2022-03-29

To our stakeholders:

I am pleased to confirm that Scanfil 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,

Mats Lindblad
Director Global Quality & Sustainability

Scanfil is a member of the UN Global Compact and supports and respects the United Nations Global Compact principles.

Scanfil commits to respect ILO core labour standards: Freedom of Associations and Right to Collective Bargaining; Elimination of Forced Labour; Effective Abolition of Child Labour; Elimination of discrimination in respect of employment and occupation.

Scanfil is always committed to the highest standards of ethical conduct and compliance with applicable laws, regulations, and other legal requirements where we as a company are conducting business. We respect different cultures, cultural heritage, and local legally accepted ways of action. Scanfil is committed to respecting Human Rights in all its operations. We adhere to United Nations Guiding Principles on Business and Human Rights.

All employees are liable to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Employees must practice honesty and integrity in every aspect of dealing with other Scanfil employees, the public, the business community, stockholders, customers, suppliers, and government authorities.

Scanfil will treat each and every employee in a fair and equal manner and will provide a safe and healthy working place for its employees. Neither Scanfil nor any person acting on behalf of Scanfil shall discriminate against any person with regard to employment based on the person’s ethnic origin, color, age, religion, creed, gender, marital status, family status, sexual orientation, disability, or any other prohibited ground of discrimination protected by applicable law. Physical, psychological, sexual, or verbal harassment against any colleague or business partner will never be tolerated. As employees, we shall conduct our work with respect for all people regardless of any differences.
Scanfil emphasizes its commitment to advancing equality between women and men. This is expressed in Scanfil CEO Statement of Support for the Women’s Empowerment Principles.

All work must be voluntary, and workers shall be free to leave work or terminate their employment with reasonable notice. Scanfil does not tolerate underage labor in its operations or in the operations of any supplier or other party with whom we cooperate. The minimum employment age is the lawful age for working in the country in question. The age of the employee is verified by checking the date of birth already during the recruitment process before the employment contract would be concluded.

We do not allow illegal or forced labor in our operations or in the operations of any parties with whom we cooperate.
In operations, the greatest threats to employee health and safety such as work-related illnesses, and accidents arise from a working culture where our health and safety processes are not followed and risks in the work environment are not controlled or even recognized. Our employees are involved in health and safety decisions through consultation and cooperation.

We comply with legal requirements and develop and implement appropriate health and safety procedures and working practices.

Scanfil has formed Safety Council which monitors all work safety aspects. Safety Council gathers quarterly to review corrective actions and preventive best practices. In addition to that sick leaves, accidents/injuries and serious accidents are monitored monthly. The occupational risk analyses are performed regularly at all locations to verify if any potential occupational diseases may result from our operations.

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

Scanfil is ISO 45001 certified in all sites (9 factories and headquarter)

All employees are trained and tested in knowledge during 2021 in Scanfil Code of Conduct.

All employees have access and possibility to report suggestions for improvements in human rights. Scanfil’s personnel survey also includes questions about any unwelcome behavior.

The violations reporting channel via report.codeofconduct@scanfil.com is available openly to all invested stakeholders or communities. All such reports become subject to thorough investigation. The responsible organizational unit needs to report the case and take measures to the Global HR Manager on monthly basis. Follow-up of those is performed quarterly at Code of Conduct Forum and bi-quarterly monitored in Global Management Review meeting. The result of this is presented to the Board of Directors by Scanfil CEO, Petteri Jokitalo, who holds the responsibility of Human Rights issues control.

The subject of reported areas is expressed in signed by CEO UN Guiding Principles on Business and Human Rights as well as UN Women’s Empowerment Principles.

This monitoring process enables the company to react timely in case of any violations of human rights would be discovered. Scanfil commits to take all the needed actions to help impacted individuals and removes the circumstances in which similar cases could happen in the future

There will be no retaliation against any employee making a report in good faith. Those employees are protected as they opinion values for company culture cultivation. Neither other stakeholders raising human rights related complaints or concerns can be subject to any retaliation. Human rights defenders are protected and Scanfil commits to neither tolerate nor contribute to any threats, intimidation, or attacks against human rights defenders in relation to company operations.

Scanfil emphasizes that any of the grievance activities, including state-based grievance mechanisms, are not impeded by the company. All participations in human rights grievance or mediation processes are protected and will not be subject to any negative after-effects, neither will be requested to waive their legal rights as a condition of participation in the grievance/mediation process.

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

Scanfil regularly held the Human Right council meeting. This is reporting the progress in the area of Human Rights for the last period.

Accidents and other relevant events related to Human Rights are measured on a monthly basis as number of cases. Root causes as well as preventive and corrective actions are:
- discussed during Monthly Global HR Review Meetings
- followed up during Quarterly Safety Council

Above outcome is reported to senior management on a regular basis.

Code of Conduct mechanisms were consulted with all sites (including non-managerial employees). First, the draft prepared by the global team is verified by local HR Managers, who secondly organize local consultation with representatives of employees. Thirdly, any comments and ideas are returned to the global team, who evaluate the applicability of the suggested measures and prepares adjustments. The finally aligned version is subject to approval and commitment of the Scanfil Group Management

External ISO 45001 audits by Bureau Veritas annually on headquarter and local sites

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

The company ensures the fulfillment of its social responsibility through fair working conditions and practices, with exclusive focus on human rights as expressed in its Code of Conduct. Scanfil uses Corporate Human Rights Benchmark (CHRB) as a benchmark tool for measuring human rights.

Scanfil commits to respect ILO core labour standards: Freedom of Associations and Right to Collective Bargaining; Elimination of Forced Labour; Effective Abolition of Child Labour; Elimination of discrimination in respect of employment and occupation.

In terms of its social responsibility, Scanfil focuses on competence development, occupational safety and health, and the development of employees’ motivation and work satisfaction. The company ensures the fulfillment of its social responsibility through fair working conditions and practices in its Code of Conduct. Human rights and equal treatment are basic values in Scanfil’s operations, and here no compromises can ever be made. Besides the personnel, they concern all partners, and they define, among other things, the principles of respecting individuals, as well as those of preventing forced labour, child labour and human trafficking. The Code of Conduct also includes instructions on reporting possible or suspected unethical or illegal actions.

Work Environmental Policy:
Our vision is to be a trusted partner for our customers, and we differentiate with our best in class performance.

Scanfil believes that a good work environment, both psychical and psycho-social, is critical to the success of our business why we consider Occupational Health and safety issues in all business strategies and initiatives. We measure our performance and will continuously work to reduce risks related to work environment.

We ensure the safety of all employees and other persons who may be directly affected by the activities of Scanfil as far as reasonably practicable.
We are all responsible to stop work directly and report to nearest manager if we observe a situation, which might bring risk to health and safety.

We comply with legal and other relevant requirements, continuously developing and implementing appropriate health and safety procedures and working practices. Through the cooperation of all Scanfil employees and where needed consulting with their representatives, we work towards and strive for zero harm of our employees by our work environment.
(End of Policy)

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

Monthly meeting by global HR to review local site safety book. Monthly reporting to operations and global management. Quarterly safety council meeting for whole Scanfil organization.

Scanfil’s personnel survey also includes questions about any unwelcome behavior. Scanfil has a whistleblowing channel to which the company’s personnel and partners can anonymously report any misconduct or suspected misconduct regarding human rights, corruption, bribery or the Code of Conduct. The company aims to ensure compliance with the Code of Conduct in supply chain management by carrying out audits.

Awareness raising or training for employees on labour rights and policies held 2021.

Human rights and equal treatment are basic values in Scanfil’s operations, and here no compromises can ever be made. Besides the personnel, they concern all partners, and they define, among other things, the principles of respecting individuals, as well as those of preventing forced labour, child labour and human trafficking. The Code of Conduct also includes instructions on reporting possible or suspected unethical or illegal actions.

Scanfil commits to respect ILO core labour standards: Freedom of Associations and Right to Collective Bargaining; Elimination of Forced Labour; Effective Abolition of Child Labour; Elimination of discrimination in respect of employment and occupation.

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

Annual audits by Bureau Veritas for ISO 45001:2018

Regularly monitoring and reporting to group management of management and employees by diversity factors (gender, age)

Compliance with the law and ethical principles is also monitored in internal control and audits. During 2021, no non-conformities pursuant to corporate governance were identified in Scanfil’s global whistle-blowing channels.

Awareness raising or training for employees on labour rights and policies held 2021.

Five cases of bullying or harassment were reported in local HR organisations. These were investigated thoroughly by local management teams, and the resulting actions were reported in the global HR organisation.

Environmental Policy:
- Our vision is to be a trusted partner for our customers and We differentiate with our best in class performance.
- We consider environmental issues in all business strategies and initiatives
- We will comply with laws, regulations and other requirements, to which the company subscribes and relate to our environmental aspects.
- We will continuously work to prevent our environmental impact, reduce air and water pollution as well as the consumption of other natural resources
- We meet our stakeholder’s requirements by continuously improve our way of working
(End of policy)

Scanfil promotes sustainable development by identifying, measuring, and reporting the environmental impact caused by its activities. The goal is to reduce negative impacts to the environment. Scanfil’s aspiration is to consider the environmental impact throughout the value chain, ranging from the procurement of raw materials to production, distribution, and recycling possibilities. All Scanfil’s sites including headquarter have a certified ISO 14001-compliant environmental management system. In its production, Scanfil mainly uses metals, components, and chemicals. It prefers recyclable materials and eco-friendly products. Part of the materials to be used are chosen by customers. The utilization rate of all raw materials is optimized to ensure the efficient use of resources and decrease the amount of waste created.

Waste materials are recycled if they cannot be re-used in the company’s own production. Steel is important raw material used by Scanfil. Its effective use is closely monitored in the production process.

The risks associated with chemicals are analyzed before their deployment, and they are handled following precise instructions and precautions. In addition, proper training and drills are arranged to prepare for any accidents.

Code of Conduct and Supplier Code of Conduct requiring business partners and suppliers to adhere to the Global Compact environmental principles

Scanfil has many targets in environment. Examples are:
- Reduce energy consumption (KPI)
- Reduce water consumption (KPI)
- Reduce waste created (KPI)
- Full material declarations
- Reduce carbon footprint (KPI)
- Fossil free energy consumption (KPI)
- Compliance with common environmental certificate and standards

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf
Supplier Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Supplier-Code-of-Conduct-2021-web.pdf

Training of all employees in Environmental policy and Code of Conduct

Initiatives and programmes to reduce waste materials (e.g. recycling) and consumption of resources (energy, fossil fuels, water, electricity, paper, packaging, etc.) implemented on all 9 sites and regularly monitored and reported to group management.

Extract from Supplier Code of Conduct:
Pollution Prevention and Resource Reduction:
Resources shall be used responsibly and carefully. Work shall be conducted to reduce any environmental burden associated with the business activities and the operational practices shall come to reflect this. Developments that lessen the environmental and social effects of the business shall be supported.

Emissions, waste of all types are to be minimized or eliminated at the source or by practices such as the use of pollution control equipment, modifying production, maintenance, and facility processes.

Hazardous Substances:
- Chemicals, waste, other materials posing a hazard to humans or the environment are to be identified, labeled, and managed for ensuring safe handling, movement, storage, use, recycling, re-use, and disposal.

Energy Consumption and Greenhouse Gas Emissions:
- Energy consumption and greenhouse gas emissions are to be tracked and documented, at the facility and/or corporate level. Participants are to look for cost-effective methods to improve energy efficiency and to minimize their energy consumption and greenhouse gas emissions. Information regarding participant’s environmental practices and performance is to be disclosed in accordance with applicable regulations and prevailing industry practices.
(End of extract from Supplier Code of Conduct)

Nonconformity handling including environmental performance. Monitoring on global level for incident handling follow up.

Regular follow by local environmental up of progress made in the area of the environmental protection during the last reporting period and reported to global environment.

Senior management follow up two times per year in group management review.

All Scanfil’s sites including headquarter have a certified ISO 14001-compliant environmental management system and is audited annually by Bureau Veritas

Assessment of risk of corruption and bribery in the company’s industry and countries of operation will be performed during 2022

Scanfil is always committed to the highest standards of ethical conduct and compliance with applicable laws, regulations, and other legal requirements where we as a company are conducting business. We respect different cultures, cultural heritage, and local legally accepted ways of action. Scanfil is committed to respecting Human Rights in all its operations. We adhere to United Nations Guiding Principles on Business and Human Rights.

All employees are liable to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Employees must practice honesty and integrity in every aspect of dealing with other Scanfil employees, the public, the business community, stockholders, customers, suppliers, and government authorities.

Policies with content direct or indirect prevent corruption:
- Social Media Policy
- Representation Policy
- Financial Policy
- Scanfil Whistle-blowing Guideline
- Global stock take policy
- Scanfil Group Disclosure Policy
- Data Protection Policy
- Social Engineering Awareness Policy
- Identity and Access Management Policy
- Conflict Mineral Policy
- Supplier Contract Management Policy
- Sourcing and Procurement Operating Policy
- Customer Risk Management Policy

Code of Conduct: https://www.scanfil.com/wp-content/uploads/2021/06/Scanfil-Code-of-Conduct-2021-web.pdf

The violations reporting channel via report.codeofconduct@scanfil.com is available openly to all invested stakeholders or communities. All such reports become subject to thorough investigation. The responsible organizational unit needs to report the case and take measures to the Global HR Manager on monthly basis. Follow-up of those is performed quarterly at Code of Conduct Forum and bi-quarterly monitored in Global Management Review meeting. The result of this is presented to the Board of Directors by Scanfil CEO, Petteri Jokitalo, who holds the responsibility of Human Rights issues control. Plan to perform trainings for all employees 2022 about the company's policies regarding anti-corruption, Bribery and anti-competitiveness.

Whistleblower guidelines are based on the Company’s Code of Conduct principles confirmed as part of the company’s self-regulation, according to the Company’s Related Party Instructions and based on the legislation or other regulations applicable to the Company at the time, including the provisions of the Market Abuse Regulation (MAR) and the Finnish Securities Markets Act (746/2012, as amended). The Whistleblower guideline is interpreted in accordance of and it is subject to the laws of Finland.

Implementation of allocation of responsibilities for anti-corruption, bribery and anticompetivness within the company ongoing and will be ready during 2022.

Awareness of unethical or illegal conduct, reporting to report.codeofconduct@scanfil.com. From this place where only a limited number of authorized global persons have access, the notification will be taken under investigation. When reporting suspected violations, employees may choose to identify themselves or to remain anonymous. The reports can be written in local languages. Employees can also choose to report violations directly to the local Human Resources Manager, who will upload them to the Code of Conduct Incidents Register.

The violations reporting channel via report.codeofconduct@scanfil.com is available openly to all invested stakeholders or communities.

Scanfil internal audit program handles consistency with anti-corruption commitment, including periodic review by senior management

Audits of anti-corruption programs made by external company