Rapala VMC Group

ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS | 3

CONTENTS

PRESIDENT AND CEO’S REVIEW .....................................3

REPORT OF THE BOARD OF DIRECTORS ........................4

RISK MANAGEMENT ......................................................64

SHARES AND SHAREHOLDERS .....................................65

BOARD AND MANAGEMENT .........................................67

KEY FINANCIAL FIGURES ..............................................70

CONSOLIDATED FINANCIAL STATEMENTS, IFRS........72

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS .............................................76

PARENT COMPANY

FINANCIAL STATEMENTS, FAS ..................................102

NOTES TO PARENT COMPANY

FINANCIAL STATEMENTS ...........................................105

SIGNATURES FOR THE REPORT

OF BOARD OF DIRECTORS

AND FINANCIAL STATEMENTS ..................................111

THE AUDITOR’S NOTE .................................................111

AUDITOR’S REPORT ....................................................112

INDEPENDENT AUDITOR’S REPORT

ON THE ESEF FINANCIAL STATEMENTS

OF RAPALA VMC PLC .................................................115

ASSURANCE REPORT ON

THE SUSTAINABILITY STATEMENT ...........................116

CORPORATE GOVERNANCE ........................................118

REMUNERATION REPORT ..........................................124

PRESIDENT AND

CEO’S REVIEW

President and CEO Lars Ollberg: “We strategically strengthened our busi-

ness in a challenging year, focusing on brand value, customer relation-

ships, and market positioning in North America and Europe. Despite initial

commercial headwinds, we stabilized operations and created a robust

foundation for future growth. Our targeted efforts successfully improved

overall business performance

Our sales remained steady at 220.9 MEUR (221.6), and our comparable

operating profit increased to 6.2 MEUR (5.6). Our profitability improved in

both halves of the year, although H2 reported operating profit fell to -2.6

MEUR (-0.4 MEUR) due to one-off’s related to achieving lower operating

expense level in the future. Our inventory levels decreased to 84.2 MEUR

(87.5), demonstrating successful inventory management and sales op

timization. Our operational cash flow was 23.4 MEUR (20.6), reflecting

improved net working capital and effective resource and operational

management. Our delivery reliability is among the highest in the industry,

and customer satisfaction has significantly improved.

Employee satisfaction has risen, with feedback from staff surveys be

ing predominantly very positive. Our employees are our most important

resource, and we will pay even more attention to fostering a good team

spirit. We also streamlined our management team. Our strategy reflected

our commitment to advancing sustainability across our product offering,

customer engagement, global operations, and stakeholder relationships.

We are aiming to integrate sustainability into all aspects of our business.

North America remains our largest market area, where our position re

mained strong. The launch of the new Rapala CrushCity product range

has exceeded our expectations and has been one of the most success

ful market entries in recent years. This new product line has opened up

new consumer groups for us, particularly among younger enthusiasts,

who represent a growing and significant customer segment. CrushCity

has further strengthened our relationships with the largest retailers in

North America.

Another significant achievement has been the successful integration of

13 Fishing with Rapala USA. As a result of this initiative, 13 Fishing is now

profitable, and the product range has been revamped in both summer

and winter fishing products. Our customers have widely adopted the new

collection into their assortments.

Although there have been challenges in the European markets due to

consumer caution, we have succeeded in improving and streamlining

our operations. Our profitability in the region has improved during 2024.

The enhancement of operational efficiency is evident in shorter delivery

times and increased customer satisfaction. Our European sales focus

specifically on the sales and marketing of Rapala products as well as

Okuma rods and reels.

In the Asian markets, we have also seen growth in sales and profitability.

We have started selling Okuma products in Thailand and Korea. The

winter sports business has been challenging, but we have implemented

several measures to support sales.

Consolidation of lure and knife production to Estonia has yielded results:

inventories and lead times have significantly decreased, and we have

achieved substantial savings in operational costs. The implementation

of the Anaplan logistics tool has improved inventory quality and fill rates.

The development of new products is progressing on schedule, and our

product development organization’s collaboration across North America,

Europe, and the APAC regions adheres to the “Think Global – Act Local”

strategy. An example of this is the global success of the Rapala CrushC

ity product family in the soft lure market, where it has quickly risen to

become one of the best-selling products in its category on all continents.

Nearly all of our lures are designed in our modern product development

center in Vääksy, Finland.

The year 2024 has been a year of stabilization for us. We believe that

our renewed strategy will provide added value to our customers and

other stakeholders. We will continue to invest in growth and efficiency

to strengthen our position as one of the leading companies in the fishing

tackle market.”

REPORT OF THE BOARD OF DIRECTORS | 5

4 | RAPALA VMC ANNUAL REPORT 2024

REPORT OF

THE BOARD OF DIRECTORS

MARKET ENVIRONMENT

In 2024, operating environment was reasonable throughout the year.

Eased inflation improved consumer sentiment resulting in improved retail

activity. Consumer appetite for consumables improved and higher value

item sales continued the path to recovery. Furthermore, favourable open

water fishing conditions lasted long in Autumn which acted as a coun

terweight to political uncertainties that might otherwise have impacted

consumer spending.

KEY FIGURES

EUR million 2024 2023 2022

Net sales 220.9 221.6 274.4

Operating profit before depreciation and impair-

ments (EBITDA) 21.1 15.6 23.6

Operating profit 8.6 4.0 12.3

as a percentage of net sales, % 3.9 1.8 4.5

Comparable operating profit 6.2 5.6 15.3

as a percentage of net sales, % 2.8 2.5 5.6

Profit/loss before taxes 0.5 -6.7 8.8

Net profit/loss for the period 0.2 -7.3 3.7

Earnings per share -0.07 -0.20 0.10

Employee benefit expenses 63.6 61.7 71.5

Average number of personnel, persons 1 353 1 436 1 704

Research and development expenses 1.0 0.8 1.3

as a percentage of net sales, % 0.4 0.4 0.5

Net cash generated from operating activities 23.4 20.6 -12.9

Total net cash used in investing activities 4.6 -9.5 10.7

Net interest-bearing debt at the end of the period 61.8 80.9 107.1

Equity-to-assets ratio at the end of the period, % 53.0 52.1 41.2

Debt-to-equity ratio (gearing) at the end of the

period, %

39.8 51.8 77.0

Return on equity, % 0.3 -5.0 2.7

BUSINESS REVIEW

The Group’s net sales for the year were at last year level with reported

translation exchange rates. Changes in translation exchange rates had

a slight negative impact on the sales and with comparable translation

exchange rates, net sales grew by 1% from the comparison period.

North America

Sales in North America increased by 1% from the comparison period with

reported translation exchange rates and increased by 1% with compa

rable translation exchange rates. Newly launched Rapala CrushCity soft

plastic lures contributed significantly to the increase in sales. CrushCity

boosted also the VMC jigging hook sales. Sales grew in almost all cat

egories except for hard baits, which was impacted by the trend shift in

fishing technique which favored soft plastics over hard baits. Favorable

Autumn weather conditions prolonged replenishment sales season with

big box retailers dominating the market. High retailer carryover inventory

in the ice fishing categories resulted in lower pre-order shipments in the

latter part of the year.

Nordic

Sales in the Nordic market decreased by 7% from the comparison period.

With comparable translation exchange rates sales were down by 7%.

Retailers’ inventories returned to healthy levels but general economic

condition impacted sales negatively. Demand for consumables improved

and CrushCity soft plastic lures contributed positively to sales. Focus on

operational excellence continued throughout the year and as a result,

sales of open water sales categories landed at prior year level. Strong

focus was put on core brands such as Rapala, Sufix and Okuma. Improved

availability of products improved sales in the second part of the year.

Winter fishing sales remained at prior year level while ski business was

down due to retailer carryover inventory from prior season. As a weather-

sensitive industry, the ski business was further impacted by unfavorable

conditions, contributing to the decline in sales for the whole region.

EXTERNAL NET SALES BY AREA

EUR million 2024 2023 Change %

Comparable

change %

North America

111.9 110.6 1% 1%

Nordic

25.8 27.8 -7% -7%

Rest of Europe

58.4 57.1 2% 3%

Rest of the World

24.8 26.1 -5% 1%

Total 220.9 221.6 0% 1%

North America 50%

Nordic 13%

Rest of Europe 26%

Rest of the World 12%

Rest of Europe

Sales in the Rest of Europe market increased by 2% from the comparison

period. With comparable translation exchange rates sales were up by 3%

from the previous year.

Market remained challenging but sales landed above prior year driven

by successful new product introductions including CrushCity, a strong

push on Dynamite Baits and a positive momentum on Okuma and VMC.

Sales in France were supported by novelties and early seasonal order de

liveries that compensated poor weather conditions and as result, sales re-

mained at prior year level. Growth in the region came from strong positive

momentum and focus on operational excellence in UK and in Germany.

Termination of third party distributorships had a minor negative

impact to the sales of this region.

Rest of the World

With reported translation exchange rates, sales in the Rest of the World market

decreased by 5% from the comparison period. With comparable translation

exchange rates, sales decreased by 1% compared to the previous year. Sales

were down in most of the markets following the macroeconomic headwind

and low discretionary spending. Asian markets suffered from weak curren

cies which favored locally produced products over imported goods. This hit

particularly the sales of Sufix fishing lines. Successful Okuma launch in Korea

provided incremental growth in addition to strong boost from CrushCity espe

cially in Australia. In Latin American markets sales landed close to prior year

level, supported by good momentum and focus on Okuma.

FINANCIAL RESULTS AND PROFITABILITY

Comparable (excluding mark-to-market valuations of operative currency

derivatives and other items affecting comparability) operating profit in

creased by 0.6 MEUR from the comparison period. Reported operating

profit increased by 4.6 MEUR from the previous year and the items affect

ing comparability had a positive impact of 2.4 MEUR (-1.6) on reported

operating profit.

Comparable operating profit margin was 2.8% (2.5) for the year. Profit

ability was pressured by lower sales and lower sales margin. This decline

was fully offset by savings in operating expenses. Sales margin decrease

is a result of strong actions taken to clear out slow-moving items and

improving inventory composition. The 6 MEUR savings program was

concluded during the year. Among the measures was bringing decision

making closer to the local markets and defining clear accountabilities.

Following this, the size of the Global Management Team was reduced

to eight members.

Reported operating profit margin was 3.9% (1.8) for the year. Reported

operating profit included impact of mark-to-market valuation of operative

currency derivatives of 0.7 MEUR (-0.2). Net gain of other items affecting

comparability included in the reported operating profit were 3.1 MEUR

(-1.9). This amount includes gain from the sale and lease back transac

tion of the Canadian real estate. Majority of the expenses relate to the

restructuring of the Global Management Team and other restructuring

expenses arising from the 6 MEUR savings program.

Total financial (net) expenses were 8.1 MEUR (10.7) for the year. Net

interest and other financing expenses were 8.8 MEUR (9.9) and (net) for

eign exchange expenses were 0.7 MEUR (0.8).

Net profit for the year increased by 7.6 MEUR and was 0.4 MEUR (-7.3)

and earnings per share was -0.07 EUR (-0.20).

BRIDGE CALCULATION OF

COMPARABLE OPERATING PROFIT

EUR million 2024 2023 Change %

Operating profit 8.6 4.0 115%

Items affecting comparability

Mark-to-market valuations of operative currency

derivatives 0.7 -0.2

Other items affecting comparability

Finnish restructuring - 0.8

US restructuring 0.7 0.8

Canada sale and leaseback -6.2 0.0

Organizational restructurings 2.2 0.3

Other restructurings 0.1 0.0

Comparable operating profit 6.2 5.6 11%

FINANCIAL POSITION

Cash flow from operations increased by 2.8 MEUR from the comparison

period and was 23.4 MEUR (20.6). Second consecutive strong operating

cash flow year is a result of strong focus on cash and working capital

management. Inventory, non-interest-bearing assets and non-interest-

bearing liabilities developed in the right direction and during the year and

as a result,19.7 MEUR (9.9) was released from working capital.

End of the year inventory was 84.2 MEUR (87.5). The change in obso

lescence allowance increased inventory value by 0.3 MEUR, and changes

in translation exchange rates increased inventory value by 1.3 MEUR.

Organic drop in inventory was 4.6 MEUR while at same time, inventory

composition improved from prior year. To secure pre-season deliveries

in yearly 2025, incoming shipments from vendors were received earlier

than prior year. Also own manufacturing capacity was kept at a higher

level at the end of the year. These two factors increased end of the year

inventory value.

Net cash generated from investing activities was 4.6 MEUR (-9.5). Capi

tal expenditure was 4.2 MEUR (9.5) and disposals 9.2 MEUR (1.4). Ex-

penditure was kept to a lower level and consisted mainly of maintenance

of manufacturing capacity and investments to new products. Prior year

expenditure includes expenses related to the production transfers from

Russia and from Finland to the Rapala VMC campus in Pärnu, Estonia.

Disposals include the sale and lease back of the Canadian real estate.

Liquidity position of the Group was good. Undrawn committed long-

term credit facilities amounted to 41.0 MEUR at the end of the year. Gear

ing ratio decreased and equity-to-assets ratio increased from last year

following the strong operating cash flow and improved working capital.

The Group’s 106 MEUR senior secured term and revolving credit fa

cilities agreement includes financial covenants based on the available

liquidity (minimum 22.5 MEUR), 12m rolling EBITDA (minimum 10 MEUR),

net debt to consolidated equity (maximum 100%), absolute net debt, and

net debt to EBITDA (“leverage ratio”). The absolute net debt covenant

for Q1/2024 was 90 MEUR, for Q2/2024 80 MEUR and for Q3/2024 80

MEUR. The financial leverage ratio covenant level for Q1/2024 was 5.50,

for Q2/2024 4.25 and for Q3/2024 and onwards 3.80. Covenants are

regularly tested, either quarterly or on the last day of each month. The

risk of breaching the covenants would trigger negotiations between the

Group and lending banks to resolve the potential covenant breach, and to

agree on actions to rectify the situation. In the unlikely event of unresolved

covenant breach, the lending banks would have the right to call all or any

part of the loans and related interest.

On Q1/2024, Q2/2024, Q3/2024 and Q4/2024 testing dates, net debt

landed at 81.0 MEUR, 59.5 MEUR, 55.8 MEUR and 61.8 MEUR, respective

ly. Leverage ratio for the respective testing dates landed at 5.30, 3.33, 3.25

and 3.72. Calculation of the covenants include customary adjustments

mainly related to items affecting comparability and asset disposals, and

therefore deviate from the reported figures elsewhere in this report. The

Group is currently compliant with all financial covenants and expects

to comply with future bank requirements as well. The Group’s liquidity

position remains good, and cash and cash equivalents amounted to 21.7

MEUR on December 31, 2024.

During the reporting period, the Group agreed on two extensions with

the lending banks for the 106 MEUR facilities. Both extensions were 6

months and as of the reporting date, the facilities mature in 2026, subject

to an extension option of 12 months.

The Group equity includes a hybrid loan of 30.0 MEUR issued in No

vember 2023. The accumulated non-recognized interest on hybrid bond

on December 31, 2024 was 0.3 MEUR. The accrued interest of 3.8 MEUR,

resulting from the decision of the Board of Directors, was paid out in

November 2024 and was recognized as a deduction from Group’s equity.

KEY FIGURES

EUR million 2024 2023 Change %

Net cash generated from operating activities 23.4 20.6 14%

Net interest-bearing debt at the

end of the period 61.8 80.9 -24%

Debt-to-equity ratio (gearing) at the

end of the period, % 39.8 51.8

Equity-to-assets ratio at the

end of the period, % 53.0 52.1

REPORT OF THE BOARD OF DIRECTORS | 7

6 | RAPALA VMC ANNUAL REPORT 2024

STRATEGY IMPLEMENTATION

The strategic vision of the Group is to become a focused brand and in-

novation driven sport fishing market leader in selected categories globally

in connection to creating outstanding experiences to global fishermen.

The revitalized “Together. One More Turn” – strategy for 2024-2026 was

originally implemented in Autumn 2023. The plan was reviewed in Autumn

2024 and rolled forward to cover years 2025-2027.

Focus remains in strengthening the balance sheet and in continuous

increase of sales of owned brands, led by the flagship Rapala brand.

Transformation into a brand powerhouse continues through building

and enhancing a brand and market focused organization. A brand power

house with best-in-class order to delivery platform will ensure our position

as a preferred partner for our retail and eCom partners. Manufacturing

and sourcing excellence will continue to underpin our operations and

strengthen our partnerships with key suppliers. Sustainability remains a

significant cornerstone in everything we do.

To achieve this vision, the key pillars for our 2025-2027 strategy period

were redefined:

RAPALA VMC EXCELLENCE BUSINESS MODEL – We commit to stan

dardize our global operations in a way that increases visibility and allows

our global operations to run in a synchronized manner. Connecting all

core management processes is a key in exploring and grasping on to op

portunities in the market. Allowing entrepreneurial spirit while maintaining

focus on brand value and strong business accountability. Target setting

oriented organization with routine processes is the best way to emulate

a community of 1375 team members to innovate, make, source, market

in the best possible way.

GROWTH AND CASH FLOW – Maximizing the use of existing assets

that make us unique: Brands, sales network and retailer partnerships,

product development, manufacturing. Extend flagship Rapala brand in

new categories and realize distribution synergies on newest brands in

the portfolio (Okuma & 13 Fishing). Be stronger where we are strong.

SAFEGUARD MANUFACTURING COMPETITIVE ADVANTAGE – We

continue streamlining and improving productivity in Pärnu manufacturing

facility following location changes in past years. Ensuring global competi

tiveness through productivity improvements and continuous maximum

utilization is our focus.

FOCUS ON SUPPLY CHAIN EXCELLENCE – More than a third of our

revenue comes from manufacturing partners, highlighting a key strategic

strength. These partners have a long-standing track record of providing

a reliable outsourced manufacturing platform, enabling us to scale ef

ficiently, enhance flexibility, and drive sustainable growth. Their expertise

plays a crucial role in our success.

We continue to harmonize ERPs and expand procurement planning tool

(Anaplan) vertically and horizontally. This enables faster working capital

turn and on-time deliveries to maximize sales opportunities.

MAINTAIN GLOBAL SALES FOOTPRINT – Our extended sales network

differentiates us from the competition. In the short-term, focus on opera

tional efficiency and bringing back the entrepreneurial spirit.

PORTFOLIO MANAGEMENT – Continue proactive consolidation of

brands to harmonize brand portfolio. Focus on flagship Rapala brand

and evaluate business performance based on brand sales.

PRODUCT DEVELOPMENT

The year 2024 saw a globally successful product launch with Rapala

CrushCity that put Rapala straight into the category of Global Soft Bait

Giants. Product Development was working hard to bring to market new

models and sizes of CrushCity baits in order to support the momentum

and pave the way for future market share growth in soft baits. As evidence

of the strong interest in the product line, The CrushCity Imposter soft lure

won the “Best in Show” award in the Soft Lure category at the Australian

Fishing Trade Association (AFTA) Awards in 2024.

Additionally, Rapala strengthened the position as global market leader

of hardbaits by introducing new highly technical and premium lures such

as Precision Xtreme Mavrik and Rapala’s thus far biggest, heaviest and

most expensive lure, Sarda. This saltwater hero lure was well received

by the saltwater heavy-duty angling community.

Technology is becoming increasingly accessible to the global angling

community. Rapala stays on top of trends and introduced a lure specifi

cally developed for forward facing sonar (a.k.a live sonar) fishing: Jigging

Rap Magnum. This lure shows exceptionally well in the sonar beam and

allows the angler to see the lure in real time on their screen.

The nonstop quest to stay on top of the trends also continued with

accessories, when Rapala introduced to trade the new highly sharp and

ergonomic FXF fillet knives. This product launch was especially impor

tant to North America, but will strengthen Rapala’s market share in fillet

knives also in Europe.

Last, but not least, Rapala stuck to the annual rhythm of introducing

new pinnacles of wooden lure manufacturing: Floater Elite in Japan and

Skitter Pop Elite. These two lures raise the bar on all artificial lures, but

especially display Rapala’s heritage and know-how in wooden lure manu

facturing in a way that was very well received by trade and the anglers

alike. These launches pave the way for future Elite lure launches.

ORGANIZATION AND PERSONNEL

The average number of personnel was 1 351 (1 436) for the full year and

1 355 (1 389) for the last six months. At the end of December, the number

of personnel was 1 375 (1 374).

On December 17, 2024, the Board of Directors appointed Cyrille Viellard

as the new President and Chief Executive Officer of Rapala VMC Corpora

tion, effective March 7th, 2025. Current President and Chief Executive

officer Lars Ollberg did continue in his position until March 6, 2025, and

will then retire after serving the company for over 45 years in various roles.

During the year, the Group prioritized its employees by conducting a

unified global survey to understand their needs and concerns. Based

on the results, targeted improvements were implemented, and learning

opportunities were expanded. This commitment to growth and engage

ment ensures a supportive and dynamic workplace for all team members.

DECISIONS OF THE ANNUAL GENERAL MEETING

The AGM approved the Board of Director’s proposal, according to which

no dividend be paid based on the adopted balance sheet for the financial

year 2023. The AGM approved that the Board of Directors consists of six

members. Emmanuel Viellard, Julia Aubertin, Vesa Luhtanen and Alex

ander Rosenlew were re-elected as members of the Board of Directors

and Pascal Lebard and Johan Berg were elected as new members. The

AGM resolved that the annual fee paid to each Board member is EUR

25,000 and EUR 70,000 to the Chairman of the Board. Board members

are paid EUR 1,000 per meeting for attendance at meetings of the Board

and its committee.

Authorised Public Accountants Firm Deloitte Ltd was elected as the

Company’s auditor. Deloitte Ltd will also carry out the assurance of the

company’s sustainability reporting for the financial year 2024 in accor

dance with the transitional provision of the act amending the Limited

Liability Companies Act (1252/2023) and will be imbursed for this task

as per its invoice approved by the company.

The AGM authorised the Board of Directors to resolve in accordance

with the proposal of the Board of Directors on the issuance of a maximum

of 3,900,000 shares through a share issue or by issuing options and other

special rights entitling to shares pursuant to chapter 10, section 1 of the

Finnish Limited Liability Companies Act in one or several tranches. The

proposed maximum number of shares corresponds to 10% of all shares

in the Company. The authorisation can also be used for incentive arrange

ments for the Company’s management and key persons, however, no

more than 900,000 shares in total may be granted for this purpose. The

authorisation covers both the issuance of new shares and the transfer

of treasury shares held by the Company, and the issuance may be car

ried out with or without payment. Under the authorisation, the Board of

Directors may issue shares or options and other special rights entitling

to shares also otherwise than in proportion to the shareholdings of the

shareholders (directed share issue). The Board of Directors is entitled

to resolve on all terms and conditions of share issues and the issue of

option rights and other special rights entitling to shares. The authorisa

tion is valid until 30 June 2025.

The AGM authorised the Board of Directors to resolve in accordance

with the proposal of the Board of Directors to repurchase a maximum

of 2,000,000 the Company’s own shares by using the Company’s un

restricted equity in one or several tranches. The proposed maximum

number of shares corresponds to approximately 5.13% of the Company’s

total number of shares. The shares may be repurchased for developing

the Company’s capital structure, for financing or carrying out potential

corporate acquisitions or other business arrangements, to be used as a

part of the Company’s remuneration or incentive plan or to be otherwise

transferred further or cancelled, for example. The shares may be repur

chased otherwise than in proportion to the existing shareholdings of

the Company as directed repurchases at the market price of the shares

quoted on the trading venues where the Company’s shares are traded

or at the price otherwise established on the market at the time of the

repurchase. The authorisation is valid until 30 June 2025.

3000

2500

2000

1500

1000

500

PERSONNEL AT THE END OF THE PERIOD, persons

1 757

1 971

1 543

20 21 22 23 24

1 374

GOVERNANCE AND SHARE INFORMATION

The Board updated and approved the Corporate Governance Statement

that is available on corporate website.

For information on shares, shareholders, share-based payment pro

grams and Board’s authorizations, see the section Shares and Sharehold-

ers. Related party transactions and top management remuneration are

disclosed in the note 28 and in separate remuneration report available

in the company website.

SHORT-TERM OUTLOOK AND RISKS

The year 2024 has been a year of stabilization for us. We believe that

our renewed strategy will provide added value to our customers and

other stakeholders. We will continue to invest in growth and efficiency

to strengthen our position as one of the leading companies in the fishing

tackle market.

US consumer demand has remained robust despite rising uncertainties

in the global trade environment. The ongoing tariff situation continues to

create challenges, but management is actively monitoring developments

and taking necessary actions to mitigate potential impacts. European

markets are indicating stable consumer spending despite recent eco

nomic and political developments. Our improved operational efficiency

is expected to yield improved results in open water fishing categories.

Favorable ice fishing conditions in North America are expected to result

in improved order book for season 2025/2026. In Nordics, ice and snow

conditions have been suboptimal, and the market is expected to remain

tough in season 2025/2026.

Our guidance reflects current market conditions but remains subject

to potential trade-related disruptions, including tariffs and regulatory

changes, which may impact demand and cost structures.

Consequently, the Group expects 2025 full year comparable operating

profit (excluding mark-to-market valuations of operative currency deriva

tives and other items affecting comparability) to increase from 2024.

Short-term risks and uncertainties and seasonality of the business are

described in more detail at the end of this report.

PROPOSAL FOR PROFIT DISTRIBUTION

The Board of Directors proposes to the Annual General Meeting that no

dividend will be paid for 2024. At December 31, 2024 the distributable

equity in Group’s parent company totaled 25.4 MEUR. No dividend was

paid for 2023.

EVENTS AFTER THE BALANCE SHEET DATE

Events after the balance sheet date are disclosed in the note 31 of the

consolidated financial statements.

1 375

SUSTAINABILITY STATEMENT | 9

8 | RAPALA VMC ANNUAL REPORT 2024

GENERAL INFORMATION

Reporting principles

General basis for preparation of the statement

The sustainability statement has been prepared in accordance with the

European Union’s Corporate Sustainability Reporting Directive (CSRD)

and the related European Sustainability Reporting Standards (ESRS).

The consolidated sustainability statement covers the entire Group,

including the parent company, Rapala VMC Oyj, and all subsidiaries in

which the Group holds more than 50% of voting rights, either directly or

indirectly. Published annually, the sustainability statement aligns with the

Group’s financial reporting period, spanning from 1 January 2024 to 31

December 2024. The scope of the sustainability statement is consistent

with that of the financial statements.

The reporting predominantly addresses Rapala VMC at the Group level,

with region- or country-specific data provided where required by relevant

European Sustainability Reporting Standards (“ESRS”). Comparative pe

riod data in the Sustainability Statement has not been externally assured.

If not separately disclosed, disclosures in this sustainability statement

have not been assured by any other external body than the assurance

provider.

The sustainability statement of Rapala VMC covers the upstream and

downstream value chain in relation to material impacts, risks and op

portunities identified through the DMA. Upstream reporting further ad-

dresses key areas such as material use, sustainable sourcing practices,

and supplier compliance with the Group’s Supplier Code of Conduct. In the

downstream value chain, the sustainability statement includes emissions

associated with transportation and distribution of products as well as

the end-of-life treatment of product packaging. GHG emissions report

ing aligns with the Greenhouse Gas Protocol and includes all assessed

and identified relevant emission sources based on the Group’s value

chain mapping. This mapping process identified the most significant

emission sources, and the calculation currently covers over 95% of the

Group’s operations.

The double materiality process has been guided by the requirements of

ESRS, ensuring alignment with its time horizon standards. This approach

enables a forward-looking perspective that accounts for both immediate

and long-term impacts, risks, and opportunities. However, in the assess

ment, the Group has also considered the time horizons outlined in its

Group strategic and sustainability risk mapping processes: short-term

(1-3 years), medium-term (3-10 years), and long-term (10+ years).

The statement doesn’t omit specific pieces of information correspond

ing to intellectual property, know-how or results of innovation. Option to

omit disclosure of impending developments or matters in course of nego

tiation has not been used. The sustainability statement is not tagged with

digital XBRL sustainability tags, as compliance with Chapter 7, Section

22, Paragraph 1, Clause 2 of the Accounting Act has not been possible

due to the absence of the ESEF regulation or other relevant European

Union legislation.

Reporting assumptions and sources of uncertainty

Certain quantitative metrics disclosed in the sustainability statement are

subject to a high level of measurement uncertainty. The main source of

measurement uncertainty in Rapala VMC’s emissions reporting comes

from the use of spend-based calculation methods for certain Scope 3

categories. Spend-based methods rely on generic emission factors, which

do not fully reflect the specific details of the Group’s supply chain, leading

to some inaccuracy.

Assumptions, approximations, and judgments made in measurement

are outlined in the following table. These methods aim to provide reliable

estimates while recognizing limitations in data availability and method

ology. Forward-looking information included in this report, such as the

identification and scoring of IROs, is considered uncertain, reflecting

the evolving nature of methodologies, data quality, and external factors.

Emission category Source of measurement uncertainty Approach and assumptions

Scope 3.1:

Purchased Goods

and Services

Partially based on spend-based calculations. Direct materials used in

manufacturing facilities and warehouses, representing approximately

19% of total emissions, are calculated using activity-based methods for

higher accuracy. Emissions from other purchased goods and services,

accounting for over 37% of total emissions, rely on spend-based ap-

proaches with higher uncertainty.

Limited access to detailed supplier- or product-specific data, contributes

to measurement uncertainty.

For emissions related to sourced finished goods, the spend data is

based on transactional purchase invoice data extracted from local ERP

systems and consolidated through Group BI software. The data is not

directly comparable with financial reporting figures, as it excludes ac-

counting adjustments and other financial reporting treatments.

Emission factors are assigned to product categories based on inter-

nal categorizations. Categories are subdivided to account for differing

products, improving accuracy. Spend-based methods were used for

categories lacking detailed supplier- or product-specific data, leading

to higher uncertainty.

Spend-based emission factors for purchased finished goods (e.g.,

EPA Supply Chain Emission Factors) typically include transportation

emissions when relevant to a product’s lifecycle. However, the Group

also calculates transportation emissions related to these transac-

tions separately under Scope 3.4 (Upstream Transportation and

Distribution) using primary data. As a result, some double counting

in transportation emissions occurs, though its extent has not been

analysed.

Scope 3.2:

Capital Goods

Constitute approximately 1% of total emissions and are calculated

using fixed asset categories with generic emission factors, introducing

measurement uncertainty.

Estimated using emission factors linked to fixed asset categories

recorded in the balance sheet. Generic factors used instead of asset-

specific data reduce precision.

Scope 3.12:

End-of-Life Treatment

of Products

Represent less than 1% of total emissions. Calculations rely on average

estimates due to the absence of a centralized database for packaging

materials and weights, limiting precision.

Calculated based on average estimates derived from internal catego-

rizations of packaging materials and weights. This approach limits

accuracy due to reliance on averages.

Table: Scope 3 reporting assumptions

Risk management and internal controls over sustainability reporting

Risk management approach

The Group’s sustainability reporting process is guided by a risk-based

approach, emphasizing the identification and management of the most

material risks associated with sustainability reporting. Consolidated sus

tainability reporting is centrally coordinated by the Group’s sustainability

team, which is responsible for preparing the sustainability statement.

The process has been strengthened through the engagement of external

experts to enhance its design and implementation. Additionally, the Group

has adopted dedicated sustainability reporting tools to collect, store, and

analyse sustainability data, ensuring data integrity and clear audit trail.

The risk assessment approach for sustainability reporting focuses on

evaluating risks related to data accuracy, availability, the competence

of key participants, and risks associated with reporting software. Risks

are prioritized based on their potential impact on reporting reliability,

regulatory compliance, and alignment with stakeholder expectations.

While these aspects are systematically assessed, the current approach

operates independently and requires further development, particularly in

terms of documentation and standardization. These improvements are

necessary to align the sustainability reporting risk management frame

work more comprehensively with the Group’s overarching risk manage-

ment processes. Integrating sustainability reporting risks into the broader

enterprise risk management framework is planned to ensure a cohesive

and effective approach to managing sustainability reporting related risks.

The Group’s sustainability reporting risks include challenges in data

collection, timing, specialized expertise, and collaboration with value

chain partners. Mitigation strategies involve centralized reporting tools,

clear schedules, training, and data-sharing agreements to improve data

quality, ensure timely reporting, and enhance expertise.

The Group acknowledges the importance of systematically integrat

ing findings from sustainability reporting risk assessments and related

internal controls into its broader governance and operational frameworks.

While an established process for such integration is not yet in place, the

Group has taken initial steps to enhance alignment and ensure continuous

improvement in this area. So far, the sustainability-related risks have been

assessed independently, with integration into the Group’s enterprise risk

management framework planned as a key development area.

Efforts to address identified risks include the implementation of cen

tralized reporting tools and standardized templates to promote consis-

tency in data collection, validation, and reporting processes. While data

governance practices have been strengthened with automated tools and

validation protocols, the Group is still developing a formal internal control

framework to improve traceability, accountability, and transparency. Ad

ditionally, capacity-building initiatives and plans to enhance engagement

with value chain partners are being introduced to address competence

gaps and improve data reliability.

Strategy and business model

Our operations

Rapala VMC is a fishing tackle company operating in over 40 countries.

The Group’s business model is built on its a brand portfolio, including

Rapala, VMC, Sufix, Storm, Blue Fox, Dynamite Baits, and others. Capabili

ties include its own manufacturing facilities, a sourcing unit in Taiwan

for subcontracted products, and a research and development function.

North America and Europe accounting for most of its revenue.

The Group’s value chain integrates upstream and downstream activi

ties to deliver fishing and outdoor products. Rapala VMC’s own manu-

factured products account for approximately 45% of the net sales. The

Group’s own manufacturing facilities in Finland, France, Estonia, and

the UK produce a wide range of products, including lures, hooks, knives,

and baits. The sourcing unit in Taiwan complements this by managing

subcontracted products, such as lines, reels, rods, and accessories. Prod

ucts are distributed through a global network, with nearly 50,000 retail

outlets across 120 countries. Detailed information of the total number

of employees by country can be found from page 51 of this report, under

section S1 - Key metrics and performance.

Rapala VMC serves a diverse global market, with a strong focus on

North America and Europe. These regions represent the Group’s most

significant markets. North America remains the largest and most impor

tant market, driven by the Group’s leadership in the fishing lure segment

and nearly all revenue originating from Group branded products. 2024

external net sales by area were: North America 111.9 Meur, Nordic 25.8

Meur, Rest of Europe 58.4Meur and Rest of World 24.8Meur.

The Group’s customer base includes small independent fishing tackle

shops, large multinational retail chains, and regional distributors, ensur

ing broad accessibility across various market segments. In the reporting

period, the Group continued to strengthen its presence in key markets,

expanding its reach and maintaining robust relationships with its diverse

customer groups.

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10 | RAPALA VMC ANNUAL REPORT 2024

Upstream activities Own operations Downstream activities Key output

The upstream value chain includes sourcing of

subcontracted products as well as raw materi-

als and components:

■ Subcontracted products: The Group’s sourc-

ing unit in Taiwan manages procurement

of subcontracted products, including reels,

rods, lines, and accessories from a global

network of suppliers. This unit ensures cost

efficiency and supplier compliance with the

Supplier Code of Conduct, which empha-

sizes sustainability and ethical practices.

■ Raw materials: The Group sources materials

such as plastics, metals, wood and paints

for its fishing lures, hooks, baits and other

Group manufactured products. Sustainabil-

ity is prioritized by incorporating renewable

and recycled materials, such as responsibly

sourced wood for lures and Forest Steward-

ship Council (“FSC”) certified cardboard for

packaging when possible. The Group’s Sup-

plier Code of Conduct policy also applies to

raw material and component suppliers.

Own operations include own manufacturing

and warehousing operations as well as wide

global distribution unit network in over 40 coun-

tries as well as in-house product development,

marketing and support functions:

■ Own manufacturing: Approximately 45%

of the Group’s net sales are derived from

products manufactured in its facilities in

Estonia, France, Finland, the UK, and Indone-

sia. These facilities specialize in producing

lures, hooks, knives, baits, and skies.

■ Human resources: The Group employs per-

sonnel across over 40 countries, ensuring

global operational reach while emphasizing

employee development, health, and safety.

■ Intellectual Capital: Expertise in research

and development drives innovation in

sustainable product design, such as lead-

free wobblers and eco-friendly materials for

fishing tackle.

The downstream value chain focuses

on delivering products to customers

and end-users through a comprehen-

sive global distribution network:

■ Distribution channels: The Group’s

products are available in nearly

50,000 retail outlets across 120

countries. Distribution is managed

through partnerships with small

independent fishing tackle shops,

large multinational retail chains,

and regional distributors, ensur-

ing accessibility across diverse

markets.

■ Customer relationships: Rapala

VMC serves a wide range of cus-

tomers, from eco-conscious rec-

reational anglers to professional

sport fishers, delivering innovative

and durable products.

The Group’s output consists of

high-quality fishing and outdoor

products that support recre-

ational and sport fishing activi-

ties, alongside efforts to enhance

sustainability.

■ Customers: Delivering innova-

tive and durable products.

■ Investors: The Group’s focus

on sustainability enhances

long-term value creation by

addressing market trends

and regulatory expectations,

bolstering brand reputation

and operational excellence.

Key inputs ■ Rapala VMC relies on a diverse range of inputs to support its business model, including raw materials, subcontracted

products, human resources, and intellectual capital

Main Business Actors

and Relationships

■ Suppliers: The Group collaborates with raw material and subcontracted product suppliers globally, focusing on compliance

with the Supplier Code of Conduct.

■ Retailers and Distributors: Strong relationships with retail partners and distributors ensure that the Group’s products are

widely available across its core markets, including North America and Europe, which account for most of its revenue.

■ End-Users: Recreational and professional anglers are central to the Group’s success. Direct feedback from end-users informs

product development and sustainability priorities, ensuring alignment with customer expectations and market trends.

Table: Rapala VMC value chain

Rapala VMC’s value chain spans upstream and downstream activities. Rapala VMC’s value chain is described in the table below.

Strategy and its development

The Group’s strategy was last updated in the fall of 2024. The strategy

is prepared on a rolling basis, with the 2024 update covering the review

period of 2025–2027. The updated strategy includes a vision of achieving

a “”Significant journey in sustainability.” The Group’s Board of Directors

have reviewed and approved this strategic update. The main focus in

2024 has been on building the sustainability organization and strength

ening the internal competences related to sustainability topics. Rapala

VMC also joined the UN Global Compact network.

Looking ahead to 2025, the Group plans to finalize its “base year”

report and subsequently develop a Group-wide transition plan aligned

with the Paris Climate Agreement’s 1.5°C goal. To support this, provided

that the Board of Directors approves and initiates the transition plan, the

Group will ensure that all key performance indicators (KPIs) and targets

are aligned with the objectives outlined in the transition plan. Employee

engagement in Rapala VMC’s sustainability efforts will remain a prior

ity, with follow-ups on surveys to assess progress and alignment with

sustainability efforts.

The Group will refine its sustainability assessments by enhancing the

process for reviewing the Double Materiality Assessment (“DMA”) and con

ducting a biodiversity assessment, which will inform the drafting of a compre-

hensive biodiversity strategy. This structured and forward-looking approach

helps the Group to achieve its sustainability objectives while meeting regula

tory requirements and responding to evolving stakeholder expectations.

In addition, the Group will expand its “Rapala Do Good” initiative, with

increased focus and funding allocated to conservation projects. These

projects can include activities such as waterway restoration, conservation

efforts, or initiatives to improve fishing accessibility for various groups.

The scope of the Rapala Do Good initiative encompasses all operational

units within Rapala VMC, requiring each to adopt and implement a project.

Products

The Group continuously assesses its significant products, services, mar

kets, and customer groups to ensure alignment with its sustainability

goals, integrating environmental and social considerations into its opera

tions and product development strategies.

Designed for sport and recreational fishing, the Group’s fishing products

include:

■ Fishing lures, hooks and baits: Sustainability efforts focus on elimi

nating harmful substances, increasing the use of recycled, certified,

and renewable materials, and minimizing the manufacturing carbon

footprint. The Group is developing and testing eco-friendly materi

als, addressing environmental concerns associated with fishing

tackle.

■ Reels, rods, and lines: The Group aims to increase collaboration

with manufacturers to improve visibility into production emissions,

set reduction targets, and enhance the recycled material content of

these products and associated packaging.

■ Tools and accessories: Efforts are centred on reducing packag

ing materials, increasing recycled material content, and ensuring

product safety.

■ The key brands in these categories include Rapala, VMC, Okuma, Su

fix, 13 Fishing, Williamson, Storm, StrikeMaster, and Dynamite Baits.

In addition to the above-mentioned key brands, Rapala VMC has a selection

of local and regional brands, and the Group also distributes select third-party

brands to enhance its product portfolio and address diverse customer needs.

A shift in fishing techniques is favouring soft plastic lures. The larg

est sales increase came from the launch of CrushCity soft plastic lures.

The growing demand for soft plastic lures presents a significant market

opportunity but also underscores the Group’s responsibility to address

sustainability challenges. Soft plastic lures have a shorter lifecycle than

traditional hardbaits, leading to increased waste generation if not properly

managed. In response, the Group prioritizes innovation in durability and

recyclability to reduce environmental impact while meeting regulatory

and consumer expectations.

Generally, Rapala VMC’s products are widely accepted, with no sig

nificant bans on any of the products or product categories, the Group

manufactures, markets, or distributes in any market. Existing bans or

restrictions typically relate to local fishing or environmental regulations

and are local in nature. For example, in Denmark, there is a prohibition

on selling fishing lures containing lead. Consequently, the Group does

not sell lead-containing products from its range in the Danish market.

On a broader scale, restrictions related to product materials are con

sistent with those applied to all consumer products. The Group actively

monitors developments in material-related legislation and proactively

seeks to replace components that may become restricted in major mar

kets. For instance, in preparation for the European Commission’s initia-

tive, supported by the European Chemicals Agency, to ban lead in fishing

(both in products sold and fishing gear used), the Group has already

significantly reduced the use of lead in Rapala-branded lures.

Markets and customers

The Group’s sustainability strategy is closely tied to its core markets:

■ North America and Europe represent the largest opportunities

for expanding sales of sustainable products, such as eco-friendly

fishing tackle and lead-free lures, due to heightened regulatory and

consumer expectations for environmentally friendly products.

The Group addresses diverse customer needs by tailoring

its sustainability approach:

■ Eco-conscious consumers: Growing demand for sustainable prod

ucts drives the development of innovative materials and product

designs that reduce environmental impact, such as lead-free lures,

plastic free packaging and the use of renewable, certified and

recycled materials.

■ Retail partners: Collaboration with large retailers drives the need for

supply chain transparency and sustainable packaging solutions, as

these companies set strict sustainability criteria for their suppliers

to align with regulatory requirements and consumer expectations.

Summary of sustainability related goals

Rapala VMC’s sustainability-related goals for 2024–2026 reflect its com-

mitment to advancing sustainability across its product offering, customer

engagement, global operations, and stakeholder relationships. These goals

are guided by the Group’s sustainability Strategy of Constant Improvement,

aiming to integrate sustainability into all aspects of its business.

Category Description Goals

Significant groups of

products

and services

Reducing the environmental impact of

products is achieved by eliminating harmful

substances, adopting sustainable materials,

and improving packaging practices.

Transitioning 100% of Rapala-branded wobblers to lead-free versions by the end of

the strategic period, reducing the environmental impact of harmful substances.

Piloting eco-friendly materials for fishing tackle to substitute non-sustainable materials.

Revising packaging to eliminate plastics where feasible, increase recycled content,

and reduce material usage, while increasing the use of FSC-certified cardboard for

packaging.

Expanding the use of domestically grown wood and bio-based materials in lures to

enhance sustainability across brands.

Customer categories A commitment to responding to customer

demand for environmentally friendly products

guides the development of sustainable solu-

tions.

Developing products with reduced environmental footprints to meet the growing

expectations of eco-conscious consumers.

Conducting consumer market studies to understand sustainability priorities in differ-

ent regions and customer segments.

Geographical areas Sustainability goals are aligned with global

operations and regional priorities, emphasiz-

ing conservation, partnerships, and carbon

footprint reductions.

Supporting waterway conservation and access to fishing through grassroots projects

in all operating regions, aligning with the Rapala Do Good initiative.

Creating a transition plan aligned with the Paris Climate Agreement, targeting carbon

footprint reductions and improved energy sourcing.

Relationships with

stakeholders

Strengthening collaboration and transparency

with stakeholders remains a priority to support

shared sustainability objectives.

Enhancing engagement with suppliers to ensure compliance with the Supplier Code of

Conduct, with a goal of achieving 100% commitment across all vendors.

Increasing spending on conservation projects through the Rapala Fund, aiming to sup-

port aquatic ecology and fishing access initiatives.

Expanding employee training, with 1% of sales allocated to professional development,

and conducting standardized employee satisfaction surveys annually across all units.

Improving employee health and safety with targets to reduce sick leaves and accidents

Table: Rapala VMC sustainability strategy goals 2024-2026

SUSTAINABILITY STATEMENT | 1 3

12 | RAPALA VMC ANNUAL REPORT 2024

Stakeholder engagement related to strategy and business model

The purpose of stakeholder engagement at Rapala VMC is to align the

Group’s sustainability strategy with stakeholder expectations, address

material impacts, and support informed decision-making. Engagement

ensures transparency, fosters mutual understanding, and drives con

tinuous improvement, enabling the company to create shared value and

achieve its sustainability objectives. Through continuous engagement

with stakeholders, including employees, suppliers, consumers, and

regulators, the Group identifies emerging issues and adjusts its focus

accordingly.

Description of key stakeholder groups

Involved in

engagement

Customers Rapala VMC serves a diverse customer base ranging from individual anglers to major retailers. Customer

satisfaction and sustainability preferences, such as the demand for eco-friendly products, are integral to

product development and business strategy.

Yes

Consumers The Group maintains a close relationship with its end-users through sponsorships, events, and feedback

channels, ensuring its products meet the expectations of recreational fishing and outdoor enthusiasts globally.

Yes

Employees With a global workforce operating in over 40 countries, the company's personnel are a cornerstone of its

operations. Key focus areas include employee well-being, health and safety, professional development,

and fostering an inclusive workplace culture.

Yes

Suppliers and

business partners

Rapala VMC collaborates with suppliers and subcontractors globally. These partnerships are guided by the

Supplier Code of Conduct, emphasizing ethical practices, sustainability, and compliance with environmental

and human rights standards.

Yes

Investors and shareholders As a publicly listed company, Rapala VMC maintains transparent communication with its investors and

shareholders. The focus is on financial performance, long-term value creation, and integration of sustainability

considerations into business strategies.

Yes

Local communities Rapala VMC actively engages with local communities where it operates, contributing to environmental

conservation and social initiatives.

Yes

Regulatory and

industry bodies

Compliance with international and regional regulations is a priority. The company also collaborates with

industry bodies such as the European Fishing Tackle Trade Association (EFTTA), American Sportfishing

Association (ASA) and Canadian Sportfishing Industry Association (CSIA), to advance sustainable practices.

Yes

Environmental and

conservation organizations

Partnerships with organizations like the Keep Archipelago Tidy Association and Finnish Freshwater

Foundation reflect Rapala VMC's commitment to preserving aquatic ecosystems and biodiversity.

Yes

Table: Key stakeholders

Stakeholder engagement plays a central role in identifying and ad-

dressing impacts from both operations and business relationships.

These analyses revealed key priorities, including sustainable product

development, climate change mitigation, and employee well-being. For

example, stakeholder input during the materiality assessment emphasized

the importance of reducing environmental impacts, such as GHG emis

sions, directly influencing the Group’s strategic focus on clean energy

initiatives and lead-free product innovations. Supplier audits highlighted

expectations for environmental responsibility, which have shaped efforts

to address climate-related risks within the supply chain. Employee feed

back informed initiatives to enhance workplace inclusivity and well-being.

Rapala VMC organizes its stakeholder engagement through a structured

framework involving multiple teams and functions, ensuring alignment with

the Group’s sustainability priorities and objectives. Engagement is tailored

to specific stakeholder groups and overseen through a combination of

centralized coordination and decentralized execution by relevant teams.

The Group Sustainability Team plays a key role in overseeing struc

tured stakeholder surveys, including the stakeholder questionnaire. Their

responsibilities include managing the process, analysing data, and ensur

ing insights are effectively utilized. The structured survey targets all key

stakeholder groups.

Supplier audits, a critical component of engagement with the supply

chain, are conducted by third-party audit providers and coordinated by the

Taiwan sourcing office, with support from the Group Sustainability Team.

This process also includes follow-up on corrective action plans to drive

continuous improvement.

Other stakeholder interactions, such as employee engagement through

satisfaction surveys, are managed by the HR function, while customer and

community interactions are typically handled by regional business units or

specific project teams. Partnerships with external organizations and regu

latory bodies are coordinated at both the Group and local levels, ensuring

compliance and alignment with stakeholder expectations.

The results of all engagement activities are systematically reviewed and

incorporated into strategic processes, including the DMA. However, the

Group recognizes opportunities to further enhance the coordination, data

analysis, and strategic integration of these activities.

In the most recent DMA, the Group engaged external experts to facili

tate the consultation process. This structured approach began with the

identification of potential impacts informed by stakeholder survey results.

The most material sustainability topics identified through the survey were

consolidated into a comprehensive list of potential material IROs, which

were then mapped against the Group’s value chain. This mapping exercise

revealed the distribution of impacts, with some spanning the entire value

chain and others concentrated in specific areas.

For internal stakeholders, including employees and management, ex

ternal experts conducted a series of interviews to gather critical insights.

These consultations complemented the survey findings, enabling a deeper

understanding of how stakeholders are impacted and ensuring that the

assessment reflects the Group’s operational realities.

The findings from stakeholder consultations and internal interviews in

formed the DMA, with actual and potential impacts reviewed and evaluated

by a designated team of management representatives.

The Group’s Global Management Team has validated the DMA. Thus, the

key results of the stakeholder studies have been presented to the manage

ment team as part of the DMA report. The key findings of the materiality

analysis have also been presented to the Board of Directors. The Global

Management Team and the Board of Directors have gone through in detail

the results of the global employee survey and the plan for corrective actions

where such actions have been necessary based on the results.

Governance

Decision-making and controls

Rapala VMC’s decision-making framework is grounded in a structured and

transparent governance model, ensuring clarity of roles, accountability,

and alignment with strategic objectives. Responsibilities are clearly de

fined across governance bodies, fostering an effective balance between

oversight and operational autonomy. The Board of Directors holds ultimate

responsibility for the Group’s strategic direction, oversight, and significant

decision-making. Key duties include approving strategies, financial state

ments, budgets, significant investments, divestments, and other material

matters. The Board of Directors operates under a written Charter outlining its

responsibilities and meets regularly according to a pre-determined schedule.

The Global Management Team (Executive Committee), led by the Presi

dent & CEO, is responsible for assisting in planning and overseeing the

Group’s operations. This includes preparing strategic matters for the Board

of Directors’ consideration, implementing approved objectives, and making

operational decisions within its mandate. When decisions of significant

strategic or financial importance arise, they are escalated to the Board of

Directors for final approval. At the subsidiary level, operational decisions

are managed by local management teams, functioning under the over

sight of the Group President & CEO. This decentralized approach ensures

responsiveness to local market dynamics while adhering to Group policies

and strategic objectives.

Rapala VMC has established an internal control framework designed

to ensure compliance with applicable laws, regulations, and internal poli

cies. The framework also aims to safeguard the reliability of financial and

operational information while supporting the Group’s commitment to ac

countability and transparency. Central to this framework is a unified orga-

nizational structure characterized by open communication between Group

management and subsidiaries. The flat hierarchy enables quick decision-

making and ensures alignment with corporate objectives and policies.

The internal control framework’s effectiveness is further enhanced by

Rapala VMC’s commitment to ongoing improvement, driven by the insights

gained through audits and regular evaluations. By fostering a culture of

accountability, transparency, and strategic alignment, Rapala VMC ensures

that its decision-making processes and internal control procedures con

tribute to long-term operational efficiency and sustainability.

Dedicated controls and procedures are integrated with internal functions

through a framework established by the Code of Conduct, Internal Control

Manual and Authorization Limits. These tools ensure ethical conduct, risk

minimization, and decision-making aligned with strategic objectives. The In

ternal Control Manual defines control requirements across financial manage-

ment, procurement, and operations, while the Authorization Limits set clear

boundaries for decision-making authority. The Code of Conduct underpins

these processes, ensuring ethical principles are embedded in all activities.

Regular reporting, internal audits, and a whistleblowing mechanism reinforce

accountability, transparency, and continuous improvement, fostering align

ment between governance controls and operational efficiency.

The Group does not have a separate Internal Audit organization due to

the size of the Group’s operations. The Group Finance is responsible for

regular reviews of financial performance and internal control procedures

at all Group companies and reporting significant findings to the President

and Chief Executive Officer and the Board of Directors. From time to time,

the management conducts or buys external services, if needed, to conduct

specific and limited internal audits. The absence of an in-house internal

audit organization is also taken into account in the external audit. The man

aging director and the controller of each subsidiary meet annually with the

local auditor to discuss internal control and statutory compliance issues.

The auditors of each subsidiary provide an audit opinion to the auditors

of the corporation at the conclusion of each annual audit. Each annual

audit may also give rise to the preparation of a management letter to the

corporation outlining their audit findings in greater detail and recommend

ing any improvements in internal controls. In addition, the auditors of the

corporation meet regularly with the Group management representatives to

discuss and review the business and related financial, accounting, internal

control and risk management issues.

Management of material impacts, risks and opportunities

The Board of Directors approves the strategic guidelines and monitors

the progress by following the relevant KPIs. The Board of Directors may

also include key KPIs as part of the management’s remuneration, such

as the annual Short Term Incentive scheme or the longer time span Long

Term Incentive scheme. Depending on the KPI, Global Management Team

members follow up the progress if not on a daily but weekly basis. Key

drivers per business region are reviewed in Monthly Business Reviews.

Major attributes are then summarized if needed in the monthly meetings

of the Global Management Team.

Monitoring and management of the IRO’s has been delegated to the

Group’s sustainability management, with Global Management Team hav

ing the oversight of the IROs. According to the allocations of sustainability

related duties within Rapala VMC sustainability management leads stra

tegic planning, goal setting, and performance monitoring, tracks regula-

tory developments and trends, manages ESG data and audits, updates

sustainability policies, supports the internal stakeholders, and provides

internal consulting on sustainability topics. Sustainability management

is headed by the Head of Sustainability, reporting to the Group President

and Chief Executive Officer, supported by Group Sustainability Manager.

No specialized sustainability committees have been formed.

Head of Sustainability would inform the Group Management Team about

material IROs, implementation of due diligence, and the results and effec

tiveness of policies, actions, metrics, and targets adopted to address them.

So far, the reporting has been ad hoc based and no systematic reporting in

2024 has been made. Based on the reporting to the Global management

Team, management reports would be provided to the Board of Directors.

According to the allocation of sustainability related duties within Rapala

VMC, the Board of Directors reviews sustainability progress quarterly and

annual reports. The Board of Directors has approved the IROs as part of

the CSRD report approval in the spring of 2025. The Group’s sustainability

management has been in regular contact with a board member mandated

by the Board of Directors to follow up the progress of the CSRD reporting

initiation and setting of the sustainability goals.

The role of the administrative,

management and supervisory bodies

At the end of the financial year 2024 the Board of Directors consisted of

six external experts with two nationalities: French and Finnish. Experience

varies from the extensive understanding of manufacturing and business

to business operations to brand orientated consumer business. Board

members also have notable international backgrounds from both studies

and work history. Two of the board members act currently as CEOs of stock

listed companies. Emmanuel Viellard (Chair) acts as a CEO for manufactur

ing company specialising in fasteners and assembly components having

strong presence both in Europe and North America, which are the main

markets for the Rapala VMC Group as well. Alexander Rosenlew acts as a

CEO of manufacturer of household plastic products having a strong pres

ence in Scandinavia which is one of the main markets for Rapala VMC in

Europe. Board members Julia Aubertin, Vesa Luhtanen and Johan Berg

SUSTAINABILITY STATEMENT | 1 5

14 | RAPALA VMC ANNUAL REPORT 2024

have meaningful backgrounds in consumer businesses varying from foods

to clothing and cosmetics. Pascal Lebard has a strong background in fi

nance. Summarized CVs of the board members are available on Rapala

VMC investor relations website. The Board of Directors’ gender diversity

ratio is 20%, and 83% of its members are classified as independent.

At the end of the financial year 2024 the Global Management Team

(Executive Committee) consisted of eight members. All members have

extensive background working for the Rapala VMC Group, hence providing

notable sector specific experience. The work histories of the members vary

from manufacturing orientated business to consumer brand businesses.

Nationalities include Finland, France and UK. Employees or other workers

are not specifically represented in the administrative, management, and

supervisory bodies; for instance, there are no employee representatives

on the Board of Directors or the Global Management Team. Currently, 7%

of the members of these bodies represent diversity in terms of gender.

The duties and responsibilities of the Board of Directors are principally

based on the Finnish Limited Liability Companies Act and the corpora

tion’s Articles of Association. All significant issues concerning the Group

are decided by the Board of Directors. These include, but are not limited

to, appointing, and dismissing the President and Chief Executive Officer,

approving strategic guidelines, financial statements, interim reports, busi

ness plans, annual budgets, stock exchange releases and considerable

investments or divestments.

The President and Chief Executive Officer acts also as the Group’s Presi

dent and Chairman of the Global Management Team. The duties and re-

sponsibilities of the Board of Directors are principally based on the Finnish

Limited Liability Companies Act and the corporation’s Articles of Associa

tion. All significant issues concerning the Group are decided by the Board of

Directors. These include, but are not limited to, appointing, and dismissing

the President and Chief Executive Officer, approving strategic guidelines,

financial statements, interim reports, business plans, annual budgets, stock

exchange releases and considerable investments or divestments.

The President and Chief Executive Officer acts also as the Group’s Presi

dent and Chairman of the Global Management Team. The duties and re-

sponsibilities of the President and Chief Executive Officer are set forth in the

Finnish Limited Liabilities Companies Act. The President and Chief Executive

Officer is responsible for the operative management within the scope of the

strategic and operative plans, budgets and action plans approved by the

Board of Directors. Unless separately authorized by the Board of Directors,

the President and Chief Executive Officer shall not take actions, which may

be considered unusual or far-reaching in view of the scope and nature of the

Group’s business. The President and Chief Executive Officer shall ensure that

the accounting of the corporation complies with the law and that the financial

management of the corporation has been arranged in a reliable manner.

The Global Management Team assists the President and Chief Executive Of

ficer in planning and managing the operations of the Group, in the preparation

of strategic questions and in the execution of the strategic objectives set by the

Board of Directors. The group’s business units are grouped under three differ

ent regions: APAC, EMEA & LATAM and North America. Regional heads have a

chair in the Global Management Team. All business unit heads report directly

to regional heads. All other functions, not directly relating to the management

of single business units, report to the Global Management Team members or

the President and The President and Chief Executive Officer directly.

As described above monitoring and management of the IRO’s has been

delegated to the Group’s sustainability management, with Global Man

agement Team having the oversight of the IROs. The President and Chief

Executive Officer, who acts as chair of the Global Management Team,

reports to the Board of Directors, as described above, including matters

of monitoring, management and oversight of IROs.

The Board of Director’s duties and responsibilities include appointing,

and dismissing the President and Chief Executive Officer, approving stra

tegic guidelines, financial statements, interim reports, business plans, an-

nual budgets, stock exchange releases and considerable investments or

divestments. The President and Chief Executive Officer is responsible for

the operative management within the scope of the strategic and operative

plans, budgets and action plans approved by the Board of Directors. This

applies to sustainability oversight as well.

The current sustainability strategy, approved as part of the overall strat

egy by the Board of Directors, concentrates heavily on building adequate

control and reporting environment within the Group for sustainability relat

ed issues. Actions include setting up the proper CSRD reporting, nominating

Sustainability Manager and reporting contacts within each operational unit.

Ultimately the Board of Directors evaluates the availability or development

of necessary skills and expertise for sustainability oversight based on the

CSRD reporting and management presentations provided from time to

time. No systematic or formalized process has been set up for evaluation.

Rapala VMC integrates sustainability-related expertise into its governance

framework to address ESG matters effectively. The Board of Directors over

sees the company’s strategic direction, including sustainability initiatives,

and ensures ESG considerations are integrated into decision-making and

operations. While specific expertise in sustainability among board members

has not been explicitly detailed, the Board of Directors aligns governance

with stakeholder expectations and regulatory requirements.

The Global Management Team, led by President & CEO, includes mem

bers with diverse expertise in finance, operations, and compliance, critical

for implementing sustainability strategies. This team ensures that ESG

initiatives are operationalized and aligned with the company’s strategic

objectives. The Sustainability Management Team provides focused ex

pertise, supporting regulatory compliance, ESG performance monitoring,

and integration of sustainability goals across functions.

Rapala VMC plans to enhance its sustainability expertise by appointing

responsible persons for sustainability reporting within business units. These

roles will drive local initiatives, ensure reporting quality, and support continu

ous ESG improvements. This planned step reflects the company’s commit-

ment to embedding sustainability deeply into its operations and governance.

The multi-tiered structure leverages existing expertise and actively develops

capabilities to integrate ESG considerations across all levels of governance.

In 2024 the focus has been heavily on setting up the control environment

for sustainability reporting within the Group. This development work will

continue in the coming years. Available skills have not been assessed

separately by the management comparing them to the identified IROs.

However, the Group has a wide employee base with a strong background,

for example material know-how and efficiency as manufacturer. The Group

is working to formalize the annual process on talent mapping that would

address the possible skill gaps, career paths and consider the necessary

training and development paths.

Sustainability incentive integration

Rapala VMC’s Remuneration Policy emphasizes performance-based remu-

neration and aims to align the remuneration of the Board of Directors and

the President & CEO with the company’s strategic goals, such as enhanc

ing shareholder value, improving competitiveness, achieving long-term

financial success, and meeting defined strategic targets. It also ensures

that remuneration remains fair, competitive, and market-aligned to attract

and retain skilled and motivated personnel at all levels of the organization.

These principles extend to the remuneration schemes for the Board of

Directors, the President & CEO, and members of the Executive Committee.

The policy defines a process for remuneration related decisions and

includes a description of remuneration of the Board of Directors and the

President and Chief Executive Officer. Further the policy explains the prin

ciples of deviating from the remuneration policy and changing it. The Board

of Directors presents the remuneration policy to the AGM at a minimum

of four-year interval and always when material changes have been made.

The next review and presentation of the policy to the AGM will occur in

2028, in accordance with the required intervals.

The Remuneration Policy outlines the framework for variable remunera

tion components. These components are tied to targets set by the Board of

Directors, designed to support the company’s strategy, as well as its short-

term and long-term financial success. In addition to economic criteria, the

incentive schemes may include other criteria, such as sustainability-related

targets. The company’s incentive schemes are conventionally divided into

Short-Term Incentive (“STI”) and Long-Term Incentive (“LTI”) schemes. STI

targets are typically set and assessed on an annual basis, ensuring alignment

with immediate strategic objectives. The Board of Directors, with preparatory

input from its Remuneration Committee, oversees the establishment and

evaluation of the incentive schemes, ensuring that they align with market

practices and stakeholder expectations. These schemes are structured to

encourage performance, promote long-term commitment, and contribute to

the realization of the company’s strategic and financial objectives.

The policy and any significant amendments are prepared by the Re

muneration Committee of the Board of Directors. The Board of Directors

reviews and approves the policy before presenting it to the AGM for a

consultative vote. The Remuneration Committee monitors the implemen

tation of the policy on an annual basis and provides recommendations to

the Board of Directors as needed.

Decisions regarding remuneration for members of the Board of Direc

tors are made annually by the AGM. The Board of Directors determines

the remuneration of the President & CEO and the Executive Committee in

alignment with the remuneration policy, following preparatory work by the

Remuneration Committee. Share-based incentive schemes, including the

issuance of shares, options, or other rights, require either a resolution of

the AGM or a resolution of the Board of Directors authorized by the AGM.

The current remuneration policy does not include any sustainability-relat

ed performance metrics or targets but as part of the current STI scheme,

Rapala VMC has integrated sustainability reporting related targets into

management remuneration. The ESG element of the STI scheme is divided

equally between two key performance indicators, each contributing 50%

to the ESG element payout:

■ For sustainability reporting, each operational entity is required to name

a contact person responsible for sustainability reporting and partici

pate in both a mid-year (H1) practice reporting round and the FY 2024

reporting process. A consolidated sustainability report must then be

drafted and finalized. These targets are critical in establishing robust

sustainability practices aligned with the CSRD requirements, as no prior

systemized sustainability reporting existed at the Group level.

■ For the global employee satisfaction survey, each operational entity,

excluding Russia, must conduct the survey, summarize results, and

draft a consolidated summary. Findings must be reviewed with em

ployees in an appropriate forum, and a consolidated summary must

be presented to the Executive Committee (EXCOM). Following this

review, an action plan addressing critical findings must be drafted

and initiated at the entity or regional level based on feasibility.

The share of variable remuneration linked to sustainability related targets in

2024 is 2.05%. Climate-related considerations are not factored into the remu

neration of members of administrative, management, and supervisory bodies.

The performance against these sustainability-related targets is first as

sessed by the Remuneration Committee of the Board of Directors, which

makes a payout proposal based on target fulfilment. The final validation and

decision on payouts are made by the Board of Directors. The assessment is

conducted on a Group-wide basis, ensuring uniform compensation levels for

all STI participants based on collective target achievement. Personal perfor

mance does not influence the payout for these sustainability-related targets.

The last three-year LTI scheme ended by the end of the financial year

2023. The Board of Directors did not initiate the new LTI program during

2024. More information on the STI metrics is included in the Group’s Re

muneration Report.

Impact, risk and opportunity management

Rapala VMC applies a high-level risk management framework that provides

an oversight of key risks relevant to the Group’s operations. This framework

is designed to support decision-making and align with the Group’s strate

gic priorities. The Board of Directors oversees risk management policies

and reviews the Group’s overall risk profile annually. The assessment of

enterprise risks is conducted at a general level, with management provid

ing periodic updates to the Board of Directors. Generally, enterprise risks

are reviewed by the Global Management Team once a year. Following this

the Board of Directors validates the risks. In 2024 the Board of Directors

reviewed the risks in its December meeting. All material sustainability IROs

have been provided as background information for this work.

In 2024, Rapala VMC has identified its sustainability-related impacts,

risks, and opportunities (“IROs”) for the first time as part of the inaugural

DMA. Sustainability related risks have been widely identified in sustain

ability oriented cross-functional work groups, but overall risk management

process addressed only certain general level sustainability risks.

The Group is working to systemize and improve the consideration of

IROs and the risk management process. The Global Management Team

has validated the DMA that includes the identified material IROs in its

meeting on 29.2.2024. In addition to this the Global Management Team

has not specifically addressed material IROs. However, Group conducted a

global employee survey partly to address the material topic theme “Working

conditions, Equal treatment and opportunities” of which the Group reports

under the reporting standard S1 - Own workforce. Results of the employee

survey has been reviewed by the local management, Global Management

Team and the Board of Directors.

The Group is actively working towards formalizing a due diligence frame

work to enhance the impact management practices.

SUSTAINABILITY STATEMENT | 1 7

16 | RAPALA VMC ANNUAL REPORT 2024

The Group utilizes a multi-step process to identify sustainability IROs, incorporating stakeholder engagement, materiality assessments and benchmarking.

Table: Process to identify IROs

Methodologies to identify IROs Assumptions applied

■ Stakeholder engagement: External and internal stakeholders, including

customers, suppliers, employees, and investors, are consulted through

structured surveys, interviews, and workshops.

■ Risk assessment: Risks are evaluated across various categories such as

operational, regulatory, and reputational risks.

■ Benchmarking: The Group benchmarks its sustainability practices against

industry leaders and peers to identify potential risks and opportunities.

■ Baseline data: The Group grounds its analysis in current operational data and

value chain mapping

■ Time horizons: Short-term, medium-term and long-term impacts are consid-

ered. For example, the short-term assessment focuses on immediate regula-

tory risks, while long-term assessments evaluate trends such as shifting

consumer preferences towards sustainable products.

■ Probability models: Probabilistic models help estimate the likelihood of various

risks and opportunities. For instance, the Group uses water risk models to

project the potential frequency and severity of water-related disruptions to its

supply chain.

■ External factors: The Group integrates external factors such as regulatory

changes, technological advancements, market trends and ecosystem dynam-

ics into its assessments.

Data sources Scope of operations covered

The Group utilizes diverse internal and external data sources to inform its assess-

ments:

■ Internal sources: Background materials such as annual and sustainability

reports, financial reports, strategy documents, sourcing reports, ESG risk

analyses, and results from stakeholder surveys.

■ External sources: Industry benchmarks (e.g., SASB standards for toys and

sporting goods), regulatory guidance (e.g., CSRD and ESRS standards), and

expert evaluations from external partners.

The assessment considers the entire value chain of the Group’s operations:

■ Upstream: Impacts and dependencies related to sourcing materials and

services, including biodiversity impacts and human rights considerations.

■ Own operations: Direct operational impacts, such as emissions, resource

efficiency, and workforce well-being.

■ Downstream: Customer and consumer impacts, including product safety,

packaging waste, and recreational fishing dynamics.

Opportunity management

Rapala VMC does not yet have a fully formalized process for integrating

opportunity management into its overall management framework. How

ever, opportunities are partially addressed through existing structures,

particularly within the sustainability strategy and risk management frame

works. The sustainability “Strategy of Constant Improvement” highlights

areas like sustainable product innovation, operational efficiencies, and

regulatory compliance as key opportunities. The DMA further supports

this by identifying and prioritizing opportunities alongside risks, particu

larly in ESG-related areas. While these practices demonstrate an initial

integration of opportunity management, the ongoing development of gov

ernance structures, such as enhancing due diligence processes, reflects

the Group’s commitment to further embedding opportunity management

into its overall strategic framework.

Description of how sustainability-related risks are

prioritized relative to other risks

Cross-functional working groups have convened in two separate years

to map sustainability-related risks as part of the preparatory process for

the double materiality analysis, diligently classifying them under Environ

mental (E), Social (S), and Governance (G) categories. These risks are

not currently prioritized over other risk categories.

At present, Rapala VMC does not utilize advanced risk-assessment

tools, which also applies to sustainability-related risks. To enhance risk

management capabilities, the Group plans to implement a sophisticated

risk management tool during the 2025 financial year. This tool will support

the consolidation of risks from unit-specific assessments into a compre

hensive Group-wide risk map, improving evaluations based on financial

impact, probability, and time horizon. Moving forward, sustainability-relat

ed risks will be assessed alongside all other risks using uniform criteria.

Double materiality assessment

The Group has determined the material information to be disclosed by

implementing a comprehensive DMA process, aligned with the criteria

outlined in ESRS 1 section 3.2 on material matters and materiality of

information. This reporting period marks the first time the Group has

conducted a DMA. The Group adopted a double materiality framework

to evaluate both financial materiality and impact materiality. The DMA

was conducted from November to December 2023.

The process incorporated value chain mapping, probabilistic modelling,

stakeholder surveys, and workshops facilitated by external experts. The

assessment included upstream, operational, and downstream impacts.

Through DMA the Group has identified key sustainability issues. These

issues are analysed across the value chain, recognizing that some im

pacts, such as supply chain emissions, span multiple geographies and

partners, while others, such as workforce well-being, are concentrated

within the Group’s operations.

The next review and revision of the materiality assessment process

are scheduled for 2025, incorporating additional stakeholder feedback,

updated regulatory requirements, and evolving market conditions. The

Group plans to integrate materiality assessments into its annual report

ing cycle.

Focus on business relationships and geographies

The Group’s process for assessing IROs from operations and business

relationships is guided by an approach that integrates stakeholder en

gagement, value chain mapping, and continuous monitoring. These

methodologies ensure that both actual and potential impacts across

the Group’s operations and its extended business relationships are identi

fied, assessed, and managed. Through value chain mapping, the Group

assesses upstream risks such as raw material sourcing, including po

tential human rights issues, environmental degradation, and regulatory

compliance challenges in high-risk geographies. Downstream, the Group

evaluates the environmental and social impacts of its distribution and

retail partnerships, such as logistics emissions and packaging waste

management.

Given the global nature of its operations, the Group pays particular

attention to risks associated with upstream suppliers and downstream

partners. This includes human rights and environmental risks in sourcing

raw materials, as well as logistical emissions in global transportation. The

Group has initiated supplier audits and is developing practices to enhance

governance and transparency, particularly in regions with heightened

geopolitical or regulatory risks.

Activities increasing adverse impacts

The Group evaluates the impacts of its operations by considering fac

tors such as resource use, emissions, waste generation, and workforce

well-being. A DMA forms the foundation for this evaluation, analysing

impacts not only from a financial perspective but also in terms of broader

environmental and social consequences. This includes impacts like GHG

emissions from manufacturing and logistics, resource efficiency, and the

health, safety, and development of employees.

Certain business activities, such as manufacturing and transporta

tion, present heightened risks of adverse environmental impacts. These

include emissions, resource consumption, and waste generation. The

Group mitigates these risks by focusing on sustainable product devel

opment, improving resource efficiency, and minimizing waste through

circular economy practices. Regulatory compliance and innovation are

prioritized to address industry-specific risks, such as changes in fishing

regulations or restrictions on specific raw materials.

Sustainability IRO management Sustainability-related IROs have been considered in various contexts but have not yet been systematically incorporated into the Group’s

broader risk management processes. Risks related to climate change, regulatory compliance, and supply chain sustainability have been

discussed in cross-functional workgroups and strategic planning efforts. As part of the Group’s first DMA, sustainability-related risks

were identified and categorized.

Identification Risks and impacts are identified at the business unit and Group level, considering local conditions, regulatory landscapes, and opera-

tional specifics. We engage with a diverse range of stakeholders—including employees, customers, and external partners—via surveys,

workshops, and audits to identify key environmental and social issues. This includes impacts such as resource use, emissions, and

employee well-being.

Assessment Identified risks are assessed based on their likelihood and potential impact on the Group’s financial performance, reputation, and opera-

tions. Each identified risk and opportunity is assessed for its potential financial effects using criteria such as likelihood, severity, and

timeframe. The evaluation incorporates quantitative thresholds, such as scoring impacts on a 1-to-5 scale for likelihood and severity.

Sustainability-related risks are evaluated holistically to determine their significance. For example, environmental impacts like emissions

and resource use are assessed alongside social impacts, such as labour conditions and community welfare.

Prioritization IROs are prioritized based on their severity, strategic relevance, and assessed financial implications, including magnitude and probability

of occurrence. Critical issues, such as environmental compliance and workforce well-being, as well as high-priority items, are reviewed

by a management team comprising representatives from key business functions, including sourcing, manufacturing, and sustainability,

to ensure alignment with regulatory, business, and strategic objectives.

Mitigation and Monitoring Action plans and mitigation strategies are developed for all prioritized risks, with responsibilities assigned in the organization. Progress

is monitored regularly through established mechanisms, including periodic audits, updates to the risk register, and performance reviews

at both the business unit and Group levels. These processes ensure timely adjustments, continuous improvement, and effective re-

sponses to emerging environmental and social risks, maintaining comprehensive oversight and alignment with the Group’s objectives.

Table: IRO management framework

SUSTAINABILITY STATEMENT | 1 9

18 | RAPALA VMC ANNUAL REPORT 2024

Application of methodologies and assumptions

The Group employs probabilistic models to estimate the likelihood and

severity of risks, such as climate-related disruptions to supply chains.

Geographical risks are assessed through value chain mapping, which

identifies regions with higher vulnerability to environmental or social

impacts. External benchmarking against industry peers further informs

risk prioritization and mitigation strategies.

The DMA process ensures that IROs are evaluated at both the activity

level and along the value chain. For example, the Group has identified

that certain impacts, such as emissions, extend across the entire value

chain, while others, like employee well-being, are more localized within

its operations. By mapping its value chain, the Group gains insights into

how its business relationships contribute to or mitigate these impacts,

enabling targeted interventions. The Group applied both impact material

ity and financial materiality criteria in line with ESRS 1 section 3.2 Material

matters and materiality of information.

■ Impact materiality: Topics were evaluated based on their scale, scope,

and irremediable nature, considering their effects on the environment,

society, and stakeholders.

■ Financial materiality: Risks and opportunities are assessed for their

likelihood of occurrence and the magnitude of their financial effects,

using quantitative thresholds such as a 1-to-5 scoring system for likeli

hood and impact. Financial impacts are classified as low, medium, or

high based on their potential effects on revenue, costs, and operations.

These assessments are documented in risk summaries, which detail

potential impacts such as reduced demand or disrupted supply chains,

enabling the prioritization of material topics.

The Group’s process recognizes the interconnected nature of its impacts,

dependencies, and the risks and opportunities they generate.

■ Impact-dependency analysis: Through value chain mapping and mate

riality assessments, the Group identifies critical areas where its opera-

tions depend on natural resources, ecosystems, and societal factors.

■ Interconnected risks and opportunities: Impacts such as emissions,

habitat loss, and resource inefficiencies contribute to risks like regula

tory changes, rising costs, and shifting consumer behaviors. At the

same time, these impacts create opportunities for product innovation,

such as using alternative materials, developing more sustainable fish

ing gear, and targeting new markets for species adapting to climate

changes.

■ Materiality integration: DMA ensures that risks arising from impacts

(e.g., ecosystem changes or material inefficiencies) are linked to

dependencies (e.g., fish population health or sustainable resource

access). This integrated analysis aligns mitigation strategies across

environmental and social dimensions, identifying both risks and growth

opportunities in areas like biodiversity management and circular

economy practices.

The Group’s DMA process systematically prioritizes negative and positive

impacts. The process incorporates the ESRS 1 framework, which includes

ten sector-agnostic ESG topics and their sub-topics and sub-sub-topics.

In the identification phase, the Group adopted a bottom-up approach,

assessing impacts at a detailed activity level while considering company-

and sector-specific issues beyond the ESRS classification. Stakeholder

engagement, internal discussions, and external benchmarks were instru

mental in developing a comprehensive list of potential material IROs.

■ Negative impacts are prioritized based on their

relative severity and likelihood:

■ Severity: Impacts are assessed for their scale, scope, and

irremediable nature. For example, environmental impacts such

as emissions or biodiversity loss are evaluated for their potential

magnitude and long-term consequences.

■ Likelihood: The probability of occurrence is assessed using

structured evaluations, including an online survey where

management representatives scored impacts on a 1-to-5 scale.

■ Positive impacts are prioritized by their

potential to deliver value across the value chain:

■ Scale: This criterion evaluates the magnitude of benefits,

such as enhanced market positioning through sustainable

product innovations.

■ Scope: The breadth of the impact is considered, including whether

it benefits multiple stakeholders or areas of the value chain.

■ Likelihood: Likelihood is assessed based on current trends,

stakeholder feedback, and the Group’s ability to realize the

impact effectively.

The evaluation process includes both qualitative criteria, such as stake

holder relevance, and quantitative thresholds derived from the scoring

of impacts. Management representatives validated the results through

workshops, ensuring alignment with business priorities and stakeholder

expectations. The financial materiality assessment complements this

process by examining the interconnections between sustainability im

pacts and financial risks or opportunities. This evaluation considers the

likelihood of occurrence and the potential magnitude of financial effects,

categorized into qualitative ranges (high/medium/low).

The Group used the results of its materiality assessment to determine

which information to disclose, guided by the following:

■ Thresholds: Materiality thresholds were established based on scoring

results from management workshops and online surveys. For example,

topics with high scores in both financial and impact materiality were

prioritized for disclosure.

■ Consolidation of Topics: The final list of material topics was grouped

into broader themes, ensuring alignment with ESRS standards at the

sub-topic and sub-sub-topic levels.

■ Validation: The consolidated results were reviewed and approved by

the management team to ensure alignment with the Group’s strategic

and sustainability priorities.

Stakeholder engagement

The Group’s impact assessment process incorporates a comprehen

sive review of key stakeholders, ensuring that both internal and external

perspectives are considered. This includes engaging with stakeholder

groups affected by the Group’s activities and users of the sustainability

statement to ensure all relevant viewpoints are captured.

The Group sustainability team oversees stakeholder surveys, including

the stakeholder questionnaire. Their responsibilities include managing

the process, analysing data, and ensuring insights are effectively utilized.

The structured survey targets all key stakeholder groups. The results of

all engagement activities are systematically reviewed and incorporated

into strategic processes, including the DMA. However, the Group recog

nizes opportunities to further enhance the coordination, data analysis,

and strategic integration of these activities.

In the most recent DMA, the Group engaged external experts to facili

tate the consultation process. This structured approach began with the

identification of potential impacts informed by stakeholder survey results.

The most material sustainability topics identified through the survey were

consolidated into a comprehensive list of potential material IROs, which

were then mapped against the Group’s value chain. This mapping exercise

revealed the distribution of impacts, with some spanning the entire value

chain and others concentrated in specific areas.

For internal stakeholders, including employees and management, ex

ternal experts conducted a series of interviews to gather insights. These

consultations complemented the survey findings, enabling a deeper un

derstanding of how stakeholders are impacted and ensuring that the

assessment reflects the Group’s operational realities.

The findings from stakeholder consultations and internal interviews

informed the DMA, with actual and potential impacts reviewed and evalu

ated by a designated team of management representatives.

Monitoring and mitigation of impacts

The Group employs monitoring mechanisms such as audits, performance

reviews, and benchmarking to assess and address impacts. In its busi

ness relationships, supplier audits and contractual agreements include

provisions for sustainability practices, such as adherence to the Group’s

Supplier Code of Conduct and environmental standards. Internally, the

Group has adopted sustainability-focused practices in operations, such

as resource efficiency improvements and emissions reduction initiatives.

Material impacts, risks and opportunities and

their interaction with strategy and business model

Rapala VMC’s materiality assessment identifies significant impacts

across its business model, operations, and value chain. These impacts

highlight areas where the company’s activities interact with ESG factors,

requiring strategic attention and alignment with sustainability objectives.

The materiality assessment also identifies specific risks and opportuni

ties stemming from these impacts, offering insights into potential chal-

lenges and areas for strategic growth. The Group’s material IROs shape

its business model, value chain, strategy, and decision-making. The com

pany has already initiated responses to these factors and is adapting its

practices to address anticipated changes.

SUSTAINABILITY STATEMENT | 2 1

20 | RAPALA VMC ANNUAL REPORT 2024

TOPIC TIME HORIZON IMPACTS RISKS OPPORTUNITIES CURRENT RESPONSE PLAN

Climate change mitigation

(E1)*

Short to long term

Emissions have im-

mediate impact on global

warming and have a

long-lasting effect. Nega-

tive impacts can reduce

overtime if Rapala VMC

successfully reduces

emissions.

Negative impact: Rapala VMC activities generate GHG emis-

sions that contribute to global warming. Main emission sources

are sourced materials, own manufacturing operations and

logistics. Main emission categories are Scope 3.1 Purchased

goods and services contributing 56% of the emissions, Scope

3.4 Upstream transportation and distribution 29%, and Scope

1+2 energy use 7%. The emissions are concentrated in the com-

pany’s own operations and upstream value chain, with logistic

operations generating emissions also downstream.

Transition risk: Efficient and fast logistics network important due to global supply

and product distribution. Transitioning to green transport increases costs and

shipping time. Also, the availability of green transport option varies greatly. Impacts

whole value chain. Short-to-long term time horizon, expected to intensify over the

next one to five years

Transition risk: Increasing regulation targeting GHG emissions within the EU and

other jurisdictions, presents a significant compliance and operational risk. Failure

to adhere to evolving GHG emission standards can result in substantial fines, legal

liabilities, and reputational damage. Implementing necessary changes to meet regu-

latory requirements may lead to increased operational costs, potential disruptions

in the supply chain, and necessitate investment in new technologies or processes.

Impacts whole value chain. Short- to long-term time horizon, expected to intensify

over the next one to five years

Transition opportunity: Adopting clean energy sources and

enhancing energy efficiency in logistics, own manufacturing

and sourcing, which reduces GHG emissions can enhance the

Group’s reputation and meet the growing consumer demand

for sustainable products. This can also lead to long-term cost

savings and increased operational resilience. Impacts whole

value chain. Medium to long term time horizon requiring

sustained efforts to adapt operations.

GHG emissions and physical climate risks have prompted Rapala VMC to transi-

tion to clean energy and enhance energy efficiency across its manufacturing and

logistics operations. These actions reduce emissions and operational costs while

ensuring compliance with regulatory requirements, such as Carbon Border Adjust-

ment Mechanism (CBAM) and Energy Efficiency Directive (EED) to name a few.

The Group has developed its GHG emission reporting and tools and has a better

understanding of main emission sources. The aim is to develop a transition plan

and targets for emission reductions also for main Scope 3 categories. The Group

is also working with vendors to increase awareness of GHG emissions through the

Supplier Code of Conduct and related vendor audits and preliminary plans have

been made to support main vendors in emission reporting.

The Group has also identified the need to improve location and activity-based risk

and impact analyses to identify more precisely the location and activity specific

risks and impacts in order to better mitigate and manage these.

Climate change adaptation

(E1)*

Short to long term

Risks are expected to

increase in the long term.

No identified material impacts. Physical risk: Extreme weather events, temperature extremes and rising sea levels

can cause disruptions in raw material availability, transportation, own and vendors

manufacturing operations and negatively impact the Group’s operations and profit-

ability. Impacts whole value chain.

Physical risk: Physical climate impacts, such as droughts, storms, and mild winters,

influence product demand and disrupt downstream market stability. This risk is

especially relevant in winter products. Impacts own operations and downstream

value chain. Short to long term time horizon, risks are expected to increase in the

long term.

*Climate related risks and oppor-

tunities are separated to transition

and physical risks according to the

ESRS E1.

Medium to long term No identified material impacts. Transition risk: Potential for recreational fishing restrictions and risks for fish stock.

The attitudes towards recreational fishing might change and this can have a negative

impact to the Groups revenue and profitability. This is also a biodiversity related risk.

Impacts own operations and downstream value chain.

Season cycle changes can extend the season and markets for

some product categories. Especially mid-season product de-

mand can increase. Impacts own operations and downstream

value chain.

Biodiversity and ecosystem

health (E4)*

Long term No identified material impacts. Transition risk: Depleting natural resources used in products such as wood. Avail-

ability of key materials can reduce due to biodiversity loss and ecosystem health

impacting operations and increasing operational costs. Impacts own operations and

upstream value chain.

The Group has set targets to increase the use of certified,

renewable materials in its products and packaging.

Short to medium term No identified material impacts. Transition risk: Introduction of stricter biodiversity related regulations that can

impact operations and increase operating costs. Such as the EU Deforestation regu-

lation and SUP directive increase the reporting requirements and cost of operations.

Impacts own operations and upstream value chain.

Transition risk: Reduced demand due to biodiversity loss and ecosystem health

impacting fish populations. These risks also extend to customer satisfaction and the

long-term sustainability of fishing ecosystems, which are central to the company’s

product offerings. Impacts own operations and downstream value chain.

*Biodiversity related risks and op-

portunities are separated to transi-

tion and physical risks according to

the ESRS E4

Medium to long term No identified material impacts. Aligning operations with biodiversity protection trends,

sustainable fishing practices and conservation efforts which

strengthen customer trust and ensure market resilience.

Impact own operations and downstream value chain.

Resource efficiency (E5) Short to long term Negative impact: The use of virgin materials such as wood,

metals and plastics and limited adoption of recycled content

in production and packaging has a negative impact to circular

economy and resource availability. These impacts are particu-

larly concentrated in upstream sourcing and internal manufac-

turing processes, where inefficiencies in material handling and

disposal create environmental and operational challenges.

Material inefficiencies in production and process inefficiencies in resource manage-

ment have a significant impact on operational costs and environmental impact.

Developing and progressive circular economy and resource efficiency regulation

pose a compliance and operational risk. Circular economy legislation varies between

regions, can be conflicted. Development is rapid. Examples of such legislation is the

proposed lead ban on fishing gear, EU Packaging regulation and plastic content-

based taxes. There is a risk of non-compliance, impact on operations and increase

operational costs. Non-compliance can lead to fines, reputational damage and non-

desirable products. High plastic or non-recycled content can lead to excessive duties

or taxes. Impacts own operations and downstream value chain.

Integrating recycled content into packaging and products,

which improves regulatory alignment and reduces material

costs, while advancing sustainability goals. In certain cases,

cost associated to market areas, such as import duties or

taxes can be reduced by altering the content to more resource

efficient and environmentally friendly. Meeting expectations

can open possibilities in the evolving market. In a complex

market environment possibility to gain market share with

compliant product offering. Impacts own operations and

downstream value chain.

The company responds to resource inefficiencies by incorporating recycled materi-

als into its packaging and product components. This aligns with evolving regulatory

requirements for circular economy practices and reduces material costs while

improving environmental performance.

Own Workforce (S1) Short to long term Negative impact: Health, safety and well-being of employees.

Physical risks are higher for manufacturing and warehouse

workers due to machinery use, heavy lifting, and chemical ex-

posure, while office-based specialist or managerial employees

may face greater psychosocial strain. Impact is concentrated on

the Group’s own operations.

Positive impact: Rapala VMC offers employment and opportuni-

ties for professional development. This fosters employee stabil-

ity, security, and job continuity and strengthens commitment

to the company. Impact is concentrated on the Group’s own

operations.

Unsafe working environments create operational disruptions, reputational challenges,

reduce productivity and hinder talent retention. Impacts own operations.

Unequal treatment and low diversity cause reputational challenges, hinder organisa-

tional resilience and talent retention.

Investing in workforce well-being and inclusivity offers

opportunities to attract and retain skilled talent, enhance

productivity, and build organisational resilience. Impacts own

operations.

Workforce-related impacts and risks have led to investments in workplace safety, in-

clusivity, and professional development programs. These actions aim to attract and

retain skilled talent, reduce turnover, and improve operational stability, supporting

long-term organisational success.

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Expected time horizons for material impacts

The time horizons for Rapala VMC’s material impacts vary based on

their nature. Immediate impacts, such as GHG emissions from logistics,

require near-term mitigation efforts. Short- to medium-term impacts, in

cluding regulatory compliance challenges related to resource efficiency

and product sustainability, are expected to intensify over the next one to

five years. Long-term impacts, such as biodiversity loss and the effects

of climate change, are anticipated to develop over five years or more,

requiring sustained efforts to adapt operations and align with regulatory

and market expectations. Similarly, the benefits of sustainable product in

novation and workforce inclusivity initiatives will unfold over the medium

to long term, contributing to the Group’s resilience and competitiveness.

Activities and business relationships linked to material impacts

Rapala VMC is directly involved with many of its material impacts through

its own activities and business operations. For example, GHG emissions

arise from the Group’s manufacturing processes and global logistics

network, while workforce-related impacts are connected to health, safety,

and inclusivity of its employees. The sourcing of raw materials, such as

timber and metals, creates indirect environmental and social impacts

through business relationships with suppliers in upstream value chains.

The Group’s relationships with distributors and retailers also influences

downstream impacts, particularly customer perceptions of product sus

tainability and packaging waste. Through collaboration with stakehold-

ers, including suppliers and customers, Rapala VMC seeks to mitigate

negative impacts and enhance positive outcomes across its value chain.

No current financial effects of the Group’s material risks and oppor

tunities on its financial position, financial performance and cash flows

and the material risks and opportunities for which there is a significant

risk of a material adjustment within the next annual reporting period to

the carrying amounts of assets and liabilities are reported in the related

financial statements.

Changes to material IROs compared to previous period

This was the first time Rapala VMC conducted a DMA. As such, no

changes to the material IROs can be reported compared to the previous

reporting period, as DMA had not been undertaken before.

E1 Climate change – Impacts, risks and opportunities

Processes to identify and assess material climate-related

impacts, risks and opportunities

Rapala VMC has not yet conducted a formal resiliency analysis of its busi

ness model in relation to climate change. The Group plans to conduct a

resiliency analysis that systematically evaluates the exposure to physical

and transitional climate risks across its operations and value chain. This

will include developing a transition plan to address identified risks and

integrating climate change considerations into strategic planning and

decision-making processes. Rapala VMC’s DMA serves as the primary

process for identifying and assessing climate-related IROs. To support

and enhance the DMA, the Group integrates insights from the Scope 3

Relevant Emission Sources Assessment, the GHG Inventory Process, and

the Sustainability Risk Management Process. Together, these processes

ensure a comprehensive approach to evaluating climate-related IROs

across operations and the value chain. Formal climate scenario analyses

have not yet been conducted to identify and assess transition risks and

opportunities over different time horizons. Current evaluations rely on

qualitative methods, such as DMA and Sustainability Risk Mapping, which

do not include structured scenario modelling. Recognizing the value of

scenario analysis, the Group plans to adopt climate scenarios aligned

with global targets, such as limiting warming to 1.5°C, to better anticipate

regulatory and market transitions affecting its operations and value chain.

As climate scenario analyses are not yet in place, no direct alignment

exists between such scenarios and the assumptions in the Group’s fi

nancial statements. However, future efforts will integrate scenario-based

analyses into financial planning to ensure consistency with global climate

targets. This will enhance the Group’s ability to systematically assess the

financial implications of transition and physical risks.

Table: Process to identify climate related IROs

Process Description of the process

DMA The DMA evaluates the Group’s impacts on climate change (outward impacts) and the effects of climate change on the

Group’s operations and value chain (inward impacts). This process incorporates stakeholder expectations, regulatory require-

ments, and sector-specific risks to identify material climate-related impacts, such as emissions from purchased goods, energy

use, and transportation.

In addition to identifying emissions, this assessment highlights key climate-related risks, such as exposure to stricter regulations

on carbon emissions and energy efficiency, and opportunities, such as customer demand for sustainable products. These find-

ings directly inform the Group’s strategy and priorities for addressing climate-related challenges and leveraging opportunities.

Other process to support IRO

identification and assessment

■ Scope 3 Relevant Emission Sources Assessment: This process focuses on analysing the most relevant Scope 3 emis-

sion categories, ensuring that significant sources of GHG emissions within the value chain are identified and prioritized.

Categories such as purchased goods and services, upstream transportation, business travel, and waste generated in

operations have been recognized as key contributors to Rapala VMC’s overall emissions. The assessment provides a

foundation for targeted action to mitigate value chain emissions.

■ GHG Inventory Process: The GHG Inventory Process calculates the Group’s total GHG emissions, including Scope 1

(direct emissions), Scope 2 (indirect emissions from energy purchases), and Scope 3 (value chain emissions). This

inventory adheres to the GHG Protocol framework and employs methodologies such as activity-based, spend-based,

and distance-based methods to estimate emissions accurately. Tools such as DEFRA Conversion Factors, Ecoinvent

databases, and Finnish Environment Institute (“SYKE”) data are used to ensure precision in emissions reporting.

■ Sustainability Risk Management Process: The Sustainability Risk Management Process identifies and evaluates

climate-related risks and opportunities across the Group’s operations and value chain. Physical risks, such as extreme

weather events affecting supply chains, and transition risks, including regulatory changes and material sourcing chal-

lenges, are assessed. The process also highlights opportunities, such as product innovation in sustainable materials and

operational efficiency gains through energy savings and circular economy practices. The ESG risk management process

supports a structured evaluation of climate-related risks at the operational and strategic levels.

Rapala VMC has not utilized high emission climate scenarios to identify

physical climate hazards. While the Group does not yet have a robust,

systematic process for screening physical risks comprehensively, it has

identified key climate-related hazards and their potential impacts on

operations and the value chain. The Group acknowledges that current

assessments are qualitative and largely informed by expert judgment

and existing reports. To strengthen its approach, Rapala VMC aims to

develop a more structured and quantitative methodology for assessing

physical risks across the value chain.

Climate-related hazards, including storms, hurricanes, floods, and

droughts, have been identified as potential risks affecting Rapala VMC’s

own operations, supply chains, and downstream activities. Upstream risks

include disruptions in the availability and quality of sourced products, both

finished goods and raw materials, caused by extreme weather events

and climate variability. Critical materials, such as balsa wood and tung

sten, are particularly vulnerable to these changes. Additionally, logistics

networks, including transportation routes and infrastructure, may face

significant disruptions from severe weather events, impacting the timely

delivery of components and raw materials to production facilities. These

disruptions can also impact downstream operations. Downstream risks

involve the impact of climate change on customer demand, such as re

duced recreational fishing opportunities due to droughts or mild winters.

Rapala VMC identifies and assesses transition risks and opportuni

ties within its operations and across its value chain using insights from

its DMA and Sustainability Risk Mapping. While the Group does not yet

explicitly evaluate transition risks through scenario analysis aligned with

a 1.5°C global warming limit, it considers elements of transition events

qualitatively, focusing on their potential impacts. The Group acknowl

edges the need to integrate structured scenario analysis aligned with

a 1.5°C climate scenario into its process to better assess physical and

transition risks and opportunities. This will provide a more robust frame

work for evaluating the potential impacts of regulatory, technological, and

market changes on its operations and value chain.

Assessment and screening of exposure

for assets and business activities

The assessment of exposure and sensitivity to physical hazards and

transition events is carried out through the Group’s DMA, supported by the

Sustainability Risk mapping process, utilizing tools such as value chain

mapping, stakeholder input and qualitative assessments. The sensitivity

of assets and activities to identify climate-related hazards and transition

events is evaluated based on dependencies and the criticality of opera

tions. These assessments provide insights into how regulatory changes,

market dynamics, and operational shifts associated with the transition

to a low-carbon economy may impact the Group’s operations and value

chain. Key areas of focus include:

■ Manufacturing facilities: Locations exposed to flooding or storms

are identified as high-risk areas for operational disruptions. Exposure

to transition events includes increased compliance requirements for

energy efficiency and emissions standards, which may necessitate

operational upgrades to meet evolving regulations and rising costs

associated with compliance to meet these standards.

■ Sourced materials and products: Availability and quality of critical raw

materials, such as tungsten and balsa wood, are at risk from droughts

and land-use changes. These materials are also subject to heightened

scrutiny as regulations on sustainable materials tighten. Supplier

engagement and traceability are crucial to mitigating these risks. The

reliance on specific suppliers increases vulnerability to supply chain

disruptions if these materials become subject to more stringent sus

tainability requirements.

■ Logistics networks: Transportation routes may face delays and infra

structure damage due to extreme weather events.

While a full geospatial analysis has not yet been conducted, the Group’s

assessments incorporate regional climate considerations and the geo

graphic locations of key assets to estimate exposure. The assessments

provide a foundational understanding of how assets and business activi

ties are exposed to transition events over short-, medium-, and long-term

time horizons. These preliminary findings inform the prioritization of

adaptation measures and risk mitigation actions. The Group acknowl

edges that current assessments are qualitative and largely informed by

expert judgment and existing reports and the need for a more robust and

systematic approach to evaluating climate-related hazards across time

horizons. To strengthen its approach, Rapala VMC aims to develop a more

structured and quantitative methodology, incorporating quantitative tools

and high-emission climate scenario analyses to strengthen the screening

process and better understand exposure risks.

During the DMA process, the Group did not identify any assets or

business activities that are currently incompatible with a transition to

a climate-neutral economy. However, significant efforts are required in

areas where the Group generates the majority of its GHG emissions,

specifically from sourced goods, materials, and logistics. The extent

to which the Group can directly influence these areas is limited due to

reliance on external partners and supply chains.

At present, the Group has not developed a formal climate transition

plan. However, this is scheduled to be drafted in 2025. The forthcom

ing plan will provide a more detailed understanding of the alignment of

the Group’s business activities and assets with the requirements for a

climate-neutral economy, as well as outline the efforts and resources

necessary for this transition. It is also important to note that the vast

majority of the Group's business activities—focused on the manufacturing

and distribution of recreational fishing equipment—do not currently fall

within the scope of the EU Taxonomy, as these activities are not among

the highest-emitting industries. As such, no significant incompatibility has

been identified to date. However, future expansions of the taxonomy’s

scope could alter this assessment.

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Definition of time horizons

Rapala VMC defines short-, medium-, and long-term time horizons as part of its process to identify and assess ESG risks. These time horizons are

linked to the expected lifetime of its assets, strategic planning horizons, and capital allocation plans as follows:

Risk type Short-Term (1–3 years) Medium-Term (3–10 years) Long-Term (10+ years)

Physical risks Aligned with the Group’s annual strategic

reviews and operational planning cycles.

It focuses on immediate risks to existing

assets, such as manufacturing facilities

and logistics networks, that could arise

from extreme weather events, including

storms and floods. Capital allocation

during this period prioritizes maintenance

and upgrades to mitigate immediate

vulnerabilities.

Medium-Term horizon reflects the Group’s

strategic planning framework, considering the

operational resilience of its assets and supply

chain. It accounts for increasing climate-

related risks, such as more frequent droughts

or storms, and their potential impact on the

availability of critical materials like balsa wood

and tungsten. Medium-term capital allocation

includes investments in operational efficien-

cies and sustainable sourcing initiatives to

reduce supply chain vulnerabilities.

The long-term horizon aligns with the expected

lifetime of major assets, such as manufacturing

infrastructure and key supply chain relationships.

It addresses long-term risks such as rising sea

levels or significant shifts in climate patterns

that could impact both production and customer

demand. Capital allocation at this stage is linked

to transformative investments, such as transi-

tioning to clean energy or developing innovative,

climate-resilient product offerings.

Transition events Immediate transition risks include the

implementation of stricter environmental

regulations, particularly those affecting

raw materials such as tungsten and

plastics, and the adoption of eco-

labelling standards. These changes could

increase compliance costs and require

adjustments in sourcing and product

development

Medium-Term horizon considers evolving cus-

tomer expectations for sustainable products

and the expansion of regulatory frameworks

targeting carbon neutrality and resource ef-

ficiency. Transition events during this period

may impact the Group’s supply chain by requir-

ing increased traceability and collaboration

with suppliers to meet sustainability criteria.

Transition risks over this horizon include broader

shifts in global markets toward low-carbon

economies and potential restrictions on high-

impact materials. These events could necessi-

tate substantial investment in product innovation

and the reconfiguration of supply chains to meet

emerging sustainability benchmarks.

Table: Time horizons used to assess ESG risks

Table: Key pollution related topics screened in value chain

Formal climate scenario analyses have not yet been conducted to identify

and assess transition risks and opportunities over different time hori

zons. Current evaluations rely on qualitative methods, such as DMA and

Sustainability Risk Mapping, which do not include structured scenario

modelling. Recognizing the value of scenario analysis, the Group plans

to adopt climate scenarios aligned with global targets, such as limiting

warming to 1.5°C, to better anticipate regulatory and market transitions

affecting its operations and value chain.

As climate scenario analyses are not yet in place, no direct alignment

exists between such scenarios and the assumptions in the Group’s fi

nancial statements. However, future efforts will integrate scenario-based

analyses into financial planning to ensure consistency with global climate

targets. This will enhance the Group’s ability to systematically assess the

financial implications of transition and physical risks.

E2 Pollution – Impacts, risks and opportunities

Rapala VMC has conducted a screening process as part of its DMA to

evaluate pollution-related IROs across its own operations, upstream sup

ply chain, and downstream value chain. This process included screen-

ing of site locations and business activities to ensure that all relevant

pollution-related impacts were assessed. However, pollution was ulti

mately deemed not material, as the evaluated topics did not exceed the

materiality assessment threshold.

A cross-functional team of management representatives, including

members from the Board of Directors, business development & strategy,

manufacturing, sourcing, legal & sustainability, and HR, led the screening

process. The team evaluated pollution-related impacts using a structured

framework based on significance, stakeholder expectations, and potential

financial and operational implications. The evaluation process included

stakeholder engagement, although consultations with directly affected

communities were not explicitly conducted.

Own operations Supply chain Downstream activities

Key pollution-related topics screened

included

VOC emissions and emissions from

solvents and paints.

Waste generated, tracked as part of the

Group’s sustainability reporting.

Effluents, wastewater, and potential local

impacts on small water systems.

Emissions and effluents from the

mining and processing of raw mate-

rials such as lead and tungsten.

Waste, water use, and biodiversity

impacts in sourcing activities.

Waste in water systems from fishing activities and

potential contamination through lead usage.

Tools and assumptions The screening process utilized qualitative analyses, internal expertise, and stakeholder input to evaluate the potential impacts. Assump-

tions were informed by historical data, industry benchmarks, and geographic considerations relevant to Rapala VMC’s operations and

value chain.

E3 Water and marine resources - Impacts, risks and opportunities

Rapala VMC has conducted a screening process as part of its DMA to

evaluate water- and marine resources-related IROs across its own opera

tions, upstream supply chain, and downstream value chain. This process

involved evaluating specific topics to ensure that all relevant water- and

marine-related impacts were systematically assessed.

A cross-functional team of management representatives, including

members from the Board of Directors, business development & strategy,

manufacturing, sourcing, legal & sustainability, and HR, led the screening

process. The team utilized a structured framework to evaluate the signifi

cance, stakeholder expectations, and potential financial and operational

implications of water- and marine resources-related impacts. The evalu

ation process included stakeholder engagement, although consultations

with directly affected communities were not explicitly conducted.

Table: Key water and marine related topics screened in value chain

Own operations

Supply chain Downstream activities

Key water and marine resources

related topics screened included

Use of water in production processes.

Wastewater generation and its potential

impact on local water systems.

Effluents from manufacturing and

their localized impacts on small water

systems.

Biodiversity impacts resulting from land

use, such as production facilities, energy

use, and transportation activities.

Water use and wastewater gen-

eration during the sourcing and

processing of raw materials.

Biodiversity impacts via forestry

and land-use changes (e.g., sourc-

ing of balsa wood, cotton).

Biodiversity impacts related to

mining activities (e.g., extraction of

steel and tungsten).

Local impacts on clean water systems

from fishing activities.

Changes in fish stocks due to extensive fishing.

Tools and assumptions The screening process utilized qualitative analyses, internal expertise, and stakeholder input to evaluate the potential impacts. Assump-

tions were informed by historical data, and geographic considerations relevant to Rapala VMC’s operations and value chain.

While these topics are important to the Group, they were ultimately

deemed non-material as standalone issues. Instead, their significance

has been integrated into the Group’s broader approach to addressing

biodiversity-related IROs. By managing these impacts under biodiversity

topics, Rapala VMC ensures a more comprehensive and cohesive strategy

for mitigating environmental risks across its value chain. This approach

enables the Group to systematically monitor and adapt to evolving regula

tory requirements, stakeholder expectations, and operational challenges

while upholding its commitment to environmental stewardship.

Rapala VMC’s operations are not highly water-intensive and do not

generate significant amounts of wastewater. However, for operations

where water consumption and wastewater generation are higher, such as

hook manufacturing, consumption and effluents are closely monitored,

and actions have been taken to reduce impacts.

E4 Biodiversity and ecosystems -

Impacts, risks and opportunities

Rapala VMC has identified and assessed actual and potential impacts

on biodiversity and ecosystems at its own site locations and across its

value chain through its DMA. The assessment summarised material im

pacts, risks, dependencies, and opportunities related to biodiversity and

ecosystems. It involved considerations of potential and actual impacts

along the value chain, in upstream sourcing and downstream product

use. The assessment did not identify specific sites, raw materials produc

tion, or sourcing activities with significant negative impacts on affected

communities or sites located in or near biodiversity-sensitive areas. The

Group has concluded that it is not necessary to implement biodiversity

mitigation measures.

While the Group has not yet conducted a thorough resiliency analysis or

developed a transition plan specific to biodiversity-related risks, its DMA

provides a foundation for identifying and prioritizing key risks across its

operations and upstream and downstream value chain and evaluating

the resilience of the Group’s strategy and business model in relation to

biodiversity and ecosystems.

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Table: Key biodiversity related topics assessed in value chain

Own site locations Upstream value chain Downstream value chain

Key biodiversity related

topics assessed

Habitat disturbance:

Potential changes to local ecosystems

due to production processes.

Water use and effluents: Impact of

water consumption and wastewater in

manufacturing on surrounding aquatic

ecosystems.

Deforestation risks: Related to timber and

balsa wood sourcing.

Mining risks to biodiversity: Impact of

mining of materials such as steel, tin and

tungsten on the surrounding ecosystems.

Pollution risks: Associated with fishing gear

and packaging waste.

Ecosystem health dependencies: The reli-

ance of recreational fishing on clean and

healthy aquatic environments.*

Tools and assumptions The screening process utilized qualitative analyses, internal expertise, and stakeholder input to evaluate the potential impacts. Assump-

tions were informed by historical data, industry benchmarks, and geographic considerations relevant to Rapala VMC’s operations and

value chain.

Assessment criteria The following criteria guided the identification and assessment process:

1. Scale and severity of impacts: Evaluating the geographic and ecological extent of actual and potential impacts.

2. Likelihood and irremediability: Prioritizing impacts based on probability and the potential for mitigation.

3. Stakeholder relevance: Incorporating the perspectives of affected stakeholders and regulatory bodies.

Time horizons Rapala VMC has utilized three time horizons aligned with the Groups strategic and Sustainability Risk mapping processes:

■ Short-term (1–3 years): Focuses on immediate operational risks, such as compliance with biodiversity regulations and mitigating

local impacts from manufacturing processes.

■ Medium-term (3–10 years): Considers evolving market and regulatory trends, including stricter biodiversity regulations and supply

chain impacts from raw material sourcing.

■ Long-term (10+ years): Addresses systemic risks, such as large-scale biodiversity loss, and aligns with global conservation goals to

ensure long-term market resilience.

*) Material IROs

Rapala VMC’s DMA did not identify any material sites within its opera-

tions, including those under its operational control. No activities were

found to negatively affect biodiversity-sensitive areas, and no material

negative impacts related to land degradation, desertification, or soil

sealing were identified. The Group also did not identify any operations

that would directly affect threatened species. However, Rapala VMC

recognizes the need for a more detailed assessment to enhance its

understanding of potential biodiversity-related impacts. Future evalua

tions will incorporate site- and material-specific analyses to ensure that

sustainability efforts remain aligned with environmental considerations

and regulatory expectations.

The DMA also did not identify significant impacts to affected com

munities related to its operations or value chain. As a result, no direct

consultations with affected communities have been conducted to date.

The assessment was based on stakeholder input from internal experts,

regulatory frameworks, and external benchmarks. However, Rapala VMC

acknowledges the need for enhanced stakeholder engagement in future

assessments, including direct consultations with potentially affected

communities, particularly if site- or material-specific analyses reveal po

tential impacts. The Group acknowledges the importance of engaging

with communities to assess shared biological resources and ecosys

tems. Future assessments may require more detailed impact analyses

and consultations to align sustainability efforts with community needs

and concerns.

Table: Description of how different types of risks were identified and assessed

Risk description Identification

Physical risks related to biodiversity and ecosystems include habitat degradation,

water scarcity, and changes in fish populations due to climate change.

These pose localized risks to operations and market demand.

Acute Risks: Events such as environmental degradation or pollution affecting

ecosystems that sustain recreational fishing.

Chronic Risks: Long-term degradation of ecosystems, such as declining water qual-

ity or deforestation impacting material sourcing.

Physical opportunities include the potential for improved fish stocks and ecosystem

restoration to create new market opportunities.

Transition risks stem from regulatory changes, market shifts towards

sustainable materials, and stakeholder expectations for sustainable practices.

Policy and Legal Risks: Potential regulatory developments, such as enhanced bio-

diversity reporting requirements and stricter product regulations under frameworks

like the EU Timber Regulation.*

Market Risks: Volatility in raw material availability and costs, particularly for

biodiversity-intensive inputs like timber.*

Reputation Risks: Shifting societal expectations and potential reputational impacts

from biodiversity-related incidents.

Aligning operations with biodiversity protection trends, sustainable fishing practices

and conservation efforts which strengthen customer trust and ensure market resil-

ience were identified as transition opportunities.*

Systemic risks related to biodiversity and ecosystems,

such as large-scale ecosystem collapse, or loss of fish habitats could

significantly affect the recreational fishing industry

Ecosystem Collapse Risks: The risk of ecosystem tipping points, such as significant

declines in fish populations or habitat degradation, which could disrupt recreational

fishing and associated product demand. This was evaluated in relation to dependen-

cies on healthy aquatic ecosystems for product use and customer engagement.*

Aggregated Risks: The analysis considered the compounded effects of biodiversity

loss on material sourcing, particularly for critical inputs like timber and tungsten.

This includes the potential for increased regulatory pressures or supply chain

disruptions stemming from ecosystem degradation.

Contagion Risks: While the assessment primarily focused on direct impacts to

Rapala VMC’s operations and value chain, the potential for cascading financial or

reputational risks across the broader economic system due to ecosystem collapse

was acknowledged as a long-term concern. This includes risks related to market

shifts or increased stakeholder scrutiny of biodiversity impacts.

*) Material IROs

As part of its DMA, Rapala VMC evaluated its operations and value chain

for potential negative impacts on biodiversity and ecosystems, including

their effects on communities. The assessment did not identify specific

sites, raw materials production, or sourcing activities with significant neg

ative impacts on affected communities. However, the Group recognizes

the importance of a more granular analysis of site- and material-specific

impacts. Future assessments will include a more detailed evaluation

of sourcing practices for key materials, such as timber and tungsten,

to ensure any potential impacts on communities and ecosystems are

effectively identified and managed.

Rapala VMC’s DMA did not identify significant negative impacts on

priority ecosystem services relevant to affected communities. Conse

quently, no specific avoidance measures have been implemented to date.

However, the Group is committed to promoting sustainable practices,

such as the use of FSC-certified timber, when possible, to minimize po

tential ecosystem impacts associated with its operations and value chain.

E5 Resource use and circular economy -

Impacts, risks and opportunities

Rapala VMC has conducted a screening of its assets and activities to

identify actual and potential IROs related to resource use and circular

economy across its operations and value chain. This screening was car

ried out as part of the DMA, which considers both impact and financial

materiality. Feedback from internal stakeholders and external partners,

including suppliers and regulatory authorities, was incorporated into the

assessment to refine the understanding of key risks and opportunities.

The assessment accounted for compliance with regulations such as the

EU Timber Regulation and market expectations for more sustainable and

circular resource use practices.

Rapala VMC has not conducted direct consultations with affected

communities specifically related to resource inflows, resource outflows,

and waste. The DMA incorporated input from internal stakeholders and

broader stakeholder groups, but no targeted engagement with affected

communities was undertaken for these topics. The Group recognizes

the importance of expanding stakeholder engagement in future assess

ments to include community consultations where material impacts may

be identified.

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Table: Key circular economy and resource use related topics screened in value chain

Own operations Supply chain Downstream activities

Key circular economy and resource

use topic screened included

Operational activities to identify criti-

cal resource use and environmental

impacts. This included evaluating

resource consumption, such as materi-

als used in production processes (e.g.,

timber and tungsten), and assessing

waste generation within manufacturing

facilities.

Critical resource inflows, such as

timber and tungsten, to understand the

environmental footprint of raw material

sourcing. This assessment considered

the sustainability of sourcing practices,

and the potential risks associated with

resource extraction, transportation, and

processing.

Waste management impacts associated with

packaging disposal.

Tools and assumptions The screening process utilized qualitative analyses, internal expertise, and stakeholder input to evaluate the potential impacts. Assump-

tions were informed by historical data, industry benchmarks, and geographic considerations relevant to Rapala VMC’s operations and

value chain.

G1 Business conduct – Impacts, risks and opportunities

IROs related to business conduct were identified and assessed as part

of Rapala VMC’s DMA. For business conduct topics (ESRS G1), the as

sessment covered all the sub-topics: corporate culture, protection of

whistle-blowers, animal welfare, political engagement and lobbying

activities, supplier relationships, and corruption and bribery. The topic

was ultimately deemed not material, as the evaluated sub-topics did not

exceed the materiality assessment threshold.

Criteria used in the process include:

■ Activity: The Group engages primarily in private business-to-business

manufacturing and distribution, with no material involvement in public

procurement or government-related business, which reduces exposure

to corruption and undue influence risks.

■ Sector: Operating in the recreational consumer goods sector, Rapala

VMC is not exposed to systemic business conduct risks typically as

sociated with high-risk industries or sectors with elevated regulatory

scrutiny.

■ Location: Rapala VMC operates in over 40 countries with own pro

duction sites mainly in Europe. While the Group has operations and

suppliers in regions generally considered to carry higher business

conduct risks, the scale and nature of potentially affected activities are

considered limited. Consequently, their overall relevance in terms of

material impacts, risks or opportunities for the Group is assessed not

to be material.

■ Transaction structure: The Group’s supplier base is diverse, and pro

curement transactions are decentralised and typically of limited value.

Internal approval procedures and risk controls are in place to ensure

integrity throughout the purchasing process.

No incidents of corruption or bribery have been identified during reporting

period. The company continues to monitor related risks and compliance

across its operations and value chain.

ENVIRONMENTAL INFORMATION

The EU Taxonomy

General

The EU taxonomy serves as the legal classification system established

to meet the EU’s climate and energy targets and reach the objectives

outlined in the European Green Deal. Businesses’ taxonomy eligibility is

based on the assessment of whether the business operations are among

the economic activities described in the taxonomy legislation. The se

lected activities are central to achieving the international climate and

environmental goals. To be eligible for the taxonomy, a specific activity

must align with the description of an economic activity included in the

taxonomy classification. To be aligned with the taxonomy, the activity

must make a substantial contribution to at least one of the six environ

mental objectives without causing significant harm to any of the other

objectives. Minimum safeguards must also be met for an economic

activity to be considered Taxonomy-aligned.

The Taxonomy Regulation establishes six environmental objectives, of

which two (climate change mitigation and climate change adaptation)

were finalized first:

■ Climate change mitigation

■ Climate change adaption

■ Protection and restoration of biodiversity and ecosystems

■ Pollution prevention and control

■ Transition to a circular economy

■ Sustainable use and protection of water and marine resources

Reporting principles

Vast majority of the Group’s business, i.e. the manufacturing and distri-

bution of fishing tackle equipment, as well as outdoor and winter sports

equipment, to consumers, does not currently fall within the scope of the

taxonomy.

In the analysis carried out in 2023, it was determined that Rapala VMC’s

electric ice auger, along with some other electric tools manufactured

by the Group’s subcontractors and sold in limited quantities, fall within

the scope of taxonomy-eligible economic activity 1.2 Manufacture of

electrical and electronic equipment, aligning with the circular economy

objective.

In 2024, Rapala VMC continued its evaluation of the EU taxonomy

framework by assessing the technical screening criteria for the four re

maining environmental objectives, as well as newly introduced activities

related to the climate change mitigation and adaptation objectives. The

assessment focused on identifying potential taxonomy-eligible activities

within the Group’s operations, particularly in areas such as renovation and

ownership of buildings and energy-related technologies. As part of this

process, the Group analysed its capital expenditures and investments to

determine any new taxonomy-aligned activities. While the assessment

highlighted potential areas for future eligibility, no taxonomy-eligible or

aligned investments or expenditures were made in 2024 concerning these

activities. The Group remains committed to continuously monitoring its

operations and investment strategy to ensure alignment with evolving

sustainability frameworks and regulatory expectations

2024 Taxonomy KPIs

Rapala VMC’s revenue, investments, and operating expenses indica-

tors adhere to International Financial Reporting Standards (“IFRS”). The

taxonomy-eligible revenue is compared to the Group’s total revenue, tax

onomy-eligible investments to total investments, and taxonomy eligible

operating expenses to total operating expenses. 3.42% of the Group’s

revenue, 0% of investments and 0% of operating expenses are taxonomy

eligible. Rapala VMC’s taxonomy-eligible revenue mainly derives from

manufacturing of electronic equipment.

Total, MEUR

Taxonomy

eligible, MEUR

Not taxonomy

eligible, MEUR

Revenue 220.9 7.3 213.6

Capital expenditures 4.2 0 4.2

Operating expenses 102.5 0 102.5

Table: Nuclear and fossil gas related activities

Row 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.

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

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.

Fossil gas related activities

4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity

using fossil gaseous fuels.

5. 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.

6. 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.

SUSTAINABILITY STATEMENT | 3 1

30 | RAPALA VMC ANNUAL REPORT 2024

TABLE 2: PROPORTION OF CAPEX FROM PRODUCTS OR SERVICES ASSOCIATED

WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES IN 2024 (MEUR)

TABLE 1: PROPORTION OF TURNOVER FROM PRODUCTS OR SERVICES ASSOCIATED

WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES IN 2024 (MEUR)

Financial year 2024

2024 Substantial contribution criteria

DNSH criteria

(DNSH: ‘Does Not Significantly Harm’)

Economic

activities

Code

Turnover

Proportion of turnover

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of taxonomy aligned or eligible

turnover, year 2023

Category enabling activity

Category transitional activity

MEUR %

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)

Turnover of environmentally

sustainable

activities (Taxonomy-aligned)

(A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL;N/

Manufacture of electrical and

electronic equipment

1.2 7,3 3,42 % N/EL N/EL N/EL N/EL EL N/EL 5.52 %

Turnover of Taxonomy-eligible

but not environmentally sustain-

able activities (not Taxonomy-

aligned activities)

(A.2)

7,3 3,42 % 0,0 % 0,0 % 0,0 % 0,0 % 100,0 % 0,0 % 5.52 %

Turnover of Taxonomy eligible

activities (A.1 + A.2)

7,3 3,42 % 0,0 % 0,0 % 0,0 % 0,0 % 100,0 % 0,0 % 5.52 %

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-

non-eligible activities (B)

213,6 96,58 %

Total (A + B) 220,9 100,0 %

Financial year 2024

2024 Substantial contribution criteria

DNSH criteria

(DNSH: ‘Does Not Significantly Harm’)

Economic

activities

Code

CapEX

Proportion of CapEX

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of taxonomy aligned or eligible

CapEx, year 2023

Category enabling activity

Category transitional activity

MEUR %

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)

CapEx of environmentally

sustainable activities

(Taxonomy-aligned) (A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL;N/

CapEx of Taxonomy-eligible

but not environmentally

sustainable activities (not

Taxonomy-aligned activities)

(A.2)

0,0

0,0 %

CapEx of Taxonomy-eligible

activities (A.1 + A.2)

0,0

0,0 %

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible

activities (B)

4.2 100,0 %

Total (A + B) 4.2 100,0 %

SUSTAINABILITY STATEMENT | 3 3

32 | RAPALA VMC ANNUAL REPORT 2024

TABLE 3: PROPORTION OF OPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH

TAXONOMY-ALIGNED ECONOMIC ACTIVITIES IN 2024 (MEUR)

Financial year 2024

2024 Substantial contribution criteria

“DNSH criteria

(DNSH: ‘Does Not Significantly Harm’)

Economic

activities

Code

OpEx

Proportion of OpEx

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Climiate change mitigation

Climate change adaptation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of taxonomy aligned or eligible

OpEx, year 2023

Category enabling activity

Category transitional activity

MEUR %

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)

OpEx of environmentally

sustainable activities

(Taxonomy-aligned) (A.1)

Of which Enabling

Of which Transitional

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL;N/

OpEx of Taxonomy-eligible

but not environmentally sustain-

able activities

(not Taxonomy-aligned activities)

(A.2)

0,0

0,0 %

OpEx of Taxonomy eligible

activities (A.1 + A.2)

0,0

0,0 %

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible

activities (B)

102.5 100,0 %

Total (A + B) 102.5 100,0 %

Procurement Guideline Supplier Code of Conduct

Key contents The Procurement Guideline outlines the principles and

guidelines Rapala VMC follows to ensure that procurement

processes are conducted efficiently, responsibly, and ethically.

The key objectives of the policy are to enable profitable and

sustainable business operations by integrating environmental,

social, and ethical considerations into procurement decisions

while ensuring alignment with the Group’s values and goals.

Environmental Responsibility: The policy promotes energy-

efficient procurement, product GHG lifecycle impact analysis,

and reducing emissions to advance carbon neutrality.

Stakeholder interests, including those of suppliers and regulato-

ry bodies, were considered in defining responsible procurement

practices. The policy also addresses customer expectations for

ethical and sustainable sourcing.

The Supplier Code of Conduct defines the principles Rapala VMC

expects its suppliers to follow to ensure ethical, responsible, and

sustainable business practices. It considers the interests of key stake-

holders, particularly suppliers and customers, by aligning environmental

and climate impact ambitions such as transparency, carbon reduction,

and sustainable energy practices. The policy aims to manage ESG

risks within the supply chain while fostering collaboration, continuous

improvement, and alignment with Rapala VMC’s values and commit-

ment to sustainability.

Scope of the policy The scope of the Procurement Guideline applies to upstream

activities in the value chain and covers all procurement activi-

ties globally within Rapala VMC’s operations. It specifically

focuses on purchasing practices and the selection of suppliers,

ensuring they meet environmental standards related to energy

efficiency and reduced emissions.

The Supplier Code of Conduct applies to all Rapala VMC’s vendors, sub-

contractors, and suppliers involved in the manufacture of products that

incorporate any intellectual property owned or controlled by the Group.

Recognizing that responsible and sustainable supply chains extend

beyond direct (1st tier) suppliers, Rapala VMC also expects its suppliers

to enforce and cascade the standards outlined in the Supplier Code of

Conduct to their own suppliers and business partners throughout the

supply chain.

Implementation and monitoring The Group’s Global Management Team, chaired by the Presi-

dent & CEO, is responsible for the implementation of the policy.

The monitoring process involves maintaining procurement ex-

pertise, evaluating supplier compliance through assessments

and adherence to the Supplier Code of Conduct, and ensuring

procurement decisions meet the Group’s goals for sustainabil-

ity, safety, and ethical performance.

The Group’s Global Management Team, chaired by the President & CEO,

is responsible for the implementation of the policy.

The process for monitoring includes supplier self-assessments,

reporting on compliance with key requirements, and Rapala VMC’s

right to conduct audits or assessments when necessary to ensure

adherence to the policy. The Group commissions third-party auditors

to assess selected suppliers annually, analyses the findings, and moni-

tors the implementation of corrective action plans with the suppliers.

Non-compliance may lead to corrective actions or, if unaddressed, the

termination of the business relationship.

Availability The document is accessible to all Group

personnel via the Group intranet.

The Supplier Code of Conduct is made readily available to all relevant

stakeholders. Externally, it is distributed to suppliers who are required to

comply with the principles outlined in the policy. Internal stakeholders

responsible for implementing the policy have received training to ensure

its effective application and are available to address any questions or

concerns raised by suppliers. Internally, the document is accessible to

all Group personnel via the Group intranet. This structured approach

ensures that both internal and external stakeholders are informed of

their obligations and equipped to support Rapala VMC’s environmental,

social, and ethical objectives, including climate change mitigation.

E1 - Climate change

Governance and strategy

Rapala VMC has not yet developed a formal climate transition plan. In

2025, the Group will finalize its “base year” 2024 report and develop a

transition plan aligned with the Paris Climate Agreement’s 1.5°C target,

implementation subject to approval by the Board of Directors. To support

this, the Group will ensure all key performance indicators and targets

align with the transition plan’s climate objectives. Sustainability goals

will be integrated into key operational areas, such as Product Develop

ment, Manufacturing, and Sourcing, with managerial-level employees as-

signed individual climate-related goals. These efforts aim to fully embed

climate action into the Group’s strategy and operations. The Group is not

excluded from Paris-aligned benchmarks, which set strict sustainability

and emission reduction requirements to support the transition to a low-

carbon economy.

Rapala VMC does not currently have a dedicated climate change policy

in place but is considering the potential need for one to address climate-

related challenges. In the meantime, the Group manages material IROs

related to climate change mitigation and adaptation through its existing

policies. Climate change mitigation and adaptation, energy efficiency and

the transition to clean energy measures are primarily addressed within the

Supplier Code of Conduct and Procurement Guideline. These frameworks

provide a solid foundation for integrating climate considerations into the

Group’s operations and supply chain management.

Table: Policies to manage material climate change IROs

SUSTAINABILITY STATEMENT | 3 5

34 | RAPALA VMC ANNUAL REPORT 2024

These two policies address multiple sustainability challenges, reflecting

Rapala VMC’s commitment to mitigating climate change by reducing

emissions, promoting energy efficiency, and advancing low-carbon op

erations across its supply chain and procurement activities. The Supplier

Code of Conduct and Procurement Guideline also support climate change

adaptation by addressing environmental risks and fostering resilience

within the supply chain. The Supplier Code of Conduct requires that

suppliers must comply with all applicable environmental laws and regula

tions and maintain an environmental management system suited to their

business context. They must identify, mitigate, and minimize environ

mental risks and negative impacts. Additionally, suppliers are expected

to monitor their environmental performance and provide records and

Table: Sustainability matters addressed by policy for climate change

Procurement Guideline Supplier Code of Conduct

Climate change mitigation The Procurement Guideline promotes the procurement of

energy-efficient products and services, promoting lifecycle im-

pact analysis to reduce environmental footprints. By prioritizing

products with lower environmental impacts, such as those that

support energy efficiency and recyclability, the policy indirectly

contributes to reducing GHG emissions in the Group’s own

operations and within its upstream value chain.

The policy requires suppliers to identify and minimize their environ-

mental risks and impacts. Suppliers are encouraged to calculate their

carbon footprint, set science-based GHG reduction targets, implement

energy efficiency strategies, and gradually increase the share of renew-

able energy used in their operations. These measures directly support

Rapala VMC’s commitment to reducing emissions within its upstream

value chain and fostering climate-conscious practices.

Climate change adaptation The Procurement Guideline supports climate change

adaptation by promoting responsible procurement practices

that emphasize resource efficiency and lifecycle analysis.

This includes selecting products and services that improve

operational resilience, reduce environmental impacts, and align

with sustainability goals, such as transitioning toward carbon

neutrality.

Suppliers are required to identify, address, and minimize environmen-

tal risks and impacts associated with their operations, which include

climate-related risks. The policy emphasizes the importance of envi-

ronmental management systems and encourages suppliers to regularly

reassess their environmental risks and establish improvement plans.

These measures help suppliers adapt to physical climate risks, such

as extreme weather events, that could disrupt operations and supply

chains.

Energy efficiency The Procurement Guideline promotes the selection of energy-

efficient products and services. Procurement decisions aim

to consider lifecycle impacts where possible, with a focus on

encouraging practices that prioritize energy-efficient solutions

to reduce overall energy use within the Group’s operations and

supply chain.

The policy encourages suppliers to implement energy reduction strate-

gies as part of their environmental management systems. Suppliers

are encouraged to identify opportunities to improve energy efficiency

in their operations and to take concrete actions to reduce energy

consumption. This aligns with Rapala VMC’s objective of minimizing

environmental impacts across its upstream value chain.

Renewable energy The Procurement Guideline promotes responsible procure-

ment decisions by encouraging the selection of products and

services that support the use of renewable energy. While not

mandatory, the policy emphasizes the importance of reducing

environmental impacts and aligning with sustainability goals.

Suppliers are encouraged to gradually increase the share of renewable

energy in their operations as part of their environmental management

systems. The policy highlights the importance of adopting energy strat-

egies that prioritize renewable energy sources while avoiding solutions,

such as certain hydropower, that may negatively impact ecosystems,

including fish migration.

documentation upon request. Suppliers are encouraged to calculate their

carbon footprint and set an ambitious science-based target. The procure

ment guidelines emphasize energy efficiency in products and services,

encouraging life-cycle assessments to better understand their impact and

costs. It also promotes the transition to carbon neutrality by prioritizing

products that are reusable and recyclable at the end of their life cycle.

By encouraging responsible procurement practices and environmental

risk mitigation, these policies enhance resilience to the physical impacts

of climate change in upstream operations. Together, they underscore

Rapala VMC’s dedication to improving energy efficiency, deploying clean

energy, and minimizing environmental impacts as integral elements of

its broader sustainability and climate-related goals.

Key metrics and performance

The Group has prioritized the purchase of clean energy as a key action

to reduce Scope 2 CO2 emissions. This initiative aligns with the Group’s

commitment to transitioning to renewable or clean energy sources and

minimizing its carbon footprint across operations. In 2024, the Group’s

largest manufacturing site in Estonia achieved 85% renewable electricity

sourcing for its operations. Additionally, all Finnish units where electricity

procurement is managed directly by the Group, rather than included in

rental agreements, sourced their electricity exclusively from renewable

energy providers. Energy certificates covering the full electricity consump

tion at the Group’s two Finnish sites and portion of the consumption

(85%) at the Estonian manufacturing units and have been purchased

as part of the Group’s clean energy strategy. The costs associated with

these certificates have been reported as part of the current operational

expenditures.

The Group currently lacks a formal transition plan to align financial

resources with its sustainability strategy. Sustainability goals have not

yet been systematically integrated into the budgeting process across all

units. To address this, the Group intends to incorporate sustainability

targets into the budget creation process in the future. This will involve

cascading the Group’s sustainability objectives to individual units as part

of a comprehensive transition plan once it is developed. At present, no sig

nificant capital expenditures (Capex) or operational expenditures (Opex)

have been allocated to the action plan. Given current energy market con

ditions, the activities undertaken thus far have not required substantial

financial resources. To achieve the target of zero Scope 2 emissions by

2026, an increase in financial resources is likely. However, the specific

amounts have not yet been earmarked in future budgets or financial

estimates. The financial resources allocated to execute this action plan

do not contribute to the EU Taxonomy aligned activities.

Market based Scope 2 emission in 2024 were 2 074 tCO2e and the

goal is to reach 0 tCO2e by end of 2026. The target applies to all Scope

2 emissions across the Group, encompassing the electricity purchased

for all Rapala VMC operations globally. This includes all indirect energy

consumption within the Group’s own facilities and manufacturing sites,

ensuring comprehensive coverage of emissions from purchased energy.

Stakeholders were not involved in the target setting. The 2024 baseline

Energy consumption and mix

Energy consumption and mix Comparative Year 2024

Fuel consumption from coal and coal products (MWh)

NA 0

Fuel consumption from crude oil and petroleum products (MWh)

NA 2 466

Fuel consumption from natural gas (MWh)

NA 3 337

Fuel consumption from other fossil sources (MWh)

NA 0

Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh)

NA 6 146

Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5)

NA 11 949

Share of fossil sources in total energy consumption (%)

NA 60,7

Consumption from nuclear sources (MWh)

NA 2 380

Share of consumption from nuclear sources in total energy consumption (%)

NA 12,1

Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of

biologic origin, biogas, renewable hydrogen, etc.) (MWh)

NA 83

Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh)

NA 5 098

The consumption of self-generated non-fuel renewable energy (MWh)

NA 180

Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10)

NA 5 361

Share of renewable sources in total energy consumption (%)

NA 27,2

Total energy consumption (MWh) (calculated as the sum of lines 6, 7 and 11)

NA 19 690

Renewable energy production (MWh)

NA 202

Energy intensity per net revenue Comparative 2024 % N / N-1

Total energy consumption from activities in high climate impact sectors

NA 14 342 NA

Total energy consumption from activities in high climate impact sectors per net revenue

from activities in high climate impact sectors (MWh/MEUR)

NA 142,9 NA

The high climate impact sector used to determine energy intensity is

Manufacturing. Total energy consumption from activities in high climate

impact sectors is derived from the reported energy usage across all Ra

pala VMC’s own manufacturing sites. Net revenue is calculated based

on revenue generated from products manufactured within the Group’s

own production facilities.

value has been determined as it marks the first year of comprehensive

Scope 2 emission reporting across all Group entities. No major structural

or operational changes occurred during the year, and external factors

such as extreme weather conditions did not significantly influence en

ergy consumption. Therefore, the 2024 data is considered representative

and provides a reliable basis for tracking progress toward the target of

achieving zero Scope 2 emissions by 2026. Rapala VMC has not validated

this target with the Science-based target initiative and thus can’t claim

the target to be aligned with the 1,5 degree scenario. This target aligns

with the use of renewable/carbon neutral energy decarbonization lever

contributing 100% to achieving the target.

Net revenue from activities in high climate impact

sectors used to calculate energy intensity (MEUR)

110,338

Net revenue (other) (MEUR) 120,566

Total net revenue (Financial statements) (MEUR) 220,904

GHG emissions

Methodologies and assumptions used to measure GHG emissions

Rapala VMC’s GHG inventory follows the GHG Protocol framework and

adopts an operational control approach for consolidation. The inven

tory covers the entire Group, including Scope 1, Scope 2, and relevant

Scope 3 categories. The reporting period aligns with the financial year

(01/01–31/12). Scope 2 emissions are calculated using both market-

based and location-based approaches. The inventory includes all activi

ties relevant to the Group across its operations and value chain during

the reporting year.

SUSTAINABILITY STATEMENT | 3 7

36 | RAPALA VMC ANNUAL REPORT 2024

Methodologies Assumptions Emissions Factors & tools

Scope 1: Emissions from stationary and mobile combus-

tion are calculated using activity-based methodologies,

relying on fuel consumption data by volume or mass. For

energy generation using renewable sources (e.g., solar and

hydro), emission factors are set to zero.

Scope 2: Emissions from purchased electricity, heating,

and cooling are calculated based on energy consumption

(kWh). Both location-based and market-based calculation

approaches are applied. Market-based emissions use

residual mix factors where available.

Scope 3: Various methodologies are applied depending on

the category:

■ Purchased goods and services:

Activity-based average-data and spend-based methods.

■ Business travel and upstream transportation:

Distance-based methodologies.

■ Waste and end-of-life treatment:

Waste-type-specific methods.

Default emission factors are used where

supplier-specific data is unavailable, particularly

for Scope 2 heating and cooling.

Radiative forcing is included for aviation emis-

sions under business travel.

Employee commuting emissions are partially

estimated based on survey data.

Emissions are calculated using standardized emission

factor databases (e.g., DEFRA, IEA) integrated into Tofuture

Oy’s reporting systems.

Scope 1: DEFRA conversion factors (2024 edition) are ap-

plied for fuels such as diesel, natural gas, and LPG.

Scope 2: Location-based factors include IEA Emission

Factors (2022) and national data sources (e.g., Fingrid for

Finland, AIB Residual Mixes for European countries).

Scope 3: Factors include DEFRA Conversion Factors 2024

for fuels and various transport modes, Ecoinvent 3.9.1

for material emissions and production processes, EPA

Supply Chain GHG Emission Factors (adjusted for inflation

to 2023) for goods and services, IEA Life Cycle Upstream

Emission Factors for energy-related activities, Finnish

Environment Institute (SYKE) for waste-specific data.

Table: Methodologies and assumptions used to measure GHG emissions

Table: Methods for estimating Scope 3 emissions

Method Description Categories method used

Activity-based average-data

method

Emission estimated using average emissions factors linked to specific activity data, such as

fuel or material consumption. It is applied to part of the purchased materials and fuel- and

energy-related activities.

3.1 Purchased goods and services

3.3 Fuel-and-energy-related activities

3.12 End-of-life treatment of sold

products (packaging)

Average spend-based method Emissions calculated based on financial expenditure data, combined with emissions factors

for specific spend categories. It is used for part of the purchased materials, all services, and

capital goods.

3.1 Purchased goods and services

3.2 Capital goods

Distance-based method Emissions estimated by applying emission factors to the distance travelled and the mode of

transportation. It is used for transportation, business travel, and employee commuting.

3.4 Upstream transportation

and distribution

3.6 Business travel

3.7 Employee commuting

Waste-type-specific method Emissions calculated based on the type and treatment of waste generated, applying waste-

specific emissions factors. It is used for waste generated in operations and the end-of-life

treatment of sold products.

3.5 Waste generated in operations

Rapala VMC calculates Scope 2 GHG emissions using both the mar-

ket-based and location-based methods, in alignment with international

standards. The Group utilizes Energy Attribute Certificates (“EACs”) and

Residual Mix Factors (“RMFs”) as contractual instruments for the market-

based calculation of Scope 2 emissions. Both bundled contracts and

unbundled Energy Attribute Certificates (“EACs”) are utilized as contrac

tual instruments to support the Group’s clean energy targets and ensure

transparency in Scope 2 GHG emissions reporting under the market-

based method.

■ Energy Attribute Certificates (EACs): EACs, including Guarantees of

Origin (GOs), are purchased to cover the electricity consumption of

specific sites. These certificates verify the renewable origin of the

electricity consumed, allowing the Group to report reduced Scope 2

emissions under the market-based approach.

■ Unbundled Energy Attribute Certificates (EACs): EACs, such as Guar

antees of Origin (GOs), are purchased separately to cover the electricity

consumption of specific sites. These certificates verify the renewable

origin of the electricity consumed, enabling the Group to report reduced

Scope 2 emissions under the market-based method.

■ Bundled Contracts: For units that do not utilize EACs, the energy

mix reported is based on the energy supplier’s generation mix when

available, which includes bundled attributes of the purchased energy.

This information is used in the calculation of market-based emissions,

reflecting the emissions intensity of the supplier’s energy portfolio.

■ Residual Mix Factors (RMFs): For sites where EACs are not applied,

RMFs are used. RMFs represent the average emissions intensity of the

grid, excluding renewable energy claims covered by EACs.

Contractual instrument MWh

Share %

of MWh

tCO2e

Share %

tCO2e

Unbundled energy attribute

certificates (EACs)

3 348 24,6 0 0,0

Bundled Contracts 3 913 28,7 303 14,6

Total Scope 2 13 625 2 074

All contractual instruments 7 261 53,3 303 14,6

Rapala VMC evaluates Scope 3 GHG emissions across its value chain and

includes the most relevant categories in its GHG inventory. This process

focuses on analysing the most relevant Scope 3 emission categories,

ensuring that significant sources of GHG emissions within the value chain

are identified and prioritized. Categories such as purchased goods and

services, upstream transportation, business travel, and waste generated

in operations have been recognized as key contributors to Rapala VMC’s

overall emissions.

Table: List of Scope 3 GHG emission categories included and excluded from the inventory

Scope 3 category Included Reasoning

3.1 Purchased

goods and services

Yes Largest emission source. Relevant in terms of size, influence, risk and stakeholder expectations.

3.2 Capital goods Yes

Capital goods investment is irrelevant in size but due to annual fluctuations it is included

in the calculation to ensure comprehensive GHG inventory.

3.3 Fuel-and

energy-related activities

Yes Emission source is directly related to the Group’s own energy consumption.

3.4 Upstream transportation

and distribution

Yes

Second largest emission source. Relevant in terms of size and influence. Includes downstream

third-party transportation paid by the Group.

3.5 Waste generated

in operations

Yes

Relevant in terms of size and influence. Emission source is directly related to the Group’s

production and other operations.

3.6 Business travel Yes Relevant in terms of influence.

3.7 Employee commuting Yes Relevant in terms of size and influence.

3.8 Upstream leased assets No The Group doesn’t have relevant upstream leased assets.

3.9 Downstream transportation and

distribution

Emissions from downstream transportation purchased by Rapala VMC are included in Category 3.4.

However, third-party storage and transportation of products to end-users, organized by retailers or other

third parties, are excluded due to a lack of reliable information, limited availability of reasonable data,

and lack of influence over these activities.

3.10 Processing of sold products No

Not applicable, as Rapala VMC primarily sells finished and ready-to-use products that do not require additional

processing.

3.11 Use of sold products No

Excluded as the majority of the Group’s products do not consume energy during their use phase.

For the small proportion that do, the associated emissions are minimal and not considered material.

3.12 End-of-life treatment of

sold products – packaging

Yes

The Group’s products are durable and rarely enter waste streams, making this category less relevant.

However, packaging waste is addressed to meet stakeholder expectations.

3.13 Downstream leased assets No Rapala VMC does not have downstream leased assets relevant for inclusion in this category.

3.14 Franchises No Rapala VMC does not operate franchise activities.

3.15 Investments No

Rapala VMC does not have strategic investments that would be significant

from a GHG emissions perspective.

SUSTAINABILITY STATEMENT | 3 9

38 | RAPALA VMC ANNUAL REPORT 2024

Gross Scopes 1, 2, 3 and Total GHG emissions

Retrospective Milestones and target years

Base year

(2024) Comparative 2024 % N / N-1 2025 2030 (2050)

Annual %

target / Base

year

Scope 1 GHG emissions

Gross Scope 1 GHG emissions (tCO2eq)

1 334 NA 1 334 0 NA NA NA NA

Percentage of Scope 1 GHG emissions from regu-

lated emission trading schemes (%)

0 NA 0 0 NA NA NA NA

Scope 2 GHG emissions

Gross location-based Scope

2 GHG emissions (tCO2eq)

4 023 NA 4 023 0 NA NA NA NA

Gross market-based Scope 2 GHG emissions

(tCO2eq)

2 074 NA 2 074 0 NA 0 NA NA

Significant scope 3 GHG emissions

Total Gross indirect (Scope 3)

GHG emissions (tCO2eq)

43 056 NA 43 056 NA NA NA NA NA

1 Purchased goods and services

25 811 NA 25 811 NA NA NA NA NA

2 Capital goods

420 NA 420 NA NA NA NA NA

3 Fuel and energy-related Activities

(not included in Scope1 or Scope 2)

1 243 NA 1 243 NA NA NA NA NA

4 Upstream transportation and distribution

13 292 NA 13 292 NA NA NA NA NA

5 Waste generated in operations

531 NA 531 NA NA NA NA NA

6 Business traveling

447 NA 447 NA NA NA NA NA

7 Employee commuting

1 288 NA 1 288 NA NA NA NA NA

12 End-of-life treatment of sold products

23 NA 23 NA NA NA NA NA

Total GHG emissions

Total GHG emissions (location-based) (tCO2eq)

48 412 NA 48 412 NA NA NA NA NA

Total GHG emissions (market-based) (tCO2eq)

46 463 NA 46 463 NA NA NA NA NA

Percentage of GHG Scope 3 calculated

using primary data

56,2 NA 56,2 NA NA NA NA NA

GHG intensity per net revenue

Total GHG emissions (location-based) per net revenue (tCO2eq/MEUR) 219,2

Total GHG emissions (market-based) per net revenue (tCO2eq/MEUR) 210,3

Net revenue used to calculate emission intensity (MEUR) 220,9

E4 – Biodiversity and ecosystems

Governance and strategy

Rapala VMC has not yet conducted a comprehensive resiliency analysis.

While a comprehensive biodiversity-specific impact assessment is under

development.

Rapala VMC’s strategy and business model demonstrate resilience

to biodiversity and ecosystems-related physical, transition, and sys

temic risks. Rapala VMC’s evaluation of the resilience of its strategy

and business model, conducted as part of the DMA process, in relation

to biodiversity and ecosystems is based on several key assumptions.

These assumptions guide the identification of risks, the development of

mitigation strategies, and the integration of biodiversity considerations

into the Group’s strategic planning processes.

■ Impact scope and materiality: Biodiversity and ecosystems-related

risks are assumed to have varying levels of significance depending

on the geographic location, activity type, and supply chain depen

dency. While these risks are material to the Group, their financial and

operational impacts are considered manageable through proactive

mitigation and adaptation strategies.

■ Global market diversification: The Group’s diversified product portfo

lio and presence in global markets are assumed to reduce dependency

on specific ecosystems or regions, mitigating the impact of localized

biodiversity loss.

■ Resource availability and regulation: It is assumed that regulatory

changes related to biodiversity, such as restrictions on land use or raw

material extraction, will evolve gradually, providing the Group time to

adapt operations and supply chain practices.

■ Ecosystem resilience: The resilience of ecosystems is assumed to

vary, with some ecosystems expected to recover from minor disrup

tions while others may require significant conservation efforts to

mitigate long-term degradation.

■ Stakeholder expectations: Increasing stakeholder expectations for

sustainable practices are assumed to influence market demand and

regulatory priorities, driving the need for sustainable materials, circular

economy initiatives, and transparency in biodiversity-related impacts.

■ Technological and product innovation: The Group assumes that

advances in product design and material technology will continue to

support the transition to more sustainable materials and practices,

reducing biodiversity-related risks.

■ Climate-biodiversity interconnection: The interconnection between

climate change and biodiversity is assumed to exacerbate physical

risks, such as habitat degradation and changes in fish populations, ne

cessitating integrated strategies for climate and biodiversity resilience.

As part of Sustainability risk mapping and Strategy processes Rapala

VMC evaluated biodiversity and ecosystems-related risks and opportuni

ties using three time horizons:

■ Short-Term (1–3 years): Focuses on immediate operational risks,

such as compliance with biodiversity regulations and mitigating local

impacts from manufacturing processes.

■ Medium-Term (3–10 years): Considers evolving market and regula

tory trends, including stricter biodiversity regulations and supply chain

impacts from raw material sourcing.

■ Long-Term (10+ years): Addresses systemic risks, such as large-

scale biodiversity loss, and aligns with global conservation goals to

ensure long-term market resilience.

The Group’s approach to biodiversity and ecosystems-related risks

includes stakeholder involvement through its DMA. Key stakeholders,

including suppliers, industry experts, and environmental organizations,

contribute input on biodiversity challenges and opportunities across the

value chain. While the Group has not yet evaluated the need to engage

directly with holders of indigenous or local knowledge, it recognizes the

importance of conducting a more thorough evaluation and plans to in

tegrate broader stakeholder perspectives into future biodiversity-related

analyses and strategies. This approach supports the development of a

resilient business model aligned with global conservation efforts and

stakeholder expectations.

Table: Resilience of current business model and strategy to biodiversity risks and opportunities:

Risk description Resilience of business model and strategy

Physical risks related to biodiversity and ecosystems include habitat degradation,

water scarcity, and changes in fish populations due to climate change.

These pose localized risks to operations and market demand.

The Group’s diversified product portfolio and global market presence

help mitigate these impacts.

■ Diverse product portfolio to address varying fishing conditions and customer

needs across global markets.

■ Monitoring and reducing impacts from its operations, such as land use and water

consumption in manufacturing.

■ Supporting research and partnerships to understand and address ecosystem

changes affecting fishing practices.

Transition risks stem from regulatory changes such as EU Deforestation regulation,

market shifts towards sustainable materials, and stakeholder expectations

for sustainable practices.*

Ongoing efforts in product innovation and circular economy practices

support the Group’s resilience.

■ Incorporating sustainable materials into product design and reducing reliance

on high-impact resources such as lead. Lead is a harmful substance to aquatic

ecosystems.

■ Adapting supply chain practices to align with stricter biodiversity-related regula-

tions, including forestry and land-use management.

■ Developing circular economy initiatives to enhance material efficiency and

minimize waste. This reduces the consumption of virgin materials, reducing the

impacts of forestry and mining to ecosystems.

Systemic risks related to biodiversity and ecosystems, such as large-scale ecosystem

collapse, or loss of fish habitats could significantly affect the recreational fishing

industry

Rapala VMC’s global presence and diverse product offerings reduce its depen-

dency on any single region or ecosystem. By engaging with stakeholders, including

scientists and environmental organizations, the Group enhances its understanding of

systemic risks.

*)Material IROs

SUSTAINABILITY STATEMENT | 4 1

40 | RAPALA VMC ANNUAL REPORT 2024

Rapala VMC plans to build on its existing assessments by conducting a com-

prehensive resiliency analysis that systematically evaluates the Group’s expo-

sure to biodiversity risks across its operations and value chain. This will include

developing a transition plan to address identified risks and integrating biodi

versity considerations into strategic planning and decision-making processes.

Future efforts will focus on:

■ Expanding collaboration with stakeholders to address

biodiversity challenges.

■ Integrating biodiversity metrics into strategic planning

and risk management frameworks.

■ Developing scenario analysis methodologies to better assess and

understand the long-term impacts of biodiversity-related changes on the

business model.

■ More detailed evaluation of sourcing practices for key materials, such as

timber and tungsten, to ensure any potential impacts on communities

and ecosystems are effectively identified and managed.

The Group does not currently have a dedicated biodiversity policy but considers

the potential need for one. In the meantime, the Group manages material IROs

related to biodiversity and ecosystems through its existing policies.

Supplier Code of Conduct Procurement Guideline

Key contents The Supplier Code of Conduct defines the principles and

requirements Rapala VMC expects its suppliers to follow to

ensure ethical, responsible, and sustainable business practices.

It considers the interests of key stakeholders, particularly

suppliers and customers. The policy aims to manage ESG risks

within the supply chain while fostering collaboration, continu-

ous improvement, and alignment with Rapala VMC’s values and

commitment to sustainability.

The Supplier Code of Conduct requires suppliers to align with

environmental responsibility, including biodiversity and eco-

system impacts. Objectives include minimizing environmental

harm, promoting sustainable resource use and ensuring ethical

practices.

The policy addresses material dependencies by requiring

suppliers to manage environmental impacts and promote

sustainable resource use, recognizing the reliance on natural

resources for production. It helps mitigate physical risks,

such as habitat destruction and biodiversity loss, by enforcing

compliance with environmental laws and improvement plans.

Transition risks, including stricter regulations and sustainability

expectations, are managed through supplier commitments to

continuous improvement and third-party auditing.

The Procurement Guideline outlines the principles and guidelines Ra-

pala VMC follows to ensure that procurement processes are conducted

efficiently, responsibly, and ethically. The key objectives of the policy are

to enable profitable and sustainable business operations by integrating

environmental, social, and ethical considerations into procurement deci-

sions while ensuring alignment with the Group’s values and goals.

The policy relates to impacts such as deforestation and habitat destruc-

tion by requiring responsible sourcing of materials. It promotes the use

of sustainable alternatives to minimize harm to ecosystems.

The policy recognizes dependencies on natural resources and aims

to mitigate risks by ensuring sustainable raw material procurement.

Transition risks, such as regulatory changes, are managed by adapting

sourcing practices to meet emerging standards.

The policy indirectly addresses social consequences by promoting ethi-

cal sourcing practices that reduce ecosystem degradation and support

sustainable livelihoods in sourcing regions.

Stakeholder interests, including those of suppliers and regulatory bod-

ies, were considered in defining responsible procurement practices. The

policy also addresses customer expectations for ethical and sustain-

able sourcing.

Scope of the policy The Supplier Code of Conduct applies to all Rapala VMC’s ven-

dors, subcontractors, and suppliers involved in the manufacture

of products that incorporate any intellectual property owned

or controlled by the Group. Recognizing that responsible and

sustainable supply chains extend beyond direct (1st tier) suppliers,

Rapala VMC also expects its suppliers to enforce and cascade the

standards outlined in the Supplier Code of Conduct to their own

suppliers and business partners throughout the supply chain.

The scope of the Procurement Guideline applies to upstream activities

in the value chain and covers all procurement activities globally within

Rapala VMC’s operations. It specifically focuses on purchasing prac-

tices and the selection of suppliers, ensuring they meet environmental

standards related to energy efficiency and reduced emissions.

Implementation and monitoring The Group’s Global Management Team, chaired by the Presi-

dent & CEO, is responsible for the implementation of the policy.

The process for monitoring includes supplier self-assessments,

reporting on compliance with key requirements, and Rapala

VMC’s right to conduct audits or assessments when necessary

to ensure adherence to the policy. The Group commissions

third-party auditors to assess selected suppliers annually,

analyses the findings, and monitors the implementation of

corrective action plans with the suppliers. Non-compliance may

lead to corrective actions or, if unaddressed, the termination of

the business relationship.

The Group’s Global Management Team, chaired by the President & CEO,

is responsible for the implementation of the policy.

The monitoring process involves maintaining procurement expertise,

evaluating supplier compliance through assessments and adherence

to the Supplier Code of Conduct, and ensuring procurement decisions

meet the Group’s goals for sustainability, safety, and ethical perfor-

mance.

Availability The Supplier Code of Conduct is made readily available to all

relevant stakeholders. Externally, it is distributed to suppliers

who are required to comply with the principles outlined in the

policy. Internal stakeholders responsible for implementing the

policy have received training to ensure its effective application

and are available to address any questions or concerns raised

by suppliers.

Internally, the document is accessible to all Group personnel via

the Group intranet. This structured approach ensures that both

internal and external stakeholders are informed of their obliga-

tions and equipped to support Rapala VMC’s environmental, so-

cial, and ethical objectives, including climate change mitigation.

The document is accessible to all Group personnel via the Group

intranet.

The Group has not identified any products, components or raw materials

with significant actual or potential impacts on biodiversity and ecosys

tems along value chain. No biodiversity and ecosystem protection policy

covering operational sites owned, leased, managed in or near protected

area or biodiversity-sensitive area outside protected areas has been

adopted. No sustainable land or agriculture practices or policies have

been adopted. No sustainable oceans or seas practices or policies have

been adopted.

Rapala VMC’s biodiversity and ecosystems-related policies align with

some of the matters reported in E4 AR4 (climate change, land-use change,

freshwater-use change, sea-use change, direct exploitation, invasive alien

species, pollution and others), demonstrating the Group’s commitment

to addressing biodiversity-related impacts, risks, dependencies, and

opportunities throughout its operations and value chain. However, the

Group acknowledges the need to further develop its policies to more

comprehensively address certain aspects of biodiversity and ecosystems

management. This includes expanding their scope and incorporating

emerging challenges such as invasive species, ecosystem service de

pendencies, and broader biodiversity risks. Strengthening its policies will

enable the Group to better align with global biodiversity goals and evolving

stakeholder expectations. By aligning its current policies with the matters

reported in E4 AR4 and committing to continuous improvement, Rapala

VMC aims to enhance its contribution to biodiversity conservation and

the resilience of ecosystems critical to its value chain.

Table: Policies to manage material biodiversity and ecosystem related IROs

Table: Disclosure on whether and how biodiversity and ecosystems-related policies relate to matters reported in E4 AR4

Contribution to direct impact

drivers on biodiversity loss:

Impacts on the

state of species:

Impacts on the extent

and condition of ecosystems:

Impacts and dependencies

on ecosystem services:

Climate change: The Group’s Supplier Code of Conduct addresses

climate change as a key driver of biodiversity loss by promoting

sustainable practices across operations, such as reducing GHG

emissions and adopting energy-efficient processes.

Land-use change (e.g., land artificialization, freshwater-use change,

and sea-use change): The Supplier Code of Conduct emphasize

responsible sourcing practices aimed at water resource overuse.

Invasive alien species: While not explicitly addressed in existing

policies, the Group recognizes the importance of mitigating risks

related to invasive species and plans to explore their inclusion in

future policy updates.

Pollution: The Code of Conduct and Procurement Guideline include

measures to minimize pollution, such as waste management and

the reduction of hazardous material use, which contribute to reduc-

ing pollution-related biodiversity impacts.

The policies do not

directly address impacts on

the state of species.

The Supplier Code of Conduct

and Procurement Guideline

mitigates ecosystem degrada-

tion by promoting sustainable

material sourcing.

The Group’s Code of Conduct

promote actions to safeguard

these services by reducing en-

vironmental footprints, sourc-

ing responsibly, and engaging

in conservation initiatives.

SUSTAINABILITY STATEMENT | 4 3

42 | RAPALA VMC ANNUAL REPORT 2024

Action Innovations and product development Sustainable packages

Description Rapala VMC is committed to reducing environmental impacts by

introducing alternatives to harmful substances and advancing

sustainable product design. This commitment is reflected in the

following key actions:

Reduction of lead in products: Expanding the use of lead-free

materials across product lines to minimize harm to aquatic eco-

systems and reduce reliance on harmful substances.

Key actions include:

Reduction of plastic usage in packaging: Phasing out plastic

materials in packaging wherever feasible and replacing them

with more sustainable alternatives, such as recycled or biode-

gradable materials, to minimize environmental waste.

Adoption of FSC-certified cardboard: Expanding the use of

FSC-certified cardboard in packaging to ensure materials are

sourced from responsibly managed forests that preserve biodi-

versity and ecological integrity.

Scope The scope of the key action to reduce lead in products is focused

on Rapala-branded products, with efforts directed at decreasing

the use of lead in wobblers through product development and

material innovation. Rapala is the Group’s key brand and con-

stitutes a significant portion of the lure product category sales

volume and value. Lead is mainly used in the lure category.

For the adoption of eco-friendly materials, the scope targets prod-

ucts with plastics, emphasizing the replacement of conventional

plastics with sustainable alternatives to minimize pollution and

enhance sustainability

The key actions apply across all product lines and packaging

materials, focusing on integrating ecological materials, reduc-

ing plastic usage, and increasing the adoption of FSC-certified

cardboard. These efforts span design, manufacturing, and sup-

ply chain processes, targeting both new product development

and existing product transitions to enhance sustainability and

protect biodiversity.

Targets Achieving 100% lead-free Rapala-branded wobblers directly ad-

dresses risks to aquatic life by eliminating harmful substances,

contributing to healthier ecosystems and aligning with consumer

expectations for environmentally safe products.

The targets are not based on conclusive scientific evidence.

Stakeholders have not been involved in target setting.

This reporting period marks the first time this data has been

collected and these indicators calculated, thus no significant

changes to the targets or methodologies were made during the

reporting period.

Increasing the use of FSC-certified cardboard in packaging

reduces reliance on unsustainable forestry practices, helping

to preserve biodiversity in managed forest ecosystems and

mitigate risks associated with deforestation.

Revising packaging to reduce plastics, increase recycled con-

tent, and decrease material use lowers environmental impact

throughout the value chain by reducing waste, pollution, and

dependency on non-renewable resources.

The targets are not based on conclusive scientific evidence.

Stakeholders have not been involved in target setting.

This reporting period marks the first time this data has been

collected and these indicators calculated, thus no significant

changes to the targets or methodologies were made during the

reporting period.

Current and Future

financial resources

Rapala VMC currently lacks the capability to track costs specifically tied to the action plan, as these expenditures are distributed across

multiple Group companies and embedded within broader operational and R&D budgets. Over several years, the Group has dedicated

substantial resources, including significant manhours and financial investments, to replacing lead with alternative materials in lures.

The transition to certified materials and the replacement of lead with tungsten have increased production material costs. However,

precise cost estimations are challenging due to various influencing factors such as inflation, resource efficiency, and market availability.

Additionally, the ongoing redesign of packaging to reduce plastic usage incurs costs related to manhours and external consultants.

These costs, however, are largely offset by reductions in overall material consumption and related operational efficiencies.

Table: Actions and resources in relation to biodiversity and ecosystems

Key metrics and performance

Rapala VMC’s sustainability strategy defines several actions and tar-

gets related to biodiversity and ecosystems. Activities include resource

efficiency improvements and reducing harmful substances. The sus

tainability targets are closely aligned with the Group’s commitment to

addressing biodiversity and ecosystem impacts, dependencies, risks, and

opportunities across its operations and value chain. The timeframe for

these actions and targets is the Group’s current sustainability strategy

period 2024-2026. No biodiversity offsets were used in action plan and

the Group has not incorporated local and indigenous knowledge and

nature- based solutions into biodiversity and ecosystems -related actions.

Table: Tracking effectiveness of biodiversity and ecosystem related policies and actions through targets

Target Measure Base year Base-year

value

Target year 2024 Change

compared

to base year, %

100 % of Rapala branded

wobblers lead free by 2026

% of active SKUs lead free 2024 88,2% 2026 88,2% 0

Increase the amount of FSC certified cardboard

used in manufacturing and warehouses (80% of

cardboard used certified)

% of FSC certified cardboard used

vs total cardboard consumption in

manufacturing and warehouses

2024 165t / 34% 2026 165t / 34% 0

Revise packages to decrease

plastic consumption in

manufacturing by 20%

% change (ton) of packaging

plastic used in manufacturing

2024 137t / 0% 2026 137t / 0% 0

( Common targets with resource use and circular economy)

The Group’s sustainability targets align with specific layers of the miti-

gation hierarchy. Targets addressing avoidance include piloting envi-

ronmentally friendly materials to replace non-sustainable materials in

fishing tackle and ensuring 100% lead-free Rapala-branded wobblers,

both of which prevent ecological harm while indirectly reducing waste

and pollution risks. Targets focused on minimization include increasing

the use of FSC-certified cardboard in packaging and revising packaging

to eliminate plastics, increasing recycled content, and reduce material

use, which lower the environmental impact of materials while indirectly

supporting avoidance by reducing resource extraction and deforestation.

In setting its biodiversity and ecosystem-related targets, the Group

did not apply ecological thresholds or allocate specific impacts to the

undertaking. The targets are also not informed by or aligned with the

Kunming-Montreal Global Biodiversity Framework, the EU Biodiversity

Strategy for 2030, or other biodiversity and ecosystem-related national

policies and legislation. Additionally, biodiversity offsets were not utilized

in the target-setting process. However, the Group is committed to refining

its approach following a thorough resilience analysis and aims to incor

porate these tools and frameworks into future target-setting processes.

E5 – Resource use and circular economy

Governance and strategy

The Group has defined two key policies, the Procurement Guideline and

the Supplier Code of Conduct to manage material IROs related to resource

use and circular economy.

Table: Policies to manage material resourced use and circular economy related IROs

Procurement Guideline Supplier Code of Conduct

Key contents The Procurement Guideline outlines the principles and

guidelines Rapala VMC follows to ensure that procurement

processes are conducted efficiently, responsibly, and ethically.

The key objectives of the policy are to enable profitable and

sustainable business operations by integrating environmental

considerations into procurement decisions while ensuring

alignment with the Group’s values and goals.

The policy explicitly promotes the use of recycled and reusable

products and materials. It encourages lifecycle assessments to

minimize reliance on virgin resources.

Stakeholder interests, including those of suppliers and regulato-

ry bodies, were considered in defining responsible procurement

practices. The policy also addresses customer expectations for

ethical and sustainable sourcing.

The policy promotes environmental compliance in sourcing and produc-

tion processes. It promotes use of recycled materials, minimizing

waste, and transitioning to circular economy practices, including repair,

reuse, remanufacture, and recycling strategies. Suppliers are encour-

aged to adopt lifecycle thinking and integrate sustainability consider-

ations into product design.

Scope of the policy The scope of the Procurement Guideline applies to upstream

activities in the value chain and covers all procurement activi-

ties globally within Rapala VMC’s operations. It includes sup-

plier selection, material purchasing, and procurement planning.

The Supplier Code of Conduct applies to all Rapala VMC’s vendors,

subcontractors, and suppliers involved in the manufacture of products that

incorporate any intellectual property owned or controlled by the Group.

Recognizing that responsible and sustainable supply chains extend beyond

direct (1st tier) suppliers, Rapala VMC also expects its suppliers to enforce

and cascade the standards outlined in the Supplier Code of Conduct to

their own suppliers and business partners throughout the supply chain.

Implementation and monitoring The Group’s Global Management Team, chaired by the

President & CEO, is responsible for the implementation

of the policy.

The monitoring process involves maintaining procurement ex-

pertise, evaluating supplier compliance through assessments

and adherence to the Supplier Code of Conduct, and ensuring

procurement decisions meet the Group’s goals for sustainabil-

ity, safety, and ethical performance.

The Group’s Global Management Team, chaired by the President & CEO,

is responsible for the implementation of the policy.

The process for monitoring includes supplier self-assessments,

reporting on compliance with key requirements, and Rapala VMC’s

right to conduct audits or assessments when necessary to ensure

adherence to the policy. The Group commissions third-party auditors

to assess selected suppliers annually, analyses the findings, and moni-

tors the implementation of corrective action plans with the suppliers.

Non-compliance may lead to corrective actions or, if unaddressed, the

termination of the business relationship.

Availability The document is accessible to all Group

personnel via the Group intranet.

The Supplier Code of Conduct is made readily available to all relevant

stakeholders. Externally, it is distributed to suppliers, who are required

to comply with the principles outlined in the policy. Internal stakehold-

ers responsible for implementing the policy have received training to en-

sure its effective application and are available to address any questions

or concerns raised by suppliers. Internally, the document is accessible

to all Group personnel via the Group intranet. This structured approach

ensures that both internal and external stakeholders are informed of

their obligations and equipped to support Rapala VMC’s environmental,

social, and ethical objectives, including climate change mitigation.

SUSTAINABILITY STATEMENT | 4 5

44 | RAPALA VMC ANNUAL REPORT 2024

Key metrics and performance

Rapala VMC’s sustainability strategy defines several actions and tar-

gets related to resource use and circular economy. Activities encompass

resource efficiency, increase of recycled materials, reducing harmful

substances and replacing them with more sustainable alternatives. The

sustainability targets are closely aligned with the Group’s commitment

to addressing resource use and circular economy impacts, dependen

cies, risks, and opportunities across its operations and value chain. The

targets are voluntarily set by the Group and not mandatory as required

by legislation. The timeframe for these actions and targets is the Group’s

current sustainability strategy period 2024-2026.

Table: Actions and resources in relation to resource use and circular economy

Action Innovations and product development Sustainable packages

Description Rapala VMC is committed to reducing environmental impacts

by introducing alternatives to harmful substances and advanc-

ing sustainable product design. This commitment is reflected

in the following key actions:

Reduction of lead in products: Expanding the use of lead-free

materials across product lines to minimize harm to aquatic

ecosystems and reduce reliance on harmful substances.

Key actions include:

Reduction of plastic usage in packaging: Phasing out plastic materials

in packaging wherever feasible and replacing them with more sustain-

able alternatives, such as recycled or biodegradable materials, to

minimize environmental waste.

Adoption of FSC-certified cardboard: Expanding the use of Forest

Stewardship Council (FSC)-certified cardboard in packaging to ensure

materials are sourced from responsibly managed forests that preserve

biodiversity and ecological integrity.

Scope The scope of the key action to reduce lead in products is

focused on Rapala-branded wobblers, with efforts directed at

decreasing the use of lead in lures through product develop-

ment and material innovation. Rapala is the Group’s key

brand and constitutes a significant portion of the lure product

category sales volume and value. Lead is mainly used in the

lure category.

For the adoption of eco-friendly materials, the scope targets

products with plastics, emphasizing the replacement of

conventional plastics with sustainable alternatives to minimize

pollution and enhance sustainability.

The key actions apply across all product lines and packaging materials,

focusing on integrating ecological materials, reducing plastic usage, and

increasing the adoption of FSC-certified cardboard. These efforts span

design, manufacturing, and supply chain processes, targeting both new

product development and existing product transitions to enhance sustain-

ability and protect biodiversity.

Targets Piloting environmentally friendly materials to replace non-sus-

tainable plastics in fishing tackle supports resource efficiency

and circular economy objectives by reducing dependency on

finite, non-renewable resources. This initiative promotes the

use of sustainable alternatives, minimizing waste and pollution

while contributing to a closed-loop system that aligns with

circular economy principles.

Ensuring all Rapala-branded wobblers are lead-free supports

circular economy objectives by eliminating toxic materials,

reducing environmental risks, and promoting safer, more sus-

tainable alternatives that align with circular design principles.

The targets are not based on conclusive scientific evidence.

Stakeholders have not been involved in target setting.

This reporting period marks the first time this data has been

collected and these indicators calculated, thus no significant

changes to the targets or methodologies were made during the

reporting period.

Increasing the use of FSC-certified cardboard in packaging supports

resource use and circular economy by promoting sustainable forestry,

reducing reliance on unsustainable practices, and helping to preserve

biodiversity in managed ecosystems.

Revising packaging to reduce plastics, increase recycled content, and

decrease material use lowers environmental impact throughout the

value chain by reducing waste, pollution, and dependency on non-

renewable resources.

The targets are not based on conclusive scientific evidence.

Stakeholders have not been involved in target setting.

This reporting period marks the first time this data has been collected

and these indicators calculated, thus no significant changes to the

targets or methodologies were made during the reporting period.

Current and Future

financial resources

Rapala VMC currently lacks the capability to track costs specifically tied to the action plan, as these expenditures are distributed across

multiple Group companies and embedded within broader operational and R&D budgets. Over several years, the Group has dedicated sub-

stantial resources, including significant manhours and financial investments, to replacing lead with alternative materials in lures.

The transition to certified materials and the replacement of lead with tungsten have increased production material costs. However, precise

cost estimations are challenging due to various influencing factors such as inflation, resource efficiency, and market availability. Addition-

ally, the ongoing redesign of packaging to reduce plastic usage incurs costs related to manhours and external consultants. These costs,

however, are largely offset by reductions in overall material consumption and related operational efficiencies.

Resource use and circular economy targets are common with biodiversity

and ecosystems targets, see Table: Tracking effectiveness of biodiversity

and ecosystem related policies and actions through targets.

The Group’s sustainability targets demonstrate an alignment with re

source use and circular economy policy objectives by addressing material

sourcing, waste reduction, and circular design. Efforts to increase the use

of FSC-certified cardboard in packaging and revise packaging to eliminate

plastics, enhance recycled content, and reduce material usage directly

support circular design and recycling, minimizing waste and promoting

the responsible use of materials.

■ Circular design: Target related to the objective is plastic

reduction in packaging. Reduction of plastic in packaging involves

switching to recyclable or reusable alternatives.

■ Increase in circular material use rate: Targets related to the objec

tive are the increase in use of FSC cardboard and plastic reduction in

packaging. Reduction of plastic in packaging involves switching to

recyclable or reusable alternatives. FSC-certified cardboard includes

recycled content.

■ Minimisation of primary raw materials: Target related to the objective

is the plastic reduction in packaging. Reducing plastic use lowers reli

ance on virgin fossil-based raw materials.

■ Reversal of depletion of stock of renewable resources: Targets

related to the objective are the increase in use of FSC cardboard and

plastic reduction in packaging. FSC certification ensures responsible

forest management and aligns with the cascading use of renewable

resources. Plastic is replaced with sustainably sourced renewable

materials, such as FSC certified cardboard and paper.

■ Waste management: Targets related to the objective are the plastic

reduction in packaging and removing lead from products. Less plastic

packaging reduces waste generation and may improve recyclability.

Removing lead prevents hazardous waste generation and facilitates

safer disposal and recycling.

■ Other matters related to resource use or circular economy:

Eliminating toxic materials, like lead, supporting safer resource loops

and a cleaner circular economy

■ Layer in waste hierarchy to which target relates:

■ Increase of FSC-certified cardboard: Recycling

■ Reduction of plastic in packaging: Prevention, recycling

■ Removing lead from products: Prevention, recycling, disposal

Material inflows

Key materials used in manufacturing include tungsten (a critical raw

material classified as a conflict mineral), balsa wood, birch wood, steel,

plastics, and various chemicals, such as paints, lacquers, solvents, and

glues. Packaging materials are a significant part of the Group’s resource

inflows. Cardboard constitutes the majority of packaging materials con

sumed.

During the reporting period, data on materials used to manufacture

Rapala VMC’s products and services was collected from the Group’s

own manufacturing sites. The data is based on direct measurement of

materials purchased and used during the reporting period, measured in

tons or kilograms. For sourced finished goods, the data is an estimate

derived from direct measurements at the Group’s own manufacturing

facilities. The estimation process accounts for the proportional volume

split between products manufactured internally and those sourced ex

ternally. To enhance the accuracy of data on outsourced products, the

Group is actively developing more detailed data collection methods.

These improvements aim to provide a more precise understanding of

the weights and material composition of externally sourced products in

future reporting periods. This approach combines direct measurements

and estimations, with key assumptions including the consistency of ma

terial usage patterns and the proportionality of material consumption

across own and sourced production volumes.

Material inflows

Overall total weight of products and technical and biological materials used during the reporting period (t) 3 549

Percentage of certified biological materials (and biofuels used for non-energy purposes) (%) (FSC certification) 4,7

The absolute weight of secondary reused or recycled components, secondary intermediary products and secondary materials used to manu-

facture the undertaking's products and services (including packaging) (t) 300

Percentage of secondary reused or recycled components, secondary intermediary products and secondary materials (%)

8,5

SUSTAINABILITY STATEMENT | 4 7

46 | RAPALA VMC ANNUAL REPORT 2024

Material outflows

The rate of recyclable content in products (%) 0,3

The rate of recyclable content in products packaging (%) 43,5

Total Waste generated (t) 1 938

Hazardous waste diverted from disposal (t)

Hazardous waste diverted from disposal due to preparation for reuse (t) 43

Hazardous waste diverted from disposal due to recycling (t) 15

Hazardous waste diverted from disposal due to other recovery operations (t)

Non-hazardous waste diverted from disposal (t) 1 159

Non-hazardous waste diverted from disposal due to preparation for reuse (t) 33

Non-hazardous waste diverted from disposal due to recycling (t)

581

Non-hazardous waste diverted from disposal due to other recovery operations (t) 546

Hazardous waste directed to disposal (t) 267

Hazardous waste directed to disposal by incineration (t)

Hazardous waste directed to disposal by landfilling (t) 2

Hazardous waste directed to disposal by other disposal operations (t) 218

Non-hazardous waste directed to disposal (t)

432

Non-hazardous waste directed to disposal by incineration (t) 86

Non-hazardous waste directed to disposal by landfilling (t) 106

Non-hazardous waste directed to disposal by other disposal operations (t)

240

Non-recycled waste (t) 699

Percentage of non-recycled waste (%) 36

Total amount of hazardous waste (t) 347

Total amount of radioactive waste (t) 0,00

Material outflows

Rapala VMC produces a range of fishing and outdoor equipment de

signed to be durable. The Group has integrated circular principles into

its production processes by focusing on durability, reusability, repair

ability, recycling, and optimizing resource use. Products are designed

for long-term use. Many of Rapala VMC’s products, including rods and

reels, are designed to allow for repairs, extending their usability through

replacement parts and repair services such as the rods and reels repair

centre in the Rapala VMC premises in Pärnu. Recyclable materials, such

as FSC-certified cardboard, are incorporated into the packaging.

Defining exact durability in years for fishing gear presents challenges,

as there are no established industry standards. The longevity of these

products varies significantly depending on user behaviour, environmental

conditions, and intensity of use. To comply with the ESRS data point E5-5,

36a, “Disclosure of expected durability of products”, the Group assessed

how its products compare to the industry average in terms of durability.

Internal category experts—who have extensive experience with these

products and the industry—provided estimates based on their knowledge

and analysis. These experts evaluated the key factors that contribute

to product lifespan, identified common causes of premature wear, and

assessed how the Group’s products address these issues relative to

industry norms.

Product

Expected

durability index

Industry

average index

Lures – Rapala hardbaits 150 100

Lures – Rapala soft baits 120 100

Lures - Other 120-150 100

VMC hooks

110-150 100

VMC jigheads 120 100

Terminal tackle 110-120 100

Okuma rods

120 100

Okuma reels 120 100

Rapala tools & accessories 120 100

The Group’s manufacturing and distribution operations generate several

key waste streams, primarily associated with material processing, pack

aging, and operational activities. These include:

■ Production Waste: Metal shavings, wood and plastic trimmings, and

coatings/byproducts from the manufacturing of fishing lures, hooks,

and other equipment.

■ Packaging Waste: Cardboard, wooden pallets, plastic wrapping,

and mixed packaging waste from product distribution.

■ Chemical and Hazardous Waste: Paint residues, adhesive and

coating waste, cleaning solvents, and contaminated absorbents

from manufacturing processes.

■ General and Operational Waste: Wastewater from production process

es, biowaste, energy waste, and mixed municipal waste from facilities.

The total waste generated amounts to 1 938 tonnes, consisting of both

hazardous and non-hazardous waste materials.

Non-Hazardous Waste (1 591 t):

■ Process wastewater generated from manufacturing and operational

activities (730 t).

■ Biomass: Cardboard, paper, wood chips, wooden packaging,

and biowaste (501 t).

■ Non-Metallic Minerals: General mixed waste, energy-related waste,

and recyclable materials (313 t).

■ Metals: Scrap metal and machining residues from manufacturing (39 t).

■ Plastics: Packaging materials, ABS plastic waste, and shrink plastic (8 t).

Hazardous Waste (approx. 347 tonnes)

■ Hazardous Substances: Waste chemicals, chemical residues,

solvents, contaminated filter cakes, pickling acids, sludges from

industrial processes and fluorescent lamps containing mercury (335 t).

■ Metals: Residues from metal plating and surface

treatments, including nickel and gold (12 t).

The Group is actively developing its methods for capturing data on prod

uct outflows and recycled content to improve the accuracy and consisten-

cy across its reporting. Rapala VMC has data of products manufactured

in its own facilities, calculations are based on materials used in produc

tion, providing precise information on material composition and recycled

content. This data forms the foundation for the Group’s methodology.

Precise item level material reporting development is ongoing, and this will

improve the accuracy of material recycled content reporting significantly.

Each local unit is responsible for reporting waste types and disposal

methods through the Group’s sustainability reporting system. For waste

streams generated by products placed on the market, the calculations

are limited to packaging waste, as the Group lacks visibility to how con

sumers use and discard its products. The methodology for calculating

waste involves direct reporting of waste types and disposal methods

from operational units, ensuring consistency and transparency across

the organization. Packaging waste is calculated based on the packaging

materials put to market from own manufacturing sites and scaling this

volume to encompass the Groups whole product portfolio and annual

sales.

The classification of products designed along circular principles is

based on clear criteria. Products are considered circular if they are de

signed for durability, reusability, or utilize materials that align with circular

economy goals, such as recyclability or the inclusion of renewable re

sources. This classification assumes that product materials are intended

to remain in use for extended periods. The Group’s products are designed

to be durable and many have components that are replaceable, extending

the life span. The Group does not have visibility to the average life span of

products, the longevity of these products varies significantly depending

on user behaviour, environmental conditions, and intensity of use. Thus,

packaging waste is prioritized in calculations due to its higher relevance

compared to the materials used in the products themselves.

The data for these classifications is derived from both direct measure

ments and estimations. Operational waste data is directly measured and

reported by local units, while estimates are applied to packaging waste

based on standardized assumptions regarding waste volume.

SOCIAL INFORMATION

S1 – Own workforce

Governance and strategy

Rapala VMC is committed to respecting and promoting internationally

recognized human rights across all its operations. The Group’s human

rights policy is aligned with the internationally recognized instruments,

it adheres to the International Bill of Human Rights, the UN Guiding Prin

ciples on Business and Human Rights, the International Labour Organiza-

tion’s Declaration on Fundamental Principles and Rights at Work, and the

United Nations Global Compact principles. The Group seeks to ensure

that materials used in its products and sourced products come from

socially responsible sources. Rapala VMC has a zero-tolerance policy

for child labour within its operations and supply chain.

The Group is working on renewing its Code of Conduct and human

rights policy to also cover the topic of remedy for human rights impacts.

Possible human rights violations or suspicions of such events can be

reported through the Group’s Whistleblowing channel.

Workforce management and well-being

All employees of Rapala VMC are required to have written employment

contracts. Where applicable, the Group verifies work and residence per

mits and adheres to local laws governing employment contracts, work-

ing hours, and annual holidays. Rapala VMC also respects binding local

collective agreements, operating under the strictest standard, whether

derived from labour laws or collective agreements. Rapala VMC respects

employees’ rights to form, join, or choose not to join trade unions. In

countries with legally recognized unions, the Group is committed to con

structive dialogue with employee representatives and ensures employees

are not penalized for trade union activity.

Recognizing that some operating regions may have risks of child la

bour, the Group enforces policies related to this issue. It does not hire

individuals under the age of 15 or below the legal age limit set by local

legislation, whichever is higher. Where local laws permit, the minimum

age for light work with reduced hours may be lower, as in the case of sum

mer jobs for students. The minimum age for hazardous work is strictly

18 years. The Group also prohibits all forms of modern slavery, including

forced labour and human trafficking, within its operations and supply

chain. Rapala VMC does not have specific policy commitments related to

inclusion and/or positive action for people from groups at particular risk

of vulnerability. However, the zero-tolerance policy against discrimination

aims to protect these groups.

Rapala VMC utilizes a global internal communication platform to

distribute important information across the organization. All policies,

including the human rights policy and other key employment policies,

are accessible via the Group’s intranet. Regular global and local em

ployee meetings are held to share updates on topics such as corporate

strategy and financial performance. In certain circumstances, the Group

may also communicate through shop stewards, who relay information

to the employees they represent. During the summer of 2024, a global

employee satisfaction survey was conducted to collect feedback and

insights from staff.

Additionally, the Group provides a whistleblowing channel managed

by a third party, WhistleB, allowing employees to report suspicions of

misconduct anonymously and in good faith. Concerns can be submitted

through a web-based whistleblowing channel, with an option for anony

mous messaging and dialogue. Access to messages received through

Table: Expected durability of products

SUSTAINABILITY STATEMENT | 4 9

48 | RAPALA VMC ANNUAL REPORT 2024

the whistleblowing channel is restricted to appointed individuals with

the authority to handle whistleblowing cases. Their actions are logged,

and handling is confidential. When needed, individuals who can add ex

pertise may be included in the investigation process. Upon receiving a

message, the whistleblowing team decides whether to accept or decline

the message based on the Whistleblowing guidelines and the applicable

legislation. If the message is accepted, appropriate measures for investi

gation will be taken. The whistleblower will receive an acknowledgment

of receipt of the report within seven days. The whistleblowing team will

send appropriate feedback within three months upon the date of receiving

the report. All messages are treated seriously and in accordance with

these Whistleblowing guidelines.

Rapala VMC has several policies in place to manage workforce related

IROs and the Group has defined employee related actions and targets in

its sustainability strategy.

Table: Policies to manage material own workforce related IROs

Code of Conduct Human rights policy Zero tolerance policy Whistleblowing policy

Key contents The Code of Conduct establishes Rapala VMC’s commit-

ment to ethical business practices and environmental

stewardship. It requires compliance with applicable laws

and regulations, emphasizing the importance of integrity

in all business dealings.

It promotes a safe and inclusive workplace, ensuring

equality and prohibiting discrimination based on charac-

teristics such as race, gender, age, or religion. Recruit-

ment, employment, and promotions are based solely on

qualifications and capabilities. Forced and child labour are

strictly forbidden, and employees are guaranteed the right

to unionize and engage in collective bargaining without

fear of penalty.

The Code also prioritizes confidentiality, requiring em-

ployees to safeguard sensitive information related to the

Group, colleagues, and partners. Ethical business prac-

tices are a core principle, with clear prohibitions against

bribery or actions that could compromise integrity.

In setting this policy, Rapala VMC has considered the

interests of customers, consumers, suppliers (including

workers in the whole value chain), business partners and

employees.

The Rapala VMC Human Rights Policy demonstrates the

company’s commitment to respecting and promoting

human rights across all its operations and supply chains.

It ensures that all practices align with ethical labour

standards, prohibiting forced and child labour while

safeguarding fair treatment and the right to freedom of

association.

The policy reinforces equitable treatment for all, requiring

that employees and workers are treated with dignity and

respect. It explicitly prohibits any form of discrimination

and mandates that suppliers uphold these principles in

their operations.

The policy establishes the company’s stance against harass-

ment, sexual harassment, and discrimination in the workplace.

It ensures that every employee has the right to a safe, healthy,

and respectful working environment. The policy explicitly de-

fines discrimination as any unfavourable treatment based on

personal characteristics such as ethnicity, gender, age, religion,

or sexual orientation. It addresses harassment and sexual

harassment by providing clear examples, including threats,

malicious comments, or inappropriate behaviours that create a

distressing atmosphere.

The policy emphasizes collective responsibility for maintaining

a safe work environment, encouraging bystander intervention

when inappropriate behaviours are observed. It also highlights

the employer’s legal obligation to act upon receiving reports of

misconduct.

In setting this policy, Rapala VMC has considered the interests

of the Group’s workforce, both own employees and external

workforce such as rented workforce.

The policy outlines the key mechanisms for addressing

suspicions of misconduct in a confidential manner. The

policy provides a secure reporting channel for employees

and external stakeholders to raise concerns about serious

wrongdoing, including violations of laws, regulations, or

internal policies.

The policy emphasizes that reports must be made in

good faith and prohibits retaliation against whistleblow-

ers who act responsibly. It also specifies the process

for handling and investigating reports, with a dedicated

whistleblowing team responsible for ensuring a thorough

and impartial review of all submitted cases.

In setting this policy, Rapala VMC has considered the

interests of employees, workers in the whole value chain,

business partners, customers and authorities.

Scope of the policy The policy applies to all employees regardless of their

role and business units across the Group’s operations

and downstream value chain. Geographic scope includes

all operational regions and markets where the Group

operates.

The policy applies to all Group operations and supply

chains, covering employee treatment, labour practices,

and material sourcing. The policy has no stated exclu-

sions, requiring suppliers to fully uphold its principles

across the value chain.

The policy applies to all employees and non-employees at

all levels of the organization. Its scope covers all behaviours

related to harassment, sexual harassment, and discrimination

across all locations where the Group operates.

The Rapala VMC Whistleblowing Policy applies to all

employees, contractors, suppliers, and other stakehold-

ers connected to the Group. Its scope includes reporting

serious risks or misconduct related to violations of laws,

regulations, internal policies, or ethical principles within

the Group’s operations or value chain. The policy covers

areas such as financial irregularities, environmental viola-

tions, health and safety concerns, and breaches of ethical

standards.

The policy does not extend to personal grievances or

dissatisfaction unrelated to the categories of misconduct

outlined, which are addressed through other internal

procedures. This clear delineation ensures the whistle-

blowing mechanism is focused on addressing significant

issues that could impact the Group, its stakeholders, or

broader society

Implementation and monitoring The Group’s Global Management Team, chaired

by the President & CEO, is responsible for the

implementation of the policy.

Monitoring is part of broader corporate governance

practices, supported by reporting mechanisms.

The Group’s Global Management Team, chaired by the

President & CEO, is responsible for the implementation

of the policy.

Monitoring is part of broader corporate governance

practices, supported by reporting mechanisms.

The Group’s Global Management Team, chaired by the Presi-

dent & CEO, is responsible for the implementation of the policy.

If a person faces discrimination, they can turn to their man-

ager, manager’s manager or possible local HR department or

occupational safety delegate for support.

The Group’s Global Management Team, chaired by the

President & CEO, is responsible for the implementation of

the policy.

Availability The document is accessible to all Group personnel

via the Group intranet.

The document is accessible to all Group personnel via

the Group intranet. It is sent to customers or business

partners when requested.

The document is accessible to all Group personnel via the

Group intranet. It has been also communicated in a separate

staff information session in some of the Group’s larger loca-

tions, such as Helsinki, Vääksy and Pärnu.

The policy is made available to affected stakeholders

and those responsible for its implementation through the

Group’s website and internal communications. It includes

clear guidance on accessing the external whistleblowing

platform and reporting mechanisms to ensure transpar-

ency and accessibility

Third-party standards adhered The policy adheres to the principles of the International

Bill of Human Rights, including the Universal Declaration

of Human Rights and its covenants, as well as the United

Nations Guiding Principles on Business and Human

Rights. It also aligns with the International Labour Orga-

nization’s (ILO) Declaration on Fundamental Principles

and Rights at Work, covering freedom of association,

non-discrimination, and the elimination of forced and child

labour.

The policy adheres to the principles of the International

Bill of Human Rights, including the Universal Declaration

of Human Rights and its covenants, as well as the United

Nations Guiding Principles on Business and Human

Rights. It aligns with the International Labour Organiza-

tion’s (ILO) Declaration on Fundamental Principles and

Rights at Work, emphasizing the elimination of forced

and child labour, freedom of association, and equitable

treatment in employment. Additionally, it reflects the prin-

ciples of the United Nations Global Compact, reinforcing

the Group’s commitment to operating with integrity and

promoting responsible practices across its operations

and supply chains.

The policy aligns with the International Labour Organization’s

Declaration on Fundamental Principles and Rights at Work

and the United Nations Global Compact principles. These

frameworks guide the policy’s commitment to ensuring a safe,

inclusive, and respectful workplace, prohibiting harassment,

discrimination, and any form of mistreatment across all opera-

tions.

The policy aligns with the principles outlined in the

European Union Whistleblower Protection Directive

(2019/1937).

SUSTAINABILITY STATEMENT | 5 1

50 | RAPALA VMC ANNUAL REPORT 2024

Table: Targets set to manage material own workforce related IROs

Target Measures Target year Target value 2024

Accident frequency rate < 10 in own

manufacturing and warehouses

Accidents per million

working hours

Annual <10 26,1

Sick leave ratio in all units % (Sick leave hours /

total hours worked)

Annual <5% 3,4%

Employee training, 1% of net sales

spent on employee training in all units

% (€ spent on employee training /

annual net sales)

Annual 1% 0,1%

This reporting period marks the first time this data has been collected and these indicators calculated,

thus no significant changes to the targets or methodologies were made during the reporting period.

Engaging with own employees

Rapala VMC actively integrates workforce perspectives into its decision-

making processes to address actual and potential impacts on employ

ees. Engagement is facilitated through both global and local channels,

ensuring employee insights shape policies and practices. This interaction

occurs directly with the workforce and through workers’ representatives,

guided by local legislation and collective agreements. The frequency of

engagement varies by location but typically occurs at least once per quar

ter. The stages of engagement depend on the material, actual and poten-

tial, positive and/or negative impact in question. The aim is to engage the

workforce proactively to prevent issues, ongoingly to monitor and improve

practices, and reactively to address specific concerns. Local leadership

holds primary responsibility for ensuring engagement at the area level,

while the global management team oversees this process globally. The

Group does not currently have a global framework agreement in place.

Globally, Rapala VMC conducted an employee satisfaction survey in

2024, focusing on equality, leadership, well-being, and workplace culture.

The response rate was approximately 59 % of the global workforce. The

results were reviewed by senior leadership and action plans have been

drafted for 2025 based on the results. This survey will be conducted an

nually, and all units globally participate. Additionally, a 2022 stakeholder

survey, which included employees as a key respondent group, mapped

actual and potential impacts—both positive and negative. This survey is

set to occur regularly to support continuous improvement.

Locally, engagement mechanisms include employee committees, such

as health and safety committees and employee forums, which enable

workers to bring issues to the attention of local management. Staff meet

ings provide opportunities for leadership to gather direct feedback from

employees. In certain locations, regular meetings are held between local

management and employee representatives, such as shop stewards, to

address specific concerns. Development discussions and performance

reviews also offer employees a platform to share feedback with their

managers. Through these processes, Rapala VMC ensures workforce

engagement is a central part of its operations. Rapala VMC currently

lacks the capability to track costs specifically tied to the action plan, as

these expenditures are distributed across multiple Group companies and

embedded within broader operational budgets.

Stakeholders have not been involved in target setting. Future develop

ment actions include engaging own workforce in setting and monitoring

targets and identifying lessons and improvements. At own manufacturing

sites, employees already have the opportunity to follow local health and

safety objectives.

Impact, risks and opportunities related to own workforce

Rapala VMC ensures its operations do not cause or contribute to material

negative impacts on its workforce by adhering to international standards

such as the International Bill of Human Rights, UN Guiding Principles,

and International Labour Organization conventions. Employment policies

comply with local labour laws and collective agreements, prohibiting

forced labour, child labour, and exploitative conditions. Manufacturing

and warehousing units implement strict health and safety protocols, con

duct audits, and hold regular training to minimize risks. A zero-tolerance

policy against discrimination is enforced, supported by diversity training

in key locations and harassment contact persons in multiple countries.

The whistleblowing channel, managed by a third party, provides employ

ees and non-employees with a confidential system to report concerns.

Resources are allocated across financial, human, and technological

dimensions to manage workforce-related impacts. Investments support

occupational healthcare, sustainability reporting, safety improvements,

and training. Local HR professionals, safety specialists, and Group-level

compliance and sustainability teams provide operational oversight. Tech

nological tools, including a global sustainability reporting platform, enable

the collection and analysis of workforce-related data such as sick leaves,

accidents, and salary differences, ensuring informed decision-making

and continuous improvement.

Table: Material own workforce related IROs, type of workforce impacted, and tools and assumptions used

Equal treatment and opportunities Occupational safety Work-life balance

Workers’ rights and

stability of employment

Impacts Unequal treatment leads to social

injustice, discrimination, and

marginalization of minority groups.

Biased recruitment and promotion

limit equal opportunities and

reinforce systemic inequality. Lack

of diversity diminishes inclusive

workplace culture, reducing social

cohesion.

Equal treatment fosters inclusion

and social equity, supporting equal

participation in the labor market.

Poor safety practices lead to physical

injuries and mental health issues among

workers. Higher risks for manual laborers

raise concerns about worker protection and

justice in hazardous roles.

Good safety standards improve public health

outcomes and quality of life for workers and

their families.

Poor balance contributes

to stress, burnout, and poor

mental health, affecting indi-

viduals and communities.

Promoting work-life balance

supports societal wellbeing,

especially for caregivers and

parents.

Job insecurity and lack of

stable employment contribute

to social inequality and

precarity.

Respecting labor rights sup-

ports just working conditions

and social justice. Stable em-

ployment supports household

income and economic stability.

Risks Unequal treatment of employees

can lead to decreased motivation

and increased turnover. Biased

recruitment and promotion

practices reduce diversity,

undermining competitiveness and

innovation. Reputational risks may

make it harder to attract top talent

in the future. Limited career and

salary development opportunities

negatively impacted individuals.

Neglecting occupational safety can increase

accidents and injuries, harming the physical

and mental wellbeing of the workforce. A

poor safety record can damage the Group’s

reputation. Productivity may decline due to

increased sick leave and absenteeism. Physi-

cal risks are higher for manufacturing and

warehouse workers due to machinery use,

heavy lifting, and chemical exposure, while

office-based specialist or managerial employ-

ees may face greater psychosocial strain.

Failing to promote a work-

life balance can result

in excessive workloads,

exhaustion, and increased

absences. Employee morale

may decline, leading to

higher turnover as the work-

life balance is highly valued

by many employees.

Failing to respect worker

rights can harm workforce

wellbeing and lead to retention

challenges. A lack of secure

employment may result in

higher employee turnover.

Disregarding worker rights can

severely and even permanently

damage the Group’s reputation.

Opportunities Equal treatment of employees can

boost morale and improve reten-

tion, particularly among minority

groups. A strong commitment

to equality enhances the Group’s

reputation and attracts top talent.

Objective, non-biased recruitment

and promotion practices foster di-

versity, strengthening competitive-

ness and innovation over time.

Emphasizing occupational safety can

reduce accidents and injuries, enhancing

workforce wellbeing.

A strong safety culture improves the Group’s

reputation as a responsible employer.

Improved safety can boost productivity by

minimizing sick leave and absenteeism.

Promoting a healthy work-

life balance can ensure sus-

tainable workloads, enhance

employee wellbeing, and

reduce absences. A strong

focus on work-life balance

fosters higher morale and

greater employee commit-

ment to the Group.

Respecting worker rights and

providing stable employment

strengthens the Group’s reputa-

tion as a responsible employer

and corporate citizen. A strong

commitment to worker rights

can reduce employee turnover

and enhance workforce

stability.

Activities On-the-job learning and training

programs enhance job satisfac-

tion and career prospects for

employees, contractors, and

leased workers. Most training

opportunities are extended to

non-employees, broadening their

impact. In Estonia, Rapala VMC

has employed Ukrainian refugees,

supporting individuals who face

greater challenges in finding

employment.

Risk assessments are conducted at Rapala

VMC locations, especially factories and

warehouses, to improve occupational safety

and health. Assessments are carried out by

health and safety personnel, factory man-

agement, or occupational health and safety

committees. Independent external audits

began in 2023 to identify potential risks, with

the Estonian factory audited in May 2023, fo-

cusing on occupational safety. Occupational

accidents and near-accident data are closely

monitored to identify higher-risk roles and

prevent future incidents.

Rapala VMC currently lacks a Group-level

accident prevention policy or manage-

ment system. Instead, local units adhere to

separate policies based on country-specific

legislative requirements and have the neces-

sary management systems in place.

Flexible working hours and

partial remote work options

in Finland, the USA, and the

UK help employees and non-

employees balance work

and personal life. These

measures are particularly

supportive of parents, care-

givers, and those with long

commutes.

Operations adhere to the

International Bill of Human

Rights, UN Guiding Principles

on Business and Human

Rights, the International Labour

Organization’s Declaration on

Fundamental Principles and

Rights at Work, and the United

Nations Global Compact. Poli-

cies comply with labour laws

and collective agreements,

ensuring the prohibition of

forced labour, child labour, and

exploitative conditions.

Type of workforce

materially

impacted

The types of employees and non-employees in Rapala VMC’s own workforce subject to material impacts are full-time employees, part-time employees,

contractors (self-employed) and rented workforce. Full-time and part-time employees are Group’s own employees. Contractors are self-employed peo-

ple and rented workforce are people provided by the third-party undertakings. All materially impacted individuals are included in the disclosure scope.

Negative impact

occurrence

Related to individual incidents

Tools and

assumptions

Actual or potential negative impacts on own workforce are identified through multiple channels, including DMA, whistleblowing channel, global em-

ployee survey, local occupational safety staff and feedback from worker representatives. Also, official audits and risk assessments are conducted.

Rapala VMC has a limited number of global processes related to actions taken in response to potential or actual negative impacts on its workforce.

The Group identifies necessary and appropriate actions through case-specific evaluations, which may involve local management, HR, and occupational

safety personnel. In cases of an actual negative impact, actions may include immediate support for affected employees, such as medical care or coun-

selling, adjustments to workplace conditions, revisions to policies or procedures, or the provision of additional training. For potential negative impacts,

preventative measures may include strengthening risk controls, enhancing training programs, or introducing new processes to mitigate identified risks.

These actions are primarily determined at the local level, reflecting country-specific regulatory requirements and operational contexts. Where relevant,

findings from incidents or risk assessments may inform broader improvements across the Group.

Assessment

criteria

In case an issue is identified, it is assessed based on its severity, scale, and likelihood of recurrence. Relevant internal stakeholders are included in the

process (for example management representatives, legal or HR teams). If needed, external experts might be consulted.

Monitoring The effectiveness of actions and initiatives in delivering outcomes for our own workforce is analysed for example based on different metrics and

reports, employee satisfaction surveys, employee feedback and HR and leadership observations.

Key metrics regarding own workforce, such as sick leaves and accidents regarding the whole Rapala VMC Group are reported to the Group’s sustain-

ability reporting software biannually. A global employee satisfaction survey was executed for the first time in 2024 and will be repeated annually so

possible changes can be tracked and the results of actions evaluated. Local HR professionals and leadership are also following up on executed ac-

tions and initiatives. The next internal audits are planned for 2025.

SUSTAINABILITY STATEMENT | 5 3

52 | RAPALA VMC ANNUAL REPORT 2024

Rapala VMC recognizes that certain groups within its workforce may

be at higher risk of harm due to the nature of their roles, the environ

ments in which they work, or the specific tasks they perform. To improve

understanding of these risks and strengthen preventive measures, the

Group has implemented regular risk assessments, external audits, and

systematic data monitoring. In factories and warehouses, occupational

safety and health risk assessments are conducted regularly by dedicated

safety personnel, factory management, or occupational health and safety

committees. These assessments help identify key risks, such as exposure

to chemicals, heavy lifting, and machine operation. In office environments,

employees in specialist or managerial roles may experience increased

psychosocial strain due to the demands of their positions. To comple

ment these efforts, Rapala VMC has initiated independent external audits

to enhance risk evaluation. In May 2023, an audit was conducted at the

Estonian factory, with a specific focus on occupational safety. The in

sights gained from these audits contribute to ongoing improvements in

workplace conditions. The Group also monitors occupational accident

data to proactively identify trends and prevent future incidents. This in

formation is used to develop measures that enhance workplace safety

and minimize risks.

Processes to remediate negative impacts

Rapala VMC’s general process for remedy if material negative impacts

are caused consists of the following steps and actions. Local differences

might occur:

■ Encouraging reporting: The Group actively encourages employees to

report any accidents and incidents, including cases of harassment or

near-miss situations, through locally established reporting guidelines.

■ Guidance for supervisors: Managers and supervisors are provided

with guidelines on how to escalate reported concerns when necessary,

ensuring appropriate action is taken.

■ Investigation of incidents: All reported cases are thoroughly

investigated to understand the circumstances and assess the impact

on affected parties.

■ Preventive measures: Based on the findings of the investigation,

the Group identifies and implements measures to prevent similar

incidents from occurring in the future.

The potential remedies, if material negative impacts are caused, vary

based on the situation and its severity. In case of occupational accidents

or harassment, the employer can provide medical care, such as covering

health care expenses or offer possibilities for therapy. The Group can

also implement training on, for example, workplace harassment, diversity,

inclusion, or safety practices to raise awareness and reduce future inci

dents. If working conditions or methods turn out to be unsafe, the Group

can act by, for example, upgrading equipment, providing protective gear,

or redesigning work processes.

The workforce has a possibility to raise concerns through workforce

representatives, such as occupational health and safety delegates or shop

stewards. The representatives can then take the concerns to the local

management. Some locations have an HR contact person or a team that

can also discuss concerns or needs. Rapala VMC has started conducting

global employee surveys annually to give employees an additional anony

mous feedback mechanism. Some locations offer anonymous feedback

or suggestion boxes. In addition to these mechanisms, concerns can be

raised in local staff meetings, team meetings, development discussions

or one to one meeting with the person’s manager. In case of more serious

incidents or suspicions of misconduct, Rapala VMC’s own workforce or

external parties can raise concerns through the Group’s whistleblowing

channel. Rapala VMC acknowledges the need to strengthen the avail

ability and employee awareness of these channels by frequently sending

reminders to employees of the different ways they can raise concerns

and report grievances.

The annual employee satisfaction survey allows monitoring of possible

issues raised by the workforce by comparing the results to the previous

year. HR or occupational safety personnel will also track issues that have

been reported to them to ensure the situations are solved and corrections

are made. The whistleblowing team tracks the topics raised through the

whistleblowing channel to identify systemic issues and potential areas

for policy or process enhancements. Key metrics, such as the number

of reports received and the proportion of reports that lead to investiga

tions, are monitored and reviewed to evaluate the effectiveness of the

whistleblowing mechanism.

To ensure protection against retaliation for individuals who raise

concerns all messages are encrypted. To ensure the anonymity of the

person sending a message, WhistleB deletes all meta data, including

IP addresses. The person sending the message does not need to state

their identity in the subsequent dialogue with responsible receivers of

the report.

Rapala VMC’s employee satisfaction surveys are anonymous and

include a minimal amount of background information to ensure that in

dividual people cannot be connected to their responses. Also, the open

comments are handled and summarized by the HR department in charge

of the survey and will not be shown in their original form to a wider audi

ence, such as the management.

In several countries where Rapala VMC operates, such as European

countries, the employees’ representatives are safeguarded by law so they

can advocate effectively for the workforce without fear of dismissal or

other negative consequences. Companies often need to meet stricter

requirements before they can terminate a worker representative’s employ

ment. However, the Group recognizes that in certain countries protections

may be less formalized, making it harder for worker representatives to

raise concerns safely.

Currently, Rapala VMC has not conducted a formal evaluation of the

workforce’s level of trust in the mechanisms and structures for raising

concerns. This area has been recognized as a potential focus for future

assessment and improvement. The level of workforce awareness re

garding the Group’s whistleblowing channel was assessed by analysing

the volume of reports received and consulting local HR personnel to

evaluate awareness within their respective areas. Feedback from these

evaluations indicates that awareness of the channel requires further im

provement. A second channel for less serious grievance topics should

be considered as well.

Rapala VMC has set targets for sick leave ratio and accident frequency

rates in own manufacturing and warehousing locations. In 2024, Rapala

VMC implemented measures to mitigate negative impacts on its work

force by improving working conditions and processes in its factories and

warehouses. In Estonia, particular attention has been given to regulating

working temperatures and enhancing air circulation and a nominated

safety specialist was also hired. To reduce occupational accidents and

sick leaves, improvements in working conditions and processes have

been implemented in the UK and France manufacturing sites. In the UK,

picking and packing equipment in the warehouse have been updated

to ease manual handling and prevent fatigue. Additionally, in 2025, two

manual pallet trucks will be replaced with electric pallet trucks to further

reduce the physical strain of manual handling. In France, the Group has

invested in a new packing line to minimize lifting requirements, thereby

reducing the risk of for example back injuries. Packing stations have also

been reorganized to improve ergonomics and reduce employee fatigue.

Rapala VMC has set a goal to spend 1 % of sales annually on employee

training and development. As a first investment the Group implemented

an online learning platform in summer 2024 to improve the possibilities

for skills development of its employees. The platform offers a comprehen

sive library of courses for business, technical and creative professionals.

Key metrics and performance

Employees by gender and contract type

HC -

Men

HC -

Women

HC -

Total

Temporary 35 31 66

Permanent 663 640 1 303

Non-guaranteed hours 2 2 4

Total HC 700 673 1 373

These values are aligned with the most representative head count numbers (1 375)

reported in the Financial Statement table. The difference is caused by differences in

calculation methods in some of the legal units.

Employees by country HC

Estonia 488

France 171

Finland 144

Other 570

Total HC 1 373

Employee turnover

Number of employees who have left undertaking during

the period

404

Employee turnover 29,4%

All eight members of the Global Management Team are male and thus

the diversity ratio is 0 %.

Age distribution

Under 30

years

30 to 50

years

Over 50

years

Distribution of employees by age (HC) 211 715 447

Distribution of employees by age (%) 15,4% 52,2% 32,5%

Health & safety metrics

Workforce covered by health and

safety management system (%)

98,3%

Number of fatalities in own workforce as result of

work-related injuries and work-related ill health

Number of fatalities as result of work-related injuries

and work-related ill health of other workers working

on undertaking's sites

Number of recordable work-related accidents

for own workforce

Rate of recordable work-related accidents for own

workforce (accidents per million working hours)

26,1

Employee numbers are reported based on year-end figures, specifically

as of the end of December. The reported numbers represent headcount,

not full-time equivalents (FTE). Headcount is defined as the total number

of individuals with an existing employee agreement with the Group, re

gardless of their active working status. This includes employees who are

temporarily inactive, such as those on parental leave, sick leave, or other

forms of extended absence. Since the figures are reported as headcount

and not FTE, no adjustments are made to account for part-time or full-time

working arrangements. Each legal entity within the organization submits

its data through the Group’s sustainability reporting system. This data is

aggregated at the Group level.

Remuneration metrics

Gender Pay Gap (%) 29,0

Total Remuneration Ratio 17,6

The gender pay gap and annual total remuneration ratio are reported

based on data collected from each legal entity within the Group. Due to

the decentralized nature of HR and payroll systems, data compilation is

performed locally, and access to sensitive payroll data is strictly limited

to authorized personnel.

■ Gender pay gap: Each legal entity calculates the average gross

hourly pay for men and women separately. These values are submit

ted to the Group in a format that ensures individual employees can-

not be identified. The Group-level gender pay gap is then calculated

by weighting the unit-specific values based on the headcount of

each unit, resulting in a weighted average.

■ Annual Total Remuneration Ratio: Legal entities report the median

total annual remuneration from their respective employee salary

pools. To calculate the Group-level ratio, the highest total annual

remuneration, which is the President & CEO’s total annual remuner

ation, is used as the comparison figure. The unit-specific medians

are also weighted by headcount to derive the aggregated Group-

level value.

This reporting period marks the first time this data has been collected and

these indicators calculated, thus no significant changes to the underlying

data or methodologies were made during the reporting period.

Incidents, complaints and severe human rights impacts

Number of incidents of discrimination 0

Number of complaints filed through channels for people

in own workforce to raise concerns

Number of complaints filed to National Contact Points

for OECD Multinational Enterprises

Amount of fines, penalties, and compensation for dam-

ages as result of incidents of discrimination, including

harassment and complaints filed

Work-related grievances, incidents, and complaints related to social and

human rights matters are currently managed at the local unit level. The

Group is in the process of establishing a centralized reporting framework

to collect this data across all entities and is working on developing har

monized definitions to ensure consistency in reporting. At present, the

sustainability report includes complaints filed through OECD national

contact points and all grievances reported through the Group’s whistle

blowing channel. The Group recognizes the importance of capturing

lower-severity grievances and is committed to enhancing its reporting

processes to include these cases in future reporting periods. No severe

human rights issues and incidents connected to own workforce have

occurred during 2024.

SUSTAINABILITY STATEMENT | 5 5

54 | RAPALA VMC ANNUAL REPORT 2024

Core elements of Due Diligence Paragraphs in the sustainability statement / Header Page

Embedding due diligence in governance, strategy

and business model

Strategy and business model

Decision-Making and controls

Management of material impacts, risks and opportunities

The role of the administrative, management and supervisory bodies

E1 – Climate change: Governance and strategy

E4 – Biodiversity and ecosystems: Governance and strategy

E5 – Resource use and circular economy: Governance and strategy

S1 – Own workforce: Governance and strategy

Workforce management and well-being

Engaging with affected stakeholders in all key

steps of the due diligence

Risk management approach

Summary of sustainability related goals

Stakeholder engagement related to strategy and business model

Management of material impacts, risks and opportunities

Impact, risk and opportunity management

Double materiality assessment

Focus on business relationships and geographies

Application of methodologies and assumptions

Stakeholder engagement

Identifying and assessing adverse impacts Stakeholder engagement related to strategy and business model

Management of material impacts, risks and opportunities

Impact, risk and opportunity management

Double materiality assessment

Focus on business relationships and geographies

Activities increasing adverse impacts

Application of methodologies and assumptions

Stakeholder engagement

Monitoring and mitigation of impacts

Material impacts, risks and opportunities and their interaction with strategy and business model

Expected time horizons for material impacts

E1 Climate change – Impacts, risks and opportunities

E2 Pollution – Impacts, risks and opportunities

E3 Water and marine resources - Impacts, risks and opportunities

E4 Biodiversity and ecosystems - Impacts, risks and opportunities

E5 Resource use and circular economy - Impacts, risks and opportunities

G1 Business conduct – Impacts, risks and opportunities

Engaging with own employees

Impact, risks and opportunities related to own workforce

Taking actions to address those adverse impacts Monitoring and mitigation of impacts

Material impacts, risks and opportunities and their interaction with strategy and business model

E1 – Climate change: Governance and strategy

Key metrics and performance

E4 – Biodiversity and ecosystems: Governance and strategy

Key metrics and performance

E5 – Resource use and circular economy: Governance and strategy

Key metrics and performance

Workforce management and well-being

Engaging with own employees

Impact, risks and opportunities related to own workforce

Processes to remediate negative impacts

Tracking the effectiveness of these efforts and

communicating

Management of material impact, risks and opportunities

Monitoring and mitigation of impacts

Key metrics and performance

Engaging with own employees

Impact, risks and opportunities related to own workforce

Processes to remediate negative impacts

ANNEXES TO THE SUSTAINABILITY STATEMENT

STATEMENT ON DUE DILIGENCE (ESRS 2, GOV-4, paragraph 30; 32)

TABLE - Disclosure of mapping of information provided in sustainability statement about due diligence process

ESRS DISCLOSURE REQUIREMENTS COMPLIED WITH IN PREPARING THE SUSTAINABILITY STATEMENT

(ESRS 2, IRO-2, paragraph 56, AR19)

TABLE - Disclosure of the list of ESRS Disclosure Requirements complied with in preparing the sustainability statement based on materiality assessment

Section ESRS Topic DR # Disclosure requirement description Page #

General ESRS 2 -

General

disclosures

BP-1 General basis for preparation of the sustainability statement General basis for preparation of the statement ; 8

BP-2 Disclosures in relation to specific circumstances Reporting assumptions and sources of uncertainty ; 8

GOV-1 The role of the administrative, management

and supervisory bodies

Decision-making and controls ; 13

Management of material impacts, risks

and opportunities ; 13

The role of administrative, management

and supervisory bodies ; 13

GOV-2 Information provided to and sustainability matters

addressed by the undertaking’s administrative, management

and supervisory bodies

Management of material impacts,

risks and opportunities ; 13

Impact, risk and opportunity management ; 15

GOV-3 Integration of sustainability-related performance

in incentive schemes

Sustainability incentive integration ; 14

GOV-4 Statement on due diligence Statement on Due Diligence ; 54

GOV-5 Risk management and internal controls over

sustainability reporting

Risk management approach ; 9

Impact, risk and opportunity management ; 15

IRO-1 Description of the process to identify and assess

material impacts, risks and opportunities

Management of material impacts, risks

and opportunities ; 13

Impact, risk and opportunity management ; 15

Description of how sustainability-related risks are

prioritized relative to other risks ; 17

Double materiality assessment ; 17

Activities increasing adverse impacts ; 17

Application of methodologies and assumptions ; 18

Stakeholder engagement ; 19

Monitoring and mitigation of impacts ; 19

IRO-2 Disclosure Requirements in ESRS covered by the

undertaking’s sustainability statement

Double materiality assessment ; 17

Stakeholder engagement ; 19

Monitoring and mitigation of impacts ; 19

ESRS disclosure requirements complied with

in preparing the sustainability statement ; 56

Datapoints from other EU legislation ; 58

MDR-A Actions and resources in relation to material

sustainability matters

Key metrics and performance ; 34

Key metrics and performance ; 42

Key metrics and performance ; 44

Workforce management and well-being ; 47

Engaging with own employees ; 50

MDR-M Metrics in relation to material sustainability matters Key metrics and performance ; 34

Key metrics and performance ; 42

Key metrics and performance ; 44

Workforce management and well-being ; 47

Engaging with own employees ; 50

MDR-P Policies adopted to manage material sustainability matters Governance and strategy ; 33

Governance and strategy ; 39

Governance and strategy ; 43

Workforce management and well-being ; 47

MDR-T Tracking effectiveness of policies and actions through targets Governance and strategy ; 33

Governance and strategy ; 39

Governance and strategy ; 43

Workforce management and well-being ; 47

Processes to remediate negative impacts ; 52

SBM-1 Strategy, business model and value chain Strategy and business model ; 9

Key metrics and performance ; 53

SBM-2 Interests and views of stakeholders Stakeholder engagement related to

strategy and business model ; 12

SBM-3 Material impacts, risks and opportunities and their

interaction with strategy and business model

Strategy and its development ; 10

Material impacts, risks and opportunities and their

interaction with strategy and business model ; 19

SUSTAINABILITY STATEMENT | 5 7

56 | RAPALA VMC ANNUAL REPORT 2024

Section ESRS Topic DR # Disclosure requirement description Page #

Environmental E5 - Resource

use and circu-

lar economy

E5.IRO-1 Description of the processes to identify and assess

material resource use and circular economy-related impacts,

risks and opportunities

E5 Resource use and circular economy –

Impacts, risks and opportunities ; 27

E5-1 Policies related to resource use and circular economy Governance and strategy ; 43

E5-2 Actions and resources related to resource use and circular

economy

Key metrics and performance ; 44

E5-3 Targets related to resource use and circular economy Key metrics and performance ; 44

E5-4 Resource inflows Material inflows ; 45

E5-5 Resource outflows Material outflows ; 46

E5-6 Anticipated financial effects from resource use and circular

economy-related impacts, risks and opportunities

Phase -in

Social S1 - Own

workforce

ESRS

2:SBM-2

Interests and views of stakeholders Stakeholder engagement related to strategy and

business model ; 12

S1.SBM-3 Material impacts, risks and opportunities and their interaction

with strategy and business model

Impact, risks and opportunities

related to own workforce ; 50

Processes to remediate negative impacts ; 52

S1-1 Policies related to own workforce Governance and strategy ; 47

Workforce management and well-being ; 47

Impact, risks and oppotunities related to own

workforce ; 50

S1-2 Processes for engaging with own workforce and workers’ repre-

sentatives about impacts

Engaging with own employees ; 50

S1-3 Processes to remediate negative impacts and channels for own

workforce to raise concerns

Processes to remediate negative impacts ; 52

S1-4 Taking action on material impacts on own workforce,

and approaches to managing material risks and pursuing

material opportunities related to own workforce, and

effectiveness of those actions

Engaging with own employees ; 50

Impact, risks and opportunities related to own

workforce ; 50

Processes to remediate negative impacts ; 52

S1-5 Targets related to managing material negative impacts, advancing

positive impacts, and managing material risks and opportunities

Workforce management and well-being ; 47

Engaging with own employees ; 50

S1-6 Characteristics of the undertaking’s employees Key metrics and performance ; 53

S1-7 Characteristics of non-employees in the

undertaking’s own workforce

Phase-in

S1-8 Collective bargaining coverage and social dialogue Phase-in

S1-9 Diversity metrics Key metrics and performance ; 53

S1-10 Adequate wages Not material

S1-11 Social protection Phase-in

S1-12 Persons with disabilities Not material

S1-13 Training and skills development metrics Phase-in

S1-14 Health and safety metrics Key metrics and performance ; 53

S1-15 Work-life balance metrics Phase-in

S1-16 Remuneration metrics (pay gap and total remuneration) Key metrics and performance ; 53

S1-17 Incidents, complaints and severe human rights impacts Key metrics and performance ; 53

S2 -

Workers in

value chain

ESRS

2:SBM-2

Interests and views of stakeholders Not material

S2.SBM-3 Material impacts, risks and opportunities and their interaction

with strategy and business model

S2-1 Policies related to value chain workers

S2-2 Processes for engaging with value chain workers about impacts

S2-3 Processes to remediate negative impacts and channels for value

chain workers to raise concerns

S2-4 Taking action on material impacts on value chain workers, and

approaches to managing material risks and pursuing material

opportunities related to value chain workers, and effectiveness of

those action

S2-5 Targets related to managing material negative impacts, advancing

positive impacts, and managing material risks and opportunities

Section ESRS Topic DR # Disclosure requirement description Page #

Environmental E1 -

Climate

change

E1.GOV-3 Integration of sustainability-related performance

in incentive schemes

Sustainability incentive integration ; 14

E1.IRO-1 Description of the processes to identify and assess

material climate-related impacts, risks and opportunities

E1 Climate change –

Impacts, risks and opportunities ; 22

E1.SBM-3 Material impacts, risks and opportunities and their

interaction with strategy and business model

Material impacts, risks and opportunities and their

interaction with strategy and business model ; 19

Processes to identify and assess material climate-

related impacts, risks and opportunities ; 22

E1-1 Transition plan for climate change mitigation Strategy and its development ; 10

Governance and strategy ; 33

E1-2 Policies related to climate change mitigation and adaptation Governance and strategy ; 33

E1-3 Actions and resources in relation to climate change policies Key metrics and performance ; 34

E1-4 Targets related to climate change mitigation and adaptation Key metrics and performance ; 34

E1-5 Energy consumption and mix Energy consumption and mix ; 35

E1-6 Gross Scopes 1, 2, 3 and Total GHG emissions GHG emissions ; 35

E1-7 GHG removals and GHG mitigation projects

financed through carbon credits

Not material

E1-8 Internal carbon pricing Not material

E1-9 Anticipated financial effects from material physical and

transition risks and potential climate-related opportunities

Phase-in

E2 -

Pollution

E2.IRO-1 Description of the processes to identify and assess material

pollution-related impacts, risks and opportunities

E2 Pollution – Impacts, risks and opportunities ; 24

E2-1 Policies related to pollution Not material

E2-2 Actions and resources related to pollution

E2-3 Targets related to pollution

E2-4 Pollution of air, water and soil

E2-5 Substances of concern and substances of very high concern

E2-6 Anticipated financial effects from pollution-related

impacts, risks and opportunities

E3 - Water

and marine

resources

E3.IRO-1 Description of the processes to identify and assess material water

and marine resources-related impacts, risks and opportunities

E3 Water and marine resources –

Impacts, risks and opportunities ; 25

E3-1 Policies related to water and marine resources Not material

E3-2 Actions and resources related to water and marine resources

E3-3 Targets related to water and marine resources

E3-4 Water consumption

E3-5 Anticipated financial effects from water and marine

resources-related impacts, risks and opportunities

E4 - Biodi-

versity and

ecosystems

E4.IRO-1 Description of processes to identify and assess material biodiver-

sity and ecosystem-related impacts, risks and opportunities

E4 Biodiversity and ecosystems – Impacts, risks and

opportunities ; 25

E4.SBM-3 Material impacts, risks and opportunities and their interaction with

strategy and business model

E4 Biodiversity and ecosystems – Impacts, risks and

opportunities ; 25

E4-1 Transition plan and consideration of biodiversity and ecosystems

in strategy and business model

Governance and strategy ; 39

E4-2 Policies related to biodiversity and ecosystems Governance and strategy ; 39

E4-3 Actions and resources related to biodiversity and ecosystems Key metrics and performance ; 42

E4-4 Targets related to biodiversity and ecosystems Key metrics and performance ; 42

E4-5 Impact metrics related to biodiversity and ecosystems change Not material

E4-6 Anticipated financial effects from biodiversity and

ecosystem-related risks and opportunities

Phase -in

SUSTAINABILITY STATEMENT | 5 9

58 | RAPALA VMC ANNUAL REPORT 2024

Section ESRS Topic DR # Disclosure requirement description Page #

Social S3 -

Affected

communities

ESRS

2:SBM-2

Interests and views of stakeholders Not material

S3.SBM-3 Material impacts, risks and opportunities and their interaction

with strategy and business model

S3-1 Policies related to affected communities

S3-2 Processes for engaging with affected communities about impacts

S3-3 Processes to remediate negative impacts and channels for affected

communities to raise concerns

S3-4 Taking action on material impacts on affected communities, and ap-

proaches to managing material risks and pursuing material opportunities

related to affected communities, and effectiveness of those actions

S3-5 Targets related to managing material negative impacts, advancing

positive impacts, and managing material risks and opportunities

S4 -

Consumers

and

end-users

ESRS

2:SBM-2

Interests and views of stakeholders Not material

S4.SBM-3 Material impacts, risks and opportunities and their interaction

with strategy and business model

S4-1 Policies related to consumers and end-users

S4-2 Processes for engaging with consumers and end-users about impacts

S4-3 Processes to remediate negative impacts and channels for consumers

and end-users to raise concerns

S4-4 Taking action on material impacts on consumers and end-users, and ap-

proaches to managing material risks and pursuing material opportunities

related to consumers and end-users, and effectiveness of those actions

S4-5 Targets related to managing material negative impacts, advancing posi-

tive impacts, and managing material risks and opportunities

Governance G1 - Business

conduct

ESRS 2:IRO-1Description of the processes to identify and assess material impacts,

risks and opportunities

G1 Business conduct –

Impacts, risks and opportunities ; 28

G1.GOV-1 The role of the administrative, supervisory and management bodies Decision-making and controls ; 13

Management of material impacts, risks and

opportunities ; 13

The role of administrative, management

and supervisory bodies ; 13

G1-1 Business conduct policies and corporate culture Not material

G1-2 Management of relationships with suppliers

G1-3 Prevention and detection of corruption and bribery

G1-4 Incidents of corruption or bribery

G1-5 Political influence and lobbying activities

G1-6 Payment practices

DR Disclosure Require-

ment and related

datapoint

SFDR ( 23 ) refer-

ence

Pillar 3 ( 24 ) reference Benchmark Regula-

tion ( 25 ) reference

EU Climate Law (

26 ) reference

Header / Page #

ESRS 2

GOV-1

Board's gender

diversity paragraph

21 (d)

Indicator number

13 of Table #1 of

Annex 1

Commission Del-

egated Regulation

(EU) 2020/1816 ( 27 )

, Annex II

The role of administrative, manage-

ment and supervisory bodies ; 13

ESRS 2

GOV-1

Percentage of board

members who are

independent para-

graph 21 (e)

Delegated Regulation

(EU) 2020/1816,

Annex II

The role of administrative, manage-

ment and supervisory bodies ; 13

ESRS 2

GOV-4

Statement on due

diligence paragraph

Indicator number 10

Table #3 of Annex 1

Statement on Due Diligence ; 54

ESRS E1-1 Undertakings ex-

cluded from Paris-

aligned Benchmarks

paragraph 16 (g)

Article 449a Regulation (EU)

No 575/2013; Commission

Implementing Regulation (EU)

2022/2453 Template 1: Banking

book-Climate Change transition

risk: Credit quality of exposures

by sector, emissions and residual

maturity

Delegated Regulation

(EU) 2020/1818,

Article12.1 (d) to (g),

and Article 12.2

Governance and strategy ; 33

DATAPOINTS FROM OTHER EU LEGISLATION

(ESRS 2, IRO-2, paragraph 56)

TABLE - Disclosure of a list of data points derived from other EU legislation and their location in the sustainability statement

DR Disclosure Require-

ment and related

datapoint

SFDR ( 23 ) refer-

ence

Pillar 3 ( 24 ) reference Benchmark Regula-

tion ( 25 ) reference

EU Climate Law (

26 ) reference

Header / Page #

ESRS E1-5 Energy consumption

from fossil sources

disaggregated by

sources (only high

climate impact sec-

tors) paragraph 38

Indicator number 5

Table #1 and Indica-

tor n. 5 Table #2 of

Annex 1

Energy consumption and mix ; 35

ESRS E1-5 ESRS E1-5 Energy

consumption and

mix paragraph 37

Indicator number 5

Table #1 of Annex 1

Energy consumption and mix ; 35

ESRS E1-5 Energy inten-

sity associated

with activities in

high climate impact

sectors paragraphs

40 to 43

Indicator number 6

Table #1 of Annex 1

Energy consumption and mix ; 35

ESRS E1-6 Gross Scope 1, 2,

3 and Total GHG

emissions para-

graph 44

Indicators number

1 and 2 Table #1 of

Annex 1

Article 449a; Regulation (EU)

No 575/2013; Commission

Implementing Regulation (EU)

2022/2453 Template 1: Banking

book – Climate change transition

risk: Credit quality of exposures

by sector, emissions and residual

maturity

Delegated Regulation

(EU) 2020/1818, Ar-

ticle 5(1), 6 and 8(1)

GHG emissions ; 35

ESRS E1-6 Gross GHG emis-

sions intensity para-

graphs 53 to 55

Indicators number 3

Table #1 of Annex 1

Article 449a Regulation (EU)

No 575/2013; Commission

Implementing Regulation (EU)

2022/2453 Template 3: Banking

book – Climate change transition

risk: alignment metrics

Delegated Regulation

(EU) 2020/1818,

Article 8(1)

GHG emissions ; 35

ESRS E5-5 Non-recycled waste

paragraph 37 (d)

Indicator number 13

Table #2 of Annex 1

Material outflows ; 46

ESRS E5-5 Hazardous waste

and radioactive

waste paragraph 39

Indicator number 9

Table #1 of Annex 1

Material outflows ; 46

ESRS S1-1 Human rights policy

commitments para-

graph 20

Indicator number 9

Table #3 and Indica-

tor number 11 Table

#1 of Annex I

Governance and strategy ; 47

ESRS S1-1 Due diligence

policies on issues

addressed by

the fundamental

International

Labor Organisation

Conventions 1 to 8,

paragraph 21

Delegated Regulation

(EU) 2020/1816,

Annex II

Governance and strategy ; 47

ESRS S1-1 processes and mea-

sures for preventing

trafficking in human

beings paragraph 22

Indicator number 11

Table #3 of Annex I

Workforce management and well-

being ; 47

ESRS S1-1 workplace accident

prevention policy

or management sys-

tem paragraph 23

Indicator number 1

Table #3 of Annex I

Impact, risks and opportunities

related to own workforce ; 50

ESRS S1-3 grievance/com-

plaints handling

mechanisms

paragraph 32 (c)

Indicator number 5

Table #3 of Annex I

Processes to remediate negative

impacts ; 52

ESRS

S1-14

Number of fatalities

and number and

rate of work-related

accidents paragraph

88 (b) and (c)

Indicator number 2

Table #3 of Annex I

Delegated Regulation

(EU) 2020/1816,

Annex II

Key metrics and performance ; 53

ESRS

S1-16

Unadjusted gender

pay gap paragraph

97 (a)

Indicator number 12

Table #1 of Annex I

Delegated Regulation

(EU) 2020/1816,

Annex II

Key metrics and performance ; 53

ESRS

S1-16

Excessive CEO pay

ratio paragraph 97 (b)

Indicator number 8

Table #3 of Annex I

Key metrics and performance ; 53

ESRS

S1-17

Incidents of discrim-

ination paragraph

103 (a)

Indicator number 7

Table #3 of Annex I

Key metrics and performance ; 53

SHARES AND SHAREHOLDERS | 6 1

60 | RAPALA VMC ANNUAL REPORT 2024

RISK MANAGEMENT

The objective of Rapala VMC Corporation’s risk management is to support

the implementation of the Group’s strategy and execution of business

targets. This is done by monitoring and mitigating the related threats

and risks and simultaneously identifying and managing opportunities.

APPROACH TO RISK MANAGEMENT

The Board evaluates the Group’s financial, operational and strategic risk

position regularly and establishes related policies and instructions to

be implemented and coordinated by Group management. The daily risk

management activities are primarily delegated to the management of

business units.

Risk management continued to receive management attention in 2024.

The focus of Group level risk management in 2024 was on foreign ex

change risk management as well as risk management activities on liquid-

ity, interest rate and hazard risks. Other emphasized areas were account

receivables, Group wide insurance programs and strategic supply chain

management.

Below is a summary of key strategic, operational and financial risks

as well as the main actions to mitigate these risks.

STRATEGIC RISKS

Sport fishing is a form of leisure hobby and the Group’s products are com-

peting against a wide range of other hobbies. The Group is promoting the

attractiveness of sport fishing through active sales and marketing as well

as brand management. By utilizing its unique research and development

processes and resources, the Group is constantly developing new prod

ucts to meet consumer needs and creating new needs for the consumers.

Brand portfolio and corporate reputation are among the most valuable

intangible assets of the Group. The Rapala VMC Group is actively manag

ing its brands and their identity and securing that the value of the brands

or corporate reputation are not jeopardized or violated by any means. The

Group’s brands are also legally protected.

Consumers relate the Group’s brands to high quality, unique fishing

experience, special functional features and trustworthy distribution chan

nel. Consumers are able to differentiate illegal copy products, and they

don’t constitute a strategic threat for the Group. The Group protects vig

orously its intellectual property rights and acts against illegal copiers

and distributors.

Sport fishing is dependent on the availability of fresh fishing waters

for fishes to live and breed. Pollution and potential environmental catas

trophes are concerns for the Group. The Rapala VMC Group is actively

promoting initiatives to enhance environmental protection and increas

ing preparedness to comply with continuously tightening environmental

regulations by taking steps to reduce the environmental impacts of its

operations and products.

The Group faces competition in all markets where its products are sold.

Due to the uniquely wide distribution network, the Group’s geographi

cal market risk is truly globally spread, evening out seasonal and local

market fluctuations.

The Rapala VMC Group has a limited number of global competitors. The

Group’s global distribution network is unique in the industry. Within each

market, the Group’s competitors are often local fishing tackle producers

and distributors operating with a limited range of products and narrow

geographical scope. In some countries, competition is created by fishing

tackle retailers selling private label products. Established fishing tackle

brands’ expansion into new product categories is also creating compe

tition in some product segments. The strength of the Group’s product

development and brand portfolio, as well as flexibility to serve different

markets with market-specific products ranges, is essential in succeeding

in market competition.

The current economic climate with uncertainty in the global trade en

vironment (including tariffs) can impact the sales of fishing tackle and

more over impact the profitability of the Group’s operations as products

are manufactured in or sourced from many different countries in Europe

and in Asia. Some of these countries have higher political risks but simul

taneously provide access to competitive labor cost. The Group monitors

country risks and costs and is actively seeking ways to manage the risk

of rising production and distribution costs.

Manufacturing of sport fishing products is not dependent on any propri

etary manufacturing technologies or patents. The Group’s manufacturing

units are actively monitoring the development of generic manufacturing

technologies and considering different production applications.

The Group has several manufacturing locations and various raw ma

terial and finished good suppliers. Different manufacturers produce for

the most part separate product categories and the Group is not critically

dependent on any single product or raw material supplier.

The Group’s customer base is geographically and quantitatively well

diversified. Customers are mostly country-specific and not operating

globally. The Group is not critically dependent on any single customer:

even the biggest single customer represents moderate share of the

Group’s net sales. The Group is not largely engaged in direct consumer

retailing. This is not considered to be a risk as consumer demand is

largely driven by brand consciousness and alternative routes to market

can be established when needed.

The Board evaluates the Group’s strategic risks annually and the Group

management continuously monitors changes in the business environ

ment. Strategic risk management in local jurisdictions is delegated to

the management of each business unit.

OPERATIONAL AND HAZARD RISKS

The fishing tackle business has traditionally been relatively resilient to

increased uncertainties and downturns in the general economic climate.

The truly global nature of the Group’s sales and operations spreads the

market risks caused by uncertainties in the global economy.

The underlying consumer demand for the Group’s products is seasonal

and impacted by unforeseeable factors such as weather. To offset and

balance the seasonality, the Group is engaged in production and distri

bution of winter fishing and winter sports equipment. To mitigate the

effects of seasonality, the Group is also operating with own distribution

in the southern hemisphere and is developing its production planning to

better respond to changes in the market demand.

Due to the seasonality in demand, the Group’s product shipments con

centrate annually to relatively short time periods, where supply problems

could endanger the sales of the season. Similarly, lower than expected

sales volumes may lead to excess inventories, as it is difficult to cancel

committed orders within short notice.

There is a high level of dependency between the Group’s manufactur

ing and distribution units and interruption at earlier stage of the supply

chain could have knock-on effects throughout the rest of the Group.

The importance of proper order forecasting and production planning

has increased. The related risks are managed with high level of co-

operation between manufacturing and distribution units, safety stocks

and extensive insurance coverage. The Group-wide supply chain and

logistics initiatives continued in 2024 and mitigated these risks relating

to operational efficiencies.

The Group’s sales prices are primarily fixed annually or bi-annually,

normally before each season. Sudden changes in raw material prices or

foreign exchange rates may have significant impact on costs of some

products. The Group aims to push increases in costs to the sales prices

immediately or during a period of time. The Group’s market risks and

mitigation actions are analyzed in more detail in the section “Financial

Risks” and in note 22 to the consolidated financial statements.

In respect of manufacturing activities, the Group is not critically de

pendent on any single external production factor supplier. Availability of

competent production labor is essential and the Group aims to maintain

good employer reputation and labor relations.

There are dependencies between the Group’s manufacturing units,

which could cause supply challenges e.g. in case of fire or other haz

ard. Such hazard could lead to property damages but also to business

interruption losses throughout the supply chain. Therefore, the Group

emphasizes hazard risk management. The Group has together with its

property and business interruption insurer continued to conduct annu

ally hazard prevention reviews to Group’s key factories and distribution

warehouses. Group management has also continued to maintain risk

awareness throughout the organization.

The Group constantly develops its global insurance programs, which

cover most of the Group companies. Global insurance policies, which

take into account the Group’s interdependency, are in place for property

damage and business interruption, transportation as well as general and

product liability. The Group has increased its focus also on mitigating

fraud risk.The Board evaluates the Group’s operational risks at least once

a year. Group management monitors and coordinates the continuous

management of operational risks, which is the responsibility of the man

agement of each business unit.

FINANCIAL RISKS

The Group’s financial risks consist of market risks, credit and default

risks and liquidity risks. The Board evaluates financial risks during the

year and Group management monitors and manages them continuously.

Financial risks are discussed in detail, as required by IFRS 7, in note 22

of the consolidated financial statements.

SHARES AND SHAREHOLDERS

Rapala VMC Corporation’s shares have been traded on the Nasdaq Hel-

sinki since 1998. In 2024, the shares traded between EUR 3.44 and 1.89

with an average price of EUR 2.45.

SHARES AND VOTING RIGHTS

On December 31, 2024, the share capital fully paid and reported in the

Trade Register was EUR 3 552 160.41 and the total number of shares

was 39 000 000. The average number of shares during the financial year

was 39 000 000. Each share is entitled to one vote.

There were no changes in the share capital in 2024.

BOARD’S AUTHORIZATIONS

The AGM authorised the Board of Directors to resolve in accordance with

the proposal of the Board of Directors on the issuance of a maximum of

3 900 000 shares through a share issue or by issuing options and other

special rights entitling to shares pursuant to chapter 10, section 1 of the

Finnish Limited Liability Companies Act in one or several tranches. The

proposed maximum number of shares corresponds to 10% of all shares

in the Company. The authorisation can also be used for incentive arrange

ments for the Company’s management and key persons, however, no

more than 900 000 shares in total may be granted for this purpose. The