Neles Oyj : GRI supplement 2021

GRI supplement 2021

ANNUAL REPORT 2021

KEY PERFORMANCE INDICATORS

GRI CONTENT

INDEPENDENT ASSURANCE REPORT

Who are we?

Neles is one of the leading providers of mission-critical flow control solutions and services for process industries. With our global team of experts and innovative solutions, we help our customers to improve their process performance and ensure the safe flow of materials. Neles is listed on the Nasdaq Helsinki in Finland and had sales of about EUR 611 million in 2021. Neles employs about 2,950 people in approximately 40 countries.

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ANNUAL REPORT 2021

KEY PERFORMANCE INDICATORS

GRI CONTENT

INDEPENDENT ASSURANCE REPORT

GRI supplement 2021

This is the GRI Supplement for Neles' 2021 Annual	About this GRI Supplement
Report. The GRI Supplement includes the independent	Neles Corporation ("Neles") publishes its sustainability data annually. The quantitative data
practitioner's assurance report.
		for 2021 contained in this supplement has been prepared in accordance with GRI Standards:
					Core option. Key performance indicators presented in this report are Metso's Valves
					Business Area from 2019 - June 30, 2020, and Neles Group's from July 1, 2020 - December
					31, 2021.
					The scope of reporting is all Group companies of Neles Corporation ("Neles Group")
					unless otherwise stated. It excludes associated companies and joint ventures. Supplier-
					related information includes spending on local suppliers, supplier sustainability audits, the
GRI supplement 2021. . . . . . . . . . . . . . . . . . .	. . . . . . . .	.	. .3 . . . .	Lost Time Incident Frequency (LTIF) of contractors and supervised workers, and the CO₂
Our year 2021 . . . . . . . . . . . . . . . . .	. . . .	. .	. . .4 . . . . . . . . . . .	emissions of purchased goods and services. The sustainability data is presented at the
Neles Group level unless otherwise stated.
Sustainability governance.. . . . .	. . . . . . . .	. . . . . 6
The GRI reporting principles for defining report content and report quality, and the GRI
Creating value. . . . . . . . . . . . . . . . . . . . . . . .			.	. .7 . . . .
101 Foundation Standard have been taken into consideration in producing the sustainability-­
Our approach to sustainability. . . . .	. . . . . . . . .	. . . . .8 . . . . . .	related content.
Our sustainability agenda. . . . . . . . . .	. . . . . . . .	. .	. . . 9. . . . . . .	The sustainability data is presented in various sections of this report, and key figures are
Neles' stakeholders. . . . . . . . . . .	. . . . . .	. . . . 10. . . . . . . . . .	summarized in conjunction with the "GRI Content Index" and "key performance indicators."
DNV Business Assurance Finland Oy Ab, an independent third party, has provided limited
Key performance indicators. . . . .				. .11. .
. . . . . . . .	.	assurance on the sustainability information disclosed in Neles' 2021 Annual Report. The
GRI Content Index . . . . . . . . . . . . . . . . .	. . . . . .	. . . .27. . . . . . . . . .	scope of the assured information is indicated in the independent assurance report on pages
General Disclosures. . . . . . . . . . . . . . . . . .	. . . . .	. . . . 27. . . . . . . .	33-34 of this report.
Topic-specific Disclosures . . . . . . . . .	. . . . . . . .	. .	.	. 29. . . . . . . .
Management Approach Disclosures. . . . . . . . . .	. .	.	. 31. . . . .
Independent Limited Assurance Report to the
Management of Neles Corporation. . . . . . . . . . .	. . . . .33. . . .

Contents

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ANNUAL REPORT 2021

KEY PERFORMANCE INDICATORS

GRI CONTENT

INDEPENDENT ASSURANCE REPORT

Our year 2021

Dealing with COVID-19

The safety of our employees has been Neles' number one priority throughout the pandemic. Neles has complied with local laws and regulations regarding COVID-19 restrictions, social distancing, wearing masks, and advising on good hand hygiene practices. Our employees have worked remotely whenever possible and, if present in Neles' facilities, they have taken rapid antigen tests to prevent exposing colleagues to the coronavirus.

In some countries, such as India and Brazil, the pandemic escalated into a humanitarian crisis and affected our operations. In March 2021, as a result

of multiple suspected and confirmed infections among Neles employees working in the Sorocaba plant, the local management took rapid safety measures and closed all operational activities for one week. More about Neles' humanitarian aid on page 17-18.

Hitting safety records

Neles is constantly focused on work safety, and employees embrace safety culture every day. As a result, our production sites in India, South Korea, Brazil and Finland made record-breaking achievements in the field of occupational safety. In 2021 our teams in Vadodara, India, and

in Sorocaba, Brazil celebrated a milestone of four accident-free years. Our operations in Ambernath, India, and in Vantaa, Finland hit 1,000 accident-free days, and Neles' plant in Chungju, South Korea achieved the remarkable milestone of seven accident-free years. These examples show that health and safety is our top priority and hitting all-time high safety records does not happen by coincidence. More about health and safety on page 21.

Winner of the Responsible Summer Job 2021 campaign

Neles took first place in the Responsible Summer Job 2021 campaign that evaluated more than 500 summer job providers in Finland. Organized by Oikotie Työpaikat, the campaign selected the winning companies based on feedback collected from summer trainees. The employers were rated based on six principles of a good summer job experience: good application experience, meaningful work, introduction and guidance, fairness and equality, reasonable pay and written contract, and testimonial. Neles was a strong performer in all six areas of the principles of a good summer job experience. The candidates especially appreciated the application phase, as well as the introduction and guidance phase, which were rated the best in the category. Neles offers summer traineeships in several fields, both in manufacturing and offices.

More about apprenticeships on page 17.

Supporting environmental transparency by joining CDP

Neles reported its environmental data through the CDP global disclosure platform for the first time in 2021. Along with more than 13,000 companies and

1,100 cities, states, and regions worldwide, we shared the impact of our operations on climate change. The CDP reporting system measures and manages environmental impacts globally and tracks progress towards building a sustainable economy. Disclosing our environmental impact is part of our long-term commitment to environmentally responsible business practices. We believe that environmental transparency is vital in building sustainable business and creating a sustainable future for our planet.

Vantaa plant's rooftop gets equipped with solar panels

As part of our efforts to reduce CO2 emissions, Neles installed a 900-kWp solar power system to the rooftop of the Vantaa plant.

The 2,250 solar panels that were put into use in November 2021 produce more than 783,000 kWh of electricity annually. By using the electricity generated by the panels in our operations, we can reduce our carbon emissions by approximately 110 tons per year. This is in line with our commitment to reduce CO2 emissions by 25% in our production by the year 2030.

More about Environment on page 13-16.

Our year

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ANNUAL REPORT 2021

KEY PERFORMANCE INDICATORS

GRI CONTENT

INDEPENDENT ASSURANCE REPORT

Sustainability and HSEQ targets

TopicTargetProgress in 2021

HEALTH AND SAFETY

Accident rate	Solid safety culture towards zero harm	LTIF remained at 1.3 (1.3 in 2020) and TRIF decreased to 3.7 (4.7 in 2020)
		Neles' plants in Vantaa and Ambernath reached the milestone of 1,000 days without incidents
		leading to non-working days. Neles' Supply Center in Vadodara, India, and in Sorocaba, Brazil, hit the
		record of 4 years without accidents. Neles' plant in Chungju, South Korea, reached an all-time high
		safety record of 7 accident-free years.
Safety as part of everyday work life	Individual HSE target of 2 risk observations per employee, and	65% of employees completed the target of 2 or more risk observations (55% in 2020)
	manager target of one safety conversation every quarter	75% of managers conducted one safety conversation every quarter (compared to 73% in 2020).
	Regular HSE audits and corrective actions	74% of corrective actions were completed within 90 days of event occurrence to prevent the injuries
		from recurring. 9 production plants and 10 service locations were audited for HSE.
Training and awareness	8 hours of HSE training per employee	Meeting Neles' minimum safety standards and completing the safety training are mandatory for all
		employees.
R&D	Product safety always covered	Product safety included in 100% of R&D projects.

ENVIRONMENT

Energy consumption	Reduction of energy consumption for each factory	12 TJ reduction in energy consumption in own operations since baseline 2019. Partly explained by
		factories closed due to the COVID-19 pandemic.
Reduction of water and waste	Reduction of water and waste for each factory	Since 2019, water consumption was reduced by 4%, and waste increased by 1%.
Reduction of emissions (2019 baseline)	Logistics: -20% CO2 by 2025	Logistics: 18% reduction since 2019 baseline (4,879 tCO2)
	Production: -25% CO2 by 2030	Production: 12% reduction since 2019 baseline (0.16 tCO2)
R&D	Sustainability targets for R&D	Sustainability targets included in 100% of R&D projects

SOCIETY AND PEOPLE

Supplier assessments and audits	Sustainability assessments conducted on 95% of suppliers in	3 supplier sustainability audits conducted by an independent auditor, 18 supplier sustainability audits
	higher risk areas by 2025	by Neles' own, internal assessment team
Supplier Code of Conduct	Top 90% of suppliers in terms of spend sign the Supplier	56% of suppliers had signed the Supplier Code of Conduct by the end of 2021
	Code of Conduct by 2025
Reduction of emissions	Top 20% of suppliers in terms of spend set emission targets	22% of our suppliers had set emission reduction targets in 2021
	by 2025
Code of Conduct	All employees trained biennially	By the end of December 2021, 87% of employees had taken the Neles Code of Conduct training
		within the past two years

Our year

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