FORCIT Group's Sustainability Report 2024

CHARGING SUSTAINABILITY

We are the leading expert in explosives and blasting solutions tailored for Nordic conditions and have a global presence in mining digitalization. Additionally, we are a key player in environmental consulting services and a responsible producer of state-of-theart defense technologies for international markets. We are dedicated to delivering high-quality, reliable services. Our approach is based on first-class products, efficient and flexible deliveries, and reliable service – this is our formula for success.

This report marks our company’s first sustainability report guided by the European Union’s Corporate Sustainability Reporting Directive (CSRD). As of this writing, both the directive and the accompanying European Sustainability Reporting Standards (ESRS) remain in development, and future regulatory requirements are still evolving. While we cannot yet predict the full legislative landscape, one thing is certain: our unwavering commitment to responsible business and to the continuous improvement of our company.

This report is structured in two parts. We begin by highlighting the key moments of the past year and sharing our perspective on what responsible business means to us. The following articles explore our role in Nordics and in Europe, our product development priorities, and the daily efforts we undertake to enhance the safety and satisfaction of our employees. The second part is the inaugural sustainability statement, guided by CSRD directive, which gives more detailed approach to our sustainability work in environmental, social and governmental issues.

Operating within the explosives and defense industries demands a high level of responsibility, particularly in today’s complex global environment. We invite you to explore how we are investing in a safer and more sustainable future.

PART OF EUROPE’S SECURITY OF SUPPLY

FORCIT plays a role in defending European democracy both by securing defense contributing to civilian industries. While the explosives industry is often associated with military production and the security of supply it provides, manufacturing is also an integral part of the same strategic chain.

Following the change in administration in the United States, critical raw materials have become a key topic of discussion. “This has been debated for years, but now it is gaining real traction. The European Critical Raw Materials Act (ECRMA) sets a goal for Europe to mine 10% of all the critical raw materials it consumes. Currently, the figure is below 3%, meaning a significant increase in self-suffiis needed,” explains Joakim Westerlund, CEO of FORCIT Group.

pE ’s stratEgiC autOnOmY

“We are important part of the European value chain.”

Critical raw materials are essential for Europe’s green transition, supporting digitalization, electric mobility, and carbon-free energy. At the same time, the defense industry relies on these same resources. “Europe is highly dependent on China for these materials. Compared to Europe’s past reliance on

Russian gas five years ago, this dependency is on an entirely different scale,” says Westerlund.

mining industrY ’s kEY rOlE in sCandinavia

Explosives remain the most effective method for extracting these critical metals and minerals from the ground. “This is why FORCIT is an important part of the European value chain,” Westerlund emphasizes. There are currently no viable alternatives to explosives in terms of cost or environmental impact. Securing Europe’s self-sufficiency in critical raw materials is also highly relevant for Scandinavia. Both Finland and Sweden have significant ore deposits, and increasing production in line with the goal of enhancing self-sufficiency will directly impact mining operations in the region.

SAFETY IS FORCIT’S PRIORITY ZERO

"When we manufacture and deliver explosives, the potential consequences of failing to maintain strict safety controls are significant," says Joakim Westerlund, CEO of FORCIT Group. Working on site throughout all seasons and in diverse weather conditions further adds to the complexity of managing safety. At the same time, the evolving global landscape presents new security challenges.

We always place explosive and occupational safety at the core of our operations. “Compared to standard chemical industry environments, our employees work in demanding conditions, conducting blasting operations in underground and open pit mines, quarries and on mountains and and fjords—some-

times in temperatures below -30°C. It’s a completely different challenge on a flat factory floor,” Westerlund

Like many operators within the chemical in dustry, FORCIT handles hazardous materials daily. "For these reasons, safety is FORCIT’s Priority Zero."

sECuritY in a CHanging WO

FORCIT Defence business is a key focus when it comes to the security of operations. "We have made significant investments physical security measures, such as fencing, surveillance, and security clearances, and in cybersecurity initiatives. At the same time, we have strengthened our internal organiza tion,” Westerlund states. The dustry attracts interest from various actors, whether state-affiliated or criminal.

A rapidly evolving operating environment continuously presents new challeng es. Russia’s war of aggression against Ukraine and the hybrid operations witnessed across Europe are part of this shifting landscape. In addition, the rise in explo sive-related crimes in Swe-

FORCIT AND THE GREEN TRANSITION: ADVANCING SUSTAINABILITY IN THE MINING INDUSTRY

FORCIT is committed to achieving carbon neutrality in its own operations by 2035. In addition, we actively promote advancements in the production methods at the early stages of our value chain. Hydrogen, which is processed into ammonium nitrate through ammonia, plays a key role in making explosives more environmentally friendly. While green hydrogen production is still in its early phases, increasing demand and expanding production capacity are reshaping the market.

CustOmEr nEEds driving CHangE

With the green transition, interest in more sustainable solutions has grown, particularly among our key customers. The use of renewable fuels, in transportation has already become a requirement in some customer projects. In Norway, Environmental Product Declaration (EPD) certification has become a standard requirement, whereas Finland is slightly behind in this development, though the trajectory is clear. The Nordic countries serve as an excellent example of the future of mining, where strict environmental regulations are already the norm.

Our objective is not just to develop green products but also to help solve our customers’ challenges. Many of our customers must comply with extensive sustainability reporting requirements, and we provide them with essential data.

rECYCling and WastE rEduCtiOn

Recycling is a fundamental part of our sustainability strategy. Primarily, we aim to min-

imize the creation of waste in our production processes. The recycling of ammonium nitrate, for example, is often mandated by regulations, and its implementation is complex due to permit procedures. In 2022, we launched a project to research an optimal method to for decomposing and separating emulsion explosives. The research is continuing process, and it shows promising results (read more at page 12).

While some of our packaging is already recyclable, there is potential for further improvement. Additionally, we utilize recycled oils in emulsion production. Half of our matrix explosive manufacturing plants utilize Re-refined Base Oil (RRBO). In 2024, a quarter of all matrix production was based on RRBO, and this share is expected to double by 2025.

tHE FuturE: tOWard a mOrE sustainaBlE mining industrY

Our strategy is not based on rapid change but on long-term, ambitious development. The green transition presents a competitive

advantage for us, yet it also requires continuous adaptation to evolving regulations and market demands as well as it challenges supply chain to find new alternatives.

Looking ahead, we are investing in even greener product solutions, improved recycling, and strengthening sustainability across our entire value chain. The growth of the mining industry and the green transition go hand in hand, and we aim to address these changes more effectively.

For us, the green transition is not just a trend but a necessity that the mining and explosives industries must embrace. We are committed to being a key player in this transformation, offering our customers responsible and competitive solutions.

HYDROGEN PEROXIDEBASED EXPLOSIVES

– OPPORTUNITY OR RISK?

In some areas explosives industry is facing a significant need for transformation as we seek solutions to reduce the environmental impacts of ammonium nitrate (AN) based products. Nitrogen oxides in blast fumes and residues of water-soluble nitrogen compounds are today’s challenges. Hydrogen peroxide has emerged as the most promising substitute for ammonium nitrate, yet its adoption comes with numerous challenges and risks. We are committed to responsible development and close collaboration with regulatory authorities to ensure safety and environmental sustainability in large-scale applications in a long term.

OppOrtunitiEs and CHallEngEs OF HYdrOgEn pErOxidE

Hydrogen peroxide offers a competitive edge due to its nitrogen-free composition. Unlike chlorate- and perchlorate-based solutions, it also has a lower environmental impact. However, its use presents challenges, particularly in terms of stability and risk management.

Regulatory bodies and legislators still have limited knowledge of the specific characteristics of hydrogen peroxide emulsions. At present, safety regulations and standards rely largely on data provided by manufacturers. For example, road transport regulations remain underdeveloped, and ADR (European Agreement concerning the International Carriage of Dangerous Goods by Road) guidelines do not yet recognize hydrogen peroxide emulsion.

WOrkplaCE saFEtY and risk managEmEnt

The use of hydrogen peroxide demands significantly more protective equipment compared to standard AN emulsion (ANE) products. According to our measurements in field conditions, vaporized hydrogen peroxide easily exceeds occupational health and safety limits. Hydrogen peroxide, also in the form of emulsion, is extremely corrosive and aggressive to skin and eyes. That is why workers must wear chemical-resistant coveralls,

powered full-face respirators with proper chemical filter, chemical-resistant gloves and boots, and other mining gear. Comprehensive training and expertise are essential for effective risk management, making targeted investments in personnel education a priority.

Storage and transportation pose additional challenges. Hydrogen peroxide's instability makes tank transportation high-risk, as the emulsion tends to self-sensitize and a thermal runaway reaction can start from the smallest contamination.

EnvirOnmEntal impaCt and rEspOnsiBilitY

The full environmental impact of hydrogen peroxide-based explosives is still under investigation. While nitrogen emissions are eliminated, carbon monoxide emissions require efficient ventilation.

It is crucial to thoroughly assess the environmental consequences of large-scale adoption, particularly concerning hydrogen peroxide’s impact on aquatic ecosystems. The drive toward nitrogen-free solutions originated from water protection concerns, but does hydrogen peroxide present an even greater risk? There are published research results about direct toxicity of hydrogen peroxide to aquatic life. It is highly expectable

that residues of hydrogen peroxide emulsion (HPE) remain in rock and ground after blasting and find their way to surrounding waters the same way as AN does. Another published risk scenario is the transformation of harmless Cr(III) compounds in ground into water soluble super-toxic Cr(VI) by hydrogen peroxide. Also potential to increased concentrations of other water-soluble metal compounds should be studied before the large scale use of HPE products. We aim to answer these questions through meticulous research and real-world experiences.

FOrCit’s tECHniCal sOlutiOn:

a rEal-timE EmulsiOn mOdulE

We have developed a hydrogen peroxide charging module that produces emulsion in real time during charging. This innovation eliminates the need for storage or transport of emulsified material, significantly enhancing safety.

We approach all new product developments with a responsible mindset, ensuring that our solutions meet both safety and environmental requirements based on rigorous testing and fact-based conclusions. We remain committed to open collaboration with regulatory authorities and actively participate in European discussions on hydrogen peroxide-based explosives’ regulation and safety.

Hydrogen peroxide presents undeniable opportunities, but its controlled implementation requires extensive research and precise risk management. Our mission is to develop safe and sustainable solutions for the explosives industry—responsibly and with a longterm perspective.

WHAT IS GREEN HYDROGEN?

Green hydrogen refers to hydrogen produced using renewable energy sources. It is distinct from other forms of hydrogen production, such as gray hydrogen (derived from fossil fuels) and blue hydrogen (where carbon emissions are captured and stored).

How Is Green HydroGen Produced?

Green hydrogen is generated through water electrolysis, a process that splits water (H2O) into hydrogen (H2) and oxygen (O2) using renewable electricity, such as wind or solar power. Since this method produces no carbon dioxide emissions, it is considered a climate-friendly alternative to conventional hydrogen production methods. Hydrogen generated as a byproduct of sodium chlorate production can also be considered green, provided that the process is powered by renewable energy sources.

PRODUCT SAFETY: THE RESULT OF THOUGHTFUL DESIGN

As stated above, safety is at the core of everything we do, whether it concerns our employees, customers, or the environment. Our products must perform reliably and safely in all conditions. This principle drives our continuous development efforts and decision-making, from raw material selection to training programs and process optimization.

raW matErial sElECtiOn WitH saFEtY and EnvirOnmEntal COnsidEratiOns

We strive to minimize the impact of our raw materials on people and the environment. For example, the use of diesel oil in explosive emulsions has raised concerns. Feedback from our employees led us to transition to a less odorous, albeit more expensive, alternative. This is just one of many examples where safety and health considerations have guided our choices.

training as a kEY COmpOnEnt OF saFEtY assuranCE

Arranging training for both our employees and customers is a fundamental part of our safety strategy. We provide comprehensive

training on blast design, ensuring that explosives are utilized as efficiently as possible. This not only enhances workplace safety but also reduces nitrogen emissions into the environment. For instance, an audit of blasting operations at one of our mining customers revealed an opportunity to cut explosive use by 15%, directly leading to a reduction in their nitrogen emissions.

WatEr saFEtY and nitrOgEn lOad managEmEnt

Water impact is a significant concern for many of our customers, and at FORCIT, we actively work to mitigate water-related risks. In blasting operations, some explosives may remain unreacted, and material loss during charging can increase nitrogen levels in the environment. We have provided training and conducted numerical analyses to support customers in managing these challenges. Since 2010, rising nitrogen levels have been observed at customer sites, prompting us to invest in the development of other, nitrogen-free alternatives.

rEduCing EnvirOnmEntal impaCt Biodiversity and environmental risks are key considerations for us. Continuous monitoring and development are integral to our sustainability efforts, ensuring that we provide safe and environmentally responsible solutions.

For us, safety is not just about regulatory compliance, it is embedded in our corporate culture and serves as a competitive advantage that we continuously develop in collaboration with our customers.

RECYCLING OF EMULSION EXPLOSIVES: A FUTURE-FOCUSED INITIATIVE

At FORCIT, we are committed to reducing the environmental impact of our operations. We continuously explore new raw materials and operating methods with a low carbon footprint. One such initiative involves studying the chemical decomposition of emulsion explosives and the potential reuse of the resulting fractions, either within our own production or as secondary material streams.

Traditionally, unusable emulsion has been disposed of through incineration. Recycling this material is extremely challenging due to safety concerns. Impurities in the emulsion can compromise quality or, in the worst-case scenario, lead to an explosion.

“Incineration is a safe method, but it still comes with inherent risks. Open burning of emulsion places a burden on the environment and requires auxiliary fuel,” says Laura Pitkäjärvi, QA Development Manager at FORCIT.

ChemiCal DeComposition

as a ReCyCling methoD

“In 2022, we launched a project in collaboration with VTT Technical Research Centre of Finland to identify an optimal method for decomposing and separating emulsion explosives, as well as for processing the recovered ammonium nitrate to meet quality standards. Our aim is to recycle the resulting solution back into FORCIT’S production,” Pitkäjärvi explains. The project began with decomposition of clean emulsion classified as oxidizing (5.1). Following a successful pilot phase in 2024, FORCIT expanded its research to include the decomposition of explosive-classified emulsion (1.1).

sCaling the pRoCess to meet inDustRial neeDs

Most of the emulsion waste consists of explosive-grade material. This waste originates in FORCIT’S own processes. We also accept expired explosives for safety reasons. Some of FORCIT’s explosive waste is disposed of in Sweden or Norway at licensed disposal facilities.

“Incineration is not an especially environmentally friendly method. Particle emissions are generated, and nitrogen oxides are released, and the energy released in the process cannot be recovered, but currently, open burning is the recommended method of disposal due to safety concerns. As such, it is necessary and may never be entirely eliminated.” Pitkäjärvi notes. “Our laboratory-scale tests have shown promising results for chemical decomposition. That said, scaling up to a full industrial process still requires significant development. The future is still open, but I believe we will reach our goal,” Pitkäjärvi concludes.

HOW ARE EXPLOSIVES BURNED?

Emulsion explosives are incinerated through open burning. A burn site is prepared with hardwood logs, and and waste emulsion is added at a time. The pile is ignited using a remote control. The combustion process takes few hours, meaning the emulsion burns relatively slowly. Returned waste from customer site is always pre-sorted before arriving our site to minimize unnecessary risks.

PEOPLE IN FORCIT

In spring 2025, we hosted a fireside chat with Sofia Wiker, People and Culture Manager, and Stefan Långström, Chief People and Culture Officer. Our conversation covered FORCIT’S HR policies, training initiatives, and the impacts of global events on their personnel, influencing both policy decisions and proactive measures. We also discussed what it’s like working in the explosives industry today and in future.

The chat was hosted by Timo Rantanen, a sustainable professional and writer.

FORCIT WAY

INTERVIEWER: Could you describe FORCIT’s personnel policy and how it appears in everyday operations?

STEFAN: Whenever we introduce new employees, I explain our personnel policy, what it means and how it manifests in our daily operations. Our policy is essentially a promise to our staff: we strive to provide an inspiring, safe, and healthy workplace, emphasizing occupational safety above all. This commitment is visible daily through our dedication to safety and quality at every stage, from production to customer delivery. Our customers perceive this commitment, which also serves as a promise to them, reinforcing that we are a reliable, safe, and quality-focused partner.

Our core values, being reliable, close, and engaged, are key. Customers should feel we create added value, that we are supportive and dependable. Internally, this translates into cooperation among employees; trust and mutual support are fundamental.

INTERVIEWER: How do safety, quality, and efficiency intersect in your operations?

STEFAN: Safety, quality, and efficiency are interconnected, not mutually exclusive. Ensuring good safety and quality standards inherently improves efficiency. As we grow, clearly defining roles, responsibilities, and processes becomes increasingly important. Leadership must support these efforts continuously.

INTERVIEWER: Could you elaborate on how FORCIT integrates its strategic documents with employee development?

SOFIA: Our business strategy, communicated now at a corporate level, is integrated into individual employee development discussions. Employees and managers discuss what the strategy specifically means for everyone, breaking it down into concrete goals. These goals are evaluated regularly throughout the year. This structured approach ties our strategic vision directly to individual performance and personal growth.

We annually measure our work environment including physical, psychological, organizational, and social factors through employee surveys. Happily, we see improvement in

perceptions of our workplace. Our Employee Promoter Score (EPS) is notably high, which reflects our employees’ likelihood to recommend FORCIT as an employer. Last year, our EPS was around 50, indicating strong internal advocacy.

INTERVIEWER: With ongoing growth and many new hires, how does FORCIT handle employee onboarding?

STEFAN: Due to significant recent recruitment, we’ve focused heavily on improving our onboarding process. We now have a more detailed and clearer introduction document, thoroughly reviewed with managers, to ensure newcomers integrate smoothly into our culture, the “FORCIT Way.” Onboarding isn’t solely leadership’s responsibility; it’s a collective effort involving all colleagues.

INTERVIEWER: Can you discuss recent initiatives regarding leadership development?

SOFIA: We’ve recently deepened our focus on leadership development through value-based leadership training. In partnership with Predictio and using the PI (Predictive

Index) analysis tool, we first assessed our leadership team’s strengths and challenges. We then expanded training to all managers and key personnel, emphasizing self-awareness in leadership, particularly in communication, a key area identified in employee feedback. We continue this leadership journey with further sessions, involving self-reflection assignments to enhance personal development.

INTERVIEWER: How does FORCIT manage and cultivate its corporate culture?

SOFIA: Starting this spring, we’re undertaking an intensive corporate culture initiative tied to our 2025 strategic objectives. Workshops across Sweden including Stockholm, Göteborg, and Karlskoga will engage all employees in defining behaviors aligned with our core values: reliable, engaged, and close. These behaviors will form a documented “FORCIT Way,” serving as a reference for individualized performance and differentiated compensation decisions. This initiative aligns with overarching corporate goals and leverages our values strategically, ultimately guiding us towards achieving our 2025 objectives.

NORDIC CORPORATE CULTURE

INTERVIEWER: How does FORCIT maintain a cohesive corporate culture across its Nordic operations while accommodating local variations?

STEFAN: We certainly have common denominators based on our core values and strategic framework, but there’s room for local adaptations and cultural variations. Life, after all, is local, not Nordic. Having worked extensively across Nordic countries, I’ve noticed cultural differences between Norway, Finland, and Sweden. Our objective is to maintain alignment around shared goals while appreciating these local nuances.

INTERVIEWER: Can you provide an example of how local variations are managed, particularly concerning compensation?

STEFAN: While there’s a consistent approach across our Nordic countries rewarding desirable behaviors and good performance, we also recognize regional differences within countries. For example, differences exist between southern and northern Finland. Un-

derstanding and utilizing these differences as strengths are vital for us.

SOFIA: Exactly. The strategic values remain consistent, but our approach allows employees to define behaviors aligned with these values locally. This approach encourages behaviors that enhance workplace satisfaction and effectiveness. Once defined in Sweden, we plan to implement similar processes in Norway and Finland, allowing each region to articulate behaviors that reflect our shared values within their unique contexts.

INTERVIEWER: You mentioned being close to customers and maintaining flexibility. How does this approach manifest across different divisions?

STEFAN: We highly value being approachable, flexible, and unpretentious in our relationships with both colleagues and customers. Although each role has clearly defined responsibilities, our culture encourages helping each other and maintaining close customer relationships. This applies strongly

across our Explosives, Defense, and Consulting divisions, where long-term relationships and customized solutions are central to our operations.

INTERVIEWER: Can you elaborate on the significance of long-term relationships at FORCIT?

STEFAN: We are proud of our exceptionally long-term customer and employee relationships. At our parent company, it’s common to find employees who’ve been with us for 20, 30, or even 40 years. Some families have worked here across multiple generations, up to the fifth generation. Such continuity is exceptional and speaks volumes about our company culture and employee satisfaction. Interviewer: You’ve been using the Predictive Index (PI) system for recruitment and leadership development. Can you describe your experiences?

STEFAN: The PI system helps significantly in understanding individual differences and leveraging them as strengths. It assists us in

identifying suitable candidates, developing teams, and improving internal communication. After five years of using PI, we’ve noticed improvements in team dynamics and better handling of collaborative challenges.

SOFIA: The evaluations of our leadership initiatives using the PI system have been very positive. Managers find it relevant and insightful, sometimes surprisingly accurate. Employees often express astonishment at how accurately the profiles reflect their behaviors, almost as if they’ve been closely observed. Having experience with similar tools at various companies, I personally find PI highly effective for personal and professional growth. It’s intuitive and beneficial for enhancing self-awareness and interpersonal dynamics.

LEADERSHIP DEVELOPMENT

INTERVIEWER: Can you describe recent initiatives in leadership development at FORCIT?

SOFIA: In the past year, we’ve invested significantly in leadership training, particularly at FORCIT Sweden, where we’ve conducted four comprehensive training sessions. These sessions started with the management team, including full-day workshops from lunch-tolunch formats, incorporating PI profiling, personal assignments, and follow-up discussions. Recently, we’ve emphasized communication skills, and we’ve developed specific improvement plans to revisit in our next session. This has substantially advanced our leadership development in 2024, and we plan to continue these efforts into 2025.

INTERVIEWER: How important is leadership training, especially for newly appointed leaders?

SOFIA: It’s extremely important, especially for individuals promoted within their existing teams. Transitioning from a team member to a leadership role requires specific support. Leaders must inspire, engage, and represent the employer’s interests clearly in every

interaction. Our training equips managers thoroughly with the necessary mindset and practical skills to effectively fulfill these responsibilities.

STEFAN: Absolutely. We’ve clarified the leadership role and the expectations around it, leading to clearer and more effective leadership overall. Our employee surveys reflect positive outcomes, showing significant improvements in leaders’ communication and feedback capabilities. Generally High ratings indicate leaders are effectively providing constructive feedback and maintaining open communication. Here we also have some room for improvement, since especially growth and changing environment can also bring challenges for managers to be as close to their team members as they would like to be.

INTERVIEWER: How do you define effective leadership at FORCIT?

STEFAN: Effective leadership at FORCIT is fundamentally service-oriented. Leaders exist to facilitate their teams’ success by removing obstacles and understanding team

dynamics deeply. Essentially, leadership is about being close, supportive, and responsive, often referred to as “servant leadership.” Leaders need to genuinely assist and engage their teams, fostering an environment where everyone can contribute effectively and feel valued.

SOFIA: Exactly. Our leadership training programs provide tailored resources based on each team’s needs, enabling managers to develop targeted improvements for 2025.

INTERVIEWER: Could you elaborate on what “value-based leadership” specifically means at FORCIT?

STEFAN: The core of our value-based leadership approach is being close to and supportive of each other. It’s about leaders actively helping their teams, being engaged, creating continuous value, and embodying trustworthiness: “walking the talk.” Actions must match words, reinforcing credibility daily. Reliability and trustworthiness also translate into safety-conscious behaviors. Leaders must have the courage to address issues immediately, never compromising on safety.

SOFIA: Indeed, courageous leadership is critical. Leaders must transparently address issues as soon as possible, rather than avoiding challenging situations. This proactive stance ensures continuous improvement and maintains high safety standards. Equally important, leaders should proactively acknowledge and reinforce positive behaviors, identifying and nurturing strengths within their teams to achieve strategic goals effectively.

INTERVIEWER: Can you give an example of leadership modeling this behavior?

SOFIA: Certainly. Our CEO, Joakim Westerlund, exemplified this during our recent leadership training day at Arlanda, Stockholm. He personally participated, sharing his own PI profile and emphasizing the importance of safety and health. Joakim illustrated this by referencing his own desire to return home healthy and energized to his children each day. He linked personal well-being directly to our corporate sustainability strategy, reinforcing that our rigorous safety standards and supportive leadership practices are fundamentally about caring deeply for one another.

HUMAN RESOURCES AND GLOBAL POLITICS

INTERVIEWER: How has the current global political situation influenced FORCIT’s HR policies?

SOFIA: Recent global events have significantly impacted our approach, especially regarding crisis management. We’ve strengthened our crisis preparedness, establishing a crisis hotline specifically for managers and arranging training sessions in collaboration with occupational health services. These sessions aim to equip managers with the necessary skills to respond effectively to accidents or crises. Furthermore, we’re updating our contingency plans and planning practical exercises this spring to enhance our readiness.

INTERVIEWER: Given global uncertainties, how proactive is FORCIT in addressing potential crises?

SOFIA: We’re highly proactive. The increased global uncertainty has naturally elevated our focus on security, both because it’s integral to our mission of making society safer and because it’s our top internal priority. Our commitment is clear: safety is non-negotiable.

STEFAN: Exactly. Our updated policies now address additional areas, such as alcohol, drugs, and cybersecurity. To prevent vulnerabilities, we conduct alcohol and drug tests during recruitment and randomly throughout employment. Immediate action follows any non-compliant results. Clear policies communicate our stance, reinforcing security.

SOFIA: Social media usage is another critical area. We’ve updated our policy regarding public representation on social platforms, emphasizing caution, particularly when employees are identified with the FORCIT brand. This approach is well-supported by our communications department, ensuring employees remain conscious of their public behavior and its implications.

INTERVIEWER: Could you elaborate on how FORCIT addresses employee health considering these global challenges?

STEFAN: Employee well-being, both physical and mental, is paramount. We continuously emphasize individual responsibility for maintaining personal health, supported by various company initiatives. Our compre-

hensive occupational health services include regular health check-ups every three years, not merely as a legal requirement but as part of our commitment to being an exemplary employer. These check-ups cover physical assessments and lifestyle counseling, promoting sustained health and productivity in physically demanding roles.

SOFIA: The mental aspect is equally critical. Societal developments have highlighted growing mental health challenges, prompting us to provide active support and monitoring. As our industry is unique, attracting new talent requires proactive efforts in promoting well-being and highlighting our supportive environment. We focus on sustaining both physical stamina and mental resilience, essential for thriving in our distinctive sector.

HOW DOES THE FUTURE LOOK LIKE?

INTERVIEWER: Looking ahead, what do you see as the most crucial HR activities for FORCIT in the next three years?

STEFAN: The most critical aspect for us will be managing change effectively. This includes adapting to shifts in the global security landscape, societal transformations, globalization, and emerging factors like artificial intelligence. While changes are constant, their impact can sometimes be unpredictable. Therefore, our readiness and ability to proactively adjust or initiate necessary changes are essential.

SOFIA: Exactly. We’ve already laid the groundwork by activating crisis management protocols, updating governing documents, and scheduling practical exercises for 2025. Our goal is to remain prepared rather than being caught off guard. Communication is key; we must ensure clear, frequent, and transparent communication, including acknowledging uncertainties when they exist. Effective communication builds confidence and prepares the organization for agility.

INTERVIEWER: How do you plan to strengthen this organizational flexibility?

STEFAN: Emphasizing internal communication and information sharing will be crucial. Employees must understand the rationale behind changes to effectively embrace them. Leadership plays a pivotal role in ensuring transparency and fostering an environment where changes are viewed constructively rather than disruptively.

SOFIA: Recently, we’ve integrated new personnel and operations from Orica, requiring us to review and update our internal procedures and work instructions. We conducted several recent training sessions for managers, particularly around delegating workplace safety and environmental responsibilities. This structured delegation supports our commitment to close, effective leadership, particularly in critical areas like safety and work environment.

INTERVIEWER: What specific measures will you implement to facilitate positive responses to change?

STEFAN: Successful change management involves understanding that individuals respond differently. Recognizing these differences within our teams will enable us to support each other effectively. Some may embrace changes rapidly, while others require thorough preparation. Understanding these varied responses allows us to better coordinate our efforts and move forward cohesively.

SOFIA: Precisely. Our ongoing development of concrete behaviors outlined in the “FORCIT Way” emphasizes flexibility and effective adaptation. Continuous dialogue with employee representatives ensures mutual understanding and fosters flexibility from both the employees’ and employer’s perspectives. Our mutual adaptability is essential for navigating future challenges successfully.

2024 SUSTAINABILITY IN NUMBERS

The following pages present FORCIT’s 2024 KPI indicators compared to the previous year.

FORCIT GROUP: ESG IN FIGURES 2024

811

* Does not include personal cars.

** No comparison due to changes in calculation principles

*** The amount increased due to a single soil remediation project.

**** Lost Time Injury Frequency = accidents with min 1 sick day per million hours worked (rolling 12 months cumulative

CONSULTING OPERATIONS IN THE NORDICS

HELSINKI

OSLO

STOCKHOLM

EXPLOSIVES OPERATIONS: FINLAND

EXPLOSIVES OPERATIONS: SWEDEN

PAJALA

EXPLOSIVES OPERATIONS: NORWAY

FORCITS´ INAUGURAL SUSTAINABILITY STATEMENT

> SBM-1 Sustainability and innovation in our operation

> SBM-2 Interests and views of stakeholders

> GOV-1, GOV-2, GOV-3, GOV-5 Governance and sustainability oversight

> IRO-1, IRO-2 Double materiality assessment (DMA) methodology

> SBM-3 Material impacts

> BP-1 General basis for preparation of the sustainability statement

> BP-2 Disclosures in relation to specific circumstances

SUSTAINABILITY AND INNOVATION IN OUR OPERATIONS

Within FORCIT, we are actively integrating sustainability into our operations. We have the capability to deliver products using renewable diesel, maintain a broad portfolio of Environmental Product Declarations (EPDs), and engage with customers in energy contract negotiations to promote sustainability. Furthermore, we continuously collaborate with communities and customers to enhance safety. Our goal is to expand our range of carbon-free or low-carbon products for customers seeking sustainable alternatives.

FORCIT Consulting innovatively develops technologies supporting everyday operations as a leading player in its own field.

COmmitmEnt tO rEspOnsiBlE

BusinEss praCtiCEs

While there is no predefined official assessment, our Double Materiality Assessment (DMA) is based on a comprehensive stakeholder analysis (DMA methology page 40). We recognize mines as our most critical customer segment, as their production of

minerals and metals is essential to enabling the green transition. Therefore, we prioritize responsible operations within their value chain, ensuring compliance with environmental permits and alignment with their sustainability objectives. Additionally, our production supports the demand for defense solutions driven by geopolitical factors.

As an integral part of the green transition value chain, we recognize our significant role in ensuring its responsible implementation. Since explosives are a form of energy, and one with a significant carbon footprint when based on fossil raw materials, we recognize our critical role in the green transition value chain and our responsibility to ensure its sustainable implementation. This is why we emphasize transparency in our own value chain, monitor the impacts of our operations, and report on them openly.

dEFEnCE sECtOr rEspOnsiBilitY and rEgulatOrY COmplianCE

The manufacturing and trade of explosives

for defense purposes strictly adhere to government regulations and international agreements. FORCIT plays a vital role in Eu ropean defense, making the safety and re liability of our operation’s critical factors at the European level.

Urbanization presents increasing challenges for excavation ly populated ronmental consulting ensures that such work can be carried out safely and ef ficiently, tal impact and supporting sustain able development.

FORCIT Group remains com mitted to sustainability, safety, and responsible business practices, ensuring our oper ations contribute to a resilient and sustain able future.

BusinEss mOdEl

Our business model is centered on delivering high-quality products and services that cater to the specific requirements of various industries, including mining, construction, and defence. The core elements of model include:

1. Sustainability and Environmental Responsibility

Forcit Group is committed to safety, minimizing its environmental footprint through sustainable practices. The company focuses on reducing emissions, managing waste, and implementing eco-friendly technologies across its operations.

2. Customer-Centric Approach

Understanding the unique needs of its Customers, Forcit Group adopts a customer-centric approach. This involves collaborating closely with Customers to develop customized solutions that enhance productivity, safety, and sustainability in their operations.

3. Product Innovation

Forcit Group places significant emphasis on research and development to innovate and improve its product offerings. The company invests in advanced technologies to develop products, systems and services that are both efficient and safe.

4. Strategic Partnerships and Collaboration

To enhance its capabilities and expand its market reach, Forcit Group engages in strategic partnerships and collaborations with industry leaders, research institutions, and regulatory bodies. These partnerships enable the company to remain at the forefront of technological advancements and regulatory compliance.

VALUE CHAIN

Our value chain is an integrated process that includes various stages, from raw material procurement to product delivery and support services. The key components of the value chain include:

The procurement of high-quality raw materials is crucial to produce reliable, safe and effective explosives and systems. We collaborate with reputable suppliers to ensure the consistent supply of essential materials while focusing to ethical and sustainable sourcing practices.

Manufacturing and Production

Our manufacturing facilities are equipped with state-ofthe-art technology to produce a wide range of explosive products and systems. The production process is designed to meet stringent quality standards and regulatory requirements, ensuring the safety and reliability of the products.

and development

Research and development

play a pivotal role in the value chain by driving innovation and continuous improvement. This involves developing new products, enhancing existing ones, and exploring novel applications for explosives and technologies.

Distribution

anD Logistics

Efficient distribution and logistics are essential to delivering products to customers on time and in intact condition. The company leverages a well-established logistics network to ensure the timely and secure delivery of its products to various locations globally.

Customer support and serviCes

Providing exceptional customer support is a key aspect of our value chain. The company offers comprehensive support services, including technical support, training, and maintenance, to ensure that customers can effectively use products throughout their life cycle.

ReseaRch

Raw MateRial SouRcing

inputs

We rely on a variety of inputs that include raw materials, technological components, and human expertise to produce our products, systems and services. Ensuring the quality and reliability of these inputs is critical to maintaining the high standards of the company’s products.

Gathering Inputs

The company employs a strategic approach to sourcing inputs by collaborating with reputable suppliers who adhere to ethical and sustainable practices. The company conducts thorough evaluations and audits of its suppliers to ensure the consistent quality of the materials procured.

Developing Inputs

The development of inputs involves continuous research and innovation to enhance the properties and performance of raw materials by developing a proprietary explosive formulas and technological components. Our R&D plays a crucial role in this process by exploring with new formulations and technologies to improve product efficacy and safety.

Securing Inputs

To safeguard the integrity and availability of its inputs, the company implements robust supply chain management practices. This includes establishing long-term contracts with key suppliers, suppliers, conducting supplier audits to ensure compliance with our standards, maintaining strategic reserves of critical materials, and diversifying sourcing channels to mitigate risks associated with supply disruptions.

upstrEam valuE CHain

The upstream value chain of the FORCIT Group focuses on the sourcing and procurement of raw materials indispensable to the production of explosives. The salient features include:

kEY suppliErs

Raw Material Suppliers:

These are entities that provide essential chemicals and materials such as ammonium nitrate, fuel oil, and other components requisite for explosives manufacturing.

rElatiOnsHips WitH suppliErs

FORCIt Group maintains strategic partnerships with its suppliers to ensure the quality and consistency of raw materials. Long-term contracts and collaboration agreements are prevalent, fostering innovation and reliability in the supply chain. Our supplier assessments cover environmental, social, and governance criteria.

Equipment Suppliers:

Suppliers of machinery and the equipment necessary for production and safety.

Logistics Providers:

Companies that manage the transportation and storage of raw materials and manufacturing supplies to ensure a continuous supply chain and adherence to safety regulations.

DOWNSTREAM

– PRODUCTION, DISTRIBUTION, AND CUSTOMER INTERFACE

Production:

FORCIT specializes in the manufacturing of high-quality explosives for mining, construction, and defense sectors. Production is guided by special technologies and rigorous safety standards to ensure efficiency and operational excellence.

Distribution Channels

Direct Sales:

Tailored solutions and services ranging from the explosives logistics, sales and high level of services and measurement technology.

Distributors:

Handle logistics and localized distribution, especially for certain markets and niche segments.

End-UsErs

Mining Companies:

Major users of explosives for both surface and underground operations.

Construction Companies:

Utilize explosives in site preparation, tunneling, foundation works, underwater blasting, demolition and urban infrastructure development.

Public sector:

Consulting services focused on environmental impact management in built environments.

Defense Sector:

Provides specialized products and lifecycle services to armed forces and defense agencies.

CustOmEr rElatiOnsHips

Customer loyalty is built on trust, innovation, and technical expertise. FORCIT supports clients with tailored services, expert consultation, and after-sales support to ensure sustainable, long-term partnerships.

stakEHOldEr EngagEmEnt

Stakeholder Group

Customers

Financial Partners

Local Communities

Employees

Industry Associations

Suppliers and Service Providers

Engagement Approach

Ongoing collaboration in R&D, safety, training, emissions data, and ensuring reliable deliveries. New products and service models are developed based on feedback.

Regular negotiations and updates; their input is considered in financial planning and practices.

Communication at least once every three years, local emergency response training, and consultations on operational impacts. Community well-being and safety are central to site planning and operations.

Continuous training on safety and environmental matters, open feedback channels, and structured dialogue through employee representation. Feedback drives occupational safety improvements.

Active participation in national and international working groups to share knowledge and anticipate regulatory changes.

Regular audits and information sharing on company objectives, with mutual focus on safety and environmental performance.

Authorities (Environment, Safety, Regulatory inspections and direct communication. Authorities also Security) provide training and input into planning and compliance.

Tax Authorities

FORCIT operates fully in line with tax legislation and local regulatory frameworks in each country of operation.

INTERESTS AND VIEWS OF STAKEHOLDERS

Results of stakeholder survey conducted in 2022 were considered during the double materiality assessment process. The survey focused on customers of FORCIT Explosives and FORCIT Consulting. The results of the survey highlight the following interests and views:

Priorities of stakeholders in order of highest Priority

Security of supply

Quality

Price and cost effectiveness

FORCIT’s impact on customers’ worksite safety

FORCIT’s internal occupational safety

Impacts on environment and climate

FORCIT’s employee satisfaction, ethics, and moral

Other insights

Expectations for sustainability towards FORCIT Group are more advanced in Norwegian and Swedish markets compared to Finland. Safety matters are valued very high: importance of sustainability will increase, and more concrete requirements will rise in the medium and long term.

Demand for more sustainable products, especially nitrogen free products, will increase. The industry must continue to evolve in order to establish business models that not only support sustainability but also align with customer preferences and drive profitability for providers.

Reliable Safety

Our solutions prioritize the safety and reliability of our customers. By incorporating advanced technology and rigorous testing procedures, as well as training our personnel, the company ensures that their explosive solutions are among the safest in the industry. This results in reduced risks and enhances operational efficiency for our customers. We design reliable, safe products with a focus on reducing environmental impact. Aware of our footprint, we take cost-effective, practical steps that make a real difference.

Enhanced Operational Effiency and Reduced Emissions

Through continuous innovation, we have developed products and services that optimize operational efficiency. The solutions are designed to minimize downtime and maximize productivity, providing customers with a competitive edge in their respective industries.

Customized Solutions

We understand that each customer has unique requirements. As such, we offer tailored solutions that address specific needs and challenges. This personalized approach ensures that customers receive the most effective and efficient services possible, leading to increased satisfaction and loyalty.

Committed Support and Training

In addition to providing top-quality products, the company offer comprehensive support and training services. This empowers customers to effectively utilize the company solutions, resulting in improved outcomes and a more profound understanding of the product usage.

Sustainability and Environmental Responsibility

We are committed to sustainability and environmental responsibility. We design our products to be reliable and safe, while actively seeking to reduce their environmental footprint. Aware of our impact and the means to minimize it, we take a practical approach that considers cost. We focus on changes that truly matter for the environment. This commitment to sustainability resonates with customers who prioritize eco-friendly practices.

Strong Financial Performance

FORCIT Group has consistently demonstrated strong financial performance. The company’s robust growth in topline and profitability are indicative of its solid market position and effective business strategies.

Innovative Product Portfolio

Our diverse and innovative product and service portfolio sets it apart from competitors. By continuously investing in research and development, we ensure that we remain at the forefront of technological advancements in the explosive industry.

Close Partnerships and Collaborations

FORCIT Group has established strategic partnerships and collaborations with key industry players. These longterm partnership agreements enhance market presence and create opportunities for growth and expansion. Owner benefit from the increased market reach and strengthen brand reputation resulting from these partnerships.

Reliable and Ethical Business Practices

FORCIT Group operates with transparency and focus on to ethical business practices. This commitment to integrity builds trust with shareholders, who value dedication to governance, compliance, and corporate responsibility.

Long-term Growth Potential

FORCIT Groups focus on innovation, market expansion, and customer satisfaction positions it for continued success and profitability.

BEnEFits FOr OtHEr

Community Development and Engagement

We take local communities into account in our safety assessments and emergency response plans, and provide modest support to local organizations working with children, such as youth sports teams.

Employment Opportunities and Workforce Development

The company is a significant employer, providing numerous job opportunities across various regions. FORCIT Group is dedicated to workforce development, offering training and career advancement programs that enable employees to grow and succeed within the organization.

Industry Leadership and Advocacy

As a leader in the explosive industry, FORCIT Group advocates for best practices and drives positive change. The company participates in industry associations, contributes to policy development, and promotes safety standards. This leadership benefits stakeholders by fostering a safer and more efficient industry landscape.

Environmental Stewardship

FORCIT Group’s commitment to environmental stewardship extends beyond its products. The company implements sustainable practices across its operations, including waste reduction, energy efficiency, and resource conservation. Stakeholders benefit from the company dedication to preserving the environment for future generations.

Innovation and Technological Advancement

By spearheading innovation and technological advancement, FORCIT Group contributes to the overall progress of the industry. Stakeholders, including suppliers, partners, and customers, benefit from the advanced solutions and improved methodologies developed by the company.

GOVERNANCE AND SUSTAINABILITY OVERSIGHT

GOV-1, GOV-2, GOV-3, GOV-5

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 sustainabil-

ity 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.

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

• 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

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 voluntari ly published sustainability reports without strictly adhering to standardized reporting frameworks. Consequently, a formal risk as sessment process specific reporting has not previously been required. Nevertheless, certain sustainability-related data is submitted annually to authorities for compliance purposes, ensuring its reliabil ity. 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 pro cess will include an internal control procedure designed to promote transparency and accountabili

DOUBLE MATERIALITY ASSESSMENT (DMA) METHODOLOGY

IRO-1, IRO-2

FORCIT Group applied the European Financial Reporting Advisory Group (EFRAG) guidelines to its double materiality assessment (DMA) methodology. The DMA scope covered FORCIT’s Explosives and Consulting business areas. The project was conducted in collaboration with an external sustainability consulting partner and consisted of five key stages:

1. Understanding the context and building on current information

2. Identification of sustainability impacts, risks and opportunities

3. Stakeholder views and expectations

4. Prioritization of material topics

5. Final results and management approval

dEFining tHE sCOpE and undErstanding tHE COntExt

In the first phase, we defined the scope and context of the DMA. This involved mapping FORCIT Group’s value chain across its business activities (Explosives and Consulting) and identifying key ESG-related stakehold-

ers. The mapping was conducted with subject-matter experts, ensuring a broad perspective on FORCIT’s operations.

The assessment covered FORCIT’s suppliers and upstream activities, internal operations, as well as customers and downstream activities. Various background materials informed the analysis, including business strategy, previous annual and sustainability reports, financial reporting, sustainability and carbon neutrality programs, prior materiality and ESG risk assessments, product and customer segment data, sourcing reports, and the results of our previous stakeholder survey.

idEntiFiCatiOn OF sustainaBilitY

impaCts, risks, and OppOrtunitiEs

FORCIT identified sustainability impacts, risks, and opportunities through interviews with key representatives and subject-matter experts across multiple functions. Nine management and expert-level professionals participated, representing:

• Group management (CEO)

• Group HR

• Group sustainability

• FORCIT Explosives (sourcing, logistics, production, product development, R&D, country representatives, sales, and customer relations)

• FORCIT Consulting (management)

The data collected during the initial phase was analyzed to consolidate a long list of identified impacts, risks, and opportunities. These were mapped across the value chain and categorized under ESRS sustainability matters and entity-specific topics to provide the identification of impacts, risks and opportunities was not limited to the ESRS standard classification, but also company/entityand sector-specific issues were considered.

idEntiFiCatiOn OF stakEHOldEr

viEWs and ExpECtatiOns

FORCIT previously conducted a stakeholder assessment in 2022, establishing a strong understanding of stakeholder views and expectations. Therefore, in this assessment, additional engagement was limited to employees. Existing stakeholder insights were reviewed and updated through expert interviews. The validated stakeholder priorities were incorporated into the materiality assessment.

dOuBlE matErialitY assEssmEnt and priOritizatiOn OF matErial tOpiCs

The fourth phase assessed the materiality of sustainability topics and their related impacts, risks, and opportunities. This was done in two parts:

Impact Materiality Assessment

An online survey was conducted with the project’s core team, including relevant subject-matter experts. The severity/benefit (actual impacts) and likelihood (potential impacts) of identified impacts were evaluated on a scale of 1-5. This produced a preliminary list of material topics based on impact materiality.

Financial Materiality and Prioritization of Material Topics

To assess the impact materiality assessment and assess the financial materiality of related risks and opportunities, a workshop was held with FORCIT Explosives management and key representatives. Financial impact and likelihood were evaluated (scale 1-5), ensuring sustainability-related financial risks were assessed relative to other business risks. The workshop outcomes finalized the prioritization of material topics.

For FORCIT Consulting, a separate workshop was not conducted. Instead, prioritization

was based on insights from internal interviews and the impact materiality assessment.

dOCumEntatiOn and apprOval

BY FOrCit grOup managEmEnt

Following the prioritization, the final material topics were linked to ESRS standards and presented to FORCIT Group management for approval. The material topics were grouped from FORCIT’s business perspective and mapped to the relevant ESRS standards and sub-topics. Additionally, a double materiality matrix was developed to illustrate the findings.

FORCIT Group management reviewed and approved the consolidated proposal. A final report was prepared in accordance with ESRS guidelines.

gOvErnanCE and intErnal COntrOl

To ensure internal oversight, various internal stakeholders, including FORCIT Group management, were engaged throughout the process. FORCIT’s Chief Sustainability Officer (CSO) and an appointed project team oversaw execution, ensuring that each phase produced actionable results.

intEgratiOn OF sWOt and risk analYsis

FORCIT integrates SWOT analysis into business decision-making, incorporating stakeholder perspectives, sustainability issues,

and key topics identified in the DMA. In risk assessments for technical facilities, environmental and safety scenarios are systematically evaluated.

FORCIT’s Explosives business unit follows an operational excellence process, applying rigorous evaluation criteria for explosion risk assessments. Feasibility studies are conducted in collaboration with experts before implementation.

alignmEnt WitH Esrs standards

Upon completing the DMA process, material sustainability topics, impacts, risks, and opportunities were mapped in the context of ESRS standards. Each topic was linked to the corresponding ESRS standard, sub-topic, and sub-sub-topic. Furthermore, material sub-topics were aligned with specific data points and application requirements to determine the material information to be disclosed. The requirements outlined in ESRS 1, Section 3.2, were considered in this process. FORCIT remains committed to ongoing evaluation and integration of sustainability considerations into its business strategy, ensuring compliance with regulatory frameworks and best practices in corporate sustainability reporting.

MATERIAL IMPACTS

The results of the Materiality Analysis were presented to BoD. They are informed if the views of the stakeholders are changed and assessed to be relevant to company and their implementation requires FORCIT to take measures for which we need funding or resources. The situation is reviewed yearly in BoD meeting.

Based on the double materiality assessment (DMA), FORCIT Group has identified and assessed material sustainability impacts, risks and opportunities across its value chain. Material topics were identified in the following themes: Climate Change (E1), Pollution (E2), Resource use and circular economy (E5), Own workforce (S1), Affected Communities (S3), Consumers and end users (S4), and Business conduct (G1). In addition, material entity-specific topics that are not covered by ESRS were identified.

FORCIT has continued to work with topics recognized in the past, but DMA process named them clearly. In 2025 the Group Leadership team is developing the management practices and policies and will analyze DMA

results and considers their implementation.

The resources in Group Sustainability department have increased thus the DMA appointed several topics to promote internally (e.g. material efficiency and safety). FORCIT applied and received the fund from Business Finland to promote material recycling.

The results of our DMA reflect FORCIT Group’s sustainability strategy and business model.

EnvironmEntal impacts

The results of our assessment highlight negative environmental impacts associated with the manufacture of explosives, including associated greenhouse gas emissions, pollution and resource use. Our sustainability strategy, carbon neutrality roadmap and related actions strives to limit negative impacts across our value chain – from product development, material selection and sourcing to manufacturing, testing, transportation and product use. With our knowledge and expertise, we can train and consult our customers on proper measurement and management of environmental impacts of blasting activities.

Social impactS

Our strong strategic focus on safety across various functions from product development, manufacturing, transportation and storage to product use ensures the safety, health and well-being of our employees, end-users of our products and local communities. It is our priority to ensure that we closely manage and minimize any risk of accidents and safety impacts. Our success depends on our talented employees. Our commitment to providing opportunities for meaningful and motivating work, skills development and long careers creates positive impacts for our employees. It is our duty to also ensure that our employees are treated equally and fairly in the workplace. We want to be involved as an active, transparent and good player in society. Our contribution to local communities promotes well-being on a larger scale.

Governance impacts

Our business is based on strong business ethics and this commitment extends to our relationship with our suppliers. With proper supplier management and due diligence in various matters, including sustainability, we ensure responsible sourcing and contribute to positive impacts in our supply chain.

Resilience analysis has not been executed. It will be done in coming years. The topics, identified in DMA, have been known for years and those topics drives the strategy and business already now. The effort on safety practices and emission free products are strongly included in general practices and programs.

Entity-spEcific

impacts,

risks and opportunitiEs

Security was identified as a material topic. It is important that we keep up our successful practices related to physical and information security as well as to management of authorized product use, so that we can ensure that any security-related risks or misuse of our products can be avoided. We also identified material opportunities related to societal impact and reforming the explosives industry. We acknowledge FORCIT Group’s role in Finnish national security, green transition, and collective development of safer and greener explosives industry.

Current and antiCipated finanCial effeCts of material risks and opportunities

Current and anticipated financial effects of material risks and opportunities is yet to be assessed on a detailed level. Financial materiality was assessed on a rough level during our DMA, but detailed assessments of impacts on financial position, financial performance and cash flows across time horizons have not been conducted. Going forward, FORCIT Group will work to further mature data, quantification and understanding of financial effects of material risks and opportunities.

GENERAL BASIS FOR PREPARATION OF THE SUSTAINABILITY STATEMENT

This sustainability statement addresses sustainability matters within environmental, social and governance areas material to FORCIT Group for the reporting year 2024. Sustainability matters addressed have been determined based on double materiality assessment performed during 2024 for FORCIT Group Explosives and Consulting business unit. Information related to Defence business unit is excluded from this sustainability statement due to high level of sensitive information and, for example, the business units material streams are not considered in GHG calculations.

BP-1

DISCLOSURES IN RELATION TO SPECIFIC CIRCUMSTANCES

Short-, medium- and long-term time horizons applied in the sustainability statement align with those suggested in section 6.4 of ESRS 1.

No significant estimations are used for volumes. The only material parameter is the GHG value for ammonium nitrate from the databank, as it is the largest contributor in company-level calculations and has a material impact across our value chain. Emissions from detonation in the "Use of sold products" category are based on theoretical reaction equations. Upstream transportation emissions are primarily calculated using average logistics parameters for road, marine, and air transport.

This voluntary sustainability statement has been prepared using ESRS-standards as a guideline. This update has expanded the scope of FORCIT Group sustainability reporting and will require adjustments to existing accounting policies and quantitative disclosures to align with the new framework.

Certain disclosures have been prepared taking other sustainability reporting standards and guidelines into account, such as the Greenhouse Gas (GHG) Protocol. ISO 14001 and 9001 are the standards which are followed in operations.

ENVIRONMENTAL INFORMATION

> ESRS E1 Climate change

> ESRS E2 Pollution

> ESRS E5 Resource use and circular economy

CLIMATE CHANGE

ESRS E1

MDR-A, MDR-P, MDR-T, E1-6

ClimatE-rElatEd risks and OppOrtunitiEs

FORCIT Group has conducted during DMA process an assessment of climate-related risks and opportunities, considering both acute hazards (e.g., droughts, floods, wildfires, storms, and heat waves) and chronic hazards (e.g., changing temperatures, precipitation patterns, and soil degradation). This analysis is crucial given the nature of our business, which requires stable conditions for the safe manufacturing, storage, and handling of explosive products.

Limitations in the availability of sustainable alternatives for currently used raw materials may postpone our transition to more sustainable material use. Shortcomings in energy efficiency of some of our facilities (older ones) may pose risks to the success of our climate change mitigation efforts. Furthermore, the company operates in rental sites which infrastructure cannot be affected directly. These sites are possible risk if they are not capable to renew energy supply from fossil to non-fossil. There are also prohibi-

tions due to ADR regulations and feasibility considerations associated with the electrification and/or fuel switching of our transportation fleet. This may pose risks to the pace of our climate change mitigation efforts.

Our assessment follows a structured approach:

• Scenario Analysis:

We consider a high-emission scenario and a 1.5°C transition scenario.

• Exposure Evaluation:

Internal subject-matter experts analyze the potential exposure of business activities and assets to climate hazards.

• Financial Materiality:

Risks are evaluated based on their likelihood and financial impact.

A more detailed risk assessment, including financial quantification, will be completed after EU sustainability reporting regulations are finalized.

FORCIT operates in rent al sites which infrastruc rectly. These sites are possible risk to carbon neutrality if they are not capable to renew energy supply from fossil to non-fossil.

unified pany’s emissions is one raw material which is cultivated from ammonia. Thus, the en ergy in ammonia production in Europe is question in long term emission minimization influences and mining industry in Nordics. You can read more about green hydrogen production on page 10. The chemical composition and re explosives under the Use of Sold Products category. Since these reactions occur in open spaces, gas monitoring or processing is not feasible.

Forcit Group

GHG emissions summary

March 17th 2025

Total GHG emissions, market-based (tCO2e)

Scope

Scope 1 2 158,08 2 643,18 Scope 2 4 112,93 720,67 Scope 3 178 171,32 179 059,60

Forcit Group GHG emissions summary

March 17th 2025

Scope 1 (tCO2e) Business

Consulting, Sweden - 140,78 Defence, Finland 2,90 2,69

Explosives, Finland 792,52 929,97

Explosives, Norway 603,41 622,80

Sweden 672,98 856,04

Scope 2, location-based (tCO2e)

(tCO2e)

emissions

Scope 2, market-based (tCO2e)

Scope 2 - Purchased energy use (MWh)

Scope 2 - Purchased electricity use (MWh)

Scope 3 emissions (tCO2e)

Scope 3.1. Purchased

Scope 3.3. Fuel and energy related 1 179,80 962,91

Scope 3.4. Upstream transport and distribution 1 306,70 1 563,45

Scope 3.5. Waste 293,50 615,43

Scope 3.6. Business travel 128,52

Scope 3.7. Employee commuting -

Scope 3.9. Downstream

Scope 3.11. Use of sold products 13 962,42 14

grEEnHOusE gas (gHg) EmissiOns

FORCIT Group monitors and reports GHG emissions across Scope 1, Scope 2, and almost every Scope 3 categories. Emission calculations are conducted within the Tofuture CSM system, with data collection accuracy improving annually. Explosive and Defence business units (manufacturing of explosives) are included in 2024. FORCIT has no own energy production and are not obliged to E-PRTR reporting. The information about the share and types of contractual instruments used for the sale and purchase of energy bundled is provided in numeric data.

The company currently lacks a documentation system for investment project data that would enable the classification of materials and services purchased, and does not have a system sufficiently reliable to ensure accurate emissions accounting for investment projects. For commuting, HR is developing the process how to follow commuting in the future. The company sees these categories minor and less material than other Scope III categories.

The company cannot provide percentage value for the data which is given by suppliers. The assumption is, that all significant factors are based on secondary data and only some minor or single factors are calculated based on EPDs. The used of sold products (output

of own production) is based on primary data more comprehensively.

Currently, company presents total amounts of energy, waste and fuel and their relation to production volumes. Values are based on invoicing and double bookkeeping of waste amount (origin and handling or transportation stage) is considered to be reliable. Once a year, the GHG emissions of all scopes are analyzed and compared to previous years.

Key GHG management actions include:

• Monitoring energy consumption and waste-burning

• Implementing energy efficiency improvements in production facilities.

• Reducing reliance on fossil fuels and increasing investments in renewable energy.

• Developing lower-emission products through R&D initiatives.

Company set the long-term target related to preparing emission monitoring and reporting capability and given recommendations to proceed with carbon neutrality road map and promote energy efficiency in operations and supporting disengage from fossil fuels. We estimate that carbon free products will get big interest among customers who participate in green transition (e.g. mining business).

At present, FORCIT has company-wide CO₂ emission reduction targets in place, but not comprehensive targets covering all GHG emissions. However, an official emission monitoring framework is under development, and detailed reduction targets will be established after EU sustainability reporting regulations are finalized.

EmissiOns rEsults

In 2024, the total GHG emissions (market-based) of Forcit Group business were 1,1 % lower than in year 2023. The total GHG emissions were 1,1, % higher compared to the previous years when location-based emission factors were used to calculate Scope 2 emissions.

Scope 1 greenhouse gas (GHG) emissions increased by 22,5 % from 2023 to 2024. The reasons impacting in the emissions increase are linked to Forcit Group managed transportation of the products to the customers which represent 98,5 % of scope 1 emissions. The transportation data availability was improved compared to year 2023 and customer mix is impacting the transportation distance.

In 2024, 9,6 % of Forcit’s total purchased energy usage was covered by Guarantees of Origin and 16,02 % of total purchased electricity.

Market-based scope 2 GHG emissions decreased by 82,5 % from 2023 to 2024, primarily driven by increased usage of renewable electricity and the increased share of renewable energy sources in the district heat used at Hanko site. Location-based scope 2 GHG emissions were 6,0 % lower compared to year 2023.

Scope 3 GHG emissions increased by 0,5% from 2023 to 2024. This increase was primarily due to improved data availability, e.g. purchased services were included at Forcit Group level in scope 3.1. GHG inventory.

GHG emission intensity based on market-based calculation is 661.8 tCO2e/net revenue (MEUR). Respectively, GHG emission intensity based on location-based calculation is 662.7 tCO2e/ net revenue (MEUR).

According to the GHG Protocol, biogenic emissions shall be reported separately from scope 1 - 2 GHG emissions. Direct and indirect (scope 1 and 2) biogenic carbon emissions were 2 014,51 tCO2 in 2024.

ClimatE transitiOn plan

During the DMA process, the identification of assets and business activities that are incompatible with or need significant efforts to be compatible with a transition to a cli-

mate-neutral economy was conducted on a more general level. While we do understand potentially locked-in GHG emissions and critical pain points where significant efforts are needed, we aim to work towards making our analysis even more detailed and robust.

Climate scenarios that were considered when identifying and assessing climate-related physical and transition risks included a high emission (also known as business as usual) scenario especially for the assessment of physical risks and a climate scenario in line with limiting global warming to 1.5°C with no or limited overshoot for the assessment of transition risks.

Various climate-related transition events were identified to assess transition risks and opportunities during the DMA process, for example related to the following matters:

transitiOn risks and OppOrtunitiEs

Policy and legal

Enhanced emissions

reporting obligations

Mandates on and regulation of existing products, services, and production processes

Technology

Substitution of existing products and services with lower emissions options

Unsuccessful investment in new technologies

Costs of transition to lower emissions

Changing customer behavior

technology Market

Uncertainty in market signals

Increased cost of raw materials

Stigmatization of sector

Unofficial carbon neutrality roadmap, made in 2022, is naming the methods to minimize CO2-emissions and their effectiveness. The roadmap is based on mathematical evaluation of the first executed emission calculations and analysis of its material emission sources. The action plan which was created when the carbon neutrality roadmap was created are fuel consumption minimization, explosive waste minimization or their circularity into process, changing electricity contract to non-fossils, improving energy efficiency of district heating solution and finding a suitable greener raw material. Data is followed by the leadership team, business unit leadership team and site responsible. The current carbon neutrality roadmap has received approval from the explosives business unit, the leadership team, and the Board.

The company’s plan is to do scenario analysis, including quantifiable milestones, and create transition plan, which is following the Paris agreement and limits the global warming to 1,5 degrees Celsius, based on actual data of 2025 and analyzed GHG emissions separately in three different scopes. The process to collect the data is under development and will result in representative values. Target is then evaluated if normalization of the base year is needed. The plan includes:

Scope 2

FOrCit CarBOn nEutralitY rOadmap 2022

instEad OF OFFiCial transitiOn plan:

Scope I

Preparing for the changes in fleets non fossil motor technology investments when the technology is usable in our conditions and has safety approvals by authorities. Minimizing the explosive wastes which must be open burn for safety reasons.

Purchasing only CO2 free energy and investment in energy efficiency improvements and fossil-based heaters removal.

Scope 3

Continuous work for finding CO2 free raw materials which are economically profitable, and improvements in productions explosive waste minimization.

• Scenario Analysis: A comprehensive assessment of GHG emissions across all scopes.

• Emission Reduction Roadmap: Key milestones for energy efficiency improvements, fuel transition, and circular economy practices.

• Investment Strategy:

Allocation of capital to sustainability initiatives, particularly in energy transition and carbon-neutral product development.

The transition plan will be fully aligned with the company’s business strategy and financial planning. The new transition plan subsequently will be approved by business units, the leadership team, and the Board of Di-

rectors. Currently, business unit leadership teams are evaluating all investment and operational needs, ensuring that changes, particularly those supporting carbon neutrality, are implemented in a logical and structured manner. While adopting new technologies and solutions, safety remains the top priority.

CSO actively participates in leadership team discussions and investment planning to ensure the effective progression of the transi-

tion plan. Moving forward, this operational practice requires more precise documentation and integration into strategic planning and financial reporting.

The execution of the transition plan builds on significant progress already made under the carbon neutrality roadmap.

Referring to FORCITs current carbon neutrality roadmap, which is not calculated precisely according to the CSRD requirement and methods, and does not cover all emissions of Scope III, but clearly follows the targets defined in Paris Agreement. The carbon neutrality roadmap is based on the data of 2021 and CO2 emission factors calculated by GHG protocol. Later, the data comprehensives are improved, and the next transition plan will gather operations in more detailed. The current roadmap contains the main CO2 sources and mathematically calculated targets which are in line with the Paris Agreement. FORCIT must prioritize the reduction of emissions of the Scope II first, thus emissions of the Scope I necessitates technology which is not approved by safety regulations or profitable for customers (e.g hydrogen technology).

Opex or Capex required for implementation of the action plan have analyzed only by rough estimation. Investments to minimize

emissions are evaluated together with all investments. The business units consider investments priorities, or they are analyzed during the group budgeting’s process, depending on whether the investments are directed to business units operations or general development in the group level. Investments planning follows the strategy period and are approved by COO, CEO or BoD following general approval processes. Investments economical profitability and influences on business are evaluated.

Taxonomy-aligned financial reporting will be prepared and used as basis for reporting financial information related to transition plan. The company has recognized potential locked-in GHG emissions in each Scope.

EnErgY COnsumptiOn and EFFiCiEnCY

FORCIT has implemented substantial measures to enhance energy efficiency and transition towards renewable energy. Notably, electricity contract renewals originally planned for the 2023-2026 period have been executed ahead of schedule. In 2022, FORCIT introduced a new car-benefit policy, resulting in a 44% increase in electric vehicles within the company fleet, supported by charging facilities provided at workplaces. Additionally, the company prioritizes maintaining a modern, well-maintained truck fleet operated exclusively by trained drivers, reducing emissions and fuel consumption.

Test investments in solar panel technology at support function facilities have shown promising results; however, combining chemical handling operations and solar technology within the same buildings has been deemed unsafe based on comprehensive risk assessments. In northern climates, the company has notably reduced fossil fuel dependency through enhancements in insulation and heating technology, significantly decreasing oil consumption. Continued R&D and procurement efforts have successfully produced lower-emission products, which will be reflected in updated Environmental Product Declarations (EPDs), ultimately benefiting end users and circular economy generally.

Further investments to optimize energy consumption are planned, with formal tracking mechanisms.

“Electricity contract renewals originally planned for the 20232026 period have been executed ahead of schedule.”

FinanCial impaCt and

taxOnOmY alignmEnt

Currently, FORCIT has not conducted a detailed analysis of how climate mitigation actions depend on internal resources, R&D investments, or investment capability. Broadly, the company recognizes the greatest climate impact mitigation potential in its core manufacturing process, specifically through managing the main raw material ammonium nitrate, as well as advancing non-fossil motor and fuel technologies, such as fuel cells and hydrogen technology.

In preparation for alignment with future EU Taxonomy requirements, FORCIT has initiated tracking sustainability-related investments, enhancing methodologies for classifying green investments, and developing documentation systems for monitoring the procurement of materials and services. The company aims to finalize taxonomy-aligned reporting when EU regulations are in place, integrating comprehensive climate impact assessments into its financial disclosures.

While climate-related factors have not been included in remuneration policies for administrative, management, and supervisory bodies, personnel in R&D, production, and procurement departments do have incentives tied directly to achieving targets related

to reducing product greenhouse gas (GHG) emissions.

sites including Hanko, Vihtavuori, Kemi, Gällivare, and Karlskoga. During these processes, information about operations, emissions, and environmental impacts is made available, allowing stakeholders to raise questions and concerns.

pOllutiOn risks and mitigatiOn mEasurEs

Pollution risks are most significant at FORCIT’s Explosives Business Unit production sites, where chemicals are handled and stored at large scale . Key risk areas include:

• Raw material handling (loading/unloading)

• Production processes

• Waste disposal and open burning

All production sites operate under environmental permits, and pollution levels remain low. The risk of pollution is mitigated through Environmental Management System (EMS) protocols, safety reports, and internal emergency plans. While the likelihood of a severe incident is low, the financial and environmental consequences of such events would be significant.

upstrEam and dOWnstrEam

pOllutiOn risks

• Upstream (Supply Chain): Pollution risks stem from raw material manufacturing and transportation. These risks are managed through supplier selection, audits, and collaboration on process improvements.

• Downstream (Product Use):

The environmental impact of FORCIT’s products is assessed through Environmental Product Declarations (EPDs). These allow customers develop their processes and to integrate emission data into their sustainability reporting.

• Positive Impacts:

FORCIT actively develops safe nitrogenfree products and provides customer training on responsible product use.

ExplOsivE WastE managEmEnt

FORCIT systematically monitors the generation of explosive waste and safety incidents on a monthly basis. Due to the lack of commercial explosive waste treatment facilities in Finland, open burning currently remains the only viable disposal method. In Sweden and Norway, commercial facilities manage explosive waste either through open burning or detonation in specialized underground caves.

Recognizing the environmental impacts, FORCIT is actively engaged in developing environmentally safer disposal alternatives.

mOnitOring and targEt sEtting

At FORCIT manufacturing sites, explosive waste is quantitatively measured by weight (kg) and then converted into a relative indicator, represented as a percentage of overall production volume. Recent trends indicate a consistent decline in explosive waste generation. Currently, there is no established group-wide reduction target, though this will undergo reassessment in 2025. Environmental authorities specify permitted waste limits through environmental permits, ensuring compliance and accountability. Monthly monitoring data undergoes detailed reviews by management teams, with comprehensive annual reporting provided to relevant regulatory bodies.

WatEr pOllutiOn and WastEWatEr managEmEnt

FORCIT actively monitors and manages emissions to water. Primary pollutants include soluble nitrogen compounds (NH4, NO3) and ethylene dinitrate. To mitigate these, nitrogen-rich wastewater undergoes treatment at municipal or specialized industrial facilities. Notably, in Hanko, wastewater from ethylene dinitrate production receives extensive

treatment at an industrial plant, significantly minimizing nitrogen emissions into marine environments. Additionally, contaminated water is effectively processed through oil separators and infiltration beds. Groundwater quality at Hanko and Vihtavuori is monitored quarterly, while seawater and wastewater emissions undergo regular analysis by external accredited laboratories.

air pOllutiOn and EmissiOns

FORCIT air pollutant emissions are below E-PRTR thresholds, ensuring minimal environmental impact. The primary pollutant identified in environmental permits across FORCIT sites is explosive waste, closely linked to CO2, NOx, and SO2 emissions. Specifically, Hanko conducts annual assessments of nitrous oxide (NOx) and volatile organic compounds (VOC), consistently achieving low emission levels.

sOil COntaminatiOn prEvEntiOn

Soil pollution represents a minor risk for FORCIT operations. Preventive strategies include rigorous operational controls, explicitly designed to avoid raw material leaks, alongside stringent hazardous chemical handling protocols that comply fully with the Seveso III Directive.

Explore the EPD environmental declarations for FORCIT's products here!

suppliEr audits and prOduCt stEWardsHip

FORCIT mandates suppliers to adhere to its Code of Conduct and undergo periodic environmental and sustainability audits. Customer training initiatives encompass the safe handling, storage, and environmental impacts of explosive materials. Additionally, Environmental Product Declarations (EPDs) for several products are being updated throughout 2025.

HazardOus suBstanCEs

and CHEmiCal saFEtY

While FORCIT currently does not track Substances of Concern (SoC) explicitly, it does ensure Substances of Very High Concern (SVHCs) are excluded from its production processes. However, certain purchased detonators may contain SVHC compounds. Lead-based electronic detonators face an impending ban in April 2026, with some manufacturers seeking exemptions.

sEvEsO iii COmplianCE and maJOr aCCidEnt prEvEntiOn

Classified as an upper-tier establishment under the Seveso III Directive (2012/18/EU), FORCIT implements a robust Major-Accident Prevention Policy (MAPP). This policy emphasizes management’s commitment to accident prevention, risk mitigation strategies, and comprehensive emergency preparedness. Safety reports, internal emergency plans, and assessments of potential domino effects involving nearby facilities are standard practices. Immediate notification to authorities, along with thorough evaluation of environmental and health impacts, is obligatory in the event of a major accident.

EmissiOn rEduCtiOn and sustainaBilitY initiativEs

FORCIT actively pursues emissions reductions through targeted sustainability initiatives. Reducing explosive waste directly correlates with decreased CO2, NOx, and SO2 emissions resulting from open burning. At the Hanko site, environmental enhancements include NOx absorption and acid treatment processes, recycling nitrogen-rich wastewater to minimize eutrophication risks, and employing oil separators to protect marine ecosystems. Sustainability progress is regularly assessed through inspections and annual reporting to environmental authorities.

EnvirOnmEntal managEmEnt and COmplianCE

FORCIT’s Environmental Policy, approved by the CEO, forms an integral part of its ISO 14001-certified Environmental Management System (EMS). The EMS encompasses sales, service, design, development, manufacturing, and supply chain operations across Finland, Sweden, and Norway, with annual external audits conducted by DNV. Transparency is ensured through publicly accessible policy documentation.

EnvirOnmEntal training and EmErgEnCY prEparEdnEss Employees undergo comprehensive training on environmental responsibilities, recorded systematically in the Solaforce HR system. Operations involving substantial quantities of hazardous chemicals require authorization from the Finnish Safety and Chemicals Agency (TUKES). Emergency preparedness is reinforced by detailed safety reports, structured emergency plans, regular drills coordinated with authorities. Incident management, including observations, near misses, and accidents, is effectively tracked via the IMS system to ensure continuous improvement and recurrence prevention.

FuturE COmmitmEnts

• Ongoing waste reduction initiatives, with a new target review scheduled for 2025.

• Expansion of environmentally friendly disposal methods (read more at page 12)

• Continued participation in regulatory discussions.

• Development of enhanced chemical tracking systems to improve pollutant identification.

FORCIT remains committed to continuous environmental improvement, regulatory compliance, and reducing its operational impact on air, water, and soil.

RESOURCE USE AND CIRCULAR ECONOMY

pOllutiOn-rElatEd impaCts, risks, and OppOrtunitiEs

Currently, FORCIT Group does not have a group-wide process for identifying actual and potential pollution-related impacts, risks, and opportunities. Risk analysis and due diligence have been conducted in procurement in FORCIT Explosives, and the company follows a Sustainable Procurement Policy. Additionally, all members of the upstream value chain have received FORCIT’s Code of Conduct.

This information has been used as input for the Double Materiality Assessment (DMA). The HSEQ team and other specialists have had the opportunity to contribute to the DMA process.

stakEHOldEr EngagEmEnt in rEsOurCE usE and CirCular ECOnOmY FORCIT has not conducted formal consultations specifically focused on resource use or circular economy. Sustainability-related inquiries from customers are addressed indi-

vidually on a case-by-case basis. In Finland, community stakeholders have the right to provide their input whenever the company applies for new environmental permits or updates existing ones. Meanwhile, in Sweden, regulations stipulate public participation only for certain categories or levels of environmental permits.

sustainaBilitY pOliCiEs and EnvirOnmEntal managEmEnt

FORCIT has several policies governing resource use and circular economy, all of which are approved by the CEO and apply across the company:

• Environmental Management System (EMS) – ISO 14001: Certified in Finland, covering sales, service, design, development, and manufacturing of explosives, as well as supply chain operations in Finland, Sweden, and Norway.

• Environmental Policy: Recognizes environmental risks, promotes energy

efficiency, and commits to regular reporting to stakeholders.

• Sustainable Procurement Policy: Requires suppliers to follow principles related to circular economy, climate change, water management, and energy use.

• Operational and Quality Policy: Includes continuous improvement, risk assessments, and auditing.

The Environmental Policy and EMS are audited annually by DNV. The Environmental Policy is published on the company website, ensuring transparency for stakeholders.

CirCular ECOnOmY and transitiOning

FrOm virgin rEsOurCEs

While FORCIT does not currently maintain a formal policy on phasing out the use of virgin resources, we actively prioritize secondary resources whenever feasible. Notable examples include the implementation of regenerated oils from recycled sources for production in two manufacturing lines within our Explosives Business Unit at Vihtavuori. Additionally, recycling initiatives are embedded across our production processes; for example, Intermediate Bulk Containers (IBCs) are reused whenever possible and ultimately recycled at the end of their lifecycle. Moreover, we actively pursue the reuse of by-products: diluted nitric and sulfuric acids generated in

production are sold externally for alternative applications, thereby reducing the need for new chemical resources.

While green explosives are technically viable, current market conditions make them financially unfeasible for customers due to higher production costs.

sustainaBlE sOurCing and

CirCular ECOnOmY intEgratiOn

Sustainable sourcing and the use of renewable resources are embedded in FORCIT’s Code of Conduct and Sustainable Procurement Policy, which mandates suppliers to adhere to:

• UN Guiding Principles on Business and Human Rights

• OECD Guidelines for Multinational Enterprises

• ILO Declaration on Fundamental Principles and Rights at Work

• Norwegian Transparency Act

Suppliers are also required to consider Environmental Product Declarations (EPDs) and sustainability factors, such as climate impact, water management, energy efficiency, and circular economy principles. FORCIT conducts pre-planned supplier audits annually to ensure compliance.

rEsOurCE usE, CirCular dEsign, and WastE managEmEnt

FORCIT does not currently meet the specific target-setting requirements of ESRS 2 MDR-T for:

• Resource inflows and outflows

• Circular material use rate

• Minimization of primary raw material use

• Reversing depletion of renewable resources

• Waste management targets

However, the company is actively working to improve circular economy practices:

• Recycling initiatives: Use of recycled oil in bulk emulsion explosives and reuse of non-contaminated, returnable packaging.

• Durability considerations: Packaging materials (e.g., cardboard boxes for shipping) comply with UN type approval for the Transport of Dangerous Goods (VAK).

• Explosive waste management: Monitoring and reduction efforts are in place, but disposal is subject to environmental permit limitations.

• New circular economy opportunities: Participation in the Business Finlandpartially funded Linear2Circular project (2025–2026).

CHallEngEs in CirCular matErial usE FORCIT is part of Responsible Care program (Chemical Industry Federation of Finland), which supports resource effiency. Due to the nature of its products, increasing the circular material use rate is challenging. FORCIT is exploring:

• Recycled materials in product casings and other components.

• Side-stream utilization to repurpose production by-products for other industries.

WastE managEmEnt and EnvirOnmEntal impaCt rEduCtiOn FORCIT continuously monitors its waste streams with dedicated efforts to minimize environmental impacts. We regularly track explosive waste on a monthly basis, actively working to reduce its generation. Efforts are also in place to significantly decrease open burning of waste at our production sites, alongside reducing the volume of waste sent externally, where the material or energy content is not utilizied. We prioritize enhancing the sorting processes and maximizing utilization of non-hazardous waste. Additionally, internal projects are actively underway to develop innovative, environmentally sound waste disposal methods, further advancing our commitment to sustainability.

New technological advancements may significantly reduce explosive waste generation in the near future. These ongoing R&D initiatives are documented in FORCIT’s 2023 Sustainability in Short report.

kEY raW matErials and rEsOurCE COnsidEratiOns

FORCIT’s primary raw materials include:

• Nitric acid, sulfuric acid, process oil, ethylene glycol, aluminum, ammonium nitrate

• Fuels (fossil and renewable) for raw material transport

• Water sources: Spring water (Hanko), surface water (Vihtavuori), municipal water (Kemi and Karlskoga, partly Hanko and Vihtavuori)

• Packaging materials: Cardboard boxes, plastic tubes, and cartridges

No critical raw materials or rare earth elements are used in FORCIT’s production processes.

CirCular dEsign limitatiOns

FORCIT’s key products are single-use explosives, meaning full circular economy integration is not feasible. Mobile units have relative long life time and after that they are possible update and to rebuild again.

data managEmEnt and rEpOrting Material use data is collected from FORCIT’s Powered Production ERP system and supplier billing records. Investment data is derived from supplier quotations and direct cost calculations. Waste stream data is obtained from waste transfer notes provided by contracted waste collectors, as well as from onsite waste measurements. Explosive waste management is carried out in compliance with Finnish environmental regulations and site-specific permits.

FuturE dEvElOpmEnts in CirCular ECOnOmY

• Linear2Circular Project: A two-year initiative starting in 2024 with additional impacts in the years to come

• New storage and production facilities: Recent expansions in Kuopio, Hämeenlinna, Sweden, and Vihtavuori support enhanced sustainability practices.

SOCIAL INFORMATION

> ESRS S1 Own workforce

> ESRS S4 Consumers and end-users

OWN WORKFORCE

WOrkFOrCE WEll-BEing and dEvElOpmEnt

At FORCIT, we prioritize employee well-being and professional growth. We provide comprehensive healthcare services and continuous skills development programs to ensure our workforce remains engaged, motivated, and equipped to meet evolving industry demands.

We take pride in maintaining a highly skilled workforce. High employee satisfaction levels reflect our commitment to fostering a positive and inclusive work environment that supports career development and engagement.

COmmitmEnt tO sustainaBilitY

FORCIT actively contributes to the green transition by integrating sustainable practices within our operations and supporting environmentally responsible initiatives throughout our value chain. Our commitment extends to both internal sustainability efforts and more sustainable solutions we offer our customers.

WOrkplaCE saFEtY and risk managEmEnt

We conduct regular work risk assessment, which are incorporated into our work instructions. Both managers and employees receive safety training, including guidance on reporting and handling safety hazards.

Currently, no significant material risks related to workforce impact have been identified. However, we continuously monitor potential risks and adapt proactive strategies to address emerging challenges.

The majority of our workforce consists of our own employees, with self-employed individuals being rare exceptions. Certain functions, such as security and cleaning, are outsourced to third-party providers.

COmplianCE WitH laBOr lEgislatiOn

FORCIT strictly adheres to labor legislation and proactively addresses any identified shortcomings. To achieve this, we implement comprehensive investigation processes that cover risk assessments, workplace accidents, incidents, and safety observa-

tions. Workplace investigations are systematically carried out in close collaboration with occupational health professionals, ensuring thoroughness and accuracy. Moreover, corrective actions derived from these investigations are clearly assigned, enabling effective follow-up and accountability within the organization.

EmplOYEE EngagEmEnt and rEpOrting mECHanisms

We maintain robust reporting and feedback mechanisms to ensure continuous improvement in safety, environmental practices, and organizational transparency. These systems include comprehensive deviation reporting as well as dedicated safety and environmental reporting platforms, such as IMS and Lan-

dax. Additionally, structured local union and employee representative bodies actively facilitate employee participation and feedback.

Occupational safety committees play a crucial role in addressing workplace safety proactively. Furthermore, we provide a confidential whistleblowing channel, supported by clear procedures, guaranteeing anonymity and protection for individuals raising concerns.

Our employees have access to workplace information through the intranet and other communication channels. Regular training on sustainability topics, as well as whistleblowing procedures and occupational health surveys, ensures transparency and accountability. We also provided everyone with their own phones, and they receive an-

nouncements or various work-related applications directly on them.

EtHiCal standards and WOrkplaCE pOliCiEs

FORCIT upholds a strong ethical foundation through the following policies:

• Code of Conduct

• Ethical Policy

• Personnel Policy

• Human Resources Policy

• Equal Treatment Policy

Our Code of Conduct and policies align with Nordic and European laws, as well as internationally recognized labor and human rights instruments.

OCCupatiOnal saFEtY and EmplOYEE rEprEsEntatiOn

Our comprehensive quality and operational systems incorporate risk management and safety considerations. These are supported by detailed work instructions and preventive safety measures. Employee representatives actively participate in safety-related decision-making through formal HSEQ committees and safety team meetings.

COnsulting nOrdiC

(Exp, dEF)

sWEdEn (Exp)

nOrWaY (Exp)

EmplOYEE EngagEmEnt and pErFOrmanCE mEasurEmEnt

FORCIT actively fosters employee engagement through a variety of structured channels. We regularly conduct personnel surveys and maintain active dialogue through worker representative committees. Additionally, we perform annual workforce engagement assessments to gauge employee satisfaction and collect feedback for continuous improvement. Ongoing discussions within common committees further ensure that employee perspectives are consistently integrated into our organizational development.

Results from surveys inform decision-making at both Group and Business Unit levels. Key workforce performance indicators (KPIs) include:

• Employee satisfaction (eNPS)

• Lost Time Injury Frequency (LTIF) targets

• Absence and turnover rates

data-drivEn WOrkFOrCE managEmEnt

We maintain detailed workforce data, including:

• Headcount (end of period)

• Absence rates (average)

• Turnover rates (average)

• Gender and age distribution (end of period)

We experience minimal employee fluctuations throughout the year, with no significant seasonal variations. Service provider companies and self-employed consultants are not included in workforce data.

Fair COmpEnsatiOn praCtiCEs

Our compensation structure reflects industry-specific differences across technical and administrative roles. Position-based pay gaps are monitored to ensure equity and compliance with collective agreements.

COmmunitY impaCt and stakEHOldEr EngagEmEnt

FORCIT acknowledges the impact of its operations on surrounding communities, including local residents, municipalities, and business partners. We evaluate and mitigate potential environmental, safety, and economic risks through responsible corporate practices.

We generate positive community impacts by creating jobs, supporting skills development, and stimulating local economies. Our operational infrastructure, including roads and utilities, benefits both our business and surrounding communities.

saFEtY and EnvirOnmEntal COnsidEratiOns

We adhere to the Seveso III directive (2012/18/EU), which guides site-specific safety procedures and emergency response plans. Our Environmental and Safety Policies emphasize compliance with national and international regulations.

COmmunitY EngagEmEnt and COOpEratiOn

We maintain close cooperation with our employees, authorities, and local stakeholders to facilitate open and transparent communication on safety-related issues. This engagement includes regular dialogue with local authorities to address community concerns proactively. Additionally, we implement structured environmental and safety observation systems to systematically monitor and respond to potential issues. To further support community relations, we perform noise monitoring and apply effective mitigation strategies during test blasting operations. Transparent communication regarding any potential impacts on the local community remains a cornerstone of our stakeholder interactions, ensuring trust and mutual understanding.

risk managEmEnt and rEsiliEnCE

FORCIT operates with financial stability and comprehensive insurance coverage to manage potential risks. Our adherence to ISO 9001 and ISO 14001 standards ensures resilience and continuous improvement in our processes.

FuturE sustainaBilitY COmmitmEnts

We continue to integrate sustainability into our operations by:

• Expanding noise control systems at test blasting facilities in Vihtavuori and Hanko (2025).

• Establishing a designated nature reserve near our Hanko site.

• Strengthening workforce engagement through structured feedback and transparent communication.

Our commitment to responsible business practices ensures that we meet regulatory requirements while proactively enhancing sustainability efforts for the benefit of our employees, communities, and stakeholders.

“We generate positive community impacts by creating jobs, supporting skills development, and stimulating local economies.”

CONSUMERS AND END-USERS

Consumers and industrial end-users subject to material impact include those in industries such as construction, mining, and defence. These sectors rely on our products, services and measurement devices for critical operations, and we prioritize their safety, efficiency, and sustainability.

Potential negative impacts for consumers and end-users primarily involve hazardous situations associated or unproper usage of explosives causing some environmental damages. To mitigate these risks, we implement strict safety guidelines, provide comprehensive user training, and ensure regulatory compliance.

Our modern and widely adopted charging technology enhances the safety and efficiency of product usage. By continuously investing in R&D, we aim to improve usability and minimize environmental impact while ensuring operational safety for end-users.

FORCIT adheres to all relevant industry standards and regulatory frameworks to mitigate risks and provide end-users with the nec-

essary training and documentation for safe product handling.

FOrCit ’s COmmitmEnt tO sa and End-usEr rEspOnsiBilit

The HSEQ (Environment, Health, Safety, and Quality) organization and employee commit tees ensure that FORCIT’s policies align with collective agreements, national legislation, and internationally recognized standards.

Our Code of Conduct and ethical policies extend beyond internal operations apply to end-users. FORCIT will evaluate the relevance and benefits of these lation to end-users by 2026.

We are committed to delivering high-quali ty, safe, and reliable products and services. Sales are limited exclusively who hold official authorization chase these products. All products are subject to a track-and-trace system, and users are trained in safe han dling procedures.

The HSEQ organization monitors corrective actions and remedial measures arising from audits and interactions with authorities and other stakeholders.

End-user safety is one of focus areas under the ISO 9001 quality management standard, and our operations are continuously monitored and improved according to its framework. While FORCIT does not currently have a dedicated action plan for end-user-specific material sustainability issues, our comprehensive safety and product development initiatives are aimed at improving safety at all levels.

Given the highly regulated nature of explosives, all related activities must comply with applicable legislation. FORCIT Group promotes safe use and best practices through user training, technical support, and our customer information magazine.

The use of explosives is governed by stringent regulations to ensure safety and compliance. In general, authorities are controlling blasters and drivers physical and mental health regularly and people with a physical disabilityare not allowed to work with explosives. License for blasting work is possible to obtain only if persons nationality enables background security declaration.

Authorities are controlling the licenses of end users and analyze the general needs for regulation development. FORCIT follows the regulation. FORCITs products (material, data, testing, quality, packaging) is audited regularly by European level controlling body (BAM), which gives approval for selling the product. Via that audit, the BAM controls and ensures the products are fulfilling the physical and chemical parameters mentioned in standards appointed to explosives.

All produced or imported products have instructions for safe handling and these documents are updated. This responsibility is managed by product managers and process performance and quality is followed in ISO 9001 audits. FORCIT Sustainability team follows changes in chemical legislation and inform if changes in classifications occur.

Development projects FORCIT research and consider risks arising from impacts on end users in very accurate level before the decisions of moving to testing phase or announcing the product for sale.

All Safety Data Sheets (SDS) are available on webpages and can be downloaded in end-users’ own language. Technical support is giving advises of good practices free of charge. FORCIT tests different materials

and protective gear to improve occupational safety and shares good practices in the customer magazine. What comes to services at the site, all vehicles are regularly inspected and controlled in daily basis. Employees are trained well before using the trucks or doing

resource for impact management, safety authority, and safe use guidance.

Each product or imported explosives are managed by product manager, which is a resource for impact management and official person in authority issues and questions of safe use.

All the actions and product development is based on minimizing affects to environment, communities and end-users.

the blasting services. When the purchasing department proposes new raw materials, the product manager assesses their impact on end-users before testing and decision-making. The aim is to ensure safer products. Product managers oversee each product and imported explosive, serving as the key

All the actions and product development is based on minimizing affects to environment, communities, end-users and we always want to find a safer solutions and practices. We reward employees for safety initiatives and those can be made also for end-users’ point of view. We train customers organizations to use explosives in sensitive areas and challenging blasting environment, storing of explosives and control they have the latest versions of SDSs and other end-users’ information. We participate in rescue training of the customer sites. We train customers organizations to safe handling and storing of explosives and control they have the latest versions of SDSs and other end-users’ information. Meetings with customers are regularly starting with mutual safety share.

The company will evaluate the need for target setting in its strategy work.

GOVERNANCE INFORMATION

> ESRS G1 Governance

GOVERNANCE

The Board of Directors plays a pivotal role in guiding FORCIT’s strategic direction and governance. Comprised of experienced professionals, the Board ensures compliance with regulatory requirements and oversees business operations in alignment with FORCIT’s long-term vision and ethical principles.

FORCIT has a comprehensive Business Conduct Policy that governs daily operations and ensures adherence to ethical standards. outlines expected behaviors for employees, management, and stakeholders, emphasizing integrity, transparency, and compliance with all applicable laws and reg-

Our commitment to business integrity is the FORCIT Compliance Line Notification Channel. Via this channel, the employee can report any suspected breaches or unethical conduct. The channel serves both internal and external stakeholders.

The promise to protect whistleblowers is carried out by providing a system in use that is maintained by the Finland Chamber of Commerce. The company has further provided a guide on how to use the whistleblower channel, where the user anonymity handling is also described.

FORCIT conducts an annual Personnel Survey to assess employee engagement, workplace satisfaction, and adherence to business conduct standards. The survey results to refine policies, improve organizational culture, and ensure that business operations align with our values and commitments.

FORCIT has implemented a standardized operating procedure to ensure transparency and accountability in business conduct. This procedure defines clear steps for reporting, investigating, and addressing potential compliance issues, reinforcing our commitment to ethical business practices and corporate responsibility.

Training on business conduct is an integrated part of our e-learning platform for new employees. As part of the onboarding process

new employees are required to participate in the e-learning course including learning on relevant business conduct topics

At FORCIT, sustainability is ingrained in our core values and business practices. We recognize the urgent need to address environmental challenges, uphold social responsibility, and maintain high standards of corporate governance. Our commitment to sustainability extends beyond mere compliance; it is a fundamental aspect of our strategy for long-term success and positive societal impact. In line with the mandates of the Norwegian Transparency Act and OECD guidelines, each European company must analyze risk factors and audit the supply chain regularly and report the results.

FORCIT has made a theoretical desktop risk assessment of the supply chain for each supplier based on material hazards, volumes, country of origin, and transportation method. On-site audits of major raw material suppliers, based on supply volumes, transportation routes, and Global Rights Index, are conducted by select teams from sustainability, supply, R&D, and production, to assess environmental, social, and governance (ESG) performance, ensuring transparency and accountability in our operations. Furthermore, with the aid of external partners, FORCIT has

mapped the transport of raw materials, and its impact on the overall CO2 footprint. During this process some suppliers have submitted EPD and PCF documentation, that aids in correct calculation of the total carbon footprint. The first step in our Sustainability Audit process is to clearly define the objectives and scope of the audit. This involves identifying

“Sustainability is ingrained in our core values and business practices.”

key ESG metrics, setting targets aligned with international standards and best practices, and ensuring stakeholder engagement. We gather relevant documentation, including policies, procedures, and performance data, to assess our current sustainability practices and identify areas for improvement.

A multidisciplinary audit team comprising experts from the relevant business areas, is

assembled to conduct the audit. This team ensures tise are brought to the assessment process. During the on-site audit comprehensive data collection is conducted across all relevant aspects of our operations, including but not limited to energy consumption, emissions, waste management, supply chain practic es, human rights and employee welfare, and community engagement.

Based on Audit, we

goals, targets, and timelines to address ar eas of improvement and capitalize on oppor tunities. Sustainability considerations are in tegrated into our overall business strategy, decision-making processes, and perfor mance management systems to drive continuous improvement and value creation. By introducing renew able raw materials, like regen erated oils in our production, FORCIT will be able to intro duce greener products on the market.

ADDITIONAL INFORMATION

> Accounting principles

gHg aCCOunting prinCiplEs

In GHG accounting, FORCIT follows GHG Protocol Corporate Standard and its supplement Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The reporting includes emissions of the GHGs covered by the GHG Protocol (CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3 ). Emissions have been converted into carbon dioxide equivalents. FORCIT uses the operational control approach to GHG accounting.

Scope 1 accounting is based on direct energy activity data (stationary combustion and combustion in vehicles), activity data from onsite burning of waste and emissions calculations. To calculate scope 1 emissions, activity data (consumed fuels and burned waste) is multiplied with fuel- and waste-specific emission factors to arrive at the total GHG emissions impact.

The sources of FORCIT’s Scope 1 factors, including biogenic emission factors, are Defra 2003 and Fuel classification 2024 from Statistics Finland.

Scope 2 GHG emissions are calculated based on activity data from purchased electricity, heat and steam and multiplied by emission factors. Market-based scope 2 emissions are based on supplier-specific emission factors when available. When these factors are not available, FORCIT applies the location-based factor.

Scope 2 category includes market instruments, such as the trading of Guarantees of Origin for electricity. Unbundled renewable energy certificates are not utilized.

Location-based scope 2 emissions are based on country-specific emission factors published by Statistics Finland, Fingrid and Energiforetagen. Emission factors for CO2eq are used when available.

Scope 3 emissions include fossil CO2eq emissions from material scope 3 categories: Purchased goods and services, Fuel and energy related activities, Upstream transportation and distribution, Waste generated in operations, Business travelling, Employee commuting, Downstream transportation and distribution, and Use of sold products. Material emission categories included in Scope 3 emissions have been reviewed and Employee commuting is included in the GHG inventory starting from year 2024.

FORCIT applies activity-based, spend-based and average methodologies for Scope 3 accounting depending on the availability and accuracy of the data. Emissions are calculated by multiplying the activity or spend data with the relevant emission factors.

Purchased goods and services category consists of the purchases from raw materials FORCIT Explosives and Consulting and purchased services from FORCIT Group. Activity data of sourced raw

materials from FORCIT Explosives has been used to calculate emissions from Purchased goods and services category. Whereas spend based data from FORCIT Group has been the data source to calculate the emissions from purchased services and indirect materials. Emissions from fuel and energy related activities consist of production of primary energy fuels, fuels used in vehicles and purchased electricity, district heat. Also, T&D losses via grid are included. Upstream transportation and distribution emissions consists of transportation and distribution of raw materials to the sites of FORCIT Explosives. Emissions from waste are calculated based on activity waste data from FORCIT Explosives and Defence multiplied by relevant emission factors. Emissions related to business travel are calculated based on plane travel distance data available in the internal travel invoice system and provided by the travel agent. Employee commuting emissions are calculated based on average distance travelled by average diesel car. Downstream transportation and distribution related emissions calculation is based on the available distance-based data set collected from FORCIT Explosives. Emissions related to use of sold products have basis on EPDs (Environmental Product Declaration) clarifications and chemical reaction equations available and fuel consumption data according to the duration of pumping time by site.

To improve access to high quality value chain data, FORCIT continues to work with suppliers and partners.

The excluded Scope 3 categories are: Capital goods, Upstream leased assets, Processing of sold products End-of-life treatment of sold products, Downstream leased assets, Franchises, and Investments.

When primary GHG emission factors from partners, suppliers and Environmental Product Declarations (EPD) are not available, FORCIT utilises secondary sources from industry databases. Sources include ecoinvent, Defra, Tilastokeskus (Statistics Finland), Energiföretagen and EPA Supply Chain GHG Emission Factors.

GHG intensity and energy intensity are calculated based on the revenue as presented in the consolidated financial statements. All FORCIT operations in operational control are included in the emissions intensity value.