Four Reasons Sustainability Report 2022

SUSTAINABILITY REPORT

FOUR REASONS AS A COMPANY

Four Reasons is a community of passionate hair stylists whose mission is to make everyone feel gorgeous as themselves. 100 % vegan, sustainably produced professional hair products, made with love for people’s individual beauty.

Four Reasons

The official name of the company is

Miraculos Oy

In addition to Finland, we export our products through our distributors to countries such as Sweden, Norway, Denmark, the Netherlands, and the USA.

The Happiest Hair Salons

Part of the Finnish family-owned Transmeri Group whose turnover is EUR 257 million and which employs over 700 people. Learn more about our Group’s sustainability work at www.transmerigroup.fi.

VALUES

Head office in Helsinki, warehouse in Espoo

Number of employees

47

Respect

Cooperation

Courage Development

AREAS OF OPERATION

Sales, marketing and import of hair cosmetics and hair salon supplies and furniture

OUR FOUR REASONS PRODUCTS

Our products are designed to meet the demanding needs of professional hair stylists and to boost the daily hair routines of DIY hair artists, making every hair day even better.

FOR THE TECHNICAL WORK OF PROFESSIONAL HAIR STYLISTS

Hair colours, developers, bleaches, perms – you name it, we got it. Our technical products have been developed in cooperation with professional hair stylists to serve hair salons both with great value and ease of use. It is easy to succeed with our reliable colour products!

PRODUCTS FOR HAIR SALONS AND HAIR ENTHUSIASTS

Straight or curly, coloured or natural, long or short. Whatever your hairstyle and type, the Four Reasons range has the products for your unique look. Choose from our five product families!

Four Reasons Optima – coverage, shine, richness

47 % resale products

Four Reasons Luxima – natural, three-dimensional, glossy

53 % technical products

Four Reasons Bleach – effective, gentle bleaches

Four Reasons Perm – fragrance-free, ammonia-free permanent

Four Reasons Professional – when only the best is good enough

Four Reasons Color Mask – toning and colour maintenance

Four Reasons Original – trusted products for everyday hair routines

Four Reasons Nature - natural luxury

Four Reasons No Nothing – a fragrance-free option

Based on the results of our personnel survey, we have received an honourable mention as one of Finland’s most inspiring workplaces for several years in a row.

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

RESPONSIBILITY FOR PEOPLE

Our goal is to have the best employee experience and the healthiest customers in the beauty industry

We want to make you feel gorgeous just the way you are. We develop products and services that provide better hair days for an increasing number of different hair types.

We support the financial well-being of stylists with, for example, fast deliveries, flexible payment times, sales promotion campaigns and trainings.

OUR SUSTAINABILITY IN A NUTSHELL

All Four Reasons products are 100% vegan, meaning they do not contain any animal-based ingredients.

The Four Reasons cleanse and care products manufactured in Finland are made with certified and 100% renewable wind power.

Our goal is to enable sustainable choices for our customers, taking into account environmental aspects from the entire life cycle of the product

Since the start of our packaging renewal in 2018, we have moved on to using recycled plastic, bio-based plastic or other non-virgin materials whenever possible. 100% of our packaging can be recycled when empty.

RESPONSIBILITY FOR THE ENVIRONMENT

We participate in the global fight against climate change with the aim of achieving carbon neutrality in our operations by 2029.

BETTER WELL-BEING FOR HAIR SALONS

A visit to a hair salon always does good, both internally and externally – as anyone who has ever sat in a hairdresser's chair knows. However, few can experience the kind of enlightenment that I had the opportunity to experience last year when I visited hair salons in my hometown Hämeenlinna in Finland.

This time, I didn't go to the salon as a customer, but I had booked an appointment in the role of an interviewer. I wanted to hear how hairdressers are doing, what challenges they are facing in the industry, and what expectations entrepreneurs in the industry have for the future. Our other members of the executive team, as well as our marketing and sales team, did the same.

We interviewed over 40 hairdressers all over Finland as part of our company's strategic work to better understand how we can support our customers even better in the future. One challenge stood out among the others: the labor shortage in the hairdressing industry. Some hair salon owners have so many customers that they can no longer take in new ones – especially since it seems that skilled workers cannot be found anywhere. This observation was supported by discussions with vocational schoolteachers, who reported a decline in interest in the industry among students and a dwindling number of students graduating in the field.

It became clear to us that it is time to restore the well-deserved value of this creative, interactive, and craftsmanship-oriented profession of hairdressers.

HAPPIEST CUSTOMERS AND MOST INSPIRING WORKPLACE

As our strategic work progressed, our vision for the year 2025 became short and concise: "The happiest hair salons." We see it as our responsibility to be at the forefront of building an attractive hairdressing industry for both new and existing entrepreneurs and employees. We want to be a trendsetter in the beauty industry by building the most inspiring workplace in the beauty industry and creating the best conditions for hairdressing entrepreneurs to succeed with the goal of having the most well-being customers in the industry.

Our sustainability work is divided into three themes that we have chosen from the United Nations' Sustainable Development Goals. The most important theme for us is health and well-being – the responsibility towards the people in our community. Only people who feel healthy

in their work can achieve great results, and only healthy customers will return to use the products and services they have used repeatedly. In the past year, we have made strides in achieving our well-being goals based on the metrics we have set. However, we are aware that the work is continuous, and we are never done. In 2023, we will implement our new strategy by developing our customer experience concept, which will take us towards our vision. We are creating a vibrant hairdressing industry and fulfilling our promise every day to be the best partner for hairdressing entrepreneurs.

FINNISH DESIGN AND MANUFACTURING

Two other themes in our sustainability work are related to our responsibility towards the environment: we promote responsible consumption and production through decisions related to our products, and we take climate action to strive for carbon neutrality in our operations. In our sustainability efforts, we consider the entire lifecycle of our products from raw materials to packaging materials, manufacturing, product selection, and packaging recycling.

The past year brought new challenges to our production chains, such as global shortages of raw materials and components, as well as increased production costs. Despite these challenges, we managed to increase the use of environmentally friendly materials in our packaging: by the end of the year, 41% of our plastic packaging was made from recycled or bio-based plastic. I am particularly proud that our washing and care products manufactured at our factory in Finland go through the entire production process using 100% renewable wind power. We approach 2023 with optimism, ambitious goals, and investments in the future. In this report, you will find more information about the measures and achievements we have taken, as well as our upcoming projects for the coming year. I hope you support us on this journey: the best way to do so is to use local hairdressing services and buy Finnish products.

Together towards even better hair days,

Four Reasons

OUR SUSTAINABILITY GOALS AND ACHIEVEMENTS

HEALTH AND WELL-BEING

The healthiest customers in the hair salon sector

Hair stylists’ estimates of their own well-being averaged 7.95, which is 0.21 percentage points more than in spring 2021 (rating scale 4–10). Learn more on p. 23.

The best employee experience in the beauty industry

According to our staff, one of our strengths is a working environment where you can be yourself! We measure the realization of the things our employees consider the most significant with the eNPS (Employee Net Promoter Score). The result was an eNPS of 30, which is considered excellent. Learn more on p. 29.

Gorgeous you!

We want to make you feel gorgeous just the way you are. We develop products and services that provide better hair days for an increasing number of different hair types. Learn more on p. 20.

RESPONSIBLE CONSUMPTION AND PRODUCTION

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 our new employees. Learn more on p. 16.

Suppliers 100% committed to the Supplier Code of Conduct by 2025

In 2021, we launched discussions with our partners about the Code of Conduct, and so far, 79%* of our partner companies have signed the Code of Conduct. Learn more on p. 40. Taking into account sustainable development for the entire life cycle of the product

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

» In 2022, 41% of the plastic packaging of sold Four Reasons 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. Learn more on p. 33.

Goal achieved, work continues

Development occurred, work in progress

Annual goal not reached or the work is just beginning

CLIMATE ACTIONS

Carbon neutrality** by the end of 2029

» We extended the GHG protocol-based emissions calculation to also cover the Scope 3 categories of commuting, business travel, transportation and distribution.

» We use 100% renewable energy at all of our premises and production facilities in Finland. Learn more on p. 45.

* The calculation of the percentage share is based on the percentage of purchases in euros from suppliers within the scope of the Code of Conduct.

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

OUR SUSTAINABILITY PROGRAMME

BEST OF 2022!

Certified natural cosmetics in the best products of the year.

HIGHLIGHTS OF 2022

41 %

The transition to the use of recycled aluminium in the Four Reasons Optima colour tubes has started! Learn more on p. 39

In 2022, 41% of the plastic packaging of sold Four Reasons products was made of recycled plastic or bio-based plastic .

79 % of our partner companies have signed our Code of Conduct . Learn more on p. 40

eNPS 30

– a promoter score given by our staff! Learn more on p. 29

The ‘Stories behind hair’ campaign celebrated everyone’s individual beauty. Learn more on p. 21

395

trainings that reached almost 4,000 hair stylists. Learn more on p. 28

OPERATING ENVIRONMENT AND MEGATRENDS

2022 was a year characterised by global crises that turned the focus of many people and companies to coping with everyday life instead of thinking about the future. The pandemic is still ongoing, and the Russian war of aggression against Ukraine, which shook Europe in particular, also indirectly affected our daily lives. We are still dealing with the climate crisis and the growing challenges of well-being.

When our faith in the future wavers, it is important to be able to see opportunities and make choices that allow us to build a better future, even in the midst of crises.

Photo by Li-An Lim on Unsplash

HEALTH AND WELL-BEING

The uncertainty around us has created a serious threat to mental health. Uncertainty regarding working life, livelihoods and public safety, the ecological sustainability crisis and the pandemic are testing people’s resilience and mental health.

CLIMATE CRISIS

Environmental degradation is the single greatest threat to humanity. It affects our health as a result of increased air pollution, diseases, extreme weather phenomena and the resulting climate anxiety, among other things. No responsible organisation can ignore its role in combating the climate crisis.

SOCIAL RESPONSIBILITY

Before the COVID-19 pandemic, consumers’ greatest causes for concern related to the environment were the use of plastic and climate change. As a result of the pandemic, corporate social responsibility received more and more attention. First and foremost, companies are expected to take responsibility for the safety and well-being of their staff and local communities.

DIGITALISATION

Digital devices and virtual reality have become an extension of our real world. Technology and data are becoming increasingly integrated into people’s daily lives, and development changes the way we operate. Consumers expect the products and services they use to be available via digital devices, but not at the expense of humanity.

Source: Sitra’s megatrends 2023

In our business development and sustainability work, we consider megatrends shaping consumer behaviour:

STAKEHOLDER COOPERATION

We engage in a continuous dialogue with our important stakeholders to better understand their needs and expectations and hopes for us. We do this with different customer, market and brand studies and by maintaining a dialogue in our own communications channels as well as in all of our daily face-to-face encounters. We utilise the feedback we collect in the continuous development of our products and services as well as our operations.

Our key stakeholders and their expectations for us:

CUSTOMERS

For professional hair stylists, hair products are a mix of passion, daily tools and an extension to their own craft. Products must be 100% reliable and safe but also economical with an excellent user experience. In addition to functional products, our customers expect comprehensive service from us to support their business: personal service, fast deliveries, training to develop the professional competence of hair stylists and marketing that promotes the sales of the hair salon.

CONSUMERS

For consumers, hair care is a daily routine, above all. Despite that, the stakes are high: the daily gamble is looking like yourself. The core role of hair products is to make everyday life easier and help get a good vibe: in other words, to create a good hair day. The product and packaging must be sustainable but not at the cost of the product’s quality. Our users appreciate our products’ value for money and our groundbreaking and courageous approach to beauty care that they can identify with.

EMPLOYEES

Our personnel are a tight-knit and result-oriented working community that has a passionate approach to hair cosmetics and the hair salon sector. Above all, our employees value the working environment of our company, where they can be themselves, as well as the security and continuity of the work. They expect good leadership, fair and just compensation, equal treatment and personal development opportunities from their employer.

OWNERS & THE BOARD OF DIRECTORS

Our owners want to focus on business opportunities that create a better future for humani ty and the entire planet. Sustainability is expected to steer the daily development of our business operations.

PARTNERS

Our key partners include factories and suppliers as well as distributors of our products who expect long-term cooperation, continuity and reliability from us. Our other partners include transport companies and businesses providing research, consultation, design and marketing services. As a business that buys services, ethical and reliable business operations are expected of us.

OUR ETHICAL PRINCIPLES

Our ethical principles are guided by the ten principles of the UN Global Compact Initiative. These ethical principles compile guidelines of the kind of business we want to conduct and what kinds of expectations we meet in our daily work with each other, our customers and other stakeholders. All of our employees must comply with these ethical

principles despite the status of the employee in the organisation or the nature of the employment. The same operating principles are binding to the entire Transmeri Group, the parent company of Four Reasons, and set our expectations for the operations of our business partners as well.

ETHICAL PRINCIPLES:

1. Respect for human rights and dignity

2. Adherence to laws and regulations

3. Prohibition of the use of child labour

4. Prohibition of forced labour and disciplinary action

5. Working conditions and pay

6. Prevention of discrimination

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

• United Nations Universal Declaration of Human Rights

• ILO Declaration on Fundamental Principles and Rights at Work

• United Nations Rio Declaration on Environment and Development

• United Nations Convention against Corruption

7. The right to organise and unionise

8. Ensuring occupational health as well as occupational and product safety

9. Protection of the environment

10. Ensuring data privacy and protection

11. Ethical business practices

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

HEALTH AND WELL-BEING

One of the UN’s key sustainable development goals is to promote the health and wellbeing of people. The crises and the general uncertainty surrounding us have strongly affected our lives in recent times.

Living in uncertainty consumes the mental resources of each and every one of us, but the situation has particularly affected entrepreneurs and those working in the service sector. Alongside their own health and that of their loved ones, many have to worry about their livelihoods. Taking care of your health and well-being is now more important than ever.

Social responsibility is the most important sustainability theme in our company, and we work to advance it at the level of our employees, customers and society as a whole. We still have a long way to go, but we are also proud of what we have achieved so far.

OUR ACHIEVEMENTS TO PROMOTE HEALTH AND WELL-BEING:

We support professional hair stylists in terms of finances, health and mental well-being. The most important part of this work is the development of safe products that help maintain the work ability of hair stylists, for example, by avoiding the use of allergenic ingredients in our products. Learn more on p. 25.

Our employees feel that our strength lies in a working environment where they can be themselves. Together, we chose leadership and team spirit as development targets, which are developed, for example, through common management practices for our supervisors and by developing our common remuneration practices.

Learn more on p. 29.

The ‘Stories behind hair’ campaign celebrated everyone’s individual beauty with the goal of making everyone feel gorgeous the way they are. With the help of the campaign, we wanted to expand the representation in beauty industry advertising by highlighting not only gorgeous hair, but also the inspiring stories behind it. Learn more on p. 21.

GORGEOUS YOU

THE GOAL IS TO MAKE YOU FEEL GORGEOUS JUST THE WAY YOU ARE!

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 noncommunicable 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.

We want to make you feel gorgeous just the way you are. We are developing products and services that provide better hair days for more diverse range of hair types.

GOALS AND INDICATORS

Goal: To make you feel gorgeous just the way you are

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

OUR ACCOMPLISHMENTS IN 2022:

We are constantly developing our products and services so that we can offer better hair days for an increasing number of different hair types. In 2022, we launched the Four Reasons Professional Shots hair care service for all hair types, as well as 16 new Four Reasons products based on the wishes of our customers. We work to ensure that hair stylists can make their customers feel gorgeous just as they are, regardless of hair type.

‘Stories behind hair’ campaign

In spring 2022, we celebrated everyone’s individual beauty with the ‘Stories behind hair’ campaign. Our goal was to make everyone feel gorgeous the way they are. With the help of the campaign, we wanted to expand the representation in beauty industry advertising by highlighting not only gorgeous hair, but also the inspiring stories behind it.

“For me, all my feelings have always been reflected in my hair. On good days, I notice that my hair strengthens my self-esteem and gives me energy. On a bad day, I get frustrated when none of the curls do what I want or sit properly,” says Johanna, one of the models of the campaign, as she explains her relationship with her copper curls.

Supporting hair loss with MyClips Collaboration

In addition, we cooperated with parties that share the same values, such as MYClips, which

manufactures handmade hair clips. MYClips is a Finnish company that manufactures hairpieces made of real hair that are attached to a wig cap. The hairpieces are designed for people with alopecia, cancer patients and other people without hair. MYClips hair clips are an ethical alternative to wigs. The purpose of the cooperation was to not only share the good but also to raise awareness of MYClips among people without hair. “Hairlessness is not always a choice, but something brought on by illness that affects one’s self-image,” says Minna Haantaus-Pekarila, hair stylist and developer of MYClips.

A community where everyone can feel gorgeous just as they are

We continued to work internally to create a workplace where everyone can be an important part of the community and feel gorgeous just as they are. In 2022, we clarified the company values that every employee is expected to commit to. Based on the results of our personnel survey, our employees feel that our greatest strength is a work environment in which they can be themselves. Learn more on p. 29.

Since last year, it has been possible in our Group to report inappropriate behaviour and suspicions of crime, violation or abuse confidentially through the ethical Whistleblowing reporting channel, which can be found on our website.

THINGS WE WILL INVEST IN IN 2023

Four Reasons is a hair salon sector community passionate about hair and whose mission is to make everyone feel amazing, just as they are.

Four Reasons’ means to support the hair stylist community in this goal include producing versatile products for the needs of different hair types, as well as providing training that helps hair stylists to consult their customers and serve them individually.

In 2023, we will continue our development work and develop products and services that provide better hair days for an increasing number of different hair types. At the start of 2023, we launched the anticipated Four Reasons Original Curl products for curly hair. We also launch technical products for hair salons that facilitate and support the work of

professional hair stylists, such as the customisable Four Reasons Shape perm solution and the Four Reasons Optima Liquids hair colours for toning bleached hair. In addition to product development, we will continue to develop our training offering, focusing especially on the importance of suitability and customer consultation.

Our model choices are an important part of our sustainability work, and we will continue the work towards increasingly diverse imagery. The popularity of the Four Reasons model bank, which launched in 2021, has surprised us all – which naturally means that you lovely, wonderful individuals are here to support us in this mission.

THE HEALTHIEST CUSTOMERS 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.

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.

THESE ARE SOME OF THE WAYS WE SUPPORTED THE WELL-BEING OF HAIR STYLISTS IN 2022:

#1 We engage in continuous product development in which we pay special attention to product safety, streamlining work and preventing hair stylists’ occupational diseases.

#2 We offer a diverse range of e-learning courses and training events – 40% of the courses were free of charge in 2022.

#3 We support the financial well-being of hair 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.

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

OUR ACCOMPLISHMENTS IN 2022

In our operations, our goal of having “the healthiest customers in the hair salon sector” means that we make choices that promote the financial, physical and mental well-being and health of professional hair stylists. Even though the hair salon sector is being tested by crises, rising costs and rush, stylists in the hair salon sector are doing better than they did a year and a half ago, according to a study* commissioned by us in October 2022. Hair stylists’ estimates of their own well-being averaged 7.95, which is 0.21 percentage points more than in spring 2021 (rating scale 4–10). The work of a hair stylist is in itself the biggest source of well-being at work: more than 90% find their work meaningful and often feel enthusiastic about their work!

THE THINGS THAT INCREASE WELL-BEING WERE DESCRIBED, FOR EXAMPLE, AS FOLLOWS:

”Exercise,

”Hobbies, wonderful colleagues and, of course, lovely customers. Leisure time is important, and travelling is great from time to time.”

”Lovely customers! A happy mind. Customer satisfaction is rewarding.”

rest and a healthy diet. Good physical strength is important in the work of a hair stylist.”

HEALTH AND WORK ABILITY

This is how we supported the health and work ability of hair stylists in 2022:

• Taking the health of hair stylists into account in our product development

• We expanded our range of fragrance-free products with, for example, the first silver shampoo approved by the Finnish Allergy, Skin and Asthma Federation

• A diverse selection of training courses that also takes into account health and well-being

We engage in continuous product development in which we pay special attention to preventing hair stylists’ occupational diseases. We try to avoid ingredients and consistencies that create allergies and skin or respiratory tract symptoms within the boundaries set by the products’ purpose of use and characteristics. Examples of the results of our development work include our fragrance-free Four Reasons Optima hair colour line, our dust-free Four Reasons Bleach and our fragrance-free Four Reasons No Nothing product line developed in collaboration with the Finnish Allergy, Skin and Asthma Federation. The latter product line was expanded in 2022 with, for example, the first silver shampoo approved by the Finnish Allergy, Skin and Asthma Federation.

FINANCIAL WELL-BEING

This is how we supported the financial well-being of hair stylists in 2022:

• Fast deliveries – over 97% of our deliveries in Finland were delivered to hair salons within 36 hours!

• A diverse range of e-learning courses – 40% of the courses were free of charge

• Free marketing materials – also for social media

• Flexible payment times

• A free e-commerce service to support additional sales

A survey conducted in December 2022 revealed that while four out of five hair stylists feel that they have sufficient expertise in terms of the company’s financial affairs, less than half feel that their current level of income is sufficient in the present and the future. The hair stylists felt that the financial difficulties are caused by the general increase in prices, longer periods between customer appointments or direct customer losses, and the perceived difficulty in raising one’s prices. Four out of five respondents said that they have increased their service prices over the past year, and three out of four have increased their product prices.

The respondents felt that brand visibility that leads to increased demand for products and campaigns that promote sales are already implemented well at Four Reasons. Flexible payment times were also praised. Good financial management goes hand in hand with the ability to cope as an entrepreneur.

MENTAL WELL-BEING

This is how we supported the mental well-being of hair stylists in 2022:

• A diverse selection of training courses that also takes into account health and well-being

• At the Little Things Matter digital event, psychologist Annamari Heikkilä shared her tips and tricks on better coping

• Peer support for hair stylists

• An active Four Reasons hair stylist community

In the heavily entrepreneurial hair salon sector, it may come as a surprise that challenges related to well-being are most often related to physical rather than mental health. Harmful stress is also experienced, but hair stylists mainly feel that work provides more resources than it takes away. More than 90% of hair stylists find their work meaningful and often feel enthusiastic about their work! Overall, four out of five feel that they are mentally well.

In terms of mental well-being, the support provided by trainers and training courses is highly rated among hair stylists: 90% find it meaningful. Peer support is also important – the majority value the support they receive from the hair stylist community and their colleagues on social media and in live events. Four Reasons has succeeded in providing mental support through training, the hair stylist community and its own sales representative: only 2% felt that they have been left completely without professional support.

ACTIONS FOR 2023

WE WANT TO DO OUR BEST TO SUPPORT YOU AS A PROFESSIONAL HAIR STYLIST!

We continue our selected line as a partner promoting the financial benefit of hair stylists by offering products and services at a smart price, profitably for all parties. We launch products that improve the service selection, customer experience and profitability of hair salons.

PROVIDING SUPPORT FOR HAIR STYLISTS

We are always planning new campaigns to promote hair stylists’ sales, and we promote the sales of our products in hair salons by providing sales promotion and marketing materials for hair salons free of charge. We also hold on to the fast deliveries appreciated by our customers because they enable minimising our customers’ capital tied up in stock. Our network of sales consultants covers the entire country and helps hair stylists with product sales, presentation and portfolio management. For our part, we try to promote

hair stylists’ work ability and coping at work by ensuring that they have the necessary tools at their disposal and the expertise to continue in their profession until retirement. We maintain an active Four Reasons community and offer peer support to hair stylists, and we will continue to promote comprehensive development together with hair stylists.

AN EVEN MORE DIVERSE TRAINING SELECTION

Our training team guides hair stylists in the use of our products with salon trainings and video and webinar trainings that make our use and technique product trainings available to all. We offer hair stylists a number of free e-learning courses that enable them to develop their professional skills free of charge, regardless of time and place. We listen to our customers’ wishes and needs and continuously develop our training selection based on their feedback. The purpose of our trainings is to support the overall well-being of our customers.

To best respond to our customers’ needs and wishes, we conduct an annual well-being survey for professional hair stylists, which is utilised when planning our operations.

• We are renewing our training selection and developing a wide, diverse range of training courses and events that take into account financial and mental well-being as well as health

• Small everyday acts of well-being, such as rewarding our customers for their feedback with well-being gift cards and sharing work ergonomics tips in our training events and on our social media channels

We continue to be present, for example, through the Four Reasons community and by providing fast deliveries, personal service and free marketing materials to support sales

THESE ARE SOME OF THE WAYS WE SUPPORT THE WELL-BEING OF HAIR STYLISTS THIS YEAR:

THE BEST EMPLOYEE EXPERIENCE IN THE INDUSTRY

At Four Reasons, we’re more than a regular working community. A total of 47 experts work in our Four Reasons headquarters in Kamppi, Helsinki, our warehouse in Espoo and the field around Finland. They are united by respect for people’s differences, the desire to work together, the courage to try and the eagerness to learn new things. When dozens of the most skilled in their craft work together and really love what they do, the end result fits the bill.

THESE ISSUES WERE PARTICULARLY MEANINGFUL TO OUR STAFF:

• reliable and capable management

• a working environment where one can be themselves

• job security and continuity

• work-life balance

• possibilities to influence one’s work and work environment

GOALS AND INDICATORS

Goal: The best employee experience in the beauty industry

Indicator: An annual personnel survey, which measures how well the things that matter most to our employees are realised in our company and how likely they are to recommend our company as a workplace. Based on the eNPS (Employee Net Promoter Score).

OUR ACCOMPLISHMENTS IN 2022

In 2022, we focused on developing common processes, creating a new strategy, clarifying common values and increasing customer understanding. We continued our internal work to create a workplace where everyone feels comfortable, regardless of their background or identity. We started planning operations that are even more customer-oriented and a project to develop our customer experience, both of which also mean the development of common processes and cooperation to ensure, among other things, the smooth flow of information.

In addition, we introduced an annual personnel survey, which will enable us to focus on matters that are more relevant to people in the future. Unlike a traditional employee survey, the Siqni survey allows employees to select

the five most relevant claims related to a good workplace, for which they give their evaluation and open feedback. This allows us to learn which things are most important to our staff, how well we succeed in them, and what we could still improve to realise the things that are valued by our staff.

According to our staff, one of our strengths is a working environment where you can be yourself. We ask our employees about the things they consider to be the most significant and measure their realisation with the eNPS (Employee Net Promoter Score). The result was an eNPS of 30*, which is considered excellent. The target of our Group’s sustainability programme for each company is an eNPS of 20, but we have set ourselves a target of an eNPS of 40 by the end of 2023.

WE WILL INVEST IN THESE IN 2023

Why settle for great when you can reach for the stars? We want the people who work for us to have the best employee experience in the beauty industry. Our goal is an eNPS of 40* by the end of 2023. In 2023, we will determinately further the company’s development projects aiming at the future. We will invest in the planning of more customer-oriented operations and the development of customer experience. This also means developing common processes to ensure smooth cooperation and the flow of information.

We will also focus on promoting the development areas that were jointly selected based on the personnel survey. Among other things, we will develop our remuneration practices and the common management practices of our supervisors, clarify our common objectives and take measures to achieve them. In addition, we will work on system development projects aimed at digitising processes and invest in cooperation with distributors. These development projects help us to provide the best service for our customers in the future and to create preconditions for growing our business outside the Finnish borders.

RESPONSIBLE CONSUMPTION AND PRODUCTION

PRODUCT LIFE CYCLE

Hair has a huge impact on how we see ourselves. Products are the tools we use to create better hair days. That is why we don’t use just any old hair products. It is our responsibility to do our part in promoting responsible production and sustainable consumption. Our long-term development work aims at creating products with a life cycle built on responsible choices that are based on sustainable development.

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 life cycle and to make responsible choices at different stages of the product life cycle.

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

You can always count on our products to be:

100% vegan

100% cruelty free

100% packaged with recyclable materials

100% manufactured at ISO 22716-certified factories

Favouring local production

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 2022, we reduced our consumption of virgin plastic in our product packaging by 17 percentage points compared to the previous year. We started the transition to recycled aluminium packaging in Four Reasons Optima colour tubes.

We manufacture our cleanse and care products in Finland, and we strive to continuously increase the local production of our products, taking into account the quality and cost aspects of the products. Domestic production accounted for 27% of all our products in 2022.

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 2022, our training reached more than nearly 4,000 professional hair stylists.

INGREDIENTS

Ingredients are an essential part of our daily work. We are constantly working to chart new sustainable salon-quality ingredients and develop new vegan product innovations for professional hair stylists and DIY artists.

In 2022, we launched several technical products for professional use, including the vegan Four Reasons Smoothing Treatment keratin treatment and the Four Reasons Professional Shots ampoule treatments suitable for all hair types. In addition, we launched 16 new vegan hair products in our Four Reasons retail range. One of these is the Four Reasons Original Volume Texture Spray, which received a Best of 2022 award.

What does vegan mean?

Learn more here.

GOALS AND INDICATORS

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

Indicator: We only develop 100% vegan Four Reasons products.

COSMOS NATURAL CERTIFICATE ISSUED BY ECOCERT

The Four Reasons Nature product line has been awarded the Cosmos Natural certificate by Ecocert, which guarantees natural ingredients as well as ecological production and packaging.

ECOCERT® Cosmos Natural certified products must meet strict criteria. The ingredients must come from renewable sources, the

production process must be environmentally friendly and the packaging must be sustainable. Ecocert was the first company in the world to develop international standards for natural cosmetics. Ecocert also actively monitors compliance with the criteria.

THINGS WE WILL INVEST IN IN 2023

All Four Reasons Nature products have the Cosmos Natural certificate issued by ECOCERT®. Read more!

We will continue to look into new sustainable ingredients and develop new vegan product innovations. In addition, we will prepare for possible legislative changes in 2023 in a sustainable manner and strive to avoid unnecessary waste through good planning.

PACKAGING

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 2022, we reduced our consumption of virgin plastic in our product packaging by 17 percentage points compared to the previous year

• In 2022, 41% of the plastic packaging in our sold Four Reasons products was made of either bio-based or recycled plastic, reducing the use of virgin plastic by approximately 7,500 kilos, equivalent to 400,000 plastic bags

• We started the transition to recycled aluminium packaging in Four Reasons

Optima colour tubes

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: Whenever possible, we select packaging materials that are made of recyclable materials, bio-based or other materials based on renewable resources for our Four Reasons products.

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

OUR ACCOMPLISHMENTS IN 2022

Charting environmentally friendly packaging is part of our product development process, whether it concerns launching a new product or renewing the packaging of existing products. Our packaging renewals in 2022 included the transition of Four Reasons Multiwave perm solution packaging to packaging made of recycled plastic and the start of the transition of Four Reasons Optima colour tubes to recycled aluminium packaging.

In addition, we have switched to using material from the side streams of the forest industry, i.e. pulp mill by-products, as one of the raw materials in the labels of some of the Four Reasons No Nothing, Four Reasons Nature and Four Reasons Original products.

THINGS WE WILL INVEST IN IN 2023

We will continue to look into new, more sustainable packaging material options and plan the transition carefully to avoid unnecessary waste. In addition, we will continue to specify the recycling labelling of product packaging in 2023. In 2023, we will also increase the use of recycled aluminium and continue the transition of Four Reasons Optima colour tubes to recycled aluminium packaging.

THIS IS HOW WE PACK FOUR REASONS PRODUCTS:

FOUR REASONS ORIGINAL

• The bottles of cleanse and care products are made of sugarcane-based bioplastic

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

• The Scalp products are packaged in recycled plastic and wrapped in PEFC-certified cardboard

• The Takeaway Color home dye is packaged in FSC-certified cardboard, the plastic packaging is made of normal plastic

• Packaging 100% recyclable

FOUR REASONS PROFESSIONAL

• The packaging of cleanse and care products is made of recycled plastic or bio-based sugarcane plastic

• The wax jars are made of sugarcane-based bioplastic

• The styling and finishing products are packaged in aluminium, caps made of recyclable plastic

• The Shots ampoule treatments are made of normal plastic

• Packaging 100% recyclable

FOUR REASONS NO NOTHING

• The packaging of cleanse and care products, Styling Mist and waxes is made of sugarcane-based bioplastic

• The plastic parts in the packaging of styling and finishing products are made 100% of recyclable plastic

• Packaging 100% recyclable

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

THIS IS HOW WE PACK FOUR REASONS PRODUCTS:

FOUR REASONS PROFESSIONAL HAIR COLOURS

• Hair dyes are packaged in aluminium. In 2022, we began a gradual transition to using recycled aluminium in Four Reasons Optima 100 ml hair colour tubes.

• So far, no alternative has been found for the virgin plastic used for packaging developers without compromising the qualities of the product

• Packaging 100% recyclable

FOUR REASONS BLEACHES

• The bleaching powders are packed in lightweight and airtight packaging made of 100% recyclable plastic, Four Reasons Bleach Cream is packaged in aluminium tube

• Separate refillable storage packs available for bleaching powders

FOUR REASONS PERM SOLUTIONS

• Multiwave and Shape packaging made of recycled plastic. Smoothing Treatment packaging is normal recyclable plastic

• Packaging is 100% recyclable when empty

TECHNICAL PRODUCTS

• Seal & Shine Oil is packaged in bio-based sugarcane plastic. Violet Drops and Clean are packaged in recyclable plastic

• Packaging is 100% recyclable when empty

PRODUCTION

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 principles, we consider the ISO 22716 certification guaranteeing good manufacturing standards as a minimum requirement for our suppliers. 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 2022, we continued discussions with our suppliers about our Code of Conduct, and so far, 79% of our suppliers have signed our related agreement and committed to adhering to the Code of Conduct.

• We are constantly looking into the possibilities of increasing local production. In 2022, 27% of our Four Reasons products were manufactured in Finland.

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 those 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 factories with ISO 14001 environmental certification.

THINGS WE WILL INVEST IN IN 2023

Our basic requirement for all factories that produce our products is the ISO 22716 certificate, which ensures that all stages of the production and those after it are conducted according to the standards of good manufacturing practice. We have achieved this goal a long time ago, but we want to aim higher.

In 2020, we drew up a Code of Conduct used by our entire Group, which we have discussed with our various suppliers. By the end of 2022, 79%* of our suppliers had signed a commitment to our Code of Conduct. The discussions with suppliers continue, and we want to bring all our suppliers within the scope of our Code of Conduct by 2025 at the latest.

In 2022, we actively explored the possibilities of increasing local production, and this work will also continue this year. Domestic production accounted for 27% of all our products at the end of the year. Our goal is to manufacture our products as locally as possible while ensuring the quality and availability of our products. At our factory, we manufacture products using 100% renewable energy.

ETHICAL PRINCIPLES:

1. Respect for human rights and dignity

2. Adherence to laws and regulations

3. Prohibition of the use of child labour

4. Prohibition of forced labour and disciplinary action

5. Working conditions and pay

6. Prevention of discrimination

7. The right to organise and unionise

8. Ensuring occupational health as well as occupational and product safety

9. Protection of the environment

10. Ensuring data privacy and protection

11. Ethical business practices

*The calculation of the percentage share is based on the percentage of purchases in euros from suppliers within the scope of the Code of Conduct.

USE OF THE PRODUCT AND DISPOSAL OF THE PACKAGING

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. We provide help and create content to make choosing the right product easier and to reduce hit-and-miss purchases.

HERE ARE SOME OF OUR SUCCESSES SO FAR:

• During 2022, our product training reached 2,710 professional hair stylists through e-learning and more than 1,000 stylists at hair salons

• All of our packages are 100% recyclable when empty.

• The recycling labels on our packaging are kept up to date, and the recycling instructions are available on our website.

GOALS AND INDICATORS

Goal 1: Our goal is to reduce our customers’ hit-and-miss purchases by helping them choose the right 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.

ACHIEVEMENTS AND ACTIONS

2022–2023

At Four Reasons, we have a long training tradition in the hair salon sector and are known for our salon-oriented training. It has always been important for us to understand the everyday life of hair salons and to offer solutions to support hair stylists’ work and financial success. Training services are not only an important part of the customer experience we produce, but also an act of sustainability, as they enable us to reduce product waste in salons and improve successful product use.

In addition to our training selection, we produce social media content supporting the use of our products on an almost daily basis and help in the daily life of hair salon work through our multi-channel customer service. We also aim to decrease the number of consumers’ hit-and-miss purchases by producing content on our website, social media and product sales points to help consumers choose the correct products and use them as instructed.

WE HELP YOU MAKE A MORE SUSTAINABLE CHOICE

For each Four Reasons product, we share information on our website to facilitate sustainable product selection. All Four Reasons products are 100% vegan. In addition, each product page has information on the product’s packaging materials, whether the product is manufactured in Finland, and the recycling instructions for empty product packaging. We also maintain general recycling instructions on our website. With this information, we aim to help you make more sustainable choices to give you the best tools to look like yourself.

WE UPDATE PACKAGING LABELLING

In 2023, we will start updating the labelling of our products to make them clearer and easier to understand. We use international recycling symbols.

CLIMATE ACTIONS

CLIMATE ACTIONS

Climate change is a threat that affects the entire 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 science community is to limit climate warming to 1.5 degrees Celsius by reducing greenhouse gas emissions. The goal stated in the Paris Climate Agreement is reaching carbon neutrality by 2050. However, the current actions are not sufficient: success requires effort from all operators in society.

The shared climate goal of the entire Transmeri Group is to make its properties, transport and traffic carbon neutral by 2035. The goal has been limited to include these three sections in line with the Climate Commitment

OUR ACHIEVEMENTS IN 2022

• In 2022, we extended the GHG protocol-based emissions calculation from the previous Scope 1 and Scope 2 level to also cover the Scope 3 categories of commuting, business travel and freight paid by us

• We use 100% renewable energy at all of our premises and our production facility in Finland

GOALS

Goal: Carbon neutrality of properties, transportation and traffic by the end of 2029.

of Finland Chamber of Commerce because decreasing the use of fossil fuels is the single most important way to stop climate change and in our operations these areas are the best ways to affect the use of fossil fuels.

Four Reasons aims to reach the carbon neutrality target faster than the speed of the Group, already by the end of 2029. Our primary action is always reducing the carbon dioxide emissions generated by our business operations but, if necessary, we will also compensate emissions caused by our operations or generate carbon offsets.

WHAT DOES CARBON NEUTRALITY MEAN?

Carbon neutrality means that the CO2 emissions that cannot be reduced by our own actions are removed from the atmosphere, for example, by offsetting. The priority is to reduce emissions, for example, by using renewable energy sources or by improving energy efficiency.

EMISSIONS REPORTING

According to the GHG Protocol (Greenhouse Gas Protocol) 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 from employee transport.

SCOPE 1: DIRECT EMISSIONS

AIMING FOR CARBON NEUTRALITY BY THE END OF 2024

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.

We use biodiesel in cars owned by the company, and in 2021, we started a gradual change towards electric cars. In 2023, we will continue the gradual transition to electric cars.

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.

All our premises use 100% renewable energy.

The CO2e emissions from district heating decreased by 64.2% 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 64%. In order to reach the carbon neutrality target, we will continue to investigate various options for switching to the use of renewable district heating in our premises.

SCOPE 3: OTHER INDIRECT EMISSIONS

AIMING FOR CARBON NEUTRALITY BY THE END OF 2029

Other indirect emissions, i.e. Scope 3, include all emissions in the value chain caused indirectly by the production of the reporting organisation’s products or services. In line with the policies of Transmeri Group, we commit to the carbon neutrality goal for the emissions of our goods transport and employee traffic. In 2022, we extended the GHG protocol-based emissions calculation to also cover the Scope 3 categories of commuting, business travel, transportation and distribution.

We will continue to identify transport companies that meet our service promises and support our sustainability goals. In order to reduce emissions from commuting, we launched an incentive model for our field-working sales consultants. We encourage and support our employees who commute long distances with their own car by offering, for example, the installation of a home charging point for an electric car.

CALCULATIONS AND BASELINE

Emissions expressed in tonnes of CO2 equivalent (tCO2e)

CALCULATION PRINCIPLES:

Transmeri Group follows the calculation principles of the Greenhouse Gas Protocol. The operative limitation of emissions calculation currently only includes Scope 1 and Scope 2 emissions categories in line with the GHG Protocol, but Scope 3 will also be included in the future.

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

Feel like giving feedback?

Eager to learn more?

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

Illustration: Venla Vaattovaara @muijavaara

FOUR REASONS

Salomonkatu 17 A, 10th floor | 00100 Helsinki, Finland

Tfn. 0201 410 410 | www.en.fourreasons.fi/