Aspo Sustainability policy

Approved by Aspo Group’s Board of Directors on August 10, 2022

1 Introduction

1.1 Background

Aspo believes that a socially, financially and environmentally sustainable business is a requirement for creating long-term value. Our sustainability work is based on the principles of internationally recognized and accepted conventions and agreements on the environment, human rights, working conditions and corruption, such as the UN Global Compact, and the UN Declaration of Human Rights.

This policy sets out the principles of how we integrate sustainability into our strategy and day to day business; from how we consider sustainability factors in our acquisition process, to our expectations on how our businesses address sustainability. This policy is linked to Aspo’s Code of Conduct, which sets outs the key principles of Aspo’s responsibility as a company and guides us on how we are expected to operate and act in our daily work.

1.2 Scope

This policy applies to Aspo Group and all its businesses. ‘Aspo’ in this policy refers to the Group as a whole, unless otherwise indicated by the context. Group subsidiaries should adopt this policy and adhere to its contents by also adopting any additional policy documents, processes and tools on a subsidiary level needed to appropriately manage opportunities and risks relating to the key sustainability themes in their respective businesses.

1.3 Purpose

The purpose of this policy is to ensure that Aspo lives up to the expectations of its stakeholders, including its owners, employees, customers, principals, government authorities and other stakeholders relating to adequately managing opportunities and/or risks in the areas of Environment, Social, and Governance-related issues.

2 Roles and responsibilities

Aspo’s organization has clear roles and areas of responsibility to ensure that the ongoing sustainability work is as effective as possible:

Aspo Board of Directors
The Board of Aspo is responsible for ensuring that the Group has appropriate sustainability measures in place, including adequate policies, guidelines and reporting processes. Group sustainability targets are presented to and approved by Aspo’s Board of Directors. The Board should have at least one meeting a year to address compliance with this policy; review this policy and propose possible amendments; and review and approve the annual Aspo Sustainability Report.

Group CEO
The Aspo Group CEO has overall responsibility for implementing the Group’s sustainability work as part of overall strategy execution and is responsible for ensuring that the Group’s operations are conducted in accordance with this policy. The Group CEO also ensures that this work is documented and reported to the Board of Directors of Aspo.

Boards of Aspo’s businesses
The Boards of Directors of all Aspo’s businesses are responsible for ensuring that the respective business has appropriate sustainability measures in place, in accordance with this policy. Furthermore, the targets and goals set by the Managing Directors of businesses are presented to and approved by the respective Boards.

Managing Directors of Aspo’s businesses
As part of strategy implementation, the Managing Directors of Aspo’s businesses are in charge of establishing and implementing appropriate sustainability work for their company, including setting relevant, quantifiable targets, drawing up and implementing relevant policy documents and instructions, and reporting to the Aspo CEO and the Board of Directors of the particular business.

Employees All Aspo employees are responsible for being familiar with, keeping up to date on and contributing to the compliance of this policy.

3 Our approach to sustainability

Aspo believes that socially, financially and environmentally sustainable business is a requirement for creating long-term value.

Aspo’s Board of Directors has set a long-term target for the whole Group, according to which Aspo’s businesses aim to be forerunners in sustainability in their respective sectors. Sustainability is also a key factor in guiding Aspo’s management system and the process of investigating new investment opportunities.

Furthermore, Aspo expects all Group companies to act in accordance with the principles of internationally recognized and accepted conventions and agreements on the environment, human rights, working conditions and corruption such as the UN Global Compact, the UN Declaration of Human Rights, and the ILO Declaration on Fundamental Principles and Rights at Work. In the event that Aspo becomes aware that a subsidiary does not meet this expectation, prompt and constructive action is taken together with the subsidiary’s management and Board to ensure that the issue is rectified.

We aim to continuously improve our sustainability work and support Aspo’s businesses in their path to becoming forerunners in sustainability. Continual improvement in material sustainability areas is driven in a consistent and systematic way.

3.1 Main focus areas

Aspo categorizes sustainability related factors into the three areas that are often used by investors: environmental, social and governance factors (“ESG”).

Through materiality assessments, stakeholder interviews and benchmark analyses, Aspo has identified a number of key sustainability commitments, which all its businesses share. These commitments and key sustainability focus areas are regularly reviewed, updated and evaluated to ensure that they remain topical and are in accordance with Aspo’s strategy. More information on Aspo’s key sustainability focus areas can be found in chapter 4.

In addition to the material sustainability themes identified at the Group level, there are other factors that are material to Aspo’s respective businesses. The Board of each subsidiary shall therefore ensure that the management will, through a process that is appropriate for the specific company, identify, address, and monitor regularly the sustainability factors that are material to the company’s business model and its stakeholders.

3.2 Sustainability in M&A

Acquisitions are a key part of Aspo’s value creation, and sustainability forms an integral part of our acquisition process and ownership agenda. During the target-mapping phase, we evaluate potential acquisition targets based on financial performance and strategic fit. When evaluating the strategic fit, sustainability related factors are of key importance, and we aim to understand the company’s material sustainability factors, assess how they may affect the company’s future business model and ensure that the company has the ability to manage them satisfactorily over time.

Sustainability is evaluated both in terms of evaluating

· Target performance across Aspo’s key sustainability themes and Aspo’s opportunities to contribute to the potential target’s ESG performance

· Impact on Aspo’s opportunity to reach set targets

Our findings may result in us not investing in a company if we deem the sustainability risks to be too complex or costly or if we assess that the business model is not or cannot become sustainable in the long term.

4 Targets, monitoring and reporting

Aspo shall set relevant goals and targets for Aspo’s sustainability work and use appropriate performance indicators to systematically measure, monitor and report the work done and the

progress towards each target. Targets can be set for both the short and long term, but since the area of sustainability is rapidly evolving, Aspo shall periodically review the relevance of the targets and adjust them, if needed.

Because Aspo’s businesses differ from one another, target setting is based on business-specific materiality assessments, stakeholder interviews and benchmark analyses.

Aspo and all its businesses share the following sustainability commitments:

· Growing our business while lowering pressure to the environment

· Improving Aspo experience for people in our value chain

· Driving sound governance practices at all levels

In addition to the Group-level targets, Aspo’s businesses have defined business-specific targets and KPI’s. The key sustainability targets and performance monitoring will be integrated into overall performance reporting Group-wide.

The sustainability work and progress made towards the targets are addressed both in Aspo interim and annual reports, as well as Sustainability Reports of each business, Aspo Sustainability Report is published in accordance with the requirements set out in the Finnish Accounting Act and EU Directive 2014/95/EU. Aspo’s sustainability report is approved by Aspo’s Board of Directors and published alongside the annual report for the same financial year.

5 Related documents

In addition to the Aspo Sustainability Policy, sustainability program development at the Group level is done with the support of Aspo Code of Conduct

Furthermore, annual Code of Conduct and Compliance trainings are mandatory for all Aspo Group personnel in addition to business-specific trainings related to, for example, health and safety.

6 Contact details

The respective Managing Directors of Aspo’s businesses are responsible for the general review and implementation of this policy in their operations.

With questions or need for assistance, please contact Aspo Communications.

7 Version history and control

This policy is to be reviewed annually by Aspo’s Board of Directors and updated as required. Last updated: August 10, 2022.