Sustainability report

Sustainability Program Management System GOV-5 (Responsibility: Board of Directors)

Clarification, monitoring, analysis, and evaluation: Business units
Review: Management team
Reporting: Group Board of Directors
Prepared: 2022
Reviewed: 2024

The management system included in the sustainability program (ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ETJ+) covers all business operations and support processes of the Loiste companies. It supports the implementation of the company's goals, values, and strategy. The goal of the sustainability program is to measure and monitor transparency, good governance, and the consideration of people and the environment in accordance with applicable rules. The operational policy is part of the sustainability program.

The company's Board of Directors has established and approved the guiding policies for sustainable development, the code of ethics, other policies, and the board's rules of procedure. These policies and guidelines complement relevant legislation, the shareholder agreement, articles of association, and the City of Kajaani's group instructions and ownership policy. The board monitors the implementation of the principles set in the policies. Our strategy defines our commitment to systematic and continuous development. The aim of Loiste’s management system is to ensure the safe, sustainable, reliable, and cost-effective management of operations, products, and services, considering their full life cycle and the functionality of its own, partner, and customer processes.

The policies are reviewed regularly and updated as needed to reflect operational practices and current standards. They apply to the entire Group. Practices are monitored in business unit meetings. The implementation of the policies and the management of the system are audited internally and externally at least annually.

Policies of Loiste Group:
• Sustainability Program Operational Policy
• Risk Policy
• Procurement Policy (including supplier management)
• Corporate Governance and Control System

We operate with attention to stakeholder needs, expectations, and the value of collaboration. Our operating models are described in processes that include monitoring and measurement of our sustainability performance, meeting the requirements of quality systems, ESG frameworks, and the EU taxonomy. Loiste is committed to upholding equality and non-discrimination throughout its operations, in accordance with the UN human rights principles, ILO, and OECD guidelines. We also expect compliance with these standards from our value chain and suppliers in the context of responsible business conduct.

• Loiste companies operate responsibly and transparently in all activities.
• We assess and review double materiality in accordance with ESRS standards as part of risk management.
• We identify stakeholder needs and expectations and integrate them into operations through our processes. Key stakeholders include customers, personnel, suppliers and partners, authorities, financiers, and owners.
• We value diversity.
• We actively monitor changes in the operating environment.
• We consider legal and international agreement perspectives in our work.

Environment

• Climate change mitigation: We aim to develop our operations in a way that maximizes their positive impact on climate change mitigation.
• We promote adaptation to climate change and ensure our infrastructure is protected from its effects as effectively as possible.
• We support the sustainable use and protection of water resources and marine natural resources.
• We promote the transition to a circular economy.
• We prevent environmental degradation.
• We protect biodiversity and various ecosystems and aim to restore them. We free up land for forest growth and carbon sinks by relocating power lines along roads and by underground cabling.

Social Sustainability

We aim to be the most attractive workplace in the energy sector, composed of top professionals. At Loiste, well-being and happiness are created through freedom to influence, collaborative action and development, shared values, and the growth and progress we foster. The goal of our personnel strategy is to ensure the expertise needed to meet critical and strategic objectives during times of change, to engage and motivate people, and to provide a framework in which our professionals can continuously develop their skills as the energy sector and our needs evolve. Together, we are building a culture of trust, openness, and collaboration. We encourage experts to take responsibility.

• We develop and maintain a company culture that respects aspects such as gender, diversity, working conditions, human rights, and the respect of human rights.
• We aim to employ locally and provide training for our staff.
• We require good personnel management and maintenance of professional qualifications from our partners.
• We comply with ILO, OECD, and UN human rights principles.

Social Responsibility

We comply with the values of Loiste Group. Loiste has adopted a Code of Ethics that must be followed in all activities. Through our commitment to social responsibility, we contribute to the well-being of society. Responsibility includes statutory elements such as employee social security and occupational healthcare, as well as voluntary investments. Actions that have a positive impact on employees, stakeholders, and society generate financial added value and competitive advantage. Loiste expects its suppliers to ensure good working conditions for employees in the value chain, which we also assess in supplier evaluations.

For employees, we consider:
• Employment security
• Working hours
• Sufficient wages
• Dialogue between labor market parties
• Freedom of association, including works councils
• Collective bargaining agreements in place
• Work-life balance
• Occupational health and safety
• Child labor is prohibited
• Forced labor is prohibited
• Discrimination is prohibited
• Indigenous peoples’ rights are respected

Loiste Group’s social responsibility applies not only to its own personnel but also to the personnel of partners, contractors, and subcontractors when they work on our behalf. Responsibility also includes selecting subcontractors who take care of their own employees. We have monitored employee well-being annually since 2003 through a staff barometer survey. Since 2016, the employee survey has been conducted using the Great Place To Work method, which allows us to address potential work-related challenges at an early stage. In addition, we regularly conduct an anonymous "Mood Survey" where employees can submit open feedback or questions to management, which are addressed in staff briefings. Constructive development discussions with supervisors and opportunities for confidential feedback are considered important. We strongly support staff’s voluntary education.

Our personnel are our most important asset and resource, and we encourage and support them to:
- actively participate in planning and developing our operations
- learn to manage continuous change
- develop professionally
- seek meaningful and challenging work
- maintain their physical and mental well-being

Our goal is to be a united team whose members can work together flexibly and are willing to solve workplace challenges boldly and constructively. Our actions are guided by self-initiative and open-mindedness.

Equality and Non-Discrimination Program

Loiste is committed to promoting equality and non-discrimination in all its operations. Our goal is to be an innovative and developing work community where every employee is accepted as they are. Equality is promoted through an inclusive approach involving the entire staff. Loiste Group has an Equality and Non-Discrimination Program, which guides our operations.

Equality must be promoted systematically and with clear goals, creating conditions that do not prevent the realization of equality. The planning must identify solutions that increase gender equality. The aim of promoting equality and implementing related measures is to ensure that procedures in areas such as recruitment, task allocation, training, remuneration, employment benefits, and obligations related to work and employment relationships are genuinely non-discriminatory. This means practical efforts to promote equality.

We value individual freedom and beliefs. We respect each other equally regardless of age, gender, organizational position, or other personal characteristics. We actively provide feedback and develop various forms of recognition. We recognize and reward individual employees for significant work achievements.

Our company has a formal Equality and Non-Discrimination Program. Equality is promoted through inclusive practices involving all personnel and coordinated by the company's occupational health and safety (OHS) team.

Occupational Health and Safety

Occupational health refers to physical and mental work capacity and health. The goal of OHS activities is to maintain employee health and prevent hazards and harm caused by work and working conditions.

Occupational safety means that the physical, mental, and social working conditions at the workplace are in order. When employees have a safe environment, a functional work community, and work that is appropriately demanding, their work is meaningful and productive.

Occupational safety is a cooperative effort between the employer and employees to ensure a safe and healthy working environment.

Identification of occupational health and safety hazards, monitoring of legislation, and assessment of social risks (Responsibility: HR Manager, Occupational Safety Manager)

We promote the health, safety, and well-being of our personnel, as well as proactive and knowledge-based well-being management. Our goal is a zero-accident Loiste. Together with our staff, we ensure a safe, healthy, and productive work environment and smooth working conditions. We support the comprehensive physical, mental, and social well-being of our employees.

We take care of our employees' work ability throughout their careers and provide support in various situations.

Our activities must not pose health or safety risks to our employees or external individuals. We require the same from our service providers – that they ensure the safety and well-being of their personnel.

Occupational health and safety indicators are regularly monitored in various committees and service management meetings. More detailed descriptions are recorded in locations specified in process documentation. Loiste Group complies with relevant legislation, standards, and other applicable regulations. Occupational safety and employee representation activities are organized in accordance with the law.

Legislation is monitored through a legal system in accordance with the process and annual schedule, reviewed four times per year. The OHS committee and the HR Manager identify the most significant social and occupational health and safety risks and hazards based on collected information. This data is gathered from various measurements and feedback, as well as through personal discussions and training. For suppliers, data is collected through service management meetings and digital reporting channels. Customers may also contact customer service.

Social Aspects Related to Personnel and Stakeholders

As part of the sustainability program, we consider the following social aspects, which are covered by our practices:

• Child labor: Child labor is prohibited both in our own operations and those of our suppliers.
• Community development: We develop our community in cooperation with stakeholders.
• Customer satisfaction: We continuously improve and monitor customer satisfaction.
• Diversity, equity, and inclusion: We ensure and require the implementation and adherence to diversity, equity, and inclusion in both our own and our suppliers’ operations.
• We follow the International Labour Organization (ILO) rules in our own operations, procurement requirements, and across our value chain.
• Employee engagement: We engage employees by enabling their active participation in company development, training opportunities, and providing various employee benefits.
• Forced or compulsory labor: Forced labor is prohibited in our own operations and those of our suppliers.
• Freedom of association: Everyone has the right to freedom of association, which must also be respected by our stakeholders.
• Health and safety – community: We ensure a safe environment for the residents of our community.
• Health and safety – contractors: We require compliance with occupational health and safety guidelines.
• Health and safety – employees: We require compliance with occupational health and safety guidelines.
• Health and safety – supply chain: We require compliance with occupational health and safety guidelines.
• Health and safety – users: We ensure a safe environment for the residents of our community.
• Labor standards and working conditions: We require a safe working environment, labor standards, and proper guidance.
• Local employment: We hire local personnel and, where possible, local businesses.
• Societal corporate partnerships: We cooperate closely with other companies whenever possible.
• Stakeholder relations: We maintain ongoing dialogue with our stakeholders.

Development of Social Aspects

By considering social aspects, we can broadly create services, jobs, and well-being. These topics are addressed through personnel management, leadership, strategy, and partner management. Loiste adheres to an Equality and Non-Discrimination Program and reports monitoring results to authorities annually.

The program is based on the Group’s own starting points and meets the legal requirements set for it. The effectiveness of equality is measured using various staff surveys and statistics. Social aspects of suppliers are described in supplier requirements. Specific questions and indicators for suppliers are monitored via service management meetings and an annual digital questionnaire. The questionnaire is aligned with the ESRS standard.

Customers and residents can provide information through online forms available on our public website, in addition to direct customer contacts.

Personnel Policy

Our personnel policy is based on Loiste’s mission, vision, strategy, values, and responsible operational and leadership principles. A good employee experience is built on the consistent and uncompromising implementation of these principles.

Objectives of the Personnel Policy
• The objective of the policy is to ensure that competent and committed personnel, who understand Loiste’s direction and their own goals, provide the foundation for achieving strong and sustainable financial results.
• Our personnel policy consists of Loiste’s key principles across areas of HR management.
• The policy covers all operations within Loiste Group. Business units and teams are responsible for implementation and resourcing within their own functions.
• Our operating principles define how all Loiste employees work and collaborate. All our actions are grounded in our four core values: Customer Focus, Together We Achieve More, Joyfulness, and Responsibility.

Leadership
• No issue is too small to be discussed across teams. Providing feedback and development ideas is important and encouraged. All issues are company issues, and feedback contributes to our development.
• The cornerstones of Loiste leadership are strategy-driven management, enabling success, trust, and mutual respect.
• Performance management supports the implementation of our strategy and business goals through strong employee performance. Setting personal goals aligned with business targets, monitoring progress, providing regular feedback, and evaluating performance help motivate and engage employees. Employees are responsible for their own performance management, supported by their supervisors. Supervisors conduct regular discussions with each of their team members. Ongoing performance management and dialogue play a critical role in ensuring successful strategy execution.

Rewarding

• The core principles of our rewarding system are competitive total compensation based on performance and fair treatment of employees. The goal of rewarding is to encourage strong performance and recognize achievements. It ensures the success of the company. Rewarding practices are based on our strategy and business goals and are supported by regular salary reviews, group-wide and business-specific performance bonuses, and common employee benefits.

Competence
• Our competence development solutions are based on our strategy and business goals, aiming to guide personal learning paths and needs-based learning. Competence development lays the foundation for success at work and employee well-being.
• We ensure thorough onboarding of our employees. Employees are responsible for their own competence, and supervisors support the development of their team members’ skills.
• Development discussions play a key role in competence development. Supervisors conduct these discussions with employees at least twice a year. In addition, we provide regular feedback on job performance. We develop the competence of our supervisors to ensure high-quality leadership and supervisory work.
• When evaluating strategy and success, it is important to consider which work is done in-house and what services or resources are procured externally.

Recruitment
• We continuously develop our recruitment methods, leadership recruitment skills, and the applicant experience.
• In recruitment, we are committed to equality, non-discrimination, and selection based on factors that predict success in the role. In our hiring decisions, we emphasize energy and subject matter expertise, education, and motivation.
• We support internal career paths, aiming for diverse and long-term employment relationships that allow employees to grow and develop.
• We manage the entire employment lifecycle and succession planning on an ongoing basis.
• We develop cooperation with educational institutions to ensure a supply of new talent.

Salary and Reward Policy

Board of Directors: The company's Board of Directors oversees the implementation of the salary and reward policy and makes necessary decisions regarding compensation practices. The incentive system is updated annually and approved by the Group's Board of Directors.

1. Introduction

Loiste Group’s salary and reward policy is designed to support the company’s strategic objectives, attract and retain skilled employees, and ensure that compensation practices are fair, competitive, and transparent. The incentive system is updated annually and approved by the Group Board. Achievement of sustainability goals also affects the compensation of governing, managing, and supervisory bodies.

2. Salary Principles

Competitiveness: Our salary levels are competitive compared to the industry average. We regularly use market and salary surveys to ensure our pay is up to date.

Fairness: Compensation is based on job demands, employee competence, and performance. Job evaluation is based on the Mercer International Position Evaluation (IPE) system.

Transparency: Our salary system is clear and open to all employees. Employees are regularly informed about the principles and practices of compensation.

3. Reward Principles

Performance-based: Rewards are based on employee performance and achieved goals. Performance evaluations and target achievement metrics form the basis for rewards.

Motivation: The reward system aims to motivate employees and promote their commitment to the company. We offer various forms of rewards to meet the needs and expectations of employees.

Equity: All employees are treated equitably and without discrimination. Reward practices are consistent and fair for everyone.

Loiste’s carbon neutrality is a strategic goal for sustainable development, directed by the CEO and implemented by business management. Employees receive performance-based bonuses based on the company’s financial results and achievement of strategic goals, including sustainability targets. The sustainability strategy aims for Loiste to be carbon neutral in its own operations by 2026 and for emissions from suppliers to be below 10% by 2030. This is measured using the GRESB and CO2 indicators. Bonuses are determined 50% by financial performance and 50% by personal goals, including progress on sustainability actions.

Good Governance

Good governance means that all parties are treated equally and statutory rights are recognized. Owners are encouraged to participate in the company’s activities, and they receive regular and accurate reporting on the organization’s financial situation. In addition, good governance involves the guidance and oversight by the organization’s governing bodies and accountability.

Our oversight responsibilities cover the timely and accurate reporting of financial information as well as auditing, internal control, risk management, compliance with laws and regulations, and ensuring that management and governance practices are properly arranged.

Business managers are responsible for overseeing impacts, risks, and opportunities. The organization’s group-level management team compiles information and, supported by the ESG Controller, reports to the group’s board of directors. Actions reflecting the impacts, risks, and opportunities are described in the corporate governance model, which outlines the business managers’ authority in relation to subsidiaries. CEOs of the subsidiaries seek investment decisions from the group’s board of directors. Business management is responsible for updating the policies. They are supported by the ESG Controller.

The administrative, managerial, and supervisory bodies decide that, in order to monitor sustainability matters, an external specialist will be used to support the group’s ESG Controller. Appropriate skills and expertise are developed through training and internal guidance meetings on sustainability within the group.
Representatives of the business units regularly review sustainability issues in supplier service management meetings in accordance with the procurement policy guidelines. Continuous orientation and guidance ensure that these skills and expertise relate to the company’s material impacts, risks, and opportunities.

Administration must ensure independence, cybersecurity, data protection, authorizations, remuneration methods, and the identification and prevention of conflicts of interest. Any significant conflicts of interest related to our business are sufficiently examined and acted upon if necessary. We require good governance from our partners as well and promote the realization of good governance throughout our value chain. We reserve sufficient resources and tools to carry out our operations in the manner we desire, as well as to develop our operations and competence.
We engage, encourage, and commit our own employees and those of our partners to improve efficiency, occupational safety and well-being, environmental impact, and energy efficiency.
In new investments, we adopt the best and most reliable available technical and financial solutions. We guide our customers to act responsibly in decisions affecting safety, the environment, and energy efficiency. We require our partners to commit to our practices and policies. We support the development of our partners’ operations and management, and improve the performance of the entire network from the perspectives of quality, efficiency, safety, environmental impact, and energy efficiency. Our management system meets the requirements of the ISO 9001 quality management system, ISO 14001 environmental management system, ISO 45001 occupational health and safety management system, and the ETJ+ energy efficiency system.

Our responsibility program includes the following practices related to governance:
• Audit committee structure/independence: Auditors are independent of the company.
• Board composition: The Board is elected by the General Meeting, and Board members are not employed by the company. We require Board members to confirm they and their family members have no commitments to the group or its subsidiaries.
• Board’s ESG oversight: The Board approves policies and receives reports on the implementation of the strategy.
• Bribery and corruption: Bribery is prohibited, and ethical guidelines must be followed.
• Remuneration committee structure/independence: The remuneration committee represents different stakeholders, and no committee member may be someone who might receive remuneration.
• Conflicts of interest: Conflicts of interest are prohibited and are also addressed in the procurement policy.
• Cybersecurity: A designated individual is responsible for data protection and information security for the entire group in accordance with NIS2 rules.
• Data protection and privacy: We comply with the legislation.
• Delegation of authority: We follow a multi-layered approval process concerning authority.
• Management remuneration: The group’s Board of Directors decides on executive remuneration.
• Fraud: Fraud is prohibited and criminalized.
• Independence of the Chairman of the Board: The Board is elected by the General Meeting, and Board members are not employed by the company. The Chairman is elected by the Board.
• Lobbying activities: Lobbying is prohibited, and ethical guidelines must be followed.
• Political contributions: Political activities and affiliations are prohibited.
• Shareholder rights: Shareholder rights are defined in the agreements.
• Whistleblowing protection: Whistleblower protection is in place, and a reporting channel is available.

Quality Management as Part of the Operating Policy

As part of Loiste’s responsibility program, quality management creates a common foundation for quality work in our various business operations. We address the elements of quality management as part of all business-related processes, from procurement to monitoring.

Quality management includes 6 basic elements:

1. The starting point is the needs and expectations of our customers, whose fulfillment is essential for Loiste’s success.
2. We keep Loiste’s assets reliable and available.
3. In our operations, we comply with Loiste’s ethical principles, current regulations, and values.
4. A competent and motivated staff is a basic prerequisite for our operations, and we want to be the most attractive workplace in the field.
5. We monitor and measure the quality of our operations and are committed to continuous improvement.
6. We extend the work in accordance with quality management to our partners as well and expect the same from them.

The implementation of quality management is measured at various times based on the areas defined in the indicators.

Development of Governance

The task of administrative services is to support the boards and business management of its client companies in finance, economics, information, and HR management, as well as in potential corporate arrangements. Its task is also to provide personnel and communication services to its clients to an agreed extent, and to coordinate competence development and project management.

In addition, in collaboration with the boards, management teams, business management, and experts of different companies, it coordinates the development and maintenance of the Loiste companies’ business ecosystem. It is also responsible, to an agreed extent, for coordinating development work related to management and quality systems, as well as the group’s information management (quality, environmental, occupational health and safety, information and cyber security, and corporate responsibility activities).

We are also developing administrative information access within our supplier value chain. We collect the data required by supplier requirements both in service management meetings and through a distributed online survey. The survey form complies with the ESRS standard.

Statutory and Regulatory Requirements and Permit Conditions (Responsibility: CEO and ESG Controller)

Legislative monitoring and other requirements for complying with regulatory guidelines are observed in conjunction with operational activities and committees. The committees report to the business units and the management team.
Business units monitor the development of the legislation relevant to their respective business areas and are responsible for compliance with the legislation. This takes place by actively participating in the preparatory bodies of the industry association and by distributing materials related to changes in legislation within the organization as received from the industry association. In addition, legislative monitoring services are used, and at least once a year, the extended management team reviews any changes in legislation and how those changes will be taken into account in operations.

Emergency, Disruption, and Accident Situations (Responsibility: Director in Charge of Continuity Management)

In crisis situations, the separate crisis plan of Loiste Oy’s business companies is followed. The continuity management group reviews the up-to-dateness of the crisis plan for Loiste Oy’s business companies.

Emergency, disruption, and accident situations related to the business are taken into account in the operating procedures of the business units. Identifying and providing instructions for these situations is the responsibility of the business unit.

Emergency, disruption, and accident situations related to properties are addressed in the rescue plan. The rescue plan has been reviewed with the personnel by an external trainer.

Statutory training is monitored by the business operations and arranged in cooperation with the HR unit.

At least 5% of personnel must have completed first aid training. The HR unit is responsible for organizing this training.

Committees

Various committees ensure and prepare compliance with standards, which is reflected in the day-to-day operations of all our business units. The role of the committees is to ensure that strategy and policies are taken into account in processes and to monitor the set operational quality indicators. The committees forward information within the organization using agreed procedures. The work of the committees and management is also evaluated through internal audits. The monitoring of processes is addressed in different committees:

• Environment and Energy Efficiency and OHS Committee, as well as Continuity Management
• Data Protection Working Group
• Service Management and Steering Groups

Target Programs and Measures

Target programs are set in the business units, which are approved by the business units and the group management. The follow-up of the target programs is carried out in various committees using indicators. The committees further share information for use by different business organizations and verify the indicators as agreed.

Environment and Energy Efficiency

The company’s goal is to improve energy efficiency and make environmentally friendly choices across its different business operations. We pay attention to waste management and final disposal, particularly focusing on hazardous waste and minimizing its generation. We measure and monitor proper handling of waste.

The basic principle of our environmental and energy policy is to ensure responsible business activities from an environmental perspective. The policy also aims to care for the environment and minimize greenhouse gas emissions that contribute to climate change. The environmental and energy efficiency laws and regulations form the minimum requirements for our operations, which we supplement in accordance with the EU taxonomy and EU-level directive requirements.

We use renewable energy sources as much as possible in heat and electricity production. In energy production, we strive for solutions that promote sustainable development and support energy efficiency and the use of renewable energy sources. In our business operations, we also take into account energy-saving measures.

We promote the efficient use of energy both in our own operations and those of our customers. We maintain the competence of our personnel in environmental and energy efficiency matters. We consider environmental and energy efficiency when planning new investments. Our public website provides guidance on questions related to energy efficiency for our customers. We pay attention to continuous risk management. We regularly communicate about our environmental and energy efficiency measures.

In terms of water usage in business processes, we take environmental impacts into account and improve water-related energy efficiency while minimizing water losses. Our responsibility extends to water usage, its availability, and water quality. We aim to minimize water consumption in properties and reduce wastewater generation.

Regarding environmental risks, we engage in preventive measures. However, if an environmental incident occurs despite all preventive actions, we strive to mitigate its effects as quickly as possible, contact the relevant authorities, and openly communicate the development of the situation.

Organization of Environmental Management

The impacts on the environment, as well as objectives and measurements, are monitored by the Environment and Energy Efficiency Group, which reports to the business units and management team. The management team includes representatives from each business unit, group governance, and company management.

Identifying Environmental Aspects and Significant Impacts (Responsibility: Environmental Manager and ESG Controller)

Information is reviewed and updated if necessary in meetings held four times a year, and the results are reported to the management team. The aim is to identify the most significant interfaces where the company’s operations affect the environment. The assessment of these aspects is also carried out when there are significant changes in operations or in the surrounding society. Dialogue regarding impact assessment is also conducted with stakeholders.

Significant Environmental Impacts

Based on environmental aspects, the management team evaluates the significance of environmental impacts on both the business and the environment. These evaluations form the basis for preparing goals and objectives to be approved.

Environmental Responsibilities

Environmental responsibilities and environmental permits are addressed, as necessary, in the business units’ operating instructions in the legal guidance portal and other internal channels for each business unit.

ETJ, i.e., the Energy Efficiency System

ETJ+ (the Energy Efficiency System) is maintained and monitored by the Environment and Energy Efficiency Committee. Loiste companies are part of the energy efficiency agreement.

Corrective and Preventive Actions, and Identifying Opportunities

Corrective Actions

Corrective actions for processes and operations are initiated by the person responsible, within the scope of their authority, based on feedback, deviations, or other indications received. If necessary, the need for action is forwarded to development groups or management teams for consideration.

Preventive Actions and Identifying Opportunities

Preventive actions for processes and operations are initiated based on risk assessments. The actions are initiated by the person responsible, within the scope of their authority. If necessary, the need for action is forwarded to development groups or management teams for consideration. The development groups, management team, and process owners assess possibilities for improvement in relation to identified risks.

Monitoring and Improving Operations

Management Team Work

Management Team

Meets twice a month. No meeting is held in July. The management team handles matters related to Loiste’s operational management. The operational management reports to the group’s Board of Directors.

Four times a year, meetings address planning and monitoring of quality, environmental, and OHS issues, with an emphasis on HR-related matters. In addition to the aforementioned topics, these meetings cover the planning and monitoring of owner and customer perspectives as well as process development and HR matters across the business units.

Composition: Business unit managers, HR manager, and financial controllers. Individuals responsible for sustainability, IT, and HR matters are separately invited regarding those areas.

Environment and Energy Efficiency, OHS Group, and Continuity Management Group

Meets four times a year according to a predetermined agenda. Preparation work related to environmental issues is the responsibility of the Environment and Energy Efficiency Group. The group’s tasks include:
• Creating and maintaining the energy policy
• Defining energy objectives and targets
• Defining targets for energy and site audits
• Using the ETJ+ energy management system in compliance with its requirements
• Reducing emissions and monitoring the achievement of sustainable development and CO2 neutrality
• Continuity management controls and monitoring in business units

This committee, combined, also acts as an advisory body to the management team, with tasks related to the planning, monitoring, and development of HR and OHS matters. Meeting materials are available on the Teams channel. All meetings are documented.

Monitoring, developing, and reporting on continuity management issues to the management team come separately from the business units.

Business Unit Meetings

A steering and development group meeting is held monthly. In addition, various development or project group meetings are conducted.

Management Review

Purpose
• The purpose of the reviews is to provide essential information about the group’s operations and development direction, as well as the suitability of the management system for guiding the group’s activities.
• The goal of the reviews is to identify key development needs and make decisions on corrective actions.

Scope
• The management team addresses the entire group’s operations at the group level. Management reviews focus only on issues relevant to the company’s operations.

Timing of Reviews
• Reviews are conducted once a year, around September-October, in conjunction with the internal audit.

Conducting the Review
• Reviews are carried out according to an agenda and annual plan.
• Successful reviews require thorough preparation.
• Minutes are taken of the review meetings and made available to all personnel.

Stakeholders

Cooperation with stakeholders affected by our activities is crucial for the company’s ongoing supplier evaluation process and for assessing material sustainability issues.

Resource Management

Personnel (Responsibility: CEO, HR Manager)

• Personnel in permanent employment within the group fall under the HR department.
• We may also employ fixed-term workers, trainees, and students as needed and when possible. Consultative labor is also used when necessary.
• The need for human resources is determined by the business management.

Personnel Competence Requirements and Development

Factors that affect the development of personnel competence include, for example:
• Changes in the industry
• General changes in society
• Technological advancements
• Changes in age structure
• Changes in corporate structure

Additional training needs required by the business are assessed in several ways, including:
• Statutory requirements
• Competence needs identified in performance reviews
• Needs arising from business strategies and goals
• Needs identified in audits

The impact of competence development is evaluated using various operational indicators.

Planning Work Practices and Tasks
Business management plans work practices, which are documented in the management system. The planning of tasks is carried out by business managers. In task planning, we consider both business needs and the employees’ personal attributes.

Salary, Incentive, and Recognition Procedures

Salary, incentive, and recognition procedures are described in our processes and internal documentation on the Intranet.

Compensation Policy

Group companies follow the applicable collective labor agreement. Salary increases are implemented at least in line with national wage agreements. The salary levels of different employee groups are reviewed annually by the CEO, unit managers, the HR manager, and the representative of the respective employee group. A performance-based incentive system is in use.

Necessary Information, Availability, Maintenance, and Protection (Responsibility: IT Manager)

General

Information essential to the business is produced and stored in various IT systems. In addition, important data is stored, for example, on paper, in recordings, and in images. The handling of records and documents follows the document management guidelines described in the operating procedures.

Protection of Documents and Records

Paper documents are stored in a separate fireproof archive area with controlled access.

Other recorded materials are stored in a fireproof location and, wherever possible, converted into electronic format. Such records include drawings, audio recordings, slides, photos, videos, etc.

Protection of Electronically Stored Data

Physical protection, access control, burglary protection, and fire alarms are described in separate operating procedures. External threats to data are addressed through firewall protection of data communications. The IT department is responsible for this implementation.

Measurement, Analysis, and Improvement (Responsibility: CEO)

Monitoring, Measurements, and Operational Results

Day-to-day operations are carried out by company personnel in cooperation with their supervisors. The supervisors’ and other responsible persons’ job descriptions include daily monitoring and oversight within their respective areas of responsibility. A more detailed description of daily oversight is provided in the operating procedures and processes for each area of responsibility and process.

Monthly, or according to another defined schedule, the measurement results for the critical success factors of each area of responsibility are reviewed in business and support unit meetings and collectively at the management team meetings for Loiste Oy’s business companies.

The quality of telephone services delivered by customer service is monitored by the service provider. A detailed description of this process is found in the customer service process descriptions.

The results of quality assessments are analyzed by the person responsible for customer service (for operational monitoring and development).

Supervisors’ and other responsible persons’ job descriptions include guiding personnel and developing competence within their area of responsibility. In addition to ensuring that work tasks proceed smoothly, supervisors must monitor their staff’s well-being and ensure that occupational health and safety objectives are met. They are supported in this work by their own supervisors, the group’s CEO, the HR manager, the group’s occupational health and safety guidelines, and the management team. Employee well-being is regularly monitored through measures such as staff barometers and workplace climate surveys.

The entire staff contributes to the development of products, services, and processes within their own areas of responsibility. Targets set for products and services, as well as the indicators used to track performance, are described in the operating and work instructions of each business and support unit.

Process performance is monitored daily by the individuals responsible. Monthly, they report to their supervisor or the business unit’s management team on progress toward process targets using the indicators described in the process cards.

Regular service management and review meetings are held with the most significant partners and suppliers to assess and develop the collaboration. For other suppliers and partners, monitoring and development of their performance is the responsibility of the individual who uses their services.

With the assistance of their supervisors, the responsible individuals must each ensure that the environmental objectives set are achieved. At the group level, the monitoring and guidance of environmental objectives are carried out by the quality management team.

Data Analysis, Identifying Opportunities, and Improvement

Data analysis and corrective actions are the responsibility of the respective business units. If needed, issues are addressed in the group’s management team. Procedures for handling any non-conforming products or services are described in the operating procedures. Business units decide on their own development projects based on their objectives and goals.

Joint development projects that involve multiple business units and support services are initiated based on a decision by the group’s management team.

Assessments

Internal Assessments/Audits
We monitor our operational level and compliance with the management system requirements through internal assessments. The assessment team consists of an external evaluator, a process owner, and the ESG Controller. This ensures that sufficient time resources are allocated to the people involved for conducting the assessment properly. We regularly monitor operational levels and compliance with the management system requirements through both internal and external audits.

The purpose of an internal assessment is to inform company management about any development needs within the management system and processes. In addition, the assessor’s role includes a consultative aspect to help promote effective and high-quality operations in every possible way.

The internal assessment program is available to all employees internally.

External Surveillance Evaluation/Audit
An external surveillance evaluation is conducted once a year according to the plan provided by the external evaluator. The ESG Controller handles the practical arrangements for the surveillance evaluation. The documentation of the external surveillance evaluation is stored internally for all personnel to access. Auditing is performed once a year according to the schedule and audit program provided by the external auditor.

Risk Assessments
Risk assessments are performed as part of daily work under supervisory duties. Any identified risks must be reported without delay to business management. Risk assessments are then conducted by the business units and/or the group’s management team. Related documentation is attached to the minutes of the management team meetings. The company has a separate risk policy.