

B. Taxonomy-non-eligible activities

CapEx of Taxonomy-non-eligible activities (B) 113 723.75 73.43%

Total (A+B) 154 879.06 100.00%

6. TAXONOMY

3. Proportion of OpEx from products or services

associated with Taxonomy-aligned economic activities

The operating expenditure (OpEx) eligible for Taxonomy related to activities such

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

• renewal of water collection, treatment and supply systems in Grycksbo,

• batch boiler, recovery boiler and turbine in Rottneros Vallvik,

• modernization of water tank, modernization of the aeration system in Kostrzyn.

OpEx of environmentally sustainable activities – EU Taxonomy aligned constitutes 14.02%.

OpEx of EU Taxonomy-non-eligible activities in 2022 constitutes 70.40%.

OpEx of EU Taxonomy-non-eligible activities in 2021 accounted 85.83%.

The main difference is operating expenses incurred in 2022 as part of the

following activities: 4.20 Cogeneration of heat/cool and power from bioenergy –

related to repairment of boilers and turbines in Rottneros, 1.3 Forest manage-

ment – related to the costs of personnel and machinery as part of forest services

and 5.2 Renewal of water collection, treatment and supply systems.

SUSTAINABILITY REPORT 2022

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 and marine

resources (7)"

Circular economy (8)

Pollution (9)

"Biodiversity and

ecosystems (10)"

"Climate change

mitigation (11)"

"Climate change

adaptation (12)"

"Water and marine

resources (13)"

"Circular

economy (14)"

Pollution (15)

"Biodiversity and

ecosystems (16)"

"Minimum

safeguards (17)"

"Taxonomyaligned

proportion of OpEx,

year N (18)"

"Taxonomyaligned proportion

of OpEx, year N-1 (19)"

Category (enabling activity /

transitional activity) (20)