Report by the Board of Directors and Financial Statements 2025

‌Annual Report 2025

Contents

Report by the Board of Directors 1

Key figures 64

Definitions and reasons for the use of key figures 66

Combined income statement 69

Combined statement of comprehensive income 69

Consolidated statement of financial position 70

Combined statement of cash flows 71

Consolidated statement of changes in equity 72

Notes to the consolidated financial statements 73

Financial statements of the parent company 108

Proposal by the Board of Directors for distribution

of profit and Auditor's Note 114

1

1

‌Report by the Board of Directors

Financial performance and governance 1

Shares and shareholders 3

Risks and risk management 6

Sustainability Report 9

‌Financial performance and governance

Financial Statements 2025 of Lassila & Tikanoja

Lassila & Tikanoja Plc was incorporated through the partial demerger of Luotea Oyj (formerly Lassila & Tikanoja plc), which was completed on 31 December 2025. The consolidated financial information as at 31 December 2025 has been presented using actual figures for the statement of financial position as at 31 December 2025 and on a carve-out basis for the other financial information, such as combined income statement and combined statement of cash flows, and comparative periods.

This carve-out financial information does not necessarily reflect the combined results of operations and financial position that Lassila & Tikanoja would have had if it would have operated as an independent legal group and therefore prepared standalone consolidated financial statements for the periods presented. Nor

does the carve-out financial information necessarily indicate the future results of operations, financial position or cash flows of Lassila & Tikanoja.

Information in the consolidated financial statements is presented in millions of euros unless otherwise stated. All figures have been rounded, and therefore the sum of individual figures may differ from the total amount presented. Unless

otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.

Financial performance

Net sales for 2025 were EUR 426.6 million (423.9), an increase of 0.7% year-on-year. Organic decrease in net sales was 1.0%. Net sales in the Waste Management and Recycling service area declined by 1.8% and amounted to EUR

278.1 million (283.1). The challenging economic environment and the decrease in waste management material volumes affected net sales development throughout the financial year. On the other hand, net sales were supported by growth in the pallet business following the acquisition completed in June. Net sales in the Hazardous Waste and Remediation service area increased by 12.0% to EUR 73.0 million (65.2). In remediation, net sales grew due to a strong project pipeline, while demand in hazardous waste remained stable. Net sales in Industrial Services

and Water Treatment were in line with the comparison period at EUR 81.3 million (81.3).

Adjusted EBITA was EUR 40.6 million (44.4), representing 9.5% (10.5) of net sales. Adjusted EBITA for the Circular Economy business was EUR 42.1 million (44.7), corresponding to 9.9% (10.5) of net sales. Relative profitability remained at a good level, although the recession in the Finnish economy affected profitability development throughout the financial year. The challenging economic situation particularly affected waste management volumes. Although the net sales

of waste management in municipal contracts and producer responsibility organisations increased compared to the previous year, net sales declined in other customer segments. Efficiency measures implemented during the period

helped adjust service production costs to lower volumes. Profitability for the year was burdened by approximately EUR 1 million in additional costs related to the implementation of the new ERP system, as well as the start of amortisation related to the system renewal investment, which had a negative earnings impact of approximately EUR 1.1 million.

Operating profit was EUR 34.2 million (40.5), representing 8.0% (9.5) of net sales. Operating profit included EUR 4.5 million in items affecting comparability. Operating profit was improved by a EUR 0.9 million fair value adjustment related to the deferred consideration for the acquisition of Sand & Vattenbläst i Tyringe AB ("SVB"). Operating profit was reduced by expenses totalling EUR 5.4 million in items affecting comparability, mainly related to the preparation of the partial demerger and business acquisitions. Earnings per share were EUR 0.67 (0.83).

Lassila & Tikanoja completed three acquisitions in 2025. In June, L&T acquired the pallet business of Stena Recycling Oy, which has generated annual net sales of approximately EUR 10 million. The acquisition strengthens L&T's service offering and supports the growth of the circular economy business in line with

the strategy. Lassila & Tikanoja acquired the shares of Viemärihuolto Reinikka Oy on 1 December 2025. Viemärihuolto Reinikka Oy provides sewer maintenance services in Central Ostrobothnia, employs 10 people, and had net sales of approximately EUR 2 million in 2024. The acquisition strengthens L&T's local service network as well as sewer maintenance services for industrial, SME, and private customers in the Kokkola area. In Sweden, Lassila & Tikanoja expanded its process cleaning business by acquiring RecondConcept i Ånge AB on 1 December 2025. The acquisition strengthens L&T's chemical cleaning and process and energy industry services. In the previous financial year, RecondConcept had net sales of approximately EUR 1.2 million and employed 7 people.

In December, Lassila & Tikanoja announced that it will invest in plastics recycling in Merikarvia. A property lease agreement with the municipality enables the expansion of L&T's plastics recycling operations. At the same time, L&T is purchasing plastic-processing equipment from a bankruptcy estate of a company that previously operated at the site. In addition to the lease agreement and the equipment purchase, L&T is investing more than one million euros in modernising the industrial facility and developing the processing lines. With the new independent plastics recycling plant, L&T's plastics recycling capacity in Merikarvia will increase by approximately 1.5 times.

Net financial expenses for the financial year were EUR -4.6 million (-4.7).

The share of the profit of the joint venture Laania Oy was EUR 1.9 million (3.2). Laania's results were burdened by an exceptionally warm spring, which reduced demand for energy wood.

Key figures

1 All periods are calculated based on the number of shares at the date of the demerger

31 December 2025.

Net sales by service area

Financing and capital expenditure

In 2025, net cash flow from operating activities amounted to EUR 73.4 million (74.0). A total of EUR 0.3 million in working capital was tied up during the financial year (EUR 1.5 million released). Net cash flow from operating activities after investments totalled EUR 41.4 million (34.3). Net cash flow from operating activities after investments for the financial year was supported by lower operative investments than in the comparison period and reduced by acquisitions, which had an impact of EUR 11.1 million (1.5).

At the end of the financial year, interest-bearing liabilities amounted to EUR

187.6 million. Net interest-bearing liabilities totalled EUR 150.2 million. The average interest rate on long-term loans, excluding lease liabilities, was 3.2%.

External loans of the company have not been included in the carve-out financial information for the comparative period. As part of the financing arrangements, the EUR 75 million unsecured notes, the EUR 35 million and EUR 15 million term loans, and the EUR 40 million revolving credit facility were

transferred to Lassila & Tikanoja in the demerger. At the end of the review period, the committed EUR 40 million revolving credit facility was fully unused. More information on the financing arrangements is presented in Notes 4.1 Financial assets and liablitities and 4.2 Financial risk management in the notes to the consolidated financial statements.

Net financial expenses totalled EUR -4.6 million (-4.7). Net financial expenses were 1.1% (1.1) of net sales.

The equity ratio was 35.0% and gearing was 86.9%. Net debt / adjusted EBITDA was 1.8x. The Group's total equity amounted to EUR 172.8 million. Cash and cash equivalents at the balance sheet date totalled EUR 37.4 million.

Gross capital expenditure for the financial year totalled EUR 41.7 million (36.1). Operative capital expenditure excluding acquisitions amounted to EUR

29.2 million (34.3). The capital expenditure consisted primarily of machine and equipment purchases, as well as investments in information systems. Acquisitions accounted for approximately EUR 12.5 million (1.8) of the gross capital expenditure.

Loans, liabilities and contingent liabilities to related parties

Related-party transactions are accounted for in Note 5.4 Related-party transactions in the notes to the consolidated financial statements. Subsidiary loans and their terms are presented in Note 9 in the notes of the financial statements of the parent company.

Outlook

In 2026, net sales are estimated to be EUR 420-450 million and adjusted EBITA EUR 38-44 million.

Partial demerger of the former Lassila & Tikanoja

On 13 December 2024, the former Lassila & Tikanoja (Demerging Company, Luotea Plc from the date of the demerger) announced, that the Board of Directors

of the Company has decided to initiate the planning of the possible separation of its circular economy businesses Environmental and Industrial Services and

facility services businesses into two independent listed companies. The plan was to separate the circular economy businesses into a newly listed company through a partial demerger of fhe former Lassila & Tikanoja plc.

According to the preliminary assessment of the Board of Directors' of the Demerging Company, the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively.

On 7 August 2025, the Demerging Company announced that its Board of Directors has approved a demerger plan, pursuant to which the Demerging Company will demerge so that all assets, debts and liabilities relating to the Circular Economy business area will be transferred in the demerger to New Lassila & Tikanoja Plc to be incorporated in connection with the demerger. According to the demerger plan, the planned completion date of the demerger was 31 December 2025.

On 4 December 2025, the Extraordinary General Meeting of the Demerging Company resolved on the partial demerger of the Demerging Company in accordance with the demerger plan approved by the Board of Directors and signed on 7 August 2025. As part of the demerger resolution, the Extraordinary General Meeting also adopted other resolutions relating to Lassila & Tikanoja. Further information on these resolutions is presented under 'Resolutions by the Extraordinary General Meeting'.

The implementation of Luotea Plc's partial demerger was registered with the Finnish Trade Register on 31 December 2025. Trading in the shares of Lassila & Tikanoja commenced on 2 January 2026 on the official list of Nasdaq Helsinki Ltd under the trading code LASTIK

Resolutions by the Extraordinary General Meeting

The Extraordinary General Meeting of the former Lassila & Tikanoja plc (currently Luotea Plc), which was held on 4 December 2025, resolved on the partial demerger of Lassila & Tikanoja and, as part of the demerger resolution and conditional upon the completion of the demerger, on the establishment of a

new independent company to be named Lassila & Tikanoja (the "New Lassila & Tikanoja"), the composition of the Board of Directors of the New Lassila & Tikanoja, authorising the Board of Directors of the New Lassila & Tikanoja to

issue shares and special rights entitling to shares in the New Lassila & Tikanoja and to decide on repurchase of the New Lassila & Tikanoja's own shares and on acceptance as pledge of the New Lassila & Tikanoja s own shares. The Extraordinary General Meeting resolved, conditional upon the completion of the demerger, on the remuneration of the Board of Directors, the election and remuneration of the auditor and the verifier of the New Lassila & Tikanoja's sustainability report and the establishment of the Shareholders' Nomination

Board of the New Lassila & Tikanoja and adopted the remuneration policy of the New Lassila & Tikanoja.

As part of the demerger resolution and conditional upon the completion of the demerger, the Extraordinary General Meeting confirmed the number of members

of the Board of Directors of the New Lassila & Tikanoja as five (5). Jukka Leinonen was elected as Chair of the Board of Directors, Sakari Lassila as Vice Chair of

the Board of Directors, and Tuija Kalpala, Teemu Kangas-Kärki and Anna-Maria Tuominen-Reini as members of the Board of Directors of the New Lassila & Tikanoja.

Conditional upon the completion of the demerger, the Extraordinary General Meeting elected PricewaterhouseCoopers Oy, Authorised Public Accountants, as the New Lassila & Tikanoja's auditor. PricewaterhouseCoopers Oy has informed the Company that Samuli Perälä, Authorised Public Accountant, would act as the New Lassila & Tikanoja's auditor with principal responsibility. Conditional upon the completion of the demerger, the Extraordinary General Meeting elected PricewaterhouseCoopers Oy, Authorised Sustainability Audit Firm, as the verifier

of the New Lassila & Tikanoja's sustainability report. PricewaterhouseCoopers Oy has informed the Company that Samuli Perälä, Authorised Sustainability Auditor, would act as the principal verifier of the New Lassila & Tikanoja's sustainability report.

The resolutions of the Extraordinary General Meeting were announced in more detail in a stock exchange release by Luotea Plc on 4 December 2025.

Events after the financial year

The company announced the composition of Lassila & Tikanoja Plc's Nomination Board on 29 January 2026. Lassila & Tikanoja Plc's three largest shareholders, who are entitled to appoint a representative to Lassila & Tikanoja Plc's Shareholders' Nomination Board are the first groups of shareholders (Evald and Hilda Nissi Foundation and Bergholm Heikki), the second group of shareholders (Chemec Oy, CH-Polymers Oy, Maijala Eeva, Maijala Investment Oy, Maijala Juhani, Maijala Juuso, Maijala Miikka, Maijala Mikko, Maijala Roope and Maijala Tuula) and Nordea Funds Ltd (through 11 funds managed by it).

The following persons have been appointed as their representatives in Lassila & Tikanoja's Nomination Board: Juhani Lassila, Miikka Maijala and Josefin Degerholm. The Chairman of Lassila & Tikanoja Plc's Board of Directors, Jukka Leinonen, acts as the fourth member of the Nomination Board. The Chairman of the Nomination Board is Juhani Lassila.

Lassila & Tikanoja Plc received a notification from Protector Forsikring ASA on 30 January 2026, according to which its shareholding in Lassila & Tikanoja decreased below 5 per cent on 29 January 2026.

Lassila & Tikanoja Plc announced on 16 February 2026, that a member of Lassila & Tikanoja Plc's Group Executive Board, Hilppa Rautpalo (Senior Vice President, Legal, HR and EHSQ), has announced her decision to leave the company to take up a new position outside the organization by August 2026 at the latest.

Lassila & Tikanoja announced on 26 February 2026 Lassila & Tikanoja's Shareholders' Nomination Board proposals for the 2026 Annual General Meeting.

The Shareholders' Nomination Board proposes the Board of Directors to have five (5) members. The Nomination Board proposes that all of the current

members, Tuija Kalpala, Teemu Kangas-Kärki, Sakari Lassila, Jukka Leinonen and Anna-Maria Tuominen-Reini be re-elected to the Board of Directors. In addition,

‌the Nomination Board proposes that Jukka Leinonen be re-elected as Chairman of the Board of Directors and Sakari Lassila as Vice Chairman.

The Shareholders' Nomination Board proposes that the remuneration of the members of the Board of Directors be as follows:

• chairman, EUR 70,000 per year (2025: EUR 70,000);

• vice chairman, EUR 47,000 per year (2025: EUR 47,000);

• members, EUR 35,000 per year (2025: EUR 35,000);

  However, if a member of the Board of Directors were to serve as the chairman of the Audit Committee or the Personnel and Sustainability Committee, and not

  simultaneously serve as the chairman or vice chairman of the Board of Directors, their annual remuneration will be EUR 47,000.

  Lassila & Tikanoja announced on 27 February 2026 that the Company will launch a share repurchase programme for share-based incentive schemes and remuneration of the Board of Directors. The Board of Directors of Lassila & Tikanoja Plc has decided to exercise the authorisation granted by the Extraordinary General Meeting held on 4 December 2025 to repurchase the

  Company's own shares. The repurchase of shares will commence at the earliest on 2 March 2026 and end at the latest on 28 April 2026. The maximum number of shares to be repurchased is 150,000, representing approximately 0.39 per cent of all shares in Lassila & Tikanoja Plc.

  Lassila & Tikanoja announced on 27 February 2026 that the company's Board of Directors has decided to establish a new long-term share-based incentive scheme for the Group's key employees. The aim of the new scheme is to align the objectives of the Company, shareholders and key employees to increase the value of the Company in the long term, to strengthen the commitment of key employees to the Company and to offer them a competitive reward plan that is based on earning and accumulating the Company's shares as well as on appreciation of the share price.

  The Performance Share Plan 2026-2030 comprises three (3) three-year (3) performance periods, covering the calendar years 2026-2028, 2027-2029 and 2028-2030. In the plan, a participant has the opportunity to earn Lassila &

  Tikanoja Plc shares based on the achievement of performance criteria. The Board of Directors decides on the performance criteria of the plan and the performance levels to be set for each performance criterion at the beginning of a performance period. The potential rewards based on the plan will be paid after the end of each performance period. During the performance period 2026-2028, the earning of rewards is based on the following performance criteria:

• Return on capital employed (ROCE) (30 %) during the period 2026-2028;

• Revenue growth (30 %) during the period 2026-2028;

• Total shareholder return (rTSR) (30 %) during the period 2026-2028;

• Reduction of the carbon footprint (ESG) (10 %) during the period 2026-2028.

The rewards to be paid based on the performance period 2026-2028 correspond to the value of approximately 218,677 Lassila & Tikanoja Plc shares in maximum total, also including the portion to be paid in cash. The target group of

the Performance Share Plan during the performance period 2026-2028 consists of approximately 25 key employees, including the Group's President and CEO and the Group Executive Board.

Lassila & Tikanoja Plc announced on 19 March 2026, that Eero Hautaniemi, who has served as President and CEO of Lassila & Tikanoja Plc since 2019, has

informed the company of his wish to step down from his position no later than 30 June 2027. The Board of Directors of the company has initiated the recruitment process for a new President and CEO.

Medium-term targets

Lassila & Tikanoja's medium-term targets are presented in the table below. Lassila & Tikanoja does not consider its medium-term financial targets to constitute market guidance for any specific year.

Dividend policy

Lassila & Tikanoja Plc aims to distribute dividends amounting to at least 50% of the Group's net profit.

Proposal for profit distribution

In 2025, the Group's earnings per share on a carve-out basis were EUR 0.67 (0.83). The Board of Directors proposes to the Annual General Meeting to be held on 28 April 2026 that a dividend of EUR 0.42 per share be paid for the financial year 2025. The Board of Directors proposes that the dividend be paid in two instalments. The first instalment of EUR 0.21 per share would be paid in May 2026 and the second instalment of EUR 0.21 per share in October 2026.

Shares and shareholders

Share capital and number of shares

Lassila & Tikanoja Plc was incorporated through the partial demerger of Luotea Plc (formerly Lassila & Tikanoja Plc), the implementation date of which was 31 December 2025. In connection with the partial demerger, the shareholders of Luotea Plc received, as demerger consideration, one (1) share in Lassila & Tikanoja Plc for each share they held in Luotea Plc. No demerger consideration was given for the treasury shares held by Luotea Plc (587,150 shares as at 31 December 2025). Accordingly, at the commencement of trading, Lassila & Tikanoja Plc had 24,234 shareholders and 38,211,724 shares in issue. Trading in the Company's shares commenced on 2 January 2026 on the official list of Nasdaq Helsinki under the trading symbol LASTIK.

The registered share capital of Lassila & Tikanoja Plc amounts to EUR 80,000.

The Company has 38,211,724 shares outstanding. At the end of the financial year, the Company did not hold any treasury shares. Each share carries one vote.

The Articles of Association do not specify a maximum number of shares or a maximum share capital. The shares have no nominal value and no accounting par value. The Company's shares are included in the book-entry system maintained by Euroclear Finland Ltd. Euroclear Finland Ltd maintains the Company's official shareholders' register.

Shareholders

At the end of the financial year, the company had 24,234 shareholders. Nominee-registered holdings accounted for 13.2% of the total number of shares.

Holdings of the Board of Directors, the President and CEO and the Executive Board

The members of the Board, the President and CEO and the Executive Board, and organisations under their control held a total of 184,858 shares in the company on 31 December 2025, representing 0.5 per cent of the total number of shares and votes.

Share-based incentive plans

The purpose of the Lassila & Tikanoja's long-term incentive plans is to commit their participants to the long-term interests and to enhance the shareholder value, as well as to offer a competitive, ownership-based reward scheme. The company has the following share-based incentive plan under which share rewards remain to be paid on the balance sheet date:

Performance-based share incentive plan 2023-2027, which includes three-

year performance periods 2023-2025, 2024-2026 and 2025-2027. During the performance periods, performance is measured based on the criteria set by the demerged company (old Lassila & Tikanoja, currently Luotea Plc). The rewards payable based on the performance periods will be paid no later than five months after the end of the performance period in a combination of shares and cash.

According to the demerger plan, the Board of Directors of the former Lassila & Tikanoja have resolved on the effects of the demerger on the Performance Share Plan's performance periods in accordance with the terms of the Performance Share Plan. For the 2023-2025 performance period of the Performance Share Plan, the result is calculated as per the number of the former Lassila &Tikanoja's shares and confirmed in euros. The reward amount earned in euros is converted into shares of the Performance Share Plan participant's employer company at the time of payment.

The New Lassila & Tikanoja intends to continue the former Lassila & Tikanoja's existing Performance Share Plan on substantially the same terms, but with

the amendment that the rewards will be in the new Lassila & Tikanoja's shares instead of the former Lassila & Tikanoja's shares and the rewards payable, as expressed in number of the new Lassila & Tikanoja shares, will be adjusted accordingly. The rewards payable under the current Performance Share Plan for the performance periods 2024-2026 and 2025-2027 will be converted into shares in the new Lassila & Tikanoja based on the formation of the price of the new Lassila & Tikanoja's shares after the listing.

Following the completion of the demerger, the Board of Directors of the New Lassila & Tikanoja will resolve on the details of the New Lassila & Tikanoja's share-based incentive plans.

Flagging notifications

The company did not receive notifications pursuant to chapter 9, section 5 of the Securities Markets Act during the review period.

Own shares

At the end of the period, the company held no own shares.

Authorisations for the Board of Directors

The Extraordinary General Meeting of the former Lassila & Tikanoja plc (currently Luotea Plc), which was held on 4 December 2025, resolved as part of the demerger resolution and conditional upon the completion of the demerger,

on authorising the Board of Directors of the New Lassila & Tikanoja to the repurchase of the company's own shares using the company's unrestricted equity. In addition, the Extraordinary General Meeting authorised the Board of Directors to decide on a share issue and the issuance of special rights entitling their holders to shares.

The Board of Directors is authorised to purchase a maximum of 2,000,000 company shares (5.2% of the total number of shares). The authorisation is valid until the conclusion of the first Annual General Meeting held by the New Lassila & Tikanoja following the completion of the demerger.

The Board of Directors is authorised to decide on the issuance of new shares or shares which may be held by the company through a share issue and/or

issuance of option rights or other special rights conferring entitlement to shares, referred to in Chapter 10, Section 1 of the Finnish Companies Act, so that under the authorisation, a maximum of 2,000,000 shares (5.2% of the total number

of shares) may be issued and/or conveyed. The authorisation is valid until the conclusion of the first Annual General Meeting held by the New Lassila & Tikanoja following the completion of the demerger.

Number of shareholders

% Number of shares

% of shares and

votes

Shareholder

Number of % of shares and shares votes

Major shareholders on 31 December 2025, excluding nominee-registered shares

14 Seligson & Co Phoebus Investment

L&T has a defined risk management process that includes a review of financial, strategic, operational, sustainability-related responsibility risks, as well as damage-related risks.

Key risk management principles

Risk management at L&T aims to identify significant risk factors, prepare for them and manage them in an optimal way. The purpose of risk management is to support management and decision-making so that the objectives set for the company are achieved. Comprehensive risk management endeavours to manage the Group's risk as a whole and not just individual risk factors.

Risk management is carried out by different functions and in accordance with the specified responsibility matrix. Risk assessments carried out at Group level are summarised and prioritised development measures are identified.

In accordance with the risk management process, risks are assessed annually

in the following categories:

• Strategic risks

• Financial risks

• Operational risks

• Sustainability risks

• Supply chain risks and

• Information management risks

  The risk management process also aims to assess the opportunities presented

  by the risks.

  Responsibilities

  The principles of L&T's risk management are approved by the company's Board of Directors. The Board monitors the implementation of risk management and assesses the efficiency of the methods employed. The President and CEO is responsible for the organisation and implementation of risk management. Risk management at L&T Group is controlled by the risk management and insurance policy confirmed by L&T's Board of Directors and the related risk management principles, which are regularly updated. The policy specifies the objectives and principles, organisation and responsibilities, and procedures of the Group's risk management. The Group's financing policy confirmed by L&T's Board of Directors is followed in the management of financial risks. The principles for insurance risk management are specified in the Risk Management and Insurance Policy.

  Identification, assessment and reporting of risks

  Risks are surveyed regularly and systematically at both the business level and in support functions and functions considered to be critical. The survey also covers risks related to the collection and reporting of sustainability information, such as potential errors in connection with the collection or consolidation

  of information. The significance of risks is assessed using a risk matrix. Measures for managing and minimising the identified risks are prepared, and responsibility for these measures is allocated to specified individuals or units. The impact of risks is analysed in terms of their effects on EBIT, among other things, and the assessment of the probability of the realisation of the risks takes into account the nature of operations and the risk mitigation measures taken by the Group.

  The most significant identified risks, and the preparations for those risks,

  are regularly reported to the President and CEO and the Board of Directors.

  Risk analysis

  The tables on the following pages describe the most important strategic, operational and sustainability related risks of L&T's business which, if realised, can endanger or prevent the achievement of business objectives. Financial risks are described in Note 4.2 Financial risk management to the consolidated financial statements. Sustainability related risks are discussed in more detail in paragraph ESRS 2 SBM-3 of the Sustainability Report.

  Near-term risks and uncertainties

  General economic uncertainty may affect the level of economic activity among customers, which may reduce the demand for L&T's services.

  Lassila & Tikanoja's business is subject to economic cycle fluctuations, and changing market conditions and fluctuations in L&T's customers' industries may affect the demand for L&T's services and solutions.

  Lassila & Tikanoja's operating areas are highly competitive, and increased competition or failure to react to the competitive situation may result in L&T losing market share.

  In its business, Lassila & Tikanoja is exposed to fluctuations in the pricing and deliveries of materials, raw materials and commodities.

  The Finnish Waste Act was amended in July 2021. Under the reforms to the Waste Act, municipalities take on a larger role in organising the collection of packaging materials and biowaste from housing properties. As a consequence of the reform, L&T's direct customer agreements with housing properties on the

  separate collection of packaging waste and biowaste will be gradually transferred to municipalities for competitive bidding between 1 July 2022 and 1 July 2025.

  L&T estimates that, as a result of municipalisation, approximately EUR 100 million

  of the Finnish waste management market will be moved out of the scope of free competition between 2024 and 2028. L&T participates in the competitive tendering of municipal contracts and is a significant operator in municipal contracts. Nevertheless, L&T estimates that the overall impact of the change will be negative for the company.

  Lassila & Tikanoja may be held liable for environmental damage, which could result in significant costs and reputational damage.

  Several ERP system deployment stages are in progress at the company. Temporary additional costs related to the deployment of systems and the establishment of the operating model as well as tied-up working capital may weaken the company's profit.

  Lassila & Tikanoja's M&A activities expose L&T to various risks that may have a negative impact on its business.

  Lassila & Tikanoja operates in a people-intensive sector and failures in recruiting skilled personnel, the loss of senior managers or other key personnel or other disruptions in the availability of personnel or their work ability may have a negative impact on L&T's business and it may not be possible to recruit and/ or retain persons with the necessary competence.

  Lassila & Tikanoja's operations and the services it provides are largely dependent on information networks and digital solutions, and disruptions to them, and breaches or attacks targeting them, as well as any failure of information system development projects and the lack of adequate data processing agreements, may have an adverse impact on L&T's business and financial position and cause damage to its reputation.

  The geopolitical situation involves uncertainty due to ongoing conflicts and various tariff systems. The tensions are also reflected in EU regulations and political priorities. The indirect impacts on energy and raw material prices and demand as well as overall economic activity in Finland and Sweden may have a negative impact on net sales and profit.

  Strategic, operational and sustainability risks

  Strategic risks

  Risk Risk description Risk management

Markets • The general economic development of L&T's operating countries, changes in the competitive landscape

and the functioning of the financial markets have an impact on the company's business operations.

ICT systems, data security and data protection

Damage-related risks

Environmental risks

decisions. An annually updated assessment of material sustainability impacts, risks and opportunities provides information for strategy work and is part of the company's risk management process. As part of the risk management process, the Board of Directors monitors that L&T has sufficient capabilities to identify, assess and manage risks effectively. The Board of Directors annually approves the results of L&T's double materiality analysis, which address L&T's material

Governance Employee Code of

Conduct

Governance

in 2026

Anti-corruption and anti-bribery policy

Senior Vice President, HR and Legal

Senior Vice President, HR and Legal

Board of Directors 2 January

2026

2026

Board of Directors 2 January

Online training

Online training

policy

impacts, risks and opportunities. L&T's key sustainability targets are reported to the Board of Directors and the market four times per year in connection with

Governance Information security

Chief Information Officer CEO and Group Executive Board to be approved

Online training

HR and Legal

2026

interim reports, and they are part of the company's strategic objectives. In connection with interim reports, the Board of Directors assesses the measures necessary for achieving the targets and metrics. The sustainability risk management

Governance Data protection policy Senior Vice President,

Board of Directors 2 January

Part of online training on the information security policy

process is part of the company's overall risk management process. The due diligence process related to acquisitions is described in more detail in section ESRS 2 GOV-4, p. 14.

Governance Tax policy CFO Board of Directors to be approved

Part of the induction of separately identified experts

in 2026

During 31 December 2025, the Board of Directors, its committees and the Group Executive Board did not convene and no information related to sustainability issues was submitted to or processed by the Board of Directors or the Group Executive

Policy on gifts

Governance and hospitality in

procurement

Senior Vice President,

Public Affairs and Sustainability

Board of Directors

(in the future, CEO and Group Executive Board)

2 January

2026

Part of the induction of separately identified experts

HR and Legal

2026

Board.

policy

GOV-3 - Integration of sustainability-related perfor-

Society HR policy Senior Vice President,

Board of Directors 2 January Board of Directors

Part of induction

mance in incentive schemes

L&T complies with the Remuneration Policy drawn up by Lassila & Tikanoja Plc's Personnel and Sustainability Committee and approved by the Board of Direc-

Society Occupational safety

Senior Vice President,

HR and Legal

(in the future, CEO and Group

Executive Board)

2 January

2026

Online training

HR and Legal

tors and presented to the Extraordinary General Meeting 2025 preceding the demerger. The Remuneration Policy describes the remuneration principles concerning the company's governing bodies, namely the Board of Directors and

Society Human rights policy Senior Vice President,

Board of Directors 2 January

2026

Board of Directors

Part of online training on the Code of Conduct

the President and CEO. During the financial year 2025, L&T complied with the Remuneration Policy presented to the Annual General Meeting. There were no deviations from the Remuneration Policy and no clawback of remuneration. In accordance with the Remuneration Policy, the aim of the remuneration scheme of the Board of Directors and the President and CEO is to contribute to the positive development of shareholder value, as well as to enhance the company's competitiveness, long-term financial success, and fulfilment of the strategy and goals set by the company.

In accordance with the proposal of the Shareholders' Nomination Board, the Extraordinary General Meeting on 4 December 2025, preceding the demerger, decided on the remuneration of L&T's Board of Directors and the grounds thereof for 2025. The remuneration of the Board of Directors did not include remuneration components related to sustainability matters.

The remuneration of the President and CEO consists of a fixed monthly salary and benefits, and a separate annually decided short-term incentive.

Supplier Code of Conduct

Society

Society Sanctions control policy

Environment Environmental policy

Chief Purchasing Officer

Senior Vice President, HR and Legal

Senior Vice President, Public Affairs and Sustainability

(in the future, CEO and Group Executive Board)

Board of Directors

(in the future, CEO and Group Executive Board)

Board of Directors

2 January

2026

2 January

2026

2 January

2026

Part of the contract requirements

Part of the induction of separately identified experts

No specific training, implementation through objectives, targets, indicators and monitoring

The objectives of the short-term incentive scheme are set - and their achievement assessed - annually. In addition, the President and CEO is included in the share-based incentive scheme, which serves as a long-term incentive scheme. The Board of Directors decides on the remuneration and financial benefits payable to the President and CEO. Before decision-making by the Board of Directors, the matter is prepared by the Personnel and Sustainability Committee of the Board.

As the company was registered on 31 December 2025 due to a partial demerger, the incentive scheme for the President and CEO for 2025 preceding the demerger, according to which the remuneration will be paid by the company in 2026, is described here. The President and CEO's incentive bonus for the earnings period that corresponds to the financial year 2025 was based on the Group's profit performance and strategic targets defined by the Board of Directors as follows: consolidated operating profit (70% weight), improving working capital (20% weight), and the employee Net Promoter Score (eNPS, 10% weight). Based on the achievement of the earnings criteria for the earnings period that corresponded to the financial year 2025, the incentive bonus was earned at 37.97% of the maximum amount, which represents, by criteria, consolidated operating profit at 33.97%, improving net working capital at 0%, and employee Net Promoter Score at 4%. The President and CEO will be paid EUR 103,658 in the financial year 2026 for the earnings period that corresponds to the financial year 2025.

The long-term incentive scheme includes a share-based incentive programme that covers the financial years 2023-2027. L&T's emission reduction targets (Scopes 1 and 2) are part of the company's strategic goals and they have been taken into account in the long-term incentive scheme for senior management.

As a rule, the earnings period of the plan is three calendar years. L&T's Board of Directors decides on the earnings criteria for each earnings period based on the Personnel and Sustainability Committee's proposal. The Board of Directors monitors and evaluates performance annually.

The share-based incentive schemes with the three three-year earnings periods of 2023-2025, 2024-2026 and 2025-2027 are described below:

Customers Customer service and customer satisfaction, operational quality, circular economy, recycling and remediation, sustainability.

Personnel The employees' physical and mental well-being, ability to cope with work, training and competence development, as well as job satisfaction and the employee experience.

A customer survey to measure the net promoter score (NPS) among corporate customers, and several customer-

specific surveys. Customer service (telephone, digital service channels) and dialogue with customer relations officers and sales. Marketing communications and events.

Feedback and development discussions, Fiilinki personnel surveys, co-operation, development workshops, personnel events and internal communication channels such as the intranet and Teams.

2045 net zero target for climate change mitigation, which was set before the partial demerger of the former Lassila & Tikanoja Group and which will be confirmed in 2026. The targets promote L&T's mission to unlock the potential of the circular economy

Potential employees Employer brand and the employee experience. Co-operation with educational institutions, recruitment and

career events, development of the employer image and sharing information through social media channels.

throughout the value chain.

L&T takes the interests, views and rights of its own workforce into account in its strategy and business model in many ways. L&T has identified and assessed the impacts, risks and opportunities related to its own workforce.

The key themes include employment security; working time; adequate wages; freedom of association; the information, consultation and participation rights of workers; social dialogue; work-life balance; health and safety; and gender equality. Attracting the best professionals in the industry is a strategic priority for L&T, and the well-being of the personnel is a key success factor for the company's business. L&T engages in extensive and diverse dialogue with its personnel, and the views of the personnel are taken into account in drawing up the business strategy. In addition, L&T's Employee Code of Conduct, personnel policy, human rights policy and occupational safety policy guide operations and ensure respect for employees' rights. The company's own workforce is described in section S1, pp. 54-60.

L&T also takes the interests, views and rights of value chain workers and respecting their human rights into account in its operations. L&T's Supplier Code of Conduct lays down minimum requirements that suppliers must respect and adhere to in their own operations and the supply chain. The Supplier Code of Conduct covers topics including respect for workers' rights, occupational safety, and the prohibition of the use of child labour and forced labour, for example. L&T requires its suppliers to commit to these principles, and they are also incorporated into L&T's procurement agreements. L&T also uses a separate self-assessment model to monitor and assess compliance with the Supplier Code of Conduct. The company has also identified and assessed potential

human rights risks in the supply chain in cooperation with the procurement function. The assessment is part of the company's human rights principles, and it was carried out before L&T's demerger into a separate listed company from the former Lassila & Tikanoja Group.

L&T has a separate, public and anonymous whistleblowing channel through which value chain workers can report misconduct. L&T processes potential human rights violations in accordance with clear procedures and carries out corrective measures as necessary. The impacts related to value chain workers are described in more detail in section ESRS 2 SBM-3, p. 21.

SBM-3 - Material impacts, risks and opportunities and their interaction with the strategy and business models

The material impacts, risks and opportunities of L&T are based on the double materiality analysis update made in 2025 prior to L&T's demerger into a separate listed company from the former Lassila & Tikanoja Group. The update reviewed materiality both with regard to the former Lassila & Tikanoja Group's sectors' facility services and circular economy business, and the company as a whole. The update work assessed changes in the former Lassila & Tikanoja Group's business operations and business environment and the significance of the changes to the previous materiality assessment carried out in 2024. A summary of the material impacts, risks and opportunities identified for the circular economy business of the current L&T, and where they focus in the value chain, is presented in the table on pp. 18-20.

L&T's material impacts on society and the environment (impact materiality) and sustainability-related risks and opportunities (financial materiality) are related to climate change (E1), biodiversity and ecosystems (E4), resource use and the circular economy (E5), and to the company's own workforce (S1) and workers in the value chain (S2). In addition, the business conduct theme (G1) is material for L&T. All of these themes are also included in L&T's current sustainability work and are linked to the company's strategy.

Impacts, risks and opportunities related to the environment

L&T's environmental impacts are largely related to the company's strategy and business models. L&T's business model promotes the circular economy in society. The services produced for customers reduce emissions and the value chain's dependence on virgin raw materials. For the customers, this is reflected in efficient waste management in which the recycling of materials is the priority, regardless

of the type of waste. At the same time, the sustainable use of natural resources is promoted and pressures on ecosystems are mitigated.

The nature-related services produced by the company, such as contaminated soil remediation projects in environmental construction, meadow restoration projects, and the removal of invasive species, have a positive impact on biodiversity. These measures support the preservation of biodiversity and improve the state of the environment, and they are a growth opportunity.

L&T's business units are dependent on energy with regard to logistics, contracting and plants, for example. This also generates a significant amount of carbon dioxide emissions. However, most of the emissions are generated in the supply chain.

Annual Report 2025

Report by the Board of Directors Sustainability Report

E

Environment

18

Annual Report 2025

Report by the Board of Directors Sustainability Report

S

Society

19

Annual Report 2025

Report by the Board of Directors Sustainability Report

G

Governance

Material sustainability topics

and sub-topics

Sub-sub-topics Impact, risk or opportunity Location in the value chain Description Time horizon (Short term, Medium term, Long term)

Corporate culture Actual positive impact across the value chain Good and transparent governance and business ethics SML

Bribery and corruption Prevention and detection, including training.

Risk own operations, upstream value chain Participation in bribery or corruption SML

20

Climate change mitigation measures are key to reducing these impacts.

The carbon handprint reveals the extent to which a company has, through conscious choices and decisions, avoided emissions and adverse environmental impacts compared to its previous operating practices. L&T's goal is to increase the positive climate impact of operations faster than the growth of net sales. The carbon handprint is L&T's entity-specific positive impact and metric.

The potential risks are related to regulation aiming to mitigate climate change, financial drivers supporting regulation and the development of the market. The achievement of L&T's climate targets depends on the development of low-emis-sion fleet technology and the development of the recycled raw material market.

Measures and targets related to biodiversity and ecosystems

L&T has identified services related to restoration and the remediation of contaminated soils as business growth areas. L&T is conducting a project to survey the nature impacts and nature value of L&T's services. The project will continue until the end of 2026. For the time being, L&T has not defined any metrics or targets for the positive nature impacts created through L&T's services. L&T is committed, through its environmental policy, to promoting the objectives set out in the EU Biodiversity Strategy. The principles for safeguarding biodiversity are defined in L&T's environmental policy. During 2026, L&T will specify its measures for the development of restoration services as part of the implementation of its growth strategy.

Impacts, risks and opportunities related to own workforce and value chain workers and business conduct

As a service sector company, our own personnel are a key resource in the implementation of the company's strategy and services. L&T's operations are also dependent on the supply chain and the services and products it produces. Through its operating methods, the company influences the well-being, occupational safety, occupational health, diversity and work practices of its own workforce and value chain workers.

L&T's actions may indirectly affect the workers of direct suppliers in the supply chain. L&T's operations depend on, for instance, subcontracting, such as transport subcontracting, which is used to supplement L&T's own logistics. Typically, subcontracted workers work on L&T's or customers' premises, particularly in logistics, environmental construction projects and process cleaning production tasks, where there may actually be an increased occupational safety risk, for example.

With regard to the value chain, discrimination and exploitation of workers can occur in service sectors that employ a large number of foreign workers. At L&T, these include the subcontracting of cleaning and property maintenance. In addition, the potential impacts may be related to inadequate working conditions, such as unclear working time entries. L&T has assessed that young and foreign workers are the most vulnerable groups in the value chain in terms of material impacts

Potential impacts are minimised through procurement agreements that take into account L&T's Supplier Code of Conduct. In addition, L&T regularly reviews occupational safety observations made at its own or customers' premises together with suppliers and their workers and takes corrective measures, if necessary.

L&T recognises that potential impacts can also occur farther in the value chain, especially in countries where working life practices or legislation are inadequate. These countries are more likely to have violations related to working conditions and human rights than non-high risk countries. Examples of such supply chains include the manufacture of L&T's workwear and the procurement of raw materials for equipment and ICT equipment.

Good governance practices form the basis for L&T's business operations. The key positive impacts of business conduct are related to L&T's good corporate culture, such as the company's ethical principles, anti-corruption and anti-bribery practices, and whistleblowing processes. The company's own policies, principles and instructions guide the practices in both its own operations and the value chain, and the actions in them strengthen the company's reliability in the eyes of customers and stakeholders.

Risks related to corruption and bribery can cause reputational and financial damage to the company. L&T uses regular training, inspections and strict rules to engage the parties. Compliance with the ethical principles offers significant opportunities for L&T. It strengthens the company's reputation as a responsible operator and creates trust among customers and stakeholders.

Measures and targets related to workers in the value chain

So far, L&T has not defined any metrics or targets for potential negative impacts related to workers in L&T's value chain. L&T has set out ethical principles concerning the health and safety of supply chain workers, as well as their fair and non-discriminatory treatment, in its Supplier Code of Conduct, to which L&T requires upstream and downstream suppliers to commit themselves. L&T has not implemented, nor does it have plans to implement, measures specifically aimed at ensuring the health and safety of value chain workers or their appropriate and non-discriminatory treatment.

Financial effects of material impacts, risks and opportunities and impact on strategy and business

The company assesses opportunities and risks annually, as well as their financial effects and risk management methods.

During the reporting period, L&T managed material impacts, risks and opportunities on its financial position, financial performance and cash flows using the company's existing risk management methods and operating principles. There were no significant financial effects from material sustainability risks during the reporting period. No adjustments related to carrying amounts are expected for these during the next financial year. The material opportunities related to the circular economy and biodiversity are related to L&T's existing service business and they have generated financial benefits for L&T during the financial year. The magnitude of the financial benefit has not been assessed in more detail. The actual financial benefits related to occupational safety have not been assessed for the financial year.

The resilience of L&T's strategy and business models to address the com-pany's material impacts, risks and opportunities is expected to be good in the upcoming strategy period 2026-2028. The company has established risk man-

agement practices, adaptability to market changes and close monitoring of the business environment. L&T seeks growth in circular economy business operations by investing in business solutions related to the circular economy of materials.

Growth is pursued by developing core services and expanding the business in Sweden, as well as possible complementary acquisitions.

The environmentally material sustainability aspects (E1, E4 and E5) are in line with L&T's strategy, which aims to mitigate climate change and biodiversity loss and promote the sustainable use of raw materials. The circular economy plays a key role in achieving these targets. L&T's strategy is also dependent on society and people, which is reflected in the impacts, risks and opportunities of L&T's own workforce (S1) and workers in the value chain (S2). L&T's aim is to provide employees with a balanced daily life in which everyone can be who they are, and to promote human rights in the supply chain. The policies concerning business conduct (G1) and the corporate culture provide the foundation for sustainable business. L&T aims for good and fair governance.

The current and anticipated effects of the company's material impacts, risks and opportunities on its business model, value chain, strategy and deci-

sion-making are subject to continuous monitoring. L&T responds to these effects by making changes to its strategy and business model as necessary. L&T has set comprehensive sustainability targets that apply to the entire value chain, especially with regard to the climate. The sustainability of the supply chain is also promoted through requirements set out in procurement agreements and their monitoring.

L&T has also described the material impacts, risks and opportunities related to climate change and own workforce and their interaction with the strategy and business model as part of the following topical ESRS standards:

• The impacts, risks and opportunities related to climate change are also described in section E1 Climate change, under disclosure requirement SBM-3 Material impacts, risks and opportunities and their interaction with the strategy and business model p. 41.

• The impacts, risks and opportunities related to own workforce are also described in section S1 Own workforce, under disclosure requirement SBM-3 Material impacts, risks and opportunities and their interaction with the strategy and business model p. 54.

IRO-1 - The process to identify and assess material impacts, risks and opportunities

L&T's double materiality assessment focused on L&T's impacts on society, the environment and governance, as well as the financial risks and opportunities associated with these impacts. The analysis is based on the ESRS sustainability topics and their sub-topics and sub-sub-topics.

In 2025, L&T's double materiality analysis was updated as internal expert work before L&T demerged into a separate listed company from the former Lassila

& Tikanoja Group. The update was carried out for the then Group as a whole, including the review of both the Group's circular economy and facility services businesses as separate entities. This Sustainability Report only presents the results of the analysis of the circular economy business operations (current L&T).

The company's sustainability, business, EHSQ, procurement, legal and human resources management from both divisions participated in the update.

The update work assessed the coverage and timeliness of the impacts, risks and opportunities arising from the company's operations identified by the former Lassila & Tikanoja Group in the previous assessment, and assessed whether there have been changes in the business environment or business model that would change the previous assessment. The update work was carried out as

a workshop. In the workshop, the expert groups reassessed the scoring of the latest double materiality analysis and supplemented the existing list of identified impacts, risks and opportunities. The materiality of the ESRS-aligned themes for L&T was analysed bi-directionally. The review was extended to L&T's value chain and its sustainability impacts.

In addition to own operations, the value chain review included contractual suppliers and waste treatment partners as well as customers. No material changes were identified in the value chain or stakeholders for 2025, so the stakeholder analysis or value chain description were not updated in connection with the update work of the double materiality analysis.

The assessment took into account the results of the human rights risk assessment conducted by the former Lassila & Tikanoja Group in 2024. With regard to the double materiality results, it has been verified that they do not conflict with the human rights assessment.

The views of key stakeholders were collected through targeted interviews. The interviews presented an updated list of material impacts, risks and opportunities for the company to the stakeholders and asked the stakeholders for their assessment of the coverage of the list. More in-depth stakeholder interviews were conducted with key suppliers, customers and other stakeholders, and the aim was to survey stakeholder sustainability expectations and potential development needs more broadly. Stakeholder views were taken into account in the scoring. Stake-holders' views on sustainability topics, impacts, risks and opportunities that are material to L&T were consistent with the company's own internal assessment.

An updated list of the company's material impacts, risks and opportunities was presented to Luotea's European Works Council, discussed by the former Lassila & Tikanoja Group's Executive Board and the Personnel and Sustainability Committee, and finally the Board of Directors confirmed the double materiality of L&T. The update process was carried out by the Group Head of Sustainability, who reported on the methods used in the process, the progress of the process and the results to the steering group assigned for the double materiality analysis three times during the process.

Impact materiality

L&T's assessment of impact materiality took into account the scale, scope and irre-mediable character of the impacts on a five-point scale, where a score of five was deemed significant for each aspect. The assessment took into account changes in potential impacts in the short term (reporting period), medium term (2-5 years) and long term (over 5 years) and examined the likelihood of occurrence of the potential impacts. The assessment took into account potential negative human rights

impacts, the severity of which takes precedence over their likelihood. The materiality

threshold was defined as a score of eight (maximum score 15), which meant that the impact would be deemed significant for the company. In addition, the results of stakeholder surveys and interviews were taken into account in the assessment.

Financial materiality

The assessment of L&T's financial effects was based on L&T's risk assessment process. The impact of risks is analysed in terms of their effects, and the assessment of the likelihood of their realisation took into account the nature of operations and the risk mitigation measures taken. The aim of the application of L&T's risk assessment process was to ensure that sustainability-related risks are identified in a similar way to the company's strategic and operational risks. Changes in the markets for recycled raw materials, the development of regulation with regard to waste management, for example (E5 Circular economy) and challenges related to the availability and turnover of labour (S1 Own workforce) have also been taken into account in L&T's strategic risks.

The assessment took into account changes in potential impacts in the short term (reporting period), medium term (2-5 years) and long term (over 5 years) and examined the likelihood of occurrence of the potential impacts. The materiality threshold was defined as a score of eight (maximum score 15), which meant that the risks and opportunities would be deemed significant for the company.

During the double materiality assessment process, L&T reviewed its impacts and dependencies as well as their links to risks and opportunities by analysing the impact of each sustainability topic on the company's business model, current risk management methods, processes and personnel. L&T has also assessed the risks and opportunities caused by changes in legislation. The assessment also took into account dependencies on natural resources, human resources and social resources.

Financial risks related to climate change mitigation are managed by the com-pany's climate-related transition plan, which includes emission reduction targets and the investments required for them. Investments in workplace safety and well-being, in turn, can improve the availability and retention of personnel, which reduces the risks arising from these factors.

Description of the processes to identify and assess material climate-related impacts, risks and opportunities

L&T's material impacts, risks and opportunities related to climate change have been assessed as part of the update of the former Lassila & Tikanoja Group's double materiality in 2025, in which the previously prepared scenario analyses were not updated.

Climate impact assessment

The assessment of the company's material impacts related to climate change mitigation is based on the company's energy consumption and the calculation of the carbon footprint and carbon handprint. L&T's management and sustainability organisation monitors the direct emissions arising from its own operations, as well as the entity-specific impact and carbon handprint, at quarterly levels. The emissions generated in the company's value chain are assessed on an annual basis.

Assessment of climate risks and opportunities

The Task Force for Climate-related Financial Disclosures (TCFD) recommendations have been applied in assessing the risks and opportunities related to climate change. The results of L&T's climate scenarios have been used as background material in assessing the impacts of changes in the environment, markets and regulation. Climate risks have been assessed in accordance with L&T's risk model in the short term (reporting period), medium term (2-5 years), and long term (over 5 years), and they were most recently updated in 2024 before the demerger of L&T into a separate listed company from the former Lassila & Tikanoja Group. The impact of risks is analysed through EBIT effects and likelihood, taking into account the nature of the risk and the existing mitigation measures. The short and medium-term horizons correspond to the time horizons applied for the company's strategic risks. The actions are described in more detail in section E1-3, p. 42.

The assessment took into account physical risks and transition risks and their impact on L&T's own personnel and business. The value chain impacts are mainly based on changes in the service offering of the businesses. Physical risks may arise from the effects of natural phenomena, such as temperature changes (chronic risk) or potential flooding (acute risk). These are expected to intensify due to climate change. Transition risks include the potential impacts of regulatory and market changes on L&T's key business areas, as well as the impacts of new technologies, particularly on the development of L&T's low-emission fleet. L&T regularly assesses climate risks as part of its risk assessment and adapts its strategy accordingly. The climate scenarios and the related assumptions have not had significant impacts on the company's financial statements or key financial figures.

Physical risks

L&T's physical risks related to climate change were assessed in the resilience analysis of the former Lassila & Tikanoja Group. Chronic climate risks, such as rising temperatures and an increase in extreme weather, have been identified as potential impacts on the company's logistics and the energy efficiency of properties. The analysis is based on IPCC's RCP scenarios (1.5°C, <2°C and 4°C) and IEA's APS, NZE2050 and STEPS scenarios, which have been mirrored to weather fluctuations in Finland and Sweden. The review covers the short-term (5 years) and long-term (until 2035) impacts.

The impacts of acute climate risks, such as flooding, on L&T's properties have been estimated to be minimal, as the sites are not located in particularly

flood-sensitive areas. The geographical review covered operations in Finland and Sweden. Based on the analysis, no significant risks were identified that would prevent the achievement of the company's climate targets.

According to L&T's assessment, the company's assets and businesses are not sensitive to these climate-related risks to a significant extent. L&T's operations are evenly distributed across Finland and Sweden, which means that operations can be temporarily relocated as necessary in the event of a disturbance, with the exception of recycling facilities. In addition, L&T's properties and movable property are insured.

Results of the double materiality analysis

High

materiality

E5

S1

Own workforce

E4

Biodiversity and

ecosystems

Resource use and

circular economy

S2

Workers in the value chain

G1

Business

conduct

E1

E3

Water and marine

resources

S4 Consumers

Climate change

and end-users

E2

Pollution

Not material

S3 Affected communities

ENVIRONMENTAL AND SOCIAL IMPACTS

15

8

Overview of the results

The double materiality assessment separately examined the impacts, risks and opportunities of each sustainability topic, sub-topic and sub-sub-topic on L&T's operations. In addition, the impacts, risks and opportunities of L&T's operations on the environment, people and society were examined for each sustainability topic, sub-topic and sub-sub-topic, on a scale of 0-15.

All sub-topics and sub-sub-topics whose score exceeded the threshold value for impact materiality or financial materiality were considered to be material topics. The threshold value was eight for both impact materiality and financial materiality. The materiality threshold is indicated by a blue background colour in the graph. In the graph, the X and Y axes take into account the maximum scores assigned to each ESRS sustainability topic, even if they consist of different sub-topics.

The average score of the impact assessment of the ESRS sustainability topics is expressed in the graph by the size of the point. This makes it possible to identify how large a proportion of the sub-topics or sub-sub-topics under each topic were identified as material in the double materiality assessment. For example, E4 Biodiversity and ecosystems is a topic that is identified as material, but the average score for the topic is relatively low, which means that only a few sub-sub-topics were identified as material in the assessment.

Colour coding

0

Low materiality

8 15

FINANCIAL EFFECTS

Society (S) Governance (G)

Transition risks

The material transition risks are related to regulatory changes that affect, in particular, the carbon neutrality goals of transport and the promotion of the circular economy, as well as potential market changes that may affect the availability of renewable fuels or the development of low-emission technologies. In L&T's risk assessment, the background factors behind regulatory risks include the price development of emission rights, bioeconomy and low-carbon economy scenarios, the EU's circular economy package, potential changes in national waste legislation, and national recycling and reuse targets. The reference framework used in the assessment was a climate scenario in which global warming can be limited to 1.5°C.

L&T has assessed the exposure and sensitivity of its businesses to identified transition events. The assessment takes into account the likelihood, scope and duration of transition risks. These transition risks are significant for L&T's materials business in particular. L&T's activities and business models are sensitive to changes in legislation, as the waste industry is subject to strong regulatory

steering. Investments made by energy sector operators, particularly in renewable fuels, or the growing adoption of new technologies in the use of heavy equipment, for example, will, in turn, influence the achievement of L&T's emission targets and the company's climate transition plan. These also indirectly affect the fulfilment of the loan terms linked to the company's climate targets.

The current targets, operating models and measures increase L&T's resilience in the changing business environment. The company has a strong market position in all of its business areas. In addition, the climate transition plan enables the effective implementation of changes. Increasing the use of renewable energy sources and sustainable raw materials, and phasing out fossil carbon, particularly in transport, will continue to be key focal points. Risk management is enhanced by assessing regulatory and market changes and reacting to them in a timely manner. The company seeks to proactively influence legislative processes through key industry advocacy organisations, for example.

Description of the processes to identify and assess material impacts, risks and opportunities related to pollution and water and marine resources

As part of the double materiality analysis of the former Lassila & Tikanoja Group, L&T's impacts on the sub-topics and sub-sub-topics of E2 Pollution and E3 Water and marine resources were also assessed. The assessment of pollution and water and marine resources took into account the location and ownership of sites. L&T's actual and potential impacts, risks and opportunities were assessed on the basis of the location, the assessment of environmental aspects related to the operations of the sites, and the environmental observations made at the sites. With regard to the value chain, the review was limited to L&T's direct suppliers and the impacts potentially related to these sectors in terms of the sustainability topic. No material impacts were identified for the most significant procurements. No separate stakeholder consultation related to these topics was organised in connection with the assessment.

Description of the processes to identify and assess material biodiversity and ecosystem-related impacts, risks, dependencies and opportunities

The material impacts, risks and opportunities related to biodiversity and ecosystems of L&T's own operations were updated in connection with the double materiality analysis before the partial demerger of the former Lassila & Tikanoja Group. The identification of environmental impacts used the company's environmental assessments, information obtained from the environmental permit process, customer feedback, particularly with regard to production sites, and geographical information on the locations of the sites in relation to valuable natural sites. L&T has consulted the affected communities regarding potential negative environmental impacts related to the sites during the environmental permit applications. No actual impacts on local communities have been identified in the consultations. All valid environmental permit decisions have been received before the partial demerger. No separate stakeholder consultation related to the sustainability topic was organised in connection with the double materiality assessment.

In 2025, the impacts and dependencies related to L&T's divisions and value chain were examined using the TNFD leap framework and the ENCORE analysis tool. The analysis clarified the understanding of the industry's nature impacts with regard to own operations and aimed to identify significant nature impacts with regard to the value chain. The review was carried out before L&T demerged from the former Lassila & Tikanoja Group into a separate listed company, but it was limited to circular economy business operations.

Based on the geographical data analysis, L&T has identified locations that are close to biodiversity-sensitive areas. With regard to the operations of sites in the vicinity of biologically sensitive areas, the impact materiality of negative impacts on the deterioration of natural habitats and the habitats of species was assessed as internal expert work based on the environmental permit entries, internal control procedures and stakeholder feedback received. Based on the assessment, it is estimated that L&T's sites have a low impact on the environment in biologically sensitive areas. No mitigating measures related to biodiversity have been imposed separately on L&T's sites by the authorities.

L&T has not assessed the physical, transition and systemic risks of the company's identified impacts and dependencies on biodiversity and ecosystems, but they have been considered indirectly as part of climate risks. Climate change is a significant driver of biodiversity loss and the deterioration of ecosystem services, on which L&T has a direct impact through its own emissions and those of its value chain. The climate risk assessment assesses the financial effects of extreme weather on the company's own operations. The deterioration of ecosystem services may also lead to an increase or intensification of extreme weather and related effects, such as flooding or droughts.

Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities

L&T identified and assessed material impacts, risks and opportunities related to resource inflows and outflows and waste as part of the double materiality analysis. L&T analysed its operations to identify and assess the actual and potential impacts, risks and opportunities in its own operations and the value chain. The material

impacts and opportunities related to resource use and the circular economy are focused on discontinued operations and are listed in the table in section ESRS 2 SBM-3, p. 28.

L&T has analysed its assets and operations to identify the actual and potential impacts, risks and opportunities in its own operations and the upstream and downstream value chain. The information used in the analysis included environmental permits concerning the company's operations, information about inflows and outflows of waste received from customers, general national and international reports and studies, and stakeholder consultations in various forums.

L&T did not separately consult the local communities around recycling plants or processing centres as part of the double materiality assessment. The company engages in regular dialogue with local residents about the environmental

impacts of its sites within the environmental permit processes for sites and regional co-operation.

Description of the processes to identify and assess material impacts, risks and opportunities related to the company's own workforce

In its double materiality assessment, L&T has identified and assessed the impacts, risks and opportunities related to its own workforce. L&T has established an understanding of the impacts and risks related to workers through, for example, regular dialogue, the identification of special groups and the assessment of occupational safety risks and observations and the human rights review carried out by the former Lassila & Tikanoja Group in 2024.

Material impacts and opportunities related to the following sub-sub-topics were identified and assessed: employment security, occupational health and safety, working hours, adequate wages and pay equality, work-life balance, freedom of association, the existence of works councils, employees' access to information, rights of consultation and participation, competence development, support for diversity and prevention of harassment, inappropriate behaviour and discrimination. These topics play a key role in L&T's strategy and business model, and they have a direct impact on the company's operations and its adaptation. The material impacts, risks and opportunities related to the company's own workforce are described in more detail in section S1 SBM-3, p. 54.

Description of the processes to identify and assess material impacts, risks and opportunities related to value chain workers

L&T has identified and assessed the material impacts, risks and opportunities concerning value chain workers as part of the double materiality assessment. The assessment was based on the results of the human rights risk assessment prepared in 2024, an assessment of the nature of L&T's subcontracting work and risks related to occupational safety, procurement co-operation and L&T's own supplier risk assessment. Material impacts related to the following sub-sub-topics were identified and assessed: occupational safety and well-being of value chain workers and discrimination against value chain workers.

L&T has identified that certain value chain workers who possess particular characteristics, who work under particular conditions, or who engage in particular activities, may be at greater risk of harm. Among workers in subcontracting,

workers with a foreign background may have inadequate language proficiency in particular, which can make it more difficult to understand and implement the

appropriate occupational safety practices. They may also have inadequate knowledge of national work practices. Young employees who lack previous work experience can also be more vulnerable to various types of violations. In addition, workers who work at L&T's or customers' premises, particularly in logistics, environmental construction projects, and process cleaning and property maintenance in production-related tasks, which may involve an actual elevated occupational safety risk, may be at risk of harm. Potential impacts may also be related to the inadequate implementation of work practices, such as unclear records of working time.

Description of the processes to identify and assess material impacts, risks and opportunities related to business conduct

The material impacts and risks identified in the double materiality assessment were related to the following sub-topics and sub-sub-topics: corporate culture and the prevention, detection and incidents of corruption and bribery. The geographical location, activities, industry and business structure of L&T's businesses have been taken into account as background data in the assessment of the related material impacts.

Corporate culture emerged as a material topic on the basis of impact materiality in the double materiality assessment. With regard to financial materiality, the prevention of corruption and bribery emerged as a material risk related to business conduct.

Updating the double materiality assessment

The double materiality assessment process is integrated into L&T's risk management process and implemented in co-operation with business-level specialists, risk management functions and financial organisations. The impacts, risks and opportunities associated with sustainability matters are assessed during the process, taking into account potential changes in the business environment.

The results of the assessment will be updated annually, and they will be discussed and approved by L&T's Group Executive Board and Board of Directors. The next update to the double materiality assessment will be carried out in 2026.

IRO-2 - Disclosure Requirements in

ESRS covered by the undertaking's sustainability

statements

The following tables provide a list of the disclosure requirements of the Sustainability Reporting Standard (ESRS) that L&T has complied with in preparing this Sustainability Report on the basis of double materiality, as well as information on the disclosure requirements that L&T has assessed as not material on the basis of double materiality. The table also includes L&T's entity-specific disclosures.

The tables can be used to navigate to information on a specific disclosure requirement in the Sustainability Report.

If L&T has not had to report information related to a specific disclosure requirement on the basis of double materiality, this is indicated by a dash. The absence of information with regard to material disclosure requirements is specified in an explanation.

SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model

IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities

Sustainability Report ESRS 2 General Disclosures, p. 17 Sustainability Report ESRS 2 General Disclosures, p. 21

Material

Material

IRO-2 Disclosure requirements in ESRS covered by the undertaking's sustainability statement Sustainability Report ESRS 2 General Disclosures, p. 25

Material

E1 ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model

Sustainability Report ESRS E1 Climate change, p. 41

Material

E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

L&T makes use of the transitional provision with regard to the required disclosures

and does not report for 2025 Material

Disclosure requirement Paragraph/included reference and page number Material/Non-material

E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model

L&T uses the "quick-fix" delegated act concerning the ESRS standard issued on 11 July 2025

and does not report for 2025 Material

E4 ESRS 2 SBM-3

Material impacts, risks and opportunities and their interaction with strategy and business model

Sustainability Report ESRS 2 General Disclosures, p. 17

Material

E4 ESRS 2 IRO-1 Description of the processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities

Sustainability Report ESRS 2 General Disclosures, p. 21

Material

E4-2 Policies related to biodiversity and ecosystems L&T uses the "quick-fix" delegated act concerning the ESRS standard issued on 11 July 2025

and does not report for 2025 Material

E4-3 Actions and resources related to biodiversity and ecosystems L&T uses the "quick-fix" delegated act concerning the ESRS standard issued on 11 July 2025

and does not report for 2025 Material

E4-4 Targets related to biodiversity and ecosystems L&T uses the "quick-fix" delegated act concerning the ESRS standard issued on 11 July 2025 and does not report for 2025

E4-5 Impact metrics related to biodiversity and ecosystems change L&T uses the "quick-fix" delegated act concerning the ESRS standard issued on 11 July 2025

and does not report for 2025

Material Material

E4-6 Anticipated financial effects from biodiversity and ecosystem-related risks and opportunities

L&T makes use of the transitional provision with regard to the required disclosures and does

not report for 2025 Material

E5-6 Anticipated financial effects of impacts, risks and opportunities related to resource use and circular economy

L&T makes use of the transitional provision with regard to the required disclosures and does

not report for 2025 Material

S1. ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model

Sustainability Report ESRS S1 Own workforce, p. 54

Material

S1-1 Policies related to own workforce Sustainability Report ESRS S1 Own workforce, p. 54 Material

S1-2 Processes for engaging with own workers and workers' representatives about impacts Sustainability Report ESRS S1 Own workforce, p. 55 Material

S1-3 Processes to remediate negative impacts and channels for L&T's own workers to raise concerns

S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions

Sustainability Report ESRS S1 Own workforce, p. 55 Sustainability Report ESRS S1 Own workforce, p. 56

Material

Material

provision 88 d and e with regard to the disclosures

business model

and does not report for 2025 and does not report for 2025 and does not report for 2025

workers, and effectiveness of those actions

and does not report for 2025

and does not report for 2025

business model

raise concerns

managing material risks and pursuing material opportunities related to affected

and managing material risks and opportunities

ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and -business model

Non-material

S4-1 Policies related to consumers and end-users - Non-material

S4-2 Processes for engaging with consumers and end-users about impacts - Non-material

S4-3 Processes to remediate negative impacts and channels for consumers and end-us- -ers to raise concerns

S4-4 Taking action on material impacts on consumers and end-users, and approaches to -managing material risks and pursuing material opportunities related to consumers

and end-users, and effectiveness of those actions

S4-5 Targets related to managing material negative impacts, advancing positive impacts, -and managing material risks and opportunities

Non-material

Non-material Non-material

opportunities

Disclosures stemming from other legislation

The following table contains all other data points derived from EU legislation listed in Appendix B of ESRS 2. The table shows where the data points can be found in our report and which data points have been assessed to be non-material on the basis of the double materiality assessment. If L&T does not yet have information related to a specific data point, it is indicated with a dash (-).

Reference to other EU legislation

ESRS 2 GOV-1 21 (d) Board's gender diversity

GOV-1 - The role of the administrative, management and supervisory

bodies, p. 10 x x

GOV-1 - The role of the administrative, management and supervisory

ESRS E1-5 40-43

Energy intensity associated with activities in high climate

impact sectors E1-5 - Energy consumption and mix, p. 43 x

Reference to other EU legislation

Reference to other EU legislation

L&T makes use of the transitional provision with regard to the required

ESRS 2 SBM-3 - S1 14 (f) Risk of incidents of forced labour

ESRS 2 SBM-3 - S1 14 (g) Risk of incidents of child labour

S1 SBM-3 - Impacts, risks and opportunities from the perspective of the

strategy and business model, p. 54 x

S1 SBM-3 - Impacts, risks and opportunities from the perspective of the

strategy and business model, p. 54 x

ESRS S1-1 20 Human rights policy commitments S1-1 - Policies related to own workforce, p. 54 x

Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1

ESRS S1-1 21

ESRS S1-1 22

ESRS S1-1 23

to 8 GOV-4 - Statement on sustainability due diligence, p. 14 x

Processes and measures for preventing trafficking in hu-

man beings S1-1 - Policies related to own workforce, p. 54 x

Workplace accident prevention policy or management

system S1-1 - Policies related to own workforce, p. 54 x

S1-3 - Processes to remediate negative impacts and channels for L&T's

ESRS S1-3 32 (c) Grievance/complaints handling mechanisms

Number of fatalities and number and rate of work-related

own workforce to raise concerns, p. 55 x

ESRS S1-14 88 (b) & (c)

accidents S1-14 - Health and safety metrics, p. 59 x x

Number of days lost to injuries, accidents, fatalities or ill-

Reference to other EU legislation

ESRS S1-17 104 (a)

Non-respect of UNGPs on Business and Human Rights

and OECD Guidelines Non-material x x

ESRS 2 SBM-3 - S2 11 (b)

Significant risk of child labour or forced labour in the value chain

L&T makes use of the transitional provision with regard to the required

disclosures x

L&T makes use of the transitional provision with regard to the required

ESRS S2-1 17 Human rights policy commitments

ESRS S2-1 18 Policies related to value chain workers

disclosures x

L&T makes use of the transitional provision with regard to the required

disclosures x

ESRS S2-1 19

Non-respect of UNGPs on Business and Human Rights

and OECD Guidelines Non-material x x

Due diligence policies on issues addressed by the

ESRS S2-1 19

fundamental International Labour Organization Conventions 1 to 8

GOV-4 - Statement on sustainability due diligence,

p. 14 x

‌EU Taxonomy

In this section, L&T discloses information on environmentally sustainable economic activities in accordance with the EU Taxonomy. The information is based on Regulation (EU) 2020/852 of the European Parliament and of the Council (Taxonomy Regulation). The Regulation contains key figures that companies are required to report on their environmentally sustainable economic activities.

The EU Taxonomy specifies six key environmental objectives on the basis of which the company's various business operations are assessed. The environmental objectives include climate change mitigation, climate change adaptation, water and marine resources, circular economy, pollution, and biodiversity and ecosystems. Lassila & Tikanoja Plc was founded on 31.12.2025. L&T has reported taxonomy-aligned, taxonomy-eligible and non-taxonomy-eligible proportions

of its business activities for three key performance indicators (turnover, operating expenditure and capital expenditure) on a carve-out basis. Carve-out based reporting is discussed in more detail in section ESRS 2 BP-1, p. 10. The company's taxonomy reporting does not use the reliefs provided by the European Commis-sion's Omnibus package.

Taxonomy alignment reflects the extent to which the company's business in question supports the environmental goals. An activity is considered to be taxonomy-aligned if it substantially contributes to one of the specified environmental objectives while doing no significant harm (DNSH) to the other objectives. In addition, the activity must comply with the criteria for minimum safeguards.

L&T's assessment

Assessments of taxonomy eligibility and taxonomy alignment have been carried out by L&T on the basis of the best interpretation of the EU Taxonomy Regulation, the Climate Delegated Act, the Complementary Climate Delegated Act and the Environmental Delegated Act, as well as the currently available guidelines issued by the European Commission.

Taxonomy eligibility has been assessed on the basis of the descriptions of economic activities and related NACE codes in accordance with the European Com-mission's delegated regulations. The taxonomy-related assessment covers turnover, capital expenditure and operating expenditure from business operations, as specified in relation to the six environmental objectives of the EU Taxonomy. L&T has no business activities related to nuclear energy or fossil natural gas.

The financial indicators related to the taxonomy are based on figures obtained from financial and ERP systems. When calculating the proportion of turnover

of taxonomy-aligned and taxonomy-eligible economic activities (note 1.2 to the financial statements), L&T takes into account revenue from services and products that have a clear connection to the identified economic activities. For capital expenditure and operating expenditure, the entries for the reporting year are reviewed and the alignment between the assessment criteria and the recorded data is assessed.

L&T's capital expenditure consists of additions in tangible fixed assets, intangible assets and right-of-use assets, including additions arising from acquisitions. (notes 3.1, 3.3 and 3.4 to the financial statements). Operating expenditure consists of non-capitalised direct expenses that are necessary to ensure the continuous and efficient operation of property, plant and equipment. These expenses include maintenance, repair and maintenance costs of equipment and buildings, short-term leases and similar expenses and other direct costs related to the maintenance of assets. Assessments of taxonomy eligibility and alignment take into account only those operating and capital expenditures that meet the technical requirements for the activities. L&T has no separate capital or operating expenditure plans for the taxonomy.

L&T reports on taxonomy at Group level. Specialists from each division and representatives of business functions have assessed whether the economic activities identified in the taxonomy meet the criteria for taxonomy alignment. The assessment is based on the activity-specific technical screening criteria described in the DNSH criteria and the Taxonomy Regulation. L&T's climate risks are described in section E1 SBM-3, p. 41.

L&T's business is regulated and requires separate environmental permits that specify environmental requirements for water, soil pollution and nature. Environmental permits apply to L&T's processing and storage areas and waste disposal plants. L&T strives to comply with all environmental requirements applicable to its operations.

L&T uses a management system that covers all of L&T's services with regard to the ISO 9001, ISO 14001 and ISO 45001 certificates. The EHSQ management

model ensures that L&T's operations comply with the permit conditions, which are monitored and reported regularly. In addition, L&T aims to manage and reduce the environmental impacts of its operations through training and technical solutions. The technical screening criteria have been reviewed in parallel to ensure that the reporting is as consistent as possible and to avoid double calculation.

Minimum safeguards

In addition to technical screening criteria, the Taxonomy Regulation provides for minimum safeguards covering labour and human rights, prevention of corruption and bribery, fair competition and taxation. At L&T, the minimum safeguards have been assessed at Group level.

L&T respects the human rights defined in the UN Declaration of Human Rights, the rights of workers of the International Labour Organisation (ILO), international conventions and the UN Guiding Principles on Business and Human Rights. In addition, L&T complies with the six steps of the OECD Guidelines for Multinational Enterprises. L&T's human rights impacts are discussed in more detail in section ESRS 2 GOV-4, p. 14.

In the prevention of corruption and bribery, L&T complies with national legislation and agreements. These principles are also documented in a separate anti-corrup-tion and anti-bribery policy, which prohibits bribery, the receipt and giving of gifts, and other unethical activities. L&T's guidelines for receiving gifts and hospitality are public and available on the company's website and intranet. The prevention of corruption and bribery is discussed in more detail in section G1-3, p. 62.

The main principles concerning taxation are described in the tax policy approved by L&T's Board of Directors. The tax policy covers all of L&T's divisions in all operating countries and applies to all employees. L&T complies with local legislation in the payment, collection, accounting and reporting of taxes. A key principle is the high-quality and timely reporting of tax forms and other statutory reports to the authorities.

L&T pays and collects taxes in the countries in which it operates and creates value, and does not shift value to low-tax jurisdictions. The pricing of intra-Group transactions complies with the applicable transfer pricing legislation, the OECD guidelines and recommendations of the tax administration. All L&T's investment and location decisions are based on business needs. Tax impacts are analysed and taken into account as part of decision-making, and business operations and group structures are reviewed on the basis of their financial content. L&T does not participate in arrangements made solely for tax reasons without a business substance.

L&T operates in Finland and Sweden, supports fair competition and complies with good business conduct and the rules of competition law in all of its business operations. All business activities undertaken by L&T either in full or in part are structurally transparent and financially justified. In its acquisition processes, L&T complies with competition law, carries out due diligence on the subjects of acquisition, and submits the legally required notifications to the competition authorities.

L&T's Code of Conduct includes basic rules on compliance with competition law and legislation. In addition, L&T provides training on competition law for employees whose role involves an identified need for more in-depth training. The purpose of the training is to help the personnel to identify situations that may be questionable or prohibited from the perspective of the rules of competition law, and to provide more detailed instructions on the course of action to take in different situations.

L&T has due diligence processes in place with regard to taxation, anti-corrup-tion, anti-bribery and fair competition. Requirements concerning human rights, labour rights and corruption have been taken into account as separate principles, included in the Code of Conduct and training. In addition, these principles have been taken into consideration in the company's procurement processes and guidelines. The Group-level policies apply to all of L&T's business operations in Finland and Sweden.

Identified taxonomy-eligible activities

The taxonomy-eligible and taxonomy-aligned activities of L&T's Environmental Services and Industrial Services divisions include, among other things, the collection and transport of waste, recovery of materials from non-hazardous waste, hazardous waste treatment, wastewater collection and treatment, sale of second-hand goods, and environmental construction services related

No

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process

to the remediation of contaminated sites and areas. These circular economy businesses include activities related to climate change mitigation 5.5 (Collection and transport of non-hazardous waste in source segregated fractions) and 5.9 (Material recovery from non-hazardous waste). Activities related to the transition to a circular economy and the prevention and recycling of waste 2.3 (Collection and transport of non-hazardous and hazardous waste), 2.7 (Non-hazardous waste sorting and material recovery) and 5.4 (Sale of second-hand goods).

Activities related to pollution prevention and control 2.1 (Collection and transport of hazardous waste), 2.2 (Hazardous waste treatment) and 2.4 (Remediation of contaminated sites and areas).

Transitional activities (nuclear power and natural gas)

A transitional activity is an economic activity that supports the transition to a climate-neutral economy and for which there are no technologically and economically feasible low-carbon alternatives. L&T does not have any taxonomy-eligible or non-taxonomy-eligible nuclear power or natural gas-related economic activities as described in the Complementary Climate Delegated Act. Consequently, Template 1: Nuclear and fossil gas-related activities (Complementary Climate Delegated Act, Annex III) is presented on the right, and templates 2-5 are omitted.

heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best No available technologies.

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,

including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety No upgrades.

No

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.

No

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.

No

The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat or cooling using fossil gaseous fuels.