To our stakeholders:
I am pleased to confirm that Ahlstrom-Munksjo OYJ reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.
In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.
Sincerely yours,

Hans Sohlström
CEO
Ahlstrom-Munksjö OYJ

Compliance with laws and regulations, and adherence to our Code of Conduct, is necessary for Ahlstrom-Munksjö to conduct its business in lawful and successful manner. Not only because it’s the right thing to do, also because misbehaviour in this area can and will have serious negative human and commercial effects. In general, there is an increasing focus on compliance topics (including business ethics, human rights, environmental, social etc.) in society as a whole and in the business community. For Ahlstrom-Munksjö, this is noticed by an increased demand for actions, transparency and communication from our various stakeholders, including investors, financing institutions, media, customers, suppliers, employees, local communities and others. As a large cap listed company, Ahlstrom-Munksjö is subject to a heightened degree of scrutiny in this area. Therefore, there is a need to focus our efforts and formalise our approach in a compliance framework that is both general and group-wide, and specific and targeted with respect to certain areas of compliance
We have finalized and published UK Modern Slavery Act statement in coordination with Legal and Sustainability. Under the Sustainability Policy we indicate the Human Rights and Respect fundamental human rights throughout the value chain as our materiality topics. We also have Occupational Health & Safety Policy, Code of Conduct and Supplier Code of Conduct in place.

Ahlstrom-Munksjö publishes a sustainability report included in its Annual Report. The Sustainability report contains KPI’s, metrics and targets with respect to, inter alia, business ethics and human rights. The 2017 Annual Report contains the following with respect to business ethics and human rights.
Human Rights as a Key Performance Indicator and the Metrics: 1) Percentage of employees who confirm Code of Conduct awareness 2) Development of group-wide Code of Conduct training program 3) Percentage of chemical and fiber suppliers that have signed the Supplier Code of Conduct or are considered compliant 4) Percentage of chemical and fiber suppliers that have undergone evaluation for Supplier Code of Conduct risks
Any potential violation can be reported to a manager, the Human Resources or Legal department either va a dedicated and confidential mailbox (codeviolation@ahlstrom-munksjo.com) or an externally maintained whistleblowing system, SpeakUp,for all employees to report unethical or unlawful behaviour.

The progress and compliance is reviewed periodically in internal Sustainable Business Council meeting which meets twice a year.

1) Percentage of employees who confirm Code of Conduct awareness
- Induction training as part of onboarding , sign-off of CoC at employment contract signing (Managed by HR)
- Done during the spring 2018 manually by signing the CoC and confirmation, At regular intervals/every 3rd year
2) Development of group-wide Code of Conduct training program
- Launcing the eLearning (white collar employees) in Q4/2018 (20 min sessions) and setting up the
- elearning Group sessions for blue collar employees organized at plant level (Managed by HR)
3) Percentage of chemical and fiber suppliers that have signed the Supplier Code of Conduct or are considered compliant
- Follow-up of the Suppliers SCoC signatures: Status Chemical Suppliers have signed or considered compliant: 89%, Fiber Suppliers 96%
4) Percentage of chemical and fiber suppliers that have undergone evaluation for Supplier Code of Conduct risks
- Status of Chemical Suppliers that have under gone evalutation for SCoC risks: 89%, Fiber Suppliers 96%

People are central to every aspect of sustainability at Ahlstrom-Munksjö. We strive to respect the highest standards of human rights in our operations and
supply chains, build close, long-term relationships with the communities that host our production sites, and provide safe and healthy work environments free
from discrimination and full of opportunity for our team. Ahlstrom-Munksjö’s continued progress in these areas is essential to our long-term success. When
our people thrive, we thrive. At Ahlstrom-Munksjö, we are strongly committed to respecting fundamental human rights in our operational activities and
expecting the same from our suppliers. In addition to preventing discrimination based on gender in accordance with our Human Rights activities, Ahlstrom-
Munksjö is working on Gender Equality to proactively ensure we are providing equal opportunities and drawing on talent across the population. Safety is our
mindset throughout our operations at Ahlstrom-Munksjö. We work towards a zero accident workplace by setting ambitious targets for continuous
improvement, developing consistent safety practices and competencies at every level, and creating a culture of responsibility and accountability for all
employees, contractors, and visitors at our production sites. Ahlstrom-Munksjö is committed to continuously developing our employees based on individual
aspirations, company values, and business needs. We provide on-the-job training as well as development programs within leadership and other strategic
competence areas. Our people are our greatest asset, and investing in their growth will help us meet evolving challenges and take advantage of new
opportunities in a dynamic operating context.

The company has issued Occupational Health & Safety Policy, HR Policy and Human Capital Policy, as well as Code of Conduct and Supplier Code of Conduct, that integrates commitments, qualitative and quantitative objectives on labor or human rights issues in the company's operations. Occupational Health & Safety Policy also covers subcontractors working on the company premises.

The company has formalized reporting KPIs on Labor Practices, Human rights and Community engagement.
There has been on site audits related to CSR issues performed by independent 3rd party (Due Diligence), and we have the CodeViolation and SpeakUp - channels for reporting any misbehaviours as whistleblower means.
In Ahlstrom-Munksjo there are people responsible for labor practices and human rights issues.
41-60% of our operations are covered with OHSAS18001 certifications, and this number is planned to increase in coming years, as Safety is important in our production facilities. OHSAS 18001 is one element of the company wide safety management system, which also included frequent safety audits (internal and external)

The progress and compliance is reviewed periodically in internal Sustainable Business Council meeting which meets twice a year.
We have set targets for specific KPI's
1) We believe zero accidents is possible and we are committed to pursuing a TRI rate of zero
2) Near Miss Rate (NMR) higher than 2.9 by end of year 2018
3) On average, at least 15 hours of tailored safety training per employee each year by end of year 2018
4) All employees have had an annual performance and development discussion with their manager by end of year 2020
5) Employee Engagement Index and Leadership Index baseline defined through a common Employee Engagement Survey
6) By end of year 2018, short- and long-term gender targets and action plan for closing the gender gap defined. The baseline has been established, as we had an acquisition of former Expera, including 2000 employees, impacting the overall gender statistics.

Following the merger in April 2017, Ahlstrom-Munksjö prioritized creating a sustainability strategy as a newly combined company with a greater global reach
and more diverse product portfolio. Activities included developing an Sustainability Policy, material topics and associated metrics and targets, a companywide
environmental and energy data collection system launch, signing the UN Global Compact, and developing a GRI Report for the new company. Our
company-wide environmental work is focused on three areas that are most relevant to our business and stakeholders: the environmental impacts of our
sourcing practices, efficiencies and innovations in our energy use, water use and emissions, and waste reduction, and serious contributions to the global
challenge of climate change through carbon dioxide emissions reductions. These topics are our strategic priority areas of focus for accurate data collection,
management for performance, and transparent reporting on progress towards targets. Our stewardship of the natural world and our resources is part of not
only company success, but our legacy for future generations.

We have environmental management systems certified such as ISO14001, EMAS and ISO50001 which are audited by 3rd party. The list of certified plants are published at the Internet pages www.ahlstrom-munksjo.com
To fight the climate change and to improve our performance in energy consumption, CO2 is the main air emission monitored at a group level. The plants are responsible for meeting the requirements of their permits (SOx, NOx etc) and reporting on the emissions to local authorities. For developing the energy strategy as a company, we have Energy Network in place, which includes Procurement, Operations and Business functions to support the long-term execution of mitigating and shifting towards more sustainable energy landscape.
On the Innovation (P&D, R&D) side, we have established a qualitative sustainability and innovation evaluation system that can demonstrate company progress in the features of new products. It has been developed on past EcoDesign work and any available industry standards and there are clear rules for how to apply the assessment.
Investments have been approved for solar panel implementation in one of our converting units in US, we have also initiated an in-house technology solution for glassfiber recovery and reuse during 2018. Several energy saving investments and BAT approaches have been completed during the year. Capital Investments are a mean to enforce the performance at our sites.

The progress and compliance is reviewed periodically in internal Sustainable Business Council meeting which meets twice a year.The cloudbased Environmental Data collection system has been taken into use in the beginning of 2018, and in this system, we are able to view the plant level performance, as well as group wide performance, against the set targets
There are agreed targets for the Environmental KPI's
1) 80 % Energy consumption under third party audited energy management system by end of 2020
2) Annual reduction of specific energy consumption from 2018 onward: - 2%
3) Annual reduction in water use per gross ton from 2018 onward: -1,5%
4) Annual reduction in water COD emissions per gross ton product from 2018 onward: -2%
5) Annual reduction in tons of waste to landfill from 2018 onward: -2%

Within the legal framework of anti-bribery Ahlstrom-Munksjö has established this policy to clarify the rules we follow and to emphasize our zero-tolerance to bribery and other corrupt practices. Ahlstrom-Munksjö is committed to conduct all of its business in an honest and ethical manner. Thus, it is our firm Group-wide policy that Ahlstrom-Munksjö Group and its Business Partners are strictly forbidden to engage in, participate in, or encourage any form of bribery in order to obtain business, to secure favourable treatment or for any other corrupt purpose. This includes, among others, offering, giving, requesting and accepting bribes either directly or indirectly. It is Ahlstrom-Munksjö’s policy that offering or making facilitation payments is prohibited in all circumstances.The payments of secret rebates or kickbacks are strictly prohibited.The policy does not prohibit giving and receiving reasonable gifts and hospitality in good faith and in the ordinary course of business provided that the rules set forth in this Section 5 are complied with. It should be noted that in certain circumstances even minor gifts and hospitality may give rise to suspicions of impropriety and constitute bribery and thus be prohibited.

Ahlstrom-Munksjö has formalized reporting KPI's on fair business practices
Anti-Bribery Policy contains an obligation to report (including both CodeViolation and SpeakUp) and there are set disciplinary sanctions to deal with policy violations
Elearning tool on the Code of Conduct which will be launched in the coming days, during Q4/2018
Awareness training performed to prevent corruption and bribery, organised as F2F/video training by Legal for targeted audiences

Ahlstrom-Munksjö's Legal department receives the emails and responses to CodeViolation and SpeakUp, to which the necessary actions are then taken.
Performance is evaluated in the Sustainable Business Council as part of the agenda, to review the current status, actions taken and next steps to improve the process/feedback/actions and results and to mitigate any risks related to any topic.