Investor Presentaiton

BOARD OF DIRECTORS' REPORT solutions and processes to enable us to conduct our business in a safe and sustainable manner and consistently apply the KONE safety management system in all our activities. Managers perform regular audits to measure compliance with KONE's policies, processes and defined working methods. Corrective actions are taken if deviations are identified. KONE also conducts process audits to identify possible obstacles to work safely. If any are found, the work in question is stopped until a safe method is approved. Over the year, we have put effort on strategic longer-term plans for safety development, to support the transition to a more proactive approach when addressing safety topics. We constantly monitor our safety performance using several indicators, including Industrial Injury Frequency Rate (IIFR). In 2022, our IIFR was 1.4 (1.6). Our target is to reach IIFR 0.6 by 2030, and we continue to target zero injuries. As proactive indicators, we tracked for instance the number of management workplace visits and the number of customer and user safety promotion events. Monthly safety performance follow-up was carried out by every area, in global safety meetings, and by the Executive Board. We are determined to continue reducing the number of incidents and injuries and expect our years of favorable safety progress to continue with strong efforts on building a culture, supportive of psychological and physical safety. To enable learning from the past and avoid accidents in the future, all employees at KONE are encouraged to actively report safety occurrences and have access to our global safety incident reporting tool, KONE Safety Solution (KSS). The number of near misses recorded in KSS increased by 17% (22%) compared to 2021. As the quantity of the reported near misses is steadily on a good level, we continued driving the quality, investigation and analysis of our near miss and incident reports, as well as improving data utilization, transparency, and sharing lessons learned. Health and safety awareness at KONE is supported by dedicated communication campaigns and training. The global KONE Safety Week was organized in all KONE units in May 2022 with a theme of Human Factors. Various safety related activities were held during the week for both internal and external stakeholders. A global year-end safety campaign was also organized to raise safety commitment and awareness of our Core Safety Principles. All KONE employees are required to complete a general safety training related to our safety management framework and KONE's Health and Safety Policy. In addition, our employees receive health and safety training relevant to their work. To complement the existing safety promotion and training practices, monthly global toolbox talks were launched at the beginning of 2022 to support local safety units and drive consistent practices. The toolbox materials are available for all KONE employees. The safety of the people using elevators, escalators and automatic building doors involves everyone from technology and maintenance service providers to building owners and equipment users. Therefore, we work closely with our customers to help them recognize and deal with situations that could lead to safety risks. We communicate actively about safety, organize activities and provide training along with educational materials to our customers and the general public to help equipment users stay safe. HUMAN RIGHTS, ANTI-CORRUPTION AND BRIBERY KONE's Code of Conduct forms an integral part of our company culture and is the foundation of our ethical business practices. The Code sets out the responsible and ethical conduct expected of KONE employees and companies and is available in 33 languages on kone.com. The topics covered in the Code of Conduct include conflicts of interest, corruption, competition compliance, trade compliance, workplace well- being, health and safety, environmental compliance, human rights, privacy, fraud and theft, cybersecurity, intellectual property and confidentiality, external communications and insider trading. Also emphasized is KONE's non-retaliation policy which states that we do not tolerate any form of retaliation against anyone having made good faith compliance reports. Regular face-to-face compliance training is provided to employees. In 2022, 53% of KONE employees completed at least one compliance training. The lower than target level of completions was due to planned global training being delayed because of Russian sanctions work and COVID-19 pandemic. Dedicated compliance officers help employees comply with KONE's Code of Conduct, and our global and regional compliance committees advise and take decisions on compliance matters, including investigations into allegations of employee misconduct as well as human rights and corruption violations. All KONE employees are expected to understand and abide by the Code and to report any violations using the channels available for this purpose. Our internal reporting channels include reporting to management, HR, Legal or Compliance. We also have a confidential reporting channel for raising concerns, the Compliance Line, available for our employees, suppliers, distributors and the public at all times. It is operated by an independent third party and is accessible (anonymously, where permitted by local law) via phone and/or web in over 30 languages. Reports can be submitted on a range of topics including fraud and theft, fraudulent reporting, corruption, competition law, human rights, harassment and discrimination, data protection and confidentiality, environment and safety, trade compliance and conflicts of interest. All reports are handled by a dedicated impartial KONE Compliance team. In 2022, we received a total of 177 compliance reports, of which 32% were received through the Compliance Line. Of the total number of reports, 30% were fraud/corruption related, 34% were HR related, 14% related to conflicts of interest, and the remaining 22% fell under various other categories. In total 35% of the 159 cases closed in 2022 were either substantiated or partially substantiated, and disciplinary actions in those cases ranged from coaching discussions to termination of employment, with 27 employees who were dismissed or resigned as a result of compliance investigations. KONE's general Code of Conduct is complemented by our Supplier and Distributor Codes of Conduct. Our Supplier Code of Conduct is available in 30 languages and sets out the ethical business practice requirements that we expect from our suppliers. It covers areas such as legal compliance, ethical conduct, our zero tolerance for bribery and corruption, and the standards we require from our suppliers in terms of labor and human rights, health and safety, and environmental issues. KONE may terminate its contracts with suppliers for failure to adhere to the Code. KONE expects its suppliers to comply with the requirements of the Supplier Code of Conduct in all their dealings with KONE, as well as with their own employees and suppliers, and third parties including government officials. All our suppliers are expected to sign KONE's Supplier Code of Conduct. By the end of 2022, 86% (80%) of KONE's total spend was with suppliers and installation subcontractors who have signed KONE's Supplier Code of Conduct or equivalent. KONE's Distributor Code of Conduct covers similar topics as the Supplier Code of Conduct. It is available in 7 languages. As business partners, our distributors are expected to comply with the requirements of the Code in all their dealings with KONE, as well as in respect of their own employees, customers and suppliers, and third parties including government officials. We aim to have the Code 19 KONE ANNUAL REVIEW 2022