Slide 1: Outokumpu ESG update
Outokumpu ESG update December 8, 2021 ESG = Environmental, Social & Governance
Slide 2: Agenda and speakers
Agenda and speakers ESG at Outokumpu 1 Stefan Erdmann, CTO & Group Sustainability Our progress in ESG 2 Stefan Erdmann Juha Erkkilä, VP – Group Sustainability Sustainability in raw material procurement 3 Hannah Stratmann, Supplier Sustainability Manager Juha Erkkilä Closing 4 Stefan Erdmann, CTO & G
Slide 3: Disclaimer
Disclaimer This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements. Such forward-looking statements are based on the current plans, estimates and expectations of Outokumpu’s management based on information available to it on th
Slide 4: ESG at Outokumpu
ESG at Outokumpu Introduction and overview Stefan Erdmann, CTO & Group Sustainability 4 | December 8, 2021
Slide 5: Outokumpu Tornio works – the biggest material recycler in Europe
Outokumpu Tornio works – the biggest material recycler in Europe 5 | December 8, 2021
Slide 6: Our differentiators are the foundation for Outokumpu's ESG ambitions
Our differentiators are the foundation for Outokumpu’s ESG ambitions Adoption of Science-Based Targets initiatives (SBTi) improves our market position as a key supplier of low-emission products towards our customers Our in-house ferrochrome mine in Kemi is a unique asset – only chrome mine in EU. Th
Slide 7: A comprehensive approach is needed to address climate change
A comprehensive approach is needed to address climate change We are the only stainless steel Emission intensity (tCO2/t crude steel) company with a commitment to the business ambition of 2.5 - 42% 1.5°C 2.0 1.5 - 30% Scope 1 SBTi target Scope 2 1.0 Scope 3 0.5 1.7 70% 0.0 2014-2016 2020 2030 By 2030
Slide 8: Leadership in sustainability requires also a strong stance on social and governance
Leadership in sustainability requires also a strong stance on social and governance Social Governance • Safety, compliance and commitment • ESG advisory council established throughout the value chain • ESG focus in sustainable sourcing • Human rights risk assessment • Strong ethics and compliance pr
Slide 9: New innovations in stainless steel products enable the world that lasts forever
New innovations in stainless steel products enable the world that lasts forever Stainless steel is a durable and low-weight solution for optimum performance in specialized fields and demanding conditions Our products World needs are enablers to go net for our zero – and clients’ we are part PEFC - P
Slide 10: Our progress in ESG
Our progress in ESG Key completed, ongoing and potential activities Juha Erkkilä, VP – Group Sustainability 10 | December 8, 2021
Slide 11: This year, we have had a strong focus in implementing concrete ESG initiatives
This year, we have had a strong focus in implementing concrete ESG initiatives Diversity and Inclusion initiative Updated Organizational ongoing in Americas, 1.5 ºC climate targets Health Index to be implemented finalized and survey on Group level in 2022 submitted to the SBTi Supplier requirements
Slide 12: Our starting point for emission reductions
Our starting point for emission reductions Emissions per scope in 2020 Scope 1 Scope 2 Scope 3 Addressing coke and fuel use has a Absolute emissions can be significantly The main four raw materials amount significant impact on Scope 1 emissions. reduced by increasing the share of low- to ~70% of our
Slide 13: Financial efficiency of carbon reduction projects
Financial efficiency of carbon reduction projects Outokumpu’s ability to reduce 1.75 Mt emissions with < 60€/t Financial efficiency (€/tCO2e, 2022F) 200 174 154 150 88 99 100 79 Internal carbon price 60€/t 52 56 50 22 22 2 3 4 7 9 10 Emission 0 0 reduction -16 100 200 300 400 500 600 700 800 900 1 0
Slide 14: Projects identified to reduce our Scope 1 emissions
Projects identified to reduce our Scope 1 emissions Scope 1 emissions constitute to a large extent from the use of Emission reduction potential until 2030 coke and various fuels in our production processes – to reduce them, we will: Up to 0,4 40 €/tCO2 • As a transitional step, replace fossil coke w
Slide 15: Alternatives to reduce our Scope 2 emissions
Alternatives to reduce our Scope 2 emissions Alternatives to reduce the electricity emissions include: Emission reduction potential • Directly purchasing low-carbon electricity Up to 0.8 ~5 €/tCO2 • Acquiring Guarantees of Origin MtCO2 Average marginal abatement cost • Investing in renewable electri
Slide 16: Determined actions to reduce Scope 3 emissions
Determined actions to reduce Scope 3 emissions Our Scope 3 emissions constitute to a major extent from Emission reduction potential emissions related to raw material sourcing – and Ferronickel has (already identified) the largest impact. 0.7 • Identified main low-carbon emission suppliers MtCO2 • Mu
Slide 17: Our technical journey towards carbon neutrality
Our technical journey towards carbon neutrality The ambition is reflected in small and large projects alike In Plan: approved for Done: progress already achieved Future: step-change technologies implementation Energy intensity decreased by ~10% Improving energy efficiency and Boosting efficiency and
Slide 18: Solid progress towards our goal of zero work-related accidents continues
Solid progress towards our goal of zero work-related accidents continues In 2021, our safety performance reached its best level We are investing ever, remaining well below the industry average. every year Safety performance (TRIFR and LTIFR) 18 m€ 8.7 in improvements of environment, health and safet
Slide 19: We are striving for continuous improvement in employee health and well-being
We are striving for continuous improvement in employee health and well-being Vaccination centers Diversity & in Germany and US Inclusion initiative • COVID-19 regulations in BA Americas implemented successfully • Global diversity, equity and inclusion (DE&I) assessment Supporting everyday health • E
Slide 20: We increase the transparency and visibility throughout the value chain
We increase the transparency and visibility throughout the value chain New Supplier Sustainability Manager Supplier Requirements updated and and activities in raw material supply Supplier Code of Conduct in • Auditing and incident follow-up preparation • Supplier ranking and scorecard • Supplier req
Slide 21: Sustainability embedded in everything we do through robust governance
Sustainability embedded in everything we do through robust governance ESG Advisory Council established Example in value-chain • Best practices and cross-industry responsibility understanding • Internal Code of Conduct revised • Mandatory training has been initiated for all personnel Sustainability c
Slide 22: Emission and footprint reduction seen as the highest priority by our stakeholders
Emission and footprint reduction seen as the highest priority by our stakeholders 22 | December 8, 2021
Slide 23: Sustainability in raw material procurement
Sustainability in raw material procurement Hannah Stratmann, Supplier Sustainability Manager 23 | December 8, 2021
Slide 24: Sustainability strategy – implications for raw material procurement
Sustainability strategy – implications for raw material procurement Aiming at 40% CO2 reduction in major raw materials by 2030 Strategic alliances with responsible key suppliers Transparent and monitored supply chain 24 | December 8, 2021
Slide 25: Five high-priority initiatives for 2021 and 2022
Five high-priority initiatives for 2021 and 2022 Supplier sustainability assessment, 1 scorecard and on-site audits Document review, supplier 2 onboarding and Supplier Code of Conduct 3 CO emissions tracking 2 United Nations Guiding Principles 4 on business and human rights 5 ESG incident management
Slide 26: Implementation of supplier sustainability assessment and scorecard started
Implementation of supplier sustainability assessment and scorecard started ✓ Supplier Requirements ✓ Code of Conduct ✓ Human Rights Risks Supplier scorecard ✓ Sanctions EcoVadis ratings Procurement Quality Logistics Technology Supplier Sustainability onboarding Regular risk & Supplier relationship s
Slide 27: Applying the ESG incident management process: Vale and the Finnwatch report
Applying the ESG incident management process: Vale and the Finnwatch report Recommendations for Outokumpu by Finnwatch: • Commitment to United Nations Guiding Principles (UNGP) • Identification of risks associated with Outokumpu’s own operations and its value chain • Action plan to address identifie
Slide 28: Investigation phase included a site visit in Brazil
Investigation phase included a site visit in Brazil Investigation: Field work targets: 1. Engaging external professionals: • Directly engage stakeholders Enact • Identify human rights impacts on 2. Desktop study and stakeholder indigenous peoples alleged by mapping Finnwatch 3. Field work in Brazil:
Slide 29: Site visit outcomes guiding the path forward
Site visit outcomes guiding the path forward Outcome of the site visit: Next steps: • The necessary information to fulfil • Consolidate all information and the field work targets could be detail way forward obtained to a very large extend • Continue engagement with both • The way forward is outlined
Slide 30: Closing
Closing Stefan Erdmann, CTO & Group Sustainability 30 | December 8, 2021
Slide 31: Our efforts in sustainability have been globally recognized
Our efforts in sustainability have been globally recognized 31 | December 8, 2021
Slide 32: Progressing in sustainability is crucial for our success as a company
Progressing in sustainability is crucial for our success as a company Environmental Social Governance With the ambition presented today, Outokumpu is fully committed to keep we aim to ensure sufficient improving capabilities on all three fronts: carbon allowances environmental, social and governance
Slide 33: Q&A session
Q&A session To ask a question, please dial in via conference call Conference call details Finland: (09) 8171 0310 UK/Europe: +44 33 3300 0804 US: +1 631 913 1422 Conference ID: 83305286#
Slide 34: Thank you!
Thank you! follow us on inv Te www.outokumpu.com Stay tuned and 4 ‘ \ B i