Four Reasons | Sustainability Report 2021

SUSTAINABILITY REPORT FOUR R E AS ON S | 30. 4. 2022

CONTENTS FOUR REASONS AS A COMPANY........................................................ 3 Our sustainability in a nutshell .................................................................4 A word from the CEO ..................................................................................5 Our story ..........................................................................................................6 Our four reasons ............................................................................................ 7 Our strategy ...................................................................................................8 OUR SUSTAINABILITY PROGRAMME ..................................................9 Our ethical principles ..................................................................................11 Our sustainability programme 2021–2029 ...................................... 12 Our sustainability goals and achievements ...................................... 13 HEALTH AND WELL-BEING ................................................................ 14 Gorgeous you ............................................................................................... 15 The healthiest customers in the industry .............................................16 Four-star staff (on a scale of 1 to 4) ........................................................17 RESPONSIBLE CONSUMPTION AND PRODUCTION ......................... 18 Product life cycle .....................................................................................19 Ingredients ............................................................................................. 20 Packaging .................................................................................................21 This is how we pack Four Reasons products: ..................................... 22 Why don’t we pack all our products in recycled materials? ..............................................................................23 Production ...............................................................................................24 Use of the product and disposal of the packaging .........................25 CLIMATE ACTIONS ............................................................................ 26 What does carbon neutrality mean? ................................................. 27 Emissions reporting ..................................................................................28

2

FOUR REASONS AS A COM PANY 3

OUR SUSTAINABILITY IN A NUTSHELL

100%

VEGAN AND CRUELTY FREE

100% WE USE 100% RENEWABLE

ELECTRICITY AT ALL OF OUR PREMISES

31%

OF OUR PRODUCTS ARE MANUFACTURED IN FINLAND WITH 100% RENEWABLE ENERGY

100% OF OUR PRODUCT PACKAGING

CAN BE RECYCLED WHEN EMPTY THE HEALTHIEST THE MOST INSPIRING WORKPLACE IN FINLAND*

CUSTOMERS IN THE HAIR SALON SECTOR**

37%

OF OUR PRODUCT PACKAGING IS MADE OF RECYCLED PLASTIC OR BIO-BASED MATERIALS AIMING TO BREAK THE MOULD OF BEAUTY

*Personnel survey, Eezy Plc, 2021 **Hair salon sector corporate image survey, Otantatutkimus Oy, 2021

Four Reasons Sustainability Report 2022 > Four Reasons as a company > Our sustainability in a nutshell

4

A WORD FROM THE CEO

We will always remember the year 2021 as a time when we

as training events and communications. In general, we want to be

learned to live in highly exceptional circumstances. While turning

a partner that provides security for small businesses in our sector,

our sense of safety upside down, the global pandemic became

both health-wise and financially. According to a study commis-

part of our daily lives – something that we read about every day

sioned by Four Reasons, our customers feel their well-being is

in the news and that was reflected in changes in the workplace, in

better than the sector's average.

our consumption habits and in our everyday choices.

The global health threat has challenged the social responsibility of companies and organisations. Four Reasons has chosen health and well-being as the key themes of our sustainability programme and assumed responsibility for the people in our community. Our sustainability programme is based on the Sustainable Development Goals of the UN, from which we have selected the three most important themes for our stakeholders that we feel we can best influence through our actions. Alongside social responsibility, the consideration of environmental aspects from the perspective of the entire life cycle of the product and the pursuit of carbon-neutral operations have become the backbone of our operations.

AIMING FOR THE HEALTHIEST CUSTOMERS IN THE INDUSTRY

SUCCESS COMES FROM THE COOPERATION OF DIFFERENT PEOPLE Despite the external challenges, 2021 was a successful year for our company in many ways. We renewed our iconic Four Reasons Original line, switching to vegan raw materials and opting for bio-based sugarcane plastic in packaging. The gorgeous new packaging and our campaign celebrating the wonderful quirks of every human being melted hearts in an unprecedented way, both in our domestic market and in our export destination countries.

The success of Four Reasons has always stemmed from working together for a common goal. I want to be part of creating a Four Reasons work community where everyone dares to express their opinions freely and feels valued just as they are. By listening to different perspectives and involving different people, we can achieve the best results. This is reflected in our HR survey as staff commit-

The pandemic has especially affected entrepreneurs and people

ment and appreciation of our corporate culture. I am therefore

working in the service sector. Alongside their own health and that

proud that we have once again been named one of Finland's

of their loved ones, many have had to worry about their liveli-

most inspiring companies. We are heading to 2022 with hope,

hoods. Nevertheless, the hair salon sector is doing quite well; eight

ambition and investment in the future. In this report, you will find

out of ten stylists reported feeling satisfied with their well-being.

more information about the measures and achievements we have

Resourceful hair salon entrepreneurs have found ways to cope in

already accomplished, as well as our projects for the coming year.

an exceptional situation, for example by increasing product sales, pursuing further training and introducing new sales and market-

Let’s continue on our shared journey towards even better hair

ing solutions.

days,

Like friendship, partnership between companies is measured in difficult times. During the pandemic, our goal of having “the healthiest customers in the hair salon sector” became a top

Jyrki Hakala

theme in Four Reasons' sustainability programme. We offered our

CEO

customers support for mental well-being through solutions such

Four Reasons

Four Reasons Sustainability Report 2022 > Four Reasons as a company > A word from the CEO

5

OUR STORY JOIN THE REBELLION. When was the last time you stopped for a moment to think about what is beautiful to you?

Today, every hair and beauty brand tells you that you are enough and you are beautiful.

The slogans do their best but are drowned out by picture-perfect models and other hype.

Instead of wanting to do their hair in the pursuit of beauty, people want to do their hair to look like themselves. For this, we offer the best tools while trying to fix the biggest problem in the industry.

Four Reasons is a Finnish rebel in the beauty industry that stands up for diversity. Our goal is to help everyone to feel great by just being themselves and to break the narrow mold of beauty one better hair day at a time.

We hope you stand with us.

Four Reasons Sustainability Report 2022 > Four Reasons as a company > Our story

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OUR FOUR REASONS The foundation of our operations is the four reasons that make up our brand promise: We Love the Real You.

#1 PEOPLE

#2 PASSION

#3 AUTHENTICITY

#4 YOU

We are a diverse bunch of rebels. We come noisy, composed, vivacious, funny, analytical, creative, a little odd and very weird. All wonderful.

You’ll fit right in.

When dozens of the most skilled in their craft do things together and really love their jobs, the end result fits the bill. We have a passion for this.

It’s the best.

To us, authenticity means integrity, transparency, and the courage to be your true self. We tell it like it is and make products that are simple and that actually work.

We know life can be wonderful, sad, fun, dull, simple, and complex. We want to turn your bad hair days into good and your good hair days into even better. It is important to us that you feel your best by just being you.

Four Reasons Sustainability Report 2022 > Four Reasons as a company > Our four reasons

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OUR STRATEGY

Illustration: Linda Saukko-Rauta Four Reasons Sustainability Report 2022 > Four Reasons as a company > Our strategy

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OUR SUSTAINAB ILITY PRO G R AM M E 9

In recent years, the importance of health, well-being and social responsibility has been emphasised.

Businesses and other social players are expected to provide increased transparency and concrete actions to avoid environmental problems and to mitigate social injustice.

In our business development and sustainability work, we consider issues such as the following megatrends shaping consumer behavior.

EMPHASIS ON SOCIAL RESPONSIBILITY Before the COVID-19 pandemic, consumers’ greatest causes for concern re-

CLIMATE CRISIS

HEALTH AND WELL-BEING

MERGING OF THE PHYSICAL AND THE DIGITAL

The prolonged pandemic has become

Digital devices and virtual reality

lated to the environment were the use

Climate change is the single grea-

a threat to mental health. The fear

have become an extension of our real

of plastic and climate change. As a re-

test threat to humanity. It affects our

of infection and increased health

world. The limits of digital and physical

sult of the pandemic, corporate social

health as a result of increased air

awareness set expectations for the

interaction are dissolving: the younger

responsibility received more and more

pollution, diseases, extreme weather

hygiene practices of companies and

generation no longer knows the

attention. First and foremost, compa-

phenomena and the resulting climate

create needs for hygiene products and

boundary between these two. Con-

nies are expected to take responsibility

anxiety, among other things. No res-

contactless services. The new safety

sumers expect all the products and

for the safety and well-being of their

ponsible organisation can ignore its

and hygiene standards are here to

services they use to be available via

staff and local communities.

role in combating the climate crisis.

stay, especially in the service sector.

digital devices.

Source: Euromonitor 2021; United Nations, Climate Change 2022 Four Reasons Sustainability Report 2022 > Our sustainability programme

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OUR ETHICAL PRINCIPLES

ETHICAL PRINCIPLES:

1. R espect for human rights and dignity Our ethical principles are guided by the

principles despite the status of the employ-

ten principles of the UN Global Compact

ee in the organisation or the nature of the

Initiative. These ethical principles compile

employment. The same operating principles

guidelines of the kind of business we want to

are binding to the entire Transmeri Group, the

conduct and what kinds of expectations we

parent company of Four Reasons, and set our

meet in our daily work with each other, our

expectations for the operations of our business

customers and other stakeholders. All of our

partners as well.

employees must comply with these ethical

2. A dherence to laws and regulations 3. P rohibition of the use of child labor 4. P rohibition of forced labor and disciplinary action 5. D ecent working conditions and wages 6. P revention of discrimination

The principles of the UN Global Compact initiative are based on and therefore consistent with the following universal principles:

7. T he right to organise and unionise

• United Nations Universal Declaration of Human Rights

8. E nsuring occupational health

• ILO Declaration on Fundamental Principles and Rights at Work • United Nations Rio Declaration on Environment and Development

and safety 9. Protection of the environment

• United Nations Convention against Corruption 10. Ensuring data privacy and protection 11. E thical business practices

Four Reasons Sustainability Report 2022 > Our sustainability programme > Our ethical principles

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OUR SUSTAINABILITY PROGRAMME 2021–2029 Our sustainability programme is based on the United Nations Member States' joint sustainable development programme, which has set 17 targets to address the sustainability challenges facing society.

Four Reasons has selected three themes from the goals that are relevant to our business operations and through which we can best impact matters that our stakeholders value. These are the themes we focus on in our sustainability work: • Health and well-being • Responsible consumption • Climate actions

Four Reasons Sustainability Report 2022 > Our sustainability programme > Our sustainability programme 2021–2029

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THESE ARE OUR SUSTAINABILITY GOALS AND WHAT WE HAVE ACHIEVED SO FAR: Goal achieved, work continues Development occurred, work in progress Annual goal not reached or the work is just beginning

HEALTH AND WELL-BEING 1. Breaking the mould of beauty 50% of Finnish women feel that the goal is already achieved in our marketing.

2. The healthiest customers in the hair salon sector

RESPONSIBLE CONSUMPTION AND PRODUCTION 1. Personnel 100% committed to the Code of Conduct All of our employees are committed to our Code of Conduct, which is part of the induction process for each of our new employees.

2. Suppliers 100% committed to the Supplier Code of Conduct by 2025 In 2021, we launched discussions with our partners about the

36% of customers concentrating their purchas-

Code of Conduct, and so far, 46% of our partner companies

es on Four Reasons reported feeling satisfied

have signed the Code of Conduct.

with their well-being, compared to 28% of customers at other wholesalers.

3. The most inspiring workplace in the Finnish beauty industry In the personnel survey, we reached the best AAA level again, improving our results from the last time and performing better than the comparison set in all areas of measurement.

3. Sustainable product selection taking into account

CLIMATE ACTIONS 1. Carbon neutrality* by the end of 2029 » We use 100% renewable energy at all of our premises and production facilities in Finland. » We switched to renewable fuel in our

environmental aspects from the entire life cycle of the product

vehicles, reducing emissions from company

» Our products are 100% vegan and 100% cruelty free.

cars by 38%.

» In 2021, 37% of the packaging of our sold products was made of recycled plastic or bio-based plastic. » Our products are manufactured in ISO 22716 certified factories in Finland and elsewhere in Europe. » All of our product packages are 100% recyclable when empty.

Four Reasons Sustainability Report 2022 > Our sustainability programme > Our sustainability goals and achievements

*According to the Climate Commitment of Finland Chamber of Commerce (direct emissions from the company's operations, emissions from freight transport and emissions from employee transport)

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H EALTH AND WELL-BEING 14

GORGEOUS YOU AIMING TO BREAK THE MOULD OF BEAUTY

Mental health issues are one of the most serious problems of our time. The UN's health and well-being goals state that promoting mental well-being can prevent many other serious non-communicable diseases. As a beauty business operator, we are particularly concerned about the social pressure experienced by young adults concerning their looks. Instead of being part of the problem to which our industry has undoubtedly contributed, we want to be part of the solution.

In 2021, we adopted the goal of breaking the narrow mould of beauty, as the catalogues of beauty industry companies and media show the same set of faces every month. Believe us, we know; we committed the same crime for years. Fortunately, each of us can take a moment to look at our own actions from the outside, learn our lessons and do better.

Achieving this goal requires constant work for diversity as beauty standards are incredibly stagnant, especially in the hair and beauty industry. For a while now, people have talked about uniqueness and the beauty of the individual. So why do advertisements, covers of women's magazines and corporate social media show only one kind of person, the type traditionally thought of as beautiful, their pictures flawlessly edited?

OUR GOALS AND INDICATORS

OUR ACTIONS IN A NUTSHELL IN 2021: #1 We organised comprehensive training for all our employees concerning diversity, inclusiveness and equality in cooperation with deidei Oy. #2 Together, we defined what inclusiveness and diversity mean in our company from the perspective of product development, marketing communications and personnel. #3 We updated our visual guidelines and revamped our imagery with the aim of

To break the narrow mould of beauty

breaking the prevailing standards of beauty and creating an image of beauty

To make you feel gorgeous just the way you are

that is identifiable to all people. 50% of Finnish women feel* we have already succeeded in breaking the mould of beauty.

Indicator: An annual consumer survey that assesses the success of our marketing communications in achieving our goals.

#4 We joined forces with Ina Mikkola and organised a magazine cover workshop where we fought together against the narrow mould of beauty.

Quantitative research conducted by Otantatutkimus Oy in November 2021, commissioned by Four Reasons, target group: Finnish women aged 16–64, n=502 Four Reasons Sustainability Report 2022 > Health and well-being > Gorgeous you

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CUSTOMERS AIMING FOR WELL-BEING IN THE HAIR SALON SECTOR

Professional hair stylists play a key role in enabling the good hair days of their customers. However, a hair stylist’s work is never about only the hair: the social interaction of a hair salon visit is just as integral a part of the service experience as the hair is. You can confide in your go-to hair stylist about personal, even difficult, matters like in a close friend.

THESE ARE SOME OF THE WAYS WE SUPPORT THE WELL-BEING OF STYLISTS: #1

We engage in continuous product development in which we pay special attention to preventing hair stylists’ occupational diseases.

#2 We offer the most diverse range of e-learning courses and events in Finland – half of the courses were free of charge in 2021. #3 We support the financial well-being of stylists with, for example, fast deliveries, flexible payment times and a free e-commerce service to support additional sales. #4

We maintain an active Four Reasons community of stylists and provide constant inspiration and peer support for professional hair stylists.

The Four Reasons principle has always been to provide professional hair stylists with extensive service – not only exceptional products but also services that support the business operations of hair stylist entrepreneurs. As a partner of professional hair stylists, we feel it’s our responsibility to ensure that hair stylists aren’t worn down by their work.

OUR GOALS AND INDICATORS Our goal is to have the healthiest customers in the hair salon sector Factors contributing to well-being*: • health • financial well-being • experienced well-being Indicator: annual survey for professional hair stylists used to measure the factors contributing to well-being, a) financial well-being b) health / work ability c) experienced well-being

*Source: The Finnish Institute for Health and Welfare

Four Reasons Sustainability Report 2022 > Health and well-being > Customers

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FOUR-STAR STAFF (ON A SCALE OF 1 TO 4) OUR GOAL IS TO BE THE MOST INSPIRING WORKPLACE IN THE FINNISH BEAUTY INDUSTRY

At Four Reasons, we’re more than a regular working community. We are more of a family and a band of rebels, a true motley crew. We come noisy, composed, vivacious, funny, analytical, creative, a little odd and very weird. When dozens of top talents from their respective sectors work together and really love what they do, it can be seen in the result.

This is where we as a company get to truly boast. Once again, our staff have acknowledged us as one of Finland’s most inspiring workplaces!

OUR GOALS AND INDICATORS Our goal is to be the most inspiring workplace in the Finnish beauty industry Indicator: the PeoplePower index measured with the annual employee satisfaction survey, which measures employee commitment, leadership and performance

Four Reasons Sustainability Report 2022 > Health and well-being > Four-star staff

THESE ISSUES WERE PARTICULARLY APPRECIATED BY OUR STAFF:

#1 Decision-making is seen as effective while bureaucracy is low.

Wage levels are also considered competitive. #2 The management culture is valued and employees feel heard when decisions are being made that affect them. #3 A high level of employee commitment can be seen as an excellent employer image. #4 The staff also feel that the shared values and goals are worth pursuing.

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R E SP O N SIBLE CONSUMPTION AND P RO DUCTIO N 18

PRODUCT LIFE CYCLE

100%

As a manufacturer and marketer of cosmetic products, we can influence people's consumption choices and contribute to the UN's goal of supporting sustainable consumption and production. We work continuously to improve the transparency of our products throughout their lifecycle and to make responsible choices at different stages of the product lifecycle.

Our cleanse and care products are manufactured in Finland with 100% renewable energy

100%

The Four Reasons product selection offers solutions for different hair types for the needs of DIY hair artists as well as professional stylists and hairdressers.

vegan

You can always count on our products to be

100% 100% 100% 100%

vegan cruelty free packaged with recyclable materials manufactured at ISO 22716 certified factories

37%

of our product packaging is made of recycled plastic or bio-based materials

OTHER GOALS AND MEASURES THAT PROMOTE THE SUSTAINABILITY OF OUR PRODUCTS INCLUDE: »

Promoting the circular economy through packaging choices We use recycled plastic, aluminium and bio-based materials in our packaging.

In 2021, we reduced our consumption of virgin plastic in our product packaging by 17.9 percentage points compared to the previous year.

»

continuously increase the local production of our products, taking into account

100%

the quality and cost aspects of the products. Domestic production accounted

aging can be recycled

□Favouring local production We manufacture our cleanse and care products in Finland and we strive to

for 31% of all our products in 2021. »

of our product packwhen empty

Minimising loss and hit-and-miss purchases: We train and guide both consumers and professional hair stylists in the selection and use of products. In 2021, our training reached more than 4,000 professional hair stylists.

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Product life cycle

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INGREDIENTS WE CHOSE VEGANISM

In 2018, we set a goal to make all our products vegan.

By 2020, we stopped using animal-based ingredients, and since then, all of our new products have been vegan.

Yes, all of these: Four Reasons Original

Four Reasons Color Mask

Four Reasons Luxima

Four Reasons Professional

Four Reasons Nature

Four Reasons Bleach

Four Reasons No Nothing

Four Reasons Optima

Four Reasons Multiwave

In the past, some of our products have included hydrolysed keratin, hydrolysed silk protein and lanolin. Keratin and lanolin are extracted from sheep's wool and hydrolysed silk protein from the cocoon of the silkworm. These ingredients have been replaced with plant-based alternatives that are equally or more effective.

Did you know that animal testing has been banned in all cosmetics in the EU since 2009?

Therefore, it is an obvious choice not to test our products or ingredients on animals.

OUR GOALS AND INDICATORS Goal: Our products are 100% vegan, meaning they do not contain any animal-based ingredients.

Indicator: Percentage of vegan products in the Four Reasons product selection.

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Ingredients

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PACKAGING AIMING TO PROMOTE THE CIRCULAR ECONOMY

Our goal is to use as eco-friendly packaging as possible without compromising the product's qualities or user experience. So far, we have reached the following goals: • All of our product packages are recyclable when empty • In 2021, we reduced our consumption of virgin plastic in our product packaging by 17.9 percentage points compared to the previous year • In 2021, 36.7% of the packaging plastic in our sold products was made of either bio-based or recycled plastic, reducing the use of virgin plastic by approximately 25 thousand kilos, equivalent to 1,250,000 plastic bags OUR GOALS AND INDICATORS Goal 1: Decreasing the amount of packaging waste Indicator: The amount of packaging waste in relation to turnover Goal 2: Promoting the circular economy For our Four Reasons products, we select only 100% recyclable packaging materials Goal 3: Decreasing the use of virgin materials For our Four Reasons products, we select only packaging materials that are made of recyclable materials, bio-based or based on other renewable resources.

Indicator: Percentage of Four Reasons products packed in bio-based packaging or packaging decreasing the use of fossil virgin plastic/other virgin material.

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Packaging

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THIS IS HOW WE PACK FOUR REASONS PRODUCTS:

FOUR REASONS ORIGINAL

FOUR REASONS PROFESSIONAL

• The bottles of cleanse and care products are

• The packaging of cleanse and care

made of sugar cane-based bioplastic • The plastic bottles and caps of styling and finishing products are made of sugar canebased bioplastic, some of the products have aluminium packaging

products is made of recycled plastic • The wax jars are made of sugar cane-based bioplastic • The styling and finishing products

FOUR REASONS NO NOTHING • The packaging of cleanse and care products, Styling Mist and waxes is made of sugar canebased bioplastic • The plastic parts in the packaging

are packaged in aluminium, caps

of styling and finishing products

• The scalp products are packaged in sugar

made of recyclable plastic

are made 100% of recyclable

cane-based bioplastic and wrapped in

• Packaging 100% recyclable

PEFC certified cardboard

FOUR REASONS NATURE • All packaging made of recycled plastic • Packaging 100% recyclable

FOUR REASONS COLOR MASK • So far, no alternative has been found for the virgin plastic used in the packaging without compromising the product’s qualities or user experience • Packaging 100% recyclable

plastic • Packaging 100% recyclable

• The Takeaway Color home dye is packaged in PEFC certified cardboard, the plastic packaging is made of normal plastic • Packaging 100% recyclable

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Packaging > This is how we pack Four Reasons products

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THIS IS HOW WE PACK FOUR REASONS PRODUCTS: WHY DON’T WE PACK ALL OUR PRODUCTS IN RECYCLED MATERIALS?

Eine Piira

FOUR REASONS PROFESSIONAL HAIR COLOURS • Hair dyes packed in aluminium. We will gradually move to recycled aluminium, starting with Four Reasons Optima hair colours, in 2022.

• So far, no alternative has been found for the virgin plastic used for packaging

inen

“Just like the rest of the haircare industry, Four

as we have not yet found a more responsible

Reasons also packs its cleanse and care prod-

packaging alternative that would protect the

ucts and some styling products in plastic. Plas-

product's qualities.

tic has many qualities that speak for its use in

The same challenge applies to our so-

hair cosmetics packaging. It’s light, durable,

called technical products, in other words

• Packaging 100% recyclable

flexible and fairly cheap – these are qualities

the hair cosmetics used by professional hair

that facilitate in the transport of the product

stylists, such as developers and curling and

FOUR REASONS BLEACHES

and improve the user experience. However,

bleaching agents. For example, when colour-

plastic doesn’t break down and degrade in

ing hair, the developer added to the dye is

• The bleaching powders are packed in lightweight

nature and oil is used as its main raw material,

packed in ordinary plastic as it is best suited to

which make it an environmental issue.

protect the product and preserve its qualities

developers, without compromising the qualities of the product

and airtight packaging made of 100% recyclable plastic • Separate refillable storage packs available for bleaching powders FOUR REASONS MULTIWAVE CURLING AGENTS • Bioplastic packaging • Packaging 100% recyclable

Over the past years, we’ve been happy to

during transport and storage. So far, we have

see more environmentally friendly alternatives

not found solutions in bio-based or recycled

to virgin oil-based plastic entering the market.

plastics for the packaging of our technical

These include packaging made of partially

products. However, the majority of our tech-

or entirely out of recycled plastic and plastic

nical products consist of hair colours packed

packaging made of different bio-based raw

in aluminium tubes, which we are gradually

materials. Almost all Four Reasons products

transferring into recycled aluminium packag-

designed for home use are packaged in either

ing.”

bio-based sugarcane plastic or recycled plastic packaging. Only in the Four Reasons

Eine Piirainen, Purchasing Agent

Color Mask line do we still use virgin plastic,

of packaging materials for Four Reasons

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Packaging > Why don’t we pack all our products in recycled materials?

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PRODUCTION PRODUCTION IN FINLAND WITH RENEWABLE ENERGY Our goal in our supply chain is to commit all our suppliers and main partners to the ethical principles in use throughout our Group by 2025.

Appropriate working conditions and pay, respect for human rights and the prohibition of child and forced labour are just a few examples of the policies that we are committed to in our ethical principles to promote sustainable procurement.

In addition to our commitment to ethical prin-

Wherever possible, we choose domestic production for our products at our own eco-certified factory, where we use 100% renewable energy.

WHAT WE HAVE ACHIEVED SO FAR: • All Four Reasons products are manufactured at an ISO 22716 certified factory in Europe • In 2021, we launched a discussion with our suppliers about our Code of Conduct, and so far, 46% of our suppliers have signed our related agreement.

• We are constantly looking into the possibilities

ciples, we consider the ISO 22716 certification guaranteeing good manufacturing standards

of increasing local production. In 2021, 31% of our products were manufactured in Finland.

as a minimum requirement for our suppliers.

OUR GOALS AND INDICATORS Goal 1: All plants that produce Four Reasons products have ISO 22716 certification that ensures that all stages of the production and after it are conducted according to the standards of good manufacturing practice.

Goal 2: 100% of our suppliers are committed to our Supplier Code of Conduct by 2025.

Goal 3: We aim to increase local manufacturing and production at plants with ISO 14001 environmental certification.

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Production

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USE OF THE PRODUCT AND DISPOSAL OF THE PACKAGING AIMING TO MINIMISE LOSS

A product that matches your needs and is used until the last drop is a sustainable purchase. Our goal is to reduce our customers' hit-and-miss purchases by helping them choose the right product and to make correct recycling easier through communications and clear labelling. We also take the minimisation of loss into account in the planning of our own production and product renewals.

HERE ARE SOME OF OUR SUCCESSES SO FAR: • During 2021, our product training reached 3,780 professional hair stylists through e-learning and more than 1,000 stylists at hair salons • We have renewed our packaging to be 100% recyclable when empty. The recycling instructions of the packaging are presented on our website and in this report.

• In order to promote sustainable product selection, we have added the “Pink Choice” label to our online store products that meet the following criteria: » 100 % vegan » made in Finland » packaged in recycled materials or bio-based sugarcane plastic

OUR GOALS AND INDICATORS Goal 1: Our goal is to reduce the number of hit-and-miss purchases by our customers to help them choose the correct product.

Goal 2: We promote the circular economy by drawing up recycling instructions for all of our products in our product packaging and/or website.

Four Reasons Sustainability Report 2022 > Responsible Consumption and Production > Use of the product and disposal of the packaging

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CLIMATE ACTIONS 26

CLIMATE ACTIONS AIMING FOR CARBON NEUTRALITY BY THE END OF 2029

Climate change is a threat that affects the whole of humanity and the planet. We cannot turn back time and make it disappear but we should use all possible methods to mitigate it.

The goal of the international community is to limit climate

Finland Chamber of Commerce because decreasing the

warming to 1.5 degrees Celsius by reducing greenhouse gas

use of fossil fuels is the single most important way to stop

emissions. The goal stated in the Paris Climate Agreement

climate change and in our operations these areas are the

is reaching carbon neutrality by 2050. However, the cur-

best ways to affect the use of fossil fuels.

rent actions are not sufficient: success requires effort from all operators in society.

Four Reasons aims to reach the carbon neutrality target

WHAT DOES CARBON NEUTRALITY MEAN? Carbon neutrality means that the CO2 emissions that cannot be reduced by our own

faster than the speed of the Group, already by the end of

actions are removed from the atmosphere, for

2029. Our primary action is always reducing the carbon

example by offsetting. The priority is to reduce

is to make its properties, transport and traffic carbon-neu-

dioxide emissions generated by our business operations

emissions, for example by using renewable en-

tral by 2035. The goal has been limited to include these

but, if necessary, we will also compensate emissions caused

ergy sources or by improving energy efficiency.

three sections in line with the Climate Commitment of

by our operations or generate carbon offsets.

The shared climate goal of the entire Transmeri Group

OUR ACHIEVEMENTS IN 2021 • We use 100% renewable energy at all of our premises and production facilities in Finland • We switched to renewable fuel in our vehicles, reducing emissions from company cars by 38%

OUR GOAL Carbon neutrality of properties, transportation and traffic by the end of 2029

Four Reasons Sustainability Report 2022 > Climate Actions

27

EMISSIONS REPORTING

SCOPE 1: DIRECT EMISSIONS

According to the GHG Protocol (Greenhouse Gas Protocol)

AIMING FOR CARBON NEUTRALITY

BY THE END OF 2024

developed to calculate environmental impacts, emissions are divided into three scopes: Scope 1, Scope 2 and Scope 3. Finland Chamber of Commerce guides Finnish companies in reducing greenhouse gas emissions with the Climate Commitment, which focuses on direct emissions from the company’s operations, emissions from goods transport and emissions for personal transport.

For the purposes of emissions reporting, Scope 1 includes direct greenhouse gas emission sources owned or controlled by the organisation.

Four Reasons is a sales and marketing organisation that does not own any property or handle its own manufacturing. As a result, the most significant action in line with Scope 1 to cut down the carbon dioxide emissions from our own operations is to decrease the emissions from vehicles owned by us.

In 2021, we switched to using biodiesel in cars owned by the company, and we recently started a gradual change towards electric cars. As a result of these measures, the CO2e emissions from our business travel decreased by 38% compared to last year. In 2022, we will continue the gradual transition to electric cars.

Four Reasons Sustainability Report 2022 > Climate Actions > Emissions reporting

SCOPE 2: INDIRECT EMISSIONS FROM PURCHASED ENERGY AIMING FOR CARBON NEUTRALITY

BY THE END OF 2024 Scope 2 covers indirect emissions from purchased energy which refers to the emissions caused by electricity, steam, heating and cooling purchased for the organisation’s own use.

In 2021, we charted the purchased and used energy used in our facilities, or office and storage premises. All our premises use 100% renewable energy. The CO2e emissions from district heating also decreased by 19.8% compared to the previous year. As a result of these measures, the CO2 emissions from energy use in business premises decreased by a total of 22.9%. In order to achieve the carbon neutrality target, we will aim to negotiate the transition to renewable district heating or, alternatively, compensate for the emissions from heating in 2022.

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SCOPE 3: OTHER INDIRECT EMISSIONS

CALCULATIONS AND BASELINE

AIMING FOR CARBON NEUTRALITY

BY THE END OF 2029

Emissions expressed in tonnes of CO2 equivalent (tCO2e)

Other indirect emissions, in other words Scope 3, include all emissions in the value chain caused indirectly by the pro-

Scope

Source of CO2 emission

duction of the reporting organisation’s products or services.

Scope 1

Fuels:

In line with the policies of Transmeri Group, we commit

Petrol

to the carbon neutrality goal for the emissions of our goods

Biodiesel

transport and personal traffic. In 2021, we launched a survey

Diesel

of the emissions impacts of the transport companies we use and of our commuter traffic. In 2022, we will continue to identify transport companies that meet our service promises

Total Scope 2

Office

sions from commuting, we are launching an incentive model

19.58

23.21%

0 9.85

-68.59%

29.43

-37.71%

60.55

-54.39%

9.58

-5.94%

District heating Warehouse

and support our sustainability goals. In order to reduce emis-

Emission Change

Electricity consumption

for our field-working sales consultants.

Warehouse

0

Office

0

Total Scope 3

Transportation and distribution Business travel Commute Total

70.14

CALCULATION PRINCIPLES: -52.83%

Emissions have not yet been calculated 99.57

-57.00%

Transmeri Group follows the calculation principles of the Greenhouse Gas Protocol. The operative limitation of emissions calculation includes only Scope 1 and Scope 2 emissions categories in line with the GHG Protocol but not yet the Scope 3 figures.

In our emissions calculation, we apply the precautionary principles, and we have utilised the services of an external consultancy to execute the emissions calculation.

Four Reasons Sustainability Report 2022 > Climate Actions > Emissions reporting

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Please feel free to contact us: Sustainable products and packaging developed by: Pia Nurmi Head of Product Development + 358 44 775 7522 pia.nurmi@fourreasons.fi Health and well-being promoted by: Johanna Strömsholm Head of Marketing & Communications + 358 44 011 1584 johanna.stromsholm@fourreasons.fi Carbon-neutral business promoted and Finland's most inspiring beauty industry work community guided by: Jyrki Hakala CEO + 358 40 534 6434 jyrki.hakala@fourreasons.fi

FOUR REASONS Salomonkatu 17 A, 10th floor | 00100 Helsinki, Finland Tfn. 0201 410 410 | www.en.fourreasons.fi/

Illustration: Venla Vaattovaara @muijavaara