GOVERNANCE AND SUSTAINABILITY OVERSIGHT

Board of directors and governance structure

The Board of Directors at FORCIT comprises experienced professionals with diverse industry backgrounds, ensuring comprehensive oversight and strategic direction. Board members contribute valuable expertise across various sectors, strengthening corporate governance and business sustainability. Saila Savolainen, Chief Sustainability Officer (CSO), leads sustainability work within the Group as a member of FLT (Forcit Leadership Team). Her role focuses on integrating sustainability into FORCIT’s strategic framework, ensuring compliance with ESG regulations, and driving responsible business practices across all operations.

FORCIT’s Corporate Governance Guidelines and Approval Grid define the responsibilities of executive and non-executive roles, providing a clear framework for corporate oversight.

Sustainability reporting and data management

The Sustainability team is responsible for managing and reporting sustainability data to Group Finance and the management team. Group Finance integrates this data into reports presented to the Board of Directors. Further governance controls and reporting procedures are under development to strengthen oversight and transparency.

Target setting and performance monitoring

FORCIT establishes annual sustainability targets and key performance indicators (KPIs) that are strategically aligned with the company’s overarching goals. These targets are initially proposed by management and subsequently approved by the Board of Directors. Once implemented, they are subject to monthly monitoring and reporting by the management team. Oversight and supervision of progress rest with the Board of Directors, ensuring accountability and strategic alignment at the highest level of governance.

Training and knowledge development

Until recently, FORCIT did not maintain a standardized procedure for delivering sustainability-related training. In response to evolving regulatory demands and emerging industry trends, the company has now introduced several targeted initiatives to build internal capacity. These include dedicated management training on corporate responsibility and ESG compliance, covering topics such as the Corporate Sustainability Reporting Directive (CSRD), Disclosure on Management Approach (DMA), responsible procurement practices, and roadmap development. Additionally, the Chief Sustainability Officer (CSO) has received specialized sustainability training to support strategic leadership. To further strengthen expertise, FORCIT has also prioritized the recruitment of both recent graduates and experienced professionals with sustainability-focused backgrounds.

The CSO presents annual status reports to the Board of Directors and plays an active role in the The Group Management Team (FORCIT Leadership Team) preparing sustainability topics for discussion multiple times per year. The CSO is also a member of Explosives Leadership Team, ensuring direct integration of sustainability considerations into operational decision-making.

The Group Management Team (FORCIT Leadership Team) consists of three (3) Business Unit Leaders, Group CEO, CFO, CSO and CHRO. These are FORCITs executive members.

The Board consists of the Chairman and 5 non-executive members.

Of the non-executive Board members all are male, i.e. 100%, however diverse with regards to age and nationality.

Out of the six (6) board members, four (4) are independent, i.e. 67 % of total board members. Three (3) nationalities are represented at Board level. The age of the board members spans from 39 to 65 years old.

HSEQ governance and sustainability monitoring

The Health, Safety, Environment, and Quality (HSEQ) organization regularly monitors sustainability matters through routine HSEQ committee meetings. Sustainability-related issues, key performance indicators (KPIs), and other relevant topics are reported monthly to both Group and Business Unit (BU) leadership teams to ensure continuous oversight and alignment with corporate objectives.

Sustainability is a core element of FORCIT Group’s corporate strategy. The sustainability organization actively participates in the preparation of all major transactions, technical risk assessments , and risk management processes to integrate sustainability considerations at every level of decision-making.

Key documentation and assessment processes include:

• Risk assessment documentation

• IMS safety observations

• Workplace assessments conducted by occupational health organizations

• Risk surveys conducted by insurance companies

• Internal audits’ memos (Safety rounds) and authority inspections’ memos

Safety and sustainability performance metrics

FORCIT Group has established safety and sustainability performance targets for employees at all levels:

Safety targets

• General Safety Target: Lost Time Injury Frequency (LTIF) applies to all whitecollar employees.

• Role-Specific Safety Targets: Employees with safety responsibilities have annual personal safety targets, which may include:

• Conducting safety rounds

• Developing risk assessment processes

• Enhancing change management procedures

Impact on internal practices

FORCIT’s knowledge-building efforts have had a direct impact on:

• Internal operations, including the development of sustainability indicators

• Regulatory compliance, ensuring the organization meets evolving legal and ESG requirements

• Procurement practices, reinforcing responsible sourcing policies

• Product development projects, incorporating sustainability considerations into R&D initiatives

• Technical applications and improvements driving safer and emission-free production

Sustainability reporting and incentive structures

The Sustainability team is responsible for managing and reporting sustainability data to Group Finance and the management team. Group Finance integrates this data into reports presented to the Board of Directors. A unified safety target has been integrated into the incentive schemes for all white-collar employees, promoting a shared commitment to safe practices. In addition, employees holding specific safety-related responsibilities receive individualized safety targets within their incentive structures. These personalized goals may include the completion of safety audits, conducting risk assessments, or advancing safety-related process improvements.

General sustainability targets are reviewed and approved by the FORCIT Group Leadership Team and are updated as needed. Individual targets are set by the heads of Business Units or Group functions, ensuring relevance to operational roles. The incentive program allocates 10% of the common sustainability target to all white-collar employees, with role-specific personal safety targets contributing an additional up to 30%, depending on the position and responsibilities.

Sustainability reporting and risk assessment

Historically, FORCIT Group has voluntarily published sustainability reports without strictly adhering to standardized reporting frameworks. Consequently, a formal risk assessment process specific reporting has not previously been required. Nevertheless, certain sustainability-related data is submitted annually to authorities for compliance purposes, ensuring its reliability. All numerical data is and backed by documentation stored with in the company’s centralized system (CSM).

FORCIT’s adherence to ISO 9001 and ISO 14001 standards further ensures management and reporting processes meet rigorous accuracy and reliability require ments. In addition, qualitative or narrative data is reviewed and validated accuracy.

Future developments in sustainability reporting

By 2025, FORCIT will fully integrate a formal sustainability reporting process into its management framework. This new process will include an internal control procedure designed to promote transparency and accountability. Furthermore, future risk analyses related to sustainability reporting will be embedded within the company’s governance structure, aligning with both regulatory developments and industry best practices. Forcit Group actively monitors the development of EU sustainability reporting regulations and operates in full compliance with the applicable rules.