Raport

SUSTAINABILITY

REPORT 2022

Arctic Paper SA Capital Group disclosure on non-nancial information

We ensure sustainability from forest to paper

TABLE

OF CONTENTS

This is Arctic

Paper / 8

Company

sustainability / 24

Sustainable supply

chain for client

satisfaction / 42

Environment

and climate / 51

1.1 Company Overview / 09

1.2 Business ethics / 18

1.3 Governance structure and management

on sustainability topics / 22

2.1 Materiality assessment / 25

2.2 Our contribution to the Sustainable

Development Goals / 30

2.3 Responsible business / 32

2.4 Principal risks and their management / 33

2.5 Arctic Paper’s partnerships / 36

2.6 Key business performance indicators / 38

3.1 Responsible supply chain / 44

3.2. Environmental assessment of suppliers

and responsible sourcing / 45

3.3 Transportation / 48

3.4. Commitment to client satisfaction / 50

4.1 Management approach / 52

4.2 Energy and emissions / 56

4.3. Sustainable circular production

and waste / 62

4.4 Water / 65

4.5 Biodiversity / 67

SUSTAINABILITY REPORT 2022

People / 68 About the

report / 98

5.1 Working at Arctic Paper –

Management approach / 69

5.2 Our employees' well-being

and satisfaction / 71

5.3 Human rights / 78

5.4 Health and safety / 81

5.5 Diversity, Equity and Inclusion / 82

Taxonomy / 84

7.1 Reporting period:

the calendar year 2022 / 99

7.2 Contact / 99

7.3 ESG factsheet / 100

GRI Index / 106

6.1 Taxonomy compliance

assessment process / 87

6.2 Compliance verication with

the technical screening criteria / 88

6.3 Compliance verication

with minimum safeguards / 89

6.4 Accounting principles / 91

What were the most

important events in 2022?

The Russian invasion of Ukraine has funda-

mentally changed many things in the

markets in which we operate. Arctic Paper

immediately discontinued all business

with Russia and Belarus. We have also

contributed to the Ukrainian cause, as well

as helped refugees eeing from the war.

The tragic events also triggered cost ina-

tion and made the availability and afforda-

bility of energy a more challenging task.

How would you summarize

the year for Arctic Paper?

We saw an increase in demand, as the

societies in which we operate eased the

restrictions related to the coronavirus and

gradually returned to normal life, triggering

growth in our business. Simultaneously, cost

ination necessitated/required several price

increases during the year. In this new busi-

ness environment, we managed to defend

our margins and grow our business. Closing

the books for 2022, we summarize a record

year, providing nancial resources to invest

in the strategic diversication towards pack-

aging and energy, while maintaining our

strong positions in paper and pulp.

How has Arctic Paper

handled the energy challenge?

We have long held a strong position

with local sources of energy at our mills,

for example, biomass energy and hydro

power. Investing in renewable energy is

also a priority in the 4P strategy that was

launched in 2021. During 2022, we have

taken further steps with investments in

a solar park in Kostrzyn and we have also

commissioned a multifuel boiler, built and

operated by our partner Adven at our mill

in Munkedal. This is an example of smart

cooperation within the circular economy.

More investments will follow in the elds of

solar and wind, with the goal of becoming

a net producer of green energy and thus

contributing to combating climate change.

What are you doing

to prevent climate change?

Transforming Arctic Paper to a CO

neutral

Group by 2035 is our ultimate goal and

it requires, among other things, major

investments in renewable energy. But it is

also a question of keeping the business

running, maintaining our competitiveness,

and creating the prots needed to invest,

which in turn demands the availability

MICHAŁ JARCZYSKI

CEO ARCTIC PAPER S.A.

SUSTAINABILITY REPORT 2022

of affordable and clean energy. We have

decided on several other targets that are

described in this report. The three most

important aspects of our materiality analysis

are the health and safety of employees,

customer satisfaction and climate change.

We have connected these focus areas with

the UN Sustainable Developments Goals

(SDG), which you also will nd in the report.

Starting with health and safety,

how are you progressing?

I am happy to say that the number of

work-related injuries has decreased during

2022, but we still need to do more to reach

our goal. This is one of the main priorities

for 2023. Good working conditions are

a prerequisite if we are to retain our staff

and recruit future talents.

Do you have any other

examples of progress?

In Munkedal, where the mill is already one

of the best in the world when it comes

to using as little water as possible and to

ensure clean water, we have invested in

making the Munkedal river more acces-

sible for sh. And the measures that were

implemented in 2021 have already shown

a remarkable effect on underwater life.

Last year we could see a major recovery

of the sh stocks in the river.

Looking forward, what

do you expect from 2023?

The outlook for the economy is uncertain,

but Arctic Paper is well-prepared with

stable nances. We will continue to invest

in our strategic diversication as well as

in new and better technology to reduce

our footprint – and that of our customers.

We are working with eco-friendly and

renewable products that are attractive

to customers who want to shift from

fossil-based to bio-based products.

THIS IS

ARCTIC

PAPER

SUSTAINABILITY REPORT 2022

1.1

COMPANY OVERVIEW

Arctic Paper SA is a leading European producer of high-quality graphic paper

listed on the stock exchanges in Warsaw (Giełda Papierów Wartościowych –

GPW) and Stockholm (NASDAQ). We produce numerous types of uncoated and

coated wood-free paper, as well as wood-containing uncoated paper for printing

houses, paper distributors, book and magazine publishing houses, the adver-

tising industry and packaging producers.

POLAND

THE PAPER MILL IN KOSTRZYN NAD ODRĄ

The mill has a production capacity of about 315,000 tonnes of paper

per year and mainly produces uncoated wood-free paper for printing

books, brochures and forms, and for producing envelopes and other

paper products.

SWEDEN

THE PAPER MILL IN MUNKEDAL

The mill has a production capacity of about 160,000 tonnes per year

and mainly produces ne uncoated wood-free paper, used primarily

for printing books and high-quality brochures.

SWEDEN

THE PAPER MILL IN GRYCKSBO

The mill has a production capacity of about 220,000 tonnes per year

and produces coated wood-free paper used for printing maps, books,

magazines, posters and advertising materials.

As of 31 December 2022, Arctic Paper employs

about 1,201 people. Our business activities are based

on the operations of three mills:

ONETWOTHREE

1. THIS IS ARCTIC PAPER

SALES OFFICES

Arctic Paper Papierhandels GmbH, Austria

Arctic Paper Benelux N.V., Belgium

Arctic Paper Danmark A/S, Denmark

Arctic Paper France SAS, France

Arctic Paper Deutschland GmbH, Germany

Arctic Paper Italia Srl, Italy

Arctic Paper Baltic States, Latvia

Arctic Paper Norge AS, Norway

Arctic Paper Polska Sp.zo.o., Poland

Arctic Paper Espana S.L., Spain

Arctic Paper Sverige AB, Sweden

Arctic Paper Schweiz AG, Switzerland

Arctic Paper UK Ltd., United Kingdom

MILLS

Arctic Paper Kostrzyn S.A., Poland

Arctic Paper Munkedals AB, Sweden

Arctic Paper Grycksbo AB, Sweden

We manage sales organisations across Europe,

which support our activities and contacts with customers.

The company is registered in Kostrzyn nad Odrą (Poland).

Arctic Paper SA is also a majority owner (in possession of 51.0 % of the shares by

December 31, 2022) of the Rottneros group. Rottneros AB is a pulp producing

company, registered on the Nasdaq stock exchange in Stockholm. The Pulp mills

owned and operated by Rottneros AB are located in Sweden and have aggregate

production capacities of about 440,000 tonnes of pulp annually. Arctic Paper SA

has nancial control over Rottneros AB, as it holds the majority of shares, yet oper-

ational control belongs to Rottneros AB, including responsibility for the company’s

performance and sustainability matters.

Data for 2022 for Rottneros AB are not available in the format presented by Arctic

Paper SA However, the impact on sustainable development and results will be

presented in a separate report of the subsidiary.

Arctic Paper SA discloses information on the EU Taxonomy of environmentally

sustainable activities at consolidated level, including data from Rottneros AB.

Rottneros AB report isavailable on web page:

https://www.rottneros.com/sustainability/

SUSTAINABILITY REPORT 2022

OUR HERITAGE AND VALUES

Arctic Paper is a company based upon Swedish roots.

We have been manufacturing paper with craft and dedication

since 1740. Today we run some of the most eco-friendly

mills worldwide and are constantly improving our sourcing,

production, sale processes and energy management.

We try to optimise our daily business processes to be part

of circular bioeconomy.

Our reputation in the high-quality graphic paper market is built on a long tradition

of exceptional work with the help of our brands, executed by the most demanding

customers who value the proven quality of our products.

We are clear, open-minded and follow a long-term plan in the way we act, think

and appear. We are sensitive towards nature and positive towards the future.

We protect natural resources and constantly create a sound balance between

people, production and regions. We run our business in a stable, long-term

and trustworthy manner. We are a forerunner in the protection of nature and

the development of new products for core markets, as well as for new markets

and segments. We offer distinctive products and services built on inventiveness

and reliable quality, crafted for the most demanding creative ideas and using

new technologies.

Our business operations are based on well-established and trusted relationships

with different stakeholders. Thus, we need to ensure that all of our business oper-

ations are transparent – from sustainable sourcing, the production and delivery

of our products, to the communication of our results to external stakeholders.

We are transparent and ethical in everything we do. Since 2018 our cooperation

with suppliers has been based on Code of Conduct for Suppliers of Arctic Paper.

We aim to choose suppliers who can and are willing to assure us that they respect

our values with regards to People and the Environment. In 2021 we elaborated

a new Sustainability Policy for the entire Arctic Paper Group. In 2023, we plan to

start working on a new code of conduct for the entire value chain of Arctic Paper.

1. THIS IS ARCTIC PAPER

OUR BRANDS

For decades we have been one of the leading European

producers of premium graphic paper products, superior

packaging grades and services for the most demanding

creatives and technologies valuing the superior, reliable

and eco-friendly quality of our paper brands.

We are known for new solutions and products, as well as the continuous exten-

sion of our product ranges in step with the latest developments in printing tech-

nology for both the graphical and the packaging segments.

The graphical paper market consists of two segments: wood-free ne paper and

wood-based paper, both divided into the sub-segments of uncoated and coated

paper, while the packaging segment is served by wood-free grades. Our mills in

Munkedal and Kostrzyn produce uncoated wood-free and wood-based paper,

while the mill in Grycksbo produces coated wood-free paper.

SUSTAINABILITY REPORT 2022

KEY BRANDS

UNCOATED WOOD-FREE PAPER, IN PARTICULAR – MUNKEN DESIGN,

MUNKEN BOOK, AMBER

• High-quality graphic paper with a very smooth surface, used for various kinds

of advertising and marketing materials. It is produced under the Munken brand.

• Bulky book paper, produced under the Munken brand, used primarily for

printing books.

• White offset paper, produced and distributed primarily under the Amber brand.

It’s one of the most versatile types of paper.

UNCOATED WOOD-BASED PAPER, IN PARTICULAR – MUNKEN PRINT

• Premium bulky book paper, produced and distributed under the Munken

brand, specially developed for colour- and monochrome-printing of books.

COATED WOOD-FREE PAPER, IN PARTICULAR – ARCTIC VOLUME, G, ARCTIC

• Manufactured under the brand names Arctic Volume, G and Arctic.

Used primarily for printing books, magazines, catalogues, maps and

personalised direct mail correspondence.

PACKAGING PAPER – MUNKEN KRAFT, G-FLEXMATT

The packaging paper portfolio manufactured in Munkedal, Kostrzyn and

Grycksbo has been established since 2020 in chosen markets and segments.

The combined offer from the two uncoated mills covers a grammage range

from 38 g/m2 to 150 g/m2 in two shades and is called Munken Kraft. Since 2021

the coated packaging paper is a 1 side coated matt grade, called G-Flexmatt.

1. THIS IS ARCTIC PAPER