BOARD OF DIRECTORS’ REPORT

ENVIRONMENTAL MATTERS KONE’s climate related disclosures according to TCFD

In line with KONE’s strategic target of being a leader in
sustainability, our environmental approach supports the
ongoing green and digital transformation of the built TCFD recommended disclosures Content in KONE’s report
environment into smart eco-cities, low-carbon communities, Governance Board’s oversight of climate-related risks and Non-financial information / Management and Board of
and net zero energy buildings. opportunities Directors’ oversight of sustainability, p. 11
We have defined our environmental ambition, objectives
and commitment to environmental sustainability in all activities
Management’s role in assessing and managing Non-financial information / Management and Board of
in our Environmental policy statement, which is publicly climate-related risks and opportunities Directors’ oversight of sustainability, p. 11
available at kone.com. In 2021, we renewed both this
statement and our Environmental Excellence program, which
guides us towards our environmental targets, to improve Strategy Climate-related risks and opportunities over the Non-financial information / Environmental matters, p. 13
alignment with our heightened climate and environmental short, medium and long term
ambition. In line with the statement, we develop smart and
sustainable technologies for People Flow® and want to be the
preferred partner for environmentally sustainable urban Impact of climate-related risks and opportunities Strategy, p. 3
environments. We drive transformation towards sustainable, on the organization’s businesses, strategy and Risks and risk management related to the reporting of non-
circular and carbon neutral operations, as well as engage our financial planning financial information, p. 23
employees, customers, suppliers and partners on climate and
Resilience of strategy, taking into consideration KONE is planning to conduct scenario work during 2022.
environmental action. The KONE Code of Conduct, the
different climate-related scenarios
Supplier Code of Conduct, the Distributor Code of Conduct
and the KONE Global Vehicle Fleet, Facility and Travel
Policies also set out environmental requirements relevant to Risk Processes for identifying and assessing climate- Risks and risk management related to the reporting of non-
the operations of KONE or its partners. management related risks financial information, p. 23
KONE has a climate pledge with science-based targets for
significant greenhouse gas emissions reductions and an aim
to have carbon neutral operations by 2030. We are committed Processes for managing climate-related risks Risks and risk management related to the reporting of non-
to a 50% cut in the emissions from our own operations (scope financial information, p. 23
1 and 2 emissions) by 2030, compared to a 2018 baseline.
This target is in line with limiting global warming to 1.5°C,
which is currently the most ambitious criteria for setting How processes for identifying, assessing and Risks and risk management related to the reporting of non-
science-based targets. On top of these ambitious emissions managing climate-related risks are integrated into financial information, p. 23
the organizations overall risk management
reduction targets, we aim to achieve carbon neutral
operations by 2030 by offsetting the remaining emissions. In Metrics and Metrics used to assess climate-related risks and Non-financial information / Key performance indicators, p. 12
addition, we target a 40% reduction in the emissions related to targets opportunities
our products’ materials and lifetime energy use (scope 3 Non-financial information / Environmental matters, p. 13
emissions) over the same target period, relative to orders
received. KONE was the first to validate its science-based Scope 1, Scope 2 and Scope 3 emissions and Non-financial information / Key performance indicators, p. 12
targets against the latest climate science in the elevator and the related risks
escalator industry and KONE’s targets are the most ambitious Non-financial information / Environmental matters, p. 13
in the industry to date. With the climate pledge, we are taking
even stronger action and leading the way in our industry to Targets used to manage climate-related risks and Non-financial information / Key performance indicators, p. 12
create more sustainable urban environments. opportunities and performance against targets
We are taking strong actions across the supply chain and Non-financial information / Environmental matters, p. 13
work together with our suppliers to cut emissions, increase the
use of sustainable materials and limit the use of hazardous

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substances. We screen our suppliers’ performance in terms of certifications for the KONE 3000S MonoSpace®, KONE 3000 We revised our target setting in 2021, both in terms of
their environmental and social responsibility with our Supplier Minispace™ and KONE 3000 TranSys™ elevators. KONE ambition and scope, to align with our climate pledge. Our
Sustainability Assessment. The assessment includes the currently has seven SGBP-certified solutions and is the first long-term target for Scope 1 and 2 emissions is an absolute
basic criteria that must be met in order to continue doing elevator and escalator company to have all certifications with reduction of 50% by 2030 from the base-year 2018. The
business with KONE, as well as other, more advanced the highest possible ratings. The SGBP-certified solutions are respective annual target for 2021 is an absolute reduction of
criteria. recommended for Green Mark -certified buildings. KONE has 7%, compared to the base-year 2019 due to the exceptional
Most of KONE’s environmental figures for 2021 will be also received several approved Byggvarubedömningen (BVB) circumstances in 2020. This target includes our Scope 1 & 2
published in the 2021 Sustainability Report during the second assessments for its products. During 2021, approved emissions, extended by selected Scope 3 categories that are
quarter of 2022. assessments were received for the KONE TranSys™ DX and closely monitored by KONE: logistics, business air travel and
MonoSpace® 700 DX elevators as well as for the waste. During 2020, the greenhouse gas emissions from our
KONE’s offering TransitMaster™ 140T escalator. BVB is a nonprofit own operations (Scope 1 and 2) reduced by 12.0% in
The majority of the environmental impacts associated with organization that evaluates solutions for buildings and drives absolute terms compared to 2019. In 2021, we have made
KONE’s activities are related to our products over their full life the use of sustainable building materials. good progress in terms of reducing emissions from our own
cycle. In 2020, our product-related Scope 3 emissions During 2021, important achievements were also made in operations. Many KONE subsidiaries are taking steps to
increased by 0.7% relative to ordered products. This was the transparent communication about the environmental and renew their vehicle fleets. For example, in our maintenance
mainly due to an increased number of products sold health impacts of our products with Environmental Product operations KONE started piloting e-cargo bikes and e-
especially in the Asia-Pacific region, where the lifetime energy Declarations (EPD) published for seven of our solutions. scooters in Austria and replacing old motorcycles with new
use emissions of our products tend to be higher due to fossil These EPDs included the first escalator EPD in the industry, electric ones in Hong Kong. In terms of our facilities, we
fuel-based energy generation. KONE will publish the carbon which was received by the KONE TransitMaster™ 140. expect to reach our short-term target of 50% (2030 target:
emissions from 2021 in the Sustainability Report during the In 2021, KONE launched the industry’s first carbon neutral 100%) of electricity consumption from renewable sources by
second quarter of 2022. maintenance service offering. KONE Care DX™ maintenance the end of 2021 thanks to good progress made during the
Requirements for smart and sustainable materials, activities will be carbon neutral through CO2e reduction year. Our manufacturing units in the United States, Mexico
solutions and buildings are increasing. We see these shifts in actions that we are implementing to reach the targets of our and China now purchase 100% renewable electricity, and the
demand as a growth opportunity and want to be the preferred climate pledge as well as by compensating the remaining solar panels we installed in our new manufacturing unit in
partner for our customers. To further understand the emerging CO2e emissions with our third-party certified carbon Chennai, India during 2020 were in operation from the
needs and technologies in sustainable, resilient urban compensation program. We support carbon offsetting projects beginning of 2021. The finalized 2021 carbon footprint results
environments and people’s behavior in them, we actively in different parts of the world. These projects reduce or avoid will be published in our Sustainability Report in the second
participate in large-scale research projects and consortiums. CO2e emissions, and are related to, for example, renewable quarter of 2022.
Our innovations can have a significant role in advancing energy such as solar and hydro power, as well as to KONE uses the ISO 14001 environmental management
climate action. We support smart and sustainable building reforestation or avoiding deforestation. system to enhance its environmental performance. It covers
through our energy-efficient and innovative offering, functional our corporate units, including all R&D, manufacturing units,
Own operations and 26 major country organizations. Three KONE
and sustainable materials, as well as transparent
documentation about our products’ environmental impacts. During the first quarter of 2021, we finalized the calculations manufacturing units have ISO 50001 energy management
Lifetime energy consumption is one of the main of our 2020 carbon footprint. KONE’s target was to reduce its system certification. At the end of 2021, 88% (2020: 90%) of
considerations in green buildings and it is also the single most operational carbon footprint relative to sales by 3% annually. our key suppliers were ISO 14001 certified, our target being
significant environmental impact of KONE’s products overall. In 2020, we exceeded our annual target as our overall 100%.
This underlines the importance of eco-efficient solutions. operational carbon footprint (Scope 1, 2 and selected Scope 3 An increasing trend in customer demand is the focus on
During the year, we obtained seven best in-class energy categories) relative to sales decreased by 8.9 % compared to wooden buildings. To accommodate this, KONE’s
performance references for our DX elevator models according 2019, with sales growth calculated at comparable exchange manufacturing unit in Finland continues to hold the FSC®
to the international ISO 25745 standard for the energy rates. Our scope 1 and 2 greenhouse gas emissions relative (Forest Stewardship Council) Chain of Custody certification,
performance of lifts, escalators and moving walks. We to sales decreased by 11.8%. KONE’s carbon footprint data providing credible assurance that elevators manufactured in
currently have 31 best-in-class energy efficiency references has been externally assured. Additionally, we have set a long- this unit come with wooden components from environmentally
for our products according to the standard. term target of 0% landfill waste from our manufacturing units and socially responsible sources. KONE’s subsidiaries in
Several KONE solutions have received external by 2030. In 2020, the share of landfill waste in our Great Britain and Ireland continue to hold the FSC® Chain of
recognition for their environmental performance. During 2021, manufacturing units was 0.6% (2019: 0.9%). Custody certification, meaning that customers can now be
we received Singapore Green Building Product (SGBP) provided this assurance for the full delivery chain for elevators

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installed in these countries. To our knowledge, KONE is the

only elevator company to have received FSC® certifications.

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PERSONNEL AND SOCIAL MATTERS

Number of employees
Our main goal is to have the most capable and engaged team
of professionals, who succeed in a changing world. We strive Jan 1–Dec 31, 2021 Jan 1–Dec 31, 2020
towards this goal through great employee experience, diverse Number of employees at the end of period 62,720 61,380
and inclusive culture, continuous learning, flexibility and Average number of employees 61,698 60,376
wellbeing. These are the core elements in our Empowered
People Way to Win, one of the four KONE-wide
transformation and development initiatives, which enable us to
succeed in our strategy. All KONE’s activities are guided by Geographical distribution of KONE employees
ethical principles. Employee rights and responsibilities include
the right to a safe and healthy working environment, fair and
Dec 31, 2021 Dec 31, 2020
equitable labor conditions, personal wellbeing, freedom of
association, collective bargaining, non-discrimination and the EMEA 23,669 23,798
right to a working environment in which harassment and Americas 7,258 7,336
bullying are not tolerated. Asia-Pacific 31,792 30,246
COVID-19 impact on the way we work Total 62,720 61,380

While the COVID-19 pandemic continued to have an impact Personnel voluntary turnover rate was 7.8% (5.5%) Employee costs for the reporting period totaled EUR 3222 (3043) million. The geographical distribution of
globally in 2021, progress in vaccine rollouts resulted in KONE employees was 38% (December 31,2020: 39%) in EMEA, 12% (12%) in the Americas and 51% (49%) in Asia-Pacific.
restrictions being eased in many regions during the second
half of the year. As regulations and practices varied from
country to country, we encouraged our country organizations achieving a more balanced gender split. During the reporting such as employee engagement and enablement, leadership,
to actively follow the local rules and guidance to ensure that year, KONE’s workforce included 145 (147) nationalities. To learning and growth, corporate responsibility, customer
we are compliant and able to take into account our customers’ strengthen our global approach and deepen our customer and centricity, innovation and drive, as well as diversity and
requirements. Our main focus throughout the pandemic has market insights, we have goals to increase cultural diversity in inclusion.
been to continue serving our customers in the safest manner our global teams. In 2021, we conducted a light version of the Pulse survey
possible. We have supported our employees by offering In 2021, we engaged our senior leaders to a D&I learning with 84% of all KONE employees taking part despite the
flexibility where needed and by ensuring easy access to journey to lead the way for an inclusive culture. We also challenging circumstances brought on by COVID-19. The
information on how to enhance wellbeing. The pandemic has continued to strengthen D&I maturity in our countries through global results show that KONE continues to be a great place
accelerated a change in how we work. During 2021, we various actions from transparent communication to data to work with a healthy company culture and KONE employees
introduced the KONE flexible working statement confirming driven decision making and more inclusive talent practices are very engaged. Despite a slight decline from the very high
that KONE will support flexible working arrangements that are and culture. 2020 scores in both engagement and enablement, the vast
aligned with our business priorities. Our elevated focus on driving D&I is visible also in KONE’s majority of the survey results were clearly above the external
Diversity and inclusion new share-based long-term incentive plan, launched in the high-performance benchmarks. We also organized Pulse
beginning of 2021, where sustainability was introduced as a Talks across all teams at KONE with 85% of employees
We actively encourage diversity at KONE, and our values new metric in addition to the financial metrics. The participating. The objective of the Talks was to ensure
guide us in upholding an inclusive culture. In the beginning of sustainability metric is a combination of different elements continuous dialogue on team wellbeing and make KONE an
2021, KONE launched a new strategic phase with strong with diversity and inclusion being one of them. even better workplace.
focus on sustainability and Diversity and Inclusion (D&I) as During 2021, we continued developing KONE’s culture to
key elements of it. As one of the D&I specific goals, we Employee engagement & KONE culture ensure that it supports our strategic targets. Throughout the
committed to making a step-change in the share of women at Making KONE a great place to work is KONE’s number one year, employees continued sharing their thoughts about the
director level and increase it to 35% by 2030. In 2021, the strategic target and it is measured by employee engagement development of KONE’s culture, values and ways of working
share of women in director level positions increased to 21% and a related Pulse employee survey. The Pulse survey offers through facilitated online discussions. In addition, a new e-
(19%). Most of our employees are male representing 88% employees an opportunity to give feedback and covers topics learning course focused on KONE’s culture and values was
(89%) of our people globally. We continue our efforts towards

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introduced during the second half of the year with We have continued to invest in building capabilities to sell During the year, we focused on strengthening safety
approximately 12,000 employees completing the course. and deliver digital solutions and services. In connection to the leadership competences by using a new interactive e-
KONE hosts a European Employee Forum annually to continuing roll-out of KONE DX Class elevators, salespeople, learning, which was completed by over 6,400 of our safety-,
bring together employee representatives and top engineers and field teams have been actively trained on these quality-, and people managers by the end of the year.
management to discuss issues ranging from safety to topics as well as on KONE 24/7 Connected Services and Managers perform regular audits to measure compliance with
business development. A smaller working group meets two to KONE’s ecosystem partnering. KONE’s policies, processes and defined working methods.
four times a year to ensure continuous discussion on Corrective actions are taken if deviations are identified. KONE
important developments affecting our employees. In 2021, the Talent attraction also conducts process audits to identify possible obstacles to
Employee Forum was conducted virtually due to the COVID- A key focus area within the KONE people strategy is attracting work safely. If any are found, the work in question is stopped
19 pandemic. In addition to regular business updates and the best talent by providing a great employee experience. until a safe method is approved.
discussion about the Sustainable Success with customers Although recruitment volumes continued to fluctuate In 2021, the IIFR (Industrial Injury Frequency Rate) was
strategy, the specific focus areas in the forum were Lean during 2021 due to COVID-19, we saw an overall increase in 1.6 with the average lost days per incident of 27.8 (27.3). The
KONE, smart and sustainable field operations as well as recruitment volumes. Targeting new competencies and previous year was exceptional due to the pandemic, with IIFR
safety, sustainability and quality. increasing diversity through recruitment continued to be one as low as 1.2. We continue to target zero injuries and expect
of KONE’s key focus areas. Efforts to increase diversity our years of favorable safety progress to continue, with strong
Training and development emphasis on safety culture and human factors. In order to
through recruitment realized during the year with a large
We strive to have the best professionals with the right number of applicants and hires outside of elevator and move towards our ultimate target, we aim at getting IIFR
competencies in each position. We facilitate this effort, and escalator industry. We were also able to recruit an increasing below 1.0 by the end of 2024. The number of safety
increase the motivation, engagement and continuous number of people with new competencies related to, for observations recorded in KONE Safety Solution, our global
development of the personnel, through regular performance example, digitalization and solution selling to KONE. safety reporting tool that was fully deployed in 2021,
discussions, which take place at least twice a year. In Systematic activities around talent attraction and building increased by 22%. All employees are encouraged to actively
addition, we actively encourage all employees to prepare talent pipelines have helped us to reach shorter times to hire report safety near misses and incidents as it provides valuable
individual development plans and to complete their talent and improved quality of hires. information for improving safety. Our objective during the year
profiles. Due to COVID-19 related travel restrictions, the annual was to enhance the quality, investigation and analysis of our
We promote the 70-20-10 approach for learning. This KONE International Trainee Program (ITP) could not be near miss and incident reports, as well as to improve
means that we believe that 70% of our learning happens organized. Instead, we offered local trainee positions for transparency.
through experiences, 20% through social learning and 10% university students. KONE also continued to further The global KONE Safety Week was organized in all KONE
through formal development and training. We provide a rich strengthen its employer brand through active school units in May 2021 with a continued theme of safe behavior,
training offering for our employees, which includes more than collaboration. complemented with elements of psychological safety. Various
8,500 courses in 36 languages. The courses vary from 2- safety related activities were held during the week for both
minute digital nanomodules to trainer-led courses lasting Safety internal and external stakeholders. Due to the pandemic, most
several days. Amidst the COVID-19 pandemic, we have Improving safety at work remained a top priority in 2021. of the activities were organized virtually. A new global year-
actively encouraged employees to make use of learning KONE has a company-wide safety management system in end safety campaign was also organized to strengthen safety
opportunities as well as continued to develop new online place to guide us in achieving continual improvement. To commitments.
learning offerings and virtualize our current instructor-led support in controlling the main risks in the workplace and keep The safety of the people using elevators, escalators and
programs. Total learning hours increased by 12% compared our workers safe, we introduced nine KONE core safety automatic building doors involves everyone from technology
to 2020. On average, KONE employees used 43 hours on principles during the reporting year. The principles are and maintenance service providers to building owners and
formal development and training. common to all KONE employees, subcontractors and equipment users. We work closely with our customers to help
In 2021, we established an upskilling program to support everyone we work with. them recognize and deal with situations that could lead to
KONE Sustainable Success with Customer strategy KONE employees receive health and safety training safety risks. We communicate actively about safety, organize
realization from a competence development perspective. The relevant to their work, enabling it to be performed in a activities and provide training along with educational materials
program is focused on driving competence development professional and safe manner. All KONE employees are to our customers and the general public to help equipment
efforts for organization-wide competences related to, for required to complete a general safety training related to our users stay safe.
example, Lean thinking as well as digital and customer safety management framework and KONE’s Health and
understanding, and it covers 80% of KONE employees. Safety Policy. At the end of the reporting year, over 80% of
KONE employees had completed the general safety training.

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HUMAN RIGHTS, ANTI-CORRUPTION AND data protection and confidentiality, environment and safety, distributors are likewise expected to comply with the
trade compliance and conflicts of interest. All reports are requirements of the Code in all their dealings with KONE, as
BRIBERY handled by a dedicated impartial KONE Compliance team. well as in respect of their own employees, customers and
KONE’s Code of Conduct was renewed in 2021 as part of In 2021, we received a total of 152 reported compliance suppliers, and third parties including government officials. Our
KONE’s sustainability actions, to better reflect our new values allegations, of which 41% were received through the target is to have the Code signed by all our distributors. By the
and strategy. The Code of Conduct forms an integral part of Compliance Line. Of these reports, 35% were fraud/corruption end of 2021, 100% (100%) of our distributors in China, and
KONE’s company culture and is the foundation of our ethical related, 35% were HR related, 10% related to conflicts of 99% (88%) of our distributors in the rest of the world, had
business practices. The Code sets out the responsible and interest, and the remaining 20% fell under various other signed the Code.
ethical conduct expected of KONE employees and companies categories. In total 40% of the 141 cases closed in 2021 were All the above Codes of Conduct are available on
and is available in 33 languages. With an even stronger either substantiated or partially substantiated, and disciplinary kone.com.
emphasis on diversity and inclusion, expanded guidance on actions in those cases ranged from coaching discussions to During the year, we continued focusing on human rights in
fraud, corruption and fair competition and new sections on termination of employment, with 23 employees who were the supply chain by further developing a supplier human rights
human rights, trade compliance and cybersecurity, the Code dismissed or resigned as a result of compliance assessment process within KONE. The COVID-19 pandemic
of Conduct is well aligned with international practice as well as investigations. continued to impact the roll-out of planned on-site pilot
stakeholder expectations. Integrity, responsibility and In 2021, the Code of Conduct e-learning course was assessments. However, an extensive online questionnaire
accountability are highlighted as essential themes. refreshed to reflect the changes in the new Code of Conduct was rolled-out to over 200 suppliers’ production sites to
The topics covered in the new Code are: conflicts of and assigned to all KONE employees. The training covers assess their potential and actual human rights risks. Human
interest, corruption, competition compliance, trade topics such as conflicts of interest, fair competition, anti- rights training was also provided to our internal human rights
compliance, workplace well-being, health and safety, bribery, privacy and confidentiality, work safety, harassment & assessors. The Global Compliance Committee is responsible
environmental compliance, human rights, privacy, fraud and discrimination, gifts & hospitality and trade compliance and for the oversight of the Human Rights program at KONE.
theft, cybersecurity, intellectual property and confidentiality, has a strong focus on scenarios that reflect day to day
situations employees might face. The course is available in 37
external communications and insider trading. Also Disclosure according to the EU
emphasized is KONE’s non-retaliation policy which states that languages. Regular face-to-face compliance training is also
we do not tolerate any form of retaliation against anyone provided to managers and other target groups. Of KONE Taxonomy Regulation
having made good faith compliance reports. The human rights employees, 96% have completed at least one compliance
section highlights our commitment to respect and endorse training in 2021, including the Code of Conduct e-learning.
internationally recognized labor and human rights standards KONE’s general Code of Conduct is complemented by our KONE discloses information according to Regulation (EU)
and specifies that we take steps to remediate adverse impacts Supplier and Distributor Codes of Conduct. Our Supplier Code 2020/852 of the European Parliament and of the Council of 18
on human rights that we become aware of. of Conduct is available in 30 languages and sets out the June 2020 on the establishment of a framework to facilitate
Dedicated compliance officers help employees comply ethical business practice requirements that we expect from sustainable investment and amending Regulation (EU)
with KONE’s Code of Conduct, and our global and regional our suppliers. It covers areas such as legal compliance, 2019/2088 (the “Taxonomy Regulation”). The Taxonomy
compliance committees advise and take decisions on ethical conduct, our zero tolerance for bribery and corruption, Regulation forms the basis for the EU Taxonomy, a
compliance matters, including investigations into allegations of and the standards we require from our suppliers in terms of classification system that establishes a list of environmentally
employee misconduct as well as human rights and corruption labor and human rights, health and safety, and environmental sustainable economic activities for six environmental
violations. All KONE employees are expected to understand issues. KONE may terminate its contracts with suppliers for objectives. The implementation of the Taxonomy Regulation
and abide by the Code and to report any violations using the failure to adhere to the Code. will progress in phases. The first delegated act setting out
channels available for this purpose. Our internal reporting KONE expects its suppliers to comply with the technical screening criteria for the first two environmental
channels include reporting to management, HR, Legal or requirements of the Supplier Code of Conduct in all their objectives, climate change mitigation and adaptation (the
Compliance. We also have a confidential externally hosted dealings with KONE, as well as with their own employees and "Climate Delegated Act"), was adopted in 2021. Another
reporting channel, the Compliance Line, to which all suppliers, and third parties including government officials. All delegated act for the remaining four environmental objectives
employees, suppliers and distributors have phone and/or web our suppliers are expected to sign KONE’s Supplier Code of (the "Environmental Delegated Act") will be published in 2022.
access. Reports can be made in the employee’s native Conduct. By the end of 2021, 80% of KONE’s total spend was In the report regarding fiscal year 2021, undertakings are
language and can be anonymous where permitted under data with suppliers and installation subcontractors who have required to disclose the proportion of Taxonomy-eligible
protection laws. Reports can be submitted on a range of signed KONE’s Supplier Code of Conduct or equivalent. economic activities in their turnover, capital expenditure and
topics including fraud and theft, fraudulent reporting, KONE’s Distributor Code of Conduct was updated in 2021 operational expenditure. Taxonomy-eligible activities currently
corruption, competition law, harassment and discrimination, and covers similar topics as the Supplier Code of Conduct. It include those in the scope of the Climate Delegated Act.
is available in 6 languages. As business partners, our Undertakings are not required to assess Taxonomy alignment

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

19 KONE ANNUAL REVIEW 2021