ARCTIC PAPER SA
MANAGEMENT BOARD’S REPORT 2025
Translatorʼs Explanatory Note: the following document is a free translation of the report of the above-mentioned Company. In the event of any
discrepancy in interpreting the terminology in Polish version is binding.
Table of contents
Letter from the President of the Management Board of Arctic Paper SA ........................................................................................................2
Information on the report ..........................................................................................................................................................................3
Definitions and abbreviations ....................................................................................................................................................................4
Forward looking statements ......................................................................................................................................................................8
Forward-looking statements relating to risk factors ...................................................................................................................................8
Selected consolidated financial data ..............................................................................................................................................................9
Description of the business of the Arctic Paper SA Group ........................................................................................................................... 11
General information ................................................................................................................................................................................ 11
Capital Group structure .......................................................................................................................................................................... 12
Changes in the capital structure of the Arctic Paper Group ..................................................................................................................... 12
Modifications to the core management principles ................................................................................................................................... 12
Shareholding structure ........................................................................................................................................................................... 12
Market environment ................................................................................................................................................................................ 13
Information on the Issuer’s and the Group’s development strategy adopted and the actions taken as part of its implementation during the
period covered by the report, together with a description of the prospects for development in the coming year. ..................................... 15
Sales structure ....................................................................................................................................................................................... 16
Sales markets ........................................................................................................................................................................................ 17
Buyers .................................................................................................................................................................................................... 17
Suppliers ................................................................................................................................................................................................ 18
Information on the seasonal or cyclical nature of business ..................................................................................................................... 18
Research and development .................................................................................................................................................................... 19
Labour matters ....................................................................................................................................................................................... 19
Natural environment ............................................................................................................................................................................... 19
Summary of the consolidated financial results ............................................................................................................................................. 21
Selected items from the consolidated statement of profit or loss ............................................................................................................. 21
Selected items from the consolidated statement of financial position ...................................................................................................... 24
Selected items from the consolidated cash flow statement ..................................................................................................................... 27
Material information and factors affecting the financial results and the assessment of the financial standing ............................................... 28
key factors affecting the Company’s performance .................................................................................................................................. 28
Unusual events and factors .................................................................................................................................................................... 29
Impact of changes in Arctic Paper Group’s structure on the financial result ............................................................................................ 29
Information on contracts significant for the Group’s operations ............................................................................................................... 29
Factors influencing the development of the Arctic Paper Group ................................................................................................................... 32
Information on market trends .................................................................................................................................................................. 32
Factors influencing the financial results in the perspective of the next year ............................................................................................. 33
Risk factors ............................................................................................................................................................................................ 33
Supplementary information .......................................................................................................................................................................... 38
Management Board’s position on financial forecasts .............................................................................................................................. 38
Principles for the preparation of annual consolidated financial statements .............................................................................................. 38
Dividend information ............................................................................................................................................................................... 38
Changes to the bodies of Arctic Paper S.A. ............................................................................................................................................ 38
Changes to the share capital of Arctic Paper S.A. .................................................................................................................................. 38
Remuneration paid to Members of the Management Board and the Supervisory Board ......................................................................... 39
Agreements with Members of the Management Board guaranteeing financial compensation ................................................................. 39
Information on the control system for employee share schemes ............................................................................................................. 39
Changes in holdings of the Issuer’s shares or rights to shares by persons managing and supervising Arctic Paper S.A. ........................ 40
Management of financial resources ........................................................................................................................................................ 40
Capital investments ................................................................................................................................................................................ 40
Information on financial instruments ....................................................................................................................................................... 40
Information on loans taken out and terminated ....................................................................................................................................... 40
Information on sureties, guarantees and pledges ................................................................................................................................... 40
Material off-balance sheet items ............................................................................................................................................................. 41
Assessment of the feasibility of investment plans ................................................................................................................................... 41
Information on significant court and arbitration proceedings and proceedings pending before public administrative authorities .............. 41
Information on transactions with related parties executed on non-market terms and conditions .............................................................. 42
Information on agreements resulting in changes to the proportions of share holdings ............................................................................. 42
Information on purchase of treasury shares ............................................................................................................................................ 42
Information on the issue of securities ...................................................................................................................................................... 42
Information on the entity authorised to audit the financial statements ..................................................................................................... 42
Headcount .............................................................................................................................................................................................. 42
Statement on the application of the corporate governance rules .................................................................................................................. 43
Information compliant with the requirements of Swedish regulations concerning corporate governance. ................................................ 53
Information of the Management Board of Arctic Paper S.A. on the selection of the auditing company .................................................... 56
Statements of the Management Board ........................................................................................................................................................ 57
Accuracy and reliability of the presented reports ..................................................................................................................................... 57
Sustainability reporting ................................................................................................................................................................................ 59
1. General information ........................................................................................................................................................................... 59
2. Environment-related information. ....................................................................................................................................................... 95
3. Social information ............................................................................................................................................................................ 141
REPORT FOR 2025 OF
ARCTIC PAPER SA
Introduction
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
2
Letter from the President of the Management Board of Arctic
Paper SA
Dear Sirs,
It is my pleasure to present to you the Arctic Paper Group’s Annual Report for 2025.
The year 2025 was marked by a demanding market environment. The anticipated economic recovery in Europe did
not materialize, and demand for paper products remained under pressure. At the same time, the market continued
to operate under conditions of elevated volatility in raw material and energy costs.
In this context, the Group’s priority was to maintain operational stability, protect profitability, and consistently
strengthen business resilience. We focused on efficiency measures, adjusting production levels to demand, and
exercising strict cost control.
The year 2025 was also a period of significant reassessment of our investment approach. In response to a
changing market environment, we limited the execution of new capital-intensive projects, concentrating instead on
initiatives with quick returns and direct impact on cash flows. This approach enables us to preserve financial
flexibility and better prepare for leveraging future market opportunities.
Despite the challenging market conditions, the Arctic Paper Group continues to maintain solid business
fundamentals. We benefit from a flexible production base, a broad product portfolio, and an experienced team, all
of which allow us to respond swiftly to changes in demand and market dynamics.
Our priority remains strengthening operational efficiency and cost discipline, while maintaining readiness to
selectively resume development projects once market conditions improve. We believe that the restoration of market
balance in Europe will create favorable conditions for improved performance and the realization of the Group’s full
potential.
I would like to extend my gratitude to our employees for their commitment and professionalism throughout this
challenging year, and to our investors for their trust and continued support.
Michał Jarczyński
President of the Management Board
Arctic Paper S.A.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
3
INFORMATION ON THE REPORT
This Management Board’s Report, which is a component of the Consolidated Annual Report for 2025, has been
prepared in accordance with the Regulation of the Minister of Finance of 29 March 2018 on current and periodic
information disclosed by issuers of securities and conditions for recognising as equivalent information required
under the laws of a non-member state (Journal of Laws of 2018, item 757).
Certain selected information contained in this report comes from the Arctic Paper Group management
accounting system and statistics systems.
This Management Board’s Report presents data in PLN, and all figures, unless otherwise specified, are
disclosed in PLN ‘000.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
4
DEFINITIONS AND ABBREVIATIONS
Unless the context requires otherwise, the following definitions and abbreviations are used in the whole document:
Abbreviations applied to business entities, institutions and authorities of the Company
Abbreviation
Definition
Arctic Paper, Company, Issuer, Parent Company, AP
Arctic Paper Spółka Akcyjna with its registered office in Kostrzyn nad Odrą,
Poland
Capital Group, Group, Arctic Paper Group, AP Group
Capital Group comprised of Arctic Paper Spółka Akcyjna and its subsidiaries
as well as joint ventures
Arctic Paper Kostrzyn, AP Kostrzyn, APK
Arctic Paper Kostrzyn Spółka Akcyjna with its registered office in Kostrzyn
nad Odrą, Poland
Arctic Paper Munkedals, AP Munkedals, APM
Arctic Paper Munkedals AB with its registered office in Munkedal
Municipality, Västra Götaland County, Sweden
Arctic Paper Mochenwangen, AP Mochenwangen, APMW
Arctic Paper Mochenwangen GmbH with its registered office in
Mochenwangen, Germany
Arctic Paper Grycksbo, AP Grycksbo, APG
Arctic Paper Grycksbo AB with its registered office in Kungsvagen, Grycksbo,
Sweden
Paper mills
Arctic Paper Kostrzyn, Arctic Paper Munkedals, Arctic Paper Grycksbo
Arctic Paper Investment AB, API AB
Arctic Paper Investment AB with its registered office in Göteborg, Sweden
Arctic Paper Investment GmbH, API GmbH
Arctic Paper Investment GmbH with its registered office in Wolpertswende,
Germany
Arctic Paper Verwaltungs
Arctic Paper Verwaltungs GmbH with its registered office in Wolpertswende,
Germany
Arctic Paper Immobilienverwaltungs
Arctic Paper Immobilienverwaltungs GmbH & Co. KG with its registered office
in Wolpertswende, Germany
Kostrzyn Group
Arctic Paper Kostrzyn Spółka Akcyjna with its registered office in Kostrzyn
nad Odrą and EC Kostrzyn Sp. z o.o. with its registered office in Kostrzyn
nad Odrą
Mochenwangen Group
Arctic Paper Investment GmbH, Arctic Paper Mochenwangen GmbH, Arctic
Paper Verwaltungs GmbH, Arctic Paper Immobilienverwaltungs GmbH &
Co.KG
Grycksbo Group
Arctic Paper Grycksbo AB and Arctic Paper Investment AB, Arctic Paper
Finance AB
Sales Offices
Arctic Paper Papierhandels GmbH with its registered office in Vienna, Austria
Arctic Paper Benelux SA with its registered office in Oud-Haverlee, Belgium
Arctic Paper Danmark A/S with its registered office in Greve, Denmark
Arctic Paper France SA with its registered office in Paris, France
Arctic Paper Deutschland GmbH with its registered office in Hamburg,
Germany
Arctic Paper Italia Srl with its registered office in Milan, Italy
Arctic Paper Baltic States SIA with its registered office in Riga, Latvia
Arctic Paper Norge AS with its registered office in Oslo, Norway
Arctic Paper Polska Sp. z o.o. with its registered office in Warsaw, Poland
Arctic Paper España SL with its registered office in Barcelona, Spain
Arctic Paper Sverige AB with its registered office in Munkedal, Sweden
Arctic Paper Schweiz AG with its registered office in Derendingen,
Switzerland
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
5
Abbreviation
Definition
Arctic Paper UK Ltd with its registered office in London, UK
Arctic Power Sp. z o.o.
(formerly Arctic Paper East Sp. z o.o.)
Arctic Power Sp. z o.o. with its registered office in Kostrzyn nad Odrą, Poland
Kostrzyn Packaging Sp. z o.o.
Kostrzyn Packaging Sp. z o.o. with its registered office in Kostrzyn nad Odrą,
Poland
Rottneros, Rottneros AB
Rottneros AB with its registered office in Sunne, Sweden
Rottneros Group, Rottneros AB Group
Rottneros AB with its registered office in Söderhamn, Sweden; Rottneros
Bruk AB with its registered office in Rottneros, Sweden; Utansjo Bruk AB with
its registered office in Söderhamn, Sweden, Vallviks Bruk AB with its
registered office in Vallvik, Sweden; Rottneros Packaging AB with its
registered office in Sunne, Sweden; SIA Rottneros Baltic with its registered
office in Kuldiga, Latvia; since 1 January 2020 – Nykvist Skogs AB with its
registered office in Gräsmark, Sweden
Pulp mills
Rottneros Bruk AB with its registered office in Rottneros, Sweden; Vallviks
Bruk AB with its registered office in Vallvik, Sweden
Rottneros Purchasing Office
SIA Rottneros Baltic with its registered office in Kuldiga, Latvia
Kalltorp
Kalltorp Kraft Handelsbolaget with its registered office in Trollhattan, Sweden
Nemus Holding AB
Nemus Holding AB with its registered office in Göteborg, Sweden
Thomas Onstad
The Issuer’s core shareholder, holding directly and indirectly over 50% of
shares in Arctic Paper S.A.; a member of the Issuer’s Supervisory Board
Management Board, Issuer’s Management Board, Company’s Management
Board, Group’s Management Board
Management Board of Arctic Paper S.A.
Supervisory Board, Issuer’s Supervisory Board, Company’s Supervisory
Board, Group’s Supervisory Board, SB
Supervisory Board of Arctic Paper S.A.
GM, General Meeting, Issuer’s General Meeting, Company’s General
Meeting
Annual General Meeting of Arctic Paper S.A.
EGM, Extraordinary General Meeting, Issuer’s Extraordinary General
Meeting, Company’s Extraordinary General Meeting
Extraordinary General Meeting of Arctic Paper S.A.
Articles of Association, Issuer’s Articles of Association, Company’s Articles of
Association
Articles of Association of Arctic Paper S.A.
SEZ
Kostrzyńsko-Słubicka Special Economic Zone
Registration Court
District Court in Zielona Góra
Warsaw Stock Exchange, WSE
Giełda Papierów Wartościowych w Warszawie Spółka Akcyjna
KDPW, Depository
Krajowy Depozyt Papierów Wartościowych Spółka Akcyjna with its registered
office in Warsaw
PFSA
Polish Financial Supervision Authority
SFSA
Swedish Financial Supervisory Authority, equivalent to PFSA
NASDAQ in Stockholm, Nasdaq
Stock Exchange in Stockholm, Sweden
CEPI
Confederation of European Paper Industries
EURO-GRAPH
The European Association of Graphic Paper Producers
Eurostat
European Statistical Office
GUS
Central Statistical Office of Poland
NBSK
Northern Bleached Softwood Kraft
BHKP
Bleached Hardwood Kraft Pulp
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
6
Definitions of selected terms and financial indicators and abbreviations of currencies
Abbreviation
Definition
Sales profit margin
Ratio of profit/(loss) on sales to sales revenue from continuing operations
EBIT
Profit on continuing operating activities (Earnings Before Interest and Taxes)
EBIT profitability, operating profitability, operating profit margin
Ratio of operating profit/(loss) to sales revenue from continuing operations
EBITDA
Operating profit from continuing operations increased by depreciation and
impairment losses on assets
EBITDA profitability, EBITDA margin
Ratio of operating profit increased by depreciation and impairment losses on
assets to sales revenue from continuing operations
Gross profit margin
Ratio of gross profit/(loss) to sales revenue from continuing operations
Sales profitability ratio, net profit margin
Ratio of net profit/(loss) to sales revenue
Return on equity, ROE
Ratio of net profit/(loss) to equity
Return on assets, ROA
Ratio of net profit/(loss) to total assets
EPS
Earnings Per Share, ratio of net profit to the weighted average number of
shares
BVPS
Book Value Per Share, Ratio of book value of equity to the number of shares
Debt-to-equity ratio
Ratio of total liabilities to equity
Equity to non-current assets ratio
Ratio of equity to non-current assets
Interest-bearing debt-to-equity ratio
Ratio of interest-bearing debt and other financial liabilities to equity
Net debt-to-EBITDA ratio
Ratio of interest-bearing debt minus cash to EBITDA from continuing operations
EBITDA-to-interest coverage ratio
Ratio of EBITDA to interest expense from continuing operations
Current ratio
Ratio of current assets to current liabilities
Quick ratio
Ratio of current assets minus inventory and short-term accruals and deferred
income to current liabilities
Cash solvency ratio
Ratio of total cash and similar assets to current liabilities
DSI
Days Sales of Inventory, ratio of inventory to cost of sales multiplied by the
number of days in the period
DSO
Days Sales Outstanding, ratio of trade receivables to sales income from
continuing operations multiplied by the number of days in the period
DPO
Days Payable Outstanding, Ratio of trade payables to cost of sales from
continuing operations multiplied by the number of days in the period
Operating cycle
DSI + DSO
Cash conversion cycle
Operating cycle – DPO
FY
Financial year
Q1
1st quarter of the financial year
Q2
2nd quarter of the financial year
Q3
3rd quarter of the financial year
Q4
4th quarter of the financial year
H1
First half of the financial year
H2
Second half of the financial year
YTD
Year-to-date
Like-for-like, LFL
On a comparable basis, with respect to operating result.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
7
Abbreviation
Definition
p.p.
Percentage point, difference between two amounts of one item given in
percentage
PLN, zł, złoty
Monetary unit of the Republic of Poland
gr
grosz – 1/100 of one zloty (the monetary unit of the Republic of Poland)
Euro, EUR
Monetary unit of the European Union
GBP
Pound sterling, monetary unit of the United Kingdom
SEK
Swedish Krona – monetary unit of the Kingdom of Sweden
USD
United States dollar, the legal tender in the United States of America
IAS
International Accounting Standards
IFRS
International Financial Reporting Standards
IFRS EU
International Financial Reporting Standards endorsed by the European Union
GDP
Gross Domestic Product
Other definitions and abbreviations
Abbreviation
Definition
Series A Shares
50,000 Shares of Arctic Paper S.A. A series ordinary shares of PLN 1 each.
Series B Shares
44,253,500 Shares of Arctic Paper S.A. B series ordinary shares of PLN 1 each.
Series C Shares
8,100,000 Shares of Arctic Paper S.A. C series ordinary shares of PLN 1 each.
Series E Shares
3,000,000 Shares of Arctic Paper S.A. E series ordinary shares of PLN 1 each.
Series F Shares
13,884,283 Shares of Arctic Paper S.A. F series of the nominal value of PLN 1
each
Shares, Issuer’s Shares
Series A, Series B, Series C, Series E, and Series F Shares jointly
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
8
FORWARD LOOKING STATEMENTS
The information contained in this report which does not relate to historical facts relates to forward looking
statements. Such statements may, in particular, concern the Group’s strategy, business development, market
projections, planned investment outlays, and future revenue. Such statements may be identified by the use of
expressions pertaining to the future such as, e.g., “believe”, “think”, “expect”, “may”, “will”, “should”, “is expected”,
“is assumed”, and any negations and grammatical forms of these expressions or similar terms. The statements
contained in this report concerning matters which are not historical facts should be treated only as projections
subject to risk and uncertainty. Forward-looking statements are inevitably based on certain estimates and
assumptions which, although our management finds them rational, are naturally subject to known and unknown
risks and uncertainties and other factors that could cause the actual results to differ materially from the historical
results or the projections. For this reason, we cannot assure that any of the events provided for in the forward-
looking statements will occur or, if they occur, about their impact on the Group’s operating activities or financial
situation. When evaluating the information presented in this report, one should not rely on such forward-looking
statements, which are stated only as at the date they are expressed. Unless legal regulations contain detailed
requirements in this respect, the Group shall not be obliged to update or verify those forward-looking statements in
order to provide for new developments or circumstances. Furthermore, the Group is not obliged to verify or to
confirm the analysts’ expectations or estimates, except for those required by law.
FORWARD-LOOKING STATEMENTS RELATING TO RISK FACTORS
In this report we described the risk factors that the Management Board of our Group considers specific to the sector
we operate in; however, the list may not be exhaustive. Other factors may arise that have not been identified by us
and that could have material and adverse impact on the business, financial condition, results of operations or
prospects of the Arctic Paper Group. In such circumstances, the price of the shares of the Company listed at Giełda
Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange) or at NASDAQ in Stockholm may
decrease, investors may lose their invested funds in whole or in part and the potential dividend disbursement by the
Company may be limited.
We ask you to perform a careful analysis of the information disclosed in “Risk factors” of this report – the section
contains a description of risk factors and uncertainties related to the business of the Arctic Paper Group.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
9
Selected consolidated financial data
Period
from 01.01.2025
to 31.12.2025
Period
from 01.01.2024
to 31.12.2024
Period
from 01.01.2025
to 31.12.2025
Period
from 01.01.2024
to 31.12.2024
PLN ‘000
PLN ‘000
EUR ‘000
EUR ‘000
Continuing operations
Sales revenue
3 197 594
3 434 693
754 648
797 994
Operating profit/(loss)
(153 776)
184 294
(36 292)
42 818
Gross profit/(loss)
(211 091)
192 449
(49 818)
44 712
Net profit/(loss) for the period
(175 365)
161 105
(41 387)
37 430
Net profit/(loss) attributable to the shareholders of the Parent Company
(99 681)
154 457
(23 525)
35 886
Net cash flows from operating activities
118 332
188 395
27 927
43 770
Net cash flows from investing activities
(302 041)
(416 630)
(71 283)
(96 797)
Net cash flows from financing activities
43 951
22 835
10 373
5 305
Change in cash and cash equivalents
(139 758)
(205 400)
(32 984)
(47 721)
Weighted average number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Diluted weighted average number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
EPS (in PLN/EUR)
(1,44)
2,23
(0,34)
0,52
Diluted EPS (in PLN/EUR)
(1,44)
2,23
(0,34)
0,52
Average PLN/EUR exchange rate*
4,2372
4,3042
As at
31 December 2025
As at
31 December 2024
As at
31 December 2025
As at
31 December 2024
PLN ‘000
PLN ‘000
EUR ‘000
EUR ‘000
Assets
2 676 405
2 756 963
633 214
645 205
Non-current liabilities
202 827
375 560
47 987
87 891
Current liabilities
776 136
612 680
183 627
143 384
Equity
1 697 441
1 768 723
401 600
413 930
Share capital
69 288
69 288
16 393
16 215
Number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Diluted number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Book value per share (in PLN/EUR)
24,50
25,53
5,80
5,97
Diluted book value per share (in PLN/EUR)
24,50
25,53
5,80
5,97
Declared or paid dividend (in PLN/EUR)
-
69 287 783
-
16 215 255
Declared or paid dividend per share (in PLN/EUR)
-
1,00
-
0,23
PLN/EUR exchange rate at the end of the period**
-
-
4,2267
4,2730
* – Items of the Statement of profit or loss and Statement of cash flows have been translated at the arithmetic average of the NBP exchange rates during the year, prevailing in the period
that the presented data refers to.
** – Balance sheet items and book value per share have been translated at the average exchange rates published by the National Bank of Poland, prevailing on the balance sheet date.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
10
REPORT FOR 2025
OF ARCTIC PAPER SA
Report
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
11
Description of the business of the Arctic Paper SA Group
GENERAL INFORMATION
The Arctic Paper Group is a paper and pulp producer. We offer bulky book paper and a wide range of products in
this segment, as well as high-grade graphic paper. The Group produces 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 and the advertising industry. In connection with acquisition of the Rottneros Group in
December 2012, the Group’s assortment was expanded with the production of pulp. As at 31 December 2025, the
Arctic Paper Group employed around 1,500 people in its paper mills, companies involved in sale of paper and in
pulp producing companies, procurement office and a company producing food packaging. Our paper mills are
located in Poland and Sweden, and have total production capacity of over 630,000 tonnes of paper per year. Our
pulp mills located in Sweden have aggregated production capacities of over 400,000 tonnes of pulp annually. As at
31 December 2025, the Group had 13 Sales Offices ensuring access to all European markets, including Central
and Eastern Europe. Our consolidated sales revenue for 12 months of 2025 amounted to PLN 3,198 million.
Arctic Paper S.A. is a holding company set up in April 2008. The Parent Company is entered in the register of
entrepreneurs of the National Court Register maintained by the District Court in Zielona Góra, 8th Commercial
Division of the National Court Register, under KRS number 0000306944. The Parent Company holds statistical
number REGON 080262255. The Company has a foreign branch in Göteborg, Sweden.
Business activity
The principal business of the Arctic Paper Group is production and sales of paper and pulp. The Group’s additional
business, partly subordinate to paper and pulp production, covers:
● Production of packaging,
● Generation of electricity,
● Transmission of electricity,
● Electricity distribution,
● Heat production,
● Heat distribution,
● Logistics services,
● Paper and pulp distribution.
Our production facilities
As at 31 December 2025, as well as on the day hereof, the Group owned the following paper mills:
● the paper mill in Kostrzyn nad Odrą (Poland) has the production capacity of about 285,000 tonnes per year and
mainly produces uncoated wood-free paper for general printing use such as printing books, brochures and
forms, and for producing envelopes and other paper products;
● the paper mill in Munkedal (Sweden) has the production capacity of about 145,000 tonnes and mainly produces
fine uncoated wood-free paper used primarily for printing books and high-quality brochures;
● the paper mill in Grycksbo (Sweden) has the production capacity of about 200,000 tonnes per year and
produces coated wood-free paper used for printing maps, books, magazines, posters and printing of advertising
materials.
As at 31 December 2025, as well as on the day hereof, the Group owned the following pulp mills:
● the Rottneros mill (Sweden) has a production capacity of approximately 160,000 tonnes per year and produces
one type of mechanical fibre pulp: chemi-thermo mechanical pulp (CTMP);
● the pulp mill in Vallvik (Sweden) has the annual production capacity of about 240,000 tonnes and produces two
types of long-fibre sulphate pulp: fully bleached sulphate pulp and unbleached sulphate pulp. Most of the
production of the Vallvik pulp mill is known as NBSK pulp. The unbleached sulphate pulp produced by the pulp
mill is characterised by very high purity and is primarily used, among other things, in the manufacture of
transformers and in the cable industry.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
12
Our products
The product assortment of the Arctic Paper Group covers:
● Uncoated wood-free paper, in particular:
● white offset paper that we produce and distribute primarily under the Amber brand which is one of the most
versatile types of paper destined for various applications;
● wood-free bulky book paper that we produce under the Munken brand, used primarily for book printing;
● high-quality graphic paper with a particularly smooth or rough surface, used for printing various advertising
and marketing materials, which we produce under the Munken Design brand;
● Coated wood-free paper, in particular:
● coated wood-free paper, manufactured under the G and Arctic Volume brands, used primarily for printing of
books, magazines, catalogues, maps, personalised direct mail correspondence.
● Uncoated wood-containing paper, in particular:
● premium wood containing bulky book paper that we produce and distribute under the Munken brand, was
developed specially for multi-colour and B/W printing of books;
● Packaging papers:
● kraft paper, which is manufactured under the brand name Munken Kraft
● one side coated packaging papers produced under the brand name G-Flexmatt
Both grades are ideal for a wide range of packaging applications, such as shopping bags, bags for loose food
products, packaging or laminates used in the food or non-food industry.
● Unbleached sulphate pulp;
● fully bleached sulphate pulp and unbleached sulphate pulp used primarily to produce printing and writing
paper, cardboard, toilet paper and white packaging paper.
● Mechanical fibre pulp:
● chemi-thermo mechanical pulp (CTMP), which is mainly used in the production of printing and writing paper;
CAPITAL GROUP STRUCTURE
The Arctic Paper Group comprises Arctic Paper S.A., as the Parent Company, and its subsidiaries, as well as joint
ventures. Since 23 October 2009, Arctic Paper S.A. has been listed on the primary market of Giełda Papierów
Wartościowych w Warszawie S.A. (Warsaw Stock Exchange) and since 20 December 2012 in the NASDAQ stock
exchange in Stockholm. The Group operates through its paper mills and pulp mills and its subsidiary producing
packaging as well as its Sales Offices and Procurement Offices.
Detailed information on the organisation of the Arctic Paper Group with identification of the consolidated entities
is provided in the section “Accounting principles (policies)” and in Additional notes to the consolidated financial
statements (note 1 and 2).
CHANGES IN THE CAPITAL STRUCTURE OF THE ARCTIC PAPER GROUP
Changes in the Arctic Paper Group’s capital structure in 2025 are described in Other material information.
MODIFICATIONS TO THE CORE MANAGEMENT PRINCIPLES
In 2025, there were no material modifications to the core management principles.
Organisational and capital links of the Company and Group companies with other entities, domestic and
foreign investments, including capital investments made outside the Group
There were no significant organisational and capital relations between the Company and Group companies and
other entities in 2025. Neither the Company nor Group companies made investments in securities, equity financial
instruments.
SHAREHOLDING STRUCTURE
Nemus Holding AB, a company under Swedish law (a company owned indirectly by Mr Thomas Onstad), is the
majority shareholder of Arctic Paper S.A., holding (as at 31 December 2025) 41,374,890 shares of our Company,
which constitutes 59.71% of its share capital and corresponds to 59.71% of the total number of votes at General
Meetings. Thus, Nemus Holding AB is the parent company of the Issuer.
Additionally, Mr Thomas Onstad, an indirect shareholder of Nemus Holding AB, holds directly 5,323,658 shares
representing 7.68% of the total number of shares in the Company, and via another entity – 600,000 shares
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
13
accounting for 0.87% of the total number of shares of the Issuer. Mr Thomas Onstad’s total direct and indirect
holding in the capital of Arctic Paper S.A. as at 31 December 2025 was 68.26% and has not changed until the date
of approval of this report.
as at 31.12.2025
Shareholder
Number
of shares
Share in
the share capital
[%]
Number
of votes
Share in the total
number of votes
[%]
Thomas Onstad
47 298 548
68,26%
47 298 548
68,26%
– indirectly via
41 974 890
60,58%
41 974 890
60,58%
Nemus Holding AB
41 374 890
59,71%
41 374 890
59,71%
other entity
600 000
0,87%
600 000
0,87%
– directly
5 323 658
7,68%
5 323 658
7,68%
Other
21 989 235
31,74%
21 989 235
31,74%
Total
69 287 783
100,00%
69 287 783
100,00%
Treasury shares
-
0,00%
-
0,00%
Total
69 287 783
100,00%
69 287 783
100,00%
The data in the above table is shown as at the date of approval of this report, which has not changed as compared
with the position as at 31 December 2025, and the date of publication of the quarterly report for Q3 2025, i.e. as at
6 November 2025.
MARKET ENVIRONMENT
Segments of the graphic paper market
The graphic paper market is split into three core segments:
● coated and uncoated fine paper,
● coated and uncoated wood-containing paper,
● magazine paper.
The Group operates solely in the segment of high-quality graphic papers. We are not present in the newsprint and
copy paper segments.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
14
Below is a description of segments in the graphic market:
● fine paper is wood-free paper in which at least 90% of the fibre content consists of pulp fibres obtained using
chemical processes. It includes the following categories:
● uncoated wood-free paper produced from wood pulp. This paper can be subjected to additional treatments
such as surface sizing, calendering and surface or bulk dyeing. The two main end-use categories in this
segment are graphic paper, used primarily for printing books, textbooks and catalogues, and office copying
paper. The two main categories of this type of paper are graphic paper (used, among others, for printing
books, textbooks and catalogues) and office copying paper (xerographic paper).
● coated wood-free paper made from pulp and coated with mixtures of pigments and binders (such as kaolin or
calcium carbonate). The coating can be applied on (online) or off (offline) the paper machine. The coating
process improves surface smoothness, enhances background opacity and enables higher quality colour
reproduction.
● Wood-containing paper is most often manufactured of mechanical pulp or recycled-paper pulp, without or with
small quantities of filler. It contains lignin which increases the opacity of the paper but accelerates ageing.
● uncoated wood-containing paper is manufactured of mechanical pulp, used to print magazines with
rotogravure and offset techniques (newsprint) and to print single-colour publications. Products of the Group
in that segment are usually used to print paperbacks.
● coated wood-containing paper, made from mechanical pulp and usually coated on both sides, is used for
printing multicoloured magazines and catalogues. These papers are usually supplied in rolls and used in
heatset printing.
Additional information on the market environment is provided further in this report in the section: Information on
market trends.
Packaging paper market segments in which Arctic Paper operates:
The packaging paper market, where Arctic Paper operates, is divided into two basic segments:
● Kraft paper, which is divided into bleached, unbleached and recycled fibre papers
● packaging papers coated on one side
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
15
The Group operates exclusively in the segment of machine-finished kraft paper and single-side coated matt surface
packaging. We are not present in the other segments.
Pulp market segments
Since December 2012, along with the acquisition of Rottneros AB, our assortment has been expanded by:
● fully bleached sulphate pulp and unbleached sulphate pulp used primarily to produce printing and writing paper,
cardboard, toilet paper and white packaging paper.
● chemi-thermo mechanical pulp CTMP), which is mainly used in the production of printing and writing paper
INFORMATION ON THE ISSUER’S AND THE GROUP’S DEVELOPMENT STRATEGY ADOPTED AND THE
ACTIONS TAKEN AS PART OF ITS IMPLEMENTATION DURING THE PERIOD COVERED BY THE
REPORT, TOGETHER WITH A DESCRIPTION OF THE PROSPECTS FOR DEVELOPMENT IN THE
COMING YEAR.
In 2025, the market environment remained challenging, characterized by low economic activity in key European
markets and continued cost pressures, particularly in the areas of raw materials and energy. Weak demand
continued to have a negative impact on the Group’s sales levels and financial performance.
Despite initiatives aimed at increasing sales volumes of paper and pulp, market conditions limited the ability to
effectively pass rising costs on to customers, which posed a significant challenge to maintaining profitability.
Consequently, the financial results achieved in 2025 should be assessed as unsatisfactory.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
16
At the same time, it should be emphasized that the performance achieved was supported by the consistent
execution of optimization measures, including further improvements in cost efficiency and active management of
the energy and raw materials portfolio.
SALES STRUCTURE
In 2025 and in 2024, the sales structure by main product lines was as follows:
PLN ‘000
2025
% share
2024
% share
Paper
2 224 339
70%
2 413 664
70%
Amber
964 147
30%
1 039 929
30%
G-Print
642 222
20%
641 329
19%
Munken
497 855
16%
508 142
15%
Arctic
79 345
2%
182 256
5%
AP Tech
40 769
1%
42 006
1%
Other
-
0%
2
0%
Pulp
973 256
30%
1 021 030
30%
NBSK and derivatives
849 782
27%
891 138
26%
CTMP
-
0%
81 395
2%
Other
123 423
4%
48 496
1%
Other (bioproducts and wood)
Total paper and pulp
3 197 594
100%
3 434 693
100%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
17
thousand tonnes
2025
% share
2024
% share
Paper
492
59%
486
59%
Amber
235
28%
220
27%
G-Print
148
18%
133
16%
Munken
85
10%
88
11%
Arctic
15
2%
37
4%
AP Tech
9
1%
9
1%
Other
-
0%
-
0%
Pulp
335
41%
341
41%
NBSK and derivatives
230
28%
219
26%
CTMP
105
13%
122
15%
Total paper and pulp
827
100%
827
100%
In 2025 there were no material changes to the sales structure of paper and pulp by the Group or in the revenue
structure from sales of paper and pulp by the Group by its products. In 2025, a decrease in sales volume and an
increase in the value of sales of paper and pulp were recorded.
SALES MARKETS
In 2025, sales generated outside Poland accounted for around 83% of the Group’s total sales, remaining at a level
comparable to the previous year. As in previous years, the Group’s sales activities were mainly focused on
European markets, which accounted for 97% of total sales in 2025 (2024: 98%).
The geographical breakdown of sales revenue by the Group’s main markets in 2025 and 2024 is shown in note
4.11 to the consolidated financial statements.
BUYERS
The base of our customers covers both direct and indirect buyers. Direct buyers purchase the Group’s products at
our paper mills. Indirect buyers do not buy the Group’s products on their own and they resort to the services of
printing houses or paper wholesalers, nevertheless, they constitute an important target group of marketing activities
of Arctic Paper since it is indirect buyers that recommend the use of the Group’s papers to direct buyers. The
groups of direct and indirect buyers of products include:
● printing houses – they are direct buyers straight from the Group’s paper mills,
● wholesalers – they are direct buyers of paper manufactured by the Group for further re-sale,
● publishers – they are direct and indirect buyers of paper manufactured by the Group straight from the Group for
their publishing business and instruct or recommend the use of our paper to printing houses to which they
commission the printing of books and other publications,
● advertising agencies – they are mainly indirect buyers that do not buy our products directly; however, they play
an important role in commissioning and recommending our products to printing houses, in particular high-quality
paper to print annual reports of companies, brochures, leaflets and packaging,
● final buyers and brand owners – they are direct and indirect customers who purchase our products directly, as
well as playing an important role in recommending the use of our products to printers they have entrusted with
printing.
Pulp mill products are mainly bought by customers that produce paper for printing, paper hygienic products and
cardboard as well as electrical devices and filters. Pulp is supplied to operators that do not have the capacity to
produce cellulose in-house, as well as to producers that produce specific grades of cellulose and source other
types externally.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
18
In our opinion, we are not materially dependent on any single specific buyer. The Group’s consolidated revenue
for 2025 shows that the share of the largest buyer did not exceed 10% of total sales revenue.
SUPPLIERS
In its business, the Group relies on the following goods and services:
● Pulp for paper mills,
● Wood for pulp mills,
● Chemicals,
● Electricity,
● Transport services.
Pulp
Pulp is the core material used by the Group to produce paper. The Group acquires pulp on the basis of renewable
annual contracts concluded under framework agreements or one-off transactions.
Wood
Wood is the core material used by the pulp mills to produce pulp. The Rottneros Group has a purchasing
department placing orders at sawmills in Sweden, as well as a subsidiary, SIA Rottneros Baltic, purchasing timber
in the Baltic countries.
Chemicals
The core chemicals used to produce papers are fillers (mainly calcium carbonate), starch (of maize,
potatoes, tapioca), optical bleaching agents and other chemicals. Chemicals are also used to produce
cellulose.
Electricity
In its production processes, the Group uses electricity and heat energy. The entire demand for electricity and heat
energy for the paper mill in Kostrzyn is covered with its own heat and power plant using natural gas. The gas is
supplied pursuant to a contract with a Polish supplier (PGNiG) at annual indexed prices in line with changes to the
sectoral indicators published by GUS [Central Statistical Office of Poland] subject to negotiations of the indexation
formula when the contractual change levels are exceeded. Gas is acquired from deposits located close to Kostrzyn
nad Odrą and delivered to the paper mill with a local pipeline.
In autumn 2022, a new boiler designed to generate steam from waste fuels was commissioned at the Arctic
Paper Munkedals mill. The boiler is designed to handle any solid fuel. The paper mill is also powered by electricity
from an internal hydroelectric power station, mains electricity and steam from a natural gas boiler.
Energy for the Arctic Paper Grycksbo mill is obtained from biomass and electricity is partly acquired from
external suppliers.
The Rottneros Pulp mill meets its entire electricity demand through purchases from external suppliers.
The Vallvik pulp mill provides for around 75% of its demand for electricity with its own resources. The remaining
demand for electricity is covered with purchases from external suppliers.
Transport services
The Group does not operate its own means of transportation and resorts to specialised external entities for
distribution of its products from paper mills and warehouses to buyers.
The Group is not materially dependent on any of its suppliers. Based on the Group’s consolidated costs for
2025, the share of the largest supplier did not exceed 10% of total costs.
INFORMATION ON THE SEASONAL OR CYCLICAL NATURE OF BUSINESS
The demand for the Group’s products is subject to slight variations throughout the year. Reduced demand for paper
occurs each year during summer holidays and around Christmas when some printing houses, in particular in
Western Europe are closed. Global graphic paper markets are also subject to structural decline due to digitalisation
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
19
in society, but thanks to its efficient sales process and strong brands, Arctic Paper manages its market shares and
overall paper decline better than its competitors.
RESEARCH AND DEVELOPMENT
The Arctic Paper Group mainly carries out development work aimed at streamlining and modernizing production
processes, improving cost and energy efficiency and improving the quality of the products offered. During the
period covered by this report, the paper and pulp mills carried out development work aimed at improving the
production process, reducing energy and raw material consumption and optimising the cost of the production
process.
LABOUR MATTERS
Matters relating to the Group’s employees are detailed in the section of the Management Report “Sustainability
statement”.
NATURAL ENVIRONMENT
Group complies with environmental standards set forth in numerous applicable regulations and in administrative
decisions. The standards are aimed at ensuring protection of soil, air and water against pollution as well as noise
and electromagnetic fields. In the section “Sustainability statement” we describe how environmental regulations
affect the Group’s activities.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
20
Summary of the
consolidated
financial results
REPORT FOR 2025
OF ARCTIC PAPER SA
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
21
Summary of the consolidated financial results
SELECTED ITEMS FROM THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
PLN ‘000
2025
2024
Change %
2025/2024
Continuing operations
Sales revenue
3 197 594
3 434 693
(6,9)
of which:
Sales of paper
2 224 339
2 413 663
(7,8)
Sales of pulp
973 255
1 021 030
(4,7)
Profit on sales
231 261
584 386
(60,4)
% of sales revenue
7,23
17,01
(9,8) p.p.
Selling and distribution costs
(345 483)
(349 188)
(1,1)
Administrative expenses
(109 576)
(120 618)
(9,2)
Other operating income
129 360
132 055
(2,0)
Other operating expenses
(59 338)
(62 341)
(4,8)
EBIT
(153 776)
184 294
(183,4)
% of sales revenue
(4,81)
5,37
(10,2) p.p.
EBITDA
40 521
298 596
(86,4)
% of sales revenue
1,27
8,69
(7,4) p.p.
Finance income
4 406
19 686
(77,6)
Finance costs
(61 721)
(11 531)
435,3
Gross profit/(loss)
(211 091)
192 449
(209,7)
Income tax
35 726
(31 344)
(214,0)
Net profit/(loss)
(175 365)
161 105
(208,9)
% of sales revenue
(5,48)
4,69
(10,2) p.p.
Net profit/(loss) for the reporting period attributable to the shareholders of the Parent Company
(99 681)
154 458
(164,5)
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
22
Revenue
In 2025, consolidated sales revenue amounted to PLN 3,197,594 thousand, compared with PLN 3,434,693
thousand in the previous year, representing a decrease of 6.9% (PLN 237,099 thousand). Revenue from paper
sales decreased by 7.8% (PLN 189,324 thousand) and revenue from pulp sales decreased by 4.7% (PLN 47,775
thousand) compared with 2024.
The volume of paper sales in 2025 was 492,000 tonnes (2024: 486,000 tonnes) and was 6,000 tonnes higher
than in the previous year. This represents an increase in sales volume by 1%.
Pulp sales volumes in 2025 were 335,000 tonnes (2024: 341,000 tonnes) and was 6,000 tonnes lower than in
the previous year. This means a decrease in sales volume by 2%.
Profit on sales, costs of sales, selling and distribution costs, and administrative expenses
Profit on sales in 2025 was by 60.4% lower than in the previous year. Sales profit margin in the current year
amounted to 7.23% compared with 17.01% (-9.8 p.p.) in the previous year.
The decrease in profit on sales in 2025 compared with 2024 was mainly due to a decrease in paper sales prices
with an increase in paper sales volume, as well as a decrease in pulp sales volume due to limited market demand.
In 2025, the selling and distribution costs amounted to PLN 345,483 thousand, down 1.1% on 2024. The selling
and distribution costs comprise particularly transportation costs.
In 2025, administrative expenses reached PLN 109,576 thousand, compared with PLN 120,618 thousand in
2024, a decrease of 9.2%. The main reasons for the decrease were lower costs related to the provision of external
consultancy services to the Group and lower employee benefit costs.
Other operating income and expenses
Other operating income in 2025 amounted to PLN 129,360 thousand, down by PLN 2,695 thousand compared with
the previous year.
Other operating expenses in 2025, reached PLN 59,338 thousand, down by PLN 3,003 thousand compared
with the previous year.
A major part of the other operating income and expenses includes revenue and costs of sales of sold energy
and other materials. In addition, other operating income in 2025 shows the following subsidy granted to the
Kostrzyn plant in the amount of PLN 39,508 thousand. This subsidy applied to companies in the energy-intensive
industry and was linked to natural gas and electricity prices.
Finance income and finance costs
In 2025, the finance income amounted to PLN 4,406 thousand and were lower in comparison to the income
recorded in 2024 by PLN 15,280 thousand, mainly due to the absence of exchange rate differences and lower
interest income on bank accounts. Finance costs in 2025 amounted to PLN 61,721 thousand compared with PLN
11,531 thousand incurred in 2024.
The higher finance costs in 2025 were primarily due to the negative result on foreign exchange differences and
higher amount of bank interests.
Income tax
Income tax in 2025 amounted to PLN 35,726 thousand, while in 2024 it amounted to PLN -37,948 thousand. The
effective tax rate to gross profit in 2025 was 18% (2024: 16%).
Profitability analysis
The Company uses alternative performance measurements when describing the Group’s financial position. In the
opinion of the Management Board, these selected indicators provide valuable information on the financial and
operational situation (in addition to the data provided by the Company in its financial statements), as well as
facilitating the analysis and evaluation of the Group’s financial results over the individual reporting periods.
The Company presents alternative performance measurements as they represent standard measures and ratios
commonly used in financial analysis, however, these ratios may be calculated and presented differently by different
companies. Therefore, the Issuer provides the exact definitions used by the Group in its reporting process. The
selection of alternative performance measures was preceded by a thorough analysis of their usefulness in terms of
providing shareholders, analysts and investors with useful information on financial position and financial efficiency,
which the Company believes allows for an optimal assessment of its financial results.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
23
The ratios presented by the Company were calculated according to the formulas described at the beginning of
this report in the “Definitions and explanations of abbreviations”.
EBITDA in 2025 was PLN 40,521 thousand, while in 2024 it was PLN 298,596 thousand. The decrease in
EBITDA in 2025 is mainly due to lower paper selling prices and higher raw material prices, and also lower sales
volumes of paper and pulp.
In the reporting period, the EBITDA margin was 1.27% versus 8.69% in 2024.
Operating profit for 2025 amounted to PLN -153,776 thousand and for 2024 to PLN 184,294 thousand. The
operating profit margin in 2025 was -4.81% versus +5.37% in 2024. The lower operating profit in 2025 resulted
from lower EBITDA.
Net profit in 2025 was PLN -175,365 thousand, while in 2024 it was PLN 161,105 thousand. Net profit margin in
2025 amounted to -5.48% as compared with +4.69% in 2024.
PLN ‘000
2025
2024
Change %
2025/2024
Profit/(loss) on sales
231 261
584 386
(60,4)
% of sales revenue
7,23
17,01
(9,8) p.p.
EBITDA
40 521
298 596
(86,4)
% of sales revenue
1,27
8,69
(7,4) p.p.
EBIT
(153 776)
184 294
(183,4)
% of sales revenue
(4,81)
5,37
(10,2) p.p.
Net profit/(loss)
(175 365)
161 105
(208,9)
% of sales revenue
(5,48)
4,69
(10,2) p.p.
Return on equity / ROE (%)
(10,3)
9,1
(19,4) p.p.
Return on assets / ROA (%)
(6,6)
5,8
(12,4) p.p.
In 2025, return on equity was -10.3%, while in 2024 it was +9.1%.
In 2025, return on assets was -6.6%, while in 2024 it was +5.8%.
The decrease in return on equity and return on assets in 2025 was mainly due to the decrease in net profit
achieved in 2025 compared with 2024.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
24
SELECTED ITEMS FROM THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
PLN ‘000
31.12.2025
31.12.2024
Change
31/12/2025
-31/12/2024
Non-current assets
1 643 086
1 492 327
150 759
Inventories
443 529
495 044
(51 515)
Receivables
390 129
444 931
(54 802)
trade receivables
367 833
428 773
(60 940)
Other current assets
48 019
37 077
10 941
Cash and cash equivalents
151 642
287 583
(135 940)
Total assets
2 676 405
2 756 963
(80 557)
Equity
1 697 441
1 768 723
(71 282)
Current liabilities
776 136
612 680
163 456
of which:
trade and other payables
454 527
427 154
27 373
interest-bearing debt
205 795
61 363
144 432
other non-financial liabilities
115 814
124 163
(8 349)
Non-current liabilities
202 828
375 560
(172 732)
of which:
interest-bearing debt
92 561
224 848
(132 287)
other non-financial liabilities
110 266
150 712
(40 446)
Total equity and liabilities
2 676 405
2 756 963
(80 557)
As at 31 December 2025, total assets amounted to PLN 2,676,405 thousand compared with PLN 2,756,963
thousand at the end of 2024.
Non-current assets
At the end of December 2025, non-current assets amounted to PLN 1,643,086 thousand and accounted for 61.4%
of total assets, compared with PLN 1,492,327 thousand at the end of 2024 (54.1% of total assets).
The increase in the value of non-current assets was primarily due to an increase in the value of property, plant
and equipment, related to investments under the 4P strategy.
Current assets
As at the end of December 2025, current assets amounted to PLN 1,033,319 thousand as compared with PLN
1,264,634 thousand at the end of December 2024. Within current assets, inventories decreased by PLN 51,515
thousand, receivables decreased by PLN 54,802 thousand, other current assets increased by PLN 10,941
thousand, and cash and cash equivalents decreased by PLN 135,940 thousand. Current assets represented 38.6%
of total assets as at the end of December 2025 (45.9% as at the end of 2024) and included inventories – 16.6%
(18.0% as at the end of 2024), receivables – 14.6% (16.1% as at the end of 2024), other current assets – 1.8%
(1.3% as at the end of 2024) and cash and cash equivalents – 5.7% (10.4% as at the end of 2024). The increase in
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
25
other current assets was mainly due to an increase in prepayments for unclaimed gas. The decrease in cash was
mainly due to negative cash flows from investing activities.
Equity
As at the end of 2025, the equity amounted to PLN 1,697,441 thousand as compared with PLN 1,768,723 thousand
at the end of 2024. As at the end of December 2025, equity accounted for 63.4% of total equity and liabilities
(64.2% as at 31 December 2024).
The decrease in equity was primarily due to the net loss for 2025.
Current liabilities
As at the end of December 2025, current liabilities amounted to PLN 776,136 thousand (29.0% of the balance
sheet total), compared with PLN 612,680 thousand (22.2% of the balance sheet total) at the end of 2024.
In 2025, there is an increase of PLN 163,456 thousand in current liabilities mainly due to an increase in loan
debt.
Non-current liabilities
As at the end of December 2025, non-current liabilities amounted to PLN 202,828 thousand (7.6% of the balance
sheet total), compared with PLN 375,560 thousand (13.6% of the balance sheet total) at the end of 2024. In the
year under review, there was a decrease of PLN 172,732 thousand in non-current liabilities.
The decrease in non-current liabilities was mainly due to the repayment of loan instalments.
Debt analysis
2025
2024
Change %
2025/2024
Debt to equity ratio (%)
57,7
55,9
1,8 p.p.
Equity to non-current assets ratio (%)
103,3
118,5
(15,2) p.p.
Interest-bearing debt-to-equity ratio (%)
17,6
16,2
1,4 p.p.
Net debt to EBITDA ratio for the last 12 months (x)
3,62
(0,00)
3,62
EBITDA to interest coverage ratio (x)
2,8
39,8
(36,9)
As at the end of December 2025, the equity debt ratio was 57.7% and was higher by 1.8 p.p. versus the end of
December 2024. The increase in the ratio was mainly due to a decrease in equity.
The non-current assets to equity ratio amounted to 103.3% at the end of 2025, which was 15.2 p.p. lower than
the level at the end of December 2024 as a result of a decrease in equity and an increase in non-current assets.
The debt-to-equity ratio with interest-bearing debt was at the end of 2025 17.6% and was 1.4 p.p. higher than
the level of this ratio calculated at the end of December 2024 mainly on the decrease in equity.
The net debt to EBITDA ratio for the last 12 months of 2025 amounted to 3.62 and was 3.62 higher than the
level of this ratio for 2024 as a result of an increase in net debt calculated as interest-bearing liabilities less cash
and a decrease in EBITDA.
The EBITDA to net interest expense ratio for the 12 last months of 2025 was 2.8 and it was lower by 36.9
versus the level of the ratio for 2024 as a result of a decrease of EBITDA.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
26
Liquidity analysis
2025
2024
Change %
2025/2024
Current ratio
1,3x
2,1x
(0,7)
Quick ratio
0,7x
1,2x
(0,5)
Cash solvency ratio
0,2x
0,5x
(0,3)
DSI (days)
54,6
63,4
(8,8)
DSO (days)
42,0
45,6
(3,6)
DPO (days)
55,9
54,7
1,2
Operating cycle (days)
96,6
109,0
(12,4)
Cash conversion cycle (days)
40,6
54,3
(13,6)
The current and quick liquidity ratios were 1.3x and 0.7x, respectively, at the end of December 2025 and decreased
by 0.7 and 0.5 compared with 31 December 2024 mainly due to a lower growth rate of current assets than current
liabilities.
The cash solvency ratio stood at 0.2 at the end of December 2025, lower than the level of the ratio at the end of
December 2024 (by 0.3) mainly due to a decrease in cash balances.
The cash conversion cycle for 2025 (40.6 days) shortened by 13.6 days compared with 2024 (54.3 days) mainly
due to a reduction in receivables and inventory turnover.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
27
SELECTED ITEMS FROM THE CONSOLIDATED CASH FLOW STATEMENT
PLN ‘000
2025
2024
Change %
2025/2024
Cash flows from operating activities
118 329
188 395
(37,2)
of which:
Gross profit/(loss)
(211 091)
192 449
(209,7)
Depreciation and impairment loss (reversal)
194 297
114 302
70,0
Changes to working capital
145 928
(89 597)
(262,9)
Other adjustments
(10 804)
(28 756)
(62,4)
Cash flows from investing activities
(302 041)
(416 630)
(27,2)
Cash flows from financing activities
43 951
22 835
(92,5)
Total cash flows
(139 761)
(205 400)
(32,0)
* positive values show inflows and values in brackets show outflows of cash
Cash flows from operating activities
Net cash flows from operating activities reached PLN 118,329 thousand in 2025, compared with PLN 188,395
thousand in 2024. Cash flows from operating activities in 2025 were 37.2% lower compared to 2024. Their level
was driven by an increase in working capital.
Cash flows from investing activities
In 2025, cash flows from investing activities amounted to PLN -302,041 thousand compared with PLN -416,630
thousand in 2024 and mainly comprised expenditure on the acquisition of property, plant and equipment.
Cash flows from financing activities
Cash flows from financing activities in 2025 reached PLN 43,951 thousand compared with PLN 22,835 thousand in
2024. The positive cash flow from financing activities in 2025 was due to the issue of shares by Rottneros.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
28
Material information and factors affecting the financial results
and the assessment of the financial standing
KEY FACTORS AFFECTING THE COMPANY’S PERFORMANCE
The Group’s operating activities have been and will continue to be historically influenced by the following key
factors:
● macroeconomic and other economic factors;
● demand growth for products based on natural fibres;
● reduced demand for certain paper types;
● fluctuations of paper prices;
● pulp price fluctuations for paper mills, timber for pulp mills and energy prices;
● fluctuations in foreign exchange rates.
Macroeconomic and other economic factors
We believe that a number of macro-economic and other economic factors have a material impact on the demand
for high-quality paper, and they may also influence the demand for the Group’s products and the Group’s operating
results. Those factors include:
● GDP growth;
● net income – as a metric of income and affluence of the population;
● production capacity – the surplus of supply in the high-quality paper segment over demand and decreasing
sales margins on paper,
● paper consumption,
● technology development.
Demand growth for products based on natural fibres
The trend observed in developed societies concerning a reduction of man’s adverse impact on the environment, in
particular reduction of use of disposable, plastic packaging that may not be recycled, offers new opportunities for
the development of the pulp & paper sector. In many companies, work has been under way to develop new
methods of packaging and production of packaging with natural materials, including pulp, so that it can be recycled.
Arctic Paper is also involved in such research. In the near future, the product segment is expected to increase its
percentage share in the volumes and revenue of the Arctic Paper Group.
Reduced demand for certain paper types
Development of new technologies, in particular in the areas of information and communication, results in
decreasing demand for certain paper types – in particular, this affects newsprint and to a lesser extent – graphic
papers. However, despite the increasing popularity of e-books, the volume of book paper produced and sold by
Arctic Paper has been stable in the recent years, less sensitive to changing market conditions. Nevertheless, in its
strategy Arctic Paper has set a direction of activity so that within several years, the segment of non-graphic papers
(that is technical or packaging paper) accounts for 1/5 of its consolidated revenue.
Paper prices
Paper prices undergo cyclic changes and fluctuations, they depend on global changes in demand and overall
macroeconomic and other economic factors such as indicated above. Prices of paper are also influenced by a
number of factors related to the supply, primarily changes in production capacities at the worldwide and European
level.
Costs of raw materials, energy and transportation
The main elements of the Group’s operating expenses include raw materials, energy and transportation. The costs
of raw materials include mainly the costs of pulp for paper mills, timber for pulp mills and chemical agents used for
paper and pulp production. Our energy costs historically include mostly the costs of electricity, gas and rights to
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
29
CO
2
emissions. The costs of transportation include the costs of transportation services provided to the Group
mainly by external entities.
Taking into account the share of those costs in total operating expenses of the Group and the limited possibility
of controlling these costs by the Group Companies, their fluctuations may have a major impact on the Group’s
profitability.
A part of pulp supplies to our paper mills is made from our own pulp mills. The remaining part of pulp
manufactured at our pulp mills is sold to external customers.
Currency rate fluctuations
The Group’s operating results are significantly influenced by currency rate fluctuations. In particular, the Group’s
revenue and costs are expressed in different foreign currencies and are not matched, therefore, the appreciation of
the currencies in which we incur costs towards the currencies in which we generate revenue, will have an adverse
effect on the Group’s results. Our products are primarily sold to euro zone countries, Scandinavia, Poland and the
UK, thus our revenue are largely denominated in EUR, GBP, SEK and PLN while revenue from the pulp mills are
primarily denominated in USD. The Group’s operating expenses are primarily expressed in USD (pulp costs for
paper mills), EUR (costs related to pulp for paper mills, energy, transportation, chemicals), PLN (the majority of
other costs incurred by the paper mill in Kostrzyn nad Odrą) and SEK (the majority of other costs incurred by the
Munkedal and Grycksbo paper mills as well as the Rottneros and Vallvik pulp mills).
Exchange rates also have an important impact on results reported in our financial statements because of
changes in exchange rates of the currencies in which we generate revenue and incur costs, and the currency in
which we report our financial results (PLN).
UNUSUAL EVENTS AND FACTORS
In 2025, there were no unusual events or factors.
IMPACT OF CHANGES IN ARCTIC PAPER GROUP’S STRUCTURE ON THE FINANCIAL RESULT
In 2025, there were no material changes in the Arctic Paper Group’s structure that would have material influence
on the financial result generated.
INFORMATION ON CONTRACTS SIGNIFICANT FOR THE GROUP’S OPERATIONS
Results of the share issue of the Issuer’s subsidiary
On 22 July 2025, the Management Board became aware of the results of the issue of new shares in Rottneros,
including the allocation to the Company of 10,000,000 new shares in the subsidiary Rottneros (8.7% of the offered
shares) in addition to the shares under pre-emptive rights, as part of a subscription for new shares without pre-
emptive rights. Prior to the aforementioned transaction, Arctic Paper S.A. held 78,230,883 Rottneros shares,
representing 51.27% of the share capital and 51.27% of the total number of Rottneros votes. Following the above
transaction and the exercise in full of its pre-emptive rights associated with its existing Rottneros shares, the
Company holds a total of 146 904 045 Rottneros shares, representing 55.02% of the share capital and 55.02% of
the total voting rights of Rottneros. By issuing 114,428,943 new Shares, Rottneros’ share capital increased by SEK
114,428,943, from SEK 153,393,890 to SEK 267,822,833. After the issue, the total number of shares and votes in
Rottneros is 267,822,833 shares.
Conclusion by Arctic Paper S.A. of a material financing agreement for the Issuer Group
On 31 October 2025, the Company entered into a term and revolving loan agreement (the “Loan Agreement”),
which was entered into between the Company as borrower and the guarantor, subsidiaries of the Company: Arctic
Paper Kostrzyn S.A., Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB as guarantors (the “Guarantors”)
and a consortium of banks consisting of: BNP Paribas Bank Polska S.A. (“Security Agent”), Bank Polska Kasa
Opieki S.A. and Santander Bank Polska S.A. (together the “Lenders”), pursuant to which the Lenders granted the
Company a term investment loan in the aggregate amount of EUR 20,000,000 and a revolving loan in the
aggregate amount of EUR 60,000,000 (the “Loans”).
The Loan Agreement was entered into due to the impending maturity of the current Term Loan Agreement
entered into on 2 April 2021, which falls five years after its execution.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
30
Loan Agreement
Pursuant to the Loan Agreement, the Lenders have made the following Loans available to the Company:
(a) an investment term loan in the total amount of EUR 20,000,000 (twenty million euros) (the “Investment Loan”);
and
(b) a revolving loan in the total amount of EUR 60,000,000 (sixty million euro) (the “Revolving Loan”).
Subject to the relevant terms and conditions of the Loan Agreement, the Investment Loan was made available,
inter alia, for the purpose of (i) refinancing the investment term loan taken for the construction of the biomass drying
and pellet production plant project (the “Project”), granted under the Term and Revolving Loan Agreement the
execution of which was reported by the Company in report No. 12/2021 of 2 April 2021 and amended by the receipt
of a term loan for the Project, which was reported by the Company in report No. 19/2023 of 8 November 2023, and
(ii) further financing of the implementation of the Project.
Subject to the relevant terms and conditions of the Loan Agreement, amounts raised under the Revolving Loan
may be used, inter alia, (i) to refinance the revolving loan provided under the Term and Revolving Loan Agreement,
which the Company announced in Report No. 12/2021 of 2 April 2021 and Report No. 19/2023 of 8 November
2023, and (ii) for general corporate purposes and to fund the working capital of the Company and its certain
subsidiaries (including intra-group lending in any form).
Disbursement of funds under the Loans will be made subject to the Company and the Guarantors meeting the
standard conditions precedent set out in the Loan Agreement.
The outstanding term loan facility provided to the Company under the Term and Revolving Loan Agreement,
which the Company announced in Report No. 12/2021 of 2 April 2021 and Report No. 19/2023 of 8 November
2023, will be repaid from the Company’s own funds prior to the availability of funding under the Loan Agreement.
Under the terms of the Loan Agreement, the interest rate on the Loans is variable, determined on the basis of
the EURIBOR base rate and an agreed margin for the Investment Loan and the Revolving Loan.
Pursuant to the Loan Agreement, the relevant Loans will be repaid on the following dates:
(i) in the case of an Investment Loan, on the day falling 5 years after the conclusion of the Loan Agreement; and
(ii) in the case of a Revolving Loan, on the date falling 3 years after the date of the Loan Agreement, with the option
to extend it for an additional two one-year periods or one two-year period (subject to compliance with the agreed
extension conditions);
The Investment Loan is repayable subject to the following conditions: 67.5% of the disbursed amount of the
Investment Loan is repayable in equal semi-annual instalments beginning in May 2026 and the remaining amount
of the Investment Loan is repayable on its final repayment date. The Revolving Loan is repayable on the final
repayment date.
Collateral
In order to secure the Lenders’ claims under the Loan Agreement and the related financing documents, the
Company and the Guarantors will establish, inter alia, the following securities: registered pledge and financial
pledge on the shares of Arctic Paper Kostrzyn S.A., pledges on the shares of the companies under Swedish law
Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB, statements on submission to execution by the
Company and Arctic Paper Kostrzyn S.A, registered pledges and financial pledges on the Company’s and Arctic
Paper Kostrzyn S.A.’s bank accounts, mortgage on the material agreed properties of Arctic Paper Kostrzyn S.A.,
registered pledge on the assets of Arctic Paper Kostrzyn S.A. and assignment agreements to secure rights under
property insurance policies.
Other material information
Award of compensation based on the Act on the Compensation System for Energy-intensive Sectors and
Subsectors to a subsidiary of the Issuer
On 29 October 2025, the Management Board became aware of the public aid granted to the subsidiary Arctic
Paper Kostrzyn S.A. for transferring the costs of purchasing emission allowances to the prices of electricity
consumed in the manufacture of products in energy-intensive sectors or subsectors for the year 2024 in the total
amount of PLN 39.5 million. The Issuer estimates that the amount of Compensation granted will have a significant
impact on the results achieved by Arctic Paper Kostrzyn S.A. in the fourth quarter of 2025.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
31
Fulfilment of conditions precedent to a material financing agreement for the Issuer Group and repayment
of an existing loan agreement
Upon receipt of confirmation from the Security Agent that the conditions precedent to the disbursement of the loans
under the Loan Agreement had been fulfilled, the Company made the first disbursement of funds under the Loan
Agreement on 19 December 2025 to repay in full the amounts of the investment loan and the revolving loan
provided to the Company under the term loan and revolving loan agreement, which the Company announced in
report No. 12/2021 of 2 April 2021 and which the Company announced in report No. 19/2023 of 8 November 2023
(the “Existing Loan Agreement”) was amended by the receipt of the investment term loan, resulting in the full
repayment of the Existing Loan Agreement.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
32
Factors influencing the development of the Arctic Paper Group
INFORMATION ON MARKET TRENDS
Supplies of fine paper
In Q4 2025, the Arctic Paper Group reported an 8.5% decrease in order levels compared with Q3 2025, with a
1.9% increase in order levels compared with the same period in 2024.
For the full year 2025, the Arctic Paper Group reported a 1.1% increase in order levels compared with the
previous year.
Source of data: Arctic Paper analysis
Paper prices
At the end of Q4 2025, prices for uncoated wood-free (UWF) papers in Europe decreased by 8.3% compared with
prices at the end of December 2024, while they recorded a decrease of 6.3% for coated wood-free (CWF) papers.
At the end of December 2025, manufacturers’ average declared prices for selected paper types and markets:
Germany, France, Spain, Italy, the UK for both uncoated wood-free (UWF) and coated wood-free (CWF) papers
were lower than at the end of September 2025 by 2.5% and 0.2% respectively.
Arctic Paper’s invoiced prices in EUR of comparable products in the uncoated wood-free paper (UWF) segment
fell by an average of 9.8% from the end of September 2025 to the end of December 2025. In the wood-free coated
papers (CWF) segment, prices fell by 3.2% over the same period. At the end of Q4 2025, Arctic Paper’s invoiced
prices for uncoated wood-free (UWF) papers decreased by 15.7% compared with prices at the end of December
2024, while for coated wood-free (CWF) papers they recorded a decrease of 9.7%.
Source: For market data – RISI, price changes for selected markets in Germany, France, Spain, Italy and the
UK in local currencies for graphic papers similar to the product portfolio of the Arctic Paper Group. The prices are
expressed without considering specific rebates for individual customers and they did not include additions nor price
reductions in relation to the publicly available price lists. The estimated prices for each month reflect orders placed
in the month while the deliveries may take place in the future. Because of that, RISI price estimates for a particular
month do not reflect the actual prices at which deliveries are performed but only express ordering prices. For Arctic
Paper products, the average invoiced sales prices for all served markets in EUR.
Pulp prices
At the end of Q4 2025, the pulp prices reached the level of: NBSK – USD 1,498.5/ton and BHKP – USD 1,100/ton.
The average NBSK price in the fourth quarter of 2025 was 1.6% lower than in the same period last year, while
the average BHKP price was 2.4% lower. compared with Q3 2025, the average pulp price in the fourth quarter of
this year fell by 0.7% for NBSK and it increased by 4% for BHKP.
Pulp costs are characterised by high volatility. The prices of the raw materials had major impact on the Group’s
profitability in the period.
The average cost of pulp used in paper production calculated for the Arctic Paper Group expressed in PLN in
Q4 2025 increased by 1.3% compared with Q3 2025. The average cost of pulp used in paper production in the
fourth quarter of 2025, compared with the same period of the previous year, decreased by 12.3%.
The share of pulp costs in the cost of sales after 12 months of the current year was 47%, compared with 52% in
the same period of 2024.
The Arctic Paper Group uses the pulp in the production process according to the following structure: BHKP
76%, NBSK 17% and other 7%.
Source of data: www.foex.fi Arctic Paper analysis
Currency exchange rates
At the end of Q4 2025, the EUR/PLN rate amounted to 4.2267 and was by 1.1% lower than at the end of Q4 2024.
The average EUR/PLN exchange rate in Q4 2025 was 4.2383, down 1.6% on the same period in 2024.
The EUR/SEK exchange rate was 10.8155 at the end of Q4 2025 (down 5.6% compared with the end of Q4
2024). For the pair, the average rate in the fourth quarter of 2025 compared with the same period of 2024 was
4.7% lower at 10.9541. The appreciating SEK against the euro adversely affected the level of revenue invoiced in
euro at the factories in Sweden (AP Munkedals and AP Grycksbo).
MANAGEMENT BOARD’S REPORT FOR 2025
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The USD/PLN exchange rate at the end of Q4 2025 was 3.6016. In Q4 2025, the average USD/PLN exchange
rate was 3.6432, compared with 4.0349 in the same period of the previous year, down by 9.7%. At the same time, it
remained at the same level as in the third quarter of 2025. The average USD/PLN exchange rate in 2025 was 5.6%
lower than for 2024. The year-on-year change had a favourable impact on the costs realised in USD by AP
Kostrzyn, in particular pulp costs.
The USD/SEK exchange rate at the end of Q4 2025 was 9.2160. The average rate in Q4 2025 was 9.4163,
compared with 10.7670 in the same period of the previous year, representing a rate depreciation of 12.5%. In the
fourth quarter of 2025, the average USD/SEK exchange rate decreased by 1% compared with the third quarter of
2025. The change in comparison to the equivalent quarter of 2024 favourably affected the costs incurred in USD by
AP Munkedals and AP Grycksbo, in particular the costs of pulp. . At the same time, the depreciation of the USD
against the SEK had an adverse effect on the pulp sales segment, where the majority of revenue is generated in
US dollars. As a result of the weaker USD relative to the SEK, revenue expressed in SEK decreased significantly.
The EUR/USD exchange rate at the end of December this year was 1.1736, compared with 1.0419 (12.6%) at
the end of December 2024. The average rate in Q4 2025 was 1.1634 compared with 1.0679 in the same period last
year and 1.1685 in Q3 2025. This represents an 8.9% strengthening of the EUR against the USD compared with
Q4 2024 and a 0.4% weakening compared with Q3 2025.
The appreciation of PLN versus EUR has adversely affected the Group’s financial profit, mainly due to
decreased sales revenue generated in EUR and translated into PLN. The stronger PLN against the USD in turn
had a positive impact on the Group’s financial performance, as it resulted in lower purchase costs for the main raw
material at the Kostrzyn mill. The appreciating SEK against the euro adversely affected income generated in euro
at APM and APG factories.
FACTORS INFLUENCING THE FINANCIAL RESULTS IN THE PERSPECTIVE OF THE NEXT YEAR
The material factors that have an impact on the financial results over the next year, include:
● Shaping demand for high-grade papers in Europe at a time of a tense geopolitical situation, high pulp prices,
and an economic slowdown in Germany. Over the recent years there has been a major decrease of demand for
fine paper in Europe (level of executed orders). Further negative developments in the market may adversely
affect order levels to our paper mills. The accelerated digitalisation of legacy print products may have the
additional effect of reducing demand for high-quality graphic papers and therefore negatively impact the Group’s
financial performance.
● Price changes of fine paper. In particular, the possibility to maintain the prices of Arctic Paper products in local
currencies in view of the declining supply/demand in Europe and in the context exchange rates fluctuations, will
have a material influence on the financial results. Paper prices will play a particularly important role for the
Kostrzyn mill, which is particularly strongly, and negatively, affected by falling sales volumes and prices due to
the changes in the market.
● Price fluctuations of raw materials, including pulp for paper mills and electricity for all operational entities. In
particular, financial results of paper mills may be negatively influenced by increasing pulp prices, particularly
BHKP. On the other hand, dropping NBSK pulp prices may negatively affect the financial results of pulp mills.
Fluctuations of electricity prices in Sweden may also have a material impact on the results generated by the
Group. In the future, such market changes may translate into changes of sales profitability in paper mills of AP
Munkedals and AP Grycksbo as well as in pulp mills of Rottneros and Vallvik.
● Changes in currency rates, in particular, the appreciation of PLN and SEK in relation to EUR and GBP, the
appreciation of PLN in relation to SEK, and the depreciation of PLN and SEK in relation to USD, may have an
adverse effect on the financial results. However, the Group’s pulp mills may benefit from the appreciation of
USD in relation to SEK.
RISK FACTORS
Risk factors related to the environment in which the Group operates
The sequence in which the risk factors are presented below does not reflect the likelihood of occurrence, extent or
materiality of the risks.
The risk related to intensifying competition in the paper market in Europe
Our Group operates in a very competitive market. The achievement of the strategic objectives assumed by the
Group may be made difficult by operations of competitors, particularly integrated paper producers operating on a
larger scale than our Group. Any more intensified competition resulting from a potential growth of production
capacity of our competitors and thus an increased supply of paper to the market, may adversely affect the
MANAGEMENT BOARD’S REPORT FOR 2025
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achievement of the planned revenue and thus the ability to achieve the underlying financial and operational
assumptions.
The Group has a high exposure to this risk
Risks associated with the tightening of the global geopolitical situation
The market in which our Group operates is exposed to risks related to the geopolitical situation in Europe and the
World, primarily in the United States of America. These risks can materialise in delays in raw material deliveries or
disrupted supply chains, forcing changes in production plans. An offshoot of uncertainty is caution in the spending
of financial resources by consumers, which can contribute to dampening economic growth.
The Group has a medium exposure to this risk
Risks associated with the worsening geopolitical situation in Europe
In the dimension of the Group’s activities in the European market, it is significant that the Group and its competitors
have stopped commercial transactions with Russia, in particular the purchase of wood for the production of long-
fibre cellulose. The result is a very strong increase in its price from alternative, Scandinavian, suppliers. It is being
felt acutely by long-fibre cellulose producers, including those belonging to the Rottneros Group.
In addition, the Group is exposed to the risk of a hybrid war between Russia and European countries, in an
extreme case the risk of armed conflict.
The Group has a high exposure to this risk
Risk of cyber attack
The risk of a cyber attack is one of the most serious threats facing businesses today, regardless of industry or size.
It is important for the Group because it affects fundamental elements of the operation: data held by the Group,
continuity of operations and production, finances, process security and reputation. A hacking attack could
potentially result in production lines being stopped and orders being delayed, resulting in a loss of customer
confidence. In addition, potential costs may include the reconstruction of the Group’s IT infrastructure, the risk of
administrative penalties (e.g. GDPR), or the risk of lawsuits as a result of claims from customers.
The Group has a high exposure to this risk
Risk of changing legal regulations
Our Group operates in a legal environment characterised with a high level of uncertainty. The regulations affecting
our business have been frequently amended and often there are no consistent interpretations which generate a risk
of violating the existing regulations and the resultant consequences even if such breach was unintentional.
Moreover, changes in environmental protection regulations and other legislation may necessitate the incurrence of
significant expenditure in order to ensure compliance, including with more stringent requirements or stricter
enforcement of the applicable regulations concerning the protection of surface waters, groundwater, soil and
ambient air.
The Group has a medium exposure to this risk
Foreign currency risk
Revenue, expenses and results of the Group are exposed to foreign currency risk, in particular relating to exchange
rates of PLN and SEK to EUR, GBP and other currencies. Our Group exports a majority of its produced paper to
European markets, generating a material part of its sales revenue in EUR, GBP, PLN and SEK. Sales revenue of
pulp in the pulp mills is subject to USD exchange rate risk. The purchase costs of materials for paper production, in
particular pulp for paper mills are paid primarily in USD and EUR. Additionally, we hold loan liabilities mainly in
PLN, EUR and SEK. PLN is the currency used in our financial statements and therefore our revenue, expenses
and results generated by the subsidiaries domiciled abroad are subject to exchange rate fluctuations. Thus,
currency exchange rate fluctuations may have a strong adverse effect on the results, financial conditions and
prospects of the Group.
The Group has a medium exposure to this risk
Interest rate risk
The Group is exposed to interest rate risk in view of the existing interest-bearing debt. The risk results from
fluctuations of such interest rates as WIBOR for debt in PLN, EURIBOR for debt in EUR and STIBOR for debt in
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
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SEK. Unfavourable changes of interest rates may adversely affect the results, financial condition and prospects of
the Group.
The Group has a low exposure to this risk
Risk related to increasing importance of alternative media
Trends in advertising, electronic data transmission and storage and in the Internet have adverse impact on
traditional printed media and thus on the products of the Group and its customers. Continuation of such changes
may adversely affect the results, financial condition and prospects of the Group.
The Group has a high exposure to this risk
The objectives and methods of financial risk management in the Group along with hedging methods of major
transactions are detailed in note 5.21 to the consolidated financial statements.
Risk factors relating to the business of the Group
The sequence in which the risk factors are presented below does not reflect the likelihood of occurrence, extent or
materiality of the risks.
Risk related to relatively low operational margins
Historically, the operational results of the Group are characterised by relatively high volatility and low profit margins
on operations. Reduced revenue resulting e.g. from changes to production capacity, output, pricing policies or
increased operating expenses that primarily comprise costs of raw materials (mainly pulp for paper mills) and
energy, may mean the Group’s losses in earning capacity. Material adverse changes to profitability may result in
reduced prices of our stock and reduced capacity to generate working capital thus adversely affecting our business
and deteriorating our prospects.
The Group has a high exposure to this risk
Risk of price changes to raw materials, energy and products
We are exposed to the risk of price changes of raw materials and energy, primarily related to price fluctuations of
pulp, gas and electricity. Paper mills buy pulp under frame agreements or in one-off transactions and do not hedge
against fluctuations of pulp prices. A part of pulp is supplied to our paper mills from the pulp mills of the Rottneros
Group. The risk of changing prices of raw materials is related primarily to changing prices of paper and pulp in the
markets to which we sell our products. A material growth of prices of one or more raw materials and energy may
adversely affect the operating results and financial condition of the Group.
The Group has a high exposure to this risk
Risk of disruption to production processes
Our Group holds three paper mills operating jointly seven production lines with total annual production capacity of
over 640,000 tonnes of paper and two pulp mills with a total production capacity of 400.000 tonnes of pulp. Long-
lasting disruption to the production process may result from a number of factors, including a breakdown, human
error, unavailability of raw materials, natural catastrophes and other that are beyond our control. Each such
disruption, even relatively short, may have material impact on our production and profitability and result in material
costs for repairs, liabilities to buyers whose orders we are not able to satisfy and other expenses.
The Group has a medium exposure to this risk
Risk related to our investments
Investments by the Group aimed at expanding the production capacity of the Group require material capital outlays
and a relatively long time to complete. As a result, the market conditions under which we operate may be materially
changed in the period between our decision to incur investment outlays to expand production capacity and the
completion time. Changes of market conditions may result in a volatile demand for our products which may be too
low in the context of additional production capacities. Differences between demand and investments in new
production capacities may result in failure to utilise the expanded production capacity to the full extent. This may
have adverse effect on the operating results and financial condition of the Group.
The Group has a medium exposure to this risk
MANAGEMENT BOARD’S REPORT FOR 2025
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Risk factors relating to the debt of the Group
Our Group mainly has debt under a loan agreement with a consortium of banks (Pekao SA, Santander Bank S.A.
and BNP Paribas SA) of 31 October 2025, loan debt with Danske Bank, Nordea Bank and under leasing
agreements.
Failure by the Group to comply with its obligations, including the agreed levels of financial ratios (covenants)
resulting from the agreements, will result in default under those agreements. Events of default may in particular
result in demand for repayment of our debt, banks taking control over important assets like paper mills or pulp mills
and loss of other assets which serve as collateral, deterioration of creditworthiness and lost access to external
funding which will be converted into lost liquidity and which in turn may materially adversely affect our business and
development prospects and our stock prices.
The Group has a medium exposure to this risk.
Risk related to insurance limits
In the context of deteriorating situation in paper industry and the results of the Arctic Paper Group, our suppliers, in
particular suppliers of such raw materials as pulp, may have problems with acquiring insurance limits (sale on
credit) and thus they may lose the possibility of offering deferred payment terms to the Arctic Paper Group. Such
situation may result in deteriorated financial situation and loss of financial liquidity of operating units and as a result
this may adversely affect the situation in the entire Group.
The Group has a medium exposure to this risk
Risk of restricted supplies of natural gas
Polskie Górnictwo Naftowe i Gazownictwo S.A (PGNiG) is the sole supplier of natural gas used by AP Kostrzyn to
generate heat and electrical energy for paper production. (PGNiG). In this context, the business and costs of paper
production at AP Kostrzyn is materially affected by availability and price of natural gas. Potential disruptions of
supplies of natural gas to the paper mill in Kostrzyn nad Odrą may have adverse effect on production, results of
operations and financial condition of the Group.
The Group has a low exposure to this risk.
Risk related to consolidation and liquidity of key customers
Consolidation trends among our existing and potential customers may result in a more concentrated customer base
covering a few large buyers. Such buyers may rely on their improved bargaining position in negotiating terms of
paper purchases or decide to change the supplier and acquire products from our competitors. Additionally, in the
context of the deteriorating condition in printing industry, such customers as paper distributors, printing houses or
publishers may not be able to obtain insurance limits (sale on credit) or have problems with financial liquidity which
may result in their bankruptcy and adversely affect our financial results. The above factors may have adverse
impact on the operational results and financial condition of the Group.
The Group has a medium exposure to this risk
Risk related to compliance with regulations on environmental protection and adverse impact of the
production process on the environment
The Group meets the requirements related to environmental protection; however, no certainty exists that it will
always be able to comply with its obligations and that in the future it will avoid material expenses or that it will not
incur material obligations related to the requirements or that it will be able to obtain all permits, approvals and other
consents to carry on its business as planned. Similarly, considering that paper and pulp production is related to
potential hazards relating to waste generated in paper mills and pulp mills and contamination with chemicals, no
certainty exists that in the future the Group is not charged with liability for environmental pollution or that no event
that may underlie the liability of the Group has not already occurred. Thus, the Group may be required to incur
major expenses in connection with the need to remove contamination and land reclamation.
The Group has a medium exposure to this risk
Risk related to CO
2
emissions
Our paper mills and pulp mills are provided with free carbon dioxide emission rights for each period. The emission
rights are awarded within the EU Emission Trading Scheme. Should such free carbon dioxide emission rights be
cancelled and replaced with a system of paid emission rights, our costs of energy generation will grow accordingly.
Additionally, we may be forced to incur other unpredictable expenses in connection with the emission rights or
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
37
changing legal regulations and the resultant requirements. Due to the above we may be forced to reduce the
quantity of generated energy or to increase the production costs which may adversely affect our business, financial
condition, operational results or development prospects.
The Group has a low exposure to this risk.
Risk related to dividend distribution
The Issuer is a holding company and therefore its capacity to pay dividend is subject to the level of potential
disbursements from its subsidiaries involved in operational activity, and the level of cash balances. Certain
subsidiaries of the Group involved in operational activity may be subject to certain restrictions concerning
disbursements to the Issuer. No certainty exists that such restrictions will have no material impact on the business,
results of operations and capacity of the Group to distribute dividend.
In connection with the term and revolving loan agreements, and the agreement between creditors signed on 31
October 2025, the Company’s ability to pay dividends is subject to the Group meeting certain financial ratios in the
period prior to payment (as that term is defined in the term and revolving loan agreement) and there being no event
of default (as that term is defined in the term and revolving loan agreement).
The Group has a medium exposure to this risk
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
38
Supplementary information
MANAGEMENT BOARD’S POSITION ON FINANCIAL FORECASTS
The Management Board of Arctic Paper S.A. did not publish projections of financial results for 2025 and has not
published and does not intend to publish projections of financial results for 2026.
PRINCIPLES FOR THE PREPARATION OF ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
The Group’s consolidated financial statements for the period from 1 January 2025 to 31 December 2025 have been
prepared on the basis of International Financial Reporting Standards and related interpretations promulgated as
regulations of the European Commission. The financial statements have been prepared on a going concern basis
for the foreseeable future. As at the date of the financial statements, there are no circumstances indicating a threat
to the Group’s and the Issuer’s going concern. Details of the preparation of the separate and consolidated financial
statements are discussed in note 2.1 to the 2025 Consolidated Financial Statements.
DIVIDEND INFORMATION
On 15 May 2025, the Management Board announced that, following the publication of the financial results for Q1
2025 of the Company and its subsidiary Rottneros AB, it had decided to amend its original recommendation
regarding the distribution of profit for 2024, which it had announced in current report No. 04/2025 of 18 February
2025. The Issuer’s Management Board has decided to recommend to the Annual General Meeting to allocate the
Company’s net profit for 2024 in the amount of PLN 197,291,617.02 in its entirety to the Company’s reserve capital.
On 11 June 2025, the Company’s General Meeting, after reviewing the Management Board’s proposal on profit
distribution, decided to allocate the Company’s entire net profit for the financial year 2024, amounting to PLN
197,291,617.02, to the Company’s reserve capital.
CHANGES TO THE BODIES OF ARCTIC PAPER S.A.
As at 31 December 2025, the Company’s Supervisory Board was composed of:
● Per Lundeen – Chair of the Supervisory Board appointed on 22 September 2016 (appointed to the Supervisory
Board on 14 September 2016);
● Roger Mattsson – Deputy Chairman of the Supervisory Board appointed on 22 September 2016 (appointed as a
Member of the Supervisory Board on 14 September 2014);
● Thomas Onstad – Member of the Supervisory Board appointed on 22 October 2008;
● Zofia Dzik – Member of the Supervisory Board appointed on 22 June 2021;
● Anna Jakubowski – Member of the Supervisory Board appointed on 22 June 2021.
Until the date hereof, there were no changes to the composition of the Supervisory Board of the Parent Company.
As at 31 December 2025, the Company’s Management Board was composed of:
● Mr Michał Jarczyński – President of the Management Board;
● Ms Katarzyna Wojtkowiak – Member of the Management Boar;
● Mr Fabian Langenskiöld – Member of the Management Board.
As at the date of publication of this report, there have been no changes to the composition of the Management
Board of the Parent Company.
CHANGES TO THE SHARE CAPITAL OF ARCTIC PAPER S.A.
In 2025, there were no changes in the Company’s share capital.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
39
REMUNERATION PAID TO MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY
BOARD
The table below presents information on the total amount of remuneration and other benefits paid or payable to
members of the Management Board and of the Supervisory Board of the Parent Company and subsidiaries for the
period from 1 January 2025 to 31 December 2025 (data in PLN).
Members of the
Management Board
and Supervisory
Board
Remuneration for
the functions
performed at Arctic
Paper SA
Retirement plan
Other
Total
Management
Board
Jarczyński Michał
2 001 912
1 514 812
3 516 724
Wojtkowiak
Katarzyna
829 200
175 793
1 004 993
Langenskiöld
Fabian
1 254 636
555 785
198 549
2 008 970
6 530 686
Supervisory Board
Per Lundeen
569 943
569 943
Roger Mattsson
268 800
268 800
Thomas Onstad
192 999
192 999
Zofia Dzik
230 400
230 400
Anna Jakubowski
192 000
192 000
1 454 142
There were no liabilities arising from pensions and benefits of a similar nature for former executives in 2025.
AGREEMENTS WITH MEMBERS OF THE MANAGEMENT BOARD GUARANTEEING FINANCIAL
COMPENSATION
As at 31 December 2025 and as at the approval date of this annual report, Members of the Management Board are
entitled to compensation in case of their resignation or dismissal from their respective positions with no valid reason
or when they are dismissed or their employment is terminated as a result of a merger of the Issuer by take-over.
The amount of such compensation will correspond to their remuneration for 6 to 24 months.
INFORMATION ON THE CONTROL SYSTEM FOR EMPLOYEE SHARE SCHEMES
There are no control systems for employee share schemes in the Group.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
40
CHANGES IN HOLDINGS OF THE ISSUER’S SHARES OR RIGHTS TO SHARES BY PERSONS
MANAGING AND SUPERVISING ARCTIC PAPER S.A.
Number of shares
or rights as at
21.04.2026
Number of shares
or rights to shares
as at 31.12.2025
Number of shares
or rights to shares
as at 06.11.2025
Change
Management Board
Michał Jarczyński
5 572
5 572
5 572
-
Katarzyna Wojtkowiak
-
-
-
-
Fabian Langenskiöld
900
900
900
-
Supervisory Board
Per Lundeen
34 760
34 760
34 760
-
Thomas Onstad*
5 323 658
5 323 658
5 323 658
-
Roger Mattsson
-
-
-
-
Zofia Dzik
-
-
-
-
Anna Jakubowski
-
-
-
-
* Direct participation
MANAGEMENT OF FINANCIAL RESOURCES
In 2025, the Group managed its financial resources appropriately, with the highest possible efficiency in the use of
these resources. The sources of funding for the Group’s activities were in particular own funds, bank loans and
borrowings and trade payables.
As of the date hereof, the Company held sufficient funds and creditworthiness to ensure financial liquidity of the
Arctic Paper S.A. Group.
CAPITAL INVESTMENTS
In 2025, the Company used short-term deposits with a maturity of up to six months.
INFORMATION ON FINANCIAL INSTRUMENTS
Information on financial instruments on:
a) the risks of: price changes, credit, material disruption of cash flows and loss of liquidity to which the Group is
exposed; and
b) the entity’s financial risk management objectives and policies, including its methods of hedging significant types
of forecast transactions for which hedge accounting is used, are disclosed in the consolidated financial statements
in notes 5.20.5. and 5.20.8.
INFORMATION ON LOANS TAKEN OUT AND TERMINATED
Information on the Group’s loans can be found in note 5.14 of the financial statements.
INFORMATION ON SURETIES, GUARANTEES AND PLEDGES
As at 31 December 2025, the Capital Group had the following:
● a bank guarantee in favour of Skatteverket Ludvika in the amount of SEK 135 thousand;
● a contingent liability of Arctic Paper Munkedals AB related to a surety for the obligations of Kalltorp Kraft HB in
the amount of SEK 773 thousand;
● a pledge on properties held by Munkedals Kraft AB as required by loan agreements with Nordea Bank for SEK
80,000 thousand (related to the investment in the hydro power plant;
● pledges on shares in subsidiaries in the Rottneros Group for SEK 284,730 thousand under loan agreements
concluded with Danske Bank.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
41
In connection with the term and revolving loan agreement signed on 31 October 2025, the Company signed
agreements and declarations pursuant to which the above receivables and other claims were secured in favour of
Bank BNP Paribas Bank Polska S.A. acting as Security Agent, i.e.
1. under Polish law – Collateral Documents establishing the following Collateral:
● financial and registered pledges on all shares or interests held by the Company and Arctic Paper Kostrzyn SA
registered in Poland, with the exception of the Company’s shares;
● mortgages on all real properties located in Poland and belonging to the Guarantors;
● registered pledges on all material rights and movable assets owned by the Company and the Guarantors,
constituting an organised part of the enterprise, located in Poland (with the exception of the assets listed in the
Loan Agreement);
● assignment of existing and future insurance policies relating to the assets of Arctic Paper Kostrzyn S.A. (with the
exception of the insurance policies listed in the Loan Agreement);
● declarations by the Company and Arctic Paper Kostrzyn S.A. on voluntary submission to enforcement, in the
form of a notary deed;
● financial pledges and registered pledges on the bank accounts of the Company and Arctic Paper Kostrzyn S.A.
registered in Poland (the pledges relate to current and future bank accounts; in the event of an event of default,
in the event that the pledged receivable or part thereof becomes due, the Company may not draw funds from
the pledged receivable, nor may it instruct the bank maintaining the account to disburse the funds);
● powers of attorney to the Polish bank accounts of the Company and Arctic Paper Kostrzyn S.A.;
● suretyship for liabilities granted by Arctic Paper S.A., Arctic Paper Kostrzyn S.A., Arctic Paper Munkedals AB,
Arctic Paper Grycksbo AB
2. under Swedish law – Collateral Documents establishing the following Collateral:
● pledges over all the Company’s and Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB shares or interests
registered in Sweden
● mortgages on all real properties located in Sweden and owned by Arctic Paper Munkedals AB, Arctic Paper
Grycksbo AB, provided that only existing mortgage deeds are subject to such security;
● corporate mortgages granted by the Guarantors registered in Sweden as long as such collateral covers solely
the existing mortgage deeds;
● assignment of (existing and future) insurance policies covering the assets of Arctic Paper Munkedals AB and
Arctic Paper Grycksbo AB (with the exception of insurance policies listed in the Loan Agreement);
● pledges on Swedish bank accounts of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB, as long as
such collateral is without prejudice to free management of funds deposited on bank accounts until an event of
default specified in the Loan Agreement.
MATERIAL OFF-BALANCE SHEET ITEMS
The Group has no significant off-balance sheet items.
ASSESSMENT OF THE FEASIBILITY OF INVESTMENT PLANS
In view of the financial results achieved and subject to accomplishment of the current financial objectives, the
Company plans to implement investments in line with its financial plan. The core objective of the investments is to
develop new products, minimise production costs, including the costs of electricity, and to improve the
effectiveness of the production process. The Group intends to finance its investment plan for 2026 with its own
funds and external funding sources.
INFORMATION ON SIGNIFICANT COURT AND ARBITRATION PROCEEDINGS AND PROCEEDINGS
PENDING BEFORE PUBLIC ADMINISTRATIVE AUTHORITIES
In the period covered by this report, Arctic Paper S.A. and its subsidiaries were not a party to any material
proceedings pending before a court, an arbitral tribunal or a public administration authority.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
42
INFORMATION ON TRANSACTIONS WITH RELATED PARTIES EXECUTED ON NON-MARKET TERMS
AND CONDITIONS
During the period under report, Arctic Paper S.A. and its subsidiaries did not execute any material transactions with
related parties on non-market terms and conditions.
INFORMATION ON AGREEMENTS RESULTING IN CHANGES TO THE PROPORTIONS OF SHARE
HOLDINGS
Otherwise, than stated herein, the Issuer is not aware of any agreements that may in the future generate changes
to the proportions of share holdings by the existing shareholders.
INFORMATION ON PURCHASE OF TREASURY SHARES
The Parent Company did not purchase any treasury shares in 2025.
INFORMATION ON THE ISSUE OF SECURITIES
The Company did not issue securities in the 2025 financial year.
INFORMATION ON THE ENTITY AUTHORISED TO AUDIT THE FINANCIAL STATEMENTS
On 06 August 2025, the Company’s Supervisory Board, based on the Audit Committee’s recommendation on the
selection of an auditor, decided to select PricewaterhouseCoopers Polska Spółka z ograniczoną
odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic Paper S.A. Group to audit the
financial statements for 2025 and 2026. The recommendation of the Audit Committee was issued as a result of the
selection procedure in compliance with the “Policy and procedure for the selection of the audit firm for the statutory
and voluntary audit of the consolidated and separate financial statements of Arctic Paper S.A. with its registered
office in Kostrzyn nad Odrą”. The audit firm and members of its team performing the audit comply with the
requirements to make an impartial and independent report from the audit of the annual consolidated and separate
financial statements of the Arctic Paper Group and of the Company in compliance with the applicable regulations,
professional standards and the rules of professional ethics.
On 14 July 2023, Arctic Paper S.A. entered into an agreement with PricewaterhouseCoopers Polska Spółka z
ograniczoną odpowiedzialnością Audyt Sp.k. to review the Company’s interim separate financial statements and
the Group’s interim consolidated financial statements for the periods from 1 January 2025 to 30 June 2025 and
from 1 January 2026 to 30 June 2026, and to audit the Company’s separate financial statements and the Group’s
consolidated financial statements for the financial periods from 1 January 2024 to 31 December 2024 and for the
financial periods from 1 January 2025 to 31 December 2025. The contract was concluded for the time required to
perform the above services.
Other information on the auditor, including information on the audit firm’s fees paid or payable for 2026 and
2025, is included in note 7.3 to the consolidated financial statements.
The non-audit services that the Group auditor responsible for the audit of the financial statements provided or is
authorised to provide to the Group and its subsidiaries during the period under review are:
1. Carrying out support services related to the preparation of VAT returns in Germany for Rottneros AB;
2. Carrying out VAT filing support services in Norway for Rottneros AB;
3. Carrying out VAT filing support services in Italy for Rottneros AB;
4. Carrying out a service to assess the client’s supply transactions and verify VAT procedures in Sweden for
Rottneros AB;
5. Carrying out support services for the submission of the monthly NIL Intrastat return to the Spanish tax
authorities, the submission of the ESPL (if required) and the receipt of notifications from the Spanish tax
authorities for Vallviks Bruk AB;
Prior to the performance of the above services, an independence assessment was carried out in relation to the
provision of these services, the Audit Committee approved their provision.
HEADCOUNT
Information on the headcount is provided in note 7.2 to the consolidated financial statements.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
43
Statement on the application of the corporate governance rules
Corporate governance rules
On 29 March 2021, the Supervisory Board of the Giełda Papierów Wartościowych w Warszawie S.A. adopted, by
Resolution No. 13/1834/2021, the corporate governance principles for companies listed on the Main Market of the
WSE – “Best Practice for WSE Listed Companies 2021” (Best Practice 2021, DPSN2021).
Best Practice 2021 came into force on 1 July 2021.
Application by companies of the corporate governance rules contained in the Best Practice is voluntary, but
reporting on their application is an obligation of every listed company, enshrined in the Regulations of the WSE.
Companies had to publish their reports on the application of DPSN2021 by 31 July 2021.
The text of the “Best Practice for WSE Listed Companies 2021” is available on the websites of the Stock
Exchange S.A. and the Company:
● https://www.gpw.pl/pub/GPW/files/PDF/dobre_praktyki/DPSN21_BROSZURA.pdf
● https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-
governance/dpsn21_broszura_wersja_do_druku.pdf
On 22 June 2022, the General Meeting of Shareholders of Arctic Paper S.A. adopted the “Diversity Policy for
the Management Board and Supervisory Board of Arctic Paper S.A.” by Resolution No. 21/2022.
The policy applies to the Management Board and the Supervisory Board of Arctic Paper S.A. Its purpose is to
regulate the recruitment and election of members of the Company’s Management and Supervisory Boards and to
ensure non-discrimination and equal opportunities in the process.
In accordance with the regulations of the Policy, candidates are assessed in accordance with the principles of
independence and merit and diversity criteria. The Company endeavours to ensure that the persons selected have
a diverse range of education, experience, knowledge and skills, gender and age.
The functions of the members of the Management Board and the Supervisory Board are entrusted to specific
individuals, irrespective of their gender, but in accordance with their professional preparation and experience. The
composition of the Company’s bodies largely depends on the decisions of the Company’s shareholders.
The Company aims to ensure that the representation of women in its governing bodies is not less than 30%.
This aspect is taken into account in the planned recruitment processes.
Information on the extent the Issuer waived the provisions of the corporate governance rules
Arctic Paper S.A. made every effort to comply with corporate governance rules as set forth in the document “Best
Practice for WSE Listed Companies 2021”. In 2025, Arctic Paper S.A. did not apply the following rules:
Best practice – systems and internal functions
Rule 3.3
“A company included in the WIG20, mWIG40 or sWIG80 index shall appoint an internal auditor heading the internal
audit function, who shall act in accordance with internationally recognised standards of professional practice for
internal auditing. In other companies where no internal auditor meeting the aforementioned requirements has been
appointed, the audit committee (or the supervisory board if it performs the functions of an audit committee) shall
annually assess whether there is a need to appoint such a person”.
EXPLANATION:
Given the size of the Company and the structure and nature of its business, the appointment of an internal auditor
is not justified by the assessments carried out by the Management Board and the Supervisory Board. Support to
the Arctic Paper Group Management Board in achieving its impact and risk management objectives is provided by
the risk management function with the assistance of the owners of the various risks
Rule 3.10
“At least every five years, a company included in the WIG20, mWIG40 or sWIG80 index shall have its internal audit
function reviewed by an independent auditor selected with the participation of the audit committee”.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
44
EXPLANATION:
Given the size of the Company and the structure and nature of its business, the Management Board, the
Supervisory Board and the Audit Committee acting within it will consider the need for an independent audit in the
future.
Best practice – General Meeting and relations with shareholders
Rule 4.1
“The company should enable shareholders to participate in a general meeting using electronic means of
communication (e- meeting) if this is justified by the expectations of shareholders communicated to the company,
as long as it is able to provide the technical infrastructure necessary for holding such a general meeting”.
EXPLANATION:
Given the need for many technical and organisational steps and the associated costs and legal risks, the Company
has not decided to hold an electronic General Meeting at this time.
Rule 4.3
“The Company shall provide a publicly available real-time broadcast of the general meeting”.
EXPLANATION:
Taking into account the costs and legal risks, the Company has not decided at this time to carry out a general
broadcast of the General Meeting. The Company will consider this possibility in the future.
Internal control and risk management systems with reference to the preparation of financial statements
The Management Board of Arctic Paper S.A. is responsible for the internal control system in the Company and
for its efficiency in the development process of financial statements and interim reports, prepared and published in
compliance with the rules of the Regulation of the Minister of Finance on current and periodical disclosure by
issuers of securities and conditions to recognise as equivalent the information that is required by the law in Non-
Member States of 29 March 2018. The preparation of the Group’s financial statements and interim reports is the
responsibility of the Company’s finance department, headed by the Chief Financial Officer. The Company prepares
its financial statements and interim reports based on the procedures in force at Arctic Paper S.A. for the
preparation and publication of interim reports. The financial data underlying the preparation of the Company’s
financial statements is derived from the accounting system. The Management Board, after the accounting closure
of each calendar month, analyses the company’s financial performance in comparison with the budgeted
assumptions and the results achieved in the previous reporting year.
The Company’s Management Board systematically evaluates, the quality of the internal control and risk
management systems in relation to the financial reporting process. On the basis of such review, the Company’s
Management Board found that as at 31 December 2025 there were no weaknesses that could materially affect the
effectiveness of internal control with respect to financial reporting.
Shareholders that directly or indirectly hold significant packages of shares
Information on the shareholders that directly or indirectly hold large packages of shares is presented in the table
below – the table presents the situation as at the date of approval of this report.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
45
Shareholder
Number of shares
Share in the share
capital
[%]
Number of votes
Share in the total
number of votes
[%]
Thomas Onstad
Thomas Onstad
68,26%
47 298 548
68,26%
– indirectly via
41 974 890
60,58%
41 974 890
60,58%
Nemus Holding AB
41 374 890
59,71%
41 374 890
59,71%
other entity
600 000
0,87%
600 000
0,87%
– directly
5 323 658
7,68%
5 323 658
7,68%
Other
21 989 235
31,74%
21 989 235
31,74%
Total
69 287 783
100,00%
69 287 783
100,00%
Treasury shares
–
0,00%
–
0,00%
Total
69 287 783
100,00%
69 287 783
100,00%
Securities with special control rights
There are no securities in the Company with special control rights – in particular, no shares in the Company are
privileged.
Information on major restrictions on transfer of title to the Issuer’s securities and all restrictions
concerning the exercising of voting rights
The Company’s Articles of Association do not provide for any restrictions concerning transfer of title to the Issuer’s
securities.
With the exception of restrictions on the transfer and acquisition of the Company’s shares that arise under
common law, there are no restrictions on the transfer of ownership of the Company’s securities.
The Company’s Articles of Association do not provide for any restrictions on the exercise of voting rights on
Arctic Paper S.A. shares.
Description of the principles of amending the Issuer’s Articles of Association
Changes to the Company’s Articles of Association fall within the sole competences of the General Meeting.
There were no changes to the Issuer’s Articles of Association in 2025.
Unless the Code of Commercial Companies and Partnerships or the Articles of Association of the Company
provide otherwise, resolutions of the General Meeting require an absolute majority of votes;
Description of the functioning of the General Meeting
The rules of procedure of the General Meeting and its core competences result straight from applicable laws and
are partly incorporated in the Company’s Articles of Association.
The Company’s Articles of Association are available at:
https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-governance/corporate-
documents/pl/arctic_paper_statut_tekst_jednolity_aktualny_2019_pl.pdf
General Meetings are held in accordance with the following basic rules:
● General Meetings are held in the Company’s offices or in Warsaw;
● General Meetings may be ordinary or extraordinary;
● Ordinary General Meetings shall be held within six months after the end of the financial year;
● General Meetings are opened by the Chair of the Supervisory Board or a person designated by him/her which is
followed by election of the Chair of the General Meeting;
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
46
● voting shall be open unless a shareholder demands a secret ballot or a secret ballot is required by the
provisions of the Code of Commercial Companies and Partnerships;
● unless the Code of Commercial Companies and Partnerships or the Articles of Association of the Company
provide otherwise, resolutions of the General Meeting require an absolute majority of votes;
● in compliance with the Company’s Articles of Association, the following matters fall within the exclusive
competences of the General Meeting:
● considering and approving the Management Board’ report on the Company’s and Group’s activities and the
Company’s financial statements and the Group’s consolidated financial statements for the previous financial
year;
● granting a vote of approval to Members of the Management Board and Members of the Supervisory Board
for the performance of their duties;
● decisions concerning distribution of profit or coverage of losses;
● changes to the business objects of the Company;
● changes to the Articles of Association of the Company;
● increase or decrease in the Company’s share capital;
● merger of the Company with another company or other companies, split of the Company or transformation of
the Company;
● dissolution and liquidation of the Company;
● issues of convertible bonds or pre-emption bonds and issues of subscription warrants;
● purchase and sale of real properties ;
● disposal and lease of the entire enterprise or an organised part thereof or establishment of limited rights in
rem thereon;
● all other issues for which the Articles of Association or the Code of Commercial Companies and Partnerships
require a resolution of the General Meeting.
General Meetings may approve resolutions in the attendance of at least half of the share capital of the Company.
General Meetings approve resolutions with an absolute majority of votes unless the Articles of Association or
applicable regulations require a qualified majority.
The shareholders’ rights and the way to enforce them result explicitly from law that has been partly incorporated
in the Company’s Articles of Association.
Operation of the Issuer’s managing and supervising bodies and its committees as well as information on
the composition of those bodies
Management Board
COMPOSITION OF THE MANAGEMENT BOARD
● The Management Board is composed of one to five Members, including President of the Management Board;
● The Management Board is appointed and dismissed by the Supervisory Board for a joint term of office.
● The term of office of Members of the Management Board is 3 (three) years.
● When the Management Board is composed of more than one person, the Supervisory Board – upon a proposal
by the President – may appoint up to three Vice-Presidents from among Members of the Management Board.
Vice-Presidents may be dismissed subject to a resolution of the Supervisory Board.
● A Member of the Management Board may be dismissed by the Supervisory Board at any time.
● A Member of the Management Board may be dismissed or suspended in their duties at any time by the General
Meeting.
CORE COMPETENCES OF THE MANAGEMENT BOARD
● The Management Board directs the affairs of the Company and represents the Company.
● If the Management Board is composed of more than one person, declarations of intent on the Company’s behalf
shall be made by the President of the Management Board individually or two Members of the Management
Board acting jointly or a Member of the Management Board acting jointly with a Proxy.
● The Management Board is obliged to exercise their duties with due diligence and comply with law, the
Company’s Articles of Association, approved regulations and resolutions of the Company’s bodies; decisions
shall be taken in line with reasonable economic risk with a view to the interests of the Company and its
shareholders.
● The Management Board is obliged to manage the assets and business of the Company and perform its duties
subject to due diligence required in business operations and subject to strict compliance with applicable laws,
provisions of the Articles of Association and internal regulations as well as resolutions approved by the General
Meeting and the Supervisory Board.
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● The Company’s Management Board shall not be entitled to take decisions on share issues and redemption.
● Each Member of the Management Board shall be liable for any damage inflicted upon the Company as a result
of their actions or omissions breaching the provisions of law or the Company’s Articles of Association.
● The responsibilities of the Management Board include – in compliance with the Code of Commercial Companies
and Partnerships – all affairs of the Company not reserved to the General Meeting or the Supervisory Board.
● Guided by the interests of the Company, the Management Board defines the strategy and core objectives of the
Company’s business.
● The Management Board shall comply with the regulations relating to confidential information within the meaning
of the Act on Trading and to comply with all the duties resulting therefrom.
Otherwise, the individual Members of the Management Board shall be responsible for independently managing the
affairs of the Company as resulting from the internal delegation of duties and functions approved by a decision of
the Management Board.
The Management Board may approve resolutions at meetings or outside meetings in writing or with the use of
direct means of remote telecommunications. The Management Board approves resolutions with a majority of votes
cast. Resolutions shall be valid if minimum one half of Members of the Management Board are present at the
meeting. In case of equal number of votes, the President of the Management Board shall have the casting vote.
The detailed mode of operation of the Management Board is set forth in the Regulations of the Management
Board with its updated version available at:
https://www.arcticpapergroup.com/globalassets/arcticpapergroup.com/02-about/04-corporate-
governance/corporate-documents/5_regulamin-zarzdu_ang_05062012.pdf
The Management Board of the Company as at the publication hereof was composed as follows:
● Michał Jarczyński – President of the Management Board appointed as of 1 February 2019;
● Katarzyna Wojtkowiak – Member of the Management Board appointed as of 9 May 2023;
● Fabian Langenskiöld – Member of the Management Board appointed as of 14 August 2023.
The Management Board was appointed for a new term of office by resolution of 9 May 2023.
Supervisory Board
COMPOSITION AND ORGANISATION OF THE SUPERVISORY BOARD
● The Supervisory Board is composed of 5 (five) to 7 (seven) Members elected by the General Meeting for a joint
three-year term of office. A Member of the Supervisory Board may be dismissed at any time.
● The Supervisory Board is composed of the Chair, Deputy Chairs and other Members. The Chair of the
Supervisory Board and Deputy Chair are elected by the Supervisory Board from among its Members at the first
meeting and – if so required – during the term of office in by-elections.
● Since the General Meeting approved resolutions on the first public issue of shares and having them listed, two
Members of the Supervisory Board have to be Independent Members.
● When an Independent Member of the Supervisory Board is nominated, resolutions on the following matters
require consent of minimum one Independent Member of the Supervisory Board:
● any benefits to be provided by the Company and any entity related to the Company for Members of the
Management Board;
● consent to the Company or its subsidiary to enter into a material agreement with a Member of the
Supervisory Board or the Management Board and with their related parties, other than agreements
concluded in the normal course of the Company’s business subject to normal terms and conditions applied
by the Company;
● election of auditor to perform audits of the Company’s financial statements.
● For the avoidance of doubt, it is assumed that loss of the independent status by a Member of the Supervisory
Board and failure to appoint an Independent Member of the Supervisory Board shall not invalidate the decisions
approved by the Supervisory Board. Loss by an Independent Member of their independent status during the
performance of their function of a Member of the Supervisory Board shall not affect the validity or expiry of their
mandate;
● In case of expiry of the mandate of a Member of the Supervisory Board before the term of office, the other
Members of the Supervisory Board shall be entitled to co-opt a new Member of the Supervisory Board is such
vacated position by way of a resolution approved with an absolute majority of the other Members of the
Supervisory Board. The mandate of such co-opted Member of the Supervisory Board shall expire if the first
Ordinary General Meeting to be held after such Member has been co-opted, fails to approve such Member. At
any time, only two persons elected as Members of the Supervisory Board in the co-option procedure and who
MANAGEMENT BOARD’S REPORT FOR 2025
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48
were not approved as candidates by the Ordinary General Meeting, may act as Members of the Supervisory
Board. Expiry of the mandate of a co-opted Member of the Supervisory Board as a result of failure to approve
such candidate by the Ordinary General Meeting may not be treated as finding any resolution approved with the
participation of such Member as invalid or ineffective.
● Chair and Deputy Chair of the Supervisory Board:
● maintain contact with the Company’s Management Board;
● manage the operations of the Supervisory Board;
● represent the Supervisory Board in external contacts and in contacts with the other bodies of the Company,
including in contacts with Members of the Company’s Management Board;
● approve the presentation of initiatives and proposals submitted for meetings of the Supervisory Board;
● take other actions as specified in the Company’s Regulations and Articles of Association;
● Members of the Supervisory Board should not resign from their function during the term of office if that could
prevent the operation of the Supervisory Board, in particular prevent timely approval of major resolutions;
● Members of the Supervisory Board shall be loyal to the Company. Should a conflict of interests arise,
Members of the Supervisory Board shall report it to other Members of the Supervisory Board and refrain from
participating in discussions and from voting on the issue to which the conflict of interests is related;
● Members of the Supervisory Board shall comply with law, the Company’s Articles of Association and
Regulations of the Supervisory Board.
COMPETENCES OF THE SUPERVISORY BOARD
● The Supervisory Board performs overall supervision over the business of the Company in all areas of its
operation.
● The Supervisory Board approves resolutions, issues recommendations and opinions and submits proposals to
the General Meeting.
● The Supervisory Board may not issue binding instructions to the Management Board concerning the
management of the Company’s affairs.
● Disputes between the Supervisory Board and the Management Board shall be resolved by the General Meeting.
● In order to exercise their rights, the Supervisory Board may review the business of the Company in any respect,
request the presentation of any documents, reports and clarification from the Management Board and issue
opinions on issues related to the Company and submit proposals and initiatives to the Management Board.
● Apart from other issues specified in law or in the Company’s Articles of Association, the competences of the
Supervisory Board include, inter alia:
● review of the financial statements of the Company;
● review of the Management Board’s report on Operations of the Company and proposals of the Management
Board concerning profit distribution and coverage of losses;
● submission to the General Meeting of an annual report from results of the above reviews;
● appointment and dismissal of Members of the Management Board, including the President and Vice-
Presidents, and setting the remuneration of Members of the Management Board;
● appointment of the auditor of the Company;
● suspension of Members of the Management Board in their functions for valid reasons;
● approval of annual financial plans for the capital group of which the Company and its subsidiaries are
members;
● approval of terms and conditions of bond issues by the Company (other than convertible bonds or bonds with
priority rights, referred to in Article 393.5 of the Code of Commercial Companies and Partnerships) and
issues of other debt securities, provision of consent to contract financial liabilities or taking actions resulting
in contracting any financial liabilities, such as borrowings, loans, overdraft facilities, conclusion of factoring,
forfaiting, lease contracts and other generating liabilities in excess of PLN 10,000,000;
● approval of the principles and amounts of remuneration of Members of the Management Board and other
persons in key management functions in the Company as well as approval of any incentive programme,
including incentive programmes for Members of the Management Board, persons in key management
functions in the Company or any persons cooperating with or related to the Company, including incentive
programmes for employees of the Company.
● Annually the Supervisory Board submits to the General Meeting a brief assessment of the Company’s condition
ensuring that it is made available to all shareholders at a time that they are able to review it before the Ordinary
General Meeting.
● The Supervisory Board concludes contracts with Members of the Management Board on behalf of the Company
and represents the Company in disputes with Members of the Management Board. The Supervisory Board may
authorise by way of a resolution one or more of its Members to perform such legal actions.
The Supervisory Board may approve resolutions in writing or with the use of direct means of remote
telecommunications. Resolutions approved as specified above shall be valid if all Members of the Supervisory
MANAGEMENT BOARD’S REPORT FOR 2025
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49
Board were notified of the content of the draft resolution. The approval date of the resolution approved as above
shall be equivalent to the date of signing by the last Member of the Supervisory Board.
Resolutions of the Supervisory Board may be approved when all Members have been notified by registered
letter, fax or e-mail message, sent minimum 15 days in advance and the meeting is attended by a majority of
Members of the Supervisory Board. Resolutions may be approved without formal convening a meeting when all
Members of the Supervisory Board agreed to vote on the specific issue or to the content of the resolution to be
approved.
Resolutions of the Supervisory Board require a simple majority of votes; in case of equal votes, the Chair of the
Supervisory Board shall have the casting vote;
The detailed mode of operation of the Supervisory Board is set forth in the Regulations of the Supervisory Board
with its updated version available at:
https://www.arcticpapergroup.com/globalassets/arcticpapergroup.com/02-about/04-corporate-
governance/corporate-documents/3_1_11-2016_appendix_eng_ap-sa---supervisory-board-bylaws_fin.pdf
The Supervisory Board of the Company as at the publication hereof was composed as follows:
● Per Lundeen – Chair of the Supervisory Board appointed on 14 September 2016;
● Roger Mattsson – Deputy Chair of the Supervisory Board appointed on 16 September 2014;
● Thomas Onstad – Member of the Supervisory Board appointed on 22 October 2008;
● Zofia Dzik – Member of the Supervisory Board appointed on 22 June 2021 (Independent Member);
● Anna Jakubowski – Member of the Supervisory Board appointed on 22 June 2021 (Independent Member).
By resolution of the General Meeting of 29 May 2024, the Supervisory Board was appointed for a new term of
office.
In 2025, the Supervisory Board held meetings on: 7 February, 22 April, 15 July, 10 June, 6 August, 21 October
and 16 December.
Audit Committee
COMPOSITION AND ORGANISATION OF THE AUDIT COMMITTEE
● The Audit Committee is composed of minimum three Members of the Supervisory Board, including the Chair of
the Committee, elected by the Supervisory Board from among its Members in compliance with the Articles of
Association and Regulations of the Supervisory Board.
● Members of the Audit Committee shall be appointed for three-year terms of office, however no longer than the
term of office of the Supervisory Board.
● The majority of the Audit Committee Members, including the Chair of the Audit Committee, must be Independent
Members.
● The Audit Committee operates on the basis of the Act on Statutory Auditors, Best Practice of WSE Listed
Companies, Regulations of the Supervisory Board and the Regulations of the Audit Committee.
● The Audit Committee performs advisory and consulting functions, operates as a collective body within the
Company’s Supervisory Board.
● The Audit Committee carries out its tasks by providing the Supervisory Board with its proposals, opinions and
reports on its scope in the form of resolutions.
● At least one Member of the Audit Committee shall have knowledge and skills in terms of accounting or auditing
financial statements. The Supervisory Board is of the opinion that the requirement of competences in the sphere
accounting and financial audit is recognised as satisfied if a Member of the Audit Committee has a major
experience in financial management in commercial partnerships, internal audit or audit of financial statements,
and additionally:
● has the title of a certified auditor or equivalent international certificate, or
● has an academic degree in the field of accounting or financial audit, or
● has long-term experience as a financial director in public companies or in working in an audit committee of
such companies.
● Members of the Audit Committee shall have knowledge and skills relating to the industry in which the Issuer
operates. This condition is recognised as satisfied if at least one Member of the Audit Committee has knowledge
and skills relating to that industry or individual Members within specific scopes have knowledge and skills
relating to the scope of that industry. The Supervisory Board is of the opinion that the requirement of
competences relating to the industry is recognised as satisfied if a Member of the Audit Committee has
information on the characteristics of the sector, that allows him to obtain a complete picture of the sector’s
complexity or has knowledge on part of the chain of activities carried out by the Company.
MANAGEMENT BOARD’S REPORT FOR 2025
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50
Competencies of the Audit Committee
● The basic task of the Audit Committee is advisory to the Supervisory Board on issues of proper implementation
and control of the financial reporting processes in the Company, effectiveness of the internal control and risk
management systems and cooperation with statutory auditors.
● The tasks of the Audit Committee resulting from supervising the Company’s financial reporting process,
ensuring the effectiveness of the Company’s internal control systems and monitoring of internal audit
operations, include in particular:
● control if the financial information provided by the Company is correct, including the accuracy and
consistency of the accounting principles applied in the Company and its Capital Group as well as the
consolidation principles of financial statements;
● carrying out at least annually, an assessment of the internal control and management system of the
Company and its Group to ensure proper identification and management of risks;
● ensuring the effective functioning of internal control, in particular by providing recommendations to the
Supervisory Board with respect to:
● strategic and operational internal audit plans and material modifications to such plans;
● internal audit policies, strategy and procedures, developed in compliance with the approved internal audit
standards;
● audits of specific areas of the Company’s operations.
● The tasks of the Audit Committee resulting from monitoring the independence of the statutory auditor and the
entity authorised to audit financial statements, include in particular:
● issuing recommendations to the Supervisory Board relating to the election, appointment and re-appointment
and dismissal of the entity acting as the statutory auditor;
● control of independence and impartiality of the statutory auditor, in particular with a view to replacing the
statutory auditor, the level of its remuneration and other relationships with the Company;
● verification of the effectiveness of the works performed by the statutory auditor;
● review of reasons of resignation by the statutory auditor.
● The Audit Committee may resort to advisory services and assistance by external legal, accounting or other
advisers if it finds it necessary to perform its duties.
● The Audit Committee is obliged to file annual reports from its operations to the Supervisory Board by 30
September in each calendar year.
The Audit Committee meets at least three times a year.
In 2025, the Audit Committee held meetings on: 1 April, 22 April, 11 August and 15 December.
As at 5 August 2021, the Audit Committee was composed of:
● Anna Jakubowski – Chair of the Audit Committee. Member meeting the criteria for independence. According to
the declaration submitted by Ms Anna Jakubowski, she meets the condition of knowledge and skills in
accounting or auditing. Ms Anna Jakubowski has several years of experience as a Member of the Audit
Committee of financial institutions, including Bank Millennium.
● Zofia Dzik – Member of the Audit Committee meeting the independence criteria. According to the declaration
submitted by Ms Zofia Dzik, she meets the condition of knowledge and skills in accounting or auditing. Ms Zofia
Dzik has several years of experience working for Arthur Andersen and Andersen Business Consulting, where
she was responsible, among others, for the area of auditing financial statements and consulting in the area of
finance.
● Roger Mattsson – Member of the Audit Committee – due to his long-standing experience as the financial
controller of the Arctic Paper Group and his participation in the Audit Committee for more than three years, Mr
Roger Mattsson fulfils the condition for the Audit Committee Member to have knowledge and skills in the
Company’s business. Additionally, he has knowledge and skills in the sphere of accounting or auditing financial
statements.
The detailed mode of operation of the Audit Committee is set forth in the Regulations of the Audit Committee.
Core assumptions underlying the policy of selecting an audit firm to conduct audits
● According to the regulations applicable to the Company, the Company’s Supervisory Board shall select – by
way of a resolution and acting under a recommendation of the Audit Committee – the auditor authorised to carry
out the audit.
● The selection is made taking into account the principles of impartiality and independence of the audit firm and
the analysis of the audit firm’s work carried out in the Company which falls beyond the scope of the audit of
financial statements, in order to avoid any conflict of interest (observance of impartiality and independence).
MANAGEMENT BOARD’S REPORT FOR 2025
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● A request for proposals concerning the selection of an audit firm for statutory audit of the Company’s financial
statements is developed by the Audit Committee in cooperation with the Company’s CFO.
● After analysing the submitted offers, the Audit Committee shall develop a recommendation with conclusions
from the selection procedure to be approved by the Audit Committee and shall submit a recommendation on the
selection of the audit firm to the Supervisory Board within such time that will support a resolution on audit firm
selection.
● The Supervisory Board shall select the audit firm on the basis of the submitted offers and after becoming
acquainted with the Audit Committee’s opinion and recommendation.
● If the Supervisory Board’s decision differs from the recommendation of the Audit Committee, the Supervisory
Board shall justify the reasons for its failure to comply with the Audit Committee’s recommendation and shall
submit such justification to the body approving the financial statements.
● The Company’s Management Board shall enter into a contract with the selected audit firm for the audit of
financial statements of the Company.
● The first contract is concluded for minimum 2 years and it may be extended for another two or three years. The
duration of the cooperation shall be counted from the first financial year covered by the audit contract, in which
the authorised auditor was appointed for the first time to carry out the consecutive statutory audits of the
Company.
● After expiry of the maximum period of the cooperation, the authorised auditor or, where applicable, any member
of its network, may not undertake a statutory audit of the Company’s financial statements for further 4 years.
● The key statutory auditor may not perform a statutory audit in the Company for a period longer than 5 years.
The key statutory auditor may conduct a statutory audit again after the expiry of 3 years.
● The maximum period of uninterrupted performance of statutory audits by the same audit firm or an audit firm
related to that audit firm or any member of the network operating in the European Union of which the audit firms
are members, may not exceed 10 years.
Core assumptions underlying the policy of the provision of permitted services other than audit services by
the audit firm performing the audit, by entities related to the audit firm and by a member of the audit firm’s
network:
● The Audit Committee of Arctic Paper S.A. shall be responsible for the policy covering the provision of permitted
services other than audit services by the audit firm performing the audit, by entities related to the audit firm and
by a member of the audit firm’s network.
● The Audit Committee of Arctic Paper S.A. controls and monitors the independence of the auditor and the audit
firm, in particular if the audit firm provides other services than audit of statutory financial statements to Arctic
Paper S.A.
● The Audit Committee of Arctic Paper S.A., when so requested by a competent body or person, approves the
provision of permitted services by the auditor that are not an audit of Arctic Paper S.A.
● The prohibited services do not include:
● carrying out due diligence procedures for economic and financial condition;
● issue of letters of support;
● attestation services related to pro forma financial information, forecast of results, or estimation of results,
contained in the issue prospectus of the audited entity;
● review of historic financial information for projects referred to in the Commission Regulation (EC) No
809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council
as regards information contained in prospectuses as well as the format, incorporation by reference and
publication of such prospectuses and dissemination of advertisement;
● verifying consolidation packages;
● confirming the fulfilment of terms and conditions of concluded loan agreements on the basis of the analysis
of financial information from the financial statements audited by the audit firm;
● attestation services related to reporting on corporate governance, risk management, and corporate social
responsibility;
● services consisting in assessing the conformity of information disclosed by financial institutions and
investment firms with requirements for disclosure of information on capital adequacy and variable
remuneration components;
● certifying financial statements or other financial information intended for supervisory authorities, supervisory
board or other supervisory body of the Company or owners, which falls beyond the scope of statutory audit
and helps these bodies to fulfil their statutory obligations.
● Provision of the above services is possible solely to the extent not related to the entity’s tax policies after a
review by the Audit Committee of hazards and mitigants of the audit firm’s independence as referred to in Article
69-73 of the Act on Certified Auditors, Audit Firms and Public Supervision.
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On 06 August 2025, the Company’s Supervisory Board, based on the Audit Committee’s recommendation on the
selection of an auditor, decided to select PricewaterhouseCoopers Polska Spółka z ograniczoną
odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic Paper S.A. Group to audit the
financial statements for 2025 and 2026. The recommendation of the Audit Committee was issued as a result of the
selection procedure in compliance with the “Policy and procedure for the selection of the audit firm for the statutory
and voluntary audit of the consolidated and separate financial statements of Arctic Paper S.A. with its registered
office in Kostrzyn nad Odrą”. The audit firm and members of its team performing the audit comply with the
requirements to make an impartial and independent report from the audit of the annual consolidated and separate
financial statements of the Arctic Paper Group and of the Company in compliance with the applicable regulations,
professional standards and the rules of professional ethics.
Remuneration Committee
COMPOSITION AND ORGANISATION OF THE REMUNERATION COMMITTEE
● The Remuneration Committee is composed of minimum two Members of the Supervisory Board, including the
Chair of the Committee, elected by the Supervisory Board from among its Members in compliance with the
Articles of Association and Regulations of the Supervisory Board.
● Members of the Remuneration Committee shall be appointed for three-year terms of office, however no longer
than the term of office of the Supervisory Board.
● The Chair of the Remuneration Committee shall be elected with a majority of votes of its Members.
● The Remuneration Committee operates pursuant to the Regulations of the Supervisory Board and the
Regulations of the Remuneration Committee.
● The Remuneration Committee performs advisory and consulting functions, operates as a collective body within
the Company’s Supervisory Board.
● The Remuneration Committee carries out its tasks by providing the Supervisory Board with its proposals,
opinions and reports in the form of resolutions.
COMPETENCES OF THE REMUNERATION COMMITTEE
● The basic task of the Remuneration Committee is advisory support to the Supervisory Board on issues related
to remuneration policy, bonus policy and other issues related to the remuneration of the employees, Members of
the Company’s authorities and the authorities of Capital Group companies.
● The tasks of the Remuneration Committee resulting from supervision over the Company’s remuneration policy
and ensuring the effective functioning of the Company’s remuneration policy, is to provide recommendations to
the Supervisory Board in particular with respect to:
● approval and changes to the remuneration principles of Members of the Company’s bodies;
● the amount of total remuneration to Members of the Company’s Management Board;
● legal disputes between the Company and Members of the Management Board with respect to the tasks of
the Committee;
● proposing remuneration and approving additional benefits to Individual Members of the Company’s bodies, in
particular under management option plans (convertible into shares of the Company);
● strategy of the Company’s remuneration and bonus policies and HR policies.
● The Remuneration Committee may resort to advisory services and assistance by external legal or other
advisers if it finds it necessary to perform its duties.
● The Remuneration Committee is obliged to file annual reports from its operations to the Supervisory Board by
30 September in each calendar year.
On 31 August 2020, the General Meeting of the Company, bearing in mind Article 90d(1) in connection with Article
90c(2)(1) of the Act of 29 July 2005 on public offerings and conditions for the introduction of financial instruments
into the organised trading system and on public companies (i.e. Journal of Laws of 2022, item 2554, as amended)
adopted the “Remuneration Policy for Members of the Management Board and Members of the Supervisory Board
of Arctic Paper S.A.”. Under the aforementioned Acts of public companies, including the Company, were obliged to
adopt, by resolution, the Remuneration Policy of Management Board and Supervisory Board Members, which is the
rules for determining the remuneration of Members of the Management Board and Supervisory Board, by the
General Meeting of Shareholders, and to publish a remuneration report. The Company shall pay remuneration to
the Members of the Management Board and the Supervisory Board solely in compliance with the adopted Policy.
The policy prepared by the Company was drawn up in accordance with the principles set out in the aforementioned
Act and refers to the required elements related to remuneration and other terms of employment for Members of the
Management Board and Members of the Supervisory Board. The policy received an opinion from the Remuneration
Committee operating at the Supervisory Board, as well as by the Supervisory Board.
On 11 June 2025, the General Meeting of the Company gave a positive opinion on the remuneration report for
2024 prepared by the Supervisory Board. The resolution of the General Meeting on the aforementioned subject is
MANAGEMENT BOARD’S REPORT FOR 2025
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advisory. The report was reviewed by the auditor. The independent auditor’s report on the performance of a service
providing reasonable assurance on the assessment of the remuneration report was attached as Appendix 2 to
current report No. 11/2025 – “Resolutions adopted by the Annual General Meeting of Arctic Paper S.A. on 11 June
2025”.
Remuneration Committee meetings were held on: 18 February, 13 March, 21 March, 27 March, 17 April.
Since 9 February 2017 the Remuneration Committee has been operating in the following composition:
● Per Lundeen – Chair of the Remuneration Committee;
● Thomas Onstad – Member of the Remuneration Committee;
● Roger Mattsson – Member of the Remuneration Committee.
The detailed mode of operation of the Remuneration Committee is set forth in the Regulations of the Remuneration
Committee.
Risk Committee
COMPOSITION AND ORGANISATION OF THE RISK COMMITTEE
● The Risk Committee is composed of minimum three Members of the Supervisory Board, including the Chair of
the Committee, elected by the Supervisory Board from among its Members. Minimum one Member of the Risk
Committee shall be an Independent Member and hold qualifications and experience in the sphere of finances.
● Members of the Risk Committee shall be appointed for three-year terms of office, however no longer than the
term of office of the Supervisory Board.
● The Chair of the Risk Committee shall be elected with a majority of votes of its Members.
● The Risk Committee operates on the basis of commonly accepted corporate risk management models (e.g.
COSO-ERM).
● The Risk Committee performs advisory and consulting functions, operates as a collective body within the
Company’s Supervisory Board.
● The Risk Committee carries out its tasks by providing the Supervisory Board with its proposals, opinions and
reports in the form of resolutions.
COMPETENCES OF THE RISK COMMITTEE
● The basic task of the Risk Committee is advisory support to the Supervisory Board on issues related to the
proper identification, assessment and control of potential risks, i.e. opportunities and threats to realisation of the
Company’s strategic goals, with particular consideration for financial risk, related to both external factors (such
as volatility of foreign exchange rates, interest rates, general international economic condition) and internal
factors (such as cash flows, liquidity management, variation of budget and financial forecasts).
● The tasks of the Risk Committee resulting from the supervision over the risk management process, include in
particular:
● supervision over correct identification, analysis and assigning priority to types of risk inherent in the
operational strategy and business pursued;
● confirmation to the identified risk appetite of the Company;
● verification if actions used to mitigate risk are planned and implemented so that the risk is mitigated to a level
acceptable by the Company;
● monitoring verifying correct risk assessment by the Management Board and the effectiveness of control
tools;
● supervision over correct notification of stakeholders on the risks, risk strategies and control tools.
● The Risk Committee may resort to advisory services and assistance by external advisers if it finds it necessary
to perform its duties.
Since 5 August 2021 the Risk Committee has been operating in the following composition:
● Per Lundeen – Chair of the Risk Committee;
● Zofia Dzik – Independent Member of the Risk Committee;
● Roger Mattsson – Member of the Risk Committee.
The Risk Committee held a meeting on 15 December 2025.
INFORMATION COMPLIANT WITH THE REQUIREMENTS OF SWEDISH REGULATIONS CONCERNING
CORPORATE GOVERNANCE.
Arctic Paper S.A. is a company registered in Poland whose shares have been admitted to trading at the Warsaw
Stock Exchange and at NASDAQ in Stockholm. The Company’s primary market is in Warsaw with a parallel market
MANAGEMENT BOARD’S REPORT FOR 2025
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in Stockholm. Companies not registered in Sweden which shares have been admitted to trading at NASDAQ in
Stockholm are obliged to comply with:
● the corporate governance rules in force in the country of their registration or
● the corporate governance rules in force in the country where they have their primary trading market, or
● the Swedish corporate governance code (hereinafter: the “Swedish Code”).
Arctic Paper S.A. follows the principles set forth in the “Best Practice of WSE Listed Companies 2021” (hereinafter:
“Best Practice”) that may be applied by companies listed at the Warsaw Stock Exchange and not the Swedish
Code. As a result, the conduct of Arctic Paper S.A. is different from the one set forth in the Swedish Code in the
following material aspects.
Shareholders’ meeting
The core documents related to General Meetings of Shareholders, such as notices, reports and approved
resolutions, are made in Polish and in English instead of Swedish.
Appointment of Company bodies
The Polish corporate governance model provides for a two-tier system of the Company’s bodies which is
composed of the Management Board being the executive body appointed by the Supervisory Board, which in turn
supervises the Company’s operations and is appointed by the General Meeting of Shareholders. Auditors are
selected by the Supervisory Board.
Neither the Best Practice, nor any other Polish regulations require the establishment of a commission in the
Company to elect candidates and therefore such commission does not exist among the bodies of the Company.
Each shareholder may propose candidates to the Supervisory Board. Appropriate information on candidates
proposed to the Supervisory Board is published on the Company’s website with appropriate advance so that all
shareholders could take an informed decision when voting on the resolution appointing a new Member of the
Supervisory Board.
Tasks of Company bodies
In accordance with the principles of the dualistic governance structure of the Company, the duties typically
performed by the Management Board of a Company incorporated under Swedish law are performed by either the
Management Board or the Supervisory Board of a Company incorporated under Polish law.
In accordance with the Polish applicable regulations, Members of the Management Board, including its General
Director who is the President of the Management Board, may not get involved in competitive activities outside the
Company. Pursuing of other business outside the Company is not regulated either in the Best Practice or other
Polish regulations; however, certain restrictions are usually incorporated in individual employment contracts.
Size and composition of the Company’s bodies
The composition of the Supervisory Board should reflect the independence criteria, just like those specified in the
Swedish Code. However, the Management Board being the executive body is composed of persons in executive
positions at Arctic Paper S.A., and these Members may not be treated as independent of the Company. The terms
of office of Members of the Management Board – just like the Members of the Supervisory Board – lasts three
years.
Chairs of the Company’s bodies
The Supervisory Board, rather than the Shareholders’ Meeting, elects a Chair and a Deputy Chair from among its
members.
Procedures of the Company’s bodies
Both the rules of procedure of the Management Board and the rules of procedure of the Supervisory Board are
adopted by the Supervisory Board. The Regulations are not reviewed each year – they are reviewed and modified
as need arises. The same principles apply to regulations of Committees operating within the Supervisory Board
that are approved by the Supervisory Board. The operation of the General Director is not regulated separately
since he/she also acts as the President of the Management Board.
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55
Remuneration of members of the bodies of the Company and management staff
The Company shall pay remuneration to the Members of the Management Board and the Supervisory Board solely
in compliance with the Remuneration Policy adopted by the General Meeting.
Information on corporate governance
The Polish corporate governance rules do not require the same detail as to the disclosed information as required
by the Swedish Code. However, information on Members of the Company’s bodies, Company’s Articles of
Association, internal regulations and a summary of material differences between the Swedish and Polish approach
to corporate governance and shareholders’ rights is published on the Company’s website.
MANAGEMENT BOARD’S REPORT FOR 2025
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56
INFORMATION OF THE MANAGEMENT BOARD OF ARCTIC PAPER S.A. ON THE SELECTION OF THE
AUDITING COMPANY
Based on the statement of the Supervisory Board of Arctic Paper S.A. on the selection of the auditing firm to audit
the annual consolidated financial statements of the Arctic Paper Group and the annual separate financial
statements of the Company for the financial year ended on 31 December 2025 in accordance with the regulations
and on the basis of the statement received from PricewaterhouseCoopers Polska spółka z ograniczoną
odpowiedzialnością Audyt sp.k, it was decided to select PricewaterhouseCoopers Polska Spółka z ograniczoną
odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic Paper S.A. Group to audit the
financial statements for 2025 and 2026.
The Management Board of the Company informs that the selection of the auditing firm by the Supervisory Board
took place in accordance with the regulations and the “Policy and procedure for the selection of the audit firm for
the statutory and voluntary audit of the consolidated and separate financial statements of Arctic Paper S.A. with its
registered office in Kostrzyn nad Odrą”.
The audit firm and members of the audit team complied with the criteria to issue an impartial and independent
report on the audit of the annual consolidated financial statements of the Company for the financial year ended on
31 December 2025, in compliance with the applicable laws, professional standards, and the principles of
professional conduct.
The Management Board of the Company also informs that the applicable laws with regard to a change of the
audit firm and the key statutory auditor, as well as mandatory cooling-off periods have been complied with. The
Arctic Paper Group has a policy relating to the selection of the auditing company and a policy of the provision of
services that are not an audit by the audit firm, entities related to the audit firm or a member of its group, including
services that are not covered with the ban on being provided by audit firms.
Signatures of the Members of the Management Board
Position
First and last name
Date
Signature
President of the Management Board
CEO
Michał Jarczyński
21 April 2026
signed with a qualified
electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak
21 April 2026
signed with a qualified
electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld
21 April 2026
signed with a qualified
electronic signature
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
57
Statements of the Management Board
ACCURACY AND RELIABILITY OF THE PRESENTED REPORTS
Members of the Management Board of Arctic Paper S.A. represent that to the best of their knowledge:
● The consolidated financial statements of the Arctic Paper Group for the year ended on 31 December 2025 and
the comparable data were prepared in compliance with the applicable accounting principles and they present
fairly the financial position of the Capital Group and its financial result for 2025 in a true, reliable and clear
manner.
● The Management Board’s Report from operations of the Arctic Paper Group in 2025 contains a true image of
the development, achievements and condition of the Arctic Paper Group, including a description of core hazards
and risks.
MANAGEMENT BOARD’S REPORT FOR 2025
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58
REPORT FOR 2025
OF ARCTIC PAPER SA
Sustainability
reporting
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
59
Sustainability reporting
1. GENERAL INFORMATION
ESRS 2 General disclosures
BP-1 General basis for the preparation of the Sustainability Statement
[BP-1, 3, 5a] This Sustainability Statement applies to the Arctic Paper S.A. Group (the “Group”). The statement
covers the period from 1 January 2025 to 31 December 2025. Pursuant to Act of 6 December 2024 amending the
Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Supervision (Journal of Laws of 2024, item
1863), Arctic Paper S.A. has prepared a Sustainability Statement for the Arctic Paper S.A. Group for the year
ending 31 December 2025 in accordance with the European Sustainability Reporting Standards (ESRS) as
endorsed by Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive
2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards.
[BP-1, 5bi] The Company has included a Sustainability Statement as part of the Consolidated Management Report
on the Operations of the Arctic Paper S.A. Group. The Sustainability Statement has been prepared in consolidated
form and has a scope of consolidation consistent with the Consolidated Financial Statements of the Arctic Paper
S.A. Group for 2025.
[BP-1, 5bii] The full list of companies covered by the Sustainability Statement can be found on page 4. The
Arctic Paper S.A. Group’s consolidated financial report for 2025.
[BP-1,5c] The Sustainability Statement applies to the upstream and downstream value chain including suppliers
and customers of the Arctic Paper S.A. Group. The Company has taken into account in the prepared Statement the
material impacts, risks and opportunities associated with direct and indirect business relationships in the value
chain.
[BP-1, 5d] The option to omit specific information relating to intellectual property, know-how or innovation results
has not been exercised in accordance with ESRS 1 Section 7.7 “Classified and sensitive information and
information on intellectual property, know-how or innovation results”.
[BP-1, 5e] An exception allowing for the omission of disclosure of impending events or matters during
negotiations for companies based in an EU Member State has also not been applied.
BP-2 Disclosures in relation to special circumstances
[BP-2, 6, 9] The Sustainability Statement of the Arctic Paper Group uses the definitions of short-, medium- and
long-term time horizons in accordance with section 6.4 of ESRS 1. The exception are the analyses of climate risks
carried out, where a 10-year horizon was adopted for the long-term time perspective (described in more detail in
the SBM-3 indicator for ESRS E1 Climate change).
[BP-2, 10, 11, 12] The figures presented in this Statement are derived from internal sources. The exception to
this is the calculation of GHG emissions, which is based on both own and external sources, as described in the
Statement in section E1-6 Gross Scope 1, 2 and 3 GHG emissions and total GHG emissions. The Group does not
identify quantitative metrics and amounts in this Statement that are subject to a high level of measurement
uncertainty, other than those resulting from the estimation of value chain emissions, i.e. Scope 3 greenhouse gas
(GHG) emissions.
[BP-2, 13, 14] During the preparation of the 2025 Sustainability Statement, an inaccuracy was identified in the
reporting of wastewater discharges for the previous reporting period. The inaccuracy resulted from an incorrect
reference to a formula in an Excel file. In the item regarding Arctic Paper Kostrzyn, instead of the value referring to
the discharge of treated wastewater to the river, data from the previous year regarding the category "sludge from
wastewater treatment plants" was used.
Consequently, the volume of wastewater discharged at the Kostrzyn plant and at the Group level was
inadequately reported. Furthermore, the reported water discharges did not include the volume of uncontaminated
cooling water discharged to the river. The corrected data was included in Disclosure E3-4.
Additionally, an error was identified in the presentation of data on the quantities of hazardous substances for the
previous reporting period. The inaccuracy resulted from an incorrect assignment of data to specific hazard classes
and discrepancies in the aggregation of volumes in the table, which resulted in the distortion of some totals. After
verifying the source data, corrections were made to the assigned data and calculations, and the corrected values
were presented in the updated Disclosure E2-5.
Furthermore, due to the acquisition of more precise emission factors for purchased chemical raw materials, the
Arctic Paper Group changed its methodology for calculating greenhouse gas emissions within Scope 3. This
MANAGEMENT BOARD’S REPORT FOR 2025
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change applies to calcium carbonate, for which an emission factor was applied that better reflects the actual
production process. The corrected values are included in Disclosure E1-6.
[BP-2, 15] The Arctic Paper Group does not have any other legislation in place that requires the company to
disclose sustainability information or generally accepted sustainability reporting standards and frameworks
[BP-2, 16] The Arctic Paper Group does not use incorporation by reference in this Statement.
[BP-2, 17] During the reporting period, the Arctic Paper Group exercised the option to voluntarily omit
disclosures on the basis of the “List of phased-in disclosure requirements” (Appendix C in ESRS 1) and the
Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated Regulation (EU)
2023/2772 as regards the deferral of the date of application of disclosure requirements for certain companies (the
so-called “Quick fix”):
Disclosure requirement
Full name of the requirement for which the omission of information has been
used
ESRS E1, E1-9
Anticipated financial impacts from material physical and transition risks and
climate-related opportunities
ESRS E2, E2-6
Potential financial effects from pollution-related impacts, risks and
opportunities
ESRS E3, E3-5
Anticipated financial effects from impacts, risks and opportunities associated
with water and marine resources
ESRS E4
All disclosures relating to ESRS standard E4
ESRS E5, E5-6
Anticipated financial effects from impacts, risks and opportunities associated
with resource use and the circular economy
ESRS S1, S1-7
Characteristics of non-employees working for the undertaking
ESRS S1, S1-8
Scope of collective bargaining and social dialogue
ESRS S1, S1-11
Social protection
ESRS S1, S1-12
Percentage of employees with disabilities
ESRS S1, S1-13
Training and skills development
ESRS S1, S1-15
Work-life balance
ESRS S2
All disclosures relating to ESRS standard S2
ESRS S3
All disclosures relating to ESRS standard S3
ESRS S4
All disclosures relating to ESRS standard S4
[BP-2, 17] Background information on the topics for which information omission was used in 2025:
ESRS E4: The topic of biodiversity is linked to the Arctic Paper Group’s business model through its reliance on key
raw materials, particularly wood and water, whose availability and quality depend on the health of ecosystems. The
sourcing of wood for pulp production is from certified suppliers (FSC or PEFC) and from sustainably managed
forests, which reduces the adverse impact on biodiversity. Biodiversity issues are not currently directly linked to the
Group’s strategy but are of significant operational importance. The potential impact of activities on ecosystems can
arise from GHG emissions and air, water and soil pollution, as well as from the use of natural resources. The Group
undertakes actions including optimising raw material consumption, identifying key ecosystem services and
monitoring the supply chain. The Arctic Paper Group has not adopted a separate policy related to biodiversity and
ecosystems. The strategy adopted by the organisation is to minimise the environmental impact, which is governed
by the Environmental Policy and the Sustainability Policies, among others. The Arctic Paper Group’s biodiversity
goal is to source pulp from suppliers that are 100% FSC or PEFC certified.
ESRS S2: The topic related to people doing work in the value chain is linked to the Arctic Paper Group’s business
model through the dependence of maintaining the continuity of production operations on regular supplies of raw
materials and the work of people involved in the supply chain. Ensuring that the operations of raw material and
service suppliers comply with the law, including human rights, is directly relevant to the continuity of supply of
critical raw materials. The Group regularly communicates, assesses and monitors suppliers for compliance with
legal requirements and ethical standards. Part of this effort is the obligation to sign up to the Arctic Paper Group
Code of Conduct for the value chain, covering social, human rights and environmental issues, among others.
MANAGEMENT BOARD’S REPORT FOR 2025
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Policies related to employees in the value chain in place in the Arctic Paper Group and their thematic scope:
• the Arctic Paper Group Value Chain Code of Conduct – the Group’s core principles of conduct, ethics and
values;
• Whistleblowing and Whistleblower Protection Policy – an anonymous whistleblowing service.
• The policies related to employees in the value chain in place at the Rottneros AB Group cover the following
topics:
• Code of Conduct – a description of the key principles and values of Rottneros AB;
• Supplier code of ethics – business ethics of suppliers, description of conduct and behaviour when working
with suppliers;
• Whistleblowing and Whistleblower Protection Policy – an anonymous whistleblowing service.
These actions support conduct in line with the Group’s values throughout the value chain. Non-compliance by
suppliers can lead to disruption of supply and increased costs due to the need to source alternative partners.
Responsible supply chain management strengthens operational stability and reduces reputational risks. The Arctic
Paper Group has not adopted quantitative targets related to people working in the value chain.
ESRS S3: The topic related to affected communities is linked to the Arctic Paper Group’s business model through
the nature of its manufacturing operations and the Group’s role as a significant employer in the regions in which it
operates. Relationships with local communities are of operational and reputational importance, supporting conduct
in line with the Group’s values. Noise generation is a direct result of the nature of the production processes and
represents a material impact on the local environment. Noise abatement may require decisions on changes to
production processes or the implementation of mitigating measures. In 2025, the Kostrzyn plant carried out
investments to reduce noise – installation of acoustic protection in the form of noise-reducing curtains and noise
attenuators at four noise emission sources. The measurement carried out did not reveal any noise in excess of the
standards. Maintaining positive relationships with local stakeholders promotes operational stability and reduces
potential social risks. The Arctic Paper Group has not adopted a separate policy related to affected communities,
but references to them can be found in other Group policies such as the Arctic Paper Group Value Chain Code of
Conduct and the Code of Conduct for the Rottneros Group. The Arctic Paper Group has not adopted quantitative
targets related to affected communities.
ESRS S4: The consumer and end-user topic (focusing on safety and the impact of the products offered) is linked to
the Arctic Paper Group’s “4P” strategy (described in more detail in subsection SBM-1) across all its pillars. Actions
concerning the certification of raw materials, the reduction of the environmental footprint, resulting from the various
pillars of the strategy translate into an increase in the offer to consumers of sustainable products responding to
market needs and consumer expectations. Paper production is based on the use of chemicals that can be
potentially hazardous and affect the health of consumers. This impact is linked to the business model, and the use
of these substances is strictly controlled during production in accordance with the applicable standards and
regulations. It is not ruled out that the strategy will in future include objectives to minimise the use of potentially
hazardous substances by investing in safe alternatives and risk management systems. The Arctic Paper Group has
not adopted separate policies or quantitative targets related to consumers and end-users.
GOV-1 Role of administrative, management and supervisory bodies
[GOV-1, 21] The Arctic Paper Group’s Management Board has a key operational and decision-making role in the
Company’s strategy and operations, taking into account environmental, social responsibility and corporate
governance issues. The Management Board of the Group consists of three members elected by the Supervisory
Board for a joint three-year term. The Management Board consists of the Managing Director, the Chief Financial
Officer and the Chief Sales Officer. As at 31 December 2025, the Management Board of Arctic Paper S.A.
consisted of 2 men and 1 woman.
[GOV-1, 21 a, d] Table – Gender diversity in the structure of governing bodies
Miernik
2025
2024
Total count of Management Board
3
3
Percentage of women on the Management Board
33%
33%
Percentage of men on the Management Board
66%
66%
MANAGEMENT BOARD’S REPORT FOR 2025
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[GOV-1, 21c] At 31 December 2025, the Management Board of the Arctic Paper Group comprises:
Michał Jarczyński
President of the Management Board and CEO, General Director
He directs and supervises the activities of the management area.
From 2008 to 2013, Mr Michał Jarczyński served as President of the
Management Board and General Director of Arctic Paper S.A. He
obtained the title of mechanical engineer from the Poznań University of
Technology; he also completed postgraduate studies in finance and
controlling at the Poznań University of Economics. Mr Michał Jarczyński
has held numerous managerial positions in Polish industry, most recently
as CEO of Radpol S.A., a Polish technology company listed on the WSE.
He has more than 15 years’ experience in the paper industry.
Katarzyna Wojtkowiak
Member of the Management Board and CFO, Chief Financial Officer
She directs and supervises the activities of the financial area.
Ms Katarzyna Wojtkowiak has many years of experience in positions in
finance departments. She has been with the Arctic Paper Group for more
than 11 years, where she served as Chief Accountant and Group
Treasury. Ms Katarzyna Wojtkowiak graduated from the Poznań
University of Economics with a specialisation in Capital Investments and
Financial Strategies of Enterprises; she is also a certified auditor and a
member of the Association of Chartered Certified Accountants (ACCA)
Fabian Langenskiöld
Member of the Management Board and Vice-President of Sales and
Marketing at Arctic Paper
He directs and supervises the company’s sales and marketing activities.
Mr Fabian Langenskiöld joined Arctic Paper in 2019 and serves as Vice-
President of Sales and Marketing. He holds a master’s degree in economic
sciences from the Hanken School of Economics in Helsinki, Finland. He has
more than 25 years of experience in marketing and sales in the paper
industry. Previously, he held important positions at companies such as
Stora Enso and Shandong Chenming Paper Holdings. In his current role, he
is responsible for leading the sales and marketing activities at Arctic Paper
Group.
The Management Board of the Group Paper Group is supported by the managing directors of the individual paper
and pulp mills, as well as the managing directors of the sales offices.
[GOV-1, 21e] The composition of the bodies of Arctic Paper S.A. does not distinguish between independent
members of the management board. Such distinction exists in the structures of subsidiaries based in Sweden.
[GOV-1, 21b] The Management Board and Supervisory Board of Arctic Paper S.A. do not include
representatives of the organisation’s employees. They sit on the boards of Arctic Paper Group companies based in
Sweden.
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The Arctic Paper Group Management Team consists of Executive Vice-Presidents responsible for various areas
of the Arctic Paper Group business, including strategy and sustainability. Persons comprising the Management
Team as at 31 December 2025:
• Michał Jarczyński – General Director of Arctic Paper S.A., Managing Director of Arctic Paper Kostrzyn S.A.
• Katarzyna Wojtkowiak – Chief Financial Officer, Arctic Paper S.A.
• Fabian Langenskiöld – Executive Vice-President of Sales and Marketing, Arctic Paper S.A.
• Jacek Łoś – Executive Vice-President of Procurement, Arctic Paper S.A.
• Wolfgang Lübbert – Executive Vice-President of Strategy and Sustainability, Arctic Paper S.A.
• Mats Frostne – Group HR Manager Arctic Paper S.A.
• Kent Blom – Managing Director of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB
[GOV-1, 20c] The members of the Management Board and the Supervisory Board of the Arctic Paper Group are
knowledgeable in sustainability-sensitive management regarding human capital, occupational safety and security,
environmental and climate impacts of production. The expertise of the Management Board and Supervisory Board
covers areas related to business management, technical expertise in production, including modern technology,
green energy, sustainable raw materials and products. Knowledge of sustainability-related regulations is passed
on, among other things, during meetings of the Supervisory Board
[GOV-1, 22] The sustainability reporting process is advised by the Sustainability Team, which is made up of
managerial level employees representing various functions and positions within the Arctic Paper Group.
Responsibility for reporting on sustainability issues is within the remit and competence of each team member.
Members of the Sustainability Team are provided with access to expertise in the form of training courses,
workshops, study programmes and also benefit from professional advice from external experts. The sustainability
team reports directly to the Management Board of the Arctic Paper Group on the management of sustainability
issues, including impacts, risks and opportunities.
[GOV 1, 21] The Group’s Supervisory Board consists of five members elected by the General Meeting for a joint
three-year term. Two members are independent. As at 31 December 2025, the Supervisory Board of Arctic Paper
consisted of 3 men and 2 women.
[GOV 1, 21] Table – Diversity in the structure of supervisory authorities
Metric
2025
2024
Total count of Supervisory Board
5
5
Percentage of independent members of the Supervisory Board
40%
40%
Percentage of women on the Supervisory Board
40%
40%
Percentage of men of the Supervisory Board
60%
60%
MANAGEMENT BOARD’S REPORT FOR 2025
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[GOV 1, 21c] As at 31 December 2025, the Supervisory Board of the Arctic Paper Group comprises:
Per Lundeen
Chair of the Supervisory Board
Mr Lundeen has been involved with the Arctic Paper Group since 2013,
at which time he was a member of the Supervisory Board of Rottneros
AB. From 2014 to August 2016, he served as President and Managing
Director of Rottneros AB. Since then, he has been President of the
Management Board of Rottneros AB. In addition, Mr Lundeen sits on the
Supervisory Boards of the following companies:
• Fiskeby Board AB: Manufacturer of renewable cardboard packaging;
• Rottneros AB: Pulp producer;
• Strand Packaging AB: Manufacturer of cardboard and cardboard
packaging.
Mr Per Lundeen, a Swedish citizen residing in Lund, is a graduate of
Chemical Engineering and Paper Technology at Chalmers University of
Technology, Goteborg. He has held management positions in the
chemical, paper and packaging industries for 40 years. He worked at
A&R Packaging Group for 20 years, including 12 years as President and
Managing Director. He was also President of ECMA – the European
Carton Manufacturers Association. Mr Per Lundeen holds the office of
Chair of the Remuneration Committee and the Risk Committee.
Roger Mattsson
Vice-Chair of the Supervisory Board
Mr Roger Mattson has served as a member of the Supervisory Board
since 2014. He also currently holds the position of Chief Financial Officer
at Nemus Holding AB.
He holds a university degree in Business, Economics and Law from the
University of Gothenburg. Mr Mattsson has extensive experience in work
in financial and controlling departments, he worked as a group controller
(Toyota Material Handling and Rexam) and as financial manager
(Lantmännen Doggy). He was also the Financial Director Talent Plastics
Group. Mr Mattsson was already involved with the Arctic Paper Group –
from 2007 to 2011, he worked as Group financial controller at Arctic
Paper.
Mr Roger Mattsson is a member of the Audit Committee. Due to his long
experience as financial controller of the Arctic Paper Group and his
several years of experience as a member of committees of the
Company’s Supervisory Board. In addition, it fulfils the condition for a
member of the Audit Committee to have knowledge and skills in the
subject matter of the Company’s business. Mr Roger Mattsson also
serves as a member of the Remuneration Committee and the Risk
Committee.
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Thomas Onstad
Member of the Supervisory Board
Mr Thomas Onstad has served as a Member of the Supervisory Board of
Arctic Paper S.A. since 2008.
He graduated from the London School of Foreign Trade.
He is also a member of the Remuneration Committee.
Zofia Dzik
Member of the Supervisory Board
Ms Zofia Dzik has been an independent member of the Supervisory
Board since 2021.
She also currently sits on the Supervisory Boards of the following
companies:
• Inter Cars SA;
• PTE Generali SA.
• In the past, Ms Zofia Dzik served as a Member of the Supervisory
Boards of the following companies:
• BRW S.A. – a leading furniture manufacturer and distributor in Poland
and Europe (Vice-President);
• PKP CARGO S.A. – Europe’s leading logistics operator and rail freight
carrier (member of the Audit Committee, Chair of the Nomination
Committee);
• Sanok Rubber S.A. – an international manufacturer of rubber products;
• CCC S.A. – fashion industry, production and sale of footwear and
clothing (member of the Audit Committee)
• InPost S.A. – logistics operator;
• PKO Bank Polska SA;
• AmRest CE – an international operator that manages food service
brands.
Ms Zofia Dzik is a graduate of the Cracow University of Economics, the
University of Illinois in Chicago, the Warsaw School of Social Sciences
and Humanities and the Executive Programs of Stanford University and
INSEAD Business School. She holds an MBA from Manchester
Business School. She is a mentor, a certified member of the Association
for Project Management (APM), and a certified member of The John
Maxwell Team, a leading international organisation of leadership
experts.
From 1995 to 2003, she was a consultant at Arthur Andersen and
Andersen Business Consulting and was Director of the Insurance
Department responsible for, among other things, projects for the financial
services sector in the following areas: strategy, business scalability,
mergers, omni-channel sales strategy, reorganisation and finance.
Since 2003, she has been involved with the fintech Group Intouch
Insurance (RSA Group), where she served as CEO of Link4 S.A., the
first direct insurer in Central and Eastern Europe, from 2004 to 2007
(start-up, brand building, CRM, process automation, individual risk
assessment, new technologies, agile method, innovative distribution
channels, leadership, people at work, talent management, succession).
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From 2007 to 2009, she was a member of the Management Board of
Intouch Insurance B.V. in the Netherlands and General Director for
Central and Eastern Europe of the Intouch Insurance Group. At the time,
she was responsible for developing new markets. She was Chair of the
Supervisory Boards of companies: TU Link4 S.A. (member of the
Council until July 2015) and Direct Insurance Shared Services Center in
Poland, Intouch Strachowanie in Russia (start-up), Direct Pojistovna in
the Czech Republic (start-up) and Vice Chair of the Supervisory Board of
TU na Życie Link4 Life SA.
Ms Zofia Dzik is the founder of the Humanites Institute, a think & do tank
in the development of Cohesive Leadership™ and social capital,
systemically linking the topics of people and technology. She is the
founder and chair of the board of the international Centre for Technology
Ethics. Member of the Scientific Council of the IDEAS Institute, a Polish
research and development centre in the field of artificial intelligence and
digital economy, and Member of the Social Council of the Wrocław
University of Technology. Academic lecturer, impact investor, long-time
mentor of start-ups (including MIT), juror (e.g. Chapter of Eagles of the
Republic). Author models: “Coherent Leadership™”, the “Village” Model
for Social Ecosystem Development™, the “Loop – Nonlinear Model for
Long-Term Social Development”.
Ms Zofia Dzik serves as a Member of the Audit Committee and meets
the knowledge and skills requirement for accounting or auditing.
Anna Jakubowski
Member of the Supervisory Board
Ms Anna Jakubowski has been an independent member of the
Supervisory Boardsince 2021.
She also currently serves as President of the Management Board at Life
Institute Sp. z o.o. Sp. K.
Ms Anna Jakubowski graduated in Business Administration (1990) from
Wilfrid Laurier University in Waterloo, Ontario, Canada.
Her professional career began at Procter & Gamble (P&G) Canada
(1991 – 1993), where she worked, as a National Account Manager. From
1993 to 1998, she held various positions ranging from Pharmacy
Channel Manager to Trade Marketing Manager and Area Sales Manager
at P&G Poland. In 1998, she took up the position of Regional Customer
Business Development Manager for P&G – Central and Eastern Europe,
in turn, from 1999 to 2007, she worked as New Business Development
Manager and as Strategy, Business Development Director for P&G
Western Europe (since 2002). She continued her career in Switzerland
at P&G Fabric Care (2007 – 2011) as Associate Director: Marketing.
From 2011 to 2016, she was professionally involved with Coca-Cola,
where she held the following positions: International Group
Marketing/Strategy Director at The Coca-Cola Hellenic Bottling Company
(2011 – 2013), Business Capability Director at The Coca-Cola Company
(2013) and from 2013 – 2016 Member of the Management Board –
Managing Director at Coca-Cola Poland Services Sp z o.o. and
Franchise General Manager for Poland and the Baltics at The Coca-Cola
Company, Management Board Member at Multivita Sp. z o.o., Member
MANAGEMENT BOARD’S REPORT FOR 2025
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of the Management Board – Managing Director at Coca-Cola Balti
Jookide AS.
In 2018, she held the position of General Director for Poland and the
Baltics at Marie Brizard Wine & Spirits Sp. z o.o. From 2019 to 2020, she
served as General Director at Avon Cosmetics Polska Sp. z o.o.
Ms Anna Jakubowski serves as a member of the Audit Committee and
she meets the knowledge and skills requirement for accounting or
auditing.
[G1 GOV-1, 5] Each member of the Management Board and the Supervisory Board and the Management Team of
the Arctic Paper Group, by virtue of his or her professional experience, education and in connection with his or her
function, has adequate knowledge and skills in business conduct.
[GOV 1, 22, 23] The functions of the members of the Board of Management and the Supervisory Board of the
Arctic Paper Group have been entrusted to specific individuals, regardless of their gender, but in accordance with
the expertise and experience of these individuals. The composition of Arctic Paper S.A.’s governing bodies largely
depends on the decisions of its shareholders, who decide directly on the composition of the Supervisory Board and
indirectly on the composition of the Management Board. Candidates are assessed according to the principles of
independence as well as merit and diversity criteria to ensure diversity not only by gender and age, but above all in
terms of education, experience, knowledge and skills.
All members of the Group’s Management and Supervisory Boards are qualified in the field of sustainable
development, enabling them to set goals and develop strategies in this area and to oversee it. These consist of
education, titles, professional qualifications, many years of professional experience and skills acquired in the
exercise of specific functions and positions and training completed.
The members of the Management Board and the Supervisory Board improve their knowledge of sustainability
topics. In 2025, members of the Management Board participated in double materiality assessment meetings, which
were conducted with external experts and included educational elements on sustainability impacts, risks and
opportunities and their management. The meetings were held with a wide range of employees responsible for the
reporting process in the Arctic Paper Group. Its results were then analysed and discussed together with the
Supervisory Board.
The Management Board of the Arctic Paper Group is responsible for the proper organisation and conduct of the
process of managing impacts, risks and opportunities. His or her is responsible for managing these areas at a
strategic level, including the analysis of impacts, risks and opportunities considered strategic, and to oversee their
management at an operational and project level, carried out by managers of the Group’s relevant organisational
units and production facilities.
In particular, the Management Board is responsible for:
1. Shaping and implementing risk management policies;
2. Identification, analysis and assessment of impacts risks and opportunities at strategic level;
3. Setting the Group’s risk appetite and tolerance limits;
4. Taking action in response to identified impacts, risks and opportunities, including in particular strategic risks;
5. Analysing the results of actions taken by managers to identify impacts, risks and opportunities, analyse risks
and apply risk controls;
6. Overseeing the conduct of regular and effective impact, risk and opportunities assessments;
7. Review of actions taken.
Support to the Management Board of the Arctic Paper Group in achieving its impact, risk and opportunities
management objectives is provided by a risk management function performed by the Group Financial Controller
with the assistance of individual risk owners. This function is responsible for defining guidelines and internal
procedures, ensuring a consistent approach to risk management across all organisational units, monitoring risk
exposure levels reported by business managers and reporting these levels and key (strategic) risks to the Arctic
Paper Group Board.
Managers of the Arctic Paper Group’s organisational units or production facilities, who also act as Risk Owners
for their units, are responsible for managing impacts, risks and opportunities at the operational level. Each of the
Owners of the management of a given area of impacts, risks and opportunities has many years of experience,
knowledge and skills in the position they hold, which allows them to objectively and accurately estimate the
magnitude of potential and actual impacts and risks.
Heads of organisational units are in particular responsible for:
1. Defining lists of objectives to be achieved by the organisational units (establishments) under their
responsibility and prioritising these objectives;
2. Identifying, analysing and assessing key risks in subordinate organisational units from the point of view of
achieving the operational objectives in the area and document (and justify) this assessment accordingly;
MANAGEMENT BOARD’S REPORT FOR 2025
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3. Managing key identified impacts, risks and opportunities material to the production facility organisational unit
they manage;
4. Development, implementation and proper functioning of control mechanisms;
5. Regular monitoring of the level of operational risk and reporting on this to the Risk Manager;
6. Ensuring that its chosen business conduct complies with the Risk Management Policy and Procedure.
The Arctic Paper Group’s risk management process is controlled by the Supervisory Board, which monitors its
effectiveness.
Within the structure of the Supervisory Board of the Arctic Paper Group, 3 committees are distinguished:
Remuneration Committee, Risk Committee and Audit Committee. The committees carry out their tasks by
presenting to the Supervisory Board, in the form of resolutions, motions, opinions, recommendations and reports on
the scope of its tasks.
Basic tasks of the committees:
• Remuneration Committee – to advise the Supervisory Board on remuneration policy, bonus policy and
other matters relating to the remuneration of employees and members of the Company’s and Group
companies’ bodies;
• Risk Committee – to advise the Supervisory Board on the proper identification, assessment and control of
potential risks, i.e. opportunities and threats to the achievement of the Company’s strategic objectives,
with particular emphasis on financial risks, related to both external factors (e.g. volatility of exchange
rates, interest rates, general global economic situation) and internal factors (e.g. cash flow, liquidity
behaviour, deviations from financial budgets and forecasts);
• Audit Committee – to advise the Supervisory Board on the proper implementation and control of the
Company’s and the Group’s financial reporting processes, the effectiveness of internal controls and risk
management systems and to liaise with the auditors. The Management Board and the Supervisory Board
of the Arctic Paper Group, and in particular the Risk Committee of the Supervisory Board, oversee the
process of identifying and managing impacts, risks and opportunities in each country in which the Arctic
Paper Group operates, based on the Risk Management Policy in place. The Management Board of the
Arctic Paper Group, guided by the interests of the Company, defines the strategy and the main objectives
of its operations. It holds regular meetings, including with members of the Management Team, which
includes managers responsible for the various operational areas of the Arctic Paper Group.
GOV-2 Information provided to the administrative, management and supervisory bodies of the company
and sustainability matters
[GOV-2 26a] At least once a year, the Management Board of the Group provides the Supervisory Board with an
update on the process for managing impacts, risks, key identified risks and responses to them. As part of the
annual update, the Management Board of the Group, together with the Management Team, also oversees the
setting of targets in the areas of identified risks and monitors progress in achieving them. Plans to update the
Group’s existing policies to align them with the current assessment of impacts, risks and opportunities are also
discussed at this time. The members of the Group’s Management Board and Supervisory Board, by virtue of their
positions and their many years of experience, are well versed in identifying and assessing the material impacts,
risks and opportunities in the Arctic Paper Group’s operational areas reporting to them.
[GOV-2, 26b] The Management Board and the Supervisory Board of the Arctic Paper Group consider the
impacts, risks and opportunities when overseeing the strategy, major transaction decisions and risk management
process. This is reflected in the focus on the implementation of projects and investments aimed, among other
things, at diversifying revenue sources and sources of electricity supply, which the Arctic Paper Group has included
in the development plans included in the “4P” Strategy.
[GOV-2, 24, 26c] In 2025, the most important sustainability topics and identified risks, impacts and opportunities
with the highest potential impact and likelihood of occurrence in the Arctic Paper Group, which were analysed by
the Management Board and the Supervisory Board of the Arctic Paper Group, included:
1. Risk of changes in the geopolitical environment that may affect the Group’s production processes and
operations;
2. Occupational accident risks and accident rates – LTI;
3. Risk of declining demand for paper products/changing customer preferences – increasing digital demands
(popularity of substitute products and services “e.g. e-books, VOD”);
4. Risk of market competition dynamics;
5. Regulatory risks related to, inter alia, planned deforestation regulations;
6. Impact of GHG emissions in own operations and value chain;
7. Impact of water consumption levels in own operations and value chain;
8. Impacts related to air and water pollution;
9. High dependence on renewable resources and issues related to their availability and price;
MANAGEMENT BOARD’S REPORT FOR 2025
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10. Risk of low participation of women in leadership positions.
GOV-3 Integrating sustainability-related outcomes into incentive schemes
[GOV-3, 29, AR 7] [E1 GOV-3 13] The remuneration of the members of the Management Board and the
Supervisory Board of the Arctic Paper Group is determined based on the provisions of the Remuneration Policy,
which is effective as of 31 August 2020. The applicable remuneration components distinguish between fixed and
variable remuneration. Variable remuneration may be calculated on the basis of financial and non-financial
indicators set by the Supervisory Board, which may also potentially include, inter alia, the company’s achievement
of its sustainability and environmental objectives.
[GOV-3, 29] During the reported period, key features of the Group’s incentive scheme did not include variable
remuneration linked to sustainability targets and/or impacts, including those related to climate change.
Determination of the criteria for variable remuneration is the responsibility of the Supervisory Board. The Arctic
Paper Group will present revised metrics of sustainability-related remuneration performance by 2027.
GOV-4 Due diligence statement
[GOV-4 30, 32 AR 8-AR 10] The Arctic Paper Group undertakes systematic preventive actions aimed at mitigating
and addressing actual and potential adverse impacts on the environment and society, including through the
following actions:
1. In line with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, the Arctic
Paper Group takes into account established policies in the countries in which it operates and considers the
views of its stakeholders. The Arctic Paper Group works closely with the local community and is a member of
local and industry organisations, contributing to the development of local communities.
2. As a company listed on the Warsaw Stock Exchange (WSE) and the Swedish Stock Exchange (Nasdaq),
Arctic Paper is guided in its business and operational activities by good corporate governance practices
applicable to public companies(for more on compliance with the provisions of the Good Practices for Listed
Companies, see the section of the consolidated report on corporate governance on page 43). In addition,
Arctic Paper SA and Rottneros AB, as public entities listed on regulated markets, must comply with the
disclosure requirements of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16
April 2014 on market abuse regarding price-sensitive inside information and must therefore guarantee the
transparency of business activities. In discharging these responsibilities, the Arctic Paper Group Management
ensures the integrity of the accounting and financial reporting systems, including independent audit, risk
management control systems and financial and operational controls, as well as compliance with the law and
relevant standards.
3. Discriminatory or disciplinary action or engaging in any other type of action that results in reprisals against
employees, union representatives or other employee representatives, are not tolerated.
4. The Arctic Paper Group has developed and implemented a risk management system across all operational
areas of the Group to identify, prevent and mitigate actual and potential adverse impacts.
5. The Arctic Paper Group provides its employees and stakeholders with the opportunity to report, in good faith,
irregularities observed in the Group’s activities (whistleblowing).
6. The Arctic Paper Group’s production facilities ensure health and safety protection standards, including the
prevention of accidents and health injuries related to or arising in the course of work, by minimising – to the
extent practicable – the causes of the hazards inherent in the working environment at production facilities.
7. The Arctic Paper Group does not engage in any corrupt activities, including offering, promising or giving any
undue financial or other benefits to public officials, employees of entities with which the company has a
business relationship, or their relatives or associates.
All of the above principles are brought together in the Arctic Paper Group Code of Conduct for the Value Chain.
The Arctic Paper Group also expects its suppliers and other third parties to adhere to the high standards and
values it represents, as described in the Code of Conduct, and that they will sign the “Declaration of Suppliers and
Third Parties on Acceptance of and Compliance with the Arctic Paper Group Code of Conduct”. The Arctic Paper
Group is committed to maintaining fair and ethical conduct in all its dealings with stakeholders and to upholding the
principles of the UN Universal Declaration of Human Rights and the principles of the UN Global Compact.
On 31 May 2023, the European Parliament and the Council of the Union adopted Regulation (EU) 2023/1115 of
the European Parliament and of the Council of 31 May 2023 concerning the making available on the Union market
and the exportation from the Union of certain goods and products related to deforestation and forest degradation
and repealing Regulation (EU) No 995/2010 (EU Deforestation Regulation (EUDR)). The purpose of the regulation
is to ensure that goods imported and exported within the European Union do not contribute to deforestation or
forest degradation during their production. The EUDR imposes obligations on importers, exporters and traders of
goods with a view to environmental protection and sustainable development. As a producer of paper and pulp, the
MANAGEMENT BOARD’S REPORT FOR 2025
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Arctic Paper Group falls within the scope of the Regulation, which will come into force on 30 December 2026. In
2025, the Arctic Paper Group continued to work to prepare the Group to meet the technical requirements related to,
among other things, submitting due diligence declarations in a dedicated EU IT system, adapting its own IT
systems to manage due diligence declarations. Preparatory work was also carried out by Arctic Paper Group
suppliers, who will also be covered by the obligations under the regulation.
BASIC ELEMENTS OF THE DUE DILIGENCE PROCESS
PARAGRAPHS IN THE SUSTAINABILITY STATEMENT
a) Consideration of due diligence in management,
strategy and business model
ESRS 2 GOV-2, ESRS 2 SBM-3
b) Engagement with affected stakeholders at all key
stages of the due diligence process
ESRS 2 GOV-2, ESRS 2 SBM-2, ESRS 2 IRO-1, S1 SBM-2, S1-2, E1-3
c) Identification and assessment of adverse impacts
ESRS 2 IRO-1, ESRS 2 SBM-3, S1-SBM 3
d) Taking action to reduce identified adverse impacts
ESRS 2 MDR-A, S1-4, E1-3, E2-2, E3-2, E5-2
e) Monitoring the effectiveness of these efforts and
providing relevant information in this regard
ESRS 2 MDR-A, ESRS 2 MDR-T, S1-5, S1-9, S1-10, S1-14, S1-16, S1-17, E1-5,
E1-6, E2-4.
GOV-5 Risk management and internal controls over sustainability reporting
[GOV-5 34, 36] The Arctic Paper Group has set up a Sustainability Team to prepare annually a “Sustainability
Statement”, coordinate the work in the different organisational units of the Arctic Paper Group, monitor the data
collection process across the Group. The Sustainability Team consists of 5 members from a variety of roles within
the Arctic Paper Group including Legal, Strategy & Development, Environment & Quality Systems, Supply Chain &
Logistics, HR. The Sustainability Team reports directly to the Management Board of the Arctic Paper Group, to
which it reports on the status. The Group’s Management and Supervisory Boards hold regular meetings with the
Sustainability Team, which reports on progress, presents material issues and suggests possible solutions.
In the course of the sustainability reporting work carried out in previous years, methods and responsibilities
within the Arctic Paper Group for collecting, checking and aggregating data were developed. Those responsible for
reporting on sustainability issues regularly deepen their knowledge, including by attending training courses related
to the European Sustainability Reporting Standards.
Selected employees of the Arctic Paper Group’s operating departments are responsible for collecting data from
the various areas covered by the reporting. The data is then collected and consolidated by the Sustainability Team,
which analyses the data and checks its accuracy. The effectiveness of the data collection process is monitored on
an ongoing basis and any discrepancies are explained.
One of the identified material risks associated with sustainability reporting is the risk of not meeting national or
EU legal requirements for environmental standards, the risk of limited control over suppliers and their practices and
the availability of upstream or downstream data, and the timing of information availability. The Arctic Paper Group
makes every effort to maintain the completeness and integrity of the data and the accuracy of the estimated results.
The 2025 Sustainability Statement was prepared based on numerical data collected in standardized MS Excel
spreadsheets and descriptive data updated in an MS Word file based on the previous version of the report. Data
was collected in accordance with established practices, facilitating the identification of any omissions or errors and
allowing for quick additions or corrections. Consistency and accuracy of information were supported by ongoing
reconciliation of data with individuals responsible for specific areas and verification of year-to-year comparability.
To minimise the risks identified in this area from 2026 onwards, the Arctic Paper Group will use a unified
software for collecting and aggregating data on sustainability reporting, which also includes data reporting by the
Arctic Paper Group’s suppliers, and will educate employees and use external expert support. In 2025, work began
on the implementation of the system, adapting the tool to the needs of the organisation, e.g. in terms of the scope
of the data, the way it is calculated and presented.
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SBM-1 Strategy, business model and value chain
[SBM-1 42, AR 14] The core business of the Arctic Paper Group is the manufacture and sale of paper and pulp.
The Group offers voluminous book paper and a wide range of products in this segment, as well as high-grade
graphic paper and also produces many types of wood-free uncoated and coated paper and wood-based uncoated
paper for printers, paper distributors, book and magazine publishers and the advertising industry.
In 2025, paper mills had a total capacity of 640,000 tonnes of paper per year (695,000 tonnes in 2024); and pulp
mills had a total capacity of 400,000 tonnes of pulp per year, as in 2024.
As at 31 December 2025, the Group had 13 paper sales offices providing access to all European markets,
including Central and Eastern Europe.
[SBM-1, 40, 40g] Adopted in September 2021, the Arctic Paper Group’s “4P” strategy responds to changing
market and regulatory conditions by combining business growth with sustainability. It is based on four pillars:
“Paper”, “Pulp”, “Packaging” and “Power”, which together form a coherent model for the use of renewable forest
resources. The strategy aims to diversify the business, increase the Group’s resilience and create long-term value
while reducing environmental impact and supporting stakeholders.
1. The “Paper” pillar focuses on maintaining Arctic Paper’s strong position in the premium graphic papers
segment. Paper production is based on renewable raw materials from certified sources, which is in line with
responsible forest management. The Company is committed to high quality, process efficiency and reducing
its environmental footprint by, among other things, reducing energy consumption and emissions. This ensures
that the Paper pillar remains a stable source of revenue while supporting the environmental and economic
objectives of the strategy.
2. The “Pulp” pillar strengthens the Group’s position in the wood fibre-based value chain, including through its
capital commitment to Rottneros. Pulp is a key renewable raw material, used in a wide range of applications in
line with the idea of a circular economy. This pillar promotes business diversification and reduces dependence
on one market segment.
3. The “Packaging” pillar responds to the growing market demand for sustainable alternatives to plastic. Arctic
Paper Group is developing packaging based on natural fibres that are renewable, recyclable and in line with
current regulatory and consumer trends. This segment represents an important growth area, combining
economic potential with a real contribution to reducing environmental pollution. The development of packaging
also supports the Group’s image as a provider of responsible material solutions.
4. The “Power” pillar focuses on increasing the Group’s energy independence and reducing CO₂ emissions by
investing in renewable energy sources such as solar and bioenergy. In-house energy production reduces
operating costs and risks associated with energy price fluctuations. At the same time, it supports Arctic
Paper’s Group long-term climate goals. This pillar reinforces the coherence of the “4P” Strategy, combining
economic efficiency with environmental responsibility and benefits for the social environment.
With its “4P” Strategy, the Arctic Paper Group covers 2/3 of its energy needs through its own production. More than
50% of the energy consumed comes from renewable sources.
The Arctic Paper Group has completed the construction of its second moulded pulp fibre packaging plant, which
allows it to replace plastic food packaging, thereby helping to reduce the amount of plastic waste generated. In
Sweden, a biomass drying and pellet production facility has been finalised at the Grycksbo plant, which is
scheduled to be operational in spring 2026. The investment will reduce energy costs by approx. SEK 50 million per
year. In addition to electricity and steam, the plant will produce approx. 50,000 tonnes of pellets per year, which is a
solid fuel in pellet form, mainly for combustion in individual as well as collective heating systems as an alternative to
fossil fuels for heat and power generation.
The above actions resulting from the “4P” Strategy increase the level of diversification of the Arctic Paper
Group’s revenues and the Group’s energy independence in the long term.
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[SBM-1, 42, AR 14] Description of the Arctic Paper Group’s business model and value chain
ARCTIC PAPER GROUP VALUE CHAIN
UPSTREAM
ARCTIC PAPER GROUP, OWN OPERATIONS
DOWNSTREAM
SUPPLIES
GROUP PROCESSES
PROCESSING
WASTE
Suppliers of raw materials
Transport
All entities in the Group with operational and support processes
Customers and consumers
Waste managers
Suppliers of raw materials that are
used in production.
FSC
®
and PEFC certified suppliers are
key partners in the supply chain.
Primary raw materials:
- wood
- pulp
- water
- pigments
- chemical additives
Energy raw materials:
- electricity
- gas
- heat
Transport companies that
deliver products produced at
Arctic Paper Group entities to
customers.
Operational processes:
- paper and pulp production,
- sourcing,
- R&D,
- logistics,
- energy production – from photovoltaic
panels, hydroelectric plants, biomass,
- quality control,
- marketing and PR communication,
- sales,
- management,
- investor relations,
- legal services,
- IT support.
Support processes:
management, administration,
HR, health and safety, finance,
accounting, controlling.
A customer is an entity that buys and
processes a product produced by Arctic
Paper Group entities in the course of its
business for profit.
Arctic Paper’s key customers are:
- printers,
- paper distributors,
- book and magazine publishers,
- the advertising industry and
- packaging manufacturers.
The consumer – the end-user is the entity
using the paper packaging for food
packaging. Consumers – end users –
individuals who use the packaging
indirectly, e.g. when buying takeaway food
from our customer.
The waste is:
- by-products of paper and pulp
production, which are converted
into biomass fuel;
- packaging used by the
consumer.
Origin of raw materials:
Europe and South America (Brazil,
Chile, Uruguay).
Energy is sourced:
1) from internal sources,
2) Sweden – RES, nuclear power
plants
3) Poland – energy mix
Transport companies providing
raw material delivery services in
international transport.
Paper and pulp production plants in Poland and Sweden.
Distribution:
Offices sales offices are located in Germany, the UK, France, Poland,
Austria, Spain and the Scandinavian and Baltic countries.
The sale and distribution of products also includes cooperation with local
distributors on other continents.
Arctic Paper sells mainly in European markets, where Germany is the
dominant market, accounting for around 20% of sales. Other important
markets are Poland (17%), the UK and Ireland (11%), Austria and Central
Europe (11%), and France (9%). Smaller shares are held by the Baltic
countries (6%), Scandinavia (10%), Benelux (4%), other European countries
(10%). Outside Europe, sales are around 2%, mainly due to high transport
costs.
Companies managing waste within the European Union.
Stakeholder groups influenced by the Group in a particular link in the value chain
suppliers, customer, consumer, potential investors, NGOs, local
communities
employees, investors, financial institutions, public administration, local
communities, NGOs
customer, consumer, potential investors, NGOs, local communities
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[SBM-1, 40ai, 40e, 40f, 42b, AR 12-13, 14] Product range and customer groups
• graphic paper, in particular:
• white offset paper that we produce and distribute primarily under the Amber brand which is one of the
most versatile types of paper destined for various applications;
• woodfree bulky book paper that we produce under the Munken brand, used primarily for book printing;
• high quality graphic paper with a particularly smooth or rough surface, used for printing a wide variety of
advertising and marketing materials, which we produce under the Munken Design brand;
• coated wood-free paper,
• uncoated wood-free paper,
• packaging papers,
• sulphated pulp,
• mechanical fibre pulp.
Selected Arctic Paper Group products, such as Munken Design, Amber Graphic, G and Arctic Volume White, have
been verified and approved for use in Nordic Ecolabel certified products.
The factories in Grycksbo, Kostrzyn and Munkedal have FSC
®
(Forest Stewardship Council
®
) and the
corresponding PEFC (Programme for the Endorsement of Forest Certification) chain of custody certificates, as well
as the EU Ecolabel and Nordic Ecolabel (Nordic Swan), which guarantee that the raw material comes from
sustainable sources. We can therefore guarantee our customers that our products come from well-managed,
responsible and certified forest resources.
All wood used for pulp production at Rottneros is traceable and pulp is available with PEFC or FSC
®
or FSC
controlled wood certification.
The pulp produced by Rottneros is approved for the production of paper and board for food contact, as well as
the Nordic Swan and EU Ecolabel. One type of pulp produced by Rottneros is e-pulp, which is used as an
insulating material, used, for example, to insulate transformers and high-voltage cables on the seabed, thus
reducing the use of artificial materials.
Food packaging produced at Rottneros Packaging is certified for food contact and is available with FSC
®
certification.
The Arctic Paper Group’s customer base includes both direct and indirect customers.
Direct customers purchase the Group’s products from paper mills. Indirect customers do not purchase the
Group’s products themselves, but use printers or paper wholesalers as intermediaries. Despite this, they are an
important target group for the Group’s marketing activities, as it is the indirect customers who recommend or
indicate the use of the Group’s products to the direct customers. The groups of direct and indirect buyers of
products include:
• printing houses – they are direct buyers straight from the Group’s Paper mills;
• wholesalers – they are direct buyers of paper manufactured by the Group for further re-sale;
• publishers – are direct and indirect customers who purchase paper produced by the Group directly from the
Group for use in their publishing activities, and commission or recommend the use of its paper to printers to
whom they themselves commission the printing of books or other publications;
• advertising agencies – they are mainly indirect customers who do not purchase our products, but play an
important role in commissioning and recommending printers for its products, especially high-quality paper for
company annual reports, brochures, leaflets and packaging;
• final customers and brand owners – they are direct and indirect customers, purchasing our products directly,
as well as playing an important role in recommending our products to printers they have entrusted with
printing.
The main customers for the pulp mill’s products are manufacturers of printing paper, paper hygiene products and
paperboard, as well as electrical appliances and filters. Pulp is supplied to entities that do not have the capacity to
produce it in-house, as well as to customers who produce a selected type of pulp and are looking for a supplier of
another type of pulp.
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The Group recognises that it is not significantly dependent on any particular customer. The share of the 3
largest customers in the Group’s consolidated revenue for the year 2025 represents approx. 20% of the value of
total sales revenue (18.3% in 2024). Additional businesses of the Group, partly subordinated to paper and pulp
production, are:
• packaging production,
• electricity generation,
• electricity transmission,
• electricity distribution,
• production of heat,
• distribution of heat,
• logistics services,
• distribution of paper and pulp.
[SBM-1, 40aii, AR 12-13] Our main markets
Paper sales in 2025
Paper sales in 2024
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Pulp sales in 2025
Pulp sales in 2024
[SBM-1, 40aiii, AR 12-13] As at 31 December 2025, the Arctic Paper Group employed nearly 1,500 people in its
paper mills: Arctic Paper Kostrzyn (Poland), Arctic Paper Munkedals (Sweden) and Arctic Paper Grycksbo
(Sweden); its paper sales companies; the pulp companies Rottneros and Vallvik (both located in Sweden); and
companies producing food packaging (Poland and Sweden). In 2024, the Group employed 1584 people. The
change has been described in subsection S1-6 Characteristics of the undertaking’s workforce.
Country
Number of employees in 2025
Sweden
941
Poland
520
Other
38
Total
1499
[SBM-1, 40aiv, AR 12-13] The Arctic Paper Group does not manufacture or sell materials, products or services that
are prohibited in certain markets.
The Arctic Paper Group’s consolidated sales revenue for the 12 months of 2025 was PLN 3,197 million.
[SBM-1, 40b, AR 12-13] The production of paper and wood products is included in the ESRS standards in the
SEC-1 activity sector classification code: MPW and derives its main revenues from these activities. The following
table sets out revenue and profit figures and certain assets and liabilities from continuing operations by segment of
the Arctic Paper Group for the 12 months ended 31 December 2025 and as at that date.
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Paper
Pulp
Total
Total continuing
operations
Revenues
Sales to external customers
2 224 339
973 252
3 197 595
3 197 595
Sales between segments
-
-
-
-
Total segment revenues
2 224 339
973 252
3 197 595
3 197 595
[SBM-1, 40B, AR 12-13] The Arctic Paper Group does not conduct activities in, nor derive revenues from, the fossil
fuels sector (coal, oil and gas), controversial weapons (anti-personnel mines, cluster munitions, chemical and
biological weapons), or the cultivation or production of tobacco.
SBM-2 Interests and opinions of stakeholders
The Arctic Paper Group has a systematic dialogue with its stakeholders, as described in the table below.
[SBM-2, 45a i, ii, iii, iv, AR16] Table – Key stakeholders, method and objectives of their engagement
MAIN CATEGORY OF
STAKEHOLDERS
MAIN DIALOGUE METHODS AND
COMMUNICATION CHANNELS
METHOD OF ENGAGEMENT
PURPOSE OF ENGAGEMENT
Employees
Direct communication, surveys,
satisfaction surveys, intranet,
Whistleblowing system
Individual meetings, survey,
satisfaction research, training and
education
Obtaining feedback on the needs and
assessment of our activities,
understanding the current and
potential nature of the organisation’s
impact on employee well-being
Customers
Direct communication through the
sales organisation, Value Chain Code
of Conduct and Sustainability Policy,
Whistleblowing system
Survey research, focus group
research (FGI)
Obtaining feedback on our needs and
assess our activities, adjust our
product and service offerings
Suppliers
Direct communication through
purchasing departments, Value Chain
Code of Conduct and Sustainability
Policy, Whistleblowing system
Survey research, focus group
research (FGI)
Obtaining feedback on the needs and
evaluation of our activities
Investors
Investor meetings, investor box,
press releases, current and periodic
reports available to the public,
Whistleblowing system
Investor meetings, general meetings
of shareholders
Obtaining an assessment of the
Arctic Paper Group’s operations,
ensure transparency in
communication and equal access to
information about the Arctic Paper
Group’s operations
Local communities
Investor box, press releases, current
and periodic reports available to the
public, Whistleblowing system
Survey, meetings with local
authorities
Obtaining feedback on the needs and
assessment of Arctic Paper Group’s
activities on the local environment
In addition to the opinion surveys conducted in the form of questionnaires, the Arctic Paper Group conducts
continuous correspondence and exchange of opinions with stakeholders, and the most material issues raised by
stakeholders are then presented to the Group’s Management and Supervisory Boards for further discussion. One
effective channel for obtaining numerous opinions from outside the organisation is the investor box, which receives
enquiries from the media or NGOs. In addition, the Arctic Paper Group is an active member of industry associations
of paper and pulp producers in Poland and Sweden and in the European Union, among others:
• Swedish Forest Industry Federation:
• Association of Polish Papermakers;
• UTIPULP – Group of European market pulp users;
• Euro-Graph - European Association of Graphic Paper Producers
An additional communication tool is also the whistleblower channel, which can be used anonymously by any
stakeholder.
S1 SBM-2 Stakeholder interests and opinions.
[SBM-2 12, AR4, AR5] In 2025, the Arctic Paper Group updated its double materiality analysis with a stakeholder
survey that included Arctic Paper Group and Rottneros and an internal workshop to assess sustainability impacts,
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risks and opportunities. The full process, and the topics identified by stakeholders, are described below in extract
IRO-1 Description of the process for identifying and assessing material impacts, risks and opportunities.
CATEGORY OF
STAKEHOLDERS
CHANNELS OF COMMUNICATION AND METHOD OF
INVOLVEMENT
PURPOSE OF ENGAGEMENT
Employees
Direct communication, surveys, focus studies, satisfaction
surveys, intranet, whistleblowing system, training and education,
cooperation with trade unions.
Obtaining feedback on the needs and assessment of our
activities, understanding the current and potential nature
of the organisation’s impact on employee well-being.
Employee feedback is an important source of information on the organisational and production solutions being
implemented. The Group has ongoing communication and dialogue with its employees, which takes place through
face-to-face discussions, regular meetings and debriefing discussions, surveys and focus groups. The Group
actively involves employees in the life of the company, for example through the “Suggestion Box” – ideas submitted
by employees are analysed and a selection of these are put into practice. The opinions and interests of employees
are used primarily at operational and organisational level, while they do not form a direct basis for changes to the
Group’s business model or strategy.
[SBM-2, 45] There have been no changes to Arctic Paper’s business model in 2025, nor have there been
events in the environment that would materially affect the model and the nature and scale of Arctic Paper’s social,
environmental or economic impact. Nor are changes planned to modify stakeholder relationships and opinions.
[SBM-2, 45a v, 45b, 45d] The aspects described above are subject to a broader annual discussion within the
organisation, involving the Management Board and the Supervisory Board of the Arctic Paper Group, aimed at
gaining a better understanding of the current and future nature of relationships with stakeholders in the context of
potential changes, including regulatory developments, as well as observed social trends and the impact of the
Group’s operations on its surroundings. Each time, the results of the stakeholder survey are analysed and
discussed by the Management Board and the Supervisory Board.
IRO-1 Description of the process to identify and assess material impacts, risks and opportunities
[IRO-1 53] The Arctic Paper Group has been subject to sustainability reporting under the CSRD since 2024, so the
first double materiality assessment under the European ESRS reporting standard was performed in 2023 and 2024.
In 2025, the study was repeated – topics were again selected for analysis and sustainability impacts, risks and
opportunities were assessed.
The 2025 double relevance study, like the previous ones, was broken down into 5 key steps:
1. Understanding the context of the organisation and gap analysis;
2. Identification of topics to be analysed (including the Stakeholder perspective);
3. Assessment of impacts, risks and opportunities;
4. Selection of material topics;
5. Validation of material topics with Group Management.
Step 1: As a first step, a review of information about the Group and its business environment took place to
understand the current situation, which took into account the perspective of all Group companies (including the
packaging company Kostrzyn Packaging sp. z o.o. and the Rottneros Group company, which were not taken into
account in the previous year). Among other things, possible gaps among material sustainability topics were
analysed, a further sample of key external stakeholders (customers, suppliers, local authority representatives) was
selected and surveyed with them in the form of interviews and focus groups.
Stakeholders identified what they considered to be the organisation’s greatest sustainability impacts in each of
the three areas – environmental, social and governance. The issues they highlighted most often were energy
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consumption, switching to renewable energy, developing a circular economy, reducing greenhouse gas emissions
and managing diversity (equal opportunities for women and men) and creating jobs for local communities.
Stakeholder opinions were taken into account in the assessment of impacts, risks and opportunities.
The stakeholder survey, conducted in 2025, was a deepening of an earlier survey carried out in 2023. The
selection of questions and the group of stakeholders invited to the survey was preceded by an analysis of the
organisation’s current context.
The most common issues from this stage, were included in the list of topics assessed by the Arctic Paper Group
from the perspective of materiality of impacts, risks and opportunities.
Step 2: As a next step, a series of internal workshops were held on:
a) actual and potential impacts on people and the environment in the context of the topics and sub-topics both
identified in ESRS Standard 1 AR 16 and from a list of issues selected by the organisation;
b) the Group’s risks and opportunities related to social, environmental and organisational governance issues
identified in the ESRS standard.
The workshop was attended by employees responsible for the various business areas. The results developed
during the workshop were then discussed with members of the Management Board.
The identification of sustainability risks and opportunities was primarily based on an analysis of impacts and
dependency on resources. Other factors that could generate sustainability-related risks and opportunities for the
Group, such as the business environment, Group strategy, were then also analysed.
The topics taken into account were drawn from a list of topics of relevance to the organisation, selected at the
preliminary analysis and stakeholder feedback stage, and related to the impact of the Group’s manufactured
products on the environment and local communities, consumption of natural resources and waste management.
Actual and potential impacts on biodiversity and ecosystems at their own locations and in the value chain were
considered. However, there was no detailed consultation with affected communities regarding the sustainability of
shared biological resources and ecosystems. Arctic Paper Kostrzyn is located close to a Natura 2000 area – the
Warta Mouth Landscape Park. Arctic Paper Munkedals is located on the west coast of Sweden, close to the
Örekilsälven River, which is also part of the Natura 2000 network. The river flows from the protected Gullmarn
Fjord. The impact of the two paper mills on these areas is described in subsection SBM-3, covering material
impacts, risks, opportunities, and their interrelationship with the strategy and business model.
Step 3: The discussion of the importance of the different issues took into account the perspective of the main links
of the Arctic Paper Group’s value chain, i.e. the supply chain (taking into account the resources, raw materials and
services that are most important for the Group’s business model) and the Group’s own operational activities
(including service delivery processes, customer service, ensuring high product quality, customer and supplier
relations, and responsible marketing communication principles).
As last year, individual impacts were described and rated on a 3-point scale in each category (scale, scope and
irreversibility). Likelihood was assessed on a scale of 1 to 3, in the short (up to 1 year), medium (1 to 5 years ) and
long (more than 5 years) time horizons. Severity is understood here as the sum of 3 categories:
• Scope, understood as:
1 – local scope (relating only to a specific region, individual facility),
2 – national scope (referring to the impact in one EU country, e.g. Poland, Sweden),
3 – transnational and non-European scope (referring to activities in many EU countries and beyond, e.g.
sourcing pulp from South America).
• Scale, understood as:
1 – small scale (occasional/one-off impacts or negligible harmful/positive impacts on humans or the
environment),
2 – moderate scale (impact of below average level of phenomenon or impact with moderate level of
harm/benefit),
3 – high scale (frequent occurrence of the impact/incident or impact with a high level of harm/benefit to people
or the environment).
• Irreversibility assessed as:
1 – an easily reversible phenomenon,
2 – moderately reversible phenomenon (with time, commitment and some reasonable financial investment),
3 – irreversible phenomenon (including requiring compensation or damages).
Financial materiality:
The assessment of financial materiality was based on two key elements: the likelihood of a given risk or
opportunity occurring, taking into account the time horizon, and the magnitude of the potential financial
consequences for the Company should it materialise. Financial impacts were subjectively assessed by the
undertaking’s experts on a three-point scale from 1 to 3, depending on the impact on the Group’s financial position,
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including its value, financial performance and potential revenues or costs, such as those resulting from attracting or
losing customers. The scale of the financial effect has been aligned with the financial thresholds of the risks
identified as part of the Arctic Paper Group’s risk management process. Risks related to sustainability issues, both
from a regulatory and operational perspective, relate to the most significant areas of the Arctic Paper Group’s
business.
Step 4: In order to determine which topic is material for reporting, it was assumed:
With the materiality of the impact, the cut-off threshold was determined by calculation: 30% of the score of the
product of the average of likelihood (assessed on a scale of 1-3 over 3 time horizons) and severity (with a
maximum pool of 9 points), consisting of the sum of 3 criteria, i.e. scale (scoring 1-3), extent (scoring 1-3) and
irreversibility (scoring 1-3). The cut-off threshold for the maximum assessed impact is 30% of the maximum score,
except for actual positive impacts, for which the cut-off was set at 50%. Mathematical rounding has been used to
calculate the thresholds for receipts.
• For potential adverse impacts, the maximum number of points is 27 (cut-off of 8 points). This score was
obtained by multiplying (the average of) likelihood (for potential impacts) by severity (which consists of the
extent, scale and irreversible nature of the impact).
• In the case of a potential positive impact, irreversibility was not assessed, therefore the maximum number of
points from the severity of the potential positive impact is 6 and the cut-off was expressed as 30% of the
product of the maximum likelihood (3) and severity (6), i.e. 30% of 18, which is 5 points.
• In the case of actual impacts, the likelihood and severity of the impacts were analysed, and the result was
the sum of all the severity and likelihood categories assessed, reaching a maximum value for actual adverse
impacts: 9, and for actual positive impacts: 6 (there is no criterion of irreversibility). The cut-off threshold
used in this case is for actual adverse impacts respectively: 3 and positive: 3 points.
Financial materiality was assessed similarly, where the cut-off threshold was determined by calculation: 30% of the
result of the product (average of) the likelihood (assessed on a scale of 1-3) and the financial effect scale (1-3). The
cut-off for maximum assessed financial materiality is 30% of the maximum score pool, i.e. out of 9 points, resulting
in a score of 2.7 points.
The course of the double materiality analysis process for IRO-1 E1, E2, E3, E4, E5 and IRO-1 G1, including the
methodology used, assumptions and stakeholder consultation issues, is the same as the general process
description in ESRS 2 of IRO-1. The analysis used both external data – including academic sources, industry
reports, ESG ratings, competitor reports – and detailed internal company data, analysed in workshops on impacts,
risks and opportunities with employees responsible for the area in the Arctic Paper Group. The double materiality
process considered the resources used by the Group (listed in order of importance), in particular: pulp, wood,
chemicals, and electricity. The topics of pollution, water, and circular economy are particularly relevant in the
locations where the Group's production facilities are located, i.e., Munkedals, Grycksbo, Kostrzyn, Rottneros, and
Vallvik. Detailed information on the materiality assessment results can be found in ESRS Disclosure 2 SBM-3.
Internal data analysis covered all production facilities and theirs operations included:
E1 – CLIMATE CHANGE
• energy consumption data and emissions associated with purchased energy (electricity, process steam, fossil
fuels, biomass) by location;
• data on the production and consumption of electricity from own RES installations;
• data on GHG emissions (scope 1,2, 3), including emissions from boilers and combustion installations;
• energy efficiency data – particularly with regard to the costs of installing, maintaining and repairing energy
efficiency equipment.
E2 – POLLUTION
• data on emissions to air, water, land: emissions of pollutants from installations exceeding the relevant
threshold value set out in Annex II to Regulation (EC) No 166/2006 of the European Parliament and of the
Council excluding GHG emissions (disclosed in section E2-4);
• data on substances of concern used in the production process;
• location and operations analysis.
E3 – WATER AND MARINE RESOURCES
• total water consumption data;
• data on the closed-loop circulation of process water (degree of recirculation);
• analysis of geographical areas;
• information on the location of plants in relation to areas at risk of water scarcity;
• wastewater discharge quality parameters;
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• analysis of goods related to marine resources;
• analysis of sectors and segments related to issues relevant to water resources.
E4 – BIODIVERSITY AND ECOSYSTEMS
• the locations of production facilities close to and further away from biodiversity sensitive areas;
• sources of wood raw material – share of FSC
®
/ PEFC certified raw material and due diligence procedures
for suppliers.
E5 – CIRCULAR ECONOMY AND WASTE
• resources used by the Group;
• data on waste generation, recovery and recycling rates.
As part of the update to the double materiality analysis process carried out in 2025, the materiality threshold for
actual positive impacts has changed from 30% in 2024, to 50% in 2025. The Group plans to carry out further
updates to its double materiality analysis processes when changes in strategy and business model occur.
Step 5: Members of the Arctic Paper Group Management Board were involved in deciding on the final materiality or
lack of materiality of the sustainability topics analysed, and the results were then presented to the Supervisory
Board. A list of significant impacts, risks and opportunities is presented in the table for SBM-3 Material sustainability
impacts, risks and opportunities. The list of impacts and risks reviewed during the work with Board members and
the conclusions on the identification of the main business opportunities for the company related to the topic of
sustainability form the basis for the Arctic Paper Group to identify a list of ESRS indicators (so-called disclosures),
the selection of which is based on confirmation of the materiality of the issue.
The Management Board of the Arctic Paper Group is responsible for the proper organisation and conduct of the
impact, risk and opportunity management process. His or her is responsible for managing these areas at a strategic
level, including the analysis of the impacts, risks and opportunities deemed strategic, and to oversee their
operational and project management, carried out by the managers responsible for the Group’s various
organisational units and production facilities, including sustainability risks.
ANALYSIS OF CLIMATE RISKS
[E1.IRO-1 20a, AR 9 a b, AR 10, 11] In 2024, the Arctic Paper Group performed a detailed analysis of climate risks,
which deepened the results of the double materiality analysis. Climate risks were identified in the short, medium
and long term, taking as a short horizon the current financial year (1 year), as a medium horizon a period of up to 5
years (in line with the standard horizon for strategic and financial planning) and as a long horizon a period of more
than 5 years (up to 15 years, in order to allow for the analysis and assessment of risks over a period of time to take
into account the average life cycle of assets and, at the same time, the first years of extreme physical climate
risks).
The analysis of climate risks launched in 2024 included, in particular:
• fuel consumption in power and heat generation processes (including natural gas at the Kostrzyn plant’s
combined heat and power plant);
• electricity consumption at production facilities (own and purchased energy);
• biomass energy production (Grycksbo paper mill);
• emissions related to pulp mill operations (a Rottneros Group company);
• costs and risks associated with the EU ETS and CO₂ emission allowances (included in the risk factors
associated with the Arctic Paper Group’s operations);
• consumption of key raw materials (pulp, wood, water) and energy as important cost and emission factors.
The structure of the energy sources at each location was also taken into account, including the in-house gas-fired
CHP plant at the Kostrzyn plant, the use of biomass at the Arctic Paper Grycksbo plant and the partial coverage of
energy requirements in-house at the Vallvik plant.
The Arctic Paper Group has mapped the entire value chain; however, it does not have an analysis of the climate
impacts of the value chain links.
The Group’s assessment of actual and potential climate change impacts was based on:
• operational data on fuel and energy consumption;
• data from GHG emission calculations;
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• the company’s development potential and the capacity of pulp and paper mills (current and planned for the
time horizon to 2030);
• analysis of energy costs as a significant factor affecting financial performance;
• identifying the regulatory risks associated with a possible reduction or change in the rules for the free
allocation of CO₂ emission allowances.
The analysis of climate risks was linked to the Group’s investment plans, including investments in renewable
energy sources (photovoltaic installations) and the modernisation of production assets as part of the
implementation of the “4P” Strategy.
In 2025, the Rottneros Group companies were included in the climate analysis, basing the analysis on the same
time horizon as for the Arctic Paper Group. In the Rottneros Group, one climate scenario below 4 C was
considered. In the Arctic Paper Group, on the other hand, two scenarios below 2 C and above 4C were considered.
[E1.IRO-1 21, AR 11d] The Arctic Paper Group did not conduct a full scenario analysis but considered two
extreme scenarios in its analysis of potential GHG emission and socio-economic development pathways: the
scenario with the highest transition risks (SSP1-2.6) and the scenario with the highest physical risks (SSP5-8.5).
This approach was intended to provide an insight into a broad spectrum of possible future paths.
The analysis of climate risks was therefore based on a scenario recommended by the regulations and
developed in line with current scientific knowledge by the IPCC: SSP5-8.5, which provides for the highest possible
physical climate risks, in line with the regulator’s intention to approach the assessment of risks as conservatively as
possible. Similarly, the process of analysing and qualitatively assessing transition risks was based on the regulatory
recommended scenario in line with the Paris Agreement developed with current scientific knowledge by the IPCC:
SSP1-2.6, which provides for the relatively highest possible transition risks, in line with the regulator’s intention to
approach the assessment of risks as conservatively as possible.
[E1.IRO-1 AR 15] These scenarios have served as a general basis to support the assessment of climate risks
and will be used in a more detailed and analytical manner in subsequent reporting cycles. The risk identification
and assessment process was integrated into the overall risk management processes, enabling the value of climate-
related transition risks to be compared with the other risks identified and assessed by the Group.
PHYSICAL RISKS
[E1.IRO-1 20 b] For physical climate-related risks, the Arctic Paper Group has identified the exposure areas of its
key assets taking into account their location and the occurrence of physical 28 climate-related risks identified in the
EU Taxonomy (Commission Delegated Regulation (EU) 2021/2139). Next, the vulnerability of assets and the
elements that support their operation (e.g. transport links, power lines) was analysed by examining the sensitivity of
these elements to physical events.
For climate-related risks, the Arctic Paper Group determined the nature of the effect and the scale of the
potential financial consequences based on subjective assessments by the undertaking’s experts. For the
quantitative analysis of physical risks, the magnitude of the financial effect of each risk was defined in terms of
financial thresholds, which are the inputs to the model for quantitative assessment of climate-related physical risks.
For the qualitative analysis of transition risks, the scale of the financial effect is determined in relation to the
predetermined financial impact ranges used to analyse all risks in the Group.
The likelihood assessment for the quantitative assessment of physical risks was based on conclusions drawn
from the analysis of a variety of sources: global climate change modelling results, historical data, empirical scientific
studies, official analyses and climate change adaptation strategies produced by authorities at various levels, and
queries on historical climate-related events in the immediate vicinity of the location under study. The extensive
review of information sources was intended to capture as accurately as possible the rationale for determining the
point likelihood of a hazard over the three time horizons. The point likelihood values served as inputs to a model for
quantifying climate-related physical risks.
[E1.IRO-1 AR 11 c] In the course of the analysis of climate-related physical risks, 106 potential physical risks
were analysed in detail and the presence of 3 risks assessed as high in the locations of key assets, the Arctic
Paper Group business processes or for the systemic dependencies that enable their operation was diagnosed.
Physical risks rated as high are:
• risk of damage to the roof and stored products/materials in the production hall in Kostrzyn due to flooding,
• risk of interruption to the operation/repair of the Kostrzyn production building due to flooding,
• the risk of repair costs due to damage, including flooding of the basement, lower warehouses and their
contents in the Kostrzyn warehouse due to flooding.
In 2025, as part of the analysis of climate-related physical risks for the Rottneros Group, 82 potential climate risks
were analysed, among which 2 risks were assessed as high in a time horizon of 1 to 15 years:
• risk of damage to non-replaceable machinery or parts of machinery as a result of heavy precipitation at
Vallviks Bruk AB,
• risk of damage to machinery and the production hall caused by flooding at Vallviks Bruk AB,
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The analysis identified the following climate-related risks as being significant over a time horizon of more than 5
years and up to 15 years:
• risk of damage to the roof and stored products/materials in the production building as a result of heavy
rainfall at Rottneros Bruk and Vallviks Bruk,
• risk of disruption to operations or temporary stoppage of production or storage buildings as a result of heavy
rainfall at Rottneros Bruk and Vallviks Bruk,
• risk of damage to non-replaceable machinery caused by heavy rainfall at Rottneros Bruk AB,
• risk of operational disruption or temporary closure of the Rottneros Bruk plant as a result of machinery
repairs caused by heavy rainfall,
• the risk of damage to production or storage buildings at Vallviks Bruk as a result of erosion caused by
flooding,
• risk of disruption to operations or temporary closure of buildings: production or storage as a result of flooding
at Vallviks Bruk,
• risk of disruption to the sewage treatment plant as a result of structural erosion caused by flooding.
TRANSITION RISKS
[E1.IRO-1 20 c, AR 12 a].
Transition risks were identified based on an analysis of the links between the Group’s key business areas and
climate-related transition events as classified by the Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD classification in the process of identifying and analysing transition risks was adapted and developed
based on the current diagnosis of the Group’s regulatory, political, legal, technological, market and reputational
environment.
To assess transition risks, the Arctic Paper Group used the Company’s overall risk management policy and a
detailed procedure dedicated to climate-related risks. The risk identification and assessment process is integrated
into the overall company-wide risk management processes, enabling the value of climate-related transition risks to
be compared with other risks identified and assessed by Arctic Paper.
The determination of likelihood for transition risks is based on an analysis of trends and available data (such as
industry reports) and is expressed on the basis of the scale of risk likelihood ranges adopted in Arctic Paper’s
overall risk assessment procedure. The extensive review of information sources is intended to capture as
accurately as possible the rationale for establishing point likelihood of hazard occurrence over three time horizons
(1 year, 5 years, 10 years) and under two climate scenarios (SSP1-2.6; SSP5-8.5).
[E1.IRO-1 AR 11 c] As a result of the transition risks analysis, 22 potential transition risks were analysed in
terms of the various reasons for the materialisation of a given risk and several specific impacts of a given risk for
each of Arctic Paper’s individual business areas.
The transition risks rated as high are:
• the risk of rising raw material costs,
• the risk of a change in consumer purchasing preferences.
Details of the results of the materiality assessment are presented in the following subsection SBM-3 Material
sustainability impacts, risks and opportunities. Their implications and links to the strategy and business model are
described at the beginning of the relevant thematic chapter within this Statement. Unless otherwise specified,
material impacts, risks and opportunities apply to all Group locations as described in subsection SBM-1 Strategy,
business model and value chain.
G1 IRO-1 DESCRIPTION OF PROCESSES TO IDENTIFY AND ASSESS MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
[G1 IRO-1 6] At the Arctic Paper Group, we see sustainability management as an integral part of business
management. We are committed to ensuring that the Group’s operations are performed in accordance with the
highest standards of conduct and legal regulations, providing transparent information. Identifying risks and
opportunities in the area of corporate governance enables them to be properly managed, responding to the real
needs of our stakeholders. The process for identifying impacts, including the assessment criteria used, is described
in section IRO-1 Description of the process used to identify and assess material impacts, risks and opportunities.
The double materiality analysis considered the entire Arctic Paper Group and all operational processes, including
primarily those related to paper and pulp production. material impacts, risks and opportunities related to direct and
indirect business relationships in the value chain (Europe, South America) are also considered.
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IRO-2 ESRS DISCLOSURE REQUIREMENTS COVERED BY THE UNDERTAKING’S SUSTAINABILITY STATEMENT
[IRO-2 56 AR 19] A list of the disclosure requirements applied is included in the annexes to this report.
[IRO-2 59] ESRS disclosures and data points were mapped to material impacts, risks, and opportunities in
accordance with the approach outlined in AR 16, and EFRAG guidance on the application of the ESRS was also
considered. The starting point for preparing the disclosure list was the result of the double-materiality analysis
(described in ESRS 2 IRO-1). The Group assigned significant data points to each of the relevant IROs and then
considered the wording of the transitional provisions. This assessment was qualitative in nature.
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SBM-3 Material impacts, risks and opportunities and their interaction with the strategy and with the business model
[SBM-3 48] [E4.. SBM-3 16] [E1.SBM-3 18, 19, AR 8b]
Table- Material sustainability impacts, risks and opportunities for the Arctic Paper Group
Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
ESRS E1 Climate change
Adaptation to climate change
Actual negative impact
GHG: emissions increased energy consumption for the cooling process (servers, factory hall).
●
●
Risk – transitions
Financial risk:
- increase in energy costs,
- the potential increase in the cost of maintaining operations,
- increase in the price of GHG emissions.
●
●
●
Climate change mitigation
Actual negative impact
GHG emissions across the value chain, including:
- purchase and production of raw materials (synthetic fibres, pulp, chemicals),
- purchase of goods and services,
- transport, distribution,
- disposal of used disposable packaging.
●
●
●
●
Risk – transitions
Reputation and market positioning risk – changes in customer preferences for products with lower carbon footprints and failure to align products
with customer expectations.
●
●
Risk – transitions
Legal risk:
- extended emissions reporting obligations,
- the risk of incomplete or incorrect information,
- exposure to legal and administrative proceedings and possible financial penalties.
●
●
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Risk – physical
High physical risk:
- an increase in extreme weather events, such as cyclones and floods, droughts and fires (e.g. in logging areas), which may affect the smooth
running of operations.
●
●
●
Risk – physical
Chronic physical hazards. Possible disruption to own operations and increased costs caused:
- changes in rainfall distribution and extreme variability in weather conditions;
- increase in average temperatures;
- lowering of the groundwater level
●
●
Opportunity
Competitive positioning for low-carbon products and services – climate change-conscious brand reputation.
●
●
●
Opportunity
Access to new markets
●
●
●
Opportunity
Efficient use of resources
●
●
Opportunity
Reducing operating costs by improving energy efficiency
●
●
Power
Risk – transitions
Technological/financial risks: costs of switching to lower emission technologies, failed investments in new technologies.
●
●
Opportunity
Lower-energy costs – the potential to reduce energy costs in the long term (resulting from the development of low carbon energy sources).
●
●
ESRS E2 Pollution
Pollution of air
Actual negative impact
Atmospheric pollution by compounds such as: SO₂, NOx, N2O, particulate matter (PM), H₂S, ozone-depleting substances, CO, NH3, volatile
organic compounds (VOCs), benzene and other aromatic hydrocarbons released during the production process and the use of transport vehicles
(value chain).
●
●
●
Water pollution
Actual negative impact
Water pollution caused by maritime transport of the target.
●
●
Actual positive impact
Supporting scientific projects on restoration, regeneration and transformation of ecosystems in cooperation with NGOs.
●
●
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Substances of concern
Actual negative impact
Use of hazardous and potentially hazardous substances from the following hazard classes:
carcinogenicity category 1 and 2, reproductive toxicity category 2, respiratory sensitisation category 1, long-term aquatic hazard category 1, 2 and
3, specific target organ toxicity – single and repeated exposure category 1.
●
●
ESRS E3 Water and Water Resources
Water: Water consumption
Actual negative impact
Water consumption within its own operations, especially in the production process (pulp and paper production).
●
●
Actual negative impact
Water consumption in the supply chain – especially in areas with high water consumption.
●
●
Risk – physical
Chronic physical hazards – droughts and rising temperatures can affect the availability of water resources for paper production or reduce the quality
of wood raw materials.
●
●
●
●
Water: Water withdrawal
Actual negative impact
Transport of purchased pulp by sea – potentially includes ballast water intake.
●
●
●
Water: Water discharges
Actual negative impact
Water discharges associated with paper and pulp production (including purchased pulp, excluding packaging).
●
●
●
Marine resources: Discharges of water into seas and oceans
Actual negative impact
Water discharges into the seas and oceans.
●
●
●
ESRS E4 Biodiversity and ecosystems
Direct drivers of biodiversity loss: Climate change
Actual negative impact
Indirect impacts on biodiversity loss and ecosystem health through operational emissions.
●
●
●
●
Direct drivers of biodiversity loss: Land use change, fresh water use change and sea use change
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Risk – transitions
Legal and operational/financial risks related to compliance with regulatory requirements on due diligence and deforestation (including EUDR).
●
●
●
Direct drivers of biodiversity loss: Direct use
Actual negative impact
Direct impact on biodiversity loss – logging for pulp.
●
●
Actual positive impact
Obtaining wood and pulp from certified suppliers and from sustainably managed forests. This is an activity that generates higher costs. By choosing
to purchase certified raw material, the Arctic Paper Group has an impact on the entire value chain.
●
●
Risk – transitions
Financial risk
- Increase in capital acquisition costs in case of environmental degradation and adverse impacts on biodiversity
- Penalties, damages, fines and civil proceedings related to adverse impacts on biodiversity
●
●
Direct drivers of biodiversity loss:. Invasive species
Actual negative impact
Transport of pulp and products by sea – potentially includes ballast water intake with simultaneous transport of invasive species.
●
●
●
●
Impacts on the extent and condition of ecosystems
Actual negative impact
Impact on soil degradation, desertification or soil sealing – impact mainly in the supply chain
●
●
Impacts on and dependence on ecosystem services
Actual negative impact
Strong dependence of activities on ecosystem services – wood raw material as a basis for activities
●
●
Risk – transitions
Financial/operational risk: Risk of raw material loss due to high dependence on ecosystem services (wood as the primary raw material).
●
●
●
ESRS E5 Resource use and the circular economy
Resources introduced, including use of resources
Actual negative impact
High reliance on non-renewable resources, including chemicals, wood and fossil fuel energy (33% of the company’s energy mix).
●
●
●
●
Discharged resources related to products and services
Actual negative impact
There is a percentage of waste for disposal that cannot be reused or recycled.
●
●
●
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Actual positive impact
Actions for the reuse of renewable raw materials.
●
●
Waste
Actual negative impact
Production of disposable packaging for perishable products such as food (Rottneros packaging).
●
●
●
Actual negative impact
The end product, i.e. the food packaging, usually ends up in a waste incinerator after use due to the packaging’s synthetic coating and the
contamination caused by use.
●
●
Actual positive impact
Circularity and its impact on product design.
●
●
ESRS S1 Own workforce
Working conditions: Job security
Actual positive impact
Employees feel secure in the company: providing employees with a safe working environment, stable employment contracts, competitive salaries.
●
●
Working conditions: Working time
Potential negative impact
Potentially increased work outside standard working hours. Potentially more demanding and less beneficial for the employee night shifts.
●
●
Actual positive impact
We are one of the largest local employers. We do not work overtime, it occurs infrequently. Production employees work a three-shift system, which
ensures rotation and increases safety. Clerks are offered flexible working hours and the possibility of hybrid working.
●
●
Working conditions: Adequate wage
Actual positive impact
Competitive remuneration, adequate to market rates and commensurate with the employee’s experience and education.
●
●
Working conditions: Social dialogue
Actual positive impact
Engaging in dialogue with employees, involving them in the day-to-day operations and surveying their opinions on the company’s performance and
operations in the form of surveys, employee idea boxes, and employee satisfaction surveys. We try to translate the conclusions of the research into
real action.
●
●
●
●
Working conditions: Work-life balance
Actual positive impact
Caring for employees’ well-being (physical and mental), work-life balance.
●
●
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Working conditions: Occupational health and safety
Actual negative impact
Accidents at work occur.
●
●
Actual positive impact
High health and safety standards, health and safety system, emergency services (employees with emergency qualifications)
●
●
Equal treatment and equal opportunities: Gender equality and equal pay for work of equal value
Actual negative impact
With few women in managerial positions, there are few opportunities for promotion.
●
●
Actual positive impact
Gender equality and equal pay for equal work.
●
●
Equal treatment and equal opportunities: Training and skills development
Actual positive impact
Employee training and skills development
●
●
Equal treatment and equal opportunities: Employment and integration of people with disabilities
Actual positive impact
Favourable working conditions for people with disabilities
●
●
Equal treatment and equal opportunities: Measures to prevent violence and harassment in the workplace
Risk
(concerns all sub-topics “Equal treatment
and equal opportunities”)
Operational/financial risks:
Lack of appropriate competences in the organisation – resulting from the shortage of employees in the region: increased wage costs, incentives
and higher recruitment costs.
Staffing problems
- Low attractiveness of the company as an employer
- Losses due to absenteeism
- Increasing employee turnover (and thus increasing costs of recruiting and inducting new employees)
- Decrease in employee productivity
●
●
ESRS S2 Those working in the value chain
Working conditions: Job security
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Actual positive impact
Value chain code of conduct: working to create a sustainable supply chain, auditing suppliers on environmental practices and respect for human
rights
●
●
Working conditions: Job security, Working time, Adequate pay, Social dialogue, Work-life balance, Health and safety at work.
Risk
Operational risk – failure by suppliers to comply with legal requirements for employees in the value chain may result in the inability to supply raw
materials to the Group. Potential increase in costs and the need to find new suppliers – an issue of raw material availability.
●
●
ESRS S3 Affected Communities
Topic specific to the Arctic Paper Group
Actual negative impact
Noise generation
●
●
Actual positive impact
An important employer for the local community
●
●
ESRS S4 Consumers and end-users
Personal safety of consumers and/or end-users
Actual negative impact
Adverse impact on the health of the products on offer (migration of hazardous substances, especially in oily and moist product packaging, where
migration is greater).
●
●
Information-related impacts on consumers or end-users
Opportunity
Better alignment of offerings and expansion of customer base.
●
●
●
ESRS G1 Business conduct
Corporate culture
Actual positive impact
Strong ethical culture of the company’s organisation, We are one of the largest local employers, we promote and share corporate values among our
employees and community. We work with suppliers who represent the same values as us.
●
●
Topic specific to the Arctic Paper Group: Responsible marketing practices
Actual positive impact
Promotion of environmentally friendly and ethically produced products.
●
●
●
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Type of IRO
Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Topic specific to the Arctic Paper Group
Actual positive impact
An efficient system for reporting feedback and complaints. Surveying customers and taking their opinions into account.
●
●
Topic specific to the Arctic Paper Group
Opportunity
Alignment with CSDD – Implemented actions may have an impact on ratings and potentially lower cost of raising capital in the future
●
●
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[SBM-3 48 g] As a result of the 2025 update of the double materiality analysis, the following changes have occurred:
Material topic and sub-topic
Change in 2025 (relative to 2024)
E-1 Climate change
Climate change mitigation
Positive impact non-material in 2025:
• Striving for zero emissions: investing in solutions that minimise the negative impact of
operations on the environment and climate, low carbon equipment
• Implementing more environmentally friendly means of transport and goods distribution
processes
Opportunity in 2025:
• Reducing operating costs by improving energy efficiency
Energy
Positive impact non-material in 2025:
• Use of renewable energy sources, improvement of energy efficiency
Opportunity non-material in 2025:
• Resilience to physical threats – by identifying them and initiating mitigating actions
E-2 Pollution
Water pollution
Negative impact non-material in 2025:
• Water contamination in the production process
Negative impact material in 2025:
• Water contamination caused by maritime transport of pulp
E-3 Water and Water Resources
Water: Water withdrawal
Positive impact non-material in 2025:
• Actions in line with the European Green Deal (or other EU/global initiatives) on clean water
• Reuse of water that has already been used, whenever possible
Water: Water discharges
Positive impact non-material in 2025:
• Create products and services that respect water resources and/or reduce water discharges;
improving water quality
E-4 Biodiversity and ecosystems
Direct drivers of biodiversity loss: Other
Positive impact non-material in 2025:
• Supporting initiatives to promote biodiversity
Direct drivers of biodiversity loss:
Land use change, fresh water use change and sea use
change
Positive impact non-material in 2025:
• Measures to support the protection and restoration of biodiversity aligned, for example, with
the EU’s 2030 Biodiversity Strategy. Naturally clean water, advanced treatment processes
for contaminated water
Direct drivers of biodiversity loss: Direct use
Actual negative impact in 2025:
• Direct impact on biodiversity loss – logging for pulp
Impacts on the extent and condition of ecosystems
Positive impact non-material in 2025:
• Actions to support biodiversity conservation and restoration aligned, for example, with the
EU’s 2030 Biodiversity Strategy; Initiatives to support the conservation and restoration of
biodiversity (Kostrzyn, Swedish rivers)
• Positive impact on biodiversity – afforestation
E-5 Resource use and the circular economy
Discharged resources related to products and services
Non-material risk in 2025:
• Regulatory risk – e.g., regulations regarding deforestation
Waste
Positive impact non-material in 2025:
• Eliminate waste in the production process wherever possible (including in the production
phase, during use and at the end of the product life cycle) – producing as little waste as
possible
Actual negative impact in 2025:
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• The end product, i.e. the food packaging, usually ends up in a waste incinerator after use
due to the packaging’s synthetic coating and the contamination caused by use
S-1 Own workforce
Working conditions: Freedom of association, the existence of
works councils and workers’ rights to information,
consultation and participation
Positive impact non-material in 2025:
• There are trade unions, and European Works Council (at group level)
Working conditions: Collective bargaining, including
percentage of employees covered by collective agreements
Positive impact non-material in 2025:
• There are also agreements at company level.
Equal treatment and equal opportunities: Measures to
prevent violence and harassment in the workplace
Positive impact non-material in 2025:
The Group counteracts harassment and violence in the workplace by implementing policies
and providing anonymous channels for reporting misconduct.
Equal Treatment and Equal Opportunities: Diversity
Positive impact non-material in 2025:
Nurturing diversity in the organisation by building diverse teams.
Working conditions: Working time
Actual positive impact in 2025:
We are one of the largest local employers. We do not work overtime, it occurs infrequently.
Production employees work a three-shift system, which ensures rotation and increases
safety. Clerks are offered flexible working hours and the possibility of hybrid working.
S-2 Employees in the supply chain
Working conditions: Job security
Positive impact non-material in 2025:
Educating suppliers on ESG issues by implementing surveys and sharing the Code of
Conduct in the value chain
S-3 Affected communities
Other
Positive impact non-material in 2025:
Supporting charitable initiatives important to the local community, helping those in need and
marginalised people
Economic, Social and Cultural Rights of Communities: Water
and Sanitation
Positive impact non-material in 2025:
Cleaning up the river so the local community can enjoy it – fishing and other recreational
activities
Civil and political rights of communities: Freedom of
expression
Positive impact non-material in 2025:
Consultation with the local community on matters affecting it
S-4 Consumers and end-users
Personal safety of consumers and/or end-users
Actual negative impact in 2025:
Adverse impact on the health of the products on offer (migration of hazardous substances,
especially in oily and moist product packaging, where migration is greater)
Information-related impacts on consumers or end-users
Opportunity in 2025:
Better alignment of offerings and expansion of customer base
G1 – Business conduct
Protection of whistleblowers
Positive impact non-material in 2025:
An effective whistleblowing and whistleblower protection system in the value chain (not in its
own operations)
Supplier relationship management, including payment
practices
Positive impact non-material in 2025:
There is a Code of Conduct in the value chain, no arrears to suppliers
Corruption and bribery: Prevention and detection, including
training, Incidents
Positive impact non-material in 2025:
Staff training on the value chain code of conduct, internal payment authorisation procedures,
anti-corruption policy, increasing positive impact and ESG opportunities
Other
Positive impact non-material in 2025:
ESG management; High transparency (e.g. through reporting)
Opportunity material in 2025:
Compliance with CSDDD - implemented actions may have an impact on ratings and
potentially lower costs of raising capital in the future.
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Topic specific to the Arctic Paper Group
Actual positive impact in 2025:
An efficient system for reporting feedback and complaints. Surveying customers and taking
their opinions into account
Topic specific to the Arctic Paper Group: Responsible
marketing practices
Actual positive impact in 2025:
Promotion of environmentally friendly and ethically produced products
Some of the sub-topics were changed, which was due to, among other things:
• Revising the double materiality assessment, including the stakeholder survey and updating the catalogue of
material impacts, risks and opportunities, as well as from changing the materiality threshold for actual
positive impacts from 30% to 50%;
• Some of the positive impacts identified in 2024 were actions to mitigate adverse impacts.
Some positive impacts, due to regulatory change, are legal obligations and therefore should not be considered as
positive impacts.
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2. ENVIRONMENT-RELATED INFORMATION.
ESRS E1 Climate change
SBM-3 Linking material sustainability impacts, risks and opportunities to the strategy and business model
[SBM-3 48b, c, d, f] Material climate change impacts, risks and opportunities are closely aligned with the Arctic
Paper Group’s strategy and business model, in particular through the Energy Pillar, which focuses on developing
RES, improving energy efficiency and reducing GHG emissions in the organisation’s operations and value chain.
An increase in average temperatures can increase energy demand, especially for cooling processes, which affects
emissions and operating costs and forces a redefinition of the resilience of the business model in a low-carbon
direction. The energy transition generates transition risks, including rising energy and commodity prices and tighter
emissions and reporting regulations, leading to increased operating and investment costs. Investments in RES,
long-term energy contracts and innovative emission-reducing technologies strengthen the resilience of the
business model, despite the increase in capital expenditure, and contribute to lower energy costs in the long term.
material physical risks, such as extreme weather events, rising temperatures and lowering groundwater levels, can
disrupt production, transport and the supply chain. Resilience analyses, infrastructure upgrades and supplier
diversification are the answer to these threats. Emissions associated with manufacturing and supply chain activities
influence the need to work with business partners ensuring environmentally sustainable business operations.
Changes in customer preferences and growing awareness in the context of climate change present a risk of
reduced demand, but at the same time create an opportunity to develop sales of premium paper and sustainable
packaging, in line with the Pillars Paper, Packaging and Pulp. Taken as a whole, climate change is both a financial
and operational challenge for AP as well as an impetus to transform its business model towards a more resilient
and competitive one.
[E1.SBM-3 19, AR 6, 7, 7b, 7c]
In 2025, the Arctic Paper Group conducted an analysis of the resilience of the Strategy to risks arising from
climate change. The resilience analysis was based on linking actions arising from the Arctic Paper Group’s “4P”
Strategy to identified climate risks. Each initiative resulting from the strategy was assessed in terms of exposure to
material physical risks and transitions in the perspective of adequate and regulatory-required climate scenarios:
SSP1-2.6 and SSP5-8.5 to cover the widest possible spectrum of potential risks and opportunities. The resilience
of each initiative to specific risks in the short term (1 year), medium term (5 years) and long term (10 years) was
then considered.
In its analysis, the Arctic Paper Group considered its own operations, production buildings, warehouses, office
buildings, indoor and outdoor workers, machinery, servers, regional and global transport links, electricity supply,
water supply, wastewater treatment plants, heat supply, Group-owned solar farms. To the best of its knowledge,
the Group has not excluded from the analysis, any material physical risks or transitions.
During the analysis, the Group made assumptions in line with the SSP1-2.6 scenario reflecting an ambitious
decarbonisation path both globally and locally. In line with the indicated scenario, rapid electrification, regulatory
and economic pressure on the energy efficiency of production processes and reliance on renewable energy were
assumed. These assumptions are reflected in the Group’s existing practices and planned strategic actions in the
form of increasing the energy efficiency of machinery and production processes, water efficiency and sourcing
renewable energy from its own production. The decarbonisation targets developed as part of the decarbonisation
strategy were developed in accordance with the guidelines of the Science Based Targets initiative. The reduction
targets adopted are in line with the Paris Agreement for the relevant emission bands (band 1, band 2 and band 3).
Details of the objectives are included in subsection E1-4 Mitigation objectives.
The estimated expected financial impact from material physical and transition risks was determined in
accordance with the risk assessment methodology used in the Group and the ERM system as a whole in a
qualitative form by assigning a rating based on predefined financial impact ranges. The estimation of the financial
impact of the risks was based on the value of the assets analysed, which could be destroyed, and the costs of
slowing down or stopping production and business processes in the form of falling revenues, rising operating costs,
rising insurance prices or rising capital costs. Related mitigation actions are described below in subsection E1-3
Actions and resources in relation to climate issue management.
Based on the results obtained, the level of resilience was determined for each initiative according to the
following thresholds: very high, high, moderate and low resilience. The analysis showed that the resilience of the
“4P” Strategy in each of the four pillars (Energy, Packaging, Paper, Pulp) against the physical risks associated with
climate change is generally high, with one area of risk rated as moderate: the risk of operational disruption or
production stoppage due to heavy rainfall or flooding.
In the case of the strategy’s resilience against transition risks, there was more variation across the strategy
pillars. For the Paper and Pulp pillars, the resilience of the strategy was assessed as high and moderate in relation
to two transition risks: rising raw material costs and a shift in consumer purchasing preferences. Pillar Packaging
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has demonstrated a high degree of resilience to both risks. In the case of the Energy pillar, the resilience of the
strategy was classified as moderate against the risk of rising raw material costs and very high for changes in
customer purchasing preferences. The analysis indicates resilience in the face of transition risks, although some
areas may require more monitoring and adaptation actions.
[E1.SBM-3, AR 8]
The Arctic Paper Group sees the main area of uncertainty associated with the resilience analysis as not
knowing which climate scenario will ultimately materialise. The Group plans its strategy in a resilient way, i.e. in
such a way that it creates the conditions for business success for the Group, regardless of which scenario
materialises. At the same time, through consistent monitoring of the regulatory, market and climate environment,
cyclical updates of the risk assessment and resilience analysis, the Group assumes that early signals of the
materialisation of any of the scenarios considered will be caught and that further optimisation of the strategy will be
carried out under conditions of reduced uncertainty.
The physical risks that have been identified as significant for the Group – the risk of flooding in Kostrzyn – have
a long potential horizon of materialisation (10 years). Therefore, in response to the effects of the risk in the form of
damage to buildings, stored products and materials, as well as the associated costs of interrupting operations to
carry out repairs to the production building and the costs of repairs, the Group anticipates taking action in the
medium term to select the optimal adaptation strategy and reduce this risk to an acceptable level.
The conclusions for the strategy resulting from the identified material transition risks: the increase in the cost of
materials and changes in consumer preferences require further analysis and quantification on the Group’s part. The
conclusions of the analyses and selected actions based on these conclusions will be incorporated into the Group’s
updated strategy to ensure continued access to finance at an affordable cost of capital, the ability to redeploy,
modernise or decommission existing assets, change the product and service portfolio and retrain employees where
necessary. Actions dedicated to correcting or adapting the Arctic Paper Group’s strategy and business model to
climate change in the short, medium and long term are a task foreseen for the next few years.
E1-1 Climate change mitigation transition plan
[E1-1 14, 17, AR 1] The Arctic Paper Group has not adopted a Transition Plan for climate change mitigation in
2025. The Group is in the process of developing the Plan and aims to adopt it by 2028. The element that supports
the Group in gradually building the Transition Plan is the Decarbonisation Strategy adopted in 2025, which sets
reduction targets for Scope 1, 2 and 3 GHG emissions. The objectives arising from the adopted strategy are
described in section E1-4 Mitigation objectives.
E1-2 Policies related to climate change mitigation and adaptation
[E1-2 24, 25] [MDR-P 65 a] In 2025, the Arctic Paper Group did not have a separate Policy related to climate
change mitigation and adaptation but plans to adopt one by the end of 2026. Currently, the most important
documents governing the approach to climate change mitigation and adaptation are The Arctic Paper Group’s “4P”
Strategy 2022-2030 (adopted in September 2021 and updated in 2023) and Arctic Paper Group’s Decarbonisation
Strategy (developed in December 2025). These documents also refer to areas related to energy efficiency and the
use of renewable energy in the Group.
As part of the “4P” Strategy, the Arctic Paper Group is committed to, among other things, working to mitigate
climate change by providing products and solutions based on energy and renewable materials, while replacing
plastics.
As part of the Decarbonisation Strategy, the Arctic Paper Group commits to reduce GHG emissions by 42% in
Scope 1 and 2 and by 25% in selected Scope 3 categories by 2030, as further described in section E1-4 Mitigation
targets. The strategy also sets out a number of operational initiatives for the Group’s value chain to help it achieve
its ambitious decarbonisation targets.
Another document that indirectly regulates the approach to climate change is also the Arctic Paper Group Value
Chain Code of Conduct, described under ESRS 2 GOV-4 and G1-1. The document commits the production
facilities to operate in accordance with the ISO 14001 and EMAS environmental management system, and the
Grycksbo and Munkedal mills additionally to have an ISO 50001 certified energy management system. In addition,
according to the Code, Group employees are required to:
• familiarise yourself with the Sustainability Policy (described below),
• act in accordance with the Sustainability Policy, with applicable environmental standards (laws,
environmental management system obligations); to manage and conscientiously document information on
our environmental impact in accordance with legal requirements
• ensure that the relevant environmental permits are in place,
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• to put forward ideas for improvements in production processes, use of raw materials that contribute to the
Group’s wider contribution to environmental protection,
• monitor the use of resources e.g. energy, water, chemicals materials and adjusting their use to improve
efficiency,
• minimise business travel, using online meeting platforms.
The Arctic Paper Group, in its Sustainability Policy, clearly states that reducing its climate impact is a priority for the
organisation. The Policy’s provisions also refer to the analysis and management of climate change risks, the
monitoring of GHG emissions and the implementation of solutions to reduce them. The Group also declares its
commitment to reducing GHG emissions across the supply chain. In addition, the Environmental Policy indicates
that at every stage of the process, from the purchase of raw materials for production through to quality
development, marketing and distribution to end customers, the overriding objective must be, among other things, to
have the least possible adverse impact on the climate.
[E1-2 24, 25] [MDR-P 65] The scope of the Strategies and Policies described above covers the entire Arctic
Paper Group’s operations, and the Group’s Management Board is responsible for implementing the provisions of
the regulations. The adopted Climate Change Policies do not refer to third party standards or initiatives. In
preparing the content of the documents, the Arctic Paper Group took into account the opinions and interests of the
Group’s stakeholders. The Group makes the regulations available by posting them on its website and on the
internal communication channels of each organisational unit.
In the Rottneros Group, climate change issues are described directly in Sustainable Development Policy. In the
document, the Group indicates that it attaches great importance to reducing its environmental impact, with the aim
of operating in a sustainable manner in the long term. In addition, Policy has been implemented in the Rottneros
Group, which identifies the use and production of renewable energy as an objective. With regard to energy
consumption, an analogous approach applies to the choice of energy sources. The desire to reduce energy
consumption in both the production and use of the Group’s products is indicated. Energy and environmental targets
are regularly monitored in conjunction with financial reporting, and stakeholders are consulted on the impact of
business activities and products on the environment and energy consumption.
The scope of the aforementioned Policies covers the entire activities of the Rottneros Group, and the
Management Board of Rottneros is responsible for implementing the provisions of the regulations. The adopted
Climate Change Policies do not refer to third party standards or initiatives. In preparing the content of the Policies,
the Rottneros Group took into account the opinions and interests of the Group’s stakeholders. The Group makes
the regulations available by posting them on the website and on the internal communication channels of each
organisational unit.
E1-3 Actions and resources in relation to managing climate issues
[E1-3 28, 29a] [MDR-A 68] Key activities related to climate issues focus at Arctic Paper Group on reducing GHG
emissions and improving the energy efficiency of its processes:
Name of the action
Description of the action
Conclusion of PPAs,
acquisition of guarantees of
origin
At Rottneros, part of the electricity demand was covered by a long-term wind PPA in 2025, which is an important part of the
efforts to decarbonise the energy mix. In addition, in order to ensure that the remaining electricity consumption is covered, the
Company acquired guarantees of origin for non-fossil electricity in 2025. The use of these instruments makes it possible to
increase the share of renewable energy in the Rottneros factory’s electricity consumption. These actions contribute to
reducing Scope 2 GHG emissions and the carbon footprint of operations.
Installation of photovoltaic
panels
As part of its decarbonisation efforts, the Arctic Paper Group is investing in renewable energy sources by installing and
expanding photovoltaic installations at selected locations. PV installations commissioned in 2024 at the Grycksbo plant
provided additional electricity production of around 350 MWh in 2025, contributing to a reduction in the need for electricity
from conventional sources. In parallel, the photovoltaic installation at the Kostrzyn plant was expanded by an additional 9
MWh in 2025, significantly increasing the share of renewable energy in the Company’s energy mix. The ongoing investments
in photovoltaics support the reduction of Scope 2 GHG emissions and contribute to the diversification of energy sources and
increased energy efficiency. These actions strengthen the Group’s operational resilience to energy price volatility and are an
important part of a long-term decarbonisation strategy.
Increasing the energy
flexibility of the plant and
supporting the stability of the
electricity system
In 2024, the installation of electricity storage in the form of a battery system was realised at Rottneros as part of efforts to
increase the efficiency of energy management. This solution has enabled better balancing of electricity production and
consumption, including renewable energy, and reduced energy losses. The 8 MW energy storage facility was actively used in
the wholesale energy markets and to provide services to the Swedish transmission system operator in 2025. In addition, the
plant temporarily reduced pulp production during periods of high electricity prices, increasing the elasticity of demand. These
actions bring economic benefits to the company, support the stability of the national electricity system and indirectly
contribute to the reduction of Scope 2 GHG emissions.
MANAGEMENT BOARD’S REPORT FOR 2025
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98
Name of the action
Description of the action
Installation of vehicle
charging stations
As part of its efforts to support the reduction of emissions from mobile combustion, the Arctic Paper Group is developing
electric vehicle charging infrastructure at selected locations. In 2025, a project to expand the electric car charging network by
installing an additional charger was completed at the Munkedals factory, bringing the number of charging points to two and
enabling the operation of electric company cars. In parallel, two electric vehicle charging stations have been installed at
Rottneros, extending the availability of infrastructure for fleet users. The development of charging infrastructure is an
important element in supporting the progressive electrification of the fleet and the reduction of GHG emissions in Scope 1.
These actions also favour optimising energy consumption and increasing the use of electricity, including energy from
renewable sources.
Expansion and optimisation
of the compressed air system
At the Kostrzyn factory, an expansion of the compressed air system was realised through the installation and commissioning
of a ZR700 variable speed compressor as part of actions to improve the energy efficiency of production processes. In
parallel, the exchanger in the cooling system was verified to ensure optimal operation of the compressor and dryer. The
solutions used enable the system operation to be better matched to actual compressed air demand. According to the energy
analysis carried out, the expected effect of the project is a reduction in electricity consumption of approx. 6.4 MWh per week,
which translates into a reduction in indirect emissions of 2.
Implementation of LED
lighting
As part of its efforts to improve energy efficiency, the Arctic Paper Group is implementing projects to replace traditional
lighting with energy-efficient LED solutions at selected locations. At the Kostrzyn plant, LED lighting was installed with control
automation, including a system for regulating operation based on sunrise and sunset, and limiting the illumination of the
railway siding during nighttime hours when shunting work is not taking place. The solutions used optimise energy
consumption and translate into an expected reduction in electricity consumption of 25.16 MWh per year. At the Munkedals
factory, the replacement of old lighting with LED technology has continued into 2025, achieving savings of 18.77 MWh per
year to date, with the calculations also taking into account projects started in earlier years and completed in 2025. The project
remains ongoing and the results to date are as intended and have been determined by comparing energy consumption
before and after implementation. In parallel, lighting retrofitting work continues at Rottneros in 2025, supporting further
reductions in energy consumption and indirect emissions in Scope 2.
Planned actions
Construction of bio-pellet
production
An investment is underway at Arctic Paper Grycksbo to build a bio pellet plant as part of efforts to decarbonise energy
processes. The new facility is scheduled to be operational in spring 2026 and will enable increased use of renewable fuels in
place of fossil fuels. The investment will contribute to reducing Scope 1 GHG emissions and improving the efficiency of raw
material and energy use in operations.
Low-carbon maritime
transport in the supply chain
A new vessel for the transportation of pulp and wood has been contracted at the Vallviks pulp mill and will begin operations in
the summer of 2026. The vessel will be equipped with a hybrid propulsion system, enabling it to reduce CO
2
emissions by
around 50% compared to the conventional vessels used to date. This investment will contribute to a significant reduction in
greenhouse gas emissions associated with maritime transport. The action supports the achievement of the reduction targets
for 3 and the transformation of maritime logistics towards more sustainable solutions.
Hydrogen land transport in
the supply chain
At the Vallviks pulp mill, it is planned to implement a low-carbon transport solution using a hydrogen-powered truck to
transport pulp to customers within Sweden and to ports. The project is scheduled to commence operation in November 2026.
This initiative aims to reduce Scope 3 GHG emissions by reducing emissions associated with road transport and supporting
the transition towards zero-emission logistics technologies.
Energy recuperation for the
paper machine
At the Kostrzyn mill, an energy recuperation project is planned for paper machine no. 2 (MP2), aimed at reducing energy
consumption and noise in the production process. A conceptual phase including an assessment of the potential for energy
and environmental savings with the calculation of the energy effect has been completed. At the same time, a request for
proposals was sent out for the development of the detailed design, with the aim of phasing the investment and spreading the
capital expenditure over at least three years. The planned actions will improve energy efficiency and comfort in the production
area.
Preparation for the
construction of an electrode
boiler
In 2025, preparatory work for the electrode boiler project was carried out at the Kostrzyn plant, including contacts with
technology manufacturers, reference visits and discussions with potential contractors. In 2026, the plan is to select a
contractor, sign the contract and start the project. The project aims to increase the share of electricity in process heat
generation and reduce emissions associated with the use of fossil fuels. The project is scheduled for completion in the
second half of 2027.
Decarbonisation of purchased
process steam by changing
the fuel mix of the supplier
The Munkedals plant covers around 75 per cent of its energy needs with process steam supplied by an external CHP plant, of
which Arctic Paper is the only steam customer. This supplier is planning to change its fuel mix (switching to biogenic fuels) at
Arctic Paper’s initiative due to the Group’s commitments to reduce its carbon footprint. Arctic Paper will contribute to the costs
of changing the fuel mix, enabling a gradual increase in the share of biogenic fuels to 95% by the end of the first quarter of
2027. This action will significantly reduce indirect GHG emissions associated with the purchase of steam.
[E1-3 29 b] The Group did not analyse the expected or achieved reductions in GHG emissions that result from
the implementation of the above actions.
[E1-3 29 b, c, AR 21, 22] [MDR-A 69 a, b] The activities of the Kostrzyn factory concerning the expansion of the
photovoltaic installation and the expansion of the compressed air system through the installation and
commissioning of a ZR700 variable speed compressor required expenditure of approx. PLN 22 million. The
remaining activities do not involve the need for significant capital or operational expenditure during the reporting
period.
The planned activities with regard to the management of climate issues are described in part above. Other
planned activities and the resources needed to implement them are currently being developed as part of the
Transition Plan.
MANAGEMENT BOARD’S REPORT FOR 2025
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E1-4 Mitigation targets
[E1-4 32] [MDR-T 80] In 2025, the Arctic Paper Group adopted a comprehensive Decarbonisation Strategy,
covering all three GHG scopes. The strategy sets quantitative targets for the Arctic Paper Group’s climate change
mitigation until 2030, with 2024 as the adopted base year. GHG emissions calculations for the base year were
based on the GHG Protocol methodology. The decarbonisation strategy has been developed in line with the
Science Based Targets initiative (SBTi) guidelines for setting GHG reduction targets. The reduction targets adopted
are in line with the Paris Agreement for the relevant emission bands (band 1, band 2 and band 3). Details of
targets, emission scopes and time horizons are provided in the following sections of the disclosure.
In the base year, direct emissions (scope 1) amounted to 133 ktCO
2
e. Their main source was the combustion of
fuels in stationary sources, such as boilers for the generation of electricity and heat and steam, with smaller
contributions from combustion in mobile sources and refrigerant leaks. Indirect energy-related emissions (scope 2),
calculated according to the market-based method, amounted to approx. 153 ktCO
2
e and included emissions from
the purchase of electricity and process steam. Together, Scope 1 and Scope 2 emissions accounted for approx.
24% of the Group’s total emissions in the base year.
Scope 3 emissions, related to the value chain, reached approx. 834 ktCO
2
e (including non-material categories)
and accounted for approx. 74.5 % of the Group’s total emissions. Key sources of emissions in this area include
purchased goods and services and the processing of sold products, as well as energy-related activities, upstream
transport and distribution, end-of-life processing of sold products.
Figure 1 – GHG emission reductions in scope 1 and 2 by 2030
As part of its Decarbonisation Strategy, the Arctic Paper Group commits to reduce absolute GHG emissions,
expressed in carbon dioxide equivalent, in Scopes 1 and 2 by 42% by 2030 (taking 2024 as the base year). The
proposed target is in line with the scenario of limiting temperature increase to 1.5°C resulting from the Paris
Agreement and the requirements of the SBTi initiative for setting targets for Scope 1 and 2 emissions.
The choice of 2030 as the target year reflects the shortest possible implementation horizon while maintaining a
reduction ambition level of 42%. Achieving the 42% reduction target for Bands 1 and 2 by 2030 requires an
absolute reduction of 120,107 tCO
2
e, which will translate into a target for Bands 1 and 2 of 165,862 tCO
2
e in 2030.
Due to the significant share of emissions from stationary combustion (45.9%) and purchased electricity (38.9%)
in the total Scope 1 and 2 emissions, decarbonisation actions will primarily focus on reducing emissions from these
sources. The main levers for implementing the Decarbonisation Strategy in this area will be to increase the share of
renewable electricity through the purchase of green electricity in selected organisational units, the purchase of
process steam with a lower carbon footprint (generated using biofuels) and the reduction in fossil fuel consumption
resulting from the partial replacement of existing installations with lower carbon solutions.
MANAGEMENT BOARD’S REPORT FOR 2025
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Figure 2 – Reduction in Scope 3 GHG emissions by 2030
For selected Scope 3 categories, the Arctic Paper Group commits to reduce absolute GHG emissions expressed in
carbon dioxide equivalent by 25% by 2030 (taking 2024 as the base year). The proposed target is in line with the
‘below 2°C’ scenario of the Paris Agreement and the requirements of the SBTi initiative for setting Scope 3 targets.
The scope of the target includes the following Scope 3 categories along with their contribution to total Scope 3
emissions
1
:
• Category 1: Purchased goods and services (38.2%),
• Category 3: Category 3: Fuel and energy-related activities (8%).
• Category 4: Upstream transport and distribution (12.4%),
• Category 12: End of life of products sold (9.4%),
Together, the categories listed account for 68% of Scope 3 emissions, meeting the 67% coverage threshold of the
SBTi guidelines.
In the base year 2024, total Scope 3 emissions amounted to 834,469 tCO
2
e, of which 566,879 tCO
2
e fell into
the reduction target categories. Achieving the 25% reduction target in the selected categories by 2030 requires an
absolute reduction of 141,720 tCO
2
e, which will translate into a Scope 3 emissions target of 425,159 tCO
2
e in 2030
within the targeted categories.
The main levers for decarbonisation in Scope 3 are actions aimed at decarbonising the supply chain, including
proactively engaging suppliers by monitoring their GHG emissions and progress in implementing decarbonisation
actions, in order to support more informed decisions on supplier selection. The organisation plans to maintain an
active dialogue with transport and distribution service providers on the use of more sustainable forms of transport
and, where possible, the implementation and contracting of routes with lower emission potential compared to fossil
fuel-based solutions.
The Arctic Paper Group’s decarbonisation goals have been set to address and manage the significant impacts,
risks and opportunities associated with climate change (as listed earlier in Table SBM-3 Material Impacts, Risks
and Opportunities for Sustainable Development), including in particular the significant negative actual impacts
associated with GHG emissions across the entire value chain. Progress in achieving decarbonisation goals is
monitored and reported on an annual basis using quantitative measures such as greenhouse gas emissions and
the degree of achievement of the adopted goals. Monitoring covers Scope 1, Scope 2 and Scope 3 GHG
emissions. The process of monitoring, analysing performance and reporting progress is the responsibility of the
Sustainability team, which reports the results to the Group Board.
Decarbonization targets have been defined for 1) Scope 1 and 2, and 2) selected Scope 3 categories
(categories 1, 3, 4, and 12). Therefore, the key measures of progress are the percentage changes in GHG
emissions (tCO
2
e) in these scopes/categories relative to emissions generated in the base year (2024). Due to the
significantly greater availability of actual data and operational control in Scope 1 and 2, as well as the inclusion of a
significant portion of emissions in the EU ETS, monitoring actual changes in GHG emissions is not subject to
significant limitations. Calculations of Scope 1 and 2 emissions, and therefore their changes, are based primarily on
data on fuel, heat, and electricity consumption, which are reliably monitored due to the production nature of the
Group's operations.
Key limitations relate to monitoring emissions, and therefore their changes, in Scope 3. Beyond category 3
related to the acquisition of fuels and energy, the accuracy of emission calculations in the remaining categories is
1
Shares refer to non-FLAG band 3, i.e. band 3 excluding FLAG emissions occurring in category 1 of band 3
MANAGEMENT BOARD’S REPORT FOR 2025
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strongly dependent on the availability of supplier data, particularly data on the carbon footprint of the products and
services provided (categories 1 and 4). The Group has taken active steps to increase the share of supplier data in
the calculations, particularly in the area of purchased chemical raw materials and pulp (category 1). Monitoring
changes in category 12 is based primarily on updated statistical data on the treatment of paper waste at the end of
its life cycle.
The calculations and GHG reduction targets for Scopes 1, 2 and 3 have not been verified by an independent
third party other than the assurance provider.
E1-5 Energy consumption and the energy mix
[MDR-M 77 a] Energy is a core component of the Arctic Paper Group’s business, conditioning the continuity and
efficiency of production processes across all facilities. The level and structure of energy consumption are important
from both a cost and environmental perspective, affecting the Group’s GHG emissions and operational
competitiveness.
Below is a summary of the Arctic Paper Group’s energy consumption as a basis for assessing energy efficiency
and identifying areas for further optimisation. Included in this consumption are fuels used in the production process
(including biomass such as wood bark, black liquor, methanol, natural gas, LNG, etc.), electricity from purchase
and from the company’s own renewable energy installations (photovoltaic installations and hydroelectric power
plant), used for production and infrastructure maintenance, steam used in production and transport fuels.
Compared to 2024, the report does not include energy consumption in leased offices or vehicles used by sales
offices. In 2024, this represented less than 0.1% of the Group's total energy consumption and included estimated
data, so the decision was made to exclude it from the report. This exclusion does not affect the overall picture of
the Group's energy consumption or the ability to compare key trends year-on-year. In connection with the reporting
of emissions under the European Emissions Trading Scheme (EU ETS), the calculation of emissions from EU ETS
installations and the input data used are subject to external verification.
In cases where the base unit was other than MWh, energy consumption was recalculated using calorific values.
These values were obtained from the emission factor databases used in the GHG emission calculations (e.g.
databases of the Swedish Environmental Protection Agency (version 2025), the National Balancing and Emission
Management Centre (KOBIZE), DEFRA (2025). Calorific values specific to the supplier were also used.
The breakdown of the electricity consumed into renewable, nuclear and fossil sources was made using the
structure of the electricity generated specific to the supplier in the case of so-called ‘green tariffs’. When Group
entities did not purchase electricity under the green tariff, the source-specific structure of electricity not covered by
guarantees of origin or other credible instruments (the so-called residual mix) was used. The structure data was
obtained from the European Residual Mixes 2024 study published by the Association of Issuing Bodies and the
Swedish Energy Markets Inspectorate (Nordic Mix).
Following the ESRS guidelines, the Arctic Paper Group adopts a conservative way of differentiating between
renewable and non-renewable energy sources. Energy is only classified as renewable or nuclear if its origin is
clearly stated in contracts with suppliers. If the energy source is uncertain, it is classified as being from fossil fuels.
MANAGEMENT BOARD’S REPORT FOR 2025
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Energy consumption and the energy mix
Unit
2025
2024
2025/2024
1) Fuel consumption from coal and coal products
MWh
0
0
0
2) Fuel consumption from oil and petroleum products
MWh
22 051.89
31 094.40
-29.1%
3) Fuel consumption from natural gas
MWh
587 526.63
567 241.73
3.6%
4) Consumption of fuel from other fossil sources
MWh
0
0
0
5) Consumption of purchased or procured electricity, heat, steam and cooling from fossil
sources
MWh
317 732.09
369 705.68
-14.1%
6) Total fossil energy consumption (calculated as the sum of lines 1-5)
MWh
927 310.61
968 041.81
-4.2%
Share of fossil sources in total energy consumption (%)
%
28.96%
31.10%
-6.9%
7) Energy consumption from nuclear sources
MWh
243 867.33
195 951.01
24.5%
Share of energy consumption from nuclear sources in total energy consumption (%)
%
7.62%
6.30%
21%
8) Fuel consumption for renewable sources, including biomass (which also includes
industrial and municipal bio-waste, biogas, renewable hydrogen, etc.)
MWh
1 813 991.66
1 715 107.99
5.8%
9) Consumption of purchased or procured electricity, heat, steam and cooling from
renewable sources
MWh
185 210.71
224 703.50
-17.6%
10) Self-produced renewable energy consumption without fuel
MWh
31 274.50
8 853.12
253.3%
11) Total renewable and low-carbon energy consumption (calculated as the sum of lines
8-10)
MWh
2 030 476.87
1 948 664.61
4.2%
Share of renewable sources in total energy consumption
%
63.42%
62.60%
1.3%
Total energy consumption (calculated as the sum of lines 6, 7 and 11)
MWh
3 201 654.81
3 112 657.44
2.9%
[E1-5 42, 43] 100% of the Arctic Paper Group’s activities fall within the sector with a material climate impact –
NACE 17 (production of pulp, paper and board), therefore the Group’s total sales as reported in the financial
statements – PLN 3,197,594,000 – are used to determine energy intensity (according to the item Revenue from
sales of paper and pulp – Note 4.1.1.).
Energy intensity
Unit
2025
2024
2025/2024
Total energy consumption associated with activities in sectors with a material
climate impact
MWh
3 201 654.81
3 112 657.44
2.9%
Energy intensity resulting from activities in sectors with material climate impacts
climate (total energy consumption per net revenue)
MWh/PLN thousand
1,0013
0,9062
10.5%
[MDR-T 77 b] The above indicators have not been verified by an external body other than the assurance provider.
E1-6 Gross scope 1, 2 3 and Total GHG emissions.
[E1-6 47, AR 39b] The following section contains the results of the Arctic Paper Group’s greenhouse gas (GHG)
inventory and shows the total emissions associated with the Group’s operations in the current reporting year. The
emissions, measured in tonnes of carbon dioxide equivalent (tCO
2
e), were calculated according to the international
Greenhouse Gas Protocol methodology. Key guidelines used in the calculations include the GHG Protocol (2004
version), GHG Protocol Scope 2 Guidance (2015 version), Corporate Value Chain (Scope 3) Accounting and
Reporting Standard (2011 version) and Scope 3 Calculation Guidance (2013 version).
The Group has operational and financial control over the entities in its structure, leading to full consolidation of
Scope 1, Scope 2 and Scope 3 emissions in the Group’s GHG inventory. The data used to calculate GHG
emissions was sourced from the Group’s internal records and was provided by employees from across the
organisation.
The following entities were excluded from the Scope 1 and 2 GHG emissions inventories: Arctic Paper Polska
Sp. z o.o., Arctic Paper Deutschland GmbH, Arctic Paper UK Limited, Arctic Paper Sverige AB, Arctic Paper
MANAGEMENT BOARD’S REPORT FOR 2025
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Benelux S.A., Arctic Paper Norge AS, Arctic Paper Baltic States SIA, Arctic Paper Danmark A/S, Arctic Paper
France SAS, Arctic Paper Schweiz AG, Arctic Paper Italia srl, and Arctic Paper Espana SL. These entities are
trading companies that have not experienced significant operational or organizational changes. In the base year
(FY2024), they generated a total of 165.71 tCO₂e, out of the Group's total Scope 1 and 2 emissions (market-based
approach) of 285,968.77 tCO₂e. The share of these entities in Scope 1 and 2 emissions was 0.06%, which is
significantly below the exemption threshold (5%).
Scope 1 applies to all direct GHG emissions from sources owned or controlled by companies within the Group.
This category includes emissions from mobile combustion sources, including transport fuels such as diesel and
gasoline, and combustion in stationary sources of fuels such as natural gas, LPG, LNG, fuel oil and industry-
specific fuels such as black liquor, methanol, wood bark or tar oil. In addition, Scope 1 also includes emissions
associated with refrigerant replenishment. Emissions were calculated on the basis of real liquid and solid fuel
consumption (also including biofuel) using emission factors obtained from, among others, the Swedish
Environmental Protection Agency (version 2025), the UK DEFRA (2025), the National Balancing and Emissions
Management Centre (KOBIZE, version for 2024 and 2025) and information from suppliers.
For activities covered by the European Emissions Trading Scheme (EU ETS), Scope 1 emissions are calculated
in accordance with the EU ETS methodology. Several entities within the Group report their CO
2
emissions
according to the EU ETS. These are: Arctic Paper Kostrzyn S.A., Arctic Paper Munkedals AB, Arctic Paper
Grycksbo AB, Rottneros Bruk AB, Vallviks Bruk AB. In connection with the reporting of emissions under the
European Emissions Trading Scheme (EU ETS), the calculation of emissions from EU ETS installations and the
input data used are subject to external verification.
Scope 2 includes indirect GHG emissions associated with the consumption of purchased electricity and steam.
The Group uses both a market-based and a location-based approach, in line with the GHG Protocol Scope 2
Guidance, to ensure a comprehensive assessment of the emissions associated with the purchase of energy that is
classified as renewable or nuclear only when its origin is explicitly stated in contracts with suppliers. If the energy
source is uncertain, it is classified as being from fossil fuels. Selected Arctic Paper Group entities purchase
electricity, under so-called green tariffs (60.1%), guarantees of origin of energy from renewable sources (0.4%) and
guarantees of origin from nuclear sources (17.2%). Emissions were calculated based on real electricity and heat
consumption. Emission factors were obtained through, among others, the UK DEFRA (2025), the National
Balancing and Emissions Management Centre (KOBIZE, version for 2024 and 2025, the Swedish Environmental
Protection Agency (version 2025) and from information from suppliers and were calculated based on real electricity
and heat consumption.
[E1-6 AR 46 h] Scope 3 emissions include all indirect emissions outside of Scope 1 and 2 that occur throughout
the Group’s value chain. Emissions in material categories arise from a variety of sources, including the purchase of
goods and services, capital goods, energy and fuel activities not included in Scope 1 or 2, transport and distribution
(upstream), processing of sold intermediates and the management of waste arising from sold products at end-of-
life.
The following entities were excluded from the Scope 3 greenhouse gas emissions inventory: Arctic Paper
Polska Sp. z o.o., Arctic Paper Deutschland GmbH, Arctic Paper UK Limited, Arctic Paper Sverige AB, Arctic Paper
Benelux S.A., Arctic Paper Norge AS, Arctic Paper Baltic States SIA, Arctic Paper Danmark A/S, Arctic Paper
France SAS, Arctic Paper Schweiz AG, Arctic Paper Italia srl, Arctic Paper Espana SL, Arctic Paper
Mochenwangen GmbH, Arctic Power AB (formerly Munkedals Kraft AB), Kalltorp Kraft Hb, Arctic Paper S.A.
Sverige filial. There were no significant operational or organizational changes to these entities. In the base year
(FY2024), they generated a total of 663.49 tCO
2
e of the Group's total Scope 3 emissions (market-based approach)
of 889,241.47 tCO
2
e. Their share of Scope 3 emissions was 0.07%, which falls significantly short of the 5%
exemption threshold.
[E1-6 AR 46 g] Emissions were calculated on the basis of real consumption expressed in physical units such as
tonnes, litres, MWh where such data were available and on an expenditure basis, in the corresponding currency.
Estimates of the calculations were mainly made for categories 10 and 12 (Processing sold products and
Processing sold products at end-of-life, respectively), where the most likely uses and disposals of the products sold
by the Group were modelled, using employee expertise and available studies. Emission estimates were also made
in Category 4, Upstream Transport and Distribution, where, in the absence of accurate data on routes travelled, the
distance was estimated based on the distance from the production facility to a central point in the country or from
the specific location of the supplier. 48.7% of the Scope 3 emissions have been calculated from the estimated
inputs and are mainly related to the estimation of categories 10 and 12. Calculations for categories 10 and 12 are
based entirely on estimates. The only actual data used in the calculations is the mass of products sold. 19% of
emissions were calculated based on primary data, i.e., data obtained directly from suppliers and business partners.
Supplier-specific emission factors were assumed as primary data. Emission factors were obtained through, among
others, the Swedish Environmental Protection Agency (version 2025), the National Balancing and Emissions
Management Centre (KOBIZE, version 2024 and 2025), the Association of Issuing Bodies (AiB, version 2024), the
European Environment Agency (EEA, version 2024) and the UK DEFRA (2025). In addition, the Group uses
MANAGEMENT BOARD’S REPORT FOR 2025
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emission factors from the International Energy Agency (IEA, version 2025), Exiobase (version 3.8.2) and Ecoinvent
(version 3.11) databases and, where possible, supplier-specific emission factors.
[E1-6 AR 46 i] Certain Scope 3 categories are not material due to the nature of the Group’s business. Include
downstream transport and distribution, leased downstream assets and franchises (no activity matching the
classification criteria for these categories). In the methodology for calculating GHG emissions, 5% of total
emissions was used as the materiality threshold. The materiality analysis of scope 3 showed, according to the
calculations in the base year (FY2024), that the following scope 3 categories are below the materiality threshold:
category 2 Capital goods, category 5 Waste generated from operations, category 6 Business travel, category 7
Employee commuting, category 8 Leased senior assets, category 11 Use of products sold and category 15
Investments. The categories considered material are, in turn, category 1 Purchased goods and services, category 3
Fuel and energy activities (not included in scope 1 or 2), category 4 Upstream transport and distribution, category
10 Processing of products sold, category12 End-of-life processing of products sold.
[E1-6 AR 39 b] Where possible, the Group’s emissions calculations consider the full spectrum of greenhouse
gases, including carbon dioxide (CO
2
), methane (CH
4
), nitrous oxide (N
2
O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), sulphur hexafluoride (SF
6
) and trifluoride nitride (NF
3
). Due to data limitations, some
sources of emission factors only provide aggregate emissions in CO
2
equivalent (CO
2
e), rather than a detailed
breakdown of individual gases (e.g. location-based indicator for electricity (KOBIZE).
To ensure accuracy, the Group’s GHG emissions calculations are based on emission factors from a number of
recognised sources. These include the Swedish Environmental Protection Agency (version 2025), the National
Balancing and Emissions Management Centre (KOBIZE, version 2024 and 2025), the Association of Issuing
Bodies (AiB, version 2024), the European Environment Agency (EEA, version 2024) and the UK’s DEFRA (2025).
In addition, the Group uses emission factors from the International Energy Agency (IEA, version 2025), Exiobase
(version 3.8.2) and Ecoinvent (version 3.11) databases and, where possible, supplier-specific emission factors.
GHG emissions calculations are based on Global Warming Potential (GWP) values from the IPCC Sixth
Assessment Report (AR6, 2021). However, when using the DEFRA database, GWP values from AR5 are used due
to the fact that DEFRA does not provide values for all indicators broken down by individual greenhouse gas.
Conversions to AR6 were not carried out for DEFRA-related emission factors due to data limitations.
MANAGEMENT BOARD’S REPORT FOR 2025
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GHG emissions
2025
2024 – after
recalculation (base
year)
2024 before
recalculation
% 2025/2024 after
recalculation
Reduction goal
2030
% Goal/ base year
Scope 1 GHG emissions
Gross Scope 1 (t CO
2
e)
135 306.18
133 442.79
133 442.79
1.4%
N/A
N/A
Percentage of Scope 1 GHG
emissions from regulated
emissions trading schemes (%)
92.2%
92.4%
92.4%
-0.2%
N/A
N/A
Scope 2 GHG emissions
Scope 2 by location-based
method (t CO
2
e)
48 170.38
45 939.28
45 939.28
4.9%
N/A
N/A
Scope 2 by market-based method
(t CO
2
e)
88 289.18
152 525.98
152 525.98
-42.1%
N/A
N/A
Scope 3 GHG emissions
Gross scope 3 by location-based
method (t CO
2
e)
776 163.65
795 056.07
849 828.72
-2.4%
N/A
N/A
Scope 3 gross by market-based
method (t CO
2
e)
789 779.49
829 986.35
884 759.00
-4.8%
N/A
N/A
1 Purchased goods and services
(t CO
2
e)
294 680.96
318 414.62
373 187.27
-7.5%
N/A
N/A
2 Capital goods (t CO
2
e)
18 393.39
24 262.31
24 262.31
-24.2%
N/A
N/A
3 Fuel and energy-related
activities (not included in scope 1
or 2) by location-based
30 341.62
31 652.39
31 652.39
-4.1%
N/A
N/A
3 Fuel and energy activities (not
included in scope 1 or 2) by
market-based method (t CO
2
e)
43 957.45
66 582.67
66 582.67
-34.0%
N/A
N/A
4 Upstream transport and
distribution (t CO
2
e)
111 191.64
103 422.44
103 422.44
7.5%
N/A
N/A
10 Processing of products sold (t
CO
2
e)
246 630.52
238 844.88
238 844.88
3.3%
N/A
N/A
12 End-of-life processing of
products sold (tCO
2
e)
74 925.53
78 459.43
78 459.43
-4.5%
N/A
N/A
Total GHG emissions
Total GHG emissions by location-
based method (t CO
2
e)
959 640.22
974 438.14
1 029 210.79
-1.5%
N/A
N/A
Total GHG emissions under the
market-based method (t CO
2
e)
1 013 374.85
1 115 955.12
1 170 727.77
-9.2%
N/A
N/A
The Scope 3 greenhouse gas emissions data presented for 2024 reflects a change in the emissions calculation
methodology, which involves the use of a more precise calcium carbonate emissions factor that better reflects the
calcium carbonate production process. This change affected the reported emissions in the base year. Because the
use of the more precise factor resulted in a change in Scope 3 emissions of more than 5%, emissions for the base
year were recalculated to ensure data comparability. The emission values presented in this disclosure for 2024
represent recalculated data and are consistent with the Group's current greenhouse gas emissions calculation
methodology. The change in methodology is described in BP-2. In 2025, total greenhouse gas emissions using the
market-based approach amounted to 1 013 374,85 tCO
2
e, a decrease by over 9% compared to the base year of
2024. Scope 1 and 2 emissions decreased by over 21% compared to the base year, reaching 223 595,36 tCO
2
e.
The Arctic Paper Group's 2030 Scope 1 and 2 target is to reduce emissions using the market-based approach by
42% by 2030, compared to 2024. Therefore, a significant portion of the Scope 1 and 2 decarbonization target was
achieved in 2025. This significant reduction is primarily related to changes in the structure of purchased electricity
sources, which is reflected in the over 42% decrease in Scope 2 emissions calculated using the market-based
approach. In 2025, Vallviks Bruk and Rottneros Bruk covered a portion of their purchased electricity with nuclear
guarantees. Significant reductions in Scope 3 emissions were recorded in Category 3, which is related to the
acquisition of purchased electricity, heat, and fuels (so-called upstream emissions). Compared to the base year,
MANAGEMENT BOARD’S REPORT FOR 2025
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106
Scope 3 emissions decreased by 34%. This is directly related to activities related to purchasing Scope 2 electricity
– reducing Scope 2 emissions directly leads to a reduction in Scope 3 emissions. Over 7% reduction in emissions
compared to the base year was recorded in Category 1, which is related to purchased products and services,
primarily raw materials used in production (technological chemicals, pulp, wood). This is related to suppliers'
decarbonization efforts and reducing the carbon footprint of their products. The Group’s Scope 3 decarbonisation
targets are to reduce emissions in categories 1, 3, 4, and 12 by 25% by 2030 compared to the base year of 2024.
Emissions in the categories covered by the decarbonisation target amounted to 524 755,58 tCO
2
e, representing
over 7% decrease compared to the base year.
GHG intensity
Unit
2025
2024
2025/2024
Total GHG emissions by
location-based method per net
revenue
t CO
2
e/PLN thousand
0.3001
0.3009
-0.3%
Total GHG emissions by
market-based method per net
revenue
t CO
2
e/PLN thousand
0.3169
0.3422
-7,4%
[E1-6 55] The Group’s total sales as reported in the financial statements – PLN 3 197 594 000 (as per Paper and
Pulp Sales Revenue – Note 4.1.1) were used to determine the GHG intensity.
[E1-6 AR 43 c, 45 e, 46 j] Biogenic emissions are disclosed separately, as ‘out-of-range’ emissions, as the
combustion of bioenergy sources is considered carbon neutral throughout their life cycle. This classification is
based on the assumption that biomass absorbs during the growth phase an equivalent amount of CO2 released
during combustion. However, non-CO
2
GHG emissions from biomass combustion, including methane (CH
4
) and
nitrous oxide (N
2
O), are covered under Scope 1, according to ESRS E1 (AR 43). In 2025, biogenic Scope 1
emissions amounted to 635 742.00 tCO
2
e, of which almost 100% came from combustion in stationary sources.
Biogenic Scope 2 emissions amounted to 25,655.36 tCO
2
e and were associated with purchased process steam.
Biogenic Scope 3 emissions amounted to 139,496.22 tCO
2
e and were associated with the use of sold biofuels.
E1-7 GHG removal and mitigation projects financed through carbon credits
The Arctic Paper Group had no GHG capture and storage projects in 2025.
E1-8 Internal carbon pricing
The Arctic Paper Group did not use internal carbon pricing in 2025 and did not assign a specific financial value to
its CO
2
emissions as part of its decision-making processes.
E1-9 Projected financial impacts from material physical and transition risks and potential climate-related
opportunities
The Arctic Paper Group benefits from the possibility to omit the information set out in ESRS E1-9 in the first three
years of the Sustainability Statement on the basis of the “List of phased-in disclosure requirements” (Appendix C in
ESRS 1) and the Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated
Regulation (EU) 2023/2772 as regards the deferral of the start date of application of the disclosure requirements for
certain companies (“Quick fix”).
ESRS E2 Pollution
SBM-3 Linking Material sustainability impacts to strategy and business model
[SBM-3 48b, c, d, f] The material impacts described in relation to pollution are primarily due to the specific nature of
the Arctic Paper Group’s production and logistics activities, and are linked to a business model based on
production and distribution. Production processes affect air pollution, water pollution and toxic emissions into the
air, water and soil. Atmospheric pollution from production and transport processes affects the level of investment
and the setting of strategic objectives. Potential water pollution in production processes does not currently affect
the change in the business model, due to the investments made in water purification and recycling technologies,
the optimisation of production processes and the implementation of environmental management standards. Arctic
Paper conducts continuous monitoring of the quality of water discharged into the environment and plans to
MANAGEMENT BOARD’S REPORT FOR 2025
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107
continue doing so. The use of potentially hazardous substances is now strictly controlled within the framework of
current standards and regulations. Actions concerning the regeneration of ecosystems and the reduction of the use
of certain substances do not currently affect the strategic objectives or the business model. At the same time, it is
not ruled out that the strategy will in future incorporate objectives to minimise the use of potentially hazardous
substances by investing in safe alternatives and risk management systems.
E2-1 Pollution-related policies
[E2-1 14, 15] [MDR-P 65] In 2025 the Arctic Paper Group does not have a separate policy on pollution, including
mitigation of adverse effects or avoidance of pollution incidents and emergencies. The Group does not currently
identify a need for such a policy. The main principles regarding the use of chemicals are contained in the
Sustainable Development Policy. The Group is committed to limiting the use of such substances. The policy does
not refer to specific agents or chemicals. In line with the stipulations of this policy, as well as based on legislation
and environmental management systems, the Arctic Paper Group strives to introduce actions in the production
process that reduce the generation of pollutants and continuously monitors emissions to water and air.
Another document indirectly governing the approach to pollution is the Arctic Paper Group Code of Conduct for
the value chain. The document commits the production facilities to operate in accordance with the ISO 14001 and
EMAS environmental management system, and the Grycksbo and Munkedal mills additionally to have an ISO
50001 certified energy management system. These certificates introduce specific environmental and energy criteria
for the Group's suppliers and require them to undergo environmental audits, hence the impact also applies to the
supply chain.
The scope of the policies covers the operations of the Arctic Paper Group, excluding the Rottneros Group. The
Group Management is responsible for implementing the provisions of the policies. The policies adopted refer to the
Sustainable Development Goals 2030, the principles of the UN Global Compact, the Best Practices for WSE Listed
Companies. In preparing the content of the document, the interests and opinions of the Group’s stakeholders were
taken into account. The Group makes the adopted regulations available by posting them on the website and on the
internal communication channels of the various organisational units.
The Rottneros Group does not have a policy dedicated to pollution, including mitigating its negative effects,
replacing potentially hazardous substances and phasing out substances of particular concern, and avoiding
pollution-related incidents and emergencies. In its Sustainability Policy, the Group refers to minimising
environmental impact, operating in accordance with environmental certifications such as ISO 14001 and ISO
50001, and monitoring the pollution generated.
The scope of the policy covers the activities of the Rottneros Group. The Management Board of the Rottneros
Group is responsible for implementing the provisions of the policy. The adopted policy does not refer to third-party
standards or initiatives. In preparing the content of the document, the interests and opinions of the Group’s
stakeholders were taken into account. The Group makes the regulations available by posting them on its website
and on the internal communication channels of each organisational unit.
E2-2 Pollution-related activities and resources
[E2-2 18, AR 13] [MDR- 68].
At the Arctic Paper Group, key pollution-related activities focus primarily on upgrading and investing in new, less
polluting production infrastructure:
MANAGEMENT BOARD’S REPORT FOR 2025
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108
Name of the action
Description of the action
Modernisation of the
aeration system at the
wastewater treatment
plant
In 2024, a project began at the Kostrzyn plant to retrofit the wastewater treatment plant with a new air supply system to improve
the efficiency of the treatment processes. In 2025, the activities continued and were completed with the upgrade of the blower
station, enabling a more stable and efficient operation of the plant. The solutions used support more efficient removal of pollutants
from wastewater and improved performance of the treatment plant. In addition, the new blower has been adapted to be powered
by a generator, which increases the reliability of the plant’s operation in the event of power cuts. Modernisation contributes to
reducing the risk of disruption to treatment processes and strengthens the environmental safety of operations.
Installation of an EGSB
reactor in a wastewater
treatment plant
In 2024, a project to install a new EGSB (Expanded Granular Sludge Bed) reactor in the anaerobic section of the wastewater
treatment plant began at the Rottneros mill. Installation work was carried out in 2025, while commissioning and start-up of the
plant is scheduled for early 2026. The reactor used enables the production of biogas, which will be used in the pulp drying process
in flash dryers, thus reducing chemical oxygen demand and air pollution such as suspended solids, nitrogen and phosphorus. The
implementation of EGSB technology supports improvements in wastewater treatment efficiency by reducing the organic pollutant
load and reducing air emissions associated with suspended solids, nitrogen and phosphorus. The project contributes to a more
integrated approach to water, energy and emissions management in plant operations.
Upgrading the waste
water tank at the
bleaching plant
In 2025, a project was implemented at the Vallviks plant to rebuild the wastewater tank at the bleaching plant, aimed at improving
control over process wastewater parameters. The scope of activities included upgrading infrastructure to reduce chlorate
emissions to water. The solutions used support a more stable operation of the plant and a reduction in the pressure associated
with the discharge of pollutants into the water environment.
Biomass boiler
modernisation at a pulp
plant
A biomass boiler upgrade was carried out at the Rottneros plant in 2024 to improve the energy efficiency of the unit. The solutions
used have enabled more efficient combustion of fuel and reduced emissions of selected air pollutants, including carbon monoxide
(CO) and nitrogen oxides (NOx). The project has contributed to increasing the stability of energy processes and improving
environmental parameters related to air pollutant emissions.
The effects of the modernisation can be seen in the emissions data: CO₂ emissions from stationary combustion fell from 1,915
tonnes per year in 2024 to 235 tonnes per year in 2025, while CO emissions decreased from 24.1 to 21.5 tonnes per year and
NOx emissions from 31.9 to 25.1 tonnes per year.
Planned actions
Modernisation of the
fresh water treatment
plant
An upgrade of the freshwater treatment plant at the Munkedals plant is planned for 2026, aimed at improving control of the quality
of water discharged into the environment. The scope of the project includes reducing sediment losses and stabilising flows in the
river, which will reduce the variability of water parameters. The planned actions aim to reduce water pollution pressures and
improve environmental conditions in the area of influence of the installation.
The investment in the project to upgrade the wastewater tank at the Vallviks plant amounted to MSEK 1.3,
which the Group considers to be a significant capital expenditure. The remaining activities do not involve
the need for significant investment or operational expenditure.
E2-3 Pollution targets
[E2-3 22] [MDR-T 81] The Arctic Paper Group has not set quantitative targets for water, air and soil pollution. To
date, no such need has been identified either in a regulatory or strategic context. The emission levels of the
individual compounds do not exceed the permitted values set out in the integrated permits in force for the individual
production facilities. Monitoring of the progress and effectiveness of the actions undertaken in this area is done
through the monitoring systems in place at the production facilities for emissions to air, water and soil.
E2-4 Contamination of air, water and soil.
[E2-4 30 b, AR 27] [E2-4 30 c] The following are emissions of polluting agents from facilities for which the relevant
threshold value specified in Annex II to Regulation (EC) No. 166/2006 of the European Parliament and of the
Council is exceeded, excluding greenhouse gas emissions, which are disclosed in Part E1-6 GHG Emissions of
Bands 1, 2 and 3 gross and total GHG emissions. These data were based primarily on direct measurements from
automated systems and, where this was not possible, on periodic measurements or calculations based on location-
specific data. Where automated measurement systems are used, calibration studies have been carried out. In the
case of Arctic Paper Kostrzyn, pollution measurements are carried out on the basis of the undertaking’s integrated
permit.
The Arctic Paper Group does not identify changes in the production process that may result in the appearance
of new pollutants or the disappearance of existing ones.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
109
Emissions of pollutants to air
Unit
Arctic Paper
Munkedals
Arctic Paper
Grycksbo
Arctic Paper
Kostrzyn
Rottneros
Vallvik
Total in 2025
Total in 2024
Carbon monoxide (CO)
1
kg
246.85
62 823.00
30 988.40
1 713.28
374 272.91
470 044,43
484 385,17
Hydrofluorocarbons (HFCs)
kg
17.50
16.70
34.20
67.80
Ammonia (NH
3
)
kg
1 027.97
67 841.93
68 869.90
64 840,98
Non-methane volatile organic
compounds (NMVOCs)
kg
286.22
6 853.10
464 941.77
472 081.09
444 471.80
Nitrogen oxides (NO
x
/NO
2
)
2
kg
2 040.00
20 038.00
133 979.30
25 125.00
312 078.54
493 260.84
479 840.74
Sulphur oxides (SO
x
/SO
2
)
2
kg
15.00
2 051.11
6 006.54
43 604.94
51 677.58
67 997.55
Hydrochlorofluorocarbons (HCFCs)
kg
10.00
10.00
4.60
Arsenic and its compounds (as As)
kg
0.07
5.22
5.29
4.98
Cadmium and its compounds (as
Cd)
kg
0.17
3.26
3.43
3.26
Chromium and its compounds (as
Cr)
kg
0.51
8.16
8.67
8.24
Copper and its compounds (as Cu)
kg
3.43
18,65
22.08
21.35
Mercury and its compounds (as Hg)
kg
0.07
0.56
0.63
0.60
Nickel and its compounds (as Ni)
kg
1.71
18.65
20,36
19.42
Lead and its compounds (as Pb)
kg
3.43
18.65
22.08
21.35
Zinc and its compounds (as Zn)
kg
34.27
74.64
108.90
108.39
Chlorine and inorganic compounds
(as HCl)
kg
2 104.87
2 104.87
2 046.68
Particulate matter (PM
10
)
2
kg
13.00
651.07
2 195.10
46 088.42
48 947.59
46 608.30
1
The measurement was verified by an accredited laboratory.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
110
Emissions of pollutants to water
Unit
Arctic Paper
Munkedals
Arctic Paper
Grycksbo
Arctic Paper
Kostrzyn
Rottneros
Vallvik
Total in 2025
Total in 2024
Nitrogen
2
kg
2 582.00
7 690.00
21 322.90
15 501.00
24 126.00
71 221.90
71 956.28
Phosphorus
2
kg
312.00
87.00
1 328.20
311.15
6 349.56
8 387.91
7 506.59
Arsenic and its compounds (as As)
2
.
kg
0.09
1.91
9.20
11.20
11.65
Cadmium and its compounds (as
Cd)
2
.
kg
0.01
0.32
9.78
10.11
7.15
Chromium and its compounds (as
Cr)
2
.
kg
0.48
70.90
30.75
20.76
122.89
63.39
Copper and its compounds (as Cu)
2
.
kg
3.37
126.40
36.60
54.82
221.19
173.34
Mercury and its compounds (as Hg)
2
.
kg
0.04
0.20
0.00
0.24
0.43
Nickel and its compounds (as Ni)
2
.
kg
1.47
24.80
141.54
16.88
184.69
159.71
Lead and its compounds (as Pb)
2
.
kg
0.40
27.10
3.20
10.27
40.97
43.86
Zinc and its compounds (as Zn)
2
.
kg
16.86
121.50
463.66
897.75
1 499.77
1 744.39
Halogenated organic compounds
(as AOX)
2
kg
240.00
244.00
11 265.96
11 749.96
9 372.60
Total organic carbon (TOC) (as
total C or COD/3)
2
kg
21 998.00
20 367.00
22 045.70
911 010.00
851 322.75
1 826 743.45
1 535 890.70
Chlorides (as total Cl)
kg
525 392.00
571 032.54
1 181 928.73
2 278 353.26
1 761 875.12
The Group identifies no material emissions of pollutants to soil.
E2-5 Substances of concern and substances of very high concern
The table below shows the quantities of potentially hazardous substances produced, purchased, used, and sold on
their own and as part of a product in 2025. This information is presented by class, according to the highest hazard
category of the substance. As a result of the double materiality analysis described in ESRS General Section 2, the
general disclosure of quantities of substances of very high concern was considered to be insignificant.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
111
Hazard class
Unit
Produced
Purchased
Applied
Sold as its
own
Sold as part of a
product
They left the
Group in the
form of waste
Carcinogenicity category 1
kg
0,00
1 106 067.97
1 105 907.71
0.00
0.00
148.26
Reproductive toxicity category 1
kg
0,00
44,30
44.30
0.00
0.00
0.00
Carcinogenicity category 2
kg
0,00
108 693.60
108 693.60
0.00
0.00
0.00
Reproductive toxicity category 2
kg
0,00
2 430,16
2 430.16
0.00
0.00
0.00
Toxic effects on target organs,
repeated exposure category 1
kg
0,00
27 257,00
0.00
0.00
0.00
23 525.00
Toxic effects on target organs, single
exposure category 1
kg
1 643 390,00
317 014,50
1 960 404.50
0.00
0.00
0.00
Toxic effects on target organs,
repeated exposure category 2
kg
0,00
267,21
267.21
0.00
0.00
0.00
Respiratory sensitisation category 1
kg
0,00
3 500.90
3 500.90
0.00
0.00
0.00
Skin sensitisation category 1
kg
975 337,50
2 177 273.92
2 210 466.90
846 214.00
58 533.60
15 644.40
Long-term hazard to aquatic
environment category 1
kg
46 954,00
365 747.48
386 834.78
0.00
0.00
875.60
Long-term hazard to aquatic
environment category 2
kg
0,00
2 989 299,56
2 989 243.06
0.00
13.20
0.00
Long-term hazard to aquatic
environment category 3
kg
0,00
187 111.39
174 220.79
0.00
0.00
12 890.60
Total for 2025
kg
2 665 681.50
7 284 708.00
8 942 013.91
846 214.00
58 546.80
53 083.86
Total for 2024(corrected values)
kg
2 624 166.00
5 769 584.96
6 822 120.33
942 246.00
558 523.06
39 939.94
During the analytical work, discrepancies were identified in the presentation of data on the quantities of hazardous
substances. These involved the incorrect assignment of some volumes to specific hazard classes. As a result, the
table structure did not fully reflect the actual material flows, which affected the level of some aggregate values.
After verifying the source data, corrections to the classification and conversions were made, and the corrected data
were included in the current E2-5 disclosure.
The correction concerned hazard classes because, according to the ESRS, hazardous substances and
substances of very high concern are subject to disclosure by hazard class. Changes were also made to the stages
(i.e., manufactured, purchased, used, and sold); however, these changes are not material, as confirmed by the
structure of the ESRS requirements, which do not consider the stage as a factor determining the scope of required
disclosures. The table below presents the reported and corrected values for each substance class for 2024. The
error correction was described in BP-2.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
112
Hazard class
Unit
Produced
Purchased
Applied
Sold as its own
Sold as part of a
product
They left the
Group in the form
of waste
Respiratory
sensitisation
category
1 (reported 2024)
kg
0.00
957 665.20
360.20
0.00
955 205.00
2 100.0
Respiratory
sensitisation
category 1
(corrected 2024)
kg
3 460.20
360.20
3 100.00
0.00
Skin sensitisation
category
1 (reported 2024)
kg
942 246.00
1 622 395.68
823 628.89
942 246.00
859 097.21
56 469.57
Skin sensitisation
category 1
(corrected 2024)
kg
942 246.00
371 348.68
11 468.89
942 246.00
355 319.21
4 560.57
Long-term hazard
to aquatic
environment
category
1 (reported 2024)
kg
58 400.00
63 954.59
89 494.74
32 840.80
19.05
Long-term hazard
to aquatic
environment
category 1
(corrected 2024)
kg
46 720.00
352 222.09
365 314.74
32 840.80
786.55
Total for 2024
(reported)
kg
2 635 846.00
7 405 939.84
7 241 660.33
942 246.00
2 014 406.06
190 473.44
Total for 2024
(corrected
values)
kg
2 624 166.00
5 769 584.96
6 822 120.33
942 246.00
558 523.06
39 939.94
The data on substances of concern come from purchasing data, sales data and safety data sheets of purchased
products, as well as information related to the nature of the production processes at each undertaking. The data
from Vallvik, Rottneros, Arctic Paper Grycksbo and Arctic Paper Munkedals, as well as Arctic Paper Kostrzyn, are
of high quality and include the CAS number (Chemical Abstracts Service – a numerical designation to identify a
chemical) and the annual consumption of the substance. As the concentration of substances of concern in
preparations containing such substances is not reported at Arctic Paper Kostrzyn, the full weight of the
preparations was used for the calculation. The use of potentially hazardous substances is based on estimates,
except when substances are incinerated, for which the data are very accurate. Many substances are reactants that
will undergo a chemical reaction and will not be detectable in the product or emissions. The simple inorganic salts
and acids used will be completely dissociated in the process and will not exist in the added form, thus remaining
undetectable.
E2-6 Anticipated financial impacts arising from material risks and opportunities associated with pollution
The Arctic Paper Group benefits from the possibility to omit the information set out in ESRS E2-6 in the first three
years of the Sustainability Statement on the basis of the “List of phased-in disclosure requirements” (Appendix C in
ESRS 1) and the Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated
Regulation (EU) 2023/2772 as regards the deferral of the start date of application of the disclosure requirements for
certain companies (“Quick fix”).
ESRS E3 Water and marine resources
SBM-3 Linking Material sustainability impacts and risks to the strategy and business model
[SBM-3 48b, c, d, f] The material water resource impacts and risks described stem from the specific nature of AP’s
business model based on pulp and paper production, which are highly water-intensive processes. The high reliance
on water as a key raw material means possible operational risks, as droughts or limited water availability can lead
to temporary production stoppages. High water consumption generates significant costs for water abstraction,
treatment and disposal, and increases in water prices and environmental charges can affect the profitability of
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
113
operations. The limited availability of water in water-scarce regions can also increase the price of raw materials,
such as pulp and paper pulp, and force modifications to the supply chain, including the search for alternative
suppliers in regions with greater water availability. Water pollution associated with the maritime transport of pulp is
an additional aspect of risk linked to the business model. Increasing regulatory requirements and market pressure
for sustainable production are prompting the Group to further invest in water-saving technologies, water recycling
and treatment, and process optimisation. The Arctic Paper Group continuously monitors the quality of water
discharged into the environment, focusing on discharging water of high quality. In the future, it is possible to
implement sustainable transport strategies, including cooperation with suppliers using ballast water treatment
systems, which may affect logistics costs. These actions increase operational resilience to water shortages,
mitigate financial and reputational risks and support the Group’s long-term financial sustainability.
E3-1 Policies related to water and marine resources
[E3-1 11, 12, 14] [MDR-P 65] In 2025 the Arctic Paper Group did not have a separate water, marine and ocean
resources policy. The Group currently manages the water and marine resources topic based on the provisions of
the Sustainable Development Policy. In line with this policy, Group companies make efforts to reduce water
consumption and wastewater discharge, and to reuse water used in the production process. The policy also
represents the Arctic Paper Group’s commitment to strive to ensure that the water used is treated first and only
then reintroduced into the environment. The policy notes that the quality of water abstracted and discharged is
monitored. The monitoring requirement also stems from the water permits in both Poland and Sweden (Swedish:
Vattendom). The document refers to the use and supply of water within its own operations, water treatment and a
commitment to reduce water consumption. It also applies to value chain operations that may be carried out in areas
at risk of water scarcity.
The scope of the policy covers the operations of the Arctic Paper Group. The Group Management is responsible
for implementing the provisions of the policy. The adopted policy does not refer to third-party standards or
initiatives. In preparing the content of the document, the interests and opinions of the Group’s stakeholders were
taken into account. The Group makes the regulations available by posting them on its website and on the internal
communication channels of each organisational unit.
E3-2 Activities and resources related to water and marine resources
[E3-2 17, 19] [MDR-A 68] Key water resource activities focus at Arctic Paper Group on optimising water
consumption:
Name of the action
Description of the action
Optimisation of water
and wastewater
management, reduction
of water consumption in
production processes
In 2024, the Arctic Paper Group continued its efforts to minimise water use in its production processes, increase water reuse and
reduce the load of pollutants discharged with wastewater. A key element of these activities was the modernisation of the
wastewater treatment infrastructure at Arctic Paper Kostrzyn, which included equipping the plant with a new air supply system,
resulting in improved efficiency of the treatment processes. The upgrade of the blower station was completed in 2025 and was a
continuation of the work started earlier. The initiatives undertaken support more efficient management of water resources and
reduce pressure from water discharges, which is important in the context of the high water intensity of paper and pulp production
processes and the increasing physical risks associated with water availability.
Installation of a water
metering system
In 2024, the infrastructure at the Rottneros plant was upgraded with the installation of a metering system at the water intake. This
solution allowed for more accurate monitoring of the amount of water abstracted and better control of its use in operational
processes in 2025. The measure supports more efficient management of water resources and the identification of potential areas
for further optimisation of water use.
Regulation of water
resources
In 2025, Arctic Paper Munkedals obtained a permit enabling more efficient and economical use of the existing water storage
capacity and the introduction of new rules for its regulation and retention in connection with the hydropower plant. This action will
allow better management of water resources in the future, particularly during dry summer periods, reducing the risk of water
shortages. The new conditions will allow more rational management of water abstraction and storage, increasing the plant’s
resilience to climatic variability.
The above activities did not require significant capital or operating expenditure.
The Group will consider the next steps and the resources needed to implement them.
E3-3 Water and marine resources objectives
[E2-3 22] [MDR-T 81] Arctic Paper Group has not currently set quantitative targets for water and marine resources
due to a lack of identified need. Monitoring the progress and effectiveness of the actions undertaken in this area is
done by monitoring water consumption, reuse and recycling. Water consumption levels do not exceed the
permitted values set out in the integrated permits in force for the individual production facilities.
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E3-4 Water consumption
[E3-4 28] The table below shows the water consumption of the Arctic Paper Group’s own operations, the amount of
water recycled and reused and the Group’s water intensity.
Water consumption
Unit
2025
2024
Total water consumption
m
3
1 322 510.77
1 337 498.51
Water abstraction
m
3
32 256 987.56
34 150 489.32
Water discharge
m
3
30 933 576.79
32 812 990.81
1
Total water consumption in areas at
risk of water scarcity, including areas
with significant water scarcity
2
m
3
0
0
Total amount of water recycled and
reused
m
3
48 060 751.88
47 541 104.99
Total amount of water stored
3
m
3
0
0
Changes in water storage
m
3
0
0
Water absorption
EUR m
3
/1million
4
net revenue
1 764.69
1 676.95
The value of total water consumption consists of:
• Steam from the drying process of the main product
• Vapours from drying in side operations (causticizing and regeneration boiler)
• Water in the product
• Water in waste, such as sludge from sewage treatment.
The water intake value consists of water taken into the factory through the factory’s own preparation of fresh water
from the river on the basis of water licences issued in Poland and Sweden (Vatttendom) and water purchased from
an external supplier (city water).
The water discharge value consists of two streams:
• Wastewater treated at the factory’s wastewater treatment plant. Volume is measured using a built-in
continuous flow meter. The values shown in the table do not include rainwater.
• Unpolluted cooling water returning to the river. This flow is calculated as a residual value for the entire
factory, except for Vallvik, where it is measured.
TOTAL AMOUNT OF WATER RECYCLED AND REUSED
Water recycling in paper mills involves returning water from the paper machines to the pulp preparation
department. Recycling is calculated on the basis of the dry content in the raw material stream. Water recycling at
the fibre line pulp mill consists of water used in counter current from screening to bleaching to washing. In the pulp
mill’s chemical recovery system (Vallvik only), the condensation water from the evaporation plant is used as wash
water on the white liqour lime sludge filter. The lime-mud filter filtrate is used as solvent water for the soda melt. All
volumes are measured using in-line flowmeters.
E3-5 Anticipated financial impacts arising from impacts, risks and opportunities related to water and
marine resources
The Group benefits from the possibility to omit the information set out in ESRS E3-5 in the first three years of the
Sustainability Statement on the basis of the “List of phased-in disclosure requirements” (Appendix C in ESRS 1)
and the Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated Regulation (EU)
1
Corrected value for 2024. During the preparation of the 2025 Sustainability Statement, an issue was identified regarding incorrect reporting of wastewater discharges for 2024. This
error resulted from an incorrect formula reference in the source Excel file. Instead of including the value "Discharge of treated wastewater to river," the line item reported for Arctic Paper
Kostrzyn used data from the previous year referring to the category "Sludge from wastewater treatment plant." Consequently, the volume of wastewater discharged at the Kostrzyn mill
was incorrectly reported. Additionally, the volume of uncontaminated cooling water discharged to the river was not included in the reported water discharges. The total wastewater
discharge reported for fiscal year 2024 was 23,078,936.75 m³, while the corrected value is 32,812,990.81 m³. The correction of the error is described in BP-2.
2
According to the WRI Aqueduct Water Risk Atlas tool, none of the Group’s locations are situated in a region of high baseline water stress.
3
The Group does not store water.
4
According to the euro exchange rate in 2025 – 4,2267; 2024 – PLN 4.3064. Source: NBP.
MANAGEMENT BOARD’S REPORT FOR 2025
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2023/2772 as regards the deferral of the date of application of the disclosure requirements for certain companies
(“Quick fix”).
ESRS E5 Resource use and the circular economy
SBM-3 Linking Material sustainability impacts to strategy and business model
[SBM-3 48b, c, d, f] The material impacts described in the area of resource use and the circular economy are linked
to Arctic Paper’s business model through the manufacturing nature of its operations and its high dependence on
raw materials, including non-renewable resources. These issues are partly linked to the Group’s strategy through
the Packaging Pillar, which includes the development of renewable resource-based and recyclable packaging as
an alternative to plastic packaging. These actions provide opportunities to reduce the consumption of primary raw
materials, reduce waste and adapt the offering to growing customer expectations and regulatory requirements. The
use of recycled materials and the efficient recovery of raw materials can contribute to lower production costs and
improved resource efficiency in the long term. At the same time, production processes produce a percentage of
non-reusable or recyclable waste. These wastes require specialised disposal methods, which generate costs for
transport, storage or incineration and may incur additional environmental charges. Rising raw material prices and
waste management costs can increase operating costs. Increasing regulatory requirements and market pressures
may require the further development of circular economy solutions. In the future, it is possible to incorporate waste
minimisation targets into the strategy and gradually redefine the business model towards less dependence on non-
renewable resources. Growing environmental awareness among consumers is encouraging demand for products in
more sustainable packaging, supporting the development of new business areas.
E5-1 Policies related to resource use and the circular economy
[E5-1 14, 15] [MDR-P 65] In 2025, the Arctic Paper Group did not have a separate policy on resource use or the
circular economy. The Group currently manages this related topic on the basis of the provisions of the
Sustainability Policy. In this policy, the Arctic Paper Group emphasises the organisation’s co-creation of a
sustainable, closed-loop production system. The Group declares the use of renewable resources such as pulp fibre
– these resources are reused and recycled with little or no waste generation. Another document governing the
approach to managing the resource topic is the Environmental Policy. It obliges the Group to buy pulp from certified
and controlled sources and to check the origin of the wood raw material used in its production. The Group declares
its efforts to purchase pulp from sustainably managed forests. This commitment is also enshrined in the
Sustainable Development Policy as part of responsible sourcing,
The scope of the policies covers the operations of the Arctic Paper Group. The Group Management is
responsible for implementing the provisions of the policies. The policies adopted do not refer to third-party
standards or initiatives. In preparing the content of the documents, the interests and opinions of the Group’s
stakeholders were taken into account. The Group makes the regulations available by posting them on its website
and on the internal communication channels of each organisational unit.
The Rottneros Group has adopted a Resource Policy in which it declares actions to exclude wood from:
• Illegal sources;
• Forests whose protected natural values are threatened by logging. In Sweden, this concerns all wood
originating from key forest habitats harvested contrary to the recommendations of the Swedish Forest
Agency.
• Forests that have been substantially converted to plantations or other land uses;
• Forest management using genetically modified trees;
• Forest management that violates any of the ILO core conventions on forced or child labour, freedom of
association, collective bargaining, discrimination and harassment;
• Forests that are being cut down in violation of human rights;
• Sources which do not comply with the EU Timber Regulation
The Rottneros Group has certification to international FSC
®
and PEFC standards for its supply chain.
The raw materials policy applies throughout the Rottneros Group, and the parent company’s Board of Directors
is responsible for implementing and complying with its provisions. The provisions of the Policy refer, inter alia, to
International Labour Organisation standards. In preparing the content of the document, the Rottneros Group took
into account the opinions and interests of its stakeholders. The Group makes the contents of the Policy available by
posting them on the website and in the internal communication channels of each organisational unit.
MANAGEMENT BOARD’S REPORT FOR 2025
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E5-2 Activities and resources related to resource use and the circular economy
[E5-2 19] [MDR-A 68] Key activities related to resource utilisation and the circular economy focus on raw material
certification or waste segregation in the Arctic Paper Group:
Name of the action
Description of the action
Maintaining FSC
®
certification for paper
trays
In both 2024 and 2025, the Rottneros Group maintained FSC
®
certification and food contact compliance for paper trays produced
in Sweden. This action confirms responsible sourcing of wood raw materials and compliance with high safety standards for
products intended for food contact. Maintaining certification supports sustainable forest management and reinforces a circular
approach to packaging design and production.
Supervision of certified
pulp sourcing
In 2024 and 2025, the Arctic Paper Group used mainly FSC
®
or PEFC certified wood pulp in the production process at all paper
mills in Poland and Sweden. This approach aims to ensure that the wood raw material comes from sustainably managed forests.
In 2025, these actions continued through ongoing supply chain oversight and systematic verification of FSC
®
and PEFC
certifications, maintaining a 100% share of certified pulp in raw material purchases. In addition, at the Arctic Paper Grycksbo mill,
the pulp used must meet the Nordic Ecolabel (Nordic Swan), which confirms the efficient use of resources, including lower
consumption of raw materials and energy in the production process.
Construction of a
thallium oil production
facility
In 2024, a new thallium oil plant was commissioned at the Vallvik mill. The project makes it possible to obtain cleaner and more
useful fractions of by-products from the pulp production process. This measure increases the efficiency of raw material use and
promotes the reuse of materials that previously had a lower use value. Following the commissioning of the new plant, a major
customer of talc oil confirmed in 2025 that the quality of the supply had improved – the moisture content is significantly lower and
the resin content and acid index are higher, resulting in a better use value of the product.
Cooperation on fly ash
recycling
In 2025, Arctic Paper Grycksbo has partnered with the municipality-owned company Falu Energi to recycle fly ash from the steam
boiler by reusing it on forest land as fertiliser. This action allows the by-product of the energy process to be managed in a way that
supports a closed loop, contributes to reducing the amount of waste sent for disposal.
Extension of the waste
separation system
In 2025, Arctic Paper Munkedals implemented an extended waste separation system, including municipal waste fractions. This
action improves the separation of waste streams at the waste generation stage and increases opportunities for further waste
management.
The activities did not involve significant investment or operational expenditure.
Further activities and the resources needed to implement them are currently being planned. These activities
primarily involve internal stakeholders (employees) as well as upstream stakeholders in the value chain (suppliers)
and will continue to do so.
E5-3 Objectives related to resource use and the circular economy
[E5-3 24, 25, 27] [MDR-T 80] The Arctic Paper Group’s resource use and circular economy (resource impact) goal
is to source pulp for paper production from FSC
®
or PEFC certified suppliers at 100%. The objective relates to the
sustainable extraction and use of renewable resources.
As of 2017, the Group declares to source almost 100% of the raw material with the indicated certificates. This
was 98% in 2025 (98% in 2024).
The target is measured on the basis of completed orders for FSC
®
or PEFC certified pulp, in the same way
since the beginning of its implementation. The metric is not linked to scientific evidence or validated by an external
body other than the assurance provider.
The purpose of supply chain verification is to gain assurance that:
• the wood does not originate from illegal sources,
• the wood does not originate from endangered areas or areas of high conservation value,
• the wood does not originate from genetically modified trees,
• indigenous peoples’ traditions and rights are not violated in the harvesting of timber.
The Group’s internal stakeholders were involved in setting the adopted target. The objective is linked to the policies
described earlier but is not driven by external regulatory obligations. A description of the methodology for
measuring the achievement of the objective is provided in the next subsection (E5-4 Resources introduced).
MANAGEMENT BOARD’S REPORT FOR 2025
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E5-4 Input resources
[E5-4 32, AR 24] Material resources introduced to the Arctic Paper Group used in the production of paper and pulp
are outlined below.
Resources introduced into the organisation
Unit
2025
2024
Total weight of products entering the organisation
t
0
0
Total weight of technical material entering the organisation
t
259 653.45
266 007.36
Total mass of biological materials entering the organisation
t
1 533 165.70
1 526 617.19
including materials from sustainable sources
t
1 502 875.92
1 497 073.57
Total mass of products, technical and biological materials introduced into the organisation
t
1 792 819.79
1 792 624.69
Percentage of biological materials used to provide services and manufacture products (including
packaging) from sustainable sources
%
98%
98%
Percentage of biological materials used in the production of pulp from sustainable sources
%
100%
100%
Percentage of biological materials used in paper production from sustainable sources*
*Including starch, wrapping paper, pallets
%
92%
92%
Total weight of products, materials, components reused or recycled in the manufacture of products
(including packaging) or services
t
0
0
Percentage of products, materials, components reused or recycled in the manufacture of products
(including packaging) or services
%
0
0
The weight was estimated on the basis of purchase invoices and product sheets.
TOTAL WEIGHT OF TECHNICAL MATERIAL ENTERING THE ORGANISATION
The technical materials assessed in this disclosure are:
• Filling and coating pigments,
• Process chemicals used in processing,
• Packaging materials except those listed under biological material.
TOTAL MASS OF BIOLOGICAL MATERIALS ENTERING THE ORGANISATION
The following biological/compostable materials are included in this category:
• Wood raw material,
• Starch,
• Paper material.
SUSTAINABLY SOURCED MATERIALS
The materials whose mass is included in this category are FSC
®
and PEFC-certified wood and pulp.
TOTAL WEIGHT OF PRODUCTS ENTERING THE ORGANISATION
The reported mass of input resources is limited to raw materials and related process materials, mainly process
chemicals consumed in the manufacturing process and packaging materials for finished goods leaving the
production facilities, due to the lack of relevant data (kg/year). The following consumed resources are not included
in this statement:
• IT equipment,
• Textiles such as workwear and machine clothing,
• Furniture,
• Building materials,
• Storage and transport equipment and facilities,
• Spare parts and consumables.
E5-5 Resources discharged
[E5-5 35] The key recyclable and degradable products offered by the Arctic Paper Group are:
• Sheets and scrolls,
• Coated and uncoated, wood-free and wood-based paper,
• CTMP pulp from the Rottneros Mill,
MANAGEMENT BOARD’S REPORT FOR 2025
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• ECF and UKP pulp from the Vallvik Mill,
• Injection-moulded packaging products from Rottneros Packaging.
[E5-5 36] The Arctic Paper Group’s products are primarily intended for printers, paper distributors, book and
magazine publishers, the advertising industry and packaging manufacturers, so the expected durability of end
products, repairability or recyclable content ratios cannot be precisely determined. The sustainability of the final
products depends primarily on how they are stored and the method of further processing and handling by
customers, as part of their own business operations and production processes.
Arctic Paper products are manufactured with the development of a circular economy in mind. The Group draws
on the methodology and experience of third parties to develop new ways of producing different types of paper,
based on the identification of chemical risks and the impact of particular solutions on product quality, taking into
account both the manufacturing process and the use and end-of-life of the product. Selected Arctic Paper products
have been tested and approved for use in Nordic Ecolabel-certified products. Products from the Arctic Paper
Kostrzyn mill are EU Ecolabel certified.
In 2025, the total volume of waste in the Arctic Paper Group was 63,435.98 tonnes, of which approx. 69% was
prepared for reuse, recycling or other recovery processes. Details of the waste are included in the table below.
Resources drained from the organisation
Unit
2025
2024
Waste for which disposal has been avoided
t
43 978.53
57 306.85
Hazardous waste, including:
t
326.80
231.01
prepared for re-use
t
0
0
recyclable
t
244.29
87.24
subject to other recovery processes
t
82.51
143.76
Non-hazardous waste, including:
t
43 651.73
57 075.84
prepared for re-use
t
1 978.25
2 262.09
recyclable
t
29 074.35
43 768.52
subject to other recovery processes
t
12 599.13
11 045.24
Waste sent for disposal
t
19 457.45
21 073.92
Hazardous waste, including:
t
54.60
7.76
burnt
t
1.52
3.65
stored
t
42,88
0.19
subjected to other disposal processes
t
10.20
3.91
Non-hazardous waste, including:
t
19 402.85
21 066.16
burnt
t
1 381.99
1 482
stored
t
17 970.73
19 546.38
subjected to other disposal processes
t
50.13
37.78
Total amount of radioactive waste
t
0
0
Total waste generated
t
63 435.98
78 323.77
Total quantity of hazardous waste
t
381.40
238.76
Total amount of non-recycled waste
t
34 117.34
34 468.01
Percentage of waste not recycled
%
53.78%
44.01%
Total non-hazardous waste
t
63 054.58
78 085.01
MANAGEMENT BOARD’S REPORT FOR 2025
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The main waste streams for the Group are packaging waste, production waste, pallet waste and municipal waste
from office operations. The Group’s waste structure is dominated by biomass (pulp fibres), wood and plastics
(packaging tape, stretch film). The Group does not generate radioactive waste.
[E5-5 40, AR 33] Waste data are obtained from waste recipients and collected at the level of production
facilities. Waste volumes from the production facilities are monitored on an ongoing basis and their weight is
reported in the respective reporting systems – BDO (Polish Waste Database) for Arctic Paper Kostrzyn and
Naturvårdsverket for the other production facilities. Most of the waste generated is waste associated with the paper
and pulp production process – sewage sludge from on-site treatment plants. Paper and cardboard packaging and
wooden packaging also represent significant amounts of waste.
E5-6 Anticipated financial impacts from material risks and opportunities related to resource use and the
circular economy
The Arctic Paper Group benefits from the possibility to omit the information set out in ESRS E5-6 in the first three
years of the Sustainability Statement on the basis of the “List of phased-in disclosure requirements” (Appendix C in
ESRS 1) and the Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated
Regulation (EU) 2023/2772 as regards the deferral of the start date of application of the disclosure requirements for
certain companies (“Quick fix”).
Taxonomy
The EU Taxonomy is a classification system that establishes criteria for environmentally sustainable economic
activities. It plays an important role in helping to scale up sustainable investments and implement the European
Green Deal. The EU taxonomy provides businesses, investors and policymakers with the relevant definitions of
how an economic activity can be considered environmentally sustainable. In this way, it provides security for
investors, protects private investors, and helps companies become more climate-friendly.
Regulation 2020/852 of the European Parliament and of the Council on the EU taxonomy was published in the
Official Journal of the European Union on 22 June 2020 and entered into force on 12 July 2020.
It lays the foundations for the EU Taxonomy by setting out 4 overarching conditions that an economic activity
must meet in order to qualify as environmentally sustainable. An economic activity qualifies as environmentally
sustainable if it:
a) it makes a substantial contribution to one or more of the environmental objectives;
b) does not cause significant harm to any of the environmental objectives;
c) it is carried out in accordance with minimum guarantees;
d) meets the technical qualification criteria.
The Taxonomy Regulation sets out the following environmental objectives:
a) climate change mitigation;
b) adaptation to climate change;
c) the sustainable use and protection of water and marine resources;
d) the transition to a circular economy;
e) pollution prevention and control;
f) protecting and restoring biodiversity and ecosystems.
In accordance with the Taxonomy Regulation, the Arctic Paper Group discloses in its annual report:
• the percentage of turnover derived from products or services related to environmentally sustainable
activities;
• the percentage of capital expenditures (CapEx) corresponding to assets or processes related to
environmentally sustainable activities;
• the percentage of operating expenditure (OpEx) corresponding to the assets or processes associated with
environmentally sustainable activities.
In this Sustainability Statement 2025, the Arctic Paper Group discloses the percentage of turnover, capital
expenditure and operating expenditure eligible for the EU taxonomy and reviews the criteria for environmentally
sustainable economic activities set out in Article 3 of Regulation 2020/852 of the European Parliament and of the
Council to determine what percentage of these three values are related to environmentally sustainable activities.
The core business of the Arctic Paper Group is the production and sale of paper and pulp. These activities are
not covered by the EU Taxonomy.
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1. Qualification and Taxonomy Compliance Assessment Process
We have divided the evaluation process into 4 stages:
1. Identification - an overview of all activities carried out by all Arctic Paper Group entities and determining whether
and which activities qualify as Taxonomy-compliant activities. The review covered Arctic Paper Group's revenues,
capital expenditures and operating expenses. The basis for considering a given activity as eligible was a
comparison of the actual activity with the description of the activity detailed under Annex I or Annex II to the
Commission Delegated Regulation (EU) 2021/2139, taking into account the Commission Delegated Regulation
(EU) 2023/2485 of 27 June 2023 amending the above Regulation and with the description of the activities
contained in the Commission Delegated Regulation (EU) 2023/2486
2. Allocation – assigning the value of turnover, capital expenditures and operating expenditures to specific
activities, identified in the first stage.
3. Verification – examination of the criteria of significant contribution and non-significant harm for all identified
activities, using the technical screening criteria referred to in the Annexes to Commission Delegated Regulation
(EU) 2021/2139.
Verification of compliance with the technical screening criteria was carried out for activities eligible for the EU
Taxonomy. and consisted of an analysis of the different criteria for significant contribution and non-significant harm
and checking to what extent the activity complies with the technical screening criteria set out in Annexes I and II to
Commission Delegated Regulation (EU) 2021/2139, as extended by Commission Delegated Regulation (EU)
2022/1214, Commission Delegated Regulation (EU) 2023/2485 and 2023/2486.
According to the analysis, none of the activities qualified in 2025 meet the technical qualification criteria. Given
that the taxonomy does not cover its main activities, the Group does not have documentation confirming the
compliance of its other activities. Arctic Paper Group carried out a climate risk analysis for all production facilities
located in Poland and Sweden, which is part of the DNSH principle for most eligible activities.
4. The next step was to assess whether the Minimum Guarantees were met.
According to Article 18 of Regulation (EU) 2020/852 of the European Parliament and of the Council: "minimum
safeguards, (...), are the procedures applied by an enterprise conducting business activities to ensure compliance
with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human
Rights, including the principles and rights set out in the eight fundamental conventions set out in the International
Labour Organization's Declaration on Fundamental Principles and rights at work and the principles and rights set
out in the International Bill of Human Rights."
The test of compliance with minimum safeguards was carried out in accordance with the recommendations
included in the Final Report on Minimum Safeguards prepared by the Platform on Sustainable Finance.
According to the recommendations, failure to meet the minimum guarantees is at least one of the following four
conditions:
• insufficient or non-existent human rights due diligence processes, including labour rights, corruption, taxation
and fair competition;
• the company or its top management has been found guilty of violations of labor law or human rights laws in
certain types of labor law or human rights court cases;
• lack of cooperation with the OECD National Contact Point (OECD NCP; NCP OECD) on the notification
received by the OECD NCP;
• The Business and Human Rights Resource Center (BHRRC) made an allegation against the company,
which the company did not respond to within 3 months.
During the verification process at Arctic Paper Group, non-compliance with the above premises was tested as
follows:
1. as a result of the internal analysis, it was determined that the Arctic Paper Group has a due diligence process in
place and in place.
• Arctic Paper Group has a whistleblowing system in place;
• mandatory training for all employees in the field of anti-corruption and anti-competitive practices;
• Arctic Paper Group implements a supplier sustainability assessment system;
• The Arctic Paper Group's Code of Conduct in the value chain, the Sustainability Policy and the Diversity
Policy were implemented.
2. as a result of verification whether no final convictions were issued in relation to the persons mentioned in the
content of the premise, in the period to which the verification relates.
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3. A review of the OECD NCP (National Contact Point) notification database was carried out, which showed that
there were no notifications concerning the Arctic Paper Group during the review period –
https://mneguidelines.oecd.org/database/.
4. A verification of the Business and Human Rights Resource Center (BHRRC) application database was carried
out, which showed no notifications regarding the Arctic Paper Group during the verification period -
https://www.business-humanrights.org/en/companies/.
5. Calculation – using the information obtained in the second and third stages to prepare tables containing the
required information and to develop supplementary information in accordance with the requirements of Annexes I
and II to Commission Delegated Regulation (EU) 2021/2178, as amended by Annex V of Commission Delegated
Regulation (EU) 2023/2486.
The process was led by a team of representatives of Arctic Paper Group companies, coordinated by the
Sustainability Team.
The eligibility assessment found that the Arctic Paper Group carries out the following activities:
• CCM 1.3 – Forest management – services in the field of wood management provided by Rottneros;
• CCM 4.1 Energy production with the use of photovoltaic energy – production of electricity from photovoltaic
farms located in Poland and Sweden;
• CCM 4.5 Hydropower Generation – at the Munkedals Hydroelectric Power Plant;
• CCM 4.8 Production of electricity from bioenergy – expenditures on pellet energy generation installations at
the factory in Grycksbo;
• CCM 4.10 Energy storage – turnover and capital expenditure related to the installation of battery storage
facilities in Rottneros;
• CCM 4.13 Production of biogas and biofuels for transport and bioliquids – revenues, capital expenditures
and operating expenditures from the production of tall oil by the Rottneros plant;
• CCM 4.20 Cogeneration of heat/cooling energy and electricity from bioenergy – capital expenditures related
to the investment in a boiler based on cogeneration from bioenergy at the plant in Vallvik and turbine in a
boiler in Grycksbo;;
• CCM 4.24 Generation of heat/cooling energy from bioenergy – capital expenditure on the renovation of the
heat recovery boiler and turbine at the Vallvik plant;
• CCM 5.1 Construction, expansion and operation of water abstraction, treatment and supply systems –
expenditures related to the modernization and expansion of water intake infrastructure in Grycksbo;
• CCM 5.3 Modernization of wastewater collection and treatment systems in Grycksbo;
• CCM 5.9 Recovery of materials from hazardous waste;
• CCM 6.5 Transport by motorcycles, passenger cars and light commercial vehicles, which evaluates vehicles
belonging to the Arctic Paper Group's own and leased fleets used in Arctic Paper's own operations;
• CCM 6.14 Infrastructure for rail transport – capital expenditures and operating costs of maintenance of the
section of railway infrastructure for the transport of raw materials in the factories in Kostrzyn and Rottneros;
• CCM 7.2 Renovation of existing buildings – capital expenditures incurred for the renovation of buildings
belonging to mills;
• CCM 7.3 Installation, maintenance and repair of energy efficiency equipment;
• CCM 7.4 Installation, maintenance and repair of electric vehicle charging stations in the Group's buildings
(and car parks);
• WTR 1.1 Manufacturing, installation and related services of leak control technologies to reduce and prevent
leakage in water supply systems;
• BIO 1.1 conservation, including the restoration of habitats, ecosystems and species as part of the restocking
of the Munkedals River.
2. Accounting policies
The requirements of Delegated Regulation 2021/2178 were applied to the calculation of individual key
indicators.
At the stage of identifying Taxonomy-eligible activities and accompanying activities, it was ensured that none of
them qualifies for more than one activity, i.e. for example, no investment project meets the definition of more than
one activity. In practice, the different activities eligible for the Taxonomy and the related activities relate to separate
areas, which eliminates the risk of double inclusion in them.
At the stage of preparation for the process of identifying types of activity, and then allocation and verification,
persons responsible for individual business areas were informed about such theoretical risk and instructed that if a
given activity meets more than one definition of activity, they should assign it to the definition of this type of activity,
which best reflects the specificity and nature of a given activity.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
122
In the reported 2025, no changes were made to the accounting policy.
The following rules are used to calculate the percentage of turnover, CapEx and OpEx eligible for the
Taxonomy:
Turnover – in terms of turnover, the basis was the total consolidated revenues of the Arctic Paper Group in
2025, disclosed in the consolidated financial statements under "Revenue from sales of paper and pulp" described
in Note 4.1. The numerator for turnover KPIs in the field of eligible activities consists entirely of the values derived
from revenues from contracts with customersP. Revenues from Taxonomy-eligible activities are assigned to the
numerator.
In 2025, the Arctic Paper Group identified 9 activities from which revenues qualify for the taxonomy.
In 2025, Arctic Paper generated Taxonomy-eligible revenues mainly from the services provided by Rottneros in
the areas of timber management services (activity 1.3) and and tall oil production (activity 4.13) at the Vallvik pulp
mill.
Arctic Paper derives from its own electricity production as indicated in the eligible descriptions of activities 4.1
CCM, 4.5 CCM, 4.8 CCM, 7.6 CCM and biogas/biofuels produced by activities 4.13 CCM. The corresponding
amounts were accordingly excluded from taxonomic reporting. In the course of the analysis, no other cases of self-
consumption were found that would require disclosure.
in thousand PLN
December 31, 2025
Revenues from Taxonomy-eligible activities
116 283
Consolidated revenues
3 197 594
Revenue indicator of Taxonomy-eligible activities
3.64%
The percentage of revenues related to Taxonomy-eligible activities is 3.64%.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
123
Percentage of turnover from products or services related to economic activities in accordance with the taxonomy
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute turnover (3)
Proportion of turnover (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion
of
Taxonomy
- aligned
(A.1.) or -
eligible
(A.2.)
turnover,
2024 (18)
Category (enabling
activity) (19)
Category (transitional
activity) (20)
ths zł
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy eligible activities
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
0
0%
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0
0,00%
0,00
%
0,00
%
0,00
%
0,00
%
0,00%
0,00
%
0,00%
Of which enabling
0
0,00%
0,00
%
0,00
%
0,00
%
0,00
%
0,00%
0,00
%
0,000%
E
Of which transitional
0
0,00%
0,00
%
0,00
%
0,00
%
0,00
%
0,00%
0,00
%
T
A.2 Taxonomy-Eligible, but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Forest management
CCM
1.3
87 837
2.75%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
2.28%
Electricity generation using solar photovoltaic
technology
CCM
4.1
2 159
0.07%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Electricity generation from hydropower
CCM
4.5
2 348
0.07%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
124
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute turnover (3)
Proportion of turnover (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion
of
Taxonomy
- aligned
(A.1.) or -
eligible
(A.2.)
turnover,
2024 (18)
Category (enabling
activity) (19)
Category (transitional
activity) (20)
Electricity generation from bioenergy
CCM
4.8
115
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,00%
Storage of electricity
CCM
4.10
1 295
0.04%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Manufacture of biogas and biofuels for use in
transport and of bioliquids
CCM
4.13
22 411
0.70%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.94%
Construction, extension and operation of water
collection, treatment and supply systems
CCM
5.1
45
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Construction, extension and operation of waste
water collection and treatment
CCM
5.3
61
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Installation, maintenance and repair of charging
stations for electric vehicles in buildings (and
parking spaces attached to buildings)
CCM
7.4
13
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Turnover of Taxonomy-eligible, but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (a.2)
116 283
3.64%
3.64
%
0.00
%
0.00
%
0,00
%
0.00%
0.00
%
3.33%
Turnover of taxonomy-eligible activities (A.1
+ A.2)
116 283
3.64%
3.64
%
0.00
%
0.00
%
0.00
%
0.00%
0.00
%
3.33%
B. Taxonomy-non-eligible activities
Turnover of Taxonomy-non-eligible
activities (B)
3 081 312
96.4%
Total (A+B)
3 197 594
100.0%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
125
The Code constitutes the abbreviation of the relevant objective to which the economic activity is eligible to make a substantial
contribution, as well as the section number of the activity in the relevant Annex covering the objective, i.e.:
CCM — Climate Change Mitigation
CCA — Climate Change Adaptation
WTR — Water and Marine Resources
CE — Circular Economy
PPC — Pollution Prevention and Control
BIO — Biodiversity and ecosystems
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
Non-financial undertakings shall also report the extent of eligibility and alignment per environmental objective, that includes alignment with each of environmental objectives for activities contributing
substantially to several objectives:
Proportion of turnover/Total turnover
Taxonomy aligned per objective
Taxonomy eligible per objective
CCM
0,00%
3.64%
CCA
0,00%
0,00%
WTR
0,00%
0,00%
CE
0,00%
0,00%
PPC
0,00%
0,00%
BIO
0,00%
0,00%
EL – Taxonomy-eligible activity for the relevant objective
N/EL – Taxonomy-non-eligible activity for the relevant objective.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
126
CapEx – with respect to capital expenditures (CapEx), the basis was capital expenditures settled in the Arctic
Paper Group in individual factories and at the headquarters, which consisted of increases in intangible assets of
PLN 47,448 thousand, rights of use of PLN 3,963 thousand and increase in fixed assets of PLN 269,742 thousand.
The denominator includes an increase in property, plant and equipment and intangible assets during a given
financial year before depreciation, amortisation and any revaluation, including those resulting from revaluation and
impairment, for a given financial year, excluding changes in fair value.
in thousand PLN
December 31, 2025
CapEx related to Taxonomy-eligible activities
120 799
Total capital expenditure
321 153
CapEx ratio of Taxonomy-eligible activities
37.61%
The percentage of capital expenditures related to eligible activities is 37.61%.
In 2025, Arctic Paper's key taxonomy-eligible capital expenditures were related to the installation of photovoltaic
farms (activity 4.1) at the Arctic Paper Group's paper mills and the investment in the construction of a pellet
production unit (activity 4.8) at Arctic Paper Grycksbo.
The entire CapEx is included in the consolidated financial statements under the following increase items:
• fixed assets – Note 5.1
• right-of-use assets - Note 5.2
• intangible assets – Note 5.4
The numerator is assigned the part of CapEx that relates to activities eligible for the taxonomy.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
127
The percentage of capital expenditure (Capex) for products or services related to business activities in accordance with the taxonomy.
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
ths zł
%
Y; N; N/EL
Y; N; N/EL
Y; N; N/EL
Y; N; N/EL
Y; N; N/EL
Y; N; N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A.
Taxono
my
eligible
activities
A.1.
Environ
mentally
sustaina
ble
activities
(Taxono
my-
aligned)
0
0%
CapEx of
environ
mentally
sustaina
ble
activities
(Taxono
my-
aligned)
(A.1)
0
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Of which
enabling
0
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
E
Of which
transitio
nal
0
0,0%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
T
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
128
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
A.2
Taxono
my-
Eligible,
but not
environ
mentally
sustaina
ble
activities
(not
Taxono
my-
aligned
activities
)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Electricity
generatio
n using
solar
photovolt
aic
technolog
y
CCM 4.1
21 216
6,61%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
9,73%
Electricity
generatio
n from
bioenergy
CCM 4.8
78 573
24,47%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
8,84%
Storage
of
electricity
CCM 4.10
49
0,02%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
4,09%
Manufact
ure of
biogas
and
biofuels
for use in
transport
CCM 4.13
2 754
0,86%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
5,45%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
129
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
and of
bioliquids
Cogenera
tion of
heat/cool
and
power
from
bioenergy
CCM 4.20
6 456
2,01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1,50%
Productio
n of
heat/cool
from
bioenergy
CCM 4.24
367
0,11%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
3,74%
Construct
ion,
extension
and
operation
of water
collection
,
treatment
and
supply
systems
CCM 5.1
2 582
0,80%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,59%
Construct
ion,
extension
and
operation
of waste
water
collection
and
treatment
CCM 5.3
476
0,15%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,43%
Transport
by
CCM 6.5
1 646
0,51%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,16%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
130
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
motorbike
s,
passenge
r cars
and light
commerci
al
vehicles
Infrastruc
ture for
rail
transport
CCM 6.14
572
0,18%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,09%
Renovati
on of
existing
buildings
CCM 7.2
2 159
0,67%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
2,24%
Installatio
n,
maintena
nce and
repair of
energy
efficiency
equipmen
t
CCM 7.3
3 472
1,08%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,88%
Installatio
n,
maintena
nce and
repair of
charging
stations
for
electric
vehicles
in
buildings
(and
parking
CCM 7.4
442
0,14%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,87%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
131
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
spaces
attached
to
buildings)
Conserva
tion,
including
restoratio
n, of
habitats,
ecosyste
ms and
species
BIO 1.1
35
0,01%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
0,00%
CapEx of
Taxono
my-
eligible,
but not
environ
mentally
sustaina
ble
activities
(not
Taxono
my-
aligned
activities
) (a.2)
120 799
37,61%
37,60%
0,00%
0,00%
0,00%
0,00%
0,01%
39,30%
CapEx of
taxonom
y-eligible
activities
(A.1 +
A.2)
120 799
37.61%
37.60%
0.00%
0.00%
0.00%
0.00%
0.01%
39,30%
B.
Taxono
my-non-
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
132
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic
activities
(1)
Code(s) (2)
Absolute Capex (3)
Proportion of CapEx (4)
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water and marine
resources (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportio
n of
Taxonom
y- aligned
(A.1.) or -
eligible
(A.2.)
CapEx,
2024 (18)
Category (enabling
activity ) (19)
Category (transitional
activity) (20)
eligible
activities
CapEx of
Taxono
my-non-
eligible
activities
(B)
200 354
62.4%
Total
(A+B)
321 153
100.0%
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
133
The Code constitutes the abbreviation of the relevant objective to which the economic activity is eligible to make a substantial contribution, as well as the section number of the activity in the relevant
Annex covering the objective, i.e.:
CCM — Climate Change Mitigation
CCA — Climate Change Adaptation
WTR — Water and Marine Resources
CE — Circular Economy
PPC — Pollution Prevention and Control
BIO — Biodiversity and ecosystems
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
Non-financial undertakings shall also report the extent of eligibility and alignment per environmental objective, that includes alignment with each of environmental objectives for activities contributing
substantially to several objectives:
Proportion of CapEx/Total CapEx
Taxonomy aligned per objective
Taxonomy eligible per objective
CCM
0,00%
37.60%
CCA
0,00%
0,00%
WTR
0,00%
0,00%
CE
0,00%
0,00%
PPC
0,00%
0,00%
BIO
0,00%
0.01%
EL – Taxonomy-eligible activity for the relevant objective
N/EL – Taxonomy-non-eligible activity for the relevant objective.
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
134
OpEx – with respect to operating expenditure (OpEx), the basis was the costs of day-to-day servicing, repairs and
maintenance of the assets of the Group companies. They include such costs as: personnel costs of persons
responsible for maintenance and repairs, costs related to repairs and overhauls of equipment/installations,
operating leases and research and development costs. The part of OpEx that relates to activities eligible for
taxonomy has been assigned to the numerator. The OPEX numerator includes those denominator items that relate
to taxonomy-compliant or taxonomy-eligible activities. The vast majority were costs related to the ongoing
maintenance of property, plant and equipment (maintenance, repairs, conservation, etc.).
in thousand PLN
December 31, 2025
Operational expenditure related to Taxonomy-eligible activities
42 336
Total operating expenses
219 317
Indicator of operational expenditure related to Taxonomy-eligible activities
19.30%
The percentage of operating expenses related to eligible activities is 19.30%.
In 2025, Arctic Paper's key Taxonomy-eligible operating expenditure was related to, m.in others, the
maintenance of the tall oil production facility at the pulp mill in Vallvik (activity 4.20).
The data used for the calculations came from the financial and accounting systems of the Arctic Paper Group's
operating units. Arctic Paper Group does not use estimates or allocations in the preparation of KPIs in accordance
with the EU Taxonomy.
The analysis showed that there is no need for a detailed disaggregation of KPIs among the operating units of
the Arctic Paper Group in accordance with point 1.2.2.3 of Annex I to Commission Delegated Regulation (EU)
2021/2178.
MANAGEMENT BOARD’S REPORT FOR 2025
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Percentage of operating expenses (Opex) for products or services related to business activities in accordance with the taxono my
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute OpEx
(3)
Proportion of
OpEx (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and
marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.)
or -eligible
(A.2.) OpEx,
2024 (18)
Category
(enabling activity
) (19)
Category
(transitional
activity) (20)
ths
zł
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy
eligible activities
A.1.
Environmentally
sustainable activities
(Taxonomy-aligned)
0
0%
OpEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1)
0
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Of which enabling
0
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,000%
E
Of which transitional
0
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
T
A.2 Taxonomy-
Eligible, but not
environmentally
sustainable activities
(not Taxonomy-
aligned activities)
EL; N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL; N/EL
EL;
N/EL
Forest management
CCM
1.3
2 132
0,97%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
3,48%
Electricity generation
using solar
photovoltaic
technology
CCM
4.1
80
0,04%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,00%
Electricity generation
from hydropower
CCM
4.5
216
0,10%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1,10%
MANAGEMENT BOARD’S REPORT FOR 2025
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Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute OpEx
(3)
Proportion of
OpEx (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and
marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.)
or -eligible
(A.2.) OpEx,
2024 (18)
Category
(enabling activity
) (19)
Category
(transitional
activity) (20)
Electricity generation
from bioenergy
CCM
4.8
172
0,08%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,97%
Manufacture of biogas
and biofuels for use in
transport and of
bioliquids
CCM
4.13
524
0,24%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,68%
Cogeneration of
heat/cool and power
from bioenergy
CCM
4.20
13
297
6,06%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
19,62%
Production of
heat/cool from
bioenergy
CCM
4.24
1 840
0,84%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,00%
Construction,
extension and
operation of water
collection, treatment
and supply systems
CCM
5.1
5 692
2,60%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
9,30%
Construction,
extension and
operation of waste
water collection and
treatment
CCM
5.3
3 601
1,64%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
5,55%
Material recovery from
non-hazardous waste
CCM
5.9
19
0,01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,00%
Transport by
motorbikes, passenger
cars and light
commercial vehicles
CCM
6.5
225
0,10%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,91%
Infrastructure for rail
transport
CCM
6.14
70
0,03%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
3,54%
Renovation of existing
buildings
CCM
7.2
2 973
1,36%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
6,24%
MANAGEMENT BOARD’S REPORT FOR 2025
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Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute OpEx
(3)
Proportion of
OpEx (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and
marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.)
or -eligible
(A.2.) OpEx,
2024 (18)
Category
(enabling activity
) (19)
Category
(transitional
activity) (20)
Installation,
maintenance and
repair of energy
efficiency equipment
CCM
7.3
263
0,12%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,70%
Installation,
maintenance and
repair of charging
stations for electric
vehicles in buildings
(and parking spaces
attached to buildings)
CCM
7.4
11
134
5,08%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0,02%
Manufacture,
installation and
associated services for
leakage control
technologies enabling
leakage reduction and
prevention in water
supply systems
WTR
1.1
82
0,04%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
0,05%
Conservation,
including restoration,
of habitats,
ecosystems and
species
BIO
1.1
15
0,01%
N/EL
N/EL
N/EL
N/EL
N/EL
EL
0,00%
OpEx of Taxonomy-
eligible, but not
environmentally
sustainable activities
(not Taxonomy-
aligned activities)
(a.2)
42
336
19,30%
19,25%
0,00%
0,04%
0,00%
0,00%
0,01%
57,67%
OpEx of taxonomy-
eligible activities
(A.1 + A.2)
42
336
19,30%
19,25%
0,00%
0,04%
0,00%
0,00%
0,01%
57,67%
B. Taxonomy-non-
eligible activities
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
138
Substantial contribution criteria
DNSH criteria
('Does Not Significantly Harm')
Economic activities (1)
Code(s) (2)
Absolute OpEx
(3)
Proportion of
OpEx (4)
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular
economy (9)
Biodiversity (10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water and
marine
resources (13)
Pollution (14)
Circular
economy (15)
Biodiversity (16)
Minimum
safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.)
or -eligible
(A.2.) OpEx,
2024 (18)
Category
(enabling activity
) (19)
Category
(transitional
activity) (20)
OpEx of Taxonomy-
non-eligible activities
(B)
176
981
80.7%
Total (A+B)
219
317
100.00%
The Code constitutes the abbreviation of the relevant objective to which the economic activity is eligible to make a substantial
contribution, as well as the section number of the activity in the relevant Annex covering the objective, i.e.:
CCM — Climate Change Mitigation
CCA — Climate Change Adaptation
WTR — Water and Marine Resources
CE — Circular Economy
PPC — Pollution Prevention and Control
BIO — Biodiversity and ecosystems
Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
MANAGEMENT BOARD’S REPORT FOR 2025
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139
Non-financial undertakings shall also report the extent of eligibility and alignment per environmental objective, that includes alignment with each of environmental objectives for activities contributing
substantially to several objectives:
Proportion of OpEx/Total OpEx
Taxonomy aligned per objective
Taxonomy eligible per objective
CCM
0,00%
19.25%
CCA
0,00%
0,00%
WTR
0,00%
0.04%
CE
0,00%
0,00%
PPC
0,00%
0,00%
BIO
0,00%
0.01%
EL – Taxonomy-eligible activity for the relevant objective
N/EL – Taxonomy-non-eligible activity for the relevant objective.
MANAGEMENT BOARD’S REPORT FOR 2025
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140
Activities of the Arctic Paper SA Group related to nuclear energy and natural gas in the context of the EU Environmental
Taxonomy
Disclosure in accordance with Annex III of Commission Delegated Regulation (EU) 2022/1214, supplementing
Commission Delegated Regulation (EU) 2021/2178 with Annex XII on standard templates for the disclosure of
information referred to in Article 8(6) and (7). – i.e. for activities related to nuclear energy and natural gas.
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity
generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
No
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as
their safety upgrades, using best available technologies.
No
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process
heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as
their safety upgrades.
No
Fossil gas related activities
1
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce
electricity using fossil gaseous fuels.
No
2
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power
generation facilities using fossil gaseous fuels.
No
3
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that
produce heat/cool using fossil gaseous fuels.
No
MANAGEMENT BOARD’S REPORT FOR 2025
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141
3. SOCIAL INFORMATION
ESRS S1 Own workforce
S1 SBM-3 material impacts and risks and their interrelationship with the strategy and with the business model
[SBM-3 48b, c, f] The material impacts and risks described in relation to the Group’s own employee resources
are linked to the Arctic Paper Group’s business model through the manufacturing nature of its operations and its
reliance on human capital. The Group focuses on building employee confidence, respecting diversity and providing
safe and stable working conditions, including shift work. These actions promote long-term employment, allow
knowledge and experience to accumulate in the organisation and translate into higher operational efficiency and
product quality. Attention to security, job stability and competitive salaries promotes employee retention. The need
to ensure safety and proper working conditions requires constant monitoring and investment in HR processes and
safety systems. These activities enable the development of human capital, which is a key element of the Group’s
business model. In the long term, maintaining a competent and committed workforce supports operational stability
and production quality. As a whole, the employee resource strategy supports both operational efficiency and the
attractiveness of the company in the labour market.
The positive impacts identified are the result of a trust-building approach that manifests itself in the provision of
good working conditions that take into account employment stability, competitive salaries, high safety standards
and dialogue with employees. The adverse impacts are mainly related to the specific nature of the Group’s
operations, i.e. manufacturing activities being an environment where there is a risk of accidents and potentially
more demanding conditions related to physical, shift and night work. In addition, due to the nature of the industry
and the location of its production plants, the Arctic Paper Group identifies the risk of a potential shortage of
employees with specific competencies in the region and the low proportion of women in managerial positions,
which the Group has addressed in the Diversity Policy of the Management Board and the Supervisory Board of
Arctic Paper, aiming to have a proportion of women in the bodies of no less than 30%. This aspect will be taken
into account in future recruitment processes.
[S1 SBM-3, 14, 15, 16] All persons who are owned employee resources of the Arctic Paper Group that may be
materially affected by it are included in the scope of disclosure under ESRS 2. These material impacts and risks
include impacts related to the Arctic Paper Group’s own operations and value chain, including through its products
or services and business relationships, to the extent that the Group has access to such information. The
predominant group of employees significantly affected by the Group’s activities are those employed directly by the
Arctic Paper Group, mainly in production and operational areas, including sales, logistics, finance, HR, among
others. The Group does little work with employees classified by the ESRS standard as non-owner employees. At
the time of publication of this Statement, the Arctic Paper Group has not yet developed a Climate Change
Mitigation Transition Plan and therefore cannot make a description of the material impact on employees that may
result from transition plans to reduce adverse environmental impacts and achieve climate-neutral operations. In the
course of the work on the double materiality analysis, the Arctic Paper Group did not identify the presence of
material risks of forced or compulsory labour or child labour in its business or value chain.
S1-1 Policies related to own workforce
[S1-1, 21, AR12, MDR-P, 65] The Arctic Paper Group manages its material impacts and risks on its own employee
resources based on the following policies:
• The Arctic Paper Group’s Value Chain Code of Conduct contains the Arctic Paper Group’s core principles of
conduct, ethics and values such as compliance with the law, reporting of potential violations, respect for
human rights including working conditions, health and safety rules, protection against discrimination, respect
for the environment. The Code addresses the following important issues: job security, working time,
adequate pay, social dialogue, health and safety at work, measures to prevent violence and harassment in
the workplace, work-life balance;
• Diversity policy; Management Board and Supervisory Board members and employees (promotes openness
to diversity and the provision of equal opportunities in recruitment and development, irrespective of
characteristics such as, inter alia, age, gender, nationality, disability). The policy addresses the following
important issues: training and skills development, diversity, gender equality and equal pay for work of equal
value, employment and integration of people with disabilities;
• Remuneration policy for Management Board and Supervisory Board members (principles for the
remuneration of top management employees in the Group, such as description of the components of
remuneration for Management Board and Supervisory Board members, general principles for the award of
variable remuneration for members of the Management Boards, prevention of conflicts of interest). In
addition Arctic Paper Group entities have in place remuneration regulations in accordance with the legal
provisions in force in a given country of specific entity;
MANAGEMENT BOARD’S REPORT FOR 2025
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142
• Sustainability Policy (explains the approach to managing sustainability topics in the Arctic Paper Group,
including general principles for managing environmental, social and business impacts). It addresses the
following material issues: health and safety at work, measures to prevent violence and harassment in the
workplace;
• The Whistleblowing and Whistleblower Protection Policy describes the approach to business ethics and
explains the ways and channels for whistleblowing. Addresses the following important issue: measures to
prevent violence and harassment in the workplace.
The scope of the policies covers the operations of the Arctic Paper Group, excluding the Rottneros Group. The
Group Management is responsible for implementing the provisions of the policies. The policies adopted do not refer
to third-party standards or initiatives. In preparing the content of the documents, the interests and opinions of the
Group’s stakeholders were taken into account. The Group makes the regulations available by posting them on its
website and on the internal communication channels of each organisational unit.
The Rottneros Group manages its material impacts and risks on its own workforce on the basis of the following
policies:
• Code of Conduct (description of Rottneros’s key principles and values, including diversity among
employees). The Code addresses the following important issues: health and safety at work, gender equality
and equal pay for work of equal value, employment and integration of people with disabilities, social
dialogue;
• Sustainability policy (Rottneros’s principles of environmental and social responsibility). The policy addresses
the following important issues of training and skills development;
• Diversity policy of the Management Board (principles for maintaining diversity in the management and
supervisory bodies). The policy addresses the following important issues gender equality and equal pay for
work of equal value;
• The Whistleblowing and Whistleblower Protection Policy (anonymous whistleblowing). The policy addresses
the following material issues: measures to prevent violence and harassment in the workplace;
• Working environment policy (concerning working conditions). The policy addresses the following material
issues: health and safety, training and skills development,
Rottneros Group policies do not address the following important issues: job security, working time, adequate pay,
work-life balance.
The scope of the policies covers the activities of the Rottneros Group. The Group Management is responsible for
implementing the provisions of the policies. The policies adopted do not refer to third-party standards or initiatives.
In preparing the content of the documents, the interests and opinions of the Group’s stakeholders were taken into
account. The Group makes the regulations available by posting them on its website and on the internal
communication channels of each organisational unit.
[S1-1 19, 20] [MDR-P, 65] The Arctic Paper Group’s commitment to respecting human rights is reflected throughout
the Group’s operations and business relationships. We develop and implement our policies and internal regulations
while adhering to international standards and initiatives as well as local regulations, including but not limited to:
• UN Global Compact principles;
• OECD Guidelines for Multinational Enterprises;
• UN Guiding Principles on Business and Human Rights;
• UN Universal Declaration of Human Rights;
• Charter of Fundamental Rights of the European Union;
• International Labour Organisation Convention.
The Arctic Paper Group respects human rights, individual rights, and the dignity of employees and all third parties.
The Arctic Paper Group Value Chain Code of Conduct is based on laws and good business practices, which means
that any deviation from the principles described in this document may lead to both disciplinary action and legal
action against violators. If an employee notices violations of the Code of Conduct or any other Arctic Paper Group
policies, they must discuss their concerns with their superior or the relevant department within the company, i.e. the
HR or legal department. If an employee does not feel comfortable reporting the above violations to a supervisor,
they can use an anonymous whistleblowing service via a web form or dedicated phone line.
[S1-1, 22, 24] [AR 15, 16] The Arctic Paper Group’s policies and internal regulations, and in particular the Arctic
Paper Group Code of Conduct for the Value Chain, explicitly address the prohibition of human trafficking, forced or
compulsory labour and child labour. The principles expressed in the Arctic Paper Group Code of Conduct for the
value chain are intended to aim to eliminate discrimination (including harassment), promote equality of opportunity
and otherwise enhance diversity and inclusion. Any discrimination on the basis of racial and ethnic origin, gender,
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
143
sexual orientation, gender identity, disability, age, religion, political opinion, national or social origin is stigmatised in
the Arctic Paper Group’s business and is not tolerated in our operations or those of our value chain entities.
[S1-1, 23] Each Arctic Paper Group organisational unit has implemented its own health and safety policy,
supplemented by appropriate policies and procedures..
[S1-1, 24] The aforementioned regulations focus on the inclusion of all groups of employees, do not formulate
specific inclusion obligations for people from vulnerable groups within their own workforce, and are implemented
with respect for the principles of diversity and inclusion.
The Arctic Paper Group reviews all policies, rules and guidelines at least once every two years.
S1-2 Procedures for working with own workforce and workers’ representatives on matters of impact
[S1-2 25, S1-4] The Arctic Paper Group actively and continuously engages and dialogues with its employees and
their representatives through various communication channels. Employees have the opportunity to express their
opinions and evaluations of the Group’s activities by, among other things, participating in surveys, during periodic
discussions with their superiors, by submitting proposals to the “Suggestion Boxes”, or anonymously by using the
whistleblowing service (whistleblower service). The Group assesses the effectiveness of cooperation with
employees through periodic employee satisfaction surveys and through ongoing communication with employees.
[S1-2, 27a-27e, 28, AR18-24] The Arctic Paper Group has a European Works Council (EWC) that meets twice a
year. The EWC covers all employees (excluding employees of Rottneros) in all EU and EEA member states. The
EWC is committed to creating the conditions for greater employee participation among all Arctic Paper employees.
Responsibility for organising and conducting employee engagement rests with the HR managers of each
organisational unit. The Group Management Board, supported by the managers of the Group’s various
organisational divisions, is responsible for implementing the results and conclusions of the communication with
employees.
S1-3 Processes for remediating the effects of adverse impacts and channels for raising concerns by own
workforce.
[S1-3 32, 33] If an employee observes a violation of the Code of Conduct or other Arctic Paper Group policies and
rules, he or she should discuss his or her concerns with his or her supervisor or the relevant department within the
unit, e.g. HR or Legal. If an employee does not feel comfortable reporting the above violations to a supervisor, they
can use the anonymous whistleblowing service. Through a publicly accessible whistleblowing system, via text or
voice message, anyone can report suspected serious wrongdoing that is inconsistent with the Arctic Paper Group’s
values. Reports can be submitted in one of three languages (Polish, English and Swedish) at: WhistleB,
Whistleblower Centre.
At the same time, the Arctic Paper Group conducts outreach activities to disseminate knowledge and raise
awareness among employees and contractors on the principles set out in the Whistleblowing and Whistleblower
Protection Policy by providing information on whistleblower protection. Every report, signal from an employee is
dealt with conscientiously and impartially.
All communications received are treated as fully confidential and those working on them shall be bound in
writing to maintain confidentiality. The employees responsible for receiving and processing reports keep track of the
inflow of applications by accessing the system. Receipt of the report is acknowledged within 7 days of receipt and
processed within 3 months, and the whistleblower is then informed of the outcome.
The Arctic Paper Group, together with all of its units, is committed to preventing and responding to retaliation
against whistleblowers including discrimination, mobbing and other undesirable behaviour in the work environment.
The Arctic Paper Group briefed employees on the implementation of channels for reporting violations and
conducted online training on reporting issues. The Arctic Paper Group has not assessed whether individuals within
its own workforce are aware of and trust the presence of these structures or processes as a means of raising their
concerns or needs and addressing them.
S1-4 Actions taken in relation to material impacts on own workforce and approaches applied to manage
material risks and to seize material opportunities related to own workforce, as well as the effectiveness of
those actions.
[S1-4, 37, 38, 40, AR 42] [MDR-A 68] The Management Board of the Arctic Paper Group and the managers of the
Group’s individual organisational units are responsible for taking action regarding material impacts on their own
employee resources.
The actions taken in 2025 mainly address the identified adverse real-world impacts and risks in the areas of
health and safety and diversity. For the other identified positive impacts, the Arctic Paper Group has continued with
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
144
its existing efforts, including offering competitive remuneration, offering employment with permanent contracts and
ensuring a functioning whistleblowing channel.
WORKING TIME
In accordance with the applicable working time regulations and the Code of Conduct in the value chain, the Arctic
Paper Group pays particular attention to compliance with the applicable working hours and minimizes the amount
of overtime work, thus reducing the possibility of accidents caused by fatigue.
ADEQUATE PAY
The Arctic Paper Group awards salaries commensurate with the positions held and competencies held, in
accordance with the Group's remuneration policies and regulations. When determining salaries, HR departments
review the prevailing market rates for specific job categories and locations.
WORK-LIFE BALANCE
The Arctic Paper Group promotes the mental and physical well-being of its employees by subsidizing
comprehensive healthcare, which includes co-financing tests as part of preventive programs, including cancer
screenings. The Group offers hybrid work options for administrative employees living outside the locations where
the Group's organizational units are located.
OCCUPATIONAL HEALTH AND SAFETY.
In order to prevent occupational safety hazards, the following actions are being taken throughout the reporting
period to prevent accidents and incidents with the potential to result in actual adverse consequences:
Encouraging employees to report risky situations in order to identify and prevent potential hazards at production
facilities:
Observation of potential risks by employees and reporting them to a common system to strengthen cooperation
in risk mitigation across all Group production facilities (PIA system). In 2025, 1,035 observations were reported,
each subject to root cause analysis. All risk observations are investigated and addressed (959 observations in
2024). The extent of action taken depends on the level of risk identified. This could be a minor adjustment to
minimise risk or a more advanced action requiring an update of procedures;
Submission by employees of proposals to improve and serve to increase work safety to the “Suggestion Box”
(122 safety proposals registered in 2025, 160 proposals in 2024), which are then analysed and approved for
implementation by the managing directors of the various organisational units.
Take corrective action following reported risk situations to eliminate potential risks:
Meeting targets arising from identified potential safety risks – in 2025 50 safety-related improvements were
implemented at Arctic Paper Kostrzyn (61 in 2024); 470 corrective actions were implemented at Arctic Paper
Munkedals (204 in 2024) and 270 at Arctic Paper Grycksbo (610 in 2024);
Updating safety procedures – regular reviews of existing safety procedures take place at all Group production
facilities and updates are made where necessary; a new fire prevention procedure has been implemented at Arctic
Paper Grycksbo – management or designated personnel are required to check fire safety equipment and assess
risk areas four times a year, and report deficiencies and take action where necessary; in addition, a management
“walk-through” has been carried out to encourage employees to pay more attention to and improve safety issues in
the organisation.
Safety training for employees:
The Values-Based Leadership programme for managers covered issues related to creating a safety culture in
Group companies;
At Arctic Paper Kostrzyn, safety and fire protection training was conducted for all employees in the production
area, as well as competency-enhancing training for the company’s paramedics; emergency drills were conducted
for employees; and an instructional video on safety in the factory area was prepared for new employees and
visitors;
At Arctic Paper Grycksbo, in addition to standard training, training was provided on topics such as fire and
safety hazards and CPR;
At Arctic Paper Munkedals, as part of a programme to develop safety competencies in selected positions
including electricians, technicians, maintenance workers, machine operators and maintenance supervisors, Lock
Out Tag Out (LOTO) training was provided teaching how to safely cut off, lock out and tag out energy sources
before servicing machinery. As part of this training, workers practised how to avoid accidents by physically securing
and marking equipment, preventing it from accidentally starting up during repairs or maintenance.
DIVERSITY AND EMPLOYMENT STRUCTURE
Activities to activate and encourage younger people and women to apply for positions in the organisation to
mitigate the risk of underemployment, increasing employee turnover and lower diversity in the workforce – for
example, at Rottneros companies, all applicants are invited to job interviews.
MANAGEMENT BOARD’S REPORT FOR 2025
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Competence mapping and structured development of competences as part of succession planning for individual
posts.
Participation in local job fairs as well as events organised by schools and colleges. The organisation of open
days in the Kostrzyn factory for school pupils, presentations in schools and the organisation of traineeships in the
factory The activities undertaken have resulted in the employment of women in management positions in areas
such as IT, maintenance.
Arctic Paper Kostrzyn promotes employee referral program that encourages and rewards current employees
who will recruit new employees.
TRAINING AND SKILLS DEVELOPMENT
The Group responds to the training needs of its employees by providing comprehensive training and development
opportunities through access to training.
FAVORABLE WORKING CONDITIONS FOR PEOPLE WITH DISABILITIES
Due to its operational profile involving the production of paper and pulp, the Arctic Paper Group has limited
opportunities to offer employment to people with disabilities. As part of the recruitment process for administrative
positions, hybrid or remote work options are offered, thus meeting the needs of people with disabilities.
[S1-4 38 43, AR 38, 39] The effectiveness of the measures is monitored through engagement and dialogue with
employees, e.g. through surveys, periodic interviews. None of the activities listed entail plans that would require
significant investment or operational expenditure.
[S1-4, AR 43] As at the date of publication of the Sustainability Statement, the Arctic Paper Group has not yet
developed a climate transition plan and, therefore, is not able to describe measures taken to mitigate any adverse
impacts that may arise from transition plans aimed at reducing adverse environmental impacts and achieving
greener and climate-neutral operations on its own workforce.
S1-5 Targets for managing material adverse impacts, enhancing positive impacts and managing material
risks and opportunities
DIVERSITY
[S1-5 46] [MDR-T 80] In the Management and Supervisory Board Diversity Policy adopted in 2021, the Arctic Paper
Group committed to strive to achieve and maintain the proportion of women on the Group’s Management and
Supervisory Boards at no less than 30% and to take this aspect into account in future recruitment processes. From
2022 the Arctic Paper Group has met this target and it is monitored at the end of each reporting period. At the end
of 2025, the ratio was 30%, as in 2024.
The proportion of women in management positions was calculated on the basis of the number of all members of
the Management Board, Supervisory Board and management team.
NUMBER OF ACCIDENTS AT WORK
The Arctic Paper Group (excluding Rottneros) has set an accident frequency rate target (Lost Time Injury Rate
“LTIR” per million working hours) of less than 4 in 2021 with a time horizon of 2025. This objective was monitored
on an ongoing basis when each accident event in the Group was recorded. The Arctic Paper Group will develop an
updated target for this area in the next reporting period.
[MDR-T 81] For the remaining identified material impacts and risks, the Arctic Paper Group has not introduced
additional targets to manage them.
The Arctic Paper Group will consider introducing the above targets as shared between Arctic Paper and
Rottneros in future years.
Own workforce or workers’ representatives were not directly involved in setting targets.
S1-6 Characteristics of the undertaking’s employees
[S1-6, 50] The majority of the Arctic Paper Group’s own employees are employed under a contract of employment
for an indefinite period. Fixed-term contracts are usually used during the probationary period of employment. Most
of the Arctic Paper Group’s own employees are employed full-time.
MANAGEMENT BOARD’S REPORT FOR 2025
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Table – employment information by gender
Gender
Number of employees in 2025
Number of employees in 2024
Men
1,122
1,198
Women
377
386
Other
0
0
Not reported
0
0
Total employees
1,499
1,584
Table – number of employees in countries where the company has at least 50 employees, representing at least
10% of its total workforce.
Country
Number of employees in 2025
Number of employees in 2024
Sweden
941
1,045
Poland
520
500
Other
38
39
Total
1,499
1,584
The number of employees is given in terms of persons. Data on the number of employees is given as at the end of
the reporting period, including those employed as replacements. The number of employees stated is consistent
with the data presented in the financial statements.
In 2025, the number of employees in the Arctic Paper Group decreased by approx. 5% compared to the previous
year, mainly due to employee reductions at the Rottneros companies.
Table – information on employees by type of employment contract and working hours, broken down by gender
[S1-6, 50b, AR55]
Category
Reporting period
Women
Men
Other
Not disclosed
Total
Number of employees
2025
377
1,122
0
0
1,499
2024
386
1,198
0
0
1,584
Number of permanent
employees
2025
363
1,096
0
0
1,459
2024
349
1,099
0
0
1,448
Number of temporary
employees
2025
14
26
0
0
40
2024
37
88
0
0
125
Number of employees not
guaranteed working hours
2025
0
0
0
0
0
2024
0
11
0
0
11
Number of full-time
employees
2025
374
1,114
0
0
1,488
2024
383
1,182
0
0
1,565
Number of part-time
employees
2025
3
8
0
0
11
2024
3
16
0
0
19
MANAGEMENT BOARD’S REPORT FOR 2025
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Table – total number of employees who left the company during the reporting period and employee turnover rate [S1-6, 50c, AR59].
Departures/turnover
2025
2024
Number of employees who left
145
144
Turnover rate
9.67%
9.1%
Turnover rate = (number of employees who left/ number of employees as at 31 December of the year in question) x 100%
S1-9 Diversity metrics
[S1-9, AR71] The diversity of our workforce is one of the factors contributing to the development of our
organisation. Different professional experience or backgrounds encourage the exchange of ideas that can
contribute to the improvement of our organisation.
The Arctic Paper Group includes in the definition of the category of top-level employees the members of the
Management Board (3 persons) and the members of the advisory team of the Management Board of the Arctic
Paper Group (7 persons, including 3 members of the Management Board).
Table – [S1-9, 66a, 66b]
Category
Reporting period
Women
Men
Number of employees (number of
persons) at top management level
2025
1
6
2024
1
6
Percentage of employees at top
management level
2025
0.27%
0.53%
2024
0.26%
0.50%
Number of workers (persons) under 30
years of age
2025
52
153
Percentage of workers under 30 years of
age
13.79%
13.64%
Number of employees (number of
people) aged between 30 and 50
194
523
Percentage of employees aged between
30 and 50
51,46%
46.61%
Number of employees (number of
people) aged over 50
131
446
Percentage of employees aged over 50
34.7%
39.8%
Total employees
377
1122
Number of workers (persons) under 30
years of age
2024
51
166
Percentage of workers under 30 years of
age
13.21%
13.86%
Number of employees (number of
people) aged between 30 and 50
204
533
Percentage of employees aged between
30 and 50
52.85%
44.49%
Number of employees (number of
people) aged over 50
131
499
Percentage of employees aged over 50
33.9%
41.7%
Total employees
386
1198
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S1-10 Adequate wage
[S1-10, 69] All Arctic Paper Group employees, regardless of geographic location of employment, receive adequate
wages. An adequate wage is a wage that ensures that the needs of the worker and his or her family are met in the
light of national economic and social conditions.
S1-14 Health and safety metrics
[S1-14 88, AR 89-91] The Arctic Paper Group is pursuing a systemic approach to safety. We train our employees
every year and ensure that our management is well prepared to deal with emergencies in this area. We have
implemented programmes for risk assessment and reporting.
100% of the Arctic Paper Group’s own employees are covered by a health and safety management system
based on legal requirements and/or recognised standards or guidelines.
The most important tool for enhancing safety is the risk assessment carried out before the start-up of any new
machine or the implementation of a new working method.
If systemic problems are detected during the production process, we introduce targeted, continuous action
plans. In addition, trained rescue teams are in place at all our production facilities. We aim to minimise the number
of light and serious accidents at workplaces. Our paper mills have an occupational health service, as well as rescue
teams trained to respond to emergencies. Some of our employees also belong to local fire departments, where
they have been trained to respond to internal and external incidents and accidents. We carefully analyse all health
and safety incidents raised by our employees, and take actions to avoid serious consequences in the future.
In 2025, in spite of the preventive actions implemented, such as observing risk behaviour, monitoring it and
introducing corrective actions (described in S1-4), the number of accidents has increased. Injuries occur mainly due
to human error. Therefore, it is very important to change behaviour and create a culture of a safe workplace and to
create awareness among workers about possible hazards at production facilities.
2025
2024
Accidents and injuries among workers
Minor
40
32
Severe
2
2
Fatal
0
0
Total
42
34
Accidents and injuries among employees of subcontractors working on company premises
Minor
6
6
Severe
0
0
Fatal
0
0
Total
6
6
[S1-14, 88c, AR 89-91] The Lost Time Injury Rate (LTIR) for own employees in 2025 was 17.07, an increase
compared to 14.7 in 2024. The Lost Time Injury Rate (LTIR) is the number of lost time accidents per million hours
worked.
In order to improve internal risk monitoring, we use an additional classification of accidents distinguishing two
categories:
• Light accidents: Minor accidents: work-related incidents that did not result in temporary incapacity for work or
resulted in sick leave lasting up to 7 calendar days.
• Serious accidents: work-related incidents resulting in sick leave lasting more than 7 calendar days or leading
to permanent disability.
This classification is in addition to our standard reporting of lost time injuries (LTIs), which are defined as any work-
related injury that results in an employee being unable to return to work the day after the incident, according to
international standards such as ILO guidelines.
By integrating this approach, we aim to go beyond compliance and continuously improve health and safety at all
operational levels.
MANAGEMENT BOARD’S REPORT FOR 2025
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S1-16 Remuneration metrics (pay gap and total remuneration)
The Arctic Paper Group remunerates employees according to their position, qualifications, experience and
performance, regardless of diversity factors.
2025
2024
Average level of gross hourly pay for men
PLN 134
PLN 130
S1-16, 97a, AR 98 – AR 100
average level of gross hourly pay for
women
PLN 116.9
PLN 121
S1-16, 97a, AR 98 – AR 100
Gender pay gap – the pay gap
13%
7%
S1-16, 97a, AR 98 – AR 100
Ratio of top earner’s salary to median
salary
17.81
10.48
S1-16, 97b, AR 101 – AR 102
THE WAGE GAP WAS CALCULATED USING THE FORMULA:
((Average level of gross hourly wage of male employees – average level of gross hourly wage of female
employees) / Average level of gross hourly wage of male employees)) *100.
The calculation takes into account average salary levels for men and women across the Arctic Paper Group.
The following factors have contributed to the increase in the wage gap in 2025:
• the start of the employment of women in lower positions in the packaging production company in Poland,
Kostrzyn Packaging;
• resignations of women in senior positions;
• use of the benchmark in the calculation for sales organisation positions for 2024.
RATIO OF TOP EARNER’S SALARY TO MEDIAN SALARY
Calculated as: Annual total remuneration of the highest paid person in the Arctic Paper Group divided by median
annual total employee remuneration (excluding the highest paid person).
In calculating the remuneration ratio, all employees were taken into account, regardless of the geographical
location of the individual units in the Arctic Paper Group where the employees are employed.
In order to determine the top earner, all salaries for the reporting period were reviewed. The full gross salaries of
the top earner, including base salary, bonuses and taxed benefits (such as car allowance) paid during the reporting
period were analysed.
The median salary was calculated based on the sum of the products of the hourly rate, the number of hours per
month and the number of months.
For Rottneros Latvia and the Arctic Paper sales organisations, available estimated data and market benchmarks
were used to calculate the median of total remuneration.
Remuneration values expressed in currencies other than PLN have been converted using the exchange rate
adopted in the balance sheet section of the financial statements.
S1-17 Incidents, complaints and serious impact on respect for human rights
In 2025, the Arctic Paper Group reported no incidents, labour-related complaints or serious human rights impacts
among its employees. The Arctic Paper Group was not a party to the proceedings in this regard.
MANAGEMENT BOARD’S REPORT FOR 2025
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2025
2024
Number of cases of discrimination
0
0
Number of complaints made through channels to own employees to express concerns
0
5
Number of complaints submitted to OECD National Contact Points for Multinational
Enterprises
0
0
Number of serious human rights problems and incidents related to own workforce
0
0
Number of serious human rights issues and incidents related to own workforce that
constitute non-compliance with the UN Guiding Principles and the OECD Guidelines
for Multinational Enterprises
0
0
Number of serious human rights cases in which the company secured remedies for
those affected
0
0
Amount of significant fines, penalties and compensation for serious human rights
issues and incidents related to own workforce
0
0
Amount of material penalties, fines and reparations for damage caused by
infringements of social and human rights factors
0
0
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ESRS G1 Business conduct
The material impacts and opportunities described in terms of business conduct are linked to the Arctic Paper
Group’s business model through the Group’s ethics and values, which shape the way employees are managed and
the relationships with suppliers. A strong ethical culture and applicable codes of conduct support the selection of
partners that meet high ethical standards, the building of lasting relationships based on trust, the stable
development of the company and its competitive market position. An effective whistleblowing system and
whistleblower protection throughout the value chain ensures regulatory compliance and supports risk management.
G1-1 Business conduct policies and corporate culture
[G1-1, 7, 9] [MDR-P 65] We conduct our business in a stable, long-term and trustworthy manner, building on
established and trusted relationships with our stakeholders. Our core values include:
Transparency – We operate steadily, transparently and openly, following a long-term plan for how we operate,
how we think and how others perceive us. We ensure transparency across all our business operations are
transparent – from sustainable sourcing, the production and delivery of our products, to the communication of our
results to external stakeholders.
High-quality products and services – The Arctic Paper Group offers products and services that meet specific
quality requirements. These enable the implementation of client projects, including those with increased technical
requirements, using available technologies and operational solutions.
Respect for natural resources – We protect natural resources and continuously strive to create a healthy
balance between stakeholder needs, production and operational activities.
The Arctic Paper Group’s principles and values are outlined in the Code of Conduct in the value chain, which
applies to every stakeholder in the Group and all areas of its operations. It commits the entire Group and its
employees to ethical conduct as well as to acting in full compliance with the laws and regulations applicable to the
Group’s operations. Policies that complement the provisions of the Code ensure that the principles material to the
Group are duly understood and adhered to.
The Arctic Paper Group’s policies on business conduct:
• The Arctic Paper Group Value Chain Code of Conduct – sets out the Arctic Paper Group’s core principles of
conduct, ethics and values that apply to all employees, suppliers and associates of the Group;
• Sustainability Policy – sets out the general principles for approaching ESG issues;
• The Whistleblowing and Whistleblower Protection Policy – sets out the rules for reporting violations, dealing
with them and providing protection for whistleblowers.
Policies in place at Rottneros Group:
• Code of Conduct – sets out the basic principles of conduct, ethics and values;
• Anti-corruption and anti-competition policy – sets out rules related to the prevention of corruption and
promotes the principles of fair competition;
• The Whistleblowing and Whistleblower Protection Policy – sets out the rules for reporting violations, dealing
with them and providing protection for whistleblowers.
These policies address the important topic of corporate culture. They affect the entire value chain. They have been
adopted by the Management Board of the Group and they are responsible for their implementation. The contents of
the documents are available on the Group’s website. In addition, the Group expects suppliers and third parties to
sign the “Declaration of Suppliers and Third Parties on Acceptance of and Compliance with the Arctic Paper Group
Code of Conduct”.
[G1-1 7] We develop and implement our policies and internal regulations in accordance with international
standards and initiatives, as well as local regulations, including but not limited to:
• UN Global Compact principles;
• United Nations Convention against Corruption (UNCAC);
• OECD Guidelines for Multinational Enterprises;
• UN Guiding Principles on Business and Human Rights;
• UN Universal Declaration of Human Rights;
• Charter of Fundamental Rights of the European Union;
• International Labour Organisation Convention.
Every manager, employee and collaborator, as well as suppliers and other third parties working with the Arctic
Paper Group should be familiar with, understand, and adhere to the Arctic Paper Group Code of Conduct, as well
as similar regulations applicable within the Rottneros Group and other applicable regulations. Issues arising in
connection with the implementation of policies, as well as any comments or suggestions for improvements, must be
MANAGEMENT BOARD’S REPORT FOR 2025
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reported to the Management Board of the Arctic Paper Group and the Management Board of the Rottneros Group,
whose responsibility is to monitor the functioning of corporate regulations in practice.
[G1-1 10a, 10e] Complaints regarding violations of the Code of Conduct and other regulations applicable to both
groups may be made directly to the Management Board of the Arctic Paper Group or the Management Board of the
Rottneros Group by all current and potential shareholders, customers, suppliers, contractors, as well as all
employees and managers of the company. All received complaints will be treated confidentially. The Management
Board of the Arctic Paper Group does not tolerate any illegal or unethical activities. Any violation of the Code of
Conduct may be punishable by disciplinary action.
[G1-1 10g] At the Arctic Paper Group, we are committed to ensuring that all our employees know and respect
the provisions of the Code of Conduct and other policies. To this end, nano-learning in the form of online training on
business ethics, among other topics, is provided to all employees. The Group provides voluntary access to training
by making computers available, which can also be used by employees in the production areas. It mainly covers the
topics of corruption and bribery, including how to recognise corrupt behaviour and how to behave in such
situations, along with information on how to report and how to respond to such situations. The Arctic Paper Group
does not have a training policy document and implements training based on current training plans and needs.
[G1-1 10h] The most vulnerable to incidents of corruption or bribery are employees involved in purchasing
processes.
BREACH REPORTING AND WHISTLEBLOWER PROTECTION
The Arctic Paper Group strives to maintain openness in its business operations and a high level of business ethics
by encouraging the reporting of any irregularities, abuses, and breaches of law, ethics, or internal company
regulations through the provision of various anonymous communication channels.
[G1-1 11] Under current legislation, the Arctic Paper Group is subject to legal requirements for whistleblower
protection and is required to provide stakeholders with channels to report violations of the law while ensuring
whistleblower protection. The existing Whistleblowing and Whistleblower Protection Policy is designed to enable
frank dialogue, without fear of potential retaliation. Unfavourable treatment or other retaliation for making an internal
or external report is not permitted under applicable law.
The Arctic Paper Group Code of Conduct in the value chain also commits the entire Group to preventing and
responding to retaliatory actions against whistleblowers including discrimination, mobbing and other undesirable
behaviour in the workplace. In addition, the Arctic Paper Group implements an informational policy aimed at
spreading knowledge and raising awareness among employees and contractors regarding the principles set out in
the Policy.
Every manager, employee, collaborator, and any person representing the Arctic Paper Group, as well as
suppliers and other third parties working with the Arctic Paper Group, should be familiar with, understand, and
adhere to the Arctic Paper Group Code of Conduct. Problems arising in connection with the implementation of the
Code, any comments, complaints relating to violations or suggestions for improvement may be reported directly to
the Management Board of the Arctic Paper Group. It is the responsibility of the Management Board to monitor the
operation of the Code of Conduct in practice and all complaints received are treated confidentially and with due
attention.
[G1-1 10c] In the event of a suspected or apparent violation of the Code of Conduct or other Arctic Paper Group
policies, employees are required to report it to their superiors or to HR or Legal. Both internal and external reports
can be made through the publicly available WhistleB platform, which is run by third-party provider Navex Global.
The platform guarantees the anonymity of reported cases and is available in several languages to ensure that
stakeholders have the widest possible access to this service. Whistleblower reports are anonymised.
[G1-1 10a] All violations are handled with due care and include taking all necessary actions to clarify the report.
Employees who act unethically or who breach the Code of Conduct or internal regulations of the Arctic Paper
Group or the Rottneros Group may be subject to disciplinary action. Depending on the circumstances and facts,
such conduct may lead to the termination of cooperation.
The Whistleblowing and Whistleblower Protection Policy requires the Management Board to appoint members
to the Whistleblowing Team. It is an impartial internal unit tasked with follow-up, including verification of the internal
report and further communication with the whistleblower. In addition, direct supervisors are obliged to inform
subordinate employees of the irregularity. Members of the Whistleblowing Team are subject to annual training on
whistleblowing management. The members of the Whistleblowing Teams in the various organisational units of the
group are individuals in the roles of HR directors and managers, legal and sustainability managers.
After the initial investigation of the case, the Team may decide whether to accept or reject the report. The
application process is conducted with confidentiality and impartiality, carefully listening to the parties involved. The
results of the ongoing investigation are presented in the form of a report. Proposals for further actions, including
corrective and preventive actions, are also prepared alongside the report. If deemed appropriate, changes to
internal operating procedures may be implemented.
MANAGEMENT BOARD’S REPORT FOR 2025
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Business conduct-related activities and objectives
[G1-1 MDR-A 68] Business conduct activities that have been undertaken in the Arctic Paper Group include:
• promoting adherence to the Value Chain Code of Conduct among Arctic Paper employees and suppliers;
• conducting compliance and anti-corruption training.
These activities have not required significant funding and are ongoing. a
[G1-1 MDR-T] The Arctic Paper Group has not set measurable targets related to business conduct.
Considering the results of the double materiality analysis regarding business conduct, the Group has not identified
any such need. The Group regularly monitors the registers maintained by the OECD National Contact Points on
Responsible Business for notifications that may relate to its activities and the number of prosecutions or penalties
issued in cases involving, inter alia, unfair business practices, unfair competition, non-compliance with human
rights, including in the supply chain, corruption or bribery.
G1-3 Prevention and detection of corruption and bribery.
[G1-3 18a] [AR5, AR6, AR7, AR8] In line with the Arctic Paper Group Code of Conduct for the Value Chain, any
form of corruption, bribery or anti-competitive activities are not subject to any tolerance. Neither the Arctic Paper
Group as a whole nor any person representing the Group (including third parties) are allowed to participate in or
support any corrupt practices. Employees are required to report any suspicions or signs of corruption to their
superiors, directly to members of the Management Board or through available whistleblowing channels.
The most vulnerable to incidents of corruption or bribery are employees involved in purchasing processes.
Therefore, to minimise the risk of corruption or bribery, a multi-step approach to purchasing has been developed
under the P06 procedure based on the ISO 9000 standard. All decisions made in the purchasing process are
based on the agreement of a dedicated group of people, not making the final decision dependent on one person.
As all decisions made during this process are never dependent on a single person, the risk of corruption is
reduced. For large investment projects, decisions regarding investment purchases are made by a dedicated
committee, and we are considering extending this practice to other large purchases. The logistics department has a
similar procurement system. The price lists are approved by our management and then passed on to our sales
team members. On the other hand, bonuses to members of the sales team are not tied exclusively to their
individual sales performance, but also to the overall financial performance of the company. We offer our clients
bonuses for six-month and annual periods, but these are linked to sales volumes, the ranges of which are carefully
monitored. Arctic Paper does not offer other types of bonuses (for example in-kind) to clients.
[G1-3 18b, 18c,] There are no separate investigative committees specifically dedicated to preventing and
detecting corruption or bribery in the Arctic Paper Group. Incidents or suspected corruption can also be reported by
external stakeholders through the WhistleB whistleblower platform. Reports are handled by the Whistleblowing
Team and other units within the company, if necessary, to ensure that those responsible for the investigation are
separate from the management structures involved.
[G1-3, 20] Arctic Paper’s Value Chain Code of Conduct and the analogous regulation in place at Rottneros are
publicly available documents, in addition also made available on the Group’s internal information channels.
[G1-3 21, AR 8] Members of management and supervisory bodies are not provided with additional training on
corruption beyond the publicly available training designed for all employees.
MANAGEMENT BOARD’S REPORT FOR 2025
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Information on how policies are communicated to those to whom they are material (prevention and detection
of corruption or bribery)
Functions at risk
Managers
Administrative, management and
supervisory bodies
Other employees and collaborators
(contract of employment/B2B, contract
of mandate, etc.)
Reporting period 2025
Total number of people at
risk of corruption
62
16
33
13
Percentage of functions at
risk covered by training
programmes
79%
Number of people at risk of
corruption and trained to
deal with it
49
13
24
12
Reporting period 2024
Total number of people at
risk of corruption
66
15
40
11
Percentage of functions at
risk covered by training
programmes
94%
Number of people at risk of
corruption and trained to
deal with it
62
15
37
10
Delivery method and duration of training
Work shops
NO
NO
NO
NO
Online
NO
NO
NO
NO
Training platform
YES
YES
YES
YES
Topics covered
Definition of corruption
YES
YES
YES
YES
Suspicion/detection procedures
YES
YES
YES
YES
Policy
YES
YES
YES
YES
Frequency
Once a year
Once a year
Once a year
Once a year
Data comes from the Group’s training system, not validated by an external body other than the assurance
provider
G1-4 Incidents of corruption or bribery
[G1-4, 24a, 24b] No cases of corruption or bribery were identified in the current reporting year.
2024
2025
Number of convictions for violations of anti-corruption
laws
0
0
Level of fines for violations of anti-corruption legislation
0
0
Incidents
0
0
The data comes from the Group’s records and has not been validated by an external body other than the
assurance provider.
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[IRO-2.56, AR19] Index of disclosure requirements met in preparing the sustainability statement
Number
and title of
the
Standard
ESRS
number
Name of disclosure
Page in the report
ESRS 2
General
disclosures
BP-1
General basis for making sustainability statements
59
BP-2
Disclosure of information in relation to specific circumstances
59
GOV-1
Role of administrative, management and supervisory bodies (including G1.GOV-1).
61
GOV-2
Information provided to the undertaking’s administrative, management and supervisory bodies and the
sustainability issues they undertake
68
GOV-3
Inclusion of sustainability-related outcomes in incentive schemes (including E1.GOV-3).
69
GOV-4
Due diligence statement
69
GOV-5
Risk management and internal controls over sustainability reporting
70
SBM-1
Strategy, business model and value chain
71
SBM-2
Stakeholder interests and opinions (including S1-S3.SBM-2).
76
SBM-3
Important impacts, risks and opportunities and their interrelationship with the strategy and with the business
model (including E1.SBM-3, E4.SBM-3, S1-S3.SBM.3).
84
IRO-1
Description of the process to identify and assess material impacts, risks and opportunities (including E1-
E5.IRO-1 and G1.IRO-1).
77
IRO-2
ESRS Disclosure Requirements covered by the undertaking’s sustainability statement
83
MDR-P
Policies adopted to manage material sustainability issues
MDR-A
Actions and resources related to material sustainability issues
MDR-M
Metrics related to material sustainability issues
MDR-T
Monitoring the effectiveness of policies and actions using targets
ESRS E1
Climate
change
E1-1
Transition plan for climate change mitigation
96
E1-2
Policies related to climate change mitigation and adaptation
96
E1-3
Actions and resources related to climate policiy
97
E1-4
Climate change mitigation and adaptation objectives
99
E1-5
Energy consumption and the energy mix
101
E1-6
Gross Scope 1, 2 and 3 GHG emissions and total GHG emissions
102
E1-7
GHG removal and mitigation projects financed through carbon credits
106
E1-8
Internal carbon pricing
106
ESRS E2
Pollution
E2-1
Policies related to pollution
107
E2-2
Pollution-related activities and resources
107
E2-3
Targets related to pollution
108
E2-4
Pollution of air, water and soil
108
E2-5
Substances of concern and substances of very high concern
110
ESRS E3
Water and
E3-1
Policies related to water and marine resources
113
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
156
Number
and title of
the
Standard
ESRS
number
Name of disclosure
Page in the report
marine
resources
E3-2
Actions and resources related to water and marine resources
113
E3-3
Targets related to water and marine resources
113
E3-4
Water consumption
113
ESRS E5
Resource
use and
the circular
economy
E5-1
Policies related to resource use and circular economy
115
E5-2
Actions and resources related to resource use and circular economy
116
E5-3
Targets related to resource use and circular economy
116
E5-4
Resources introduced
117
E5-5
Resources discharged
117
ESRS S1
Own
workforce
S1-1
Policies related to own workforce
136
S1-2
Procedures for working with own workforce and workers’ representatives on matters of impacts
138
S1-3
Processes for remediating the effects of adverse impacts and channels for raising concerns by own
workforce
138
S1-4
Addressing the material impacts on its own workforce and applying approaches to manage material risks
and opportunities related to its own workforce and the effectiveness of these actions
138
S1-5
Targets for managing material adverse impacts, enhancing positive impacts and managing material risks
and opportunities
140
S1-6
Characteristics of the undertaking’s employees
140
S1-9
Diversity metrics
142
S1-10
Adequate wage
143
S1-14
Health and safety metrics
143
S1-16
Remuneration metrics (pay gap and total remuneration)
144
S1-17
Incidents, complaints and serious impacts on respect for human rights
144
ESRS G1
Business
conduct
G1-1
Business conduct policies and corporate culture
146
G1-3
Prevention and detection of corruption and bribery
148
G1-4
Incidents of corruption or bribery
149
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The following is an index of all data points derived from other EU legislation used in this Sustainability Statement, based on
ESRS 2 Appendix B.
Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS 2 GOV-1
Gender diversity of
board members para.
21(d)
Indicator No 13 in
Table 1 in Annex I
Annex II of
Commission
Delegated Regulation
(EU) 2020/1816 (5)
Material
61
ESRS 2 GOV-1
Percentage of body
members that are
independent para.
21(e)
Annex II of Delegated
Regulation (EU)
2020/1816
Material
61
ESRS 2 GOV-4 Due
diligence statement
para. 30
Indicator No 10 in
Table 3 in Annex I
Material
70
ESRS 2 SBM-1
Participation in fossil
fuel activities para.
40(d)(i)
Indicator No 4 in Table
1 in Annex I
Article 449a of
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation (EU)
2022/2453 (6), Table
1: Qualitative
information on
environmental risks
and Table 2:
Qualitative information
on social risks
Annex II of Delegated
Regulation (EU)
2020/1816
Not material
ESRS 2 SBM-1
Participation in
chemical production
activities para. 40(d)(ii)
Indicator No 9 in Table
2 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816
Material
76
ESRS 2 SBM-1
Participation in
controversial weapons
activities para.
40(d)(iii)
Indicator No 14 in
Table 1 in Annex I
Article 12(1) of
Delegated Regulation
(EU) 2020/1818 (7),
Annex II of Delegated
Regulation (EU)
2020/1816
Not material
ESRS 2 SBM-1
Participation in
tobacco cultivation and
production activities
para. 40(d)(iv)
Article 12(1) of
Delegated Regulation
(EU) 2020/1818,
Annex II of Delegated
Regulation (EU)
2020/1816
Not material
ESRS E1-1 Transition
plan to achieve climate
neutrality by 2050
para. 14
Article 2(1) of
Regulation (EU)
2021/1119
Material
96
ESRS E1-1 Units
excluded from the
scope of the Paris
Agreement-adapted
benchmarks para.
16(g)
Article 449a of
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation (EU)
2022/2453, Model 1:
Banking portfolio –
Climate change
transition risk: credit
quality of exposures
by sector, emision and
residual maturity
Article 12(1)(d) to (g)
and 12(2) of
Delegated Regulation
(EU) 2020/1818
Not material
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS E1-4 GHG
emission reduction
targets para. 34
Indicator No 4 in Table
2 in Annex I
Article 449a of
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation (EU)
2022/2453, Model 3:
Banking portfolio –
Transition risks
associated with
climate change:
metrics of adaptation
Article 6 of Delegated
Regulation (EU)
2020/1818
Material
99
ESRS E1-5 Fossil
energy consumption
disaggregated by
source (only for
sectors with material
climate impacts) para.
38
Indicator No 5 in Table
1 and Indicator No 5 in
Table 2 in Annex I
Not material
ESRS E1-5 Energy
consumption and the
energy mix para. 37
Indicator No 5 in Table
1 in Annex I
Material
101
ESRS E1-5 Energy
intensity linked to
activities undertaken in
sectors with material
climate impact para.
40-43
Indicator No 6 in Table
1 in Annex I
Material
101
ESRS E1-6 Scope 1,
2, 3 gross GHG
emissions and total
GHG emissions para.
44
Indicators 1 and 2 in
Table 1 in Annex I
Article 449a of
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation (EU)
2022/2453, Model 1:
Banking portfolio –
Climate change
transition risk: credit
quality of exposures
by sector, emission
and residual maturity
Article 5(1), Article 6
and Article 8(1) of
Delegated Regulation
(EU) 2020/1818
Material
102
ESRS E1-6 Gross
GHG intensity para.
53-55
Indicator No 3 in Table
1 in Annex I
Article 449a of
Regulation (EU) No
575/2013;
Commission
Implementing
Regulation (EU)
2022/2453, Model 3:
Banking portfolio –
Transition risks
associated with
climate change:
metrics of adaptation
Article 8(1) of
Delegated Regulation
(EU) 2020/1818
Material
106
ESRS E1-7 GHG
removal and carbon
credits para. 56
Article 2(1) of
Regulation (EU)
2021/1119
Not material
ESRS E1-9 Reference
portfolio exposure to
physical climate-
related risks para. 66
Annex II to Delegated
Regulation (EU)
2020/1818, Annex II
to Delegated
Regulation (EU)
2020/1816
Not material
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS E1-9
Disaggregation of
monetary amounts
according to sudden
and prolonged
physical risk
paragraph 66(a) ESRS
E1-9 Location of
significant assets with
material physical risk
para. 66(c) Article
449a of Regulation
(EU) No 575/2013;
para. 46 and 47 of
Commission
Implementing
Regulation (EU)
2022/2453; Model 5:
Banking portfolio –
Physical risk related to
climate change:
exposures subject to
physical risk.
Not material
ESRS E1-9
Breakdown of the book
value of property by
energy efficiency class
para. 67(c)
Article 449a of
Regulation (EU) No
575/2013; para. 34 of
Commission
Implementing
Regulation (EU)
2022/2453; Model 2:
Banking portfolio –
Climate change
transition risk: loans
secured by real estate
– energy efficiency of
collateral
Not material
ESRS E1-9 Degree of
exposure of the
portfolio to climate-
related opportunities
para. 69
Annex II of Delegated
Regulation (EU)
2020/1818
Not material
ESRS E2-4 Amount of
each pollutant listed in
Annex II of the E-
PRTR (European
Pollutant Release and
Transfer Register)
Regulation emitted to
air, water and land,
para. 28
Indicator No 8 in
Annex I Table 1,
indicator No 2 in
Annex I Table 2,
indicator No 1 in
Annex I Table 2 and
indicator No 3 in
Annex I Table 2
Material
108
ESRS E3-1 Water and
marine resources
para. 9
Indicator No 7 in Table
2 in Annex I
Material
113
ESRS E3-1 Special
policy para. 13
Indicator No 8 in Table
2 in Annex I
Not material
ESRS E3-1
Sustainable seas and
oceans practices para.
14
Indicator No 12 in
Table 2 in Annex I
Not material
ESRS E3-4 Total
amount of water
recycled and reused
para. 28(c)
Indicator No 6.2 in
Table 2 in Annex I
Material
113
ESRS E3-4 Total
water consumption in
m3 per net income
from own operations
para. 29
Indicator No 6.1 in
Table 2 in Annex I
Material
113
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS 2 SBM 3-E4
para. (16)(a)(i)
Indicator No 7 in Table
1 in Annex I
Material(Quick
fix)
ESRS 2 SBM 3-E4
para. 16(b)
Indicator No 10 in
Table 2 in Annex I
Material(Quick
fix)
ESRS 2 SBM 3-E4
para. 16(c)
Indicator No 14 in
Table 2 in Annex I
Material(Quick
fix)
ESRS E4-2
Sustainable
land/agriculture
practices or policies
para. 24(b).
Indicator No 11 in
Table 2 in Annex I
Material(Quick
fix)
ESRS E4-2
Sustainable ocean/sea
practices or policies
para. 24(c)
Indicator No 12 in
Table 2 in Annex I
Material(Quick
fix)
ESRS E4-2 Policies to
tackle deforestation
para. 24(d)
Indicator No 15 in
Table 2 in Annex I
Material(Quick
fix)
ESRS E5-5 Non-
recycled waste para.
37(d)
Indicator No 13 in
Table 2 in Annex I
Material
117
ESRS E5-5 Hazardous
waste and radioactive
waste para. 39
Indicator No 9 in Table
1 in Annex I
Material
117
ESRS 2 SBM-3-S1
Risk of incidents of
forced labour para.
14(f)
Indicator No 13 in
Table 3 in Annex I
Material
ESRS 2 SBM-3-S1
Risk of incidents of
child labour para.
14(g)
Indicator No 12 in
Table 3 in Annex I
Material
ESRS S1-1
Commitments on
human rights policy
para. 20
Indicator No. 9 in
Table 3 and Indicator
No. 11 in Table 1 in
Annex I
Material
ESRS S1-1 Due
diligence strategies for
issues covered by the
core Inter-National
Labour Organization
Conventions 1-8, para.
21
Annex II of Delegated
Regulation (EU)
2020/1816
Material
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS S1-1
Procedures and
measures to prevent
trafficking in human
beings para. 22
Indicator No 11 in
Table 3 in Annex I
Material
Indicator No. 11 in
Table 3 in Annex I
ESRS S1-1 Policy or
management system
for the prevention of
accidents at work
para. 23
Indicator No 1 in Table
3 in Annex I
Material
ESRS S1-3 Complaint
Mechanisms para.
32(c)
Indicator No 5 in Table
3 in Annex I
Material
ESRS S1-14 Number
of work-related deaths
and number and rate
of work-related
accidents para. 88(b)
and (c)
Indicator No 2 in Table
3 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816
Material
ESRS S1-14 Number
of days lost due to
injuries, accidents,
fatalities or illnesses
para. 88(e)
Indicator No 3 in Table
3 in Annex I
Material
ESRS S1-16
Unadjusted gender
pay gap para. 97(a)
Indicator No 12 in
Table 1 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816
Material
ESRS S1-16
Excessive level of
remuneration of the
General Director para.
97(b)
Indicator No 8 in Table
3 in Annex I
Material
ESRS S1-17 Cases of
discrimination para.
103(a)
Indicator No 7 in Table
3 in Annex I
Material
ESRS S1-17 Non-
compliance with the
UN Guiding Principles
on Business and
Human Rights and
OECD Guiding
Principles para. 104(a)
Indicator No. 10 in
Table 1 and Indicator
No. 14 in Table 3 in
Annex I
Annex II of Delegated
Regulation (EU)
2020/1816, Article
12(1) of Delegated
Regulation (EU)
2020/1818
Material
ESRS 2 SBM-3-S2
Material risk of
incidents of child or
forced labour in the
value chain para. 11(b)
Indicators No 12 and
No 13 in Table 3 in
Annex I
Not material
ESRS S2-1
Commitments on
human rights policy
para. 17
Indicator No. 9 in
Table 3 and Indicator
No. 11 in Table 1 in
Annex I
Material(Quick
fix)
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS S2-1 Policies
related to persons
performing work in the
value chain para. 18
Indicator No 11 and
No 4 in Table 3 in
Annex I
Material(Quick
fix)
ESRS S2-1 Non-
compliance with the
UN Guiding Principles
on Business and
Human Rights and
OECD Guidelines
para. 19
Indicator No 10 in
Table 1 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816, Article
12(1) of Delegated
Regulation (EU)
2020/1818
Material(Quick
fix)
ESRS S2-1 Due
diligence strategies for
issues covered by the
core Inter-National
Labour Organization
Conventions 1-8, para.
19
Annex II of Delegated
Regulation (EU)
2020/1816
Material(Quick
fix)
ESRS S2-4 Human
rights issues and
incidents related to
upstream and
downstream value
chains para. 36
Indicator No 14 in
Table 3 in Annex I
Material(Quick
fix)
ESRS S3-1 Human
rights policy
commitments, para. 16
Indicator No 9 in Table
3 of Annex I and
indicator No 11 in
Table 1 of Annex I
Material(Quick
fix)
ESRS S3-1 Failure to
comply with UN
Guiding Principles on
Business and Human
Rights, ILO Principles
or OECD Guidelines
para. 17
Indicator No 10 in
Table 1 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816, Article
12(1) of Delegated
Regulation (EU)
2020/1818
Material(Quick
fix)
ESRS S3-4 Human
rights issues and
incidents para. 36
Indicator No 14 in
Table 3 in Annex I
Material(Quick
fix)
ESRS S4-1 Policy
relating to consumers
and end-users para.
16
Indicator No. 9 in
Table 3 and Indicator
No. 11 in Table 1 in
Annex I
Material(Quick
fix)
ESRS S4-1 Non-
compliance with the
UN Guiding Principles
on Business and
Human Rights and
OECD Guidelines
para. 17
Indicator No 10 in
Table 1 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816, Article
12(1) of Delegated
Regulation (EU)
2020/1818
Material(Quick
fix)
ESRS S4-4 Human
rights issues and
incidents paragraph 35
Indicator No 14 in
Table 3 in Annex I
Material(Quick
fix)
ESRS G1-1 United
Nations Convention
against Corruption
para. 10(b)
Indicator No 15 in
Table 3 in Annex I
Material
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Disclosure
requirement and
associated data point
Reference to the
regulation on
disclosure of
information relating to
sustainable
development in the
financial services
sector
Reference to the third
pillar
Reference to the
Reference Indicators
Regulation
Reference to
European climate law
MATERIAL
TOPIC / NOT
MATERIAL
TOPIC
PAGE IN THE
STATEMENT
ESRS G1-1 Protection
of whistleblowers para.
10(d)
Indicator No 6 in Table
3 in Annex I
Material
ESRS G1-4 Fines for
breaches of anti-
corruption and anti-
bribery legislation
para. 24(a)
Indicator No 17 in
Table 3 in Annex I
Annex II of Delegated
Regulation (EU)
2020/1816
Material
ESRS G1-4 Standards
Against Corruption and
Bribery para. 24(b)
Indicator No 16 in
Table 3 in Annex I
Material
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Signatures of the Members of the Management Board
Position
First and last name
Date
Signature
President of the Management Board
CEO
Michał Jarczyński
21 April 2026
signed with a qualified
electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak
21 April 2026
signed with a qualified
electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld
21 April 2026
signed with a qualified
electronic signature
