KONE 2017 | SUSTAINABILITY REPORT Enabling our partners and societies to prosper 40 KONE’s economic impacts in 2017 Customers 8,942 (8,784) MEUR Suppliers 5,001 (4,857) MEUR Added value 3,942 (3,927) MEUR - = ETHICAL BUSINESS PRACTICES KONE has operations in over 60 countries and collaborates with authorized distribu- tors in over 80 countries around the world. As a global corporate citizen, we are fully committed to the laws and regulations of the countries where we operate. The KONE Code of Conduct sets out our com- pany’s commitment to integrity, honesty, and fair play. KONE’s global presence makes it cru- cial for us to ensure that we have clear compliance rules and guidance in place, which enable us to conduct business in an ethically and socially responsible manner throughout our entire value chain. The KONE Code of Conduct The KONE Code of Conduct (the Code) is an integral part of KONE’s culture and defines our standards of ethical conduct. The Code addresses what is expected of KONE employees and KONE companies. It also explains how we conduct our busi- ness in a responsible and ethical manner in order to win and retain customer trust. The KONE Code of Conduct is on kone. com in over 30 languages. KONE’s Competition Compliance Policy KONE’s Competition Compliance Policy promotes the principles of fair competition that are presented in the Code of Conduct. The policy details our unambiguous posi- tion against anti-competitive practices. It sets out the rules and principles that all KONE employees must follow to ensure that we comply fully with competition laws. The Competition Compliance policy is available in over 30 languages. KONE Supplier and Distributor Codes of Conduct KONE’s Supplier Code of Conduct sets out the ethical business practice requirements that we expect from our suppliers. It covers areas such as legal compliance, eth- ical conduct, our zero tolerance for brib- ery and corruption, and the standards we require from our suppliers in terms of labor and human rights, health and safety, and the environment. KONE expects its suppli- ers to conform to the requirements of the Supplier Code of Conduct in all their deal- ings with KONE, as well as with their own employees and suppliers, and third par- ties including government officials. KONE may terminate its contracts with suppliers if they fail to adhere to the Code. All our new suppliers must sign KONE’s Supplier Code of Conduct. It is available in over 20 languages and can be found at kone.com/suppliers. As KONE’s business partners, our dis- tributors are expected to comply with the requirements of the Distributor Code of Conduct in all their dealings with KONE, as well as in respect of their own employees, customers and suppliers, and third parties including government officials. The KONE Distributor Code of Conduct is available in four languages. Training and awareness building All KONE employees are expected to under- stand and abide by the Code and to report any violations using the channels available for this purpose. During 2017, KONE intro- duced an additional confidential externally hosted reporting channel, the Compliance Line, where employees can report concerns either by phone or web. Reports can be made in the employee’s native language and the Compliance Line can be used anon- ymously where permitted by local law. All KONE employees who have daily access to a computer are required to com- plete the Code of Conduct online training. In 2017, the completion rate for the target group was 95%. Regular face-to-face compliance training is also provided to managers and other target groups. For example, in 2017 over 1,600 employees in China, over 450 employees in India, and 104 employees in Sourcing received face- to-face compliance training. A selected group of employees is also required to complete Competition Com- pliance online training based on their role and position in the company. They include members of KONE’s Executive Board and employees involved, for example, in man- agement, sales, sourcing, and trade associ- ation related activities. Individual business units can nominate additional participants when necessary. Dedicated compliance officers help employees comply with KONE’s Code of Conduct, and our global and regional compliance committees advise and take decisions on compliance matters, includ- ing investigations into allegations of employee misconduct as well as human rights and corruption violations. INDUSTRY-LEADING SUPPLY CHAIN In 2017 KONE had nine production sites for elevators, escalators and building doors, 10 global distribution centers for elevators, and five distribution centers for spare parts. KONE’s supply chain operations cover new equipment production, moderni- zation, and spares supply. We also work closely with selected key material suppli- ers and logistics service providers. Approx- imately 4,600 people keep KONE’s supply operations running. KONE improves its supply chain con- tinuously. In 2017 the implementation of a new manufacturing execution system (MES) continued and at the moment, the MES has been taken into use in our fac- tories in China and Finland. It is a com- puterized system that is used to track and Stakeholders Employees 2,030 (1,962) MEUR Creditors -58 (-36) MEUR Public sector 994 (979) MEUR Shareholders 849 (795) MEUR Economic value retained in the company 126 (226) MEUR 2016 figures in brackets.