Solteq Oyj : Statement of Non-Financial Information 2023

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Statement of Non-Financial Information

2023

Corporate Responsibility at Solteq

Solteq provides software solutions and IT expert services to the energy sector, retail industry, and the needs related to e-commerce. The Company operates with nearly 500 IT professionals in Finland, Sweden, Norway, Denmark, Poland, and the United Kingdom. Responsibly produced solutions and operating with a high degree of ethics as a service provider, employer, partner, and corporate citizen are a precondition for successful business and strong stakeholder relations.

Solteq's Code of Conduct is based on the Company's operating principles concerning anti-bribery and corruption, human resource management, sustainable development, environmental responsibility, information security, and data protection. In addition to the Company's internal guidelines, the operations are guided by local legislation, regulations, instructions, standards issued by authorities, and international principles governing ethical business, human rights, and social responsibility.

Preparing for Changes in Sustainability Reporting

During 2023, Solteq started preparing for sustainability reporting in accordance with the European Sustainability Reporting Standards (ESRS). Sustainability topics were assessed using ESRS-compliant double materiality assessment methodology. In addition, the Company conducted an extensive stakeholder survey to examine the views and needs of the key stakeholders regarding Solteq's sustainable practices and related reporting. Solteq will continue to develop its sustainability strategy based on the results of the double materiality assessment and the stakeholder survey.

The Company will begin sustainability reporting in accordance with ESRS standards following the Corporate Sustainability Reporting Directive (CSRD) schedule in 2025. This Non-Financial Information Report presents the key results of the updated double materiality assessment and the stakeholder survey. Reporting on different sustainability topics complies with the reporting framework of existing legislation.

The Double Materiality Assessment Confirmed Solteq's View of the Most Relevant Sustainability Topics

The double materiality assessment evaluated the significance of sustainability topics defined by ESRS. The double materiality assessment was conducted from the perspective of both impact and financial significance. The analysis assessed Solteq's impacts on the surrounding society and stakeholders and the impact of sustainability topics on Solteq's business.

In the previous years, the Company has defined social responsibility, data protection and information security, anti-corruption and bribery measures, as well as environmental responsibility as the key areas of corporate responsibility for its operations. No significant new material sustainability topics were identified through the double materiality assessment conducted in 2023. Themes related to own workforce, ethical business conduct, information security, and data protection continued to emerge as the most significant subtopics of sustainable development.

Key Sustainability Topics Were Evaluated Through Expert Working Groups and Research Data

During the double materiality assessment, different sustainability topics were discussed in working groups consisting of Solteq's own experts and external experts in capital markets, investor

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communications, and sustainable development. Publicly available research and other relevant materials were utilized in the work.

The scale, scope, and character of the impacts was considered when assessing the sustainability topics. The environmental and social impact assessment relied on thematic publicly available data, such as risk reports from the World Economic Forum, gender equality reports, the sixth assessment report by the IPCC (Intergovernmental Panel of Climate Change), and the UNEP FI (United Nations Environment Program Finance Initiative) assessment tool for human rights impacts. The materiality of each sustainability theme was evaluated based on scientific information and considering the scope and scale of the impacts.

When assessing the economic impact of sustainability themes, the impact of a potential risk or opportunity on Solteq's revenue, costs, debt structure, or revenue growth was considered. A threshold was set for materiality, which was considered essential from the perspective of capital markets. Some of the risks, opportunities, and impacts are uncertain by nature, so their likelihood also determines the topics highlighted in sustainability reporting. Due to the uncertainties related to sustainability topics and the nature of forward-looking reporting, there are differences in the definition of significance between financial and non-financial reporting.

The Results of the Stakeholder Survey Were in Line with Solteq's Own Sustainability Views

The views of stakeholders were mapped through a digital questionnaire. The survey was sent to shareholders, bondholders, the Board of Directors, the Executive Team, personnel, customers, and partners. In addition, the survey was targeted at investors and analysts through external independent investor media. The number of respondents to the survey was 139.

The survey mapped stakeholders' views on which sustainability topics are most relevant to Solteq. In addition, stakeholders were consulted on their wishes for more information on the different sustainability topics.

The results of the stakeholder survey were in line with Solteq's own sustainability views, and the sustainability topics identified as material were the same for external and internal stakeholders.

Responsibility in Customer Relationships

Solteq helps customers find solutions that suit their needs, are technologically up to date and offer a high level of information security. Customer satisfaction is actively monitored.

The principles governing quality management in customer projects are defined in Solteq's quality plan. The goal of instructions and guidelines related to quality planning, assurance, control, and improvement is to ensure the high-quality execution of customer projects and the achievement of the agreed objectives.

Risk Management System

The Group's risk management is guided by legal requirements, regulations and instructions given by authorities, other rules and standards binding the Company, business requirements set by the Company's shareholders and the expectations of other stakeholders. The goal of risk management is to identify and acknowledge the risks involved in the Company's operations as well as to make sure that the

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risks are appropriately managed when making business decisions. The Company's risk management supports the achievement of strategic goals and ensures the continuity of business operations.

Risk management is aimed at ensuring that the risks affecting the Company's business are identified, managed, and monitored. To ensure that responsible practices are implemented, the Company has recognized and is systematically monitoring certain areas, such as:

• risks pertaining to employees and working, such as those related to discrimination, working conditions, and equal pay,
• risks related to information security and privacy, particularly phishing, data breaches or other leaks of personal data,
• risks related to corruption and bribery, particularly with respect to the supply chain and customer relationships, and
• risk factors related to the Company's reputation and stakeholders' trust in the Company, such as changes in the operation of the Company or its partners, and any accidents, crises affecting the environment and the personnel, and negative publicity. The Company is prepared to communicate in a timely and clear manner in case of any crisis, emergency, and disruption to maintain the stakeholders' trust in the Company. The Company has an up-to-date crisis communication plan, and crisis communication has been invested in by organizing crisis communication training to the personnel.

Managing Corporate Responsibility and Sustainability

Sustainability topics identified as material are regularly discussed by the Executive Team and the Board of Directors. The CEO is responsible for sustainability reporting. When CSRD-compliant reporting begins, the same instances responsible for financial reporting will be responsible for sustainability reporting.

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Personnel

Highly competent, motivated, and healthy employees are the foundation for Solteq's success. Hence, the Company's operations are largely built on the core values (Integrity, Dedication, Better together) defined together with the employees. A strong foundation of values in operations aims for a good employee experience and positive customer experience as a result.

IT is a rapidly evolving industry, and Solteqians are eager to continuously develop their skills. In 2023, the training focused on improving the employees' technical competencies and on meeting the needs of team leaders in everyday management situations. Due to weakened economic outlook, the training sessions focused on supporting critical areas of expertise for the business.

Well-being at work is managed as part of the Company's business operations. Well-being at work is supported by, among other things, flexible working hours, remote work opportunities, and extensive sports, culture, and well-being initiatives. The Company has significantly invested in developing preventive occupational healthcare services as personnel faces an increasing amount of stress factors, caused by the world economics and politics.

In businesses based on skilled personnel and optimal resources, successful recruitment plays a strategically important role. In 2023, the Company recruited 55 new employees (159). Personnel turnover was at 19 percent (24).

Employee satisfaction is measured by weekly surveys. The survey results are used to support personnel strategy and management. Employer recommendation (eNPS) decreased from the previous year. In 2023, the eNPS score was -29 (27). The Company is in transition, and the restructuring measures implemented along with the challenging market conditions were clearly reflected in the declining employee satisfaction.

Solteq strives to be a flexible employer that values equality and diversity. Employees are treated equally regardless of their gender, ethnicity, religious beliefs, age, and other such factors. The average age of the personnel was 41.7 years (40.9). Women accounted for 26.5 percent of Solteq's personnel (24.5).

Solteq respects internationally recognized human rights and workers' rights and nurtures a safe and healthy work environment for all its employees. The fundamental principles of Solteq's personnel management have been defined in the action plans related to the personnel. According to the Company's view, there are no significant risks of human rights infringements associated with its operations. Possible risks of human rights infringements are related to the supply chain. These risks are managed by choosing business partners carefully and by obligating the partners to commit to the responsibility principles drawn by Solteq or other equivalent principles of responsible practice.

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Data Protection and Information Security

The confidentiality of data and the integrity of information systems are at the core of Solteq's efforts related to information security. It is crucial for Solteq to protect the privacy of its stakeholders and the appropriate handling of confidential data.

Solteq's company-level IT operations, covering data security practices, control systems, and risk management, were granted ISO/IEC 27001:2013 certification in 2019. The certification requires that the Company continuously develops its data security and data protection. The certification was audited in December 2023. The auditor for the certification was KPMG IT Certification Ltd. No significant shortcomings were found.

In terms of personal data, Solteq operates in the market in the roles of both controller and data processor. The Company's data protection practices are publicly available. Solteq processes personal data in compliance with legislation and only collects personal data when necessary.

Solteq gives guidance and instructions to its customers regarding appropriate technical and organizational measures, which contributes to the protection of privacy in society. During 2023, Solteq has been involved in the implementation of information security and data protection as part of its customer projects. The emphasis has been on further developing and enhancing identity protection and the technical protection level of IT infrastructure, for example, by enhancing endpoint device protection. In addition, preparations for the requirements of NIS2 Directive commenced during 2023. Solteq has taken particular precautions on the increased cybersecurity threats.

The prevention and communication of information security threats are managed by an established Security Incident Reporting process, which ensures that the relevant parties are informed of potential or actual security incidents. With this process, Solteq aims to ensure efficiency in handling information security incidents. Solteq is involved in the Digipooli project led by the National Emergency Supply Agency. Digipooli is a trust network between businesses and public authorities that supports and promotes digital security in society and secures operating conditions for disturbances and exceptional situations.

Solteq's employees' information security skills are maintained through regular and mandatory information security trainings. Solteq employees receive information security training already as part of the orientation. Extended data protection and information security training to the entire personnel was introduced in the spring of 2019. Approximately 80 percent of the employees completed the Information Security and Data Protection training in 2023.

Solteq's information security and data protection operations are managed by an information security team that operates closely with the business units and is responsible for the information security of infrastructure services and enterprise resource planning.

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Anti-Corruption and Bribery

Solteq does not condone bribery or corruption in any form. The Company requires compliance with anti- bribery principles as well as the principles governing business transparency in all of its operations.

Solteq chooses its partners carefully and all payments are subject to appropriate approval using a predefined phased approval process and they must be recorded in the Company's accounts. The Company does not pay or approve of any questionable benefits. All benefits provided and received must be such that they can be openly reported to everyone. The Company is committed to transparency in all its business operations.

Solteq's Board of Directors has approved the Company's Anti-Corruption and Bribery Policy and its principles in 2016. The policy complements Solteq's Code of Conduct. In addition, Solteq requires its suppliers and partners to commit to the Company's ethical principles or corresponding principles pertaining to corporate responsibility.

Solteq's stakeholders are primarily domestic and Nordic entities. The Company's business takes place in regions where the risk for corruption and bribery is low. Solteq assesses partnership risks on a case- by-case basis and requests additional accounts and clarifications, when necessary, based on the partnership risk assessment.

Solteq has a whistleblowing channel to enable anonymous reporting and following up on the processing of notifications of suspected misconduct. The Company is committed to processing all reports confidentially and in accordance with a standard process. Solteq complies with the EU Whistleblowing Directive and national legislation. During the year 2023, not a single suspected misconduct meeting the Whistleblowing criteria was received.

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Climate and Environment

Solteq takes climate and environmental perspectives into account in its operations. Due to the nature of Solteq's business model, the impact of environmental factors such as climate change and biodiversity on the Company's business is limited. The impact of the Company's own operations on the environment is also minimal, and the potential for influencing the environmental impact of the value chain is very limited. Nevertheless, the Company will continue to consider environmental aspects in its operations and will monitor the development of its greenhouse gas emissions to be able to take reduction measures.

Assessing Greenhouse Gas Emissions

Solteq has assessed the greenhouse gas emissions of its own operations since 2020 in accordance with the international Greenhouse Gas Protocol. In calculating the climate burden caused by greenhouse gas emissions, both the direct emission sources (Scope 1 and 2) generated by the Company's operations and three categories from the indirect (Scope 3) emission source classes (Scope 3) have been considered. The climate burden arises from emissions of greenhouse gases such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) into the atmosphere. The amount of greenhouse gas emissions is expressed in carbon dioxide equivalents (CO2e), where the different global warming effects of various greenhouse gases are taken into account using characterization factors (GWP, global warming potential). The calculation has been carried out with similar thresholds during 2020-2023, making the results comparable. For the year 2023, the calculation was conducted by OpenCO2net Oy.

In 2023, the market-based greenhouse gas emissions of Solteq Group's value chain were 789.3 tonnes CO2e.

• Scope 1 covers direct emissions resulting from the Group's operations, which arise from emission sources owned or controlled by the Company. These cover the greenhouse gas emissions resulting from the consumption of fossil fuels in leased cars, which accounted for approximately 3 percent of the Company's total emissions.
• Scope 2 covers indirect emissions related to purchased energy as a result of the Company's operations. These include greenhouse gas emissions from electricity, heating, and cooling of the Company's premises and the leased electric vehicles. Together these emissions accounted for approximately 10 percent of Solteq's total emissions.
• Scope 3 covers indirect emissions related to the value chain and procurement resulting from the Company's operations. These include the greenhouse gas emissions from business travel, commuting, and equipment and capacity purchases. Scope 3 emissions accounted for approximately 87 percent of Solteq's total emissions. Nearly 70 percent of the Scope 3 emissions originated from equipment and capacity purchases.

The Company's emissions decreased by a total of 331 tCO2e, which corresponds to approximately a 30 percent reduction in greenhouse gas emissions compared to the previous year. Emission reductions occurred in each application area and emission category.

Greenhouse Gas Emissions of Solteq Group's Own Operations

In 2023, the greenhouse gas emissions of Solteq Group's own operations were 201 tCO2e. The calculation includes the following:

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• emissions from the consumption of fossil fuels in leased cars (Scope 1),
• emissions from electricity, heating, and cooling of premises, as well as emissions from leased electric cars (Scope 2), and
• emissions caused by business travel (Scope 3).

Emissions from commuting and equipment and capacity acquisitions are not included in the calculation to ensure comparability with previous years.

In 2023, the greenhouse gas emissions from the Group's own operations decreased by 47.7 percent from the previous year. The decrease in Scope 1 emissions was influenced by the reduction in the number of leased cars and fuel purchases. The reduction of Scope 2 emissions is explained by the increase in the proportion of renewable energy in the consumption of electricity and district heating in premises. The decrease in Scope 3 emissions was due to a reduced amount of business travel. The emission reductions related to leased cars and business travel are attributed to a decline in the number of personnel compared to the previous year.

Greenhouse gas emissions of Solteq Group's own operations

2020

2021

2022

2023 Change 2022-2023, %

Greenhouse gas

emissions of own387356384201-47.7 operations, tCO2e

Greenhouse gas

emissions relative to6.45.25.63.5-37.5 revenue, kg CO2e /

TEUR

Greenhouse gas

emissions per0.70.60.60.4-33.3 employee, tCO2e

The greatest potential for reducing greenhouse gas emissions lies in favoring premises and capacity utilizing renewable energy sources. In addition, restraint in business travel also helps to mitigate emissions. In the future, direct greenhouse gas emissions can be reduced by favoring electric and hybrid cars in leasing contracts.

Green Choices as a Part of Daily Work

Solteq strives to reduce the environmental impact of business premises and equipment as well as increase the recycling of materials. The Company favors modern, energy-efficient, and healthy environments in its choices of business premises.

Centrally located offices, the use of modern communication technology, and remote work opportunities aim to reduce the need for travelling. The Company continues to favor sustainable means of travel, whenever team meetings and other face-to-face meetings are organized.

A significant proportion of the industry's environmental impacts arises from hardware manufacturing. Solteq takes this into account in its purchase practices by favoring energy efficiency, life cycle, and reliability of hardware. Network and information system hardware and phones are mostly purchased from well-known and certified suppliers. Equipment that has reached the end of its life cycle is collected in

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WEEE collection containers at Solteq's offices to be recycled and used as raw material for electronics. Solteq conducts dialogue with different equipment suppliers to support sustainable principles.

EU Taxonomy

The EU Taxonomy is a classification system for sustainable finance that aims to support the transition towards an economy based on low carbon emissions, resource efficiency, and sustainable development. Through the classification system, EU is steering capital market financing towards sustainable targets, as well as steering companies operating in those markets towards more transparent reporting and responsible business practices. The sectors included in the classification system are those with the greatest potential to meet the EU's climate change mitigation and adaptation goals.

Solteq has assessed its suitability and alignment for the EU Taxonomy classification system for 2022 and 2023. The Company's core business operations do not correspond to activities that contribute to climate change mitigation or adaptation as these are defined by the classification system for the information, communications, and technology sector. As a result, 0 percent of Solteq's business operations come within the scope of economic activities that are suitable for or aligned with the classification system. Solteq continues its efforts in sustainability and is preparing to extend its sustainability reporting in 2025.

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