Cover Letter to Suppliers

Dear supplier, service provider or partner,

Thank you for engaging in dialogue with us.

This document describes Aisti’s key expectations for suppliers, service providers and other business partners in relation to sustainability, compliance, supply chain transparency, risk management and the availability of emissions data.

This document may be used when preparing a proposal, in supplier assessments, in contract negotiations and during cooperation to anticipate reporting and verification needs. The requirements are applied on a risk-based and materiality-based basis, taking into account the product or service supplied, the supplier category and the scope of cooperation.

Our aim is to build a transparent, compliant and continuously developing supply chain together with our partners. If certain requested information is not yet available, we ask you to describe the current situation and, where possible, provide a timeline for producing the information.

Safe and sound,

Hanna Liimatainen
Sustainable Business Development | Aisti
+358 50 5370515 | hanna@aisti.com

And

Tiina Riippa
Supply Chain Manager
+358 44 7762731 | tiina@aisti.com

About Aisti

Aisti is a Finnish materials technology company that manufactures acoustic ceiling tiles using renewable wood fibre. We use foam-forming technology to shape fibres into acoustic tiles designed for high acoustic performance.

Aisti’s products are designed for architects, contractors and property developers. Our aim is to provide high-quality acoustic solutions whose performance, compliance and life-cycle impacts are assessed and documented through product-specific documentation, testing and calculation.

Our mission is Changing construction for good.

Purpose and Scope

This document serves as Aisti’s general framework for supplier requirements and sustainability information requests. It may be used, for example, in the following situations:

·        as an appendix to requests for quotation and supplier tendering processes;

·        in supplier dialogue and preliminary supplier assessment;

·        as support for contract negotiations;

·        in assessing supplier risk classification and audit needs;

·        in collecting sustainability, emissions and compliance information;

·        in monitoring and developing cooperation during the supplier relationship.

This document alone does not constitute all contractual terms. Binding obligations, audit rights, data usage rights, confidentiality, sanctions, liabilities and other contractual terms are defined, where necessary, in a separate agreement, purchase terms, Code of Conduct or other contractual appendix.

The requirements are applied based on materiality and risk. Not all requirements apply in the same way to all suppliers. Their application depends, for example, on the product or service, the criticality of the supply chain, the sector, data availability, delivery volume and Aisti’s customer or regulatory obligations.

Sustainability in Our Value Chain

Aisti’s sustainability work is built through its products, production, supply chain and business partners. We expect our partners to commit to applicable sustainability, compliance and risk management principles and to be able to provide documentation, data and verification that are material to the cooperation.

Our aim is to develop value chain transparency together with our suppliers. We recognise that sustainability data, emissions accounting and supply chain traceability develop in stages. For this reason, we may also accept a phased approach, provided that the supplier is able to describe the current situation, the available data, the boundaries of the data and the plan for improving data availability.

At Aisti, the bar is set high for sustainability and responsible business. Our mission, Changing construction for good, is clear. Just as the sustainability of our products is built through their properties and the choices related to them, responsibility is also built through production and our partners. We recognise openly that this work is never fully complete, but we want to build it transparently throughout the value chain. We therefore expect our partners to commit to these principles, provide agreed sustainability information and verification as part of our cooperation, and develop value chain transparency together with us.

Common Minimum Level for All Suppliers

Aisti expects all suppliers, service providers and business partners to meet at least the following requirements, where applicable:

Compliance with Laws

The supplier must comply with applicable EU, national and local legislation and regulatory requirements.

Code of Conduct and Ethical Principles

The supplier must commit to Aisti’s Code of Conduct or demonstrate that it follows equivalent ethical principles in connection with the agreement, supplier approval or another agreed process.

Occupational Health and Safety

The supplier must ensure the occupational health and safety of its employees and subcontractors and comply with applicable requirements related to working on site.

Working Conditions and Human Rights

The supplier must respect workers’ rights, comply with applicable employment terms and prevent risks related to forced labour, child labour, discrimination, harassment and other inappropriate treatment in its own operations and in its material supply chain.

Information Security, Data Protection and Data Handling

The supplier must process Aisti’s data, personal data and other confidential information in accordance with applicable legislation, agreements and information security requirements.

Confidentiality and Protection of Trade Secrets

The supplier must protect Aisti’s and other parties’ confidential information, trade secrets and other protected material.

Quality and Change Management

The supplier must have sufficient procedures for managing quality, variation, complaints and changes. Material changes that may affect Aisti must be communicated in advance.

Traceability

The supplier must be able to demonstrate the origin and supply chain of the material products, materials or services supplied to Aisti with an appropriate level of accuracy. For raw materials, Aisti requires delivery-lot or batch-level traceability.

Chemical Management and Compliance

Compliance, safety and use-related information concerning chemicals, hazardous substances, coatings, additives and other material inputs must be available where applicable.

Provision of Sustainability and Emissions Data

Upon request, the supplier must provide sustainability, emissions, origin, quality and compliance information that is material to Aisti in the agreed format and within the agreed timeframe.

Climate Work and the Need for Emissions Data

Aisti has a climate roadmap that will be finalised based on the start of production and the data from the first full production year. Our aim is to build an emissions reduction pathway that is aligned with science-based climate objectives and the 1.5 °C target level.

We will publish our detailed climate targets, base year, calculation boundaries and pathway once the first sufficiently comprehensive and verifiable production data is available.

The main focus is on managing and reducing Aisti’s own Scope 1 and Scope 2 emissions. In addition, we want to document and reduce Scope 3 emissions in the value chain in cooperation with our partners and suppliers.

We request emissions data and other sustainability information from suppliers primarily for the following purposes:

·        to support procurement decisions and supplier assessments;

·        to support life-cycle calculations related to Aisti’s products and value chain;

·        to prepare customer and regulatory reporting;

·        to assess risk management, traceability and compliance;

·        to identify supply chain emissions reduction actions and development initiatives.

Requested Sustainability and Emissions Data

We request emissions data relating to our customer relationship, the services and/or products supplied to us, upon request and according to an agreed cycle. We request emissions data in a retrievable or extractable format, together with a description of the calculation methodology. The requested information may include the following:

Emissions Data

Emissions data relating to the customer relationship, product, delivery, service, project or reporting period, for example in kgCO₂e.

Calculation Methodology

A description of the calculation methodology used, including boundaries, emission factors, assumptions, data quality and allocation principles.

Activity Data

If kgCO₂e data is not available, we request suitable activity data, such as mass, kilometers, tonne-kilometres, material breakdowns, energy consumption, working hours, visits, waste fractions or other data relevant for calculation.

Product and Material Information

Product codes, materials, material breakdowns, country of origin, country of manufacture, delivery-lot or batch information, certificates, test reports, safety data sheets and other applicable verification documents.

Sustainability Verification

Certificates, audit reports, EPDs, PCF calculations, LCA reports, sustainability reports, Code of Conduct commitments or other appropriate evidence.

Sustainability Contact Person

The contact details of the person or function responsible for the supplier’s sustainability, emissions, quality or compliance information.

If the requested information is not yet available, the supplier must describe:

·        what information is currently available;

·        what information is not available;

·        why the information is not available;

·        when the information can be produced;

·        what interim data the supplier can provide;

·        whether the supplier has ongoing development actions to improve data availability.

Data Delivery Format and Reporting Frequency

As a baseline objective, Aisti aims to receive customer-, product-, delivery- or service-specific data at least annually. For critical or high-volume supplier categories, such as logistics, data may be requested semi-annually, quarterly or monthly.

The preferred delivery formats are:

·        API or supplier portal, if available;

·        CSV or Excel data;

·        product sheet or packaging sheet;

·        EPD, PCF or LCA report;

·        sustainability or emissions report;

·        certificate, audit report or other verification;

·        agreed interim activity data.

The supplier must indicate whether the data provided is based on estimates, averages, the supplier’s general data, industry factors or customer-specific measured data. The boundaries and quality of the data must be described sufficiently.

Primary Supplier Groups for Emissions Data

Emissions data may be requested in relation to our customer relationship, the services supplied to us and/or the products supplied to us, upon request and according to an agreed cycle.

• Logistics Partners and 3PL Providers

Data allocated to Aisti’s shipments, for example GHG Protocol Scope 3 Category 4 and/or Category 9, depending on whether the transportation and distribution relates to upstream or downstream activities.

• Raw Material and Material Suppliers

Data related to purchased goods and services, for example Scope 3 Category 1.

• Packaging Suppliers

Information on packaging materials, structure, recyclability and emissions. If the packaging is considered part of the product, the information may also be needed for product carbon footprint calculations.

• Service Providers

For example facilities, cleaning, maintenance, repairs and services related to waste management.

• Waste Management and Recycling Services

Waste volumes, waste fractions, treatment methods, collections, transport and possible emissions data related to waste treatment.

• Equipment and Supplies Suppliers

For example workwear, PPE, textiles, tools and other supplies.

• IT and Digital Service Providers

Information security, data protection, data location, subcontractors, continuity and possible service-specific emissions data.

• Machinery, Equipment and Fleet Suppliers

Life-cycle information, energy efficiency, maintainability and spare parts related to machinery, equipment, tools, vehicles and warehouse equipment. Depending on the nature of the purchase, emissions may typically fall under Scope 3 Category 2 Capital Goods and/or Scope 3 Category 1 Purchased Goods and Services.

• Construction and Installation Contractors and Project Suppliers

Site safety, subcontracting, working conditions, material flows, waste management, project-specific data and deviation management.

Verification of Environmental Claims

If the supplier provides Aisti with information concerning environmental, climate, recyclability, sustainability or other sustainability-related claims, the supplier must ensure that the information is:

·        accurate;

·        up to date;

·        material;

·        verifiable;

·        clear in its boundaries;

·        described in terms of methodology;

·        relevant to the product or service supplied.

Claims must be based on a documented methodology, calculation, testing, certification or other appropriate evidence.

General or comparative claims such as “environmentally friendly”, “responsible”, “green”, “low-emission”, “carbon neutral”, “recyclable”, “natural” or “sustainable” must not be used without a precise justification, clear boundaries and supporting evidence.

If a claim is based on compensation, avoided emissions, customer emissions reductions, carbon handprint or another indirect impact, the calculation method, boundaries and relationship to the actual emissions data of the product or service must be described separately.

Verification and Enabling Audits

Upon request, the supplier must be able to demonstrate compliance with the applicable requirements described in this document through documentation, reports, certificates, audit results, calculations, process descriptions or other appropriate evidence.

On a risk-based basis and with reasonable prior notice, Aisti may request additional clarification or carry out an assessment or audit related to sustainability, quality, safety, information security, traceability or the supply chain. The audit may be carried out at the supplier’s site, as a remote audit, as a document audit or in another manner agreed by the parties.

Audits are limited to the products, services, processes, supply chain elements and related information supplied to Aisti. Audits will take into account confidentiality, data protection, occupational safety, the protection of trade secrets and the supplier’s justified safety requirements.

Detailed audit rights, audit scope, schedule, costs, use of third parties, data processing and possible consequences are defined, where necessary, on a contract-specific basis.

Corrective Actions

If a material deviation is identified in an assessment, audit or submitted documentation, the supplier must, upon request, provide Aisti with a corrective action plan within a reasonable time and report on its progress as agreed.

If the deviation is serious, repeated or the supplier does not take reasonable corrective actions, Aisti may reassess the continuation of the cooperation in accordance with the contractual terms and its risk management principles.

Subcontracting Chain

The supplier must identify the material subcontractors and supply chain elements related to Aisti’s deliveries with an appropriate level of accuracy. Upon Aisti’s request, the supplier must provide information on material subcontractors, supply chain structure, countries of origin, countries of manufacture and related risks.

The supplier must ensure that the material subcontractors used for Aisti’s deliveries comply with equivalent requirements to the extent that they relate to the product or service supplied to Aisti.

The supplier must notify Aisti in advance of material changes concerning critical subcontractors, manufacturing sites, origin, materials, production processes or factors affecting compliance in relation to the product or service supplied to Aisti.

Notification of Deviations and Significant Disruptions

The supplier must notify Aisti without undue delay of any material deviations, disruptions or crisis situations that may affect the following aspects of products or services supplied to Aisti:

·        availability;

·        quality;

·        safety;

·        compliance;

·        delivery time;

·        traceability;

·        availability of sustainability information;

·        availability or reliability of emissions data;

·        Aisti’s customer, regulatory or contractual obligations.

Such situations may include, for example:

·        significant production or logistics disruptions;

·        serious occupational safety incidents;

·        environmental damage;

·        interventions by authorities;

·        cyber security or information security breaches;

·        material disruptions in the subcontracting chain;

·        suspicions related to the origin of raw materials;

·        suspicions related to compliance;

·        chemical, quality or product safety deviations;

·        expiry, cancellation, withdrawal or material change of a certificate, permit or verification.

The notification, handling, corrective actions and possible consequences related to deviations are specified further on a contract-specific basis where necessary.

Data Use, Confidentiality and Data Protection

Aisti may use sustainability, emissions, origin, traceability, quality and compliance information provided by the supplier for the following purposes:

·        supplier assessment and procurement decisions;

·        supplier risk management;

·        contract preparation and monitoring of cooperation;

·        calculations related to Aisti’s products, services and value chain;

·        preparation of customer, regulatory, financing and stakeholder reporting;

·        planning of sustainability and emissions reduction actions;

·        handling of audits, verifications and deviations.

Confidential information is processed in accordance with applicable confidentiality terms, data protection requirements and agreements. Personal data is processed only in accordance with applicable data protection legislation and agreed processing grounds.

If information provided by the supplier is intended to be used in an external product-specific claim, customer communication or public reporting in a manner that allows the supplier to be identified, the details will be agreed separately where necessary.

Supplier Category-Specific Material Aspects

The following are examples of supplier category-specific material aspects. Final requirements are defined based on the procurement, contract, risk classification, applicable reporting obligation or framework, and the product or service supplied.

IT and Digital Service Providers

Material information and requirements may include, for example:

·        information security;

·        data protection;

·        data location;

·        subcontractors and cloud service chain;

·        continuity management;

·        access rights management;

·        notification of information security breaches;

·        service-specific emissions data or the supplier’s emissions accounting status, if available.

Waste Management and Recycling Services

Material information and requirements may include, for example:

·        waste volumes and waste fractions;

·        sorting rate;

·        treatment methods;

·        transparency of the treatment chain;

·        number of collections and transport data;

·        hazardous waste and related documentation;

·        possible emissions data related to waste treatment and transport.

Suppliers of Chemicals and Hazardous Substances

Material information and requirements may include, for example:

·        safety data sheets, or SDS documents;

·        chemical classifications and labelling;

·        LCA and EPD calculations, where applicable;

·        storage and handling instructions;

·        training requirements;

·        risk management measures;

·        substitute products or less hazardous alternatives;

·        compliance with applicable chemicals legislation.

Consulting and Audit Services

Material information and requirements may include, for example:

·        independence;

·        management of conflicts of interest;

·        transparency of methods;

·        ownership of information;

·        confidentiality;

·        qualifications and certifications;

·        quality and traceability of reporting.

Machinery, Equipment and Fleet Suppliers

Material information and requirements may include, for example:

·        energy efficiency;

·        operational safety;

·        maintainability;

·        availability of spare parts;

·        service life;

·        material information;

·        product-specific emissions data, if available;

·        service and maintenance documentation.

Packaging Suppliers

Material information and requirements may include, for example:

·        packaging structure;

·        material breakdown;

·        weight;

·        recyclability and its boundaries;

·        coatings, laminates and additives;

·        recycling instructions;

·        origin and compliance information;

·        certificates and verifications;

·        kgCO₂e per package or per kilogram of material, if available.

Wood Raw Material Suppliers

For wood-based raw materials, the supplier must be able to demonstrate:

·        origin of the raw material;

·        delivery-lot-specific traceability;

·        material stages of the supply chain;

·        verification of sustainable forest management or responsible sourcing;

·        applicable certificates and certificate numbers;

·        FSC status and applicable FSC claim, if the delivery is sold with an FSC claim.

Wood-based raw material supplied to Aisti must be either FSC-certified or traceable and responsibly sourced in another manner approved in advance by Aisti, unless otherwise agreed in the contract.

If the delivery is sold with an FSC claim, the supplier must maintain valid FSC Chain of Custody certification. The FSC status and applicable claim must be indicated in delivery and sales documents. Upon request, the supplier must provide a valid certificate, certificate number and any other verifying documentation reasonably required by Aisti.

Construction and Installation Contractors and Project Suppliers

Material information and requirements may include, for example:

·        site safety;

·        subcontracting;

·        working conditions;

·        qualifications and permits;

·        material flows;

·        waste management;

·        hazardous substances;

·        project-specific emissions or activity data;

·        reporting of deviations and near-miss situations;

·        insurance and regulatory obligations.

Detailed Table for Possible Sustainability and Emissions Data