Investor Presentaiton

BOARD OF DIRECTORS' REPORT in the first year. Taxonomy alignment requires Taxonomy- eligible activities to meet the detailed technical screening criteria and comply with the Do No Significant Harm (DNSH) criteria and the minimum social safeguards defined in the Taxonomy Regulation. We have evaluated KONE's Taxonomy-eligibility according to the descriptions of economic activities listed in Annex I (climate change mitigation) and Annex II (climate change adaptation) of the Climate Delegated Act and the related NACE codes provided in these descriptions. Where the description has been ambiguous, we have reviewed the technical screening criteria laid out in the Annexes to help interpret the nature of the activity. We have not evaluated Taxonomy-alignment for 2021. TAXONOMY-ELIGIBLE TURNOVER At this stage, only economic activities with the most significant need and potential to make substantial contribution to climate change mitigation and adaptation have been included within the scope of the Climate Delegated Act. Our interpretation is that the majority of KONE's business, i.e. the manufacturing, maintenance and modernization of elevators and escalators, is currently not within the scope of the Taxonomy because it is not among the most high-emitting industries. Nonetheless, we support more sustainable urban environments and buildings with our energy-efficient and innovative offering and the use of healthy, functional, and sustainable materials. Furthermore, we have set ambitious science-based targets for significant reductions in our greenhouse gas (GHG) emissions by the year 2030. Read more about KONE's environmental sustainability in the 'Non-financial information' section of this report. In addition to elevators and escalators, KONE's offering includes automatic building doors. We have identified certain aspects of our automatic building door business as being Taxonomy-eligible according to the economic activities 3.5 'Manufacture of energy efficiency equipment for buildings' and 7.3 'Installation, maintenance and repair of energy efficiency equipment' in Annex I. The description of the economic activity 3.5 includes NACE code C25.12 'Manufacture of doors and windows of metal', which comprises the manufacture of metal doors, windows and their frames, shutters and gates as well as metal room partitions for floor attachment. Based on this NACE code description, we have concluded that KONE's revenue related to manufacturing of sliding doors, swing doors, revolving doors, turnstiles, overhead doors, roller shutters, high speed doors, garage doors and gates is Taxonomy-eligible. We have also concluded that the installation, maintenance, and repair of these door/gate solutions is Taxonomy-eligible based on the description of activity 7.3, which includes individual renovation measures consisting in installation, maintenance or repair of energy efficiency equipment. Furthermore, we have determined that elevators sold with a regenerative drive can be considered energy efficiency equipment and thus a Taxonomy-eligible economic activity based on the description of economic activity 3.5 'Manufacture of energy efficiency equipment for buildings' in Annex I. When descending with a heavily loaded car or ascending with a lightly loaded car, elevators can recover energy by converting the stored mechanical energy into electrical energy in the motor, which acts as a generator. Elevators equipped with a regenerative drive can push the generated energy back into the electrical grid of the building, where it can be used by other building appliances, such as HVAC. While the regenerated energy varies according to the building type, the saving can potentially amount to 20-40% in mid-rise buildings. As part of our science-based targets, validated against the latest climate science by The Science Based Targets initiative, we have set a scope 3 emission reduction target focused on reducing lifetime energy consumption of our products. Regenerative drive is currently the best available technology to reduce our product-related emissions from the use of the equipment. Therefore, increasing the share of sales of elevators with regenerative drive is one of the assumptions in reaching our product- related science-based target. This supports the argument for considering regenerative drives as energy efficiency equipment that help mitigate climate change. In total, we have identified 5.0% of taxonomy-eligible turnover in 2021 from the economic activities mentioned above. TAXONOMY-ELIGIBLE CAPEX AND OPEX In line with KONE's science-based targets, we are investing in enabling significant reductions in greenhouse gas emissions in both our own operations and in the value chain. Some of the actions taken, e.g. the installation of solar panels in our facilities and enhancement of charging infrastructure for EVs could fit into the scope of the Taxonomy. These investments do not, however, represent a meaningful share of the total capex and/or are not considered to be part of KONE's own capital expenditure. Thus, we have not identified material Taxonomy-eligible CapEx in 2021. In terms of OpEx, we have identified Taxonomy-eligible operating expenses related to the purchase of output from other companies' Taxonomy-eligible economic activities, i.e. purchased renewable energy for facilities according to Chapter 4 ('Energy') in Annex I and leasing costs of vehicles according to activity 6.5 ('Transport by motorbikes, passenger cars and commercial vehicles') in Annex I. Based on the description of activity 6.5, we have concluded that the leasing costs related to our entire vehicle fleet are Taxonomy-eligible. In total, we have identified 20.7% of Taxonomy-eligible OpEx in 2021, of which the majority relates to KONE's vehicle fleet. KONE has defined the total OpEx (denominator), MEUR 536.7, based on the methodology specified in the Taxonomy Regulation. It includes research and development costs of KONE, in addition to costs related to maintenance and repair of facilities and buildings, energy purchases and costs for KONE's vehicle lease fleet. Turnover, CapEx and OpEx from products or services associated with Taxonomy-eligible economic activities Turnover Taxonomy-eligible activities, % Taxonomy-non eligible activities, % Total turnover*, MEUR CapEx Taxonomy-eligible activities, % Taxonomy-eligible /non- eligible economic activities 5.0 % 95.0 % 10,514.1 0.0 % Taxonomy-non-eligible activities, % Total CapEx*, MEUR OpEx 100.0 % 267.3 OpEx of Taxonomy-eligible activities, % Taxonomy-non-eligible activities, % 20.7% 79.3% 536.7 Total opEx, MEUR *Total turnover and total capex as per KONE group reported figures. KONE's principles for defining turnover and capital expenditure can be found in sections 2.1., 4.3 and 4.4. in the Financial Statements. 19 KONE ANNUAL REVIEW 2021