Four Reasons Sustainability Report 2023

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| 2023
FOUR REASONS
SUSTAINABILITY REPORT
FOUR REASONS AS A COMPANY .......................................................... 3 A Few Words from the CEO 8 Our sustainability goals and achievements ................................................ 9 OUR SUSTAINABILITY PROGRAMME ................................................... 10 Highlights of 2023 .................................................................................................. 11 Operating environment and megatrends 12 Stakeholder cooperation ................................................................................... 13 Our ethical principles 14 Our sustainability programme 2021–2029 ............................................... 15 HEALTH AND WELL-BEING ................................................................... 16 Gorgeous you ........................................................................................................... 18 Our customers ........................................................................................................ 20 Our employees ....................................................................................................... 23 RESPONSIBLE CONSUMPTION AND PRODUCTION ........................... 26 Ingredients ............................................................................................................... 28 Packaging ............................................................................................................... 30 Production ............................................................................................................... 45 Use of the product and disposal of the packaging ............................... 37 CLIMATE ACTIONS ................................................................................ 39 Emissions reporting ............................................................................................... 41 Calculations and baseline 42
CONTENT

FOUR REASONS AS A COMPANY

3

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

4 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company

Four Reasons is part of the Finnish family-owned Transmeri Group, which had a turnover of €291 million in 2023 and employs more than 750 people. Find out more about our group's sustainability work at www.transmerigroup.fi.

1997 Foundedin

In addition to our home market Finland, we export our products through our distributors to Sweden, Norway, Denmark, the Netherlands, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, UK, Ukraine and the USA.

47 Number of staff

19,5M€ Turnover

Head office in Helsinki, Finland warehouse in Espoo

Sales, marketing and importing of hair cosmetics and hairdressing accessories and equipment.

Miraculos Oy
Cooperation Courage Development
Vision
Staff Company name
Respect
VALUES
The Happiest Hair Salons
2 5 13 13 12 less than 25 y 25-34 y 35-44 y 45-55 y over 55 y 11 5 14 12 3 less than 2 y 2-5 y 5-10 y 10-20 y over 20 y
Age distribution Duration of employment
BUSINESS AREAS
5 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company

OUR FOUR REASONS PRODUCTS

Our own brand, Four Reasons, is designed to meet the demanding needs of hairdressing professionals and to make everyday hair routines easier for DIY hair artists, making every hair day even better.

6 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company

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!

Four Reasons Optima - coverage, shine, richness

Four Reasons Luxima

- naturalness, three-dimensional, glossy

Four Reasons Bleach - effective, gentle bleaches

51% technical products

Four Reasons Perm - curling and smoothing products

PRODUCTS FOR HAIR SALONS AND HAIR ENTHUSIASTS

Straight or curly, colored or natural, long or short. Whatever your hair style and type, the Four Reasons range has the tools to look just like you.

Choose from our five product families!

49% resale products

Four Reasons Color Mask - for hair toning and color maintenance

Four Reasons Professional - when only the best is good enough

Four Reasons Original - trusted products for everyday hair routines

Four Reasons Nature - natural luxury

Four Reasons No Nothing - a fragrance-free option

7 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company

FROM THE CEO

How to distinguish a responsible hair cosmetic product? From the labelling? From the INCI list? From the information provided on websites? While these may provide an indication of the product's responsibility, the fact is that it is impossible for even the most informed consumer to judge the responsibility of a product's entire value chain based on packaging and public information alone. Packaging made from recycled materials does not make a product responsible if the production conditions are unethical. And an ethically produced product does not automatically guarantee sustainability if it is transported over long distances and causes high emissions.

The new standard for sustainability reporting, CSRD, which is being developed in the EU, is an important step in the fight against misleading sustainability communication and greenwashing. The harmonisation of terminology will be a welcome change in the marketing of cosmetics.

Four Reasons' sustainability work is based on a customer-centric approach: putting the customer's needs first and providing products and services that are genuinely in demand. A responsible cosmetics purchase is one that is used up.

Difficult times are forcing both businesses and consumers to prioritise - how to balance economic, social and environmental responsibility? Am I willing to pay more for eco-packaging? Do I support local? Do I choose cheaper at the expense of sustainability? Decisions are not always straightforward.

Three years ago, we started systematic sustainability work at Four Reasons by creating a sustainability programme based on the UN Sustainable Development Goals. Our aim is to improve the sustainability of our products throughout the value chain and reduce their climate impact. Yes, our products are vegan, our packaging is recyclable, and we use 100% renewable energy in our factory in Finland. While we have achieved significant results, we recognise that sustainability work is ongoing and will take years of work.

Last year, our most significant environmental achievement was the switch to recycled aluminium in the color tubes of our best-selling hair dye, Four Reasons Optima. This change will reduce the use of virgin aluminium by almost six tonnes per year.

While environmental responsibility is often the most visible aspect of sustainability work, at Four Reasons sustainability is first and foremost about good partnerships with our customers and being a fair employer. We are constantly developing new product innovations in partnership with our customers, educating our customers on the latest trends and business practices, and focusing on personal service. We create a workplace where every employee feels that their contribution is meaningful and where they enjoy working. The recognition we receive from our staff and customers is particularly heartwarming, and you can read more about it in this sustainability report.

I would argue that a responsible company is recognised first and foremost by the way it treats its customers and staff. How does a company respond when a customer complains about a faulty product? Is the company really interested in the customer and his or her needs? What do employees say about the company? They are likely to say much more about responsibility than what the packaging texts reveal.

So a warm thank you to our customers and staff for our 2023 achievements. We will continue our determined work towards our common goals by making responsible choices!

Together towards even better hair days,

8 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company > From the CEO
CEO

HEALTH AND WELLBEING

The healthiest clients in hairdressing

OUR SUSTAINABILITY GOALS AND ACHIEVEMENTS

RESPONSIBLE CONSUMPTION AND PRODUCTION

100% ethical commitment

All our staff are committed to our Code of Conduct, which is part of the induction process for each new employee. Read more on page 16.

100% ethical suppliers by 2025

Target achieved, work in progress

Progress made, work in progress

Annual target not achieved or work in progress

We created an unprecedented COLLAB vol 2 event that brought together the whole hairdressing industry and received awesome reviews. Read more on page 20.

Best employee experience in the beauty industry

Our staff value the stability of our workplace. We scored 43 in the eNPS employee survey.

Read more on page 23.

Gorgeous you!

We want to make you feel great just the way you are. 46% of Finnish women felt that our marketing achieved this goal. Read more on page 18.

During 2021, we launched discussions with our partners on an ethical code of conduct and 80%* of our partners have signed up so far. Read more on page 35.

Sustainability considerations

throughout the product lifecycle

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

» In 2023, 40% of the plastic packaging for Four Reasons products we sold was made from recycled or bio-based plastic.

» Our products are manufactured in ISO 22716 certified factories in Finland and elsewhere in Europe.

» All our product packaging is 100% recyclable when empty. Read more on page 27.

CLIMATE ACTIONS

The Group's climate target is to actively reduce emissions from buildings, transport and mobility and offset the remaining emissions by 2035.

» We reduced emissions from our own cars by 17.5%.

» We reduced emissions from business travel by 15%.

» We use 100% renewable energy in our premises for electricity.

* The % is calculated as the % of purchases in euro from ethical suppliers.

** As defined by the Chamber of Commerce's Climate Commitment (direct emissions from business operations, emissions from freight transport and emissions from passenger transport).

9 Four Reasons Sustainability Report 2023 ENG > Four Reasons as a company > Our sustainability goals and achievements

OUR SUSTAINABILITY PROGRAMME

10

HIGHLIGHTS OF 2023

We switched to recycled aluminium in Four Reasons Optima color tubes, saving six tonnes of aluminium per year.

By the end of 2023, 80%* of our suppliers had signed up to our ethical code of conduct.

40%

of the plastic packaging of Four Reasons products sold in 2023 was recycled plastic or bio-based plastic .

eNPS 43

- Employer Net Promoter Score provided by our staff! Read more p. 24

Our training reached almost 5,000 hairdressers.

Of the Four Reasons products sold during the year, 30% were made in Finland in our factory, where we use 100% renewable energy.

We managed to reduce emissions from the use of company-owned cars by 17.5% by reducing the use of diesel by switching to electric cars. 62.5% of the company's fleet is made up of electric cars.

11 Four Reasons Sustainability Report 2023 ENG > Our sustainability programme > Highlights of 2023

OPERATING ENVIRONMENT AND MEGATRENDS

We take into account megatrends that are shaping consumer behaviour in our business development and sustainability work:

HEALTH AND WELL-BEING

The uncertainty around us has created a serious threat to mental health. Uncertainty about jobs, livelihoods and public safety, the ecological sustainability crisis and the pandemic we are experiencing are testing people's resilience and mental health.

CLIMATE CRISIS

SOCIAL RESPONSIBILITY

Environmental degradation is the single biggest threat facing humanity. It affects our health through increased air pollution, disease, extreme weather events and the resulting climate stress. No responsible organisation can ignore its part in tackling the climate crisis.

Everyone has the right to be heard, seen and treated equally. Inclusiveness and diverse representation are also expected from businesses. A well-functioning workplace actively builds a culture in which everyone feels that they are relevant and that their work is meaningful, and no one is excluded.

DIGITALISATION

Digital devices and virtual reality have become an extension of our real world. Technology and data are increasingly embedded in people's daily lives, enabling ever more personalised customer experiences. Consumers expect the products and services they use to be accessible through digital devices, but not at the expense of humanity.

Source: Sitra megatrends 2023

12 Four Reasons Sustainability Report 2023 ENG > Our sustainability programme > Operating environment and megatrends

STAKEHOLDER ENGAGEMENT

We engage in an ongoing dialogue with our key stakeholders to better understand their needs and our expectations and aspirations. We do this through a range of customer, market and brand research, as well as through dialogue through our own communication channels and face-to-face encounters. We use the feedback we collect to continuously improve our products and services as well as our operations.

Our key stakeholders and their expectations from us:

CUSTOMERS

For hairdressers, hair products are a combination of passion, an everyday tool and an extension of their own craft. Products must not only be 100% reliable and safe, but also economical and a great user experience. In addition to products that work, our customers expect us to provide a comprehensive service to support their business: personal service, fast delivery, education to develop the professional competence of hair stylists and marketing that promotes the sales of the hair salon.

CONSUMERS

For consumers, hair care is first and foremost a daily routine. Yet the stakes are high: it's all about looking good every day. The core function of hair products is to make everyday life easier and to create a good mood: in other words, to create a good hair day. The product and the packaging must be sustainable, but not at the expense of the quality of the product. Our users appreciate the value for money of our products and our boundary-breaking, empathetic and bold approach to beauty care.

EMPLOYEES

Our staff is a close-knit, results-oriented community with a passion for hair cosmetics and hairdressing. Above all, our employees value our company's work environment, where they can be themselves, as well as the security and continuity of a job. Employers are expected to provide good leadership, fair compensation, equal treatment and opportunities for personal development.

OWNERS & BOARD OF DIRECTORS

Our owners want to focus on business op portunities that create a better future for humanity and the planet. Sustainability is expected to steer the daily development of our business operations.

PARTNERS

Our key partners are factories and suppliers, as well as distributors of our products, who expect long-term cooperation, continuity and reliability. Other partners include transport companies and companies offering research, consultancy, design and marketing services. As a company that buys services, we are expected to do business ethically and reliably.

13 Four Reasons Sustainability Report 2023 ENG > Our sustainability programme > Stakeholder engagement

OUR ETHICAL PRINCIPLES

Our ethical principles are guided by the ten principles of the UN Global Compact. These ethical principles bring together guidance on how we want to do business and what is expected of us in our day-to-day dealings with each other, our customers and other stakeholders. All our employees must comply with this Code of Conduct, regardless of their position in the organisation or the nature of their employment. The same Code of Conduct applies to the entire Transmeri Group, of which Four Reasons is a part, and sets our expectations for the conduct of our business partners.

The principles of the UN Global Compact 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

CODE OF CONDUCT: 1. Respect for human dignity and rights 2. Compliance with laws and regulations 3. Prohibition of the use of child labour 4. Prohibition of forced labour and disciplinary measures 5. Working conditions and pay 6. Non-discrimination 7. Right to organise and association 8. Occupational health and safety 9. Environmental protection 10. Ensuring data privacy and protection 11. Ethical business practices
14 Four Reasons Sustainability Report 2023 ENG > Our sustainability programme > Our ethical principles

OUR SUSTAINABILITY PROGRAMME

YEARS 2021-2029

Our sustainability programme is based on the UN's Joint Programme on Sustainable Development, which sets out 17 targets to address the sustainability challenges facing society. At Four Reasons, we have selected three of these goals that are relevant to our business and through which we can best influence the issues that matter to our stakeholders. These are the themes we focus on in particular in our sustainability work:

•Health and well-being

•Responsible consumption

•Climate action

15 Four Reasons Sustainability Report 2023 ENG > Our sustainability programme > Our sustainability programme YEARS 2021-2029

HEALTH AND WELL-BEING

16

One of the UN's key sustainable development goals is to promote human health and well-being. The crises and insecurity around us consume the mental resources of each of us, but the situation has particularly affected those working in the service sector and entrepreneurs. Taking care of your own health and wellbeing is more important than ever.

OUR ACHIEVEMENTS IN PROMOTING HEALTH AND WELL-BEING 2023:

Our employees see job security and continuity as our strength. We exceeded our targets in the Employee Survey and achieved an eNPS of 43. Read more on p. 23

Social responsibility is our main corporate responsibility theme, and we are working on it at the level of our staff, our customers and society as a whole. We have work to do in this area for years to come, but we are also proud of our achievements so far.

We expanded our product range with a curly hair product line, which was a huge hit. Read more on p. 19.

We created an unprecedented, inspiring Collab vol. 2 to bring together hairdressing professionals! Read more on p. 21

17 Four Reasons Sustainability Report 2023 ENG > Health and well-being > Our sustainability programme YEARS 2021-2029

GORGEOUS YOU

AIMING TO MAKE YOU FEEL GORGEOUS JUST THE WAY YOU ARE!

Mental health problems are one of the serious scourges of our time. The UN's health and wellbeing goals state that promoting mental wellbeing can prevent many other serious noncommunicable diseases. As a beauty business operator, we are particularly concerned about the social pressure on appearance experienced by young adults. Instead of being part of the problem to which our industry has undoubtedly contributed, we want to be part of the solution.

OBJECTIVES AND METRICS

Goal 1: To make you feel gorgeous just the way you are.

Measure: Annual consumer survey to measure the success of our marketing communications in achieving our objectives.

18 Four Reasons Sustainability Report 2023 ENG > Health and well-being > Gorgeous you

OUR ACHIEVEMENTS FOR 2023

Multi-faceted marketing

Four Reasons is a passionate hair community that aims to make everyone feel great about themselves. Our main way to achieve this is to create marketing communications that are relatable to as many people as possible and break traditional beauty industry norms. Our policy is to use ordinary people as models rather than professional models and to avoid over-editing the images. We measure the achievement of this objective in our marketing communications through an annual consumer survey targeting Finnish women aged 16-64. In 2023, 46% of respondents to the survey said the target was achieved in our marketing, while 14% said it was not.

Hair products for all hair types

We are constantly developing our products and services to offer better hair days for more and more different hair types. In 2023, we launched the Four Reasons Original product line for curly hair, which was a huge hit. For those whose curls don't come naturally, we created a new vegan perm for salon use, which was also welcomed as a modern tool for professionals. Short-haired people were also pampered with the new Four

Reasons Original Molding Paste and men in particular were catered for with the Four Reasons Original Everyday Shampoo. For tinting blonde hair, we launched the professional Four Reasons Optima Liquids family of shades, as well as stunning new shades in the Four Reasons Color Mask range for maintaining light pastel shades.

Bringing out the best

We're working to help hairdressers make their clients feel great about who they are, whatever their hair type. We collaborated with Petri "Piatu" Puhakka, one of Finland's leading hair artists known for his phenomenal transformations, to create a new kind of training for hairdressers focused on customer consultation. In Piatu's training, hairdressers learn to see the best in each client and accentuate them with the right style for each client. The Piatu training tour covered 10 locations and reached hundreds of hair professionals.

ACTIONS FOR 2024

During 2024, we will focus our training on developing consultation skills in the hairdressing industry. This will help hairdressers to enhance their skills in consultation and listening, and we will integrate the development of these skills into our overall hairdressing training offer. Our aim is that consumers can trust Four Reasons salons to provide them with the best hairdressing experience and the right hair for their personalities and lifestyles.

19 Four Reasons Sustainability Report 2023 ENG > Health and well-being > Our Achievements For 2023

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. People confide in a trusted hairdresser about personal, even difficult things, just as they would a good 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.

OBJECTIVES 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

Measure: 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: National Institute for Health and Welfare

20 Four Reasons Sustainability Report 2023 ENG > Health and well-being > The healthiest Customers in the hair Salon sector

HEALTH

We are constantly developing our products with a special focus on the prevention of occupational diseases in hairdressers. We strive to avoid the use of raw materials and formulations that are allergenic and cause skin or respiratory problems, within the limits of the products' uses and properties. Examples of the results of our development work include our fragrance-free color range Four Reasons Optima, our dustfree bleach Four Reasons Bleach and our fragrance-free product range Four Reasons No Nothing, developed in cooperation with the Allergy, Skin and Asthma Association.

ECONOMIC WELL-BEING

We support the economy of hairdressers by increasing brand awareness and product demand from hair salons and by facilitating product sales through promotional materials and training.

In 2023, out-of-store sales of our retail products increased across all our distribution channels, despite the volatile market conditions. We directed consumers reached by our marketing to our online retailer search, which saw clicks increase by 184% year-on-year. We also offered hairdressers promotional campaigns, including free marketing materials for both hair salons and social marketing.

MENTAL WELL-BEING

In the small business-dominated hairdressing industry, one important source of mental well-being is the feeling of belonging to a community. Four Reasons wants to offer its customers an active community of hairdressers where everyone can feel heard and seen. To activate this community, we keep the conversation going on the hairdressers' own Four Reasons Pro Community Facebook group and organise training sessions and events where hairdressers can network and exchange ideas. The biggest networking event for the hairdressing industry in 2023 was the Four Reasons COLLAB, which brought together around 400 hairdressing professionals both live and via stream.

21 Four Reasons Sustainability Report 2023 ENG > Health and well-being > The healthiest Customers in the hair Salon sector

ACTIONS FOR 2024

We are piloting a new training package for salon owners, focusing on management and business development. Many people in the hairdressing industry are entrepreneurs but few have received training in entrepreneurship, let alone in managing staff. Four Reasons' new training series on business management skills aims to provide hairdressing entrepreneurs with a boost in entrepreneurial skills and in managing agency staff and employees working in the same salon. We will be collecting feedback from our clients during the spring pilot.

To support hairdressers' health and work performance, we will explore ways to improve work ergonomics through salon equipment solutions. We will also train our staff to better provide ergonomic solutions for our customers.

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

• We will renew our training offer and develop a wide, diverse range of training and events that take into account financial, health and mental wellbeing

• Small everyday wellbeing actions such as rewarding our clients for their feedback with wellbeing gift cards, sharing work ergonomics tips in our training sessions and on our social media channels

Offering fast deliveries, free marketing materials to support sales, the Four Reasons community and personal service

22 Four Reasons Sustainability Report 2023 ENG > Health and well-being > Actions for 2024

THE BEST EMPLOYEE EXPERIENCE IN THE INDUSTRY

At Four Reasons, we're more than just a workplace. At Four Reasons' head office in Kamppi, Helsinki, in the field around Finland and at our warehouse in Espoo, we have 47 experts in their field, united by respect for diversity, a willingness to work together, the courage to try and the enthusiasm to learn. When dozens of the most skilled in their craft work together and really love what they do, the end result fits the bill.

OBJECTIVES AND METRICS

Goal: The best employee experience in the beauty industry

Measure: 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).

23 Four Reasons Sustainability Report 2023 ENG > Health and well-being > The best employee experience in the industry

OUR ACHIEVEMENTS FOR 2023

We developed our work community based on the results of the 2022 employee survey, focusing on clarifying common goals and mission statements. In our annual employee survey, each employee selects the five most relevant statements about a good workplace and assesses their implementation. In this way, we learn what matters most to our staff, how well we are doing on them and what we can do to develop our workplace in a way that matters to our staff. In 2023, the most relevant issues for our staff were job security and continuity.

The survey also measures the eNPS (Employee Net Promoter Score), which shows the percentage of our employees who are willing to recommend our company as an employer. Last year we achieved an excellent score of eNPS 30* but we set our target even higher, at 40. In the 2023 HR survey, we exceeded our target with an eNPS score of 43.

These results did not come out of the blue, but we actively responded to our staff's requests for improvement. We launched a new strategy that clarified a common goal for the whole company. We reformed our organisational structure and updated the job descriptions of each of our employees, and defined a common set of leadership practices for our front-line staff and management team, based on our values. At the request of our staff, we also introduced a sports bonus.

Four Reasons Sustainability Report 2023 ENG > Best employee experience in the industry 24 > Health and well-being

ACTIONS FOR 2024

Why aim for the A when you can reach for the stars? We want the people who work for us to enjoy the best employee experience in the beauty industry. Now that we've achieved our previous goal, we're setting our sights even higher: in 2024, we're aiming for 50* in the Employee's Net Promoter Score (eNPS).

In 2024, we will be determined to drive forward the development projects that will shape the future of our company. We will focus on becoming more customer-centric and improving the customer experience. We will listen to our people and clarify the rules of the game for project management and train project managers to lead our business development projects.

We also focus on promoting the development priorities selected for each department on the basis of a staff survey. We are also developing our internal communication rules and meeting practices, and harmonising practices across departments that affect the employee experience. We will also continue with our system development projects to digitise processes and use smart technology, and invest in distributor cooperation. These developments will help us to continue to offer our customers the best service and create the conditions for growing our business beyond Finland's borders.

*eNPS value can be anything between -100 and 100. The average eNPS for all the companies surveyed at is 12. Source. https://www.siqni.fi/enps/

25 Four Reasons Sustainability Report 2023 ENG > Health and well-being > Actions for 2024

RESPONSIBLE CONSUMPTION AND PRODUCTION

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PRODUCT LIFE CYCLE

Hair has a huge impact on the way we feel about ourselves. Products are the tools we use to create better hair days. We have a responsibility to play our part in promoting responsible production and sustainable consumption. Our long-term development work aims to create products whose entire life cycle is built on responsible, sustainable choices.

As a manufacturer and marketer of cosmetic products, we can influence people's consumption choices and contribute to the United Nations’ goal of supporting sustainable consumption and production. We are constantly working to improve transparency throughout the life cycle of our products and to make responsible choices at different stages of their life cycle.

Promoting local production

OTHER OBJECTIVES AND MEASURES TO PROMOTE THE SUSTAINABILITY OF OUR PRODUCTS INCLUDE:

Promoting the circular economy through packaging choices

We use recycled plastic and aluminium and bio-based materials in our packaging. For Four Reasons Optima color tubes, we switched to recycled aluminium packaging in 2023.

You can always count on our products to be:

100% vegan

100% cruelty free

100% in recyclable packaging

100% produced in ISO 22716 certified factories

We manufacture most of our cleanse and care products in Finland and continuously strive to increase the local production of our products, taking into account the quality and cost aspects of the products. Domestic production accounted for 30% of all Four Reasons products sold in 2023.

Minimising waste and wastage

We educate and guide both consumers and hairdressers in the selection and use of products. In 2023, we reached over 5,000 hairdressers with our education.

27 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > Product life cycle

RAW MATERIALS

We are constantly working to identify new sustainable salonquality raw materials, and developing new vegan product innovations for hair professionals and DIY hair artists.

COSMOS NATURAL CERTIFICATE AWARDED BY ECOCERT

The Four Reasons Nature range has the Cosmos Natural certificate awarded by Ecocert, which guarantees the naturalness of the raw materials and the ecological nature of the production processes and packaging.

ECOCERT® Cosmos Natural certified products must meet strict criteria. The

raw materials must come from renewable resources, the manufacturing process must be environmentally friendly, and the packaging must be responsible. Ecocert, the certification body, was the first in the world to develop international standards for natural cosmetics. Ecocert also actively monitors compliance with the criteria.

What does vegan mean?

Read more here:

GOALS AND METRICS

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

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

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

28 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > Raw materials

OUR ACHIEVEMENTS IN 2023

Four Reasons Shape

At the beginning of 2023, the last product containing animal keratin, KC Perm Keratin, was removed from our range and replaced by Four Reasons Shape perms. Four Reasons Shape is a hair-type adjustable perm solution for all curl treatments. The three different strengths of the product can be mixed together to create the optimum, bouncy curl for each hair type. The ability to mix perm solutions also reduces the amount of product used by eliminating the need for multiple applications of different strengths of perm solutions.

Legislative changes

The EU Commission drafted a new regulation on cosmetics legislation which banned the use of several raw materials in cosmetics. One of the substances banned in 2023 was the chelating ingredient Pentasodium Pentetate, which is commonly used in cosmetics and was also used in some Four Reasons products. The sale and use of products containing this ingredient in cosmetic products was banned in the EU from 1 December 2023. The other banned ingredients did not apply to Four Reasons products. This applied to some Four Reasons Luxima colors and Four Reasons Oxid bicarbonate, Four Reasons Optima Total 8% bicarbonate and Four Reasons Multiwave A, B and C perms in our products. Where salons had unopened Four Reasons products containing the raw material Pentasodium Pentetate in stock when the legislation came into force on 1 December 2023, we replaced the products with equivalent products without the banned ingredient. This was to ensure that our customers survived without financial loss.

ACTIONS FOR 2024

During 2024, we will continue to develop vegan products. In early 2024, we will launch Four Reasons Professional Bio-Molecule RepairTM products that maintain, protect and repair hair with BioMolecule Repair™ technology.

We monitor and anticipate changes in legislation, taking into account the impact on the environment, the economy and product safety.

29 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production

PACKAGING

Our aim is to package our products in the most environmentally friendly way possible, without compromising the product's properties or the user experience. So far, we have achieved the following milestones:

• All our product packaging is recyclable when empty

• In 2023, we reduced our annual aluminium use by six tonnes by switching to recycled aluminium in Four Reasons Optima color tubes.

• Of all Four Reasons product packaging made from plastic, 40% is made from either recycled plastic or bio-based plastic.

OBJECTIVES AND INDICATORS

Goal 1: Reduce packaging waste.

Measure: packaging waste as a percentage of turnover.

Goal 2: Promote the circular economy: we choose only 100% recyclable packaging materials for our Four Reasons products.

Goal 3: Reduce the use of virgin materials: We will choose, wherever possible, packaging made from recycled materials. bio-based or other renewable resources

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

30 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > Packaging

OUR ACHIEVEMENTS IN 2023

Reducing virgin plastic

From the Four Reasons products sold in 2023, 40% of plastic packaging was made from either recycled plastic or bio-based plastic. In 2022, the figure was 41%. The reduction in this figure is driven by the sales ratios of our products: we sold more products that did not use recycled plastic or bio-based plastic. As our product sales volumes increased, we did not succeed in reducing our plastic consumption in kg.

Color tubes to recycled aluminium

In 2023, we switched to recycled aluminium in the packaging of Four Reasons Optima 100ml color tubes. All Four Reasons Optima 100ml color tubes sold in 2023 were made from recycled aluminium, reducing the use of virgin aluminium by up to 5,637kg per year.

Curling agents in eco-friendly packaging

At the beginning of 2023, we launched Four Reasons Shape curling agent, which are now packaged in eco-friendly 500ml packaging. The larger packs reduce plastic consumption by up to 45%* (*Five 100ml packs use 86g of plastic compared to 47.5g in one 500ml pack).

31 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production

ACTIONS FOR 2024

We listened to customer feedback and will phase out cardboard packaging for Four Reasons Original Scalp products during 2024. The cardboard will be phased out as it runs out of stock.

As we reformulate our products and packaging, we will carefully consider both packaging materials and the stock balances of finished products, ensuring that the reformulation is carried out in an environmentally responsible manner. Four Reasons Professional range of cleaning and conditioning caps have so far been a combination of metal and aluminium. In 2024, we will move to mono-plastic caps. This change will make it easier to recycle our products and reuse materials.

32 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production

THIS IS HOW WE PACK FOUR REASONS PRODUCTS:

FOUR REASONS ORIGINAL

• Bottles for cleanse and care products made from sugarcanebased bioplastics

• Plastic bottles and jars for styling and finishing products made from sugarcane-based bioplastics, some products packaged in aluminium packaging

• Scalp products packaged in recycled plastic

• Takeaway Color home color packaged in FSC certified cardboard, plastic packaging in standard plastic

• Packaging 100% recyclable

FOUR REASONS PROFESSIONAL

• Cleanse and care product packaging made from bio-based plastic

• Wax jars made from sugarcanebased bio-plastic

• Styling and finishing products packaged in aluminium, caps made from recyclable plastic

• Shots ampoule treatments made from virgin plastic

• Packaging 100% recyclable

FOUR REASONS

NO NOTHING

• Packaging for cleanse and care products and Styling Mist and waxes made from sugarcanebased bioplastics

• Plastic parts for styling and finishing products made from 100% recyclable plastic

• Packaging 100% recyclable

FOUR REASONS NATURE

• All packaging made from recycled plastic

• Packaging 100% recyclable

FOUR REASONS

COLOR MASK

• No alternative to virgin plastic has yet been found for packaging without compromising product properties and user experience

• Packaging 100% recyclable

33 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > This is how we pack Four Reasons products:

THIS IS HOW WE PACK FOUR REASONS PRODUCTS:

FOUR REASONS HAIR COLORS FOR PROFESSIONAL USE

• Hair colors packaged in aluminium. Optima 100ml color tubes are made of recycled aluminium.

• 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 BLEACHING POWDERS

• 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

• Packaging 100% recyclable

TECHNICAL SUPPORT PRODUCTS

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

• Empty packaging 100% recyclable

34 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > This is how we pack Four Reasons products:

PRODUCTION

Our supply chain objective is to commit all our suppliers and key partners to the Group-wide Ethical Business Principles by 2025. Decent working conditions and pay, respect for human rights and the prohibition of child and forced labour are just a few examples of the policies to which we are firmly committed in our Supplier Code of Conduct, and by which we promote responsible sourcing.

In addition to our commitment to ethical conduct, we consider the ISO 22716 certification, which guarantees standards of good manufacturing practice, as a minimum requirement for our suppliers. Wherever possible, we choose to manufacture our products domestically in our own environmentally certified factory, using 100% renewable energy.

OBJECTIVES AND INDICATORS

Goal 1: All factories manufacturing Four Reasons products have ISO 22716 certification, which ensures that all stages during and after production comply with good manufacturing practice standards.

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

Goal 3: We aim to increase the local production and manufacturing of our products in ISO 14001 certified factories.

CODE OF CONDUCT: 1. Respect for human dignity and rights 2. Compliance with laws and regulations 3. Prohibition of the use of child labour 4. Prohibition of forced labour and disciplinary measures 5. Working conditions and pay 6. Non-discrimination 7. Right to organise and association 8. Occupational health and safety 9. Environmental protection 10. Ensuring data privacy and protection 11. Ethical business practices 35 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > Production

OUR ACHIEVEMENTS IN 2023

Our basic requirement for all factories that manufacture our products is ISO 22716 certification, which ensures that all stages of our products during and after production comply with good manufacturing practice standards. We achieved this goal a long time ago, but that doesn't mean we're satisfied with this.

Supplier Code of Conduct

In 2020, we developed the Supplier Code of Conduct for our entire Group, on which we have been in dialogue with our various suppliers. By the end of 2023, 80%* of our suppliers had signed up to our Code of Conduct. In 2023, we replaced the euro-based calculation with a supplier-based calculation. The percentage of signatories to the Code of Conduct is 58%. With the parallel calculation, the calculation will be consistent with the Group's calculation.

Increasing local production

We are continuously exploring opportunities to increase local production. In 2023, 30% of Four Reasons products sold will be made in Finland, compared to 28% in the previous year. This growth was driven by increased sales of our resale products and the manufacturing in Finland of some of the products launched in 2023. In our own factory, we manufacture our products using 100% renewable energy.

ACTIONS IN 2024

The debate on a Supplier Code of Conduct will continue, and by 2025 at the latest, we want to have all our suppliers covered it. We will actively explore the possibilities of local sourcing during 2024. Our aim is to produce our products as close to home as possible, while ensuring the quality and availability of our products.

36 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production

PRODUCT USE AND PACKAGING DISPOSAL

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 waste minimisation into account when designing our own production and product innovations. We help and create content to facilitate choice and reduce wastage.

OBJECTIVES AND INDICATORS

Goal 1: We aim to reduce the number of wasteful purchases by helping our customers to choose the right product.

Goal 2: We promote the circular economy by providing recycling instructions for each of our products on our product packaging and/or website.

37 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production > Product use and packaging disposal

OUR ACHIEVEMENTS IN

2023

Better product knowledge through training

At Four Reasons, we have a long tradition of training in the hairdressing industry and are known for our business-focused training. It has always been important to us to understand the everyday life of salons and to provide solutions to support hairdressers' work and financial success. Education services are not only an important part of the customer experience we deliver, but also an act of responsibility, helping us to reduce product waste in salons and improve the success of product use. In 2023, our product training reached 1,860 hairdressers through our e-training and more than 2,800 hairdressers and barbers on-site at salons and training events.

In addition to our training offerings, we produce almost daily social media material to support the use of our products and help with everyday hairdressing through our multi-channel customer service. We also aim to reduce the number of missed purchases by producing content to help consumers choose and use our products on our website, social media channels and at the point of sale.

Recycling labelling on packaging

During 2023, we updated our packaging recycling labels with internationally recognised recycling symbols to clarify recycling instructions. Recycling instructions for empty packaging can be found on our website. All our empty packaging is 100% recyclable.

ACTIONS FOR 2024

We update and develop our training offer in a customer-oriented way - serving our customers both in Finland and in our export markets. We organise both e-trainings and live trainings in salons and training events. Our aim is to provide timely and practical learning experiences that support hairdressers' career development.

We choose packaging materials that are 100% recyclable when empty. We will continue to add international recycling labels to our product packaging.

38 Four Reasons Sustainability Report 2023 ENG > Responsible consumption and production

CLIMATE ACTION

39

CLIMATE ACTION

Climate change is a threat to humanity and the planet. We cannot reverse it, but we should use all means to mitigate it. Every responsible company must also take its responsibility to mitigate climate change. Transmeri Group's climate goal is to actively reduce emissions from properties, transport and traffic and to offset the remaining emissions by 2035. These categories of emissions are also relevant for our company.

OUR ACHIEVEMENTS IN 2023

• We succeeded in reducing emissions from the use of company-owned cars by 17.5% by reducing diesel fuel use through a switch to electric vehicles. 62.5% of the company's fleet is electric.

• We use 100% renewable energy in all the properties we manage in terms of electricity use.

• We managed to reduce emissions from business travel by 15%, with the biggest contributor being the increased use of electric cars by our sales staff.

• We are working with the Group to develop our sustainability work and reporting capability to meet CSRD* requirements.

TARGETS

Reducing fossil fuels is the most important way to stop climate change and it is through these areas that we can make the most impact through our activities.

WHAT DOES CARBON NEUTRALITY MEAN?

Carbon neutrality is the removal from the atmosphere of carbon dioxide emissions that cannot be reduced by our own activities, for example through offsetting. The priority is to reduce emissions, for example by using renewable energy sources or improving energy efficiency.

*CSRD (Corporate Sustainability Reporting Directive) is the EU's sustainability reporting directive.

Actively reduce emissions from properties, transport and traffic and offset remaining emissions by 2035.

(previous report had targets in both Scope 1 and Scope 2, but now only one target)

40 Four Reasons Sustainability Report 2023 ENG > Climate action > Climate action

EMISSIONS REPORTING

According to the Greenhouse Gas Protocol (GHG Protocol), which was developed to calculate environmental impacts, emissions are divided into three scopes, described as Scope 1, Scope 2 and Scope 3. The Finnish Chamber of Commerce guides Finnish companies in reducing greenhouse gas emissions through its Climate Commitment, which focuses on direct emissions from business operations, emissions from goods transport and emissions from passenger transport.

SCOPE 1: DIRECT EMISSIONS

AIM FOR CARBON NEUTRALITY BY THE END OF 2024

For emissions reporting, Scope 1 includes sources of direct greenhouse gas emissions owned or managed by the organisation. Four Reasons is a sales and marketing organisation that does not own any real estate or production facilities. As such, the most significant measure under the Scope 1 definition is our ability to contribute to the carbon emissions of our operations by reducing emissions from the vehicles we own. We use biodiesel in our company-owned vehicles and in 2021 we started a gradual transition to electric vehicles. In 2024, we will continue to phase in electric vehicles.

SCOPE 2: INDIRECT EMISSIONS FROM PURCHASED ENERGY

AIMING FOR CARBON NEUTRALITY BY THE END OF 2035

Scope 2 covers indirect emissions from purchased energy, which refers to emissions from the production of electricity, steam, heating and cooling purchased for the organisation's own use. All our premises use 100% renewable electricity. CO2e emissions from district heating increased by 40% compared to the previous year. The calculation has been revised and this has had the effect of increasing the reported emissions.

41 Four Reasons Sustainability Report 2023 ENG > Climate action > Emissions reporting

SCOPE 3: OTHER INDIRECT EMISSIONS

AIMING FOR CARBON NEUTRALITY BY THE END OF 2029

Other indirect emissions, or Scope 3, include all other emissions in the value chain that are indirectly caused by the production of products or services by the reporting organisation. In line with the Transmeri Group, we are committed to the carbon neutrality target for emissions from freight transport and passenger transport. In 2023, emissions from business travel were reduced by 15% and emissions from travel to work alone were reduced by 10%, due to the upgrade of some sales vehicles to electric. We support the electrification of our staff car fleet by paying for home charging points for car buyers. We will also continue to identify transport companies that meet our service promises and support our sustainability objectives.

CALCULATION AND SOURCE DATA

Emissions are expressed in tonnes carbon dioxide equivalent (tCO2e)

ACCOUNTING PRINCIPLES:

Transmeri Group follows the accounting principles of the Greenhouse Gas protocol. The operational boundary of the emissions calculation currently includes the Scope 1 and 2 emission categories of the GHG Protocol, and in the future also the Scope 3 category.

We apply the precautionary principle in our emissions calculation and have used the services of an external consultancy to carry out the emissions calculation.

CALCULATION AND SOURCE DATA
Scope CO2 emission source Emissions Change Scope 1 Fuels: Petrol Biodiesel Diesel Total 24.07 0 1.11 25.18 4.91% -85.36% -17.55% Scope 2 District heating Electricity consumption Total 35.38 0.00 35.38 40.39% 40.39% Scope 1 & 2 total 55.97 -43.79% Scope 3 Transportation and distribution Business travel Travel to work Total 124.50 112.94 35.62 273.07 -3.48% 11.8% -28.26% -4.33% Scope 1, 2 & 3 calculated emissions total: 333.63 tCO2e
42 Four Reasons Sustainability Report 2023 ENG > Climate action > Calculation and source data

Want to give feedback?

Want more information?

Contact us: Developing responsible products and packaging: Pia Nurmi

Assortment Director

+ 358 44 775 7522

pia.nurmi@fourreasons.fi

Building health and well-being: Johanna Strömsholm

Marketing and Communications Director

+ 358 44 011 1584 johanna.stromsholm@fourreasons.fi

Promoting carbon-neutral business and creating the best beauty employee experience in the beauty industry: Jyrki Hakala

CEO

+ 358 40 534 6434 jyrki.hakala@fourreasons.fi

FOUR REASONS

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

Tel. +358 201 410 410 | www.fourreasons.com

Illustration by Venla Vaattovaara @muijavaara
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