Huhtamaki Corporate Responsibility

Huhtamaki Corporate Responsibility

Our corporate responsibility 2

Huhtamaki s Global Commitment to Corporate Responsibility 3

4 Life cycle assessment (LCA) Assessing the entire life cycle of packaging provides a better picture of its overall environmental sustainability performance We have implemented a Packaging Life Cycle Assessment (PLCA) model, which is an analytical tool for systematic evaluation of the environmental impacts of packaging through all its life cycle stages: - Raw material production and supply - Packaging conversion - Consumption - End-of-life We have used the tool since 2009

Raw materials and supply chain management in focus A new Group-level supply chain target has been launched: All key supplier covered by Supplier Code of Conduct Safety starts from the raw material - We systematically investigate the origin of the chemicals - We are committed to use sustainable wood fibre with known origin - Certification criteria is two-fold: - Forest management and use - Traceability of wood from forest to the end-customer (CoC) - There are two predominant systems for forest certification: - PEFC (Program for the Endorsement of Forest Certification) - FSC (Forest Stewardship Council) - Forest certification and COC is always verified by a 3rd party - Our production units hold PEFC/FSC Chain of Custody cerficates to verify the origin of wood to final product 5

Production waste Our main waste fractions are: cutting waste from paperboard packaging manufacturing by-products from the molded fiber pulping process by-products from plastic packaging manufacturing Waste type and disposal method (2015) 3% 11% 12% 74% 6 Waste type and disposal method (tonne) 2014 2015 Landfill 19,800 19,000 Recycled 111,000 115,000 Energy recovery (incineration) 14,000 17,000 Total 145,000 151,000 Hazardous waste total 4,500 4,300 Material recovery 77% 76% Material and energy recovery 86% 87%

7 Energy Efficiency In 2015, our energy efficiency improved by 4% compared to 2014 Energy consumption per sellable tonne produced (STP) was 2.35 MWh/STP (2.44 MWh/STP in 2014)

8 Emissions Most of the GHG emissions generated from our operations originate from purchased energy The indirect CO 2 emissions are highly dependent on the mix of energy sources used in the operating countries national energy grids Our total CO 2 emissions per sellable tonne have decreased 7% over the last four years.

Water use Compared to many other manufacturing industries, our operations use a fairly limited amount of water during the manufacturing process Our fresh water intake in 2015 was 8.5 million m 3 (8.7 million m 3 ), most being surface water The most water intensive business in the Group is rough molded fiber packaging manufacturing; however, the water is efficiently circulated in the process Water source 2014 2015 Ground water 1.2 14% 1.4 16% Surface water 4.1 48% 4.1 48% Municipial supply 3.4 39% 3.1 36% Total 8.7 100% 8.5 100% 9

Huhtamaki Henderson Certified management systems 2016 Site ISO 14001 ISO 9001 OHSAS PEFC FSSC22000 Henderson x x x x x 10

Workplace safety is our top priority Safety is continuously enhanced, in particular by striving to impact employees attitudes towards safety and by encouraging people to proactive thinking It is also important to share best practices in occupational safety between segments and to pay attention to timely and thorough reporting of safety incidents and near misses. Workplace safety KPIs, Group 2012 2013 2014 2015 Lost Workday Injury Frequency (LWIF) 1 Huhtamaki employees 3.4 3.0 2.9 2.6 Lost Workday Injury Frequency (LWIF) 1 including contractors 3.3 3.0 2.9 2.7 Lost Day Rate (LDR) 2 1,080 778 727 673 Work related fatalities 0 0 0 0 Workplace safety KPIs per segment 2015 FS E-A-O NA Flex MF Lost Workday Injury Frequency (LWIF) 1 Huhtamaki employees 3.7 3.7 1.0 4.5 Lost Day Rate (LDR) 2 661 1,356 177 1,674 11 1) Incidents at work per million hours worked 2) LDR expresses how many hours are lost for every million hours worked Lost time incident (LTI) is an accident or an incident that causes the employee a miss of more than one working shift.

Sustainable packaging Cradle to grave Life Cycle Assessments The main function of packaging is to protect the food product from getting spoiled As little as possible but as much as necessary, optimal packaging solutions Huhtamaki uses a lifecycle approach to assess the total environmental impact caused by a product: Raw material procurement and production Packaging production Use Recovery and recycling (disposal) What does LCA s provide us with? It can help to provide a better understanding of: The environmental impact profile of material (cradle to grave) The environmental performance of packaging within given infrastructures The relevance of choice of end of life strategy for the overall environmental performance of packaging systems The potential of packaging materials to contribute to a more sustainable packaging strategy 12

Compostable cup and PE Lined cups - Biodegradable and compostable are terms used when describing organic materials breaking down in a specific environment. - Both terms are often used when describing environmentally friendly products. However to be environmentally friendly the compostable cup must be composted in industrial conditions i.e a closed loop solution - To have a truly sustainable cup, the whole process needs to be taken into account. There is little value in having a compostable cup if the paperboard is not harvested from certified forests and then converted at a facility that has no certified systems in place to cover both social and environmental factors. PE Coated Cup PLA Coated Cup Paperboard Sourced from a PEFC certified site that is carbon neutral Sourced from a PEFC certified site that is carbon neutral Lining Sourced from a non-renewable resource Sourced from a renewable resource Manufacturing process End-of-life 13 Manufactured locally certified by ISO14001:2004 (To establish, implement, maintain and improve an environmental management system, assure conformity with environmental policy & demonstrate conformity with the international standard.) Landfill, the paperboard will eventually degrade and the PE lining will breakdown into small particles. Manufactured locally certified by ISO14001:2004 (To establish, implement, maintain and improve an environmental management system, assure conformity with environmental policy & demonstrate conformity with the international standard.) If disposed of in an industrial grade compost facility the paperboard including the lining will breakdown if sent to landfill the paper board will degrade over time however the PLA lining will break down and emit methane gas during this process.

How do we help? Manufacturing paper cups locally has a reduced impact on the environment across the range of indicators versus importing a fully formed cup ex Asia Light-weighting of material Recycled raw materials Recyclable and compostable packaging Monomaterials easier to recycle for consumers Biodegradable cups and lids made of monomaterials, like PLA* Certified raw materials (PEFC certificate preferred by global customers) Always taking into account product safety and food contact restrictions = safe pair of hands 14 * PLA = polylactic acid = a thermoplastic aliphatic polyester derived from renewable resources, like corn starch

Summary - Environmental value proposition 15 Third party certified PEFC CoC certificate validating that the paper in our products stem 100% from: Legal & acceptable sources Sustainably managed forests Sustainable sources labeling capabilities on packaging (e.g PEFC) Third party certified ISO 14001 environmental management system validating a systematic approach in managing environmental issues on site Group LCA capabilities for simulating products life cycle environmental performance allowing for: Informed environmental claims Informed product development decisions Informed material choices Environmental product development capabilities Bio-products Recyclable products

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