Investor Presentaiton

BOARD OF DIRECTORS' REPORT We are working ambitiously together with our suppliers to cut emissions, increase the use of sustainable materials and limit the use of hazardous substances. We screen our suppliers' performance in terms of their environmental and social responsibility with our Supplier Sustainability Assessment. The assessment includes the basic criteria that must be met in order to continue doing business with KONE, as well as other, more advanced criteria. Most of KONE's environmental figures for 2022 will be published in the Sustainability Report during the second quarter of 2023. KONE's sustainable offering Requirements for smart and sustainable materials, solutions and buildings are increasing. We see these shifts in demand as a growth opportunity and want to be the preferred partner for our customers. To further understand the emerging needs and technologies in sustainable, resilient urban environments and people's behavior in them, we actively participate in large- scale research projects and consortiums. Our innovations can have a significant role in advancing climate action. We support smart and sustainable construction through our energy-efficient and innovative offering, functional and sustainable materials, as well as transparent documentation about our products' environmental impacts. Lifetime energy consumption is one of the main considerations in green buildings and it is also the single most significant environmental impact of KONE's products overall. This underlines the importance of eco-efficient solutions. We currently have 31 best-in-class energy efficiency references for our elevator and escalator platforms according to the international ISO 25745 standard for the energy performance of lifts, escalators and moving walks. Several KONE solutions have received external recognition for their environmental performance. During 2022, we received Singapore Green Building Product (SGBP) certifications for KONE TravelMaster TM 110 and KONE TransitMaster™ 140 escalators and KONE N MonoSpace®, KONE N MiniSpace TM and KONE 3000S MonoSpaceⓇ elevators. KONE currently has seven SGBP certifications with the highest 'Leader' ratings. KONE is the first elevator and escalator company to achieve such top ratings in the vertical transportation category. The SGBP certified solutions are recommended for Green Mark certified buildings. In 2022, KONE also received approved Byggvarubedömningen (BVB) assessments for the KONE TransitMaster™ 120, KONE TravelMaster TM 110T and KONE TransitMaster TM 180 escalators. BVB is a nonprofit organization that evaluates solutions for buildings and drives the use of sustainable building materials. Furthermore, KONE MonoSpace®, one of the best-in-class rated elevators, received an additional China-mark certification for its superior energy efficiency. The recognition was certified by TÜV Rheinland, a global provider of technical, safety and certification services. Important achievements were also made in the transparent communication about the environmental and health impacts of our products with Environmental Product Declarations (EPD) published for four of our solutions. EPDS were published for KONE MonoSpace® 500 DX for North American markets and KONE MiniSpace TM High Rise with KONE UltraRope® elevators, as well as for KONE TravelMaster TM 110 and KONE TravelMaster TM 110T escalators. The year 2022 marks the 20th anniversary for the elevator industry's first published EPD by KONE. Since then, we have expanded the number of third party verified EPDS in line with EN15804. Our EPDs cover the most sold elevator platforms from low- to high-rise. In 2022, our sustainable offering was extended with the launch of the first carbon neutral elevator in the industry. Our customers now have the option to buy their highly energy efficient KONE DX Class elevator as carbon neutral, where embodied carbon emissions until the handover (including emissions from materials, manufacturing, logistics and installation) are compensated. We follow a three-step approach to reach carbon neutrality: measure, reduce, and compensate. We measure and communicate our product carbon footprint in our EPDs. We actively reduce our carbon emissions in line with KONE's Climate Pledge, KONE's Environmental guidelines and overall emission reduction targets. The remaining carbon emissions are compensated through a third party - South Pole. Own operations During the first quarter of 2022, we finalized the calculations of our 2021 carbon footprint. KONE's total carbon footprint data (Scope 1, 2 and 3 GHG emissions) have been externally assured. In 2021, KONE's target was to reduce its operational carbon footprint (Scope 1 and 2) by 7% compared to 2018. This target was exceeded as our overall operational carbon footprint decreased by 15% compared to 2018. To reflect the expansion of our operations, we also measure comparable carbon footprint scope which reduced by 20% in 2021 compared to 2019. The largest individual factor contributing to the reduction in Scope 1 and 2 greenhouse gas (GHG) emissions was the increasing use of renewable electricity in our facilities. In 2021, we exceeded our green electricity target of 50% set in 2017 and, simultaneously, reached our medium- term target of 80% green electricity by 2025 four years in advance. All our manufacturing units use only on-site or purchased renewable electricity, except India. Furthermore, many KONE subsidiaries are taking steps to electrify their vehicle fleets. As an example, nearly 30% of our car fleet in Norway and over 10% of our fleets in the Netherlands, Sweden and Israel are composed of electric vehicles. While the majority of Scope 1 and 2 GHG emission reductions were achieved through our own efforts, COVID-19 restrictions also contributed through their continued impact to business operations globally. Good progress was made in achieving our target to reduce GHG emissions in our own operations (Scope 1 and 2) during 2022. The vast majority of emissions associated with KONE'S activities are generated outside our immediate operations in the value chain, particularly by our products' lifetime energy consumption and material use. In 2021, our product and value chain related Scope 3 GHG emissions decreased by 0.3% compared to 2020 and increased by 0.4% compared to 2018, relative to ordered products. The major contributing factor to the decrease was the further improved energy efficiency of our products. We are constantly improving our product-related Scope 3 GHG emissions calculations as we work with our suppliers and partners for more transparent and efficient data collection. We have also set a separate target of 4% annual reduction in our Scope 3 logistics carbon footprint relative to units delivered. In 2021, our logistics GHG emissions decreased by 3.5% relative to units delivered as compared to the previous year. For waste, our long-term target of 0% landfill waste from our manufacturing units by 2030 remains in place. In 2021, we were already at a low level of 0.4% (2020: 0.6%). KONE has a long-term and annual biodiversity target stating that KONE manufacturing units must not be located in or near UNESCO Word Heritage sites, Nature 2000 or other conservation parks or biodiversity sensitive areas. In 2022, KONE fulfilled the target. We will publish the GHG emissions from 2022 in our Sustainability Report during the second quarter of 2023. KONE uses the ISO 14001 environmental management system to enhance its environmental performance. It covers our corporate units, including all R&D, manufacturing units, and 32 major country organizations. Three KONE 15 KONE ANNUAL REVIEW 2022