Annual Report
2023
CHANGE RUNS ON
RENEWABLES
Non-ofcial version
Business review 3
2023 in brief 5
CEO’s review 6
Strategy 9
Innovation 11
Our businesses 13
Key events 2023 18
Key gures 2023 and nancial targets 21
Information for investors 23
Sustainability 25
Sustainability highlights 27
Sustainability at Neste 28
Sustainability governance 30
Compliance 32
Material sustainability topics 33
Sustainable Development Goals (SDGs) 35
Material sustainability KPIs 38
Stakeholder engagement 43
Value creation 49
Our people 50
Safety 54
Climate 57
Our carbon handprint 60
Our carbon footprint 66
Biodiversity 75
Our transition toward our vision 77
Our most material nature and environment topics 78
Environmental compliance 80
Human Rights 81
Responsible recruitment 84
Living wages 85
Children and youth 85
Reducing inequality 85
Supply chain and raw materials 86
Supply chain 87
Renewable raw materials 91
Recycled raw materials 94
Future raw materials 94
Performance and reporting 97
Performance in gures 99
GRI Content Index 103
TCFD Index 111
SASB Index 112
UNGP Reporting Framework Index 114
Principles for calculating the key indicators 115
Independent Practitioners’ Assurance Report 117
Governance 119
Corporate Governance Statement 121
Risk management 135
Remuneration report 140
Review by the Board of Directors 145
Review by the Board of Directors 147
Key gures 171
Calculation of key gures 173
Financial statements 176
Consolidated nancial statements 177
Parent company nancial statements 237
Proposal for the distribution of earnings and
signing of the
Review by the Board of Directors
and the Financial Statements 258
Auditor’s Report 259
Content
Business review Sustainability Governance Review by the Board of Directors Financial Statements
We are using science and
innovative technology to
transform waste and other
resources into renewable
fuels and circular raw
materials; helping you
act now, to meet your
sustainability goals.
Annual Report 2023
Business
review
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
4
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Business review
2023 in brief 5
CEO’s review 6
Strategy 9
Innovation 11
Our businesses 13
Key events 2023 18
Key gures 2023 and nancial targets 21
Information for investors 23
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
5
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Investments
2,351 MEUR
Safe
days278
Average number
of personnel6,018
Our renewable products helped
reduce greenhouse gas emissions11.0 Mt CO
2
e
The share of waste and residues of Neste’s
total renewable raw material inputs globally92%
Revenue
22,926 MEUR
Our dividend proposal
for 2024 per share 1.20 EUR
Leverage
ratio22.7%
Comparable return on average capital
employed after tax (Comparable ROACE)23.9%
3,458 MEUR
Comparable
EBITDA
Neste creates solutions for combating climate change and acceler-
ating a shift to a circular economy. We refine waste, residues, vege-
table oils and innovative raw materials into renewable fuels and sus-
tainable feedstock for polymers and chemicals.
On a global scale, the year was marked by a volatile business
environment, geopolitical turbulence and several regulatory changes.
Despite a challenging business environment we continue to lead the
way towards a sustainable future. Our objective is to deliver out-
standing value with renewable and circular solutions with a focus on
growth and efficiency as outlined in our strategy, “Taking charge of
change.”
Read more about key events in 2023 on page 18
and sustainability highlights on page 27.
Watch this video to discover the highlights of the year.
In brief
2023
5
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2023 – Focus on growth and efficiency
For Neste, 2023 was a year of continuing implementa-
tion of our renewables growth strategy “Taking charge
of change.”
On a global scale, the year was marked by a volatile
business environment, geopolitical turbulence and sev-
eral regulatory changes.
Despite a challenging business environment, we were
able to deliver a strong financial result. Our focus was
on ramping up two major renewables growth projects
and the continued strengthening of our global renew-
able feedstock platform. During the year, we reached
many significant milestones, including the opening of
our Singapore refinery expansion and the ramping up
of our joint operation with Marathon Petroleum in Cali-
fornia, acquisitions and new partnerships related to our
feedstock sourcing platform, and progress in opening
new markets by expanding our customer base.
Our growth strategy focused on growth in sustain-
able solutions, and value creation for our stakeholders
remains firmly in place. In late 2023, we also introduced
a simplified organizational structure designed to support
our long-term competitiveness and to create a strong
foundation for our future success.
2023 highlights
The year was marked by several significant achieve-
ments, enabled by the dedication and commitment of
our employees.
We successfully completed the EUR 1.6 billion Singa-
pore Expansion project, and celebrated its opening in
May. The project not only expands Neste’s renewables
production capacity but will also enable the production
of up to one million tons of sustainable aviation fuel (SAF),
thereby strengthening our position as the world’s leading
SAF producer. The project also includes enhanced raw
material pretreatment capacity and increases Neste’s
capability to process more challenging waste and res-
idue raw materials. As the ramp-up of our Singapore
expansion encountered some challenges and delays,
we made tremendous efforts to resolve them and to
ensure safe and reliable operation going forward.
To strengthen our position in the US, we ramped up
our joint operations with Marathon Petroleum to pro-
duce renewable diesel following a conversion project at
Marathon’s refinery in Martinez, California.
With these substantial capacity increases during the
year, Neste expects to reach a nameplate capacity of
5.5 million tons of renewable products in 2024 and has
production on three continents.
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We are also investing in more capacity in Rotterdam.
The expansion of our renewable products refinery in Rot-
terdam will increase the production capacity by 1.3 mil-
lion tons annually. The Rotterdam expansion is expected
to be operational in 2026, increasing our global name-
plate capacity to 6.8 million tons of renewable products.
Combined with our ongoing SAF optionality project in
Rotterdam, the project aims to increase the refinery’s
production capability for sustainable aviation fuel to 1.2
million tons annually.
In the aviation sector, we continued our efforts to build
a foundation for business growth in the coming years
and expanded our cooperation with airports, airlines and
transportation companies around the world. The ability
to supply our aviation customers in the Americas, EMEA
and the Asia-Pacific region is an important enabler for
supporting the global aviation industry’s decarboniza-
tion efforts. The renewable aviation business has signif-
icant growth potential, as both regulatory and voluntary
demand will evolve in the coming years.
We continued to support our road transportation cus-
tomers in reducing their greenhouse gas emissions and
meeting their sustainability obligations. We expanded
our customer base, strengthening our position with key
customers in North America especially and continuing
our efforts to expand into the off-road market segments.
We further continued our efforts to grow the market
for feedstocks for the polymers and chemicals industry
by co-creating renewable and circular solutions through
strong partnerships along the value chain. We also
reached an important milestone in our chemical recy-
cling growth strategy by starting the construction of a
liquefied waste plastic upgrading facility at our Porvoo
refinery in Finland.
Neste also continued the development of its offering of
lower-emission solutions by expanding its electric vehi-
cle public charging station network across Finland and
the Baltics.
We continued to strengthen our renewable feedstock
sourcing platform through acquisitions and by expand-
ing into new markets to ensure the availability of renew-
able raw materials. We expanded our terminal capac-
ity globally, and a new commercial office in India was
opened to drive our renewable raw material growth. We
acquired a used cooking oil collection and aggregation
business from Crimson Renewable Energy in the US. In
Europe, we increased our ownership of Neste Deme-
ter B.V. to 80% of the company and agreed to acquire
the remaining shares over the next few years, as agreed
with the minority shareholders.
The global aviation industry has set a target of achieving a goal
of net-zero emissions by 2050. Sustainable aviation fuel will play a
crucial role in decarbonizing the aviation industry in the near term.
Journey to becoming
a 100% renewable and
circular solutions provider
We completed the strategic study launched in Septem-
ber 2022 and decided to launch a gradual transforma-
tion of our oil refinery in Porvoo, Finland, into a lead-
ing renewable and circular solutions refining hub. The
planned transformation will proceed in phases and will
require multiple separate investment decisions during
the next decade before its targeted completion in the
mid-2030s. As an example of planned first steps in the
transformation, we are in the basic engineering phase of
a large green hydrogen facility in the Porvoo refinery.
Our direction is clear: We want to be at the forefront of
accelerating the green transition with our renewable and
circular solutions and to create value for our stakehold-
ers. The long-term transformation of the Porvoo refin-
ery is a key element in our renewables growth strategy,
completing Neste’s journey to becoming a 100% renew-
able and circular solutions provider when finalized. This
will further strengthen our position in serving the future
needs of our customers.
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Ambitious innovations
Our innovation work focuses on exploring new business
opportunities around scalable future raw materials and
related technologies. Throughout its history, Neste has
invested in developing unique capabilities to work with
demanding raw materials, and it is on this expertise that
our systematic innovation entity is now based.
In 2023, we continued our persistent research, devel-
opment and innovation work to increase the availability
of renewable and recycled raw materials and to further
develop technologies to diversify our raw materials port-
folio. We made progress with many of our innovation
initiatives to enable the commercialization of selected
technologies in the coming years. We also strengthened
our global innovation and research capabilities by open-
ing an Innovation Center in Singapore.
Simplified organization to strengthen
competitiveness
In November, to improve efficiency and long-term com-
petitiveness, we announced our plan to simplify our
organizational structure. We merged our Renewable
Aviation, Renewable Road Transportation, and Renew-
able Polymers and Chemicals business units into a sin-
gle Renewable Products business unit. As part of our
transition journey, this decision aims to clarify roles and
responsibilities and our ability to adjust to rapid market
changes, staying ahead of the curve – and to focus on
servicing our customers’ needs.
With the simplified organization, we will strengthen
accountabilities and support efficient decision making.
This will enable us to be more agile and will support us
in reaching our target of annual cost savings of 50 mil-
lion euros.
To tackle climate change, we need urgent
global actions instead of words at all
levels. In addition to ambitious climate and
sustainability objectives, we need progress,
tangible and measurable actions and
accessible solutions.
Safety integrated into everyday
operations
In 2023, Neste continued to emphasize shared respon-
sibility for safety, integrating it into everyday operations.
Among the highlights of 2023 were the efforts to drive
our process safety and reliability improvement, which
were visible in the operational performance at the Por-
voo refinery, for example. In parallel, we focused on con-
tinuous occupational safety performance improvement
by focusing on contractor safety, for example.
Recognition of our sustainability efforts
We are extremely proud to have been recognized yet
again in 2023 for the 17th consecutive year as a global
sustainability leader in both the Dow Jones Sustainabil-
ity World and Europe indices. Neste was named the
19th most sustainable company in the world in the Cor-
porate Knights Global 100 index, and first among its
industry peers. Our climate actions achieved Leadership
level recognition for the eighth consecutive year by the
CDP. Furthermore, Neste was recognized as a Leader in
the Global Child Forum’s children’s rights and business
benchmark for 2023.
In 2023, we continued to strengthen our commitment
to our values – We care, We have courage, and We
cooperate.
In 2023, we celebrated Neste’s 75th anniversary and
our continued transformation. I wish to thank our employ-
ees and partners for being part of this journey. Looking
forward, we will continue our dedicated efforts to create
value for all our stakeholders and to further strengthen
Neste’s position as a global leader in renewable and cir-
cular solutions. Together, we can actively lead the way
to creating a more sustainable world for generations to
come.
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We are committed to continuing to grow as the
world’s leading producer of sustainable aviation
fuel and renewable diesel, while pioneering
more sustainable feedstock solutions for the
polymers and chemicals industry.
Strategy
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At Neste, we continue to lead the way towards a sustain-
able future. Our objective is to deliver outstanding value
with renewable and circular solutions with a focus on
growth and efficiency as outlined in our strategy, “Taking
charge of change.”
We are dedicated to leveraging our talents and har-
nessing our capabilities. By doing so, we are well
equipped to create value by producing products and
solutions for our customers and partners, helping them
reduce their emissions and carbon footprint.
Our aim is to deliver outstanding value
with renewable and circular solutions.
Core themes of
Neste’s strategy
Profitable growth
Expand global raw material base. We will
continue to grow and strengthen our position in
the waste and residues value chain, novel veg-
etable oils, and liquefied waste plastics.
Grow in attractive markets. By strength-
ening our presence in selected markets, we
can better serve our customers and help them
thrive. This will be true for all businesses but
especially in areas of aviation, and polymers
and chemicals.
Efficiency
Increased optionality and value creation.
By enhancing our optionality in raw materials,
products, and markets, we can better adapt to
dynamic business environments and strengthen
our end-to-end optimization capabilities. This
elevates our competitive edge but also ampli-
fies our proficiency in navigating market dynam-
ics and regulatory landscapes, and enables us
to create better value for our customers.
Increased cost competitiveness. We will
further intensify our efforts to improve com-
petitiveness and drive efficiency. This includes
meticulous management of fixed costs and net
working capital, as well as organizational, digi-
tal, end-to-end and project development.
The demand for renewable and circular solutions will
continue to rise, with a robust long-term demand out-
look. This demand emanates from businesses, regula-
tion and environmentally conscious consumers. In the
dynamic business landscape, our strategy is guiding us
to effectively respond and adapt to the ever-changing
business environment and increasing competition.
We continue to ensure high standards in sustainability
and strive for our sustainability vision. Safety remains at
the heart of our operations – every day, everywhere.
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Innovation has enabled our transformation toward
global leadership in renewable and circular solutions,
and it is the driving force behind our strategy to
ensure the future success of Neste.
Our core approach is to convert low-quality raw mate-
rials into high-quality solutions. We are continuously
working towards increasing the availability of renewable
and recycled raw materials, while also developing tech-
nologies to diversify our current raw material portfolio.
We are advancing our research and innovation work
across multiple areas including algae, lignocellulose, liq-
uefied waste plastic, novel vegetable oils from regener-
ative agricultural practices, Power-to-X, and renewable
hydrogen. These globally scalable raw material pools,
together with related technologies, will play an import-
ant role in further reducing dependence on crude oil and
tackling climate change.
Read more about future raw materials.
Innovation
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In addition to exploring new growth opportunities,
we constantly develop, test and analyze our existing
renewable and circular solutions. In 2023, nearly 25%
of our personnel worked in innovation, research, prod-
uct development and engineering. We have dedicated
teams working on developing these focus areas to
commercialization.
We invest the majority of our annual R&D expendi-
ture in innovation, research and development, and test-
ing raw materials and the technologies that could enable
their use. In 2023, our R&D expenditure was EUR 94
million.
Innovation is the key to creating
new business
We are focusing on scalable, sustainable raw materi-
als and the technologies required for their conversion to
fuels as well as feedstock for polymers and chemicals
polymers. Our twofold aim is to ensure the growth of our
current businesses and to build new growth platforms
for renewable and circular solutions.
In recognition of our innovation work, a group of Neste
inventors was honored with the prestigious European
Inventor Award 2023 in the industry category. The award
was granted by the European Patent Office (EPO) for
work on converting waste and residues into high-quality
renewable solutions.
To further strengthen our global R&D and innovation
capabilities, we established an Innovation Center in Sin-
gapore that has been operational since early 2023. The
center focuses on research into raw materials and the
pretreatment processes and drives collaboration with
partners in the Asia-Pacific region. Neste’s Technology
Center in Porvoo, Finland continues to serve as a vital
R&D facility focusing on the entire value chain, from raw
materials to end products.
Several advancements in our
key focus areas
Demonstrating renewable hydrogen production at
our Rotterdam refinery in the Netherlands within the
MultiPLHY project is one of the initiatives enabling us to
further drive the development of new sustainable tech-
nologies. During 2023, the project proceeded to the
commissioning phase.
Another of the company’s renewable hydrogen proj-
ects focuses on investing in the production capacity
of renewable hydrogen and reducing GHG emissions
from hydrogen production at the Porvoo refinery in Fin-
land. This project entered the basic engineering phase
in 2023 and it is expected that investment decisions will
be reached during 2024.
In November 2023, the Ministry of Economic Affairs
and Employment in Finland granted Neste energy invest-
ment aid of EUR 1.96 million for heat recovery from
hydrogen production. This complements the EUR 27.7
million grant Neste received from Business Finland for
our renewable hydrogen project, which has the recogni-
tion of being an Important Project of Common European
Interest (IPCEI).
Neste’s PULSE (pretreatment and upgrading of lique-
fied plastic waste to scale up circular economy) project
aims to build chemical recycling capacities at the Por-
voo refinery in Finland. In June 2023, Neste made a final
investment decision, and work began on upgrading of
the facilities. Project PULSE is also funded by the EU
Innovation Fund.
In 2023, Neste advanced the preparation of its algae
pilot production facility in order to further strengthen the
growth of its global raw material pool. The project is in
the planning phase, with a final investment decision yet
to be made.
Extensive collaboration network
Innovation requires partnering and cooperation. Neste is
already collaborating with a network of 37 leading uni-
versities and research institutes and continues to expand
and intensify cooperation with them. We work with tech-
nology companies, startups and value chain partners to
introduce innovations in renewable and circular solu-
tions to global-scale businesses. We have also estab-
lished corporate venture activities to invest in technology
startups.
We have made minority investments in several tech-
nology companies: Circularise, a supply chain traceabil-
ity and transparency startup; Alterra Energy, in relation
to developing chemical recycling; and Sunfire GmbH, in
relation to renewable hydrogen demonstration (project
MultiPLHY). In 2023, we continued collaboration with all
these companies.
In the Neste Veturi program, we are developing sustain-
able, globally scalable solutions for fuels and chemicals
from renewable and recycled raw materials. The program
covers Neste’s efforts to expand the raw material pool to
lignocellulosic wastes and residues, microalgae, novel
vegetable oils, plastic waste, CO
2
and renewable hydro-
gen. The development work is supported by the Finnish
innovation funding organization Business Finland.
During 2023 the Veturi ecosystem was strengthened
further. It has gathered over 100 Finnish companies, uni-
versities and research institutes together to jointly build
Neste Veturi program develops globally scalable sustainable solutions
the future capabilities needed to establish new tech-
nologies, value chains and business in renewable
and circular solutions.
One example of a successful joint Veturi project is
the e-fuel research project that combined high-tem-
perature electrolysis, carbon capture and hydrocar-
bon synthesis technologies to produce e-fuels in a
demonstration environment at VTT Bioruukki Pilot
Centre, Espoo, Finland. At the end of 2023, the proj-
ect concluded with the successful testing of the
e-fuel.
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At Neste we create value for society by helping our
customers reduce climate emissions and accelerate
circularity. We develop sustainably produced lower-
emission solutions for transportation, aviation and
marine uses, as well as renewable and circular solutions
for the chemical and plastics industries.
Our businesses
Neste is the world’s leading producer of sustainable
aviation fuel (SAF), renewable diesel and renewable
feedstock solutions for the polymers and chemicals
industry. Neste refines waste, residues, novel vege-
table oils from regenerative agricultural practices and
innovative raw materials into renewable fuels and
renewable and recycled feedstock for polymers and
chemicals. Neste develops chemical recycling tech-
nologies and capacity to combat the plastic waste
challenge.
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We produce renewable products at our refineries in Fin-
land, the Netherlands and Singapore entirely from renew-
able raw materials with an annual nameplate capacity of
approximately 3.3 million tons. Neste’s Singapore refinery
expansion and our joint operation with Marathon Petro-
leum in Martinez, California, will increase Neste’s total
production nameplate capacity of renewable products
to 5.5 million tons in 2024. When completed, Neste’s
Rotterdam refinery capacity expansion project will fur-
ther increase the company’s total production capacity of
renewable products to 6.8 million tons annually by the
end of 2026. This will help us meet the increasing global
demand for lower-emission products.
Neste is also a technologically advanced refiner of
high-quality oil products with a commitment to reach
carbon neutral production by 2035. We are also intro-
ducing liquefied waste plastic and renewable raw mate-
rials at our oil refinery in Porvoo, Finland, with the ambi-
tion of making it the most sustainable refinery in Europe
by 2030. A strategic roadmap to transition our Porvoo
refinery to a leading renewable and circular solutions
refining hub by mid-2030s was announced in Decem-
ber 2023.
We invest heavily in researching, testing and deploy-
ing new raw materials and technologies. Our engineer-
ing arm, Engineering Solutions, delivers high-quality
technology and engineering services for the group and
its external customers.
Assurance Functions
Risk Management Compliance Internal Controls
Renewable Products Oil Products Marketing & Services
1)
Functions
Renewables Supply Chain and Sustainability
Finance, Strategy and IT
Technology and Projects
HR, Safety and Communications
Legal
1)
Marketing & Services is led through an internal board and its EVP is not a member of the Executive Committee
In November 2023, Neste published plans to simplify its organizational structure and operational model to secure the execution of its
growth strategy with improved cost-efficiency and long-term competitiveness. The aim is to strengthen accountabilities and efficient
decision making. It is estimated that the planned organizational changes may lead to a reduction of approximately 400 roles globally.
According to the plan, the new organization will be effective as of April 2024.
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Renewable Products business unit
Renewable Aviation offers Neste MY Sustainable Avi-
ation Fuel™ (SAF), which provides a solution for reduc-
ing the greenhouse gas (GHG) emissions of air travel
and transportation. Using the fuel in neat form reduces
GHG emissions by up to 80% over the fuel’s life cycle
compared to using fossil jet fuel (calculation method:
CORSIA). We are actively working with partners in the
aviation supply chain to grow the availability of SAF for
the aviation industry globally.
Renewable Polymers and Chemicals offers Neste
RE™, a drop-in solution made with renewable and recy-
cled raw materials to replace fossil feedstock in the pro-
duction of polymers and chemicals. Neste RE, produced
from 100% renewable raw materials, has a more than
85% smaller carbon footprint over its life cycle than con-
ventional fossil raw materials commonly used in poly-
mers and chemicals production (Life Cycle Assessment
on Environmental Impacts of Neste RE, June 2021).
Neste RE can also be made from chemically recycled
hard-to-recycle plastic waste. In a circular plastics value
Strengths
• High-quality renewable diesel, SAF, renewable and
recycled feedstock for the polymers and chemicals
industry, as well as other renewable products and
solutions to significantly reduce greenhouse gas
emissions and reliance on fossil-based alternatives;
• Chemical recycling technology helps combat plastic
waste challenge and enable recycled content in
demanding applications;
• Capability of establishing value chain partnerships
to develop chemical recycling of hard-to-recycle
plastic and to enable production of new high-quality
polymers and chemicals from waste plastic.
• An extensive global supply network for a wide variety
of renewable raw materials with waste and residues
accounting for 92% (95%) of Neste’s renewable raw
materials inputs globally in 2023;
• Capability of pretreating low-quality waste and
residue raw materials to enable their use in the
production of high-quality products;
• Global customer base extending over multiple
sectors
Nameplate capacity
Ca. 3.3 million tons of renewable products annually,
increasing to 6.8 million tons by the end of 2026.
Chemical recycling capacity development aims at
processing annually over 1 million tons of plastic waste.
Main market areas
Europe and North America, expanding in the Asia-
Pacific region.
Customers
Retailers, wholesale customers such as transportation
service companies, municipalities and other fleet
owners or operators, airlines, airports, aviation fuel
suppliers and corporate business travelers, as well as
polymers and chemicals producers.
Main demand factors
• Governments are increasingly introducing renewable
energy requirements – or emission reduction targets
– for the transportation sector. This is especially the
case in the European Union, where for example SAF
will be mandated;
• Regulators working on recycled content targets to
promote circularity;
• Leading companies and brands wanting to reduce
their own emissions and providing their customers
with more sustainable products based on renewable
and circular solutions; and
• There is increasing societal pressure from consumers
who want to see a reduction in fossil fuel use and
increase in the use of products made from recycled
materials. This is particularly related to the global
plastic waste challenge.
Market position
Neste is the world’s leading producer of SAF,
renewable diesel and a pioneer in producing renewable
and recycled feedstock solutions for various polymers
and chemicals industry uses. We are also developing
chemical recycling to combat plastic waste challenge.
Neste MY Renewable Diesel is available in Finland
at 187 stations and in the Baltics at 39 stations and is
sold at more than 500 stations via channel partners in
Sweden, Denmark, Belgium, the Netherlands, the US,
Germany and France.
Main competitors
Other renewable diesel and SAF producers, as well as
producers of conventional biodiesel. Other providers of
renewable and circular solutions for the polymers and
chemicals sectors.
chain, in which waste plastic is chemically recycled and
the polymers are produced from recycled Neste RE,
greenhouse gas emissions are reduced by at least 35%
compared to the current scenario in which polymers
are produced from virgin fossil raw materials and plastic
waste is incinerated (Life Cycle Assessment on Environ-
mental Impacts of Chemical Recycling of Waste Plastic
– Case Neste, October 2022).
Renewable Road Transportation offers Neste MY
Renewable Diesel™, enabling its customers to reduce
their GHG emissions by as much as up to 75% or up to
95% compared to fossil diesel over the fuel’s life cycle.
The GHG emission reduction varies, depending on the
region-specific legislation that provides the methodology
for the calculations (e.g., EU RED II 2018/2001/EU for
Europe and US California LCFS for the US), and the raw
material mix used to manufacture the product for each
market. Neste MY Renewable Diesel is a drop-in solu-
tion, which means it can be used in existing diesel vehi-
cles and fuel infrastructures as such or in a fuel blend.
At Neste we create
value for society by
helping our customers
reduce climate
emissions.
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Oil Products business unit
Our offering includes high-quality oil products and related
services for road transportation, non-road uses, aviation
and marine sectors, as well as products for the oil and
petrochemical industries.
Neste’s refinery in Porvoo, Finland, is among the most
efficient and versatile refineries in Europe and processes
both crude oil and renewable raw materials into more
than a hundred products to customers globally. Neste’s
ambition is to make the Porvoo refinery the most sus-
tainable refinery in Europe by 2030. A strategic roadmap
for transitioning our Porvoo refinery to a leading renew-
able and circular solutions refining hub by mid-2030s
was announced in December 2023.
Strengths
• Extensive selection of high-quality fossil solutions;
• Increasing flexibility in processing challenging raw
materials;
• Technologically advanced refinery enabling high-
value product generation; and
• Capacity to scale-up new technologies and process
innovative raw material.
Refining capacity
Ca. 10 million tons of crude oil refining capacity
annually, producing ca. 12 million tons of products.
Renewable and circular capacity potential 2 to 4 million
tons.
Main market areas
Baltic Sea area, Europe and in Americas.
Customers
Retailers and distributors, oil majors and trading
companies, petrochemical companies and companies
marketing lubricants and solvents.
Main demand factors
• Increasing demand for solutions containing both
fossil and renewable products;
• Customers requiring flexibility in the supply chain;
and
• Supply security in turbulent market conditions.
Market position
Strong position in the Baltic Sea area wholesale
markets.
Main competitors
Refineries in Northwest Europe and market participants
importing oil products to Northwest Europe.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Marketing & Services business unit
Marketing & Services offers sustainable, lower-emission
and digital solutions for the needs of consumers, com-
panies and partners in Finland, and in the Baltic coun-
tries. In addition to Neste MY Renewable Diesel used
for transport, heavy machinery, agriculture and heating
purposes, Neste MY Sustainable Aviation Fuel, Neste’s
electric vehicle charging solutions and emission calcula-
tion and reporting solution Neste MY Carbon Footprint™
service, create value for customers. We seek to develop
a diverse range of services aiming to provide the best
customer experience.
Strengths
• High quality customer experience enhanced by
digitalization and innovations;
• High-quality and sustainable solutions: Neste MY
Renewable Diesel and Neste MY Sustainable
Aviation Fuel;
• Extensive electric vehicle charging solutions in
Finland; Neste Charge™, a B2B electric vehicles
charging solution and a workplace charging solution
and a public high power charging solution for light
and medium-duty electric vehicles, Neste MY
Renewable Charging™;
• Strong brand and extensive station network in
Finland and in the Baltic countries; and
• Solutions like Neste ReNew™ lubricants and Neste
MY Carbon Footprint service that create additional
value for customers.
Main market areas
Finland, Estonia, Latvia and Lithuania. Station network
consists of 722 stations in Finland and 226 stations in
the Baltic countries. In Finland, Neste MY Renewable
Diesel is available at 187 stations and in the Baltics
at 39 stations. Publicly available electric vehicle high-
power charging, Neste MY Renewable Charging, is
available at 13 stations across Finland and the Baltics.
Main demand factors
• Legislation requiring more sustainable energy
solutions;
• Developments in traffic and transportation volumes;
and
• Customers’ growing expectations of services and
more sustainable solutions.
Market position
Neste holds the leading market position in Finland.
In addition, Neste is among the leading operators in
Estonia, Latvia and Lithuania.
Main competitors
Other large retailers in Finland and the Baltic countries.
Customers
Private customers, transportation services, aviation
industry, shipping, industrial and agricultural sectors,
etc.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
18
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Neste plans to simplify its
organizational structure
In November 2023, Neste announced its aim
to simplify its organizational structure and oper-
ational model to secure the execution of its
growth strategy with improved cost-efficiency
and to strengthen long-term competitiveness.
Neste decided to invest in a
liquefied waste plastic upgrading
unit at its Porvoo refinery
Neste commenced the construction of upgrad-
ing facilities for liquefied plastic waste at its
Porvoo refinery in Finland. With an investment
of EUR 111 million, Neste will build the capac-
ity to upgrade 150,000 tons of liquefied waste
plastic per year. The investment is part of a
broader project (PULSE), which has received
an EU Innovation Fund grant of EUR 135 mil-
lion if fully implemented, and is targeting a total
capacity of 400,000 tons per year.
Key events 2023
Industrial hydrogen valley in Finland
Neste partnered with other leading energy companies to
explore the development of an industrial hydrogen val-
ley in Finland. This joint effort aims to advance Finland
toward becoming a leading hydrogen economy in Europe.
The opening of the Singapore refinery
expansion and Innovation Center
Neste celebrated the EUR 1.6 billion Singapore Expan-
sion project’s successful completion, doubling its pro-
duction capacity in Singapore, including the capability of
producing up to one million tons of sustainable aviation
fuel (SAF), solidifying Neste’s position as a global SAF
leader. We maintained our focus on innovation and estab-
lished an Innovation Center in Singapore to enhance
global innovation and research efforts.
Neste recognized as a Leader
in Global Child Forum’s
benchmark
Neste was recognized as a Leader in
Global Child Forum’s global children’s
rights and business benchmark, The State
of Children’s Rights and Business 2023.
Neste selected for the
initial target validation group
for science-based targets
for nature
Neste was selected for the initial target
validation group for science-based targets
(SBTs) for nature by the Science Based
Targets Network (SBTN), which aims to
set the global standard for ambitious and
measurable corporate action on nature.
Globally, only 17 companies were invited
to the target validation group to pilot a
global framework for setting such targets.
Transformation in Porvoo refinery progresses
Neste’s crude oil refinery in Finland is to be gradually transformed into a lead-
ing renewable and circular solutions refining hub. The decision was made
after the completion of a strategic study launched in September 2022. The
planned transformation will proceed in phases and require multiple separate
investment decisions before targeted completion in the mid-2030s.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Green hydrogen project
in Porvoo proceeded
Neste’s project to produce green hydrogen for
the refinery’s processes at the Porvoo refinery
proceeded to the basic engineering phase. The
Finnish Ministry of Economic Affairs and Employ-
ment granted Neste energy investment aid of
EUR 1.96 million for heat recovery from green
hydrogen production.
Partnering actively for a more sustainable
aviation industry
In 2023, Neste expanded its supply of SAF to airlines, cargo carriers, airports
and manufacturers across the globe, such as United Airlines, Emirates,
Ryanair, Air Canada, Brussels Airlines, Wizz Air, Boeing, Finnair, Viva Aero-
bus, Cargolux, Västflyg airline, Thai Airways, All Nippon Airways and Japan
Airways in cooperation with partners such as ITOCHU and Fuji Oil and World
Fuel Services.
Neste enabled the first single engine helicopter flight with 100% SAF and
Australia’s first helicopter flight using SAF in collaboration with Airbus, Safran
and Microflite.
Acquisition of UCO business from
Crimson Renewable Energy
During 2023, Neste continued to strengthen its
sourcing capabilities through acquisitions and
expanding to new markets to ensure the availabil-
ity of renewable raw materials. Neste completed its
acquisition of the used cooking oil (UCO) collec-
tion and aggregation business and related assets,
including shares in SeQuential Environmental Ser-
vices, LLC, and Pure, LLC, as well as a UCO pro-
cessing plant in Salem, Oregon.
Neste increased the amount
of waste plastic processed
In its efforts to scale up chemical recycling,
Neste successfully concluded another series of
industrial-scale processing runs with increasing
volumes of liquefied waste plastic at its refinery
in Porvoo, Finland. The processing runs in the
second half of 2023 doubled the total amount
of liquefied waste plastic processed by Neste to
more than 6,000 tons.
Key events 2023
Neste’s ownership in Neste
Demeter increases
Neste acquired a further 29% of the shares of
Neste Demeter B.V., a trader of animal fats and
proteins, increasing Neste’s ownership to 80% of
the company. Neste also agreed to acquire the
remaining shares of the company over the next
few years.
European Inventor Award 2023
Neste’s inventors won the European Inventor
Award 2023 in the Industry category for their work
on converting waste and residues into high-quality
renewable solutions. The European Patent Office
granted the award, recognizing Neste’s inventors’
contribution to innovative technologies.
Neste expanded its raw materials
and renewable fuels supply
capabilities
Neste expanded its capability of supplying renew-
able fuels to customers in the US in cooperation
with Vopak. Neste commissioned terminal capac-
ity at Vopak’s Los Angeles terminal in California
for storing Neste MY Sustainable Aviation Fuel
(SAF) and Neste MY Renewable Diesel. In 2023,
the Neste Terminal Rotterdam expansion project
was also completed, more than doubling the raw
material storage capacity at the site in Vlaardingen,
the Netherlands. In addition, Neste established an
integrated SAF supply chain to Singapore Changi
Airport.
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Key events 2023
Expanded Neste RE™ supply to new partners
We continued to collaborate with industry pioneers to tackle the
global plastics challenge and to replace fossil feedstocks with
more sustainable ones in the production of polymers and chemi-
cals. In cooperation with various partners, including Mitsui Chem-
icals Group, Eppendorf, Uponor and Suntory, ENEOS and Mit-
subishi Corporation, we paved the way for new plastic products
to be made with our renewable and recycled Neste RE. Neste
and ILLIG entered into a strategic partnership to advance the use
of more sustainable solutions in the production of thermoformed
plastic packaging.
Reducing greenhouse gas emissions of
renewable diesel marine transportations
Since May 2023, two tankers transporting Neste’s renew-
able diesel from Finland to Sweden have been fueled with
lower-emission marine fuel. Neste Marine™ 0.1 co-pro-
cessed fuel supports the International Maritime Organiza-
tion’s ambitious targets for the maritime sector to reduce its
emissions to combat climate change.
Neste, ISCC and
DHL Group: increasing
traceability along the
value chain
Neste, ISCC and DHL Group
joined forces to pioneer and test
a system through which airlines,
logistics service providers and end
customers such as corporates
can credibly report the emission
reduction achieved by using SAF
to reduce their carbon footprint
from air travel and transportation.
Reducing greenhouse gas
emissions with partners
We were able to expand our supply of
Neste MY Renewable Diesel™ to exist-
ing and new partners in the road trans-
portation sector, mining, steel mills and
railroads, as well as to new markets. We
continued and started partnerships with
several global companies such as Deut-
sche Bahn, ITOCHU, Outokumpu, Rio
Tinto and Cologne Bonn Airport to
help them and their customers reduce
greenhouse gas emissions.
Neste MY Renewable Diesel is avail-
able is available to customers in Finland,
Sweden, the Netherlands, Belgium,
Germany, Estonia, Latvia, Lithuania,
Denmark and in California and Oregon
in the US.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Financial targets
Our dividend policy is to pay a competitive
and over time growing dividend.
20212020 2022 2023
Personnel, on averageRevenue, EUR million
20212020
11,751
15,148
25,707
2022
2023
25,000
20,000
15,000
10,000
5,000
0
Comparable EBITDA, EUR million
20212020 2022 2023
3,500
3,000
2,500
2,000
1,000
1,500
500
0
GHG reduction achieved with
Neste’s renewable products,
million tons CO
2
e
1)
1)
Compared to crude oil-based fuel.
20212020 2022 2023
10
8
4
6
2
0
10.0
10.9
11.1
11.0
Leverage ratio, %
20212020 2022 2023
40
15
10
0
5
-5
Financial target: A leverage ratio of below 40%
-4.7
0.6
13.9
22.7
EBITDA, EUR million
20212020
1,508
2,607
3,048
2,548
2022 2023
3,000
2,500
2,000
1,500
500
1,000
0
4,833
4,872
5,244
6,018
Dividend per share, €Comparable return on average capital
employed after tax
(Comparable ROACE), %
Financial target:
Comparable
ROACE of at least
15% annually
20212020 2022 2023
30
25
20
15
23.9
19.8
18.3
30.1
Key figures 2023
20212020
1.20
2)
2022 2023
2.0
1.0
0
0.80
0.82
1.52
1)
22,926
1,929 1,920
3,537 3,458
25
20
1)
2022: Ordinary dividend 1.02 + Extraordinary
dividend 0.50
2)
2023: Board’s proposal the AGM.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
22
Business review Sustainability Governance Review by the Board of Directors Financial Statements
2023 2022 Change,%
Income statement
Revenue, MEUR
22,926 25,707 -11%
EBITDA, MEUR
2,548 3,048 -16%
Operating profit, MEUR
1,682 2,410 -30%
Profit before income taxes, MEUR
1,596 2,279 -30%
Profit for the period, MEUR
1,436 1,891 -24%
Comparable EBITDA, MEUR
3,458 3,537 -2%
Comparable net profit, MEUR
2,216 2,336 -5%
Profitability, %
Return on equity (ROE), %
17.9 25.1 -29%
Comparable return on average capital employed after tax
(Comparable ROACE),%
23.9 30.1 -21%
Financing and financial position
Total equity, MEUR
8,463 8,327 2%
Interest-bearing net debt, MEUR
2,488 1,344 85%
Leverage ratio, %
22.7 13.9 63%
Equity-to-assets ratio, %
53.1 56.3 -6%
Net Debt to EBITDA, %
1.0 0.4 150%
Net cash generated from operating activities, MEUR
2,279 1,197 90%
Other indicators
Capital employed, MEUR
12,532 10,942 15%
Net working capital in days outstanding
41.0 35.4 16%
Capital expenditure and investment in shares, MEUR
2,351 2,218 6%
Research and development expenditure, MEUR
94 85 11%
Average number of personnel
6,018 5,244 15%
Total Recordable Injury Frequency per million hours worked (TRIF)
2.3 2.0 15%
Process Safety Event Rate (PSER)
1.2 1.4 -14%
Share-related indicators
Earnings per share (EPS), EUR 1.87 2.46 -24%
Comparable earnings per share, EUR 2.88 3.04 -5%
Equity per share, EUR 11.02 10.83 2%
Cash flow per share, EUR 2.97 1.56 90%
Price/earnings ratio (P/E) 17.26 17.50 -1%
Dividend per share, EUR 1.20
1)
1.52
-21%
Dividend payout ratio, % 64.3
1)
61.8
4%
Dividend yield, % 3.7
1)
3.5
6%
Dividend per comparable earnings per share, % 41.6 50.0 -17%
Share price at the end of the period, EUR 32.21 43.02 -25%
Average share price, EUR 37.66 42.26 -11%
Lowest share price, EUR 28.55 30.81 -7%
Highest share price, EUR 48.50 52.18 -7%
Market capitalization at the end of the period, MEUR 24,776 33,091 -25%
1)
Board of Directors proposal to the Annual General Meeting.
2023 2022 Change,%
2023 2022 Change,%
GHG indicators
Reduced GHG emissions by Neste customers
with Neste’s products (compared to fossil fuel) in MtCO
2
e
1)
11.0 11.1 2%
Neste’s absolute GHG emissions in scope 1 and 2
(production) (tCO
2
e)
2)
2.8 2.5 6%
Use phase emission intensity of sold fuel products (gCO
2
e/MJ)
3)
58 57 4%
1)
Annual greenhouse gas (GHG) reduction achieved with Neste’s renewable products compared to 100% crude oil based fuel.
Calculation method complies with the EU Renewable Energy Directive II (EU) 2018/2001 and the California LCFS methodology,
which has been applied in the GHG reporting for volumes sold in the US since the beginning of 2022.
2)
Market-based emissions for scope 2
3)
Use phase emission intensity of sold fuel products is calculated by dividing the GHG emissions from the use of fuel products produced
and sold by Neste with the total amount of energy released upon the use of those fuel products (gCO
2
e/MJ)
Key figures 2023
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
23
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Neste shares are listed on Nasdaq Helsinki under the trading code NESTE.
The company had 148,094 (118,906) shareholders at the end of 2023.
Information for investors
Annual General meeting
Neste Corporation’s Annual General Meeting will be held
on Wednesday 27 March 2024 at 10 a.m. EET in the
Conference Centre of Helsinki Expo and Convention
Centre, at Rautatieläisenkatu 3, Helsinki. Registration
and the distribution of voting papers will begin at 9 a.m.
Shareholders wishing to participate in the Annual Gen-
eral Meeting should inform the company by 4.00 p.m.
EET on 19 March 2024 at the latest.
• Via Neste Corporation’s website www.neste.com, by
following the instructions detailed therein, or
• By phone, at +358 (0)20 770 6862 (Monday-Friday,
9.00 am - 4.00 pm EET), or
• By letter, addressed to Neste Corporation, Annual
General Meeting, POB 95, FI-00095 NESTE.
Holders of proxies are requested to forward them when
stating their wish to participate, ensuring that they reach
the company by 4.00 pm EET on 19 March 2024 at the
latest. The AGM can also be followed via live webcast.
The Board of Directors proposes to the AGM that an
ordinary dividend of EUR 1.20 per share be paid on the
basis of the approved balance sheet for 2023. The divi-
dend shall be paid in two installments.
Interim reports in 2024
Neste Corporation will publish financial reports in 2024
as follows:
• Interim Report January–March 2024:
25 April 2024
• Half Year Financial Report January–June 2024:
25 July 2024
• Interim Report January–September 2024:
24 October 2024
The Interim Reports are published in Finnish
and English and can be downloaded at
neste.com/investors.
Contact information
Investor Relations:
Martti Ala-Härkönen, CFO
Tel. +358 40 737 6633
Anssi Tammilehto,
Vice President, Investor Relations
Tel. +358 50 458 8436
Debt Investor and
Banking Relations:
Katariina Perkkiö,
Vice President, Group Treasury
+358 50 458 1492
Neste’s general e-mail
address for investors:
Dividend
payment
in 2024
15 March 2024:
AGM record date.
2 April 2024:
Dividend payment
record date for the
first installment.
9 April 2024:
Dividend payable
for the first
installment.
2 October 2024:
Dividend payment
record date for the
second installment.
9 October 2024:
Dividend payable
for the second
installment.
Year in brief CEO’s review Strategy Innovation Our businesses Key events Key figures and financial targets Information for investors
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Total shareholder return, %
100
40
80
20
-20
60
0
-25.4
94.0
20212020 2022
1.1
2023
-21.6
Earnings per share and dividend
per share, EUR
20212020 2022 2023
0.93
1.60
0.80
2.31
1.54
0.82
2.46
3.04
1.52
1)
1.87
2.88
1.20
2.5
2.0
3.0
1.5
1.0
0.5
0
Earnings per share
Comparable earnings per share
Dividend per share
2)
1)
2022: Ordinary dividend 1.02 + Extraordinary dividend 0.50
2)
2023: Board’s proposal the AGM.
Neste’s share performance 2019–2023, EURShareholders’ total return, indexed
Neste Stoxx Nordic
Shareholder structure on 31 December 2023, %
Neste share’s trading volumes in 2023, %
Finnish State 44.2% (35.9%)
Non-Finnish shareholders 36.8% (39.7%)
Finnish institutions 10.6% (16.8%)
Households 8.4% (7.6%)
Nasdaq Helsinki 65.8% (66.8%)
CBOE Europe 29.7% (29.3%)
Turquoise 4.1% (3.8%)
BATS Europe 0.3% (0.1%)
Chi-X Europe 0.0% (0.0%)
70
30
50
10
60
20
40
0
2021 2022 202320202019
300
100
200
400
0
2021 2022 202320202019
Annual Report 2023
Sustainability
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
26
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Sustainability
Sustainability highlights 27
Sustainability at Neste 28
Sustainability governance 30
Compliance 32
Material sustainability topics 33
Sustainable Development Goals (SDGs) 35
Material sustainability KPIs 38
Stakeholder engagement 43
Value creation 49
Our people 50
Safety 54
Climate 57
Our carbon handprint 60
Our carbon footprint 66
Biodiversity 75
Our transition toward our vision 77
Our most material nature and environment topics 78
Environmental compliance 80
Human Rights 81
Responsible recruitment 84
Living wages 85
Children and youth 85
Reducing inequality 85
Supply chain and raw materials 86
Supply chain 87
Renewable raw materials 91
Recycled raw materials 94
Future raw materials 94
Performance and reporting 97
Performance in gures 99
GRI Content Index 103
TCFD Index 111
SASB Index 112
UNGP Reporting Framework Index 114
Principles for calculating the key indicators 115
Independent Practitioners’ Assurance Report 117
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
27
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Sustainability highlights 2023
Supply chain
and raw materialsBiodiversity
Climate
Human rights
OUR SUSTAINABILITY VISION
3.3Mt 278
annual renewables
production capacity by the
end of 2023.
safe days
The amount of greenhouse gas emissions
our customers reduced with our renewable
products in 2023*
2020 2021 2022 2023 2030
11.1Mt 11.0Mt
20Mt
Target 2030
10.9Mt
11.0Mt
10.0Mt
Equaling to the greenhouse
gas emissions from more
than 4.3 million
road cargo trips
from Rome to
Stockholm
or from more than 22,000
full aircraft round trips
from Amsterdam to
San Francisco.
Neste selected for the initial
target validation group
for science-based targets
for nature (SBTN).
100%
We conducted
215
anonymous worker voice surveys to engage
with supply chain workers on their employment
and living standards.
We conducted a total of 154
sustainability audits on our
raw material suppliers,
sub-suppliers, terminals
and contractors.
of our renewable raw material
suppliers have committed to
Neste Supplier Code of Conduct.
We reduced our renery inputs
of conventional palm oil to
at the end of 2023.
* See calculation principles on page 115
We established site-level
complaints channels
at our reneries for
addressing any concerns
of contracted workers.
zero
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
28
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Sustainability is at the core of our
strategy enabling our growth and purpose:
Creating a healthier planet for our children.
As the world’s leading producer of sustainable aviation
fuel, renewable diesel and renewable feedstock solu-
tions for various polymers and chemicals industry uses,
Neste is driving the transition to renewable and circu-
lar solutions. We provide our customers and partners
with low-emission solutions to the world’s most press-
ing sustainability challenges. Our renewable and circular
solutions are our contribution to keeping societies run-
ning more sustainably and helping to reduce the depen-
dency on virgin fossil raw materials.
We refine waste, residues and other innovative raw
materials into renewable fuels and more sustainable
feedstocks for plastics and other materials. Our work
is guided by the Neste sustainability vision, in which
we have set ourselves aspirational targets for climate,
Sustainability at Neste
biodiversity, human rights, as well as our supply chain
and raw materials – issues that are all increasingly inter-
linked. Together with our partners, we are aiming for a
carbon neutral and nature positive value chain by 2040.
With our ambitious sustainability commitments and
solutions, available already today, we are committed to
limiting global warming to 1.5°C and meeting the objec-
tives of the Paris Agreement.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
29
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Our success is built on
collaboration and innovation
Together with our partners, we are scaling up our renew-
able and circular solutions, increasing innovation through
extensive research and value chain partners, and estab-
lishing mutually beneficial partnerships committed to
sustainability. While working to tackle the global climate
challenge and ecosystem decline, we also acknowledge
our social and economic role regionally and locally.
We have an impact on people and the environment
within our own operations, but also throughout our value
chain. We care for our own employees’ health, safety
and wellbeing, while also paying close attention to diver-
sity, equity and inclusion, and to the welfare of the most
vulnerable groups of individuals in our supply chain.
Economic responsibility, ethics, compliance and cor-
porate governance, as well as supply chain and raw
material sustainability are the cornerstones of everything
we do. We have identified several environmental, social
and governance topics as relevant for our business and
our everyday sustainability work, in line with the UN Sus-
tainable Development Goals.
Progress in 2023
In 2023, we continued to take concrete actions through-
out our value chain and with our wide range of stake-
holders. We strive to ensure that our performance meets
and exceeds expectations.
Targets
Climate
We lead transformation towards a
carbon neutral value chain by 2040.
Reduce our customers’
greenhouse gas emissions by
at least 20 million tons
annually by 2030 with our
renewable and circular
solutions.
Reduce emissions in our own
production (scopes 1 & 2) by
50% by 2030 compared to
2019 level, and reach carbon
neutral production
by 2035.
Reduce the use phase
emission intensity of sold
products by 50% by 2040
compared to 2020 levels.
Work with our suppliers and
partners to reduce emissions
across the entire value chain
(scope 3).
Biodiversity
Our vision is to drive a positive impact
on biodiversity and achieve
a nature positive value chain by 2040.
Aim at creating net positive
impacts (NPI) for biodiversity
from new own activities from
2025 onwards.
Target no net loss (NNL) of
biodiversity from all ongoing
own activities by 2035.
Human rights
We strive to create a more equitable
and inclusive value chain by 2030 in
which everyone works with dignity.
Commit to paying all of our
employees at least a living
wage; take action to promote
living wages in Neste’s supply
chains; and require strategic
contractors and suppliers to
pay their employees a living
wage by 2030.
Commit to and promote the
Employer Pays Principle, with
implementation in high-risk
areas by 2030 to ensure that
no worker pays for a job and
the costs of recruitment are
paid for by the employer, not
the worker.
Work together with our
stakeholders to increase
children’s access to
education by 2030; and
promote respect for children’s
rights by actively supporting
and participating in initiatives
aimed at keeping children in
school.
Reduce inequalities across
the value chain and address
the root causes of systemic
human rights issues by 2030.
Supply chain & raw materials
We drive safe and healthy workplace,
fair labor practices and increased
sustainability commitment
across the supply chain.
Require 100% of suppliers
and other business partners
to be committed to Neste
Supplier Code of Conduct
and have the best-in-class
grievance processes.
Include human rights,
biodiversity and climate
targets as key criteria for
suppliers as we drive
diversification and increased
availability of sustainable raw
materials.
Our sustainability vision
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Neste’s sustainability work is managed by the
Sustainability, Human Resources, and Health, Safety
and Environment (HSSEQ) organizations.
The Executive Committee approves our sustainability
priorities. Responsibility for individual corporate sus-
tainability targets is shared between the members of
the Executive Committee. The Vice President, Sus-
tainability is responsible for ensuring that relevant
management processes and impact assessments
related to material corporate sustainability topics are
developed and implemented as part of our strategy.
The relevant business units and functions reserve the
required resources within their scope to implement
the actions commonly agreed in the Executive Com-
mittee. The Vice President, Sustainability leads a ded-
icated global Sustainability function.
Sustainability governance
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At corporate level, sustainability is steered by a cross-
functional Sustainability Leadership Team and chaired
by the VP, Sustainability. The Sustainability Leadership
Team has members from different teams and func-
tions, e.g., Climate Change and Circular Economy, Sup-
ply Chain Sustainability, Human Rights, Sustainability
Reporting and Engagement, HSSEQ, Innovation, and
Communications. The Sustainability Leadership Team
meets monthly and prepares the sustainability priorities
and proposals to be taken to the Executive Committee
by the EVP, Renewables Supply Chain and Sustainabil-
ity, with the relevant sustainability experts. The Execu-
tive Vice President is a member of the Neste Executive
Committee and reports directly to the CEO.
The sustainability vision is part of the Neste strategy.
It undergoes the same Neste Executive Committee and
Board review as any other strategic priority. The Board
approves the long-term ambition and targets for the sus-
tainability vision, based on the proposal from the Execu-
tive Committee and the Sustainability function, and reg-
ularly reviews the sustainability performance.
Significant factors concerning the composition of the
Board of Directors include that the members should
possess a variety of competences that complement the
other members of the Board: education and experience
in different professional and industrial fields, and in busi-
ness operations and management, all of which include
competences on sustainability-related issues.
Sustainability risk management
The Neste Corporate Risk Management Policy and sup-
porting principles, requirements and processes also
apply to sustainability risks, which are managed as a
specific risk category in quarterly risk reviews. The
assessment considers short-, medium- and long-term
perspectives.
Our operations are associated with several sustain-
ability-related risks. We aim to identify any threats and
proactively prevent them. The most important risk issues
are evaluated as part of the strategic planning and perfor-
mance management cycle. The risk management team
monitors the level of risks and ensures that the risks are
identified and mitigated appropriately by Neste’s busi-
ness units, functions and country units. We report on
our most significant sustainability-related risks in our
Annual Report and its Review by the Board of Directors.
Our risk-based approach and our sustainability risks are
further described in our Non-Financial Information (NFI)
Statement.
Our sustainability impacts are reviewed and moni-
tored frequently at many levels of the company in addi-
tion to the Board of Directors. Sustainability-related
work, including climate change-related work, is steered
by the company’s EVP, Renewables Supply Chain and
Sustainability.
Our sustainability impacts are
reviewed and monitored frequently
at many levels.
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Compliance
We are committed to high ethical standards and conduct our business
in compliance with applicable laws and regulations. That means acting
transparently, responsibly, with integrity and in accordance with our values.
Neste’s Code of Conduct sets the framework for our
company’s global business operations and establishes
the ethical practices to guide every Neste employee in
their day-to-day business tasks. We also require our sup-
pliers and other business partners to comply with appli-
cable laws and expect them to follow equivalent ethical
business standards as stated in the Code of Conduct,
and further described in our Supplier Code of Conduct.
Raising awareness of and training in the Code of Con-
duct and its topics are central elements of the Neste
compliance program. We regularly communicate inter-
nally on compliance-related topics and train our employ-
ees through both e-learning courses and in-person
training.
We constantly develop our compliance program with
special efforts in the defined key focus areas: competition
law compliance; anti-corruption; trade sanctions; pri-
vacy; and anti-money laundering. In 2023, we revised our
Anti-Money Laundering and Counter Terrorism Financ-
ing Standard and re-issued the related anti-money laun-
dering e-learning. The e-learning course was assigned
to targeted employees, and it achieved a completion rate
of 94%. We also revised our competition law e-learning
course and relaunched it for the targeted group at the
end of 2023. The Code of Conduct e-learning course
issued in 2021 is part of the new employee onboarding,
and we further conducted targeted Code of Conduct
workshops in 2023.
Furthermore, we raised awareness and fostered open
communication to encourage employees to speak up.
We also revised our internal Misconduct Investigation
Standard to align with the Whistleblower Directive and
relevant applicable laws.
Neste’s Compliance Function regularly issues news-
letters addressing various compliance topics and, in
2023, we also launched an internal news channel for
such topics. Throughout the year, the newsletters cov-
ered subjects such as speaking up, anti-money laun-
dering, privacy, conflict of interest, competition law, and
gifts and hospitality.
Neste also has an Anti-Corruption Principle that pro-
vides more detailed guidance on responsible business
practices and the prevention of corruption. More infor-
mation about Neste’s grievance process, including the
related Misconduct Investigation Standard, is available in
the Corporate Governance Statement and in the Report
of the Board of Directors.
Neste’s compliance program and function is described
in more detail as part of Neste’s Corporate Governance
Statement and in the Report of the Board of Directors.
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Material sustainability topics
Understanding the views and expectations of
our stakeholders is crucial for executing our
sustainability vision and strategy.
To identify what topics we should particularly focus
on in our sustainability efforts, we have conducted
a GRI-based materiality assessment once every two
years and engaged our key stakeholders in the pro-
cess. Neste’s previous materiality assessment was
conducted in 2022 following the double material-
ity approach, which considers impact and financial
materiality. The most material topics identified for
Neste are based on their business and stakeholder
influence, outward impact on the economy, environ-
ment and people, as well as the estimated magnitude
of their impacts. Our materiality assessment process
is built on four stages: identification, evaluation, prior-
itization and the integration of the most material sus-
tainability topics.
Identify
the sustainability
issues significant
for Neste’s
business and
stakeholders.
Evaluate
the potential sustainability
impacts, key risks and
opportunities.
Prioritize
the sustainability
topics based on
the importance for
stakeholders and
Neste’s business.
Integrate
the material sustainability
topics into Neste’s
sustainability work.
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Materiality assessment
The material topics reflect Neste’s business opera-
tions, as well as strategic ambitions in combating cli-
mate change and creating a healthier planet for our
children. The material topics represent various sustain-
ability aspects, and they are relevant throughout our
value chain. Supply chain sustainability and raw mate-
rials, economic responsibility, as well as ethics, compli-
ance and corporate governance are not seen as individ-
ual material topics but as underlying themes that need
to be taken into account when considering each of the
eleven topics. These themes are the cornerstones of our
sustainability agenda.
In 2022, we updated our material topics to adjust for
the impacts of immediate or future trends. These can be
trends that influence the environmental, social or cor-
porate governance (ESG) dimensions of sustainable
development. In the materiality assessment, we utilized
industry-specific aspects, external trends, stakeholder
interviews, sustainability frameworks and standards,
regulatory requirements, and Neste’s strategy and sus-
tainability vision.
Material topics were refined by identifying ESG aspects
relevant to our business and stakeholders. The topics
were then evaluated based on actual and potential sus-
tainability impacts and business-related key risks and
opportunities.
The stakeholders involved in the materiality assess-
ment process were grouped into categories (listed on
page 44) and represent a large variety of key interest
groups. Several people from different Neste depart-
ments participated in the process to update and identify
key stakeholders. To obtain an understanding of impact
and financial materiality, both internal and external
stakeholders were involved in the evaluation of the main
current and future ESG risks and opportunities through
interviews and surveys. Based on the results, topic own-
ers and subject matter experts provided a final input to
the results.
Based on the results of the assessment process,
eleven material topics were prioritized (see the mate-
riality matrix on this page). The horizontal axis of the
matrix represents the significance of financial material-
ity; the vertical axis displays the significance of impact
materiality. The topic disclosures of Neste’s sustainabil-
ity report provide further descriptions for topic-specific
material risks and opportunities, impacts, policies and
commitments.
The materiality assessment results were evaluated by
the Neste Advisory Council on Sustainability and New
Markets to gain an objective round of external expert
views. The material topics and the matrix were approved
by the Neste Executive Committee.
A key element for the integration of the ESG factors
throughout our value chain is defining the material indi-
cators which guide our operations and business deci-
sions. Neste is committed to measuring its performance
on ESG issues to refine the objectives underlying our
strategy.
In addition, we conduct an annual Neste Brand Health
Research study into the key trends and perceptions of
the main global players in renewable and circular solu-
tions, as well as on our sustainability topics, across Asia,
Europe and the Americas, representing a wide range of
organizations. The research’s findings support the views
stated in the materiality assessment and provide an
insight into our progress against our goals.
Our pathway toward CSRD
As part of building our abilities, processes and practices
for the implementation of the new Corporate Sustain-
ability Reporting Directive (CSRD), we carried out a dou-
ble materiality assessment in 2023 to identify the rele-
vance of sustainability matters and their relationship to
non-financial and financial impacts in our own operations
and in our value chain. The defined material topics will
form the coming sustainability related disclosures under
the CSRD for information about financial year 2024. In
this report for the financial year 2023, the information is
based on our previous biannual materiality assessment.
Materiality matrix 2022–2023
Signicance of Neste’s impacts on
environment, economy and people
Signicant Crucial
Crucial
Signicance of impacts on environment, economy and people to Neste business
Carbon
handprint
Carbon
footprint
Protecting
biodiversity, air,
water and soil
Stakeholder
engagement,
communication
and transparency
Innovation
Partnerships
Sustainable products
and services
Safety,
health and
wellbeing
Modern
slavery
Diversity, equity
and inclusion
Engaged and
talented workforce
Supply chain and
raw material sustainability
Economic
responsibility
Ethics, compliance and
corporate governance
The cornerstones for everything we do
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The UN Sustainable Development Goals (SDGs) are
a collection of 17 interconnected global goals to help
achieve a better and more sustainable future for all.
They represent an action plan for the planet and soci-
ety to thrive by 2030, and explicitly call on businesses to
help lead this transformation. We recognize the strategic
importance of the SDGs to our business and the world
and are committed to helping in their achievement.
We have identified nine priority SDGs as the goals to
which we most significantly contribute and have used
the SDG Compass to determine them. To understand
and prioritize the most relevant SDGs for Neste, we have
assessed both the positive and negative impacts our
business has on the SDGs throughout our value chains.
Our prioritization process is based on our sustainabil-
ity materiality assessment, impact evaluation study, an
external review and an internal expert analysis.
Our most relevant SDGs form a strong basis for our
sustainability work. By identifying material sustainabil-
ity topics and the relevant SDGs, we position Neste as
part of society as well as part of the global sustainabil-
ity framework. This work formed the basis of our sus-
tainability KPIs. We monitor, measure and follow up our
actions’ effect on the broader context. The sustainability
KPIs can be found in the table on pages 38-42.
Clean energy
• Neste increases the share of renewable energy in
the global energy mix by producing and selling low-
emission renewable fuels—for example, for road
transportation and aviation.
• Neste finalized the expansion of its Singapore
refinery, which will increase the refinery’s total
production capacity to 2.6 million tons per year,
including up to one million tons of sustainable
aviation fuel.
• Neste enabled one of the world’s largest
international airlines, Emirates, to operate the
world’s first Airbus A380 demonstration flight
with one engine powered with 100% sustainable
aviation fuel.
• All the diesel-powered ground fleet runs on Neste
MY Renewable Diesel™ at both Amsterdam
Schiphol and Cologne Bonn airports.
• Neste and ScanOcean introduced Neste’s
marine fuel to the Swedish market, enabling the
marine sector to start reducing greenhouse gas
emissions.
• Neste and Mexican ultra-low-cost carrier Viva
Aerobus signed a purchase agreement for one
million liters of sustainable aviation fuel.
• Neste aimed for 100% renewable electricity use
globally by 2023. The share of renewable electricity
was 89.3%
1)
, and with so-called additional
measures
2)
we were able to cover 99.6% of Neste’s
total purchased electricity.
• Neste signed a purchase agreement for solar power
supply to Porvoo refinery in Finland in the end of
2023. Solar power supply is expected to start in
spring 2024.
Decent work and economic growth
• We actively take steps to protect labor rights and
promote safe and secure working environments
for all workers, with special attention to vulnerable
groups.
• We heightened our employees’ safety awareness by
organizing our first global Safety Week, centered on
learning from everyday work.
• Neste is committed to implementing effective
measures to eradicate exploitation, modern slavery,
and child labor.
• Neste respects and supports children’s rights and
was recognized as a Leader in the Global Child
Forum’s Benchmark Report, The State of Children’s
Rights and Business 2023.
• Neste provides good-quality employment, education
and training for young people. In 2023, we hired
440 summer trainees in paid roles to work across
different functions at Neste.
• We support our employees’ individual development
goals. The average time spent in learning programs
for Neste employees in 2023 was 27.2 hours, and
our company-wide development programs had more
than 1,100 participants.
• Neste established site-level complaints channels
at all its refineries, promoted with posters to inform
migrant contract workers of their labor rights and
encourage them to report any concerns directly to
Neste.
1)
Martinez Renewables excluded from reported renewable electricity share as
Neste does not control electricity supply agreements for the joint operations.
2)
Additional measures include available market-based renewable electricity instruments.
Sustainable Development Goals
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Industry, innovation and infrastructure
• Neste’s growth and transformation is rooted in
innovation and technology. We invest the majority
of our annual R&D expenditure in researching and
testing future raw materials and technologies.
• Neste established an Innovation Center in Singapore
to strengthen its global innovation and R&D
capabilities.
• Neste and CINEA (the Climate, Infrastructure and
Environment Executive Agency of the European
Commission) signed the EU Innovation Fund’s grant
agreement for the waste plastic chemical recycling
project PULSE in Porvoo, Finland.
• Building of the demonstration facility at VTT
Bioruukki Pilot Centre was completed, and pilot
runs were successfully conducted.
• Neste’s renewable hydrogen project in Porvoo
proceeded to the basic engineering phase.
• In Rotterdam, the electrolyzer system was
successfully installed in the refinery within the
EU-funded project MultiPLHY, which demonstrates
renewable hydrogen production.
• Neste and the other leading energy companies
in Finland joined forces to develop an industrial
hydrogen valley. This joint effort creates industrial
investment opportunities and supports Finland’s and
Europe’s carbon neutrality goals.
• Neste advanced the preparation of its algae pilot
production facility in order to further strengthen the
growth of its global raw material pool.
Reducing inequalities
• Neste views inequality as a systemic risk that
requires urgent action from business and is taking
actions to address it.
• Neste is an active member of the WBCSD Business
Commission to Tackle Inequality (BCTI), a multi-
stakeholder coalition of organizations that place
addressing inequality at the heart of the business
agenda for sustainable growth.
• Neste’s human rights ambition for 2030 is to create
a more equitable and inclusive value chain in which
everyone works with dignity.
• Neste expanded and completed living wage gap
assessments for its own employees across global
locations and took further steps to promote living
wages in its supply chains.
• Neste is using anonymous worker voice surveys to
engage directly with supply chain workers on their
employment and living standards.
• Neste is a signatory to the UN Women’s
Empowerment Principles (WEPs) and conducts an
annual WEPs gender gap analysis.
• Neste has signed two Unilever Partner Promises —
the Supplier Equity, Diversity and Inclusion Promise
and the Living Wage/Living Income Promise.
• Team value discussions on diversity, equity and
inclusion were carried out across Neste in 2023. By
the end of the year, 95% of teams had participated in
these discussions.
Sustainable cities and communities
• Neste creates value for society and helps customers
to reduce greenhouse gas emissions by offering
lower-emission renewable fuels for aviation and road
transportation. Our renewable products can also help
reduce transportation-related local emissions and
improve local air quality in urban areas.
• Neste helps cities fight climate change by reducing
GHG emissions with renewable fuels: We power
the fleets of cities and municipalities with renewable
diesel across the US west coast and partnered with
PetroCard to expand access to renewable diesel in
the Pacific Northwest region of the US.
• Neste supplies Neste MY Sustainable Aviation Fuel™
to the Swedish Trollhättan-Vänesborg Airport
enabling it to become the world’s first airport to use
sustainable aviation fuel on all flights, together with
Västflyg Airlines.
• Neste’s renewable diesel was introduced to the
Danish and the French markets.
• Neste has introduced public high-power charging
(HPC) at its service stations in Finland for light and
medium-duty electric vehicles. The number of
charging stations in Finland is increasing, and the first
stations in the Baltics were opened in 2023.
• In Finland, Neste participates in the nationwide
“Down a Degree” energy-saving campaign by
reducing energy consumption at its facilities.
• The Ham Trick Campaign encourages households
in Finland to recycle Christmas waste fats into
renewable diesel.
Responsible consumption
and production
• Neste creates solutions for combating climate
change and accelerating a shift to a circular
economy. We refine waste, residues and innovative
raw materials into renewable fuels and more
sustainable feedstock for polymers and chemicals.
• Climate, biodiversity, human rights and supply
chain sustainability aspects are integrated in our
investment process and criteria to better guide
investment planning from the sustainability impact
perspective.
• Neste finalized the expansion of its Singapore
refinery and continued with the Rotterdam refinery
expansion project. Martinez Renewables refinery in
the US also started operating in 2023.
• Neste enables PET bottles produced with bio-based
materials with Suntory, ENEOS and Mitsubishi
Corporation. The introduction of bio-based materials
will reduce fossil resource dependence in the PET
value chain.
• Neste, Uponor, Wastewise Group and Borealis
successfully produced pipes made of cross-linked
polyethylene (PEX). The project demonstrates that
chemical recycling can process hard-to-recycle
waste plastics into high-quality polymer products.
• Neste decided to invest in a liquefied waste plastic
upgrading unit at its Porvoo refinery.
• We completed Sedex self-assessment for our
refinery in Porvoo, allowing us to thoroughly assess
gaps in our management systems and human rights
due diligence. The same assessments are ongoing
for Rotterdam and Singapore refineries.
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Climate action
• Neste’s climate vision is to lead transformation
towards carbon neutral value chain by 2040. Our
climate commitments cover the entire value chain
(scopes 1, 2 & 3).
• Neste completed the strategic study on transitioning
its refinery in Porvoo, Finland, into a leading
renewable and circular solutions refining hub in the
mid-2030s. The ambition is to make the Porvoo
refinery the most sustainable refinery in Europe, in
which production of renewable hydrogen will play a
key role.
• Neste includes its climate commitments in long-term
incentives for Neste’s key personnel and its climate
impact in the investment criteria.
• Neste uses the internal carbon price as a strategic
tool to support its climate commitments.
• Neste and SQUAKE enable businesses to opt for
sustainable aviation fuel in flight booking systems to
reduce their air-travel-related carbon emissions.
• Neste joined COP28, the 2023 UN Climate Change
Conference, as a partner of the Finland Pavilion.
• In Finland, Neste joined a green transition campaign
by Climate Leadership Coalition (CLC) to highlight
the importance and opportunities of the green
transition for Finnish businesses and society.
Life on land
• Neste is committed to protecting biodiversity with a
vision to drive a positive impact on biodiversity and
achieve a nature positive value chain
1)
by 2040. We
aim to create net positive impacts for biodiversity
from new activities from 2025 onwards, and target
no net loss (NNL) of biodiversity from all ongoing
activities by 2035.
• Neste is committed to preventing deforestation and
requires the same from its suppliers.
• As an active member of the Consumer Goods Forum
(CGF) Forest Positive Coalition, Neste drives wider
collaboration on preventing deforestation across
industries.
• Biodiversity and climate topics are key when
assessing potential raw materials. Neste’s raw
material sourcing for renewable fuels is regulated by
strict biodiversity criteria as outlined in the EU RED II
((EU) 2018/2001).
• Neste engages in ongoing local activities to protect
biodiversity, such as, continuous environmental
monitoring in the vicinity of the Porvoo refinery.
• Neste works closely with NGOs and research
partners who have a strong understanding of
biodiversity, such as Fauna & Flora.
• Neste has joined the Science Based Targets
Network’s (SBTN) Corporate Engagement Program
to develop and set science-based targets for nature.
In 2023, Neste was one of the few companies who
were selected in the initial target validation group for
science-based targets for nature.
• Neste participates in the World Business Council
for Sustainable Development’s (WBCSD) Nature
projects, focusing on collaboration in biodiversity
metrics development.
Partnerships for the goals
• Partnerships are at the core of the SDGs and we see
them as the key to advancing sustainable business.
Here are some recent examples of our partnerships:
• Neste is collaborating with ITOCHU to supply
sustainable aviation fuel to All Nippon Airways
and Japan Airlines, as well as in making Neste My
Renewable Diesel more widely available in the
Japanese market.
• Neste, ISCC and DHL Group successfully piloted
a new system enabling credible and traceable
transfer of sustainability benefits from use of
sustainable aviation fuel along the value chain.
• Neste and Scania piloted a digital solution to
make renewable fuels use easier to track
• Neste’s collaboration with Bell, Safran Helicopter
Engines, GKN Aerospace and Virent contributed
to the milestone of the world’s first 100% SAF
powered single engine helicopter flight.
• Neste supports research on the Baltic Sea and
climate change at the CoastClim research center.
• Neste and ILLIG partnered to showcase more
sustainable solutions for thermoformed plastic
packaging through demonstration cases.
• Read more about our engagements and
commitments as well as the work we do with our
stakeholders, on pages 43-46.
1)
A nature positive value chain means that throughout our value chain, we are creating more positive impacts on nature than causing adverse ones.
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Carbon handprint Helping our customers reduce their
GHG emissions
Reduced GHG emissions by Neste customers with
Neste’s products (compared to fossil fuel) in MtCO
2
e
1)
20 MtCO
2
e annually by 2030 11.0 MtCO
2
e (11.1 MtCO
2
e)
Carbon footprint Leading transformation toward
carbon neutral value chain and
reaching carbon neutral production
Absolute GHG emissions in our own production
(scopes 1 & 2)
50% reduction by 2030 in comparison
to 2019 baseline 3.4 MtCO
2
2.8 MtCO
2
e (2.5 MtCO
2
)
19% reduction compared to baseline
Indirect value chain emissions (scope 3): Use phase
emission intensity of sold fuel products (gCO
2
e/MJ)
50% reduction by 2040 in comparison
to 2020 baseline of 58 gCO
2
e/MJ
58 gCO
2
e/MJ (57 gCO
2
e/MJ)
0% reduction compared to baseline
Energy consumption savings achieved during reporting
year (GWh)
and cumulative energy consumption savings
during 2017–2025 compared to 500 GWh target (%)
2017–2025 target: 500 GWh Energy consumption savings during reporting year 27.2 GWh
2)
(42.6 GWh). Cumulative savings 2017–2023 compared to target:
55% (50%) achieved.
Share of renewable electricity of total purchased
electricity (%)
- scope 2 (market-based) measures (%)
- additional measures
3)
(%)
Aiming for 100% renewable electricity by 2023 89.3%
4)
(93.8%) scope 2 (market-based) measures
10.3% additional measures
3)
Protecting
biodiversity, air,
water and soil
Driving a positive impact on
biodiversity and achieving a nature
positive value chain by 2040
Management of biodiversity impacts Implementing a program to create net positive
impacts (NPI) for biodiversity from Neste’s own
direct new activities from 2025 onward, and no
net loss (NNL) of biodiversity from all Neste’s
own direct ongoing activities by 2035
Materiality analysis according to SBTN guidance for upstream and
direct operations completed, with freshwater and land use aspects
concluded as significant for biodiversity and nature in Neste’s value
chain. Biodiversity included in our major investment decision making
process.
Direct driver of biodiversity change: Freshwater use and
effluents
Introducing Neste’s own direct water impacts to
the nature positive roadmap
Freshwater-related impacts in each Neste site, as well as upstream
supply chain, was assessed as part of our SBTN Initial Target
Validation Pilot work.
Availability of pollution prevention technology
5)
100% availability of pollution prevention
technology at refineries, terminals and retail sites
Availability of pollution prevention technology on average 91% (98%)
at refineries, terminals and retail sites
Number of permit violations Zero permit violations for Oil Products (OP),
Renewable Products (RP) and Marketing &
Services (M&S)
Permit violations: 13 (3), of which 6 (2) in OP, 6 (1) in RP and 1 in
M&S
Material topic Objective Key performance indicator Target Performance in 2023 SDG link
Material sustainability KPIs
SDG17: Partnerships for the goals
17
SDG8: Decent work and economic growth
SDG12: Responsible consumption and production
12
8
SDG7: Clean energy
SDG11: Sustainable cities and communities
11
7
SDG15: Life on land
15
SDG10: Reducing inequalities
10
SDG13: Climate action
SDG9: Industry, innovation and infrastructure
9
13
1)
Annual greenhouse gas (GHG) reduction achieved with Neste’s renewable products compared to 100% crude oil based fuel. Calculation method complies with the EU Renewable Energy Directive II (EU) 2018/2001 and the California LCFS methodology, which has been applied in the GHG reporting for volumes
sold in the US since the beginning of 2022
2)
The savings consist of energy efficiency measures started during 2023, which have been scaled to cover the full year.
3)
Additional measures include available market-based renewable electricity instruments, e.g. I-RECs in APAC/Singapore, which are not currently eligible for scope 2 market-based accounting. JV operations excluded from the figure.
4)
Martinez Renewables excluded from reported renewable electricity share as Neste does not control electricity supply agreements for the joint operations.
5)
Retail sites included for the first time in 2023.
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Material sustainability KPIs
Safety, health
and wellbeing
Ensuring the health and safety of
employees and contractors in all
Neste locations and supply chain
Total Recordable Incident Frequency (TRIF)
6)
2.0 for 2023, long-term target: Zero accidents TRIF 2.3 (2.0)
Process Safety Event Rate (PSER)
7)
1.4 for 2023, long-term target: Zero accidents PSER 1.2 (1.4)
Safe days (including environmental permit violations) 305 for 2023, long-term target: Continuously
increasing the number of Safe Days
278 (314) Safe Days
Strengthening Neste culture that
supports the physical and mental
wellbeing of our employees
Wellbeing index from employee engagement survey
(Forward Survey), consisting of elements and scores in
engagement, wellbeing and change adaptation
Target is to maintain results on a good level Engagement 70 (66), wellbeing 66 (61), change adaptation 66 (62)
8)
Modern slavery Managing modern slavery risks in
Neste operations and supply chains
Number of Neste employees who have received training
on modern slavery
To increase the number of employees who have
received training on modern slavery, prioritizing
those involved in supply chains and
procurement
Training on forced labor and vulnerable groups carried out for 1,667
(2,689) employees as part of Neste’s Code of Conduct e-learning
Human Rights Due Diligence (HRDD)
9)
carried out for
key business areas/functions
To strengthen Neste’s capacity to identify,
assess, and address human rights risks in our
operations and supply chains
Four major assessments/initiatives undertaken in 2023:
1) Corporate-wide assessment to review Neste’s salient issues and
mitigation actions.
2) Surveyed Neste’s time charter vessel partners on their human
rights and labor practices.
3) Living wage gap assessments completed for Neste’s own
employees globally.
4) Sedex assessments completed for our Porvoo refinery, and
ongoing for Rotterdam and Singapore refineries.
Improve HRDD maturity level for Neste’s own operations
using the Consumer Goods Forum HRC assessment
framework and KPIs.
10)
Achieve CGF Leadership Level for 100% of our
own operations by 2025
100% of the "Established" maturity level achieved in 2023
Material topic Objective Key performance indicator Target Performance in 2023 SDG link
SDG17: Partnerships for the goals
17
SDG8: Decent work and economic growth
SDG12: Responsible consumption and production
12
8
SDG7: Clean energy
SDG11: Sustainable cities and communities
11
7
SDG15: Life on land
15
SDG10: Reducing inequalities
10
SDG13: Climate action
SDG9: Industry, innovation and infrastructure
9
13
6)
Number of cases per million hours worked. Includes both Neste’s and contractors’ personnel, except for Demeter, Walco and SeQuential, and green-field expansion project, which were reported internally and followed-up separately in 2023.
7)
Number of cases per million hours worked.
8)
Demeter, Mahoney, SeQuential and Agri Trading not included.
9)
HRDD refers to any activities carried out to identify, assess, address, prevent or mitigate forced labor risks, such as developing internal processes, carrying out impact assessments, risk mapping, gap assessments, etc
10)
The Consumer Goods Forum HRDD maturity assessments for Neste’s own operations have three achievement levels: Launched, Established, and Leadership.
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Diversity,
equity
and inclusion
Fostering a diverse and inclusive
workplace that ensures fair
treatment and development of the
skills base and innovation power
needed for company growth
Multi-country teams (%) Increasing trend 18% (15%) are multi-country teams
Women in personnel (%), female representation in line
manager positions (%) and senior management (%)
To increase women’s representation in line
manager positions and senior management
close to the representation of females in
personnel (%)
Women in personnel 32.6% (32.2%)
32.9% (30.7%) women in line manager positions
29.1% (27.4%) women in senior management
Response rate to employee engagement survey (%) Maintain a high response rate of 80% or above 84% (80%)
8)
Engaged
and talented
workforce
Ensuring engaged, well-led and
competent employees
Strengthening Neste culture that
supports strong sense of belonging
and versatile growth opportunities
Employee engagement score from employee
engagement survey (Forward Survey)
Maintain a good level of employee engagement Employee engagement score
70 (66). Majority of employees thought
favorably of working at Neste and would recommend Neste as a
workplace. 73% (66%) felt happy working at Neste, 84% (80%)
understood how their own work contributed to company’s success,
79% (75%) thought Neste acts in a responsible way, 82% (76%) said
their team has everything they need be safe at work and 83% felt
comfortable being themselves at work.
8)
Leadership score from employee engagement survey
(Forward Survey), indicating the support received from
the line manager
To maintain or exceed previous year’s level Manager support score 77 (74)
8)
Training hours per employee To maintain or exceed previous year’s level 27.2 hours (20.8)
The external turnover for the year To maintain the rate on a good level Leaving rate of permanent employees 9.6% (10.2%)
Hiring rate of permanent employees 15.3% (18.3%)
Material topic Objective Key performance indicator Target Performance in 2023 SDG link
Material sustainability KPIs
SDG17: Partnerships for the goals
17
SDG8: Decent work and economic growth
SDG12: Responsible consumption and production
12
8
SDG7: Clean energy
SDG11: Sustainable cities and communities
11
7
SDG15: Life on land
15
SDG10: Reducing inequalities
10
SDG13: Climate action
SDG9: Industry, innovation and infrastructure
9
13
8)
Demeter, Mahoney, SeQuential and Agri Trading not included.
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Material sustainability KPIs
Stakeholder
engagement,
communication
and transparency
Ensuring the appropriate scope and
quality of information disclosure
related to own operations and
business practices in the supply
chain and ensuring an ongoing,
meaningful process of interaction
and dialog with our stakeholders
Monthly supply chain grievance log updates To roll out 12x annually updated supply chain
grievance logs
12 (12) monthly logs
Regular supply chain transparency via Traceability
Dashboard (Palm oil & PFAD)
To publish information twice yearly 2 (2) publications
Innovation Fostering innovative solutions for
sustainable development
Research and development expenditure Fostering innovative solutions for sustainable
development
EUR 94 million (EUR 85 million)
Number of granted patents
Number of pending patent applications
A moderately increasing trend for granted
patents and a constant inflow of patent
applications
2,027 (2,073) granted patents
697 (683) pending patent applications
Partnerships Initiating and fostering partnerships
between Neste and its partners to
address the challenges of and
innovate solutions for sustainable
development
Collaborations with research institutions and universities Initiating and fostering partnerships between
Neste and its partners
37 (35) collaboration partnerships
Sustainable
products
and services
Ensuring that sustainability is
integrated into Neste’s product and
service portfolio
Volume of liquefied waste plastic processed (t/a) To process more than 1 Mt of liquefied waste
plastics to increase circularity of plastics and
reduce crude oil dependence in refining and
petrochemical processes
3,900 (1,400) tons of liquefied waste plastic
Production of Neste Renewable Diesel and SAF, 1,000
tons
Increasing trend 3,518 (2,988)
Share of Clean Revenue from Group revenue, %; and
Share of investments consisting of Clean CAPEX, Clean
R&D and Clean M&A (Clean Investments), %
To maintain the annual share compared to
previous year
Clean Revenue 37.7% (38.9%)
Clean Investments 85.5% (88.3%)
Material topic Objective Key performance indicator Target Performance in 2023 SDG link
SDG17: Partnerships for the goals
17
SDG8: Decent work and economic growth
SDG12: Responsible consumption and production
12
8
SDG7: Clean energy
SDG11: Sustainable cities and communities
11
7
SDG15: Life on land
15
SDG10: Reducing inequalities
10
SDG13: Climate action
SDG9: Industry, innovation and infrastructure
9
13
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Material sustainability KPIs
Supply chain
and raw material
sustainability
Ensuring sustainability of Neste
suppliers and business partners and
raw materials’ sustainability
Percentage of business partners who have committed
to Neste’s minimum sustainability requirements in the
Supplier Code of Conduct (%)
100% of business partners committed 100% (99%) of the renewable raw material volumes, 86% (84%) of
the crude oil and fossil raw materials volumes, and 91% (73%) of
overall indirect contracted spend were covered by Neste Supplier
Code of Conduct or equivalent
The number of renewable raw material supplier’s
sustainability due diligence and their outcome
To assess all new renewable raw material
suppliers against sustainability criteria
Total: 388 (325), New approved suppliers: 249 (223), All approved:
279 (236), Pending: 102 (74), Rejected: 7 (15)
11)
The percentage of new fossil raw material suppliers that
have undergone sustainability due diligence
To assess all new fossil raw material suppliers
against sustainability criteria
100% (100%) of the new fossil raw material suppliers assessed
Total of sustainability audits conducted To increase the number of sustainability audits
conducted, prioritized through a risk-based
approach
154 (118) sustainability audits
Share of waste and residues of global renewable raw
material inputs (%)
Growing the sourcing of waste and
residue raw materials globally
12)
92% (95%)
Ethics,
compliance
and corporate
governance
Ensuring good corporate
governance practices in accordance
with the laws and regulations
applicable as well as to operate in
an ethical way in the society
A total of suspected misconducts reported in person or
via the whistleblowing line to the Investigations Group
To further encourage employees and external
stakeholders to report observed or suspected
misconduct
A total of 30 (14) suspected misconducts of which 4 concerning the
same issue, were reported in person or via the whistleblowing line to
the Investigations Group in the following categories: HR 10 (2),
discrimination and harassment 6 (2), conflict of interest 3 (0), bribery,
corruption and facilitation payment 0 (1), fraud 3 (4), theft, asset
misuse & embezzlement 0 (3), supplier/business partner
misconduct/unethical behavior 4 (1), inappropriate behavior 2 (0),
sustainability 1 (0), unethical conduct towards clients/suppliers/
business contacts 1 (0), and 0 (1) in the category Other.
Code of Conduct training rate All Neste employees completed the training 99%, including new joiners, have completed the Neste Code of
Conduct e-learning course.
13)
Corporate governance reporting in the Corporate
Governance Statement
Economic
responsibility
Reporting in the Financial Statements
Material topic Objective Key performance indicator Target Performance in 2023 SDG link
SDG17: Partnerships for the goals
17
SDG8: Decent work and economic growth
SDG12: Responsible consumption and production
12
8
SDG7: Clean energy
SDG11: Sustainable cities and communities
11
7
SDG15: Life on land
15
SDG10: Reducing inequalities
10
SDG13: Climate action
SDG9: Industry, innovation and infrastructure
9
13
11)
Figures include existing suppliers, which undergo a sustainability assessment process every 3–5 years. Supplier data includes only main contractual parties, excluding sub-suppliers.
12)
The share of waste and residue raw materials of Neste’s renewable raw material inputs globally is expected to stay above 90% in the coming years, while in the longer term, the growth in novel vegetable oils’ availability may increase the share of sustainably produced vegetable oils
13)
2021, 2022 and 2023 completions included. Mahoney and Sequential excluded due to change of learning platform.
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Stakeholder engagement
We aim for continuous, active and open dialog
with our stakeholders and regularly seek
external views on our operations.
We follow the business environment actively and
engage with relevant stakeholder groups. We also
involve our stakeholders in our materiality assess-
ment process to seek their views on sustainability
topics. Active engagement is essential throughout our
value chain and in the collaboration with suppliers and
non-governmental organizations.
We believe in collaboration and want to be actively
involved in developing a more sustainable future. We
participate in the development of our industry, relevant
associations and NGOs, and aim to actively engage in
open dialog with all our stakeholders.
Our key stakeholders are:
• Our own employees and management
• Corporate customers and consumers
• Analysts and shareholders
• Policymakers, authorities and legislators
• Suppliers of goods, raw materials and services
• Non-governmental organizations, industry
associations and cooperation bodies
• Universities, think tanks and research organizations
• Local communities
• Media
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B2B customers • Responding to the customers’ needs with sustainable and high-quality
products and services; security of supply;
• Accelerating emission reductions with renewable and circular solutions; building
a circular economy; achieving climate commitments; recycling of plastic waste;
• Cooperation; innovation and R&D; safety; local operation sites such as
refineries.
• Meetings, newsletters, and technical, marketing or sustainability-related training sessions;
• Collaboration at top management level to drive sustainable actions across organizations;
• Surveys monitoring satisfaction;
• Joint communications with partners, or co-branding;
• Partnerships to reduce carbon footprints across all organizations;
• Co-creating new services and solutions;
• Ongoing dialog;
• Sales of Neste products.
Consumers • Product, service and operations sustainability and quality; customer
relationships and cooperation; innovation and R&D;
• General information about products, pricing, raw materials and the value the
products provide.
• Gathering insight through consumer surveys;
• Providing regular fact sheets, press releases and news to consumers;
• Working with local distributors;
• Advertising campaigns to create awareness;
• Responding promptly to questions and concerns via phone, email, social media and Neste website.
Investors and equity
analysts
• Climate change mitigation as a business opportunity; biodiversity;
environmental and social sustainability of raw materials and supply chains;
diversity, equity and inclusion;
• Growth strategy; financials and future outlook.
• Financial communications, including financial reporting, stock exchange releases, conference calls, roadshows, individual or group
meetings, and annual Capital Markets Day;
• Proactive communications regarding business developments, investments, and progress;
• Transparent and regular reporting and disclosures;
• Cooperation with rating agencies and investor assessments.
Governmental
organizations
• Climate and emission reduction targets;
• Renewable fuels in transportation and other industries like construction, mining
and agriculture;
• Renewable and recycled materials; plastics recycling; circular economy;
• Sustainable finance.
• Sharing views on policies, laws and regulations with policymakers;
• Supporting policymakers by providing industry insights and technological capabilities.
• Responding via public consultations; meeting with policymakers and local and national officials working on climate and energy topics;
• Active membership in industry associations.
Suppliers and
contractors
• Neste Supplier Code of Conduct and Neste Responsible Sourcing Principle
expectations and criteria, including human and labor rights, occupational health
and safety, climate, the environment and ethical business conduct;
• Sufficient volumes of raw materials, as well as other products and services, for
Neste’s needs;
• Living wages and incomes;
• Potential avenues for enhanced collaboration and alignment.
• Arranging annual sustainability workshops, training and seminars to share information and support capacity building of contractors and
raw material suppliers;
• Collaborating closely with contractors and suppliers to enhance sustainability performance, ensure a high level of safety, efficiency and
quality, and to find common development avenues;
• Providing practical guidance on our sustainability requirements and living wages for suppliers and contractors. Improving visibility of
working conditions and living standards through worker interviews and anonymous worker voice surveys;
• Collecting information on our scope 3 emissions annually;
• Monitoring sustainability performance of our suppliers and contractors through audits. Helping them to perform corrective actions in
cases of non-compliance;
• Sharing information with contractors at Neste sites through regular meetings, info sessions, training and newsletters. Providing site-level
complaint channels at all refineries for raising any work-related complaints;
• Continuous search for and evaluation of potential new raw material suppliers.
Key stakeholder Key topics of dialog How we engage
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NGOs • Climate change mitigation; sustainability; biodiversity;
• Human rights; children’s rights;
• Sustainable raw material sourcing; circularity and recycling aspects.
• Continuous dialog with NGOs, e.g., on biodiversity and human rights;
• Collaboration in joint projects (e.g., projects aiming for transformative sustainability improvements regionally and to support smallholders in
improving their sustainability performance and certification);
• Ongoing dialog, e.g., transparent reporting on sustainability performance, including the status and progress of sustainability-related
grievances linked to Neste’s raw material sourcing;
• Dialog with the Neste Advisory Council on Sustainability and New Markets;
• Sustainability of supply chains and suppliers, commitment to sustainability, protecting biodiversity (e.g., preventing deforestation), and
respecting human rights (e.g., forced labor and freedom of association).
Industry associations • Climate change mitigation; transport emissions reductions;
• Renewable and circular solutions; circular economy; plastics recycling;
• Industry competitiveness; sustainability.
• Engaging in dialog and working with and as members of industry associations;
• Providing insight, analysis and our views on different topics;
• Taking part in events and seminars;
• Memberships in associations including (but not limited to): Renewable Carbon Initiative (RCI); FuelsEurope; the European Biodiesel Board;
the Advanced Biofuels Association (US); and, the European Chemical Industry Council (CEFIC);
• The complete list of Neste’s memberships is available on neste.com.
Cooperation bodies • Sustainability; climate commitments; climate change mitigation; emission
reduction; biodiversity;
• Renewable and circular solutions; plastics recycling; resource efficiency; circular
economy; innovation;
• Human rights; just transition to net zero; living wages; diversity and inclusion.
• Engaging in dialog with cooperation bodies and supporting initiatives;
• Participating in working groups for developing industry-related matters within initiatives;
• Ensuring the sustainability of our supply chain with certifications;
• Cooperating with, e.g., Task Force on Climate-Related Financial Disclosures (TCFD), Nordic Business Network for Human Rights, UN
Global Compact, World Business Council for Sustainable Development (WBCSD), Business Comission to Tackle Inequality (BCTI), and,
International Sustainability & Carbon Certification (ISCC);
• The complete list of Neste’s commitments and engagements is available on neste.com.
Universities and
research organizations
• Innovation and R&D; raw material and technology development; artificial
intelligence;
• Green hydrogen; e-fuels; industrial chemistry; catalyses;
• Renewable and circular solutions; life cycle analyses (LCA).
• Engaging in dialog with universities, different research organizations as well as researchers all over the world;
• Strategic cooperation with, e.g., Aalto University, Åbo Akademi and VTT (The Technical Research Centre Finland) and international
partners mainly in Europe and in the US;
• Further strengthening our global innovation and R&D capabilities by opening an Innovation center in Singapore in 2023 and continuously
exploring the research landscape and opportunities in the area;
• Competence ecosystem in renewable and circular solutions by building a portfolio of R&D&I projects in cooperation with universities,
research institutions and companies in Finland.
Local communities • Employment and cooperation opportunities;
• Health and safety matters;
• Site investments and development projects;
• Environmental and social impacts on local communities.
• Engaging in dialog and collaboration with local communities and production site neighbors via newsletters, meetings, regional websites
and social media;
• Arranging site tours for various interest groups;
• Engaging and collaborating with local authorities and city representatives;
• Volunteer initiatives from employees at local level (e.g., Food Bank, beach cleaning);
• Conducting a stakeholder study biennially to assess the local community and authority perspectives on Porvoo refinery’s environmental,
social and safety impacts and communications;
• Complaints channels available for local communities to raise any concerns they have directly with Neste.
Key stakeholder Key topics of dialog How we engage
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Media • Company news and other announcements; interim and annual results;
• Company strategy and growth; mergers and acquisition activities; different
projects;
• Customer stories and cooperation; societal and economic topics; innovation
and R&D; sustainability;
• Fuel taxing and pricing; renewable and circular products and solutions.
• Press releases and other materials (e.g., on website);
• Following and responding to media inquiries;
• Connecting the media with the correct spokespersons at Neste;
• Organizing media visits and events, background briefings.
Employees • Neste strategy and values; sustainability; climate commitments;
• Financial results and outlook; key projects and company milestones;
• Learning and development;
• Health, safety and wellbeing; business ethics and code of conduct; diversity,
equity and inclusion.
• Sharing information about Neste’s strategy, regular updates on its implementation and key milestones reached, financial performance;
• Promoting diversity, equity and inclusion as part of Neste culture development work;
• Ensuring regular discussions around development, values and wellbeing, individually and in teams, and providing development tools and
programs;
• Measuring employee engagement and collecting employee feedback through several methods, e.g., regular pulse surveys, team and
individual discussions, town hall meetings and team days;
• Proactive and systematic communication and training regarding topics of interest, responsive communication and dialog on topics raised
by employees;
• Emphasizing the importance of social interaction and sharing of thoughts and ideas;
• Systematic support for health, safety and wellbeing;
• Flexible ways of working and tools to support them;
• Fit-for-purpose leadership development, e.g., tailored leadership program We Lead;
• Support provided to all employees during the changes.
Key stakeholder Key topics of dialog How we engage
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Global increase in efforts
to combat climate change
Our commitment to limiting global warming means
we actively engage around the globe with policymak-
ers, regulators and the wider stakeholder community to
demonstrate the benefits of renewable fuels as a decar-
bonization solution. Renewable fuels, like all decarbon-
ization technologies, can be supported or implemented
through environmental and energy policies or laws.
In particular, we focus on driving ambition for renew-
able fuel targets in the road, aviation and maritime sec-
tors, as well as nascent policies for renewable polymers
and chemicals to support decarbonization targets in the
plastics and chemicals industries.
Throughout much of this work, we show the impor-
tance of allowing waste and residue raw materials in the
creation of renewable fuels, as well as working toward
favorable policy environments for new energies such as
renewable hydrogen and Power-to-X.
Neste highlights the growing impact and importance
of innovation in biofuels to encourage their continued
acceptance and use to reach global decarbonization
goals.
Main policy and legislation impacts on business in 2023
Europe
Priorities continued to focus on the European Union’s
Fit-for-55 package, particularly:
• Driving higher ambition for decarbonization
policies for transportation. Examples of Neste’s
advocacy work here include support for the
implementation of European-wide and national
Sustainable Aviation Fuel (SAF) policies to
decarbonize aviation, and for EU lawmakers to
introduce a mechanism that accounts for GHG
savings from renewable fuels in heavy-duty
vehicles through the HDV CO
2
Regulation and
the Euro 7 Regulation;
• Calling for a broad base of sustainable raw
materials for renewable fuel creation, for
example, through the EU’s Renewable Energy
Directive, in addition to seeking regulatory
certainty on feedstock eligibility for long-term
investment decisions;
• Encouraging a range of decarbonization
solutions, as well as faster permitting processes
to access EU financing schemes for HVO,
SAF, eFuels and bio-based material production
plants;
• Collaborating to develop sustainability criteria for
bio-based materials and chemicals;
• Monitoring legislation as it comes into force,
seeking clarity on new requirements, and
ensuring full compliance with new rules, for
example, the EU’s Deforestation Regulation.
• Leading advocacy on non-fossil targets in the
chemical and plastic sector.
In Europe, the varying eligibility of feedstocks, meth-
ods of calculating GHG emissions and certification
methods can slow down investment decisions.
The Americas
The main priority for Neste in the Americas has
been enhancing the market acceptability of renew-
able fuels in both new and existing markets. This
has been done through advocacy work supporting:
• An overhaul of the California Low Carbon
Fuel Standard (LCFS) program and the British
Columbia Clean Fuel Standard program;
• Changes to the US federal Renewable Fuel
Standard (RFS) program;
• An extension of US federal blenders tax
credits and modification of future Clean Fuels
Production Credit;
• The startup of LCFS programs in Canada and
Washington State;
• New incentives for SAF in several states;
• Stakeholder engagement to create policy
frameworks for renewable polymers and
chemicals;
• Market entry into Brazil in line with growing
demand, and new mandates for SAF.
The market in the United States has seen an increase
in coalitions to promote the adoption of clean-fuel
policies in North America. However, there is also
increased competition among renewable fuel sup-
pliers, a political prioritization of electrification poli-
cies, and a relatively slow adoption of the Inflation
Reduction Act.
Asia-Pacific
In Asia-Pacific, Neste has sought to drive favorable
climate change regulations across the region. This
work has centered around:
• A strong drive in the region for decarbonization
policies and regulations in aviation;
• Further initiatives and government consultations
on decarbonizing road transportation;
• Relaying circular economy solutions across
regional governments and stakeholders to build
support for renewable polymers and chemicals;
• Supporting regulators in Japan upon the
announcement of a 10% SAF mandate;
• Contributing upon request to Singapore’s
Sustainable Aviation Blueprint, and in India
partnering the Observer Research Foundation
on a joint study to highlight the associated health
risks of the continued re-use of used cooking oil;
• Contributing to several consultations related to
biofuels and climate change in Australia and
New Zealand;
• Providing support to the governments of Japan
and South Korea in achieving their bio-based
targets by 2030.
Neste was involved in stakeholder consultations for
the development of the Sustainable Biofuels Obli-
gation Bill in New Zealand for the last three years.
Regrettably, this was canceled in 2023, with a range
of factors cited, including the current cost-of-living
challenges. Neste continues to support Singapore’s
Sustainable Aviation Blueprint development and is a
member of the SAF Working Group in Sustainable
Aviation Aotearoa, a forum for industry, government
and other bodies to discuss the technology and
regulatory challenges in encouraging the adoption
of SAF in New Zealand.
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Research cooperation
In 2023, we continued to strengthen our cooperation
with companies, startups, universities and research
institutions:
• Neste’s Veturi ecosystem brings together Finnish
companies, startups, universities and research
institutions to jointly build the future capabilities
needed to establish new value chains in renewable
and circular solutions.
• Strategic cooperation with VTT (The Technical
Research Centre Finland), which fosters the joint
use and development of research infrastructures in
Finland.
• Strategic cooperation with Aalto University and Åbo
Akademi University, with the aim of improving the
competitiveness of parties while increasing Finnish
chemical industry expertise, including fields such
as chemical and process engineering, bioeconomy,
digitalization, and the circular economy.
• With UPM and Borealis Polymers, Neste is
supporting a chemistry professorship specializing in
the circular economy at the University of Helsinki.
• A five-year sponsorship for Helsinki University’s
Centre for Coastal Ecosystem and Climate Change
Research (CoastClim) to further understand how the
condition of the seas and climate change are linked.
• The cooperation also continued in our projects
related to green hydrogen in Rotterdam and Porvoo,
for example.
In addition, we actively engage in a dialog with sev-
eral universities and research institutes on collaboration
opportunities.
Read more about our research cooperation.
External recognitions
• CDP Climate Change (A–), Water (B) and Forests (A–)
Assessments
• Corporate Knights Global 100: among the 100 most
sustainable companies in the world for the 18th
consecutive time
• Dow Jones Sustainability Indices: 17th consecutive
time in the index, included in DJSI World and DJSI
Europe listings
• Ecovadis Platinum rating
• European Inventor Award 2023, Industry category
winner
• MSCI ESG Rating Index, AAA
• S&P Global Sustainability Yearbook
• Sustainalytics’ 2024 ESG Top-Rated Companies List
The Advisory Council on
Sustainability and New Markets
In 2019–2023, the Advisory Council on Sustainability
and New Markets has provided Neste strategic insight
and guidance for its sustainability work and supported
the company in accelerating transformation and broad-
ening its sustainability leadership activities. The inde-
pendent external council convened three times a year
and was chaired by John Elkington, one of the pioneers
of the global sustainability movement. The other mem-
bers of the council included James Cameron, Marcius
Extavour, Louise Kjellerup Roper, Bernice Lee and Geof-
frey Weston.
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View Neste’s tax footprint report on our website.
Read more about
Neste's value creation on our website.
1)
Includes natural gas and industrial gas suppliers.
2)
See Principles for calculating the key indicators.
3)
Customers of recently acquired companies included for the first time.
4)
Annual average
number of employees.
5)
Full-time equivalent (FTE).
6)
Total Recordable Injury Frequency.
7)
A day without a TRI accident, process safety events, fire or ignition, breach of environmental permit, or
traffic accident.
8
)
Palm fatty acid distillate
9)
Contains the use of conventional palm oil that has been earlier processed into renewable products and sold to market.
10)
The volumes are presented
in millions of tons. The share of the volumes are calculated from exact figures and consequently the rounded figures presented may deviate from the share of volumes disclosed.
11)
The savings
consist of energy efficiency measures started during 2023, which have been scaled to cover the full year.
12)
Compared to crude oil-based fuel. Calculation principles can be found on page 115.
Indirect upstream Direct upstream
Indirect downstream
Impact
Direct downstream
Economic/Governance
Environment
• Number of suppliers in
» Renewable Products 614
» Oil Products 84
1)
» Indirect procurement 6,512
• 100% of the renewable raw material
volumes, 86% of the crude oil and
fossil raw materials volumes and
91% of overall indirect contracted
spend were covered by Neste
Supplier Code of Conduct
or equivalent.
• Operations in 16 countries
• Production in 4 countries
• Total equity 8,463 MEUR
• R&D expenditure 94 MEUR
• Interest-bearing net debt 2,488 MEUR
• Material and services 19,098 MEUR
• Other expenses 695 MEUR
• Renewable raw material inputs 4.3 Mt
• Sourced crude oil and fossil raw
materials 11.7 Mt
• Indirect procurement spend
4,095 MEUR
• Cash-out investments 1,621 MEUR
• Market cap 24,776 MEUR (at the end of 2023)
• Comparable EBITDA 3,458 MEUR
• Comparable ROACE 23.9%
• Dividends 922 MEUR from 2023
• Revenue 22,926 MEUR
• Share of Clean Revenue 37.7%
2)
• Share of Clean Investments 85.5%
2)
• Economic value retained 1,197 MEUR
• Neste MY Renewable Diesel sales 0.9 Mt
• Sales from in-house production, Oil Products 11.9 Mt
• 948 service stations in 4 countries
• Oil Products and Renewable Products in the wholesale
market sold in 44 countries to approx. 378 customers
3)
• 2,027 granted patents and 697 pending patent applications
• Increase in the value
of the shares and dividends
• New business opportunities
• Renewables help customers to
reduce GHG emissions, reduce
their reliance on fossil resources,
and support UN SDGs
• Helping end users to avoid
infrastructure and other investments
with drop-in solutions
• M&S B2B Customer satisfaction:
Net Promoter Score (NPS) 58%
• Taxes and tax-like fees paid and
remitted by Neste EUR 3,9 billion
• Creating new jobs and supporting the
existing ones in the company’s value chains
• Redirecting consumer expenditure
towards sustainable solutions
• Supporting the development of customers’
brand value and brand awareness
• 100% of our PFAD
8)
supply
chain is mapped for palm oil
mills and 93% to plantations
• 100% of our palm oil
9)
use is certified and
traceable to plantations
• Scope 3 emissions from upstream
value chain 7.9 MtCO
2
e
• Use of waste and residues
of global renewable raw
material inputs 4.0 Mt, 92%
of the total renewable feedstock
10)
• Water withdrawal 9,402,000 m
3
/a
• Energy consumption 12.6 TWh of
which 16.1% renewable energy.
• Energy saving measures 27.2 GWh
11)
• Waste generated 301,000 t of which 29% recycled
• Water discharge 8,720,000 m
3
/a
• Scope 1, direct CO
2
emissions 2.3 Mt CO
2
• Scope 2 emissions from purchased energy 0.5 Mt CO
2
e
• Scope 3 emissions from downstream value chain
49.8 Mt CO
2
e
• GHG emission reduction achieved with
Neste’s renewable products 11.0 Mt
12)
• Neste MY Renewable Diesel enabled up to
95% or up to 75% lower GHG emissions,
when switching from fossil diesel to Neste MY
Renewable Diesel
12)
• Help fight the plastic waste challenge through
developing chemical recycling to increase
plastics recycling and circularity of materials
• Mitigating climate change
• Replacing fossil raw materials
with more sustainable alternatives
• Improving air quality
• Preventing deforestation
• Contributing to circular economy
• Influencing operating environment
and regulation
• 100% of Neste’s
renewable raw material
suppliers screened using
social criteria
• Highly skilled employees
» Number of employees 6,018
4)
» Hiring rate of permanent
employees 15.3%
» Leaving rate of permanent
employees 9.6%
» Recorded average training
hours per FTE 27.2
5)
• Wages and salaries 531 MEUR
• Other personnel expenses 110 MEUR
including training costs 5 MEUR
• 67.4% men and 32.6% women
• 2/8 members of the Board of Directors and
4/12 members of the Executive Committee are women
• Employee safety TRIF 1.7
6
)
• Safe days 278
7
)
• Contractor TRIF 3.2
6
)
• Charity work and sponsorship 1.0 MEUR
• Number of Neste employees, who
participated in volunteer work 659
• Supporting social development and
the services societies provide in
countries of operation
• Enhancing competitiveness of
employees in the labor market
• Wellbeing and safety of
employees and suppliers
• Reducing transportation-related
emissions in cities and communities
• Securing human and labor rights
• Improving gender equality
Social
Neste’s
business model
We provide value for society
by developing renewable, low-
emission and circular solutions
for the aviation, chemical and
plastics industries, transport
sector and cities.
We do this by taking the
lead to transform towards
a carbon neutral value chain
by 2040, and setting ourselves
aspirational targets for
climate, biodiversity, human
rights, supply chain and
raw materials.
Input
Output
Outcome
Value creation
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Our people
We want working at Neste to both do good
and feel good. Together, Neste employees
drive the company forward, guided by our
values-led culture.
We lead the way in accelerating both business and
cultural transformation while driving high safety excel-
lence. At Neste, we all have the opportunity to con-
tribute to our success, and we encourage everyone
to be the driver of their own personal growth. As an
employer, we want to offer meaningful work for highly
competent talents who share our values and are eager
to join us in creating a healthier planet for our children.
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In 2023, we celebrated several strategic milestones such
as Neste’s 75th anniversary and the opening of expan-
sion of the Singapore refinery. We experienced strong
growth, and we are now present in 16 countries, includ-
ing new operations in India and Brazil. The average num-
ber of Neste personnel in 2023 was 6,018, and about
1,400 new employees had been hired globally by the
end of 2023. Most of our recruitments, about 66%, were
for permanent positions. According to the survey tar-
geted at new joiners, 88% of new employees feel happy
working at Neste.
In November 2023, Neste published plans to sim-
plify its organizational structure and operational model
to secure the execution of its growth strategy with
improved cost-efficiency and to strengthen long-term
competitiveness. With the planned changes and sim-
plified structure, the aim is to strengthen accountabili-
ties and efficient decision making. It is estimated that the
planned organizational changes may lead to a reduction
of approximately 400 roles globally. The final decisions
on the possible personnel effects will be done during Q1
2024. According to the plan, the new organization will
be effective as of April 2024.
We are creators of change
Neste’s transformation and growth offered our people
many career opportunities and personal growth possi-
bilities in new projects. Our key to learning is engaging
people broadly, bringing units together.
The transition of our Porvoo refinery to becoming the
most sustainable refinery in Europe by 2030 and the
goal of reaching carbon neutral production by 2035 is a
transformation made possible by people. Neste’s capa-
bilities and the versatility of the Porvoo refinery create an
excellent platform for change. Our focus is on a sustain-
able people-centric transformation, and we have widely
implemented development initiatives to support change
leadership by training more than 300 key people on the
topic. Increasing our optionality in raw materials, prod-
ucts and markets also requires technical readiness capa-
bilities. Our competence and capability development has
evolved through change projects and field engagement.
Part of our growth strategy is to merge with or acquire
other companies, and this requires strong capabili-
ties to succeed. In 2023, we built our competence fur-
ther by creating an extensive mergers and acquisitions
playbook for HR and establishing a network of subject
matter experts to support HR activities related to M&As.
We renewed our employer branding framework and
messages with a new global people promise (= employer
value proposition, EVP) to retain and attract the right tal-
ent. Our new people promise “For creators of change”
is aligned with our strategy, as we can all make a differ-
ence and be creators of change.
Neste is built by people with passion
To support Neste’s transformation journey, we arranged
strategy events for our employees to ensure clarity
toward our strategic goals and to strengthen engage-
ment and feeling of belonging across the company.
In 2023, Neste’s short-term incentive plan (STI) was
renewed to accelerate the execution of our strategy,
annual performance plans and sustainable profitability.
The STI plan supports our strategy in the form of a flexi-
ble, competitive and regional approach to ensure we can
attract and retain the key talents. Our aim is to reach and
exceed the planned results and to drive performance
while supporting the mindset of succeeding together.
To support our growth, HR’s operating model devel-
opment continued in 2023 with the scaling-up of our
Employment and Recruitment Hubs in Finland. Central-
ized employment management and recruitment partner
support for managers raised operational efficiency and
process quality in Neste’s people operations globally. As
the next step in the operating model development, the
hub will be deployed within Oil Products at the begin-
ning of 2024.
The thoughts and ideas
of our people matter
Engaging and communicating proactively with Neste’s
employees is crucial to us everywhere we operate to
ensure information sharing and facilitate discussion
with our employees. At a global level, all employees are
invited quarterly to personnel info sessions to hear about
Neste’s strategy, business updates and financial results.
In the sessions, our people have the opportunity to ask
questions from senior management.
We also conduct global employee engagement sur-
veys, including an annual employee survey and a shorter
quarterly survey. The surveys engage employees on a
range of topics, like, Neste’s transformation, strategic
goals, company culture, inclusion and belonging. The
global employee engagement survey results are regu-
larly discussed, and both measures and action plans
agreed within teams at each level of the organization. In
addition, we have other employee surveys targeted at
specific groups, for example, new joiners and summer
trainees, as well as employees leaving the company.
Business units and functions engage more directly
with employees (or employee representatives if appli-
cable) at a more detailed level on developments rele-
vant to the employees in question. At a local level, a key
element of employee cooperation is that it is driven by
local requirements in each country of operation. Neste is
committed to following applicable local collective agree-
ments. Neste also has local cooperation bodies; there
is currently a cooperation committee or works council in
Finland, Rotterdam and Singapore.
Altogether
6,014
employees
globally by the end
of 2023.
According to the
New Joiner survey,
88%
of new employees
feel happy working
at Neste.
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Examples of 2023 cooperation are a joint effort to
develop a white-collar salary system in Finland within a
Salary Working Committee. In Rotterdam, a Compensa-
tion and Benefits package was developed together, and
development groups were also formed for themes such
as elderly policy.
Further developing our
innovation capabilities
Innovation has always been in Neste’s DNA. In 2023, we
identified the unique capabilities that enable and drive
the commercialization of new technologies and innova-
tions. In the innovation organization, the combinations
of technical, commercializing and leadership capabilities
are developed as part of our Technical Expert and Proj-
ect Management career paths, as well as in cooperation
with commercial competence development programs. To
ensure the reach and impact of different learning oppor-
tunities, we have focused on the individual level through
enhanced individual development plans, building capa-
bility-based communities, and on company-level inno-
vation programs and awards that encourage our inno-
vation culture.
Our leadership model
is built around our values
Leadership is one of the most important elements driv-
ing our company culture. Our leadership model is built
around our values – We care, We have courage, We
cooperate – and it describes how we want to lead, as
well as behave, to deliver on our strategy and ensure
that work at Neste does good and feels good.
At Neste, we support our employees’ individual devel-
opment goals, develop our competences to meet busi-
ness targets, and prepare our people for the growing and
changing demands of future work. Line managers and
employees have regular Forward discussions in which
development and career plans are updated, and learn-
ing goals are agreed. The average time spent in learn-
ing programs for Neste employees in 2023 was 27.2
hours, and our company-wide development programs
had more than 1,100 participants.
We recognize the importance of developing and
supporting young people’s professional growth, as
well as learning ourselves from the insights of young
talents. In 2023, 440 summer trainees of 19 differ-
ent nationalities worked in 18 different locations at
Neste, including offices, refineries, laboratories and
terminals. We provided a variety of summer jobs in
25 different job families, from sales to production
and from logistics to research and development.
At Neste, summer trainees are paid employees,
and we invest in their training and development to
To support our people in leading both strategy and
people, we run several strategic development programs
with our partners. The programs are built around the lat-
est research on leadership and strategy, and are deliv-
ered by top of the field professors to ensure an inspir-
ing learning experience. By bringing together people
from different business units, we ensure cross-functional
cooperation and build the foundation for future success.
Neste acknowledges that all people have different
preferences when it comes to learning and develop-
ment, and to support this, we have an ongoing project
to build a tailored learning experience platform for Neste.
This platform will gather learning content from our exist-
ing learning libraries and enable our employees them-
selves to create and share development activities and
curate suitable content from an external learning library.
The platform is expected to launch in 2024 with content
tailored to support Neste’s strategy and all our change
creators’ individual learning aspirations.
Advancing diversity,
equity and inclusion
Diversity, equity and inclusion (DEI) are central to our val-
ues-led culture and ways of working, human rights work
and sustainability vision. DEI is embedded in our values,
policies and principles such as our Code of Conduct,
People Policy and Human Rights Principle.
We strive toward a feeling of belonging and want
everyone to feel safe, respected and encouraged to be
themselves at work. As an increasingly diverse multicul-
tural company, enhancing DEI is at the core of develop-
ing our employee experience and working toward our
strategic goals on “Taking charge of change.”
promote future employability in the transition to a
carbon neutral society. We provided the summer
trainees with a program so they can network, get to
know Neste as a company and learn about our busi-
ness units, regardless of where in our organization
they work. Based on feedback, 84% of our summer
trainees would recommend Neste as a great place
to work.
Read more about summer traineeships.
Our 440 summer trainees gained skills for the future
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Our DEI priorities for 2023 included:
• Building awareness and understanding of diversity,
equity and inclusion across Neste
• Strengthen DEI in our people practices
• Developing DEI reporting
As part of development work, we also piloted ways to
support the inclusion of minority groups. For example,
we carried out accessibility mapping at Neste headquar-
ters and included people with disabilities in test groups
that tested fueling robots at our service stations.
Our Executive Committee follows the progress of our
DEI development work and efforts on a quarterly basis,
and DEI is also regularly discussed with the Board of
Directors.
Neste’s approach to remuneration is to be fair and
transparent by running performance and rewards pro-
cesses ethically and with integrity and supporting this
with clear communication. Pay equity and pay trans-
parency work has started with the creation of a Neste
roadmap to proceed toward the requirements based on
the EU’s Pay Transparency Directive and requirements
related to transparency and equity in other Neste coun-
tries outside Europe.
We want work at Neste
to do good and feel good
At Neste, health, safety and wellbeing at work are interre-
lated. Our wellbeing model defines the different aspects
of wellbeing, in which each individual, manager and the
whole work community all play their part.
Neste’s occupational healthcare aims to create a
healthy and safe working environment and a well-func-
tioning work community. To align the quality of our
health services, we follow the Neste Occupational
Health Principle throughout the organization, subject
Team value discussions on DEI carried out across Neste
As part of advancing DEI, all team leaders were assigned mandatory team value discussions on diver-
sity, equity and inclusion to be carried out with their teams in 2023. The aim was to build awareness and
understanding of DEI topics and of how we all play a role in creating an inclusive workplace. The team
value discussions on DEI consisted of a short self-study video and discussion material covering topics
such as unconscious bias and intersectionality, as well as team commitments, feedback and follow-up.
Info sessions, guidelines and additional learning material were provided to team leaders to support them
in carrying out the discussions. By the end of the year, 95% of teams had had a team value discussion.
Based on feedback, 88% of managers found the team value discussion useful or very useful.
Voluntary work and donations
We engage positively with all the communities
close to our operations. In 2023, we offered our
employees two paid full days dedicated to volun-
tary work, as we believe volunteering activities are
a way to build closer ties with our society. Many of
our employees opted to dedicate their time to char-
itable endeavors, including raising money for char-
ity through sponsored sports challenges and waste
collection. The number of Neste employees who
participated in volunteer work increased to 659 vol-
unteers (2022: 356).
In addition to voluntary work, our goal is to have
a positive impact through charitable donations to
causes that are aligned with our purpose, values
and strategy. We make donations in line with three
key themes: innovation and education; climate and
environment; and equality and human rights. In
2023, we made donations to Plan, UNICEF, Trees
for Houston, The Food Bank in Houston and Sin-
gapore, as well as Mahila Housing Sewa Trust and
UN World Food Programme, among others. For the
tenth year in a row, Neste donated the fuel needed
by the Children’s Mobile Health Care Center in Lat-
via, which provides diagnostic and preventive med-
ical services for children. Neste was also one of the
key partners of John Nurminen Foundation, which
aims to save the Baltic Sea and its heritage for future
generations.
Read more about our donations.
to local legislation and requirements. In Finland, Neste
also investigates the health and safety factors related
to work and working conditions, including office visits,
also taking into account exposure agents present at the
workplace.
Work-life balance has a significant effect on wellbe-
ing at work. In 2023, we supported the wellbeing of our
employees by providing various services and additional
support like webinars on sleep and recovery and flexible
ways of working, depending on the job description.
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Safety
At Neste, managing safety is the foundation of
everything we do. We aim to do no harm to people
nor the environment – which is the essence of our
safety vision “No harm. Together.”
In alignment with our safety vision, our commitment
extends beyond safeguarding individuals and the envi-
ronment. We are equally dedicated to protecting our
operations, assets, information and brand from any
harm and negative impact. We believe that this can
be achieved when everyone working at Neste is truly
committed to managing and improving safety.
Our safety vision:
No harm. Together.
Safety
at Neste
Understand
hazards and risks
Manage
risks and
opportunities
Learn from
experience
Commitment to
operational excellence
Assets
Environment
People
Information
OperationsBrand
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We are all leaders of safety
Safety leadership is a shared responsibility at Neste –
it is a collective effort, integrated into our daily opera-
tions and workplaces. Our Safety Leadership Principle
outlines the expectations and accountabilities for safety
leadership across all employees and anyone working for
the company. We are guided by our company values:
We care, We have courage, We cooperate. We contin-
uously evolve our ability to identify and manage hazards
while learning from our experiences.
In 2023, comprehensive safety discussions were car-
ried out throughout the company to generate conversa-
tions at all organizational levels, emphasizing the need for
more efficient hazard and risk management in our opera-
tions. The aim was for these discussions to be translated
into tangible actions within teams to enhance safety per-
formance. The Neste Executive Committee took a deep
dive into safety in a customized “I Act Safe” workshop
focusing on critical safety aspects in high-hazard indus-
tries and the effective implementation of our Operations
Excellence Management System (OEMS).
The foundation of safety excellence and contin-
ual improvement are defined by Neste’s OEMS, which
includes Operations Excellence Principles and supple-
mentary detailed standards. The requirements extend
not only to our employees but also our suppliers and
partners.
In 2023, we continued to streamline and simplify the
OEMS implementation process, conducting systematic
self-assessments and audits to ensure compliance. We
performed 23 on-site OEMS audits within our opera-
tions. Our safety management prioritized the identifica-
tion, analysis and mitigation of high-potential incidents
with severe consequences.
Always ensuring people safety
At Neste, we prioritize the uncompromised safety of our
people and partners. Our Life Saving Rules serve as
guidance for preventing fatal and life-changing injuries
and incidents, empowering everyone with the authority,
as well as the responsibility, to stop work when neces-
sary to ensure their own or others’ safety.
In 2023, our “I Act Safe” workshops reached a broad
audience, and we organized a total of 55 workshops
with approximately 750 participants. The workshops
focused on personal safety leadership, awareness and
management. Additionally, we provided practical train-
ing to over 200 tank truck drivers in Finland and the Bal-
tic countries, enhancing their safe deliveries in the chal-
lenging Nordic climate.
Beyond our employees, we expect our contractors
to uphold an uncompromised commitment to safety.
We ensure that contractors can work safely and are
informed of any risks related to their work. We only work
with business partners who comply with all applicable
laws and regulations. In 2023, we conducted approx-
imately 2,100 contractor health, safety, security, envi-
ronment and quality performance evaluations during
contract execution, and over 60 contractor safety man-
agement system audits provided valuable insights for
performance improvement.
All contractors complete site safety training before
accessing our sites, and any incidents involving contrac-
tors are thoroughly investigated and included in Neste
safety statistics. We continuously strive to improve
contractor safety performance through audits, a rig-
orous selection process, regular performance evalua-
tions, mutual feedback and an increased focus on safe
subcontracting.
In 2023, we heightened safety awareness by orga-
nizing our first global Safety Week, centered on learn-
ing from everyday work. Both local and global events
catered to all Neste employees, whether on the front-
lines of our operations or within office environments.
Furthermore, we recognized and awarded several
contractors across Neste locations worldwide for their
exceptional commitment to safety. The Contractor Safety
Award was granted to several contractors selected by
Neste’s local organizations globally.
At Neste, we prioritize uncompromised
safety of our people and partners.
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Safe operations are the
basis of our process safety
Process safety at Neste encompasses the design and
construction of safe facilities, safe operations, life cycle
asset management and regular inspections. In 2023, our
focus was on implementing the Neste Process Safety
Fundamentals (PSF), a learning resource with best prac-
tices for enhancing process safety understanding among
frontline workers in their daily tasks. We also conducted
a benchmarking study to improve our process hazard
analysis practices, ensuring the definition and imple-
mentation of critical safety controls. In response to envi-
ronmental concerns, we initiated a project to transition
away from Per- and Polyfluorinated Alkyl Substances
(PFAS) fire-fighting foams at our sites before the manda-
tory deadlines.
To maintain robust fire-fighting capabilities, we collab-
orated with the global Large Atmospheric Storage Tanks
project (LASTFIRE). We also participated in a research
study with other organizations in Finland to better under-
stand the recovery of renewable products and liquid
waste plastic from the sea in the event of oil spills.
Safety is assured throughout
the product life cycle
Providing the required registrations and carefully com-
piled safety data sheets in all the countries of our oper-
ations is the core of product safety at Neste. This work
requires constant cooperation and monitoring of global
chemical legislation. One important task has been to fol-
low the development of the EU’s Chemicals Strategy for
Sustainability.
In 2023, we continued to refine our internal sys-
tems, including instructions, training, awareness cam-
paigns, networking and practical tools for managing the
different regulatory requirements related to chemicals.
We assured our employees’ chemical safety by con-
ducting exposure measurements for example in con-
nection with the liquefied waste plastic (LWP) handling
at different stages, thus generating information to guar-
antee safe work.
Performance in key projects
remained a focal point
Incorporating safety into projects such as investments,
change initiatives, and turnarounds remained our focus
in 2023. We placed significant emphasis on organiza-
tional learning to ensure our success in this area.
The Singapore expansion project, concluded in
2023, achieved an overall Total Recordable Injury Fre-
quency (TRIF) of 0.5. This was well within our target, and
high-consequence work-related injuries were avoided.
In Rotterdam, the capacity growth project proceeded
smoothly, with 2 million work hours worked without any
recordable injuries. We identified excellent contractor
onboarding processes as a key success factor, sharing
this knowledge across the organization.
The Naantali refinery demolition project, completed
in 2023, safely navigated its unique challenges without
high-consequence work-related injuries. This success
can be attributed to a thorough hazard analysis, strong
cooperation with our demolition partner, and adaptive
learning based on field and worker insights.
Safety performance in 2023
In 2023, Neste’s occupational safety performance rate
including contractors (TRIF, or rate of accidents requir-
ing medical treatment per million hours worked) did
not reach the target level (2.0) and was 2.3 (2022: 2.0).
The biggest challenges were experienced in contractor
safety, where TRIF was 3.2.
In 2023, the process safety performance rate (PSER,
or the rate of process safety tier 1 and tier 2 events per
million hours worked) was 1.2 (2022: 1.4), which was
in the 2023 target level (1.4). Process safety events are
classified into two categories according to guidance
from the American Petroleum Institute.
We also monitored the number of safe days, which
signifies days without occupational accidents, pro-
cess safety events, other fires and leaks, environmen-
tal non-compliances, marine safety incidents, and traffic
accidents. In 2023, the number of safe days was 278
(2022: 314), and the number of incidents was 94 (2022:
56). The injury and safe day statistics of Mahoney Envi-
ronmental were included for the first time to the Neste
Group’s safety performance measurements.
Total recordable
injury frequency (TRIF)
20212020 2022 2023
3
4
2
1
0
TRIF own employees
TRIF total
TRIF contractors
1.1
1.7
1.1
0.8
1.6
3.2
1.6
3.7
1.3
2.3
1.4
2.0
Process safety
event rate (PSER)
20212020 2022 2023
3
2
1
0
PSER1
PSER2
1.0
0.4
0.6 0.6
0.6
0.9
1.6
1.2
0.8
1.4
0.9
1.4
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Climate
Climate change continues to change the world as we
know it, and prompt actions to reduce greenhouse
gas emissions (GHG) globally are needed.
Climate commitments are an integral part of our corporate strategy
and sustainability vision. We want to lead the transformation toward
a carbon neutral value chain.
1)
Use phase emission intensity is calculated by dividing the emissions from the use of products sold by Neste (part of scope 3) with the total amount of sold energy (gCO2e/MJ).
Our vision is to lead transformation toward a carbon neutral value chain by 2040.
Handprint: Helping our customers to
reduce their GHG emissions with our
renewable and circular solutions
Offer solutions that help our customers reduce
their emissions by at least 20 MtCO
2
e annually
by 2030 and meet their climate targets
Footprint: Reducing
GHG emissions
across our value chain
(scope 1–3)
Reduce emissions in our own
production (scope 1 & 2) by
50% by 2030 and reach carbon
neutral production by 2035
Reduce the use phase emission
intensity
1)
of sold products
by 50% by 2040 compared
to 2020 levels (scope 3)
Work with our suppliers
and partners to reduce
emissions across our
value chain (scope 3)
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What do we want to achieve?
We enable our customers to reduce their greenhouse
gas (GHG) emissions by offering renewable and circu-
lar products to replace fossil products. Our target is to
help our customers reduce their GHG emissions by at
least 20 million tons of CO
2
e annually by 2030. Our stra-
tegic initiatives are a key driver in increasing our carbon
handprint.
At the same time, we need to reduce our own car-
bon footprint. We are committed to reducing the GHG
emissions from our production (scopes 1 & 2) and reach
carbon neutral production by 2035. We are also com-
mitted to reducing the use phase emission intensity
1)
of
sold products and work with our suppliers and partners
to reduce the indirect GHG emissions from our entire
value chain (scope 3).
We have identified over 100 measures to reach the
targets, several of which are already well underway. We
monitor the progress regularly across the organization.
Read about our progress in 2023 in the Carbon hand-
print and Carbon footprint sections.
Scopes 1, 2 and 3
The Scope framework established by GHG Proto-
col is a tool for assessing GHG emissions across
the value chain. The framework divides GHG
emissions into three different scopes that each
have several categories.
Scope 1: Direct emissions
(e.g., from production)
Scope 2: Indirect emissions
from purchased energy
Scope 3: Other indirect emissions
from value chain
Neste has defined its own production emissions
to cover scope 1 and scope 2. Scope 3 includes
all other relevant emissions throughout the value
chain, such as GHG emissions related to the use
of the products we sell and emissions related to
purchased goods such as raw materials, pur-
chased services, transportation and logistics.
Opportunity and risk scenarios
Climate change poses both business risks and opportu-
nities to Neste. Neste is therefore committed to applying
the Task Force for Climate-related Financial Disclosures
(TCFD) reporting framework to understand and evaluate
the potential implications of climate change.
Neste uses scenario analysis to assess the resilience
and adaptability of Neste’s strategy to climate change.
We base our scenario analysis on the internationally
acknowledged climate pathways that represent objective
and well-established benchmarks for the energy indus-
try, for example, published by the International Energy
Agency (IEA). We complement our scenarios through
internal analysis and the identification of trends and fac-
tors relevant to our business. In 2023, we analyzed the
implications for Neste in three climate scenarios:
• Net Zero World 2050, which is in line
with the 1.5 °C pathways;
• Net Zero EU and North America by 2050,
consistent with a 2 °C trajectory; and
• Compromised Climate Targets, reflecting
global warming of 2.5 °C–3 °C or more
by the end of the century.
We have identified and estimated the impact of the risks
and opportunities to Neste in each scenario according
to the TCFD framework.
We are committed to applying the Task Force for
Climate-related Financial Disclosures reporting
framework to understand and evaluate the
potential implications of climate change.
1)
Use phase emission intensity is calculated by dividing the emissions from the use of fuel products sold by Neste (part of scope 3) with the total amount of sold energy (gCO
2
e/MJ).
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Potential implications of climate change for Neste
Net Zero World
Net Zero EU and
North America by 2050
Compromised
climate targets
Description Rapid and radical emissions reductions glob-
ally to meet Net Zero emissions by 2050 and
limit global warming to 1.5 °C, building on the
IEA Net Zero 2050 Scenario.
Advanced economies demonstrating strong
climate action while developing economies
follow slower action, consistent with a 2 °C
trajectory, building on the IEA Announced
Pledges Scenario.
Failure to take climate action leads to the con-
tinuation of the current trends, causing global
warming of 2.5 °C to 3 °C or more by the end
of the century. The scenario is partly built on
the IEA Stated Policies Scenario.
Opportunities The accelerated global demand for renewable
and circular products provides Neste opportu-
nities to leverage global reach, expand to new
markets, and optimize across raw materials,
countries and customer sectors.
Continued demand growth in renewable and
circular solutions; regulatory markets sup-
ported by voluntary climate ambitions.
Modest demand growth in renewable prod-
ucts due to less favorable regulatory frame-
work gives room for differentiation and serving
selected voluntary markets efficiently.
Risks Accelerated global demand for renewable and
circular products and a supportive regulatory
landscape may present transition risks related
to stringent competition for key raw materials
and in entering new markets.
Identified transition risks are related to regu-
lation limiting the competitiveness of renew-
able fuels or narrowing the eligibility of key raw
materials. A steep decline of demand for fos-
sil fuel could also be seen as a transition risk
for Neste’s current business. Risks related to
accelerated alternative technology develop-
ment have also been identified.
Modest demand growth in renewable prod-
ucts due to less favorable regulatory frame-
work gives scope for differentiation and serv-
ing selected voluntary markets efficiently.
Indicative financial
impact to Neste
Positive Base case Slightly negative
The focus of Neste’s strategic planning is on the next
10 years. In the scenario work, a time horizon until 2050
is used as the effects of climate change become more
imminent in the longer term. Climate change and actions
to mitigate and adapt to it pose both transition and phys-
ical risks and opportunities to companies. In the climate
context, topics such as energy transition, regulation,
competition and customer preferences are relevant for
Neste’s business. The impact potential of such drivers
on Neste are evaluated in short-, medium- and long-
term time horizons with varying degrees of certainty.
Neste will continue to build on its climate actions so that
they are in line with the 1.5 °C emission scenarios but
refers to the “most likely” scenario reflecting a trajectory
of 2 °C global warming by the end of the century as the
base case.
We calculate the impacts and test Neste’s strategy
resilience against the scenarios by estimating the impact
on Neste’s profitability compared to the base case, for
example. This is to ensure the key drivers underlying
our strategy are robust under the varying assumptions
across the pathways. The results of the scenario assess-
ment provide valuable information about the adaptability
and resilience of Neste’s strategy. The results are used
to support Neste’s strategy development and finan-
cial planning. Identified climate risks are included in our
Enterprise Risk Management (ERM) process, and risk
mitigation plans are implemented where appropriate.
The full TCFD recommendations set out eleven recom-
mended disclosures around four core areas for compa-
nies to report material climate-related information to the
market. You can navigate to all the Neste disclosures in
the annual report via the TCFD index.
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Our carbon handprint
In 2023, we enabled our customers to
reduce GHG emissions by 11.0 million tons.
1)
We are committed to helping our customers reduce
their greenhouse gas emissions by at least 20 million
metric tons CO
2
e annually by 2030. We aim to achieve
our target with our portfolio of renewable, lower-emis-
sion and circular solutions for road transportation, avi-
ation, and marine uses, as well as for the plastics and
chemicals industries.
Our renewable and circular solutions
enable our customers to reduce
GHG emissions across industries
Neste MY
Sustainable
Aviation Fuel
TM
Neste MY
Renewable
Diesel
TM
Neste RE
TM
, feedstock for polymers
and chemicals production made out of
renewable and recycled raw materials
Neste Marine
TM
0.1 Co-processed
for marine, and also possible
other solutions to new sectors
1)
See calculation principles on page 115
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The idea behind carbon handprint is to offer solutions
to our customers that reduce their carbon footprint.
It is the difference between the carbon footprints
over the life cycle of a baseline product or service
and a more sustainable product or service measured
in mass of GHG (i.e. kgCO
2
e). The bigger the hand-
print, the better.
All our renewable and circular solutions have sig-
nificantly lower GHG emissions over their life cycle
compared to fossil alternatives, which helps our cus-
tomers reduce their GHG emissions and reach their
climate targets (see pages 63–65 for details).
To assess the carbon handprint, we first calculate
the GHG emissions of our renewable and circular
Reaching capacity growth
with refinery investments
Growing our capacity to produce renewable and circular
solutions is a key contributor toward our carbon hand-
print target. Through our strategic investments, our pro-
duction capacity of renewable and circular solutions will
expand significantly in the coming years.
In 2023, we finalized the expansion of our Singapore
refinery, which started operations in April 2023. The
ramp-up to full capacity was delayed during the second
half of 2023. The expansion will increase the total pro-
duction capacity of the Singapore refinery to 2.6 million
tons per year, including up to 1 million tons of sustain-
able aviation fuel.
The Martinez Renewables refinery in the US started
operating in 2023. Pretreatment capabilities started
to operate in the second half of 2023, and the facility
is expected to increase Neste’s renewable products
capacity by slightly over 1 million tons (365 million US
gallons) per year. These actions are expected to signifi-
cantly increase the GHG reduction for our customers in
2024.
Furthermore, in the Netherlands we continued the Rot-
terdam expansion project in 2023. The project will expand
our overall renewable product capacity by another 1.3
million tons per year, bringing the total renewable prod-
uct capacity in Rotterdam to 2.7 million tons annually.
Our target is to start up the new production unit during
the first half of 2026, and it will be a significant step
products over their entire life cycle from the produc-
tion of their raw materials to the end use of the final
product. For fuels, the life cycle ends when the prod-
uct has been used, and for other (non-fuel) prod-
ucts such as renewable feedstock for new polymers
and chemicals, the life cycle ends in the end-of-life
treatment and potential recycling. Then we compare
these life cycle GHG emissions of each of our renew-
able and circular products with the fossil compara-
tor emission values as defined in the relevant regula-
tion (e.g., EU RED II, LCFS) to evaluate the achieved
GHG reductions for our customers.
Since 2016, with the VTT Technical Research Centre
of Finland and Lappeenranta University of Technology,
and later with Business Finland and other partners,
we have been participating in the development of the
world’s first science-based method for handprint cal-
culation and communication. It aspires to provide an
unambiguous and internationally approved concept
of carbon neutrality and a reliable indication of the
environmental benefits (handprint) of circular econ-
omy solutions.
Neste’s renewable products, such as Neste MY
Renewable Diesel, Neste MY Sustainable Aviation
Fuel and Neste RE, our renewable feedstock for poly-
mers and chemicals industries, help our customers
reduce their GHG emissions and reach their climate
targets.
What does carbon handprint mean?
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toward reaching our 2030 handprint target.
In 2023 we completed the strategic study on trans-
forming our refinery in Porvoo, Finland, into a lead-
ing renewable and circular solutions refining hub. The
planned transformation will proceed in phases, and
requires multiple separate investment decisions during
the next decade before targeted completion in the mid-
2030s. The company expects the long-term capacity
potential after the transformation to be about 3 million
tons of renewable and circular products. Neste’s exper-
tise and the versatility of the Porvoo refinery create an
excellent platform for change.
The final timeline for transitioning from crude oil to
renewable and circular raw materials will be determined
later in line with the actual fuel market demand, legis-
lation development and transformation progress. Some
changes have already been initiated with the co-pro-
cessing of both renewable and circular feedstock and
could continue with retrofits of existing units at a later
stage.
As a tangible step, we made an investment decision
to commence the construction of upgrading facilities for
liquefied plastic waste at our Porvoo refinery in Finland
in 2023. With an investment of 111 million euros, we will
build the capacity to upgrade 150,000 tons of liquefied
waste plastic per year.
At the same time, we need to ensure that our renew-
able and circular products have the lowest possible
GHG emissions across their life cycle. For example, this
requires a careful GHG impact evaluation of the renew-
able raw materials we use, optimizing our supply chains
and ensuring that the GHG emissions caused by refining
are minimized.
Achieving our carbon handprint target by
growing our renewable and circular solutions
We aim to help our customers
reduce their GHG emissions
by at least 20 million tons
per year by 2030
2017 2018 2019 2020 2021 2022 2023 2026 2030
7.9
8.3
9.6
10
10.9
11.1
11.0
20 Mt
Innovating new
technologies
to utilize novel
renewable
raw materials
Key drivers to increasing
the GHG reduction
for our customers
Singapore expansion
and Martinez Renewables
Transition of Porvoo
refinery to a renewable
and circular site
Rotterdam
expansion
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Renewable solutions for
road transportation and
heavy machinery use
In 2023, we continued to expand the availability of renew-
able diesel by bringing it to new markets and by grow-
ing the Neste station network. We also strengthened the
use of renewable diesel in industrial sectors like mining
and infrastructure construction, which depend on heavy
machinery. Our solutions are also available for agricul-
ture and forestry.
In April 2023, we launched Neste MY Renewable Die-
sel on the Danish market, and expanded the network
even further with a new distributor in July.
In Finland, we expanded the availability of Neste MY
Renewable Diesel from 168 stations to 187 stations. In
Estonia, Latvia and Lithuania the number of stations sell-
ing the fuel grew by 9 stations, totaling 39.
In the Netherlands, Sweden, the US, Belgium and
Denmark Neste MY Renewable Diesel was sold at more
than 600 stations by the end of the year.
We respond to the electric vehicle megatrend and the
growing need of electric vehicle charging. During 2023,
we opened 13 public Neste Renewable Charging ser-
vice stations at our existing fuel stations in Finland and
in the Baltic countries.
Progress in establishing
Neste as a partner or supplier
to airlines and cargo carriers
• Expanding the SAF agreement with United Airlines
• Ryanair using Neste SAF for all flights from Amsterdam Airport
• Supplying Neste SAF to Air Canada for flights from San Francisco International Airport
Expanding partnerships
along the supply chain to
grow the availability of SAF
• Establishing an integrated SAF supply chain to Singapore Changi Airport
• First delivery of SAF via the European CEPS pipeline system to Brussels Airlines
at Brussels Airport
• Enabling Sweden’s Trollhättan-Vänersborg Airport to become the world’s first airport
to use sustainable aviation fuel on all flights
Expanding into the
voluntary market
with new partnerships
• A partnership with SQUAKE enabling businesses to opt for sustainable aviation fuel in flight
booking systems
• Partnering with Adventure Trade Travel Association to expand SAF availability in the travel industry
Examples of other
achievements
• Neste, ISCC and DHL Group successfully piloting the ISCC Credit Transfer System
New partnerships in aviation in 2023:
Solutions to reduce
GHG emissions in aviation
Neste continues to help the aviation industry achieve its
ambitious goal of net zero carbon emissions by 2050 by
providing an immediate solution for reducing the emis-
sions from air travel and transport. Neste MY Sustain-
able Aviation Fuel is made from sustainably sourced
100% renewable waste and residue raw materials such
as used cooking oil and animal fat waste. In its neat form,
Neste MY SAF can reduce greenhouse gas emissions by
up to 80% over the fuel’s life cycle, compared to using
fossil jet fuels (calculation method: CORSIA)
1)
.
Neste MY SAF also significantly reduces non-CO
2
emissions compared to fossil jet fuel use. The fuel can
be used as a drop-in fuel, as it is compatible with exist-
ing aircraft engines and airport fuel infrastructure, requir-
ing no extra investment in them.
Our current annual SAF production capability is 1
million tons per year. With the expansion of our Singa-
pore refinery and ongoing modification of our Rotterdam
refinery, we will have an annual SAF production capa-
bility of 1.5 million tons in early 2024. Furthermore, the
ongoing Rotterdam refinery expansion will increase the
capacity to 2.2 million tons in 2026.
We are actively working with partners in the aviation
supply chain to grow the availability of SAF globally.
The fuel is already used by leading commercial airlines
in Europe, North America and Asia-Pacific, including
Lufthansa, Air France-KLM, IAG, Finnair, American Air-
lines, United Airlines and cargo carriers such as DHL
Group, Cargolux and Amazon PrimeAir. It is available at
an increasing number of major airports, including San
Francisco International Airport, Los Angeles Interna-
tional Airport, Amsterdam Airport Schiphol, Frankfurt Air-
port, Narita International Airport and Singapore Changi
Airport.
In addition, we offer businesses a tailored service to
help them directly reduce the greenhouse gas emis-
sions of their air travel or transportation by purchasing
SAF; Neste SAF Solutions. This solution delivers real
in-sector emission reductions that can credibly be used
to meet science-based targets or other sustainability
commitments.
1)
The actual emission reduction per flight depends on the fuel blend used for that flight.
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Reduced emissions with
Neste MY Renewable Diesel
Neste MY Renewable Diesel is a drop-in solution for
all diesel-powered vehicles. Its use does not require any
changes to existing engines or logistics.
In 2023, our customers were able to reduce their GHG
emissions by up to 95%
1)
or up to 75%
2)
, when switch-
ing from fossil diesel to Neste MY Renewable Diesel.
The GHG reduction depends on the local regulations,
which provide the methodology and define the fossil die-
sel reference GHG emissions value. The reduction also
depends on the transportation distances and on the
renewable raw material mix used for each market.
The GHG emissions over the entire fuel life cycle
are taken into account. The fuel life cycle consists of,
on one hand, the Well-to-Tank (WTT) GHG emissions,
which includes the emissions from raw material, from
raw material transportation, from fuel refining and from
product transportation. And on the other hand, it con-
sists of the Tank-to-Wheel (TTW) GHG emissions, which
includes the emissions from fuel use. For Neste MY
Renewable Diesel, the GHG emissions from the fuel use
phase (TTW) amounts to zero or nearly zero, as the bio-
based carbon dioxide released upon combustion equals
the amount of carbon that renewable raw material has
absorbed earlier.
Neste MY Renewable Diesel helps reduce greenhouse gas (GHG) emissions compared to fossil diesel
Fossil diesel
Neste MY Renewable Diesel
(from waste and residues)
1)
Based on European market and EU RED ((EU)2018/2001) methodology
2)
Based on North American market and LCFS methodology
Raw material
Europe North
America
Raw material
transportation
Europe North
America
Fuel refining
Europe North
America
Fuel transportation
Europe North
America
Fuel use
Europe North
America
Total GHG emissions
Europe North
America
WTT, Well-to-Tank
WTW, Well-to-Wheel
TTW, Tank-to-Wheel
Up to
95%
1)
GHG
emission
reduction
Up to
75%
2)
GHG
emission
reduction
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Helping Deutsche Bahn
become carbon neutral
Deutsche Bahn significantly expanded its use of
renewable diesel by purchasing around 13,300 tons
(17 million liters) of renewable diesel produced by
Neste in 2023. Switching from fossil diesel to Neste
MY Renewable Diesel enables Deutsche Bahn to
reduce greenhouse gas emissions from the opera-
tion of their diesel-powered locomotives and railcars
by up to 90%
1)
. In total, the purchased amount will
save Deutsche Bahn around 46,000 tons of green-
house gas emissions (CO
2
e) compared to the use
of fossil diesel.
Deutsche Bahn is using HVO-type 100% renew-
able diesel in around 1,000 of its vehicles, and its
subsidiary DB Cargo AG in its entire fleet of 800
vehicles.
Sustainable solutions for marine
More than 90% of the world’s trade is carried by sea,
making maritime transport essential to the global econ-
omy. Neste helps shipping companies reduce their
emissions and respond to the tightening regulations.
To reduce sulphur dioxide emissions, we provide sev-
eral low-sulphur fuel solutions. To reduce GHG emis-
sions, we offer either Neste co-processed marine fuel or
renewable diesel (HVO).
Neste Marine™ 0.1 Co-processed helps the marine
sector start reducing its dependence on fossil fuels, as
the fuel produced by Neste also consists of renewable
content. In the production of the fuel, crude oil is partly
replaced by renewable raw materials. In 2023, the avail-
ability of the fuel expanded from Finland to Sweden and
Denmark via our partners ScanOcean (Sweden) and
Malik Energy (Denmark).
In addition, we provide solutions that enable GHG
emissions reductions in maritime, such as renewable
diesel and drop-in bio-components for marine blend-
ing. We aim to develop new complementary solutions
to widen Neste’s low-emission offering for the maritime
industry.
Renewable and circular solutions for
the polymers and chemicals industries
We provide the polymers and chemicals industries with
renewable and circular solutions that help mitigate cli-
mate change, combat waste plastic pollution and reduce
dependence on crude oil.
Our drop-in renewable feedstock for the polymers
and chemicals industries, Neste RE
TM
, is made from
renewable raw materials, primarily waste and residue
oils and fats such as used cooking oil. With our feed-
stock, polymers and chemicals producers, as well as
global brands, can manufacture lower carbon footprint
products and reduce the use of fossil resources. We are
also committed to becoming a solution provider for the
chemical recycling of waste plastic. This will allow us to
contribute to a circular plastics economy by increasing
the recycling of plastic waste. This will help reduce plas-
tic waste pollution while keeping materials in the loop to
reduce fossil resource dependence. Read more about
chemical recycling on page 94.
Emission reductions with Neste RE
Neste RE is a feedstock for the polymers and chemicals
industries, which is made with renewable and recycled
materials. Renewable Neste RE is produced primarily
from waste and residue oils and fats of renewable ori-
gin such as used cooking oil. Life cycle assessment for
renewable Neste RE shows a carbon footprint reduction
of more than 85% over the life cycle when it is used to
replace conventional fossil feedstock in the chemicals
and polymers industries.
Recycled Neste RE is a product from the chemical
recycling of hard-to-recycle plastic waste. The life cycle
assessment for Neste feedstock produced via chemi-
cal recycling shows a carbon footprint reduction of at
least 35% compared to the current scenario, in which
the feedstock is made from fossil raw materials, and the
plastic waste ends up in incineration.
1)
Calculation based on EU RED ((EU)2018/2001)
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Our carbon footprint
Neste’s climate vision is to lead the
transformation toward a carbon
neutral value chain.
A critical part of making our vision of leading the trans-
formation toward a carbon neutral value chain is reduc-
ing greenhouse gas emissions (GHG) in our operations
and across our value chain. We have set targets that
cover both direct and indirect emissions from our pro-
duction and value chain, referred to as scopes 1, 2 and
3 as defined by the GHG Protocol.
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First, we are committed to reducing the greenhouse
gas emissions from our production (scopes 1 & 2). We
are committed to reducing our production emissions by
50% by 2030 compared to 2019, and reaching carbon
neutral production by 2035. We have a climate road-
map in place that describes the short-, medium- and
long-term actions that will enable us to move toward our
commitments.
Second, we have a target of reducing the use phase
emission intensity of sold products (part of scope 3 emis-
sions) by 50% by 2040 compared to 2020. The main
driver to meet, and exceed, this target is to continue our
transformation toward renewable and circular solutions.
Finally, we want to lead the transformation toward a
carbon neutral value chain, and are committed to work-
ing with our suppliers and partners to reduce the indi-
rect GHG emissions across our value chain (scope 3).
This requires actions beyond our own production and
products.
Our footprint: Neste’s value chain GHG emissions
We use the scope framework defined in the Corporate Standard by GHG Protocol to assess
the GHG emissions across our value chain. Scope 1 and scope 2 cover the emissions related
to our own production and 50% of the scope 1 & 2 GHG emissions from the Martinez Renew-
ables joint operation. Scope 3 includes all other relevant emissions throughout our value chain.
1)
Scope 1 accounting and reporting based on CO
2
.
2)
Includes Use of sold products and End-of-life treatment of sold products.
3)
Including Purchased services, Waste generated in operations, and Fuel- and energy-related activities.
4)
Use phase emission intensity is calculated by dividing the emissions from the use of fuel products sold by Neste (part of scope 3)
with the total amount of sold energy (gCO
2
e/MJ).
Scope 1
Direct emissions
from refining
Scope 2
Indirect emissions
from purchased energy
Scope 3
Other indirect emissions
from value chain
Reported GHG emissions in 2023, MtCO
2
e
1)
Purchased
goods
Other
3)
Product
transport
Raw material
transport
Use of
products
2)
58g CO
2
e/MJ
Use phase emission
intensity of sold fuel
products
4)
Refining
Purchased
energy
2.3
0.5
5.0 0.72.0 48.81.1
Reduce GHG emissions in our
own production (scopes 1 & 2) by
50% by 2030 and reach carbon
neutral production by 2035
Reduce the use phase emission
intensity
1)
of sold products by
50% by 2040 compared to
2020 levels (scope 3)
Work with our suppliers
and partners to reduce
GHG emissions across
our value chain (scope 3)
1)
Use phase emission intensity is calculated by dividing the emissions from the use of fuel products sold by Neste
(part of scope 3) with the total amount of sold energy (gCO
2
e/MJ).
Our vision is to lead transformation toward
a carbon neutral value chain by 2040
Neste recognizes the need to reduce global GHG
emissions by approximately 50% every decade and
reach global net zero GHG emissions by 2050 or sooner
to limit global warming to 1.5°C compared to pre-indus-
trial levels. Through our climate commitments to reduc-
ing the GHG emissions from our production, sold prod-
ucts and throughout the value chain, we want to show
leadership and determination to play our part in limiting
global warming to 1.5°C meeting the objectives of the
Paris Agreement.
Neste has been closely analyzing and following the
development of leading climate frameworks, such as the
Science Based Targets initiative (SBTi), Transition Path-
way Initiative (TPI) and Exponential Roadmap Initiative
(ERI) to guide our climate commitments toward being in
line with the latest climate science and the 1.5°C path-
way. We will continue to develop our climate commit-
ments and actions to ensure that they are aligned with
the 1.5°C emission scenarios.
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Progress & highlights
of the climate roadmap in 2023
We are committed to reducing the climate impact of our
actions not only through the targets we have set, but
also through the actions that we have already imple-
mented or included in our strategic business plans for
later implementation. We have already had a tangible cli-
mate roadmap for reducing our production carbon foot-
print (scope 1 & 2) for many years, and we have also
proceeded with more concrete plans for reducing scope
3 GHG emissions.
In 2023, we continued the implementation and devel-
opment of key items in our climate roadmap. One exam-
ple of the short term actions was increasing the share
of renewable electricity of total purchased electricity
to 99.6%
1)
.
In the longer term, renewable hydrogen remains one of
the biggest focus areas. As part of the Porvoo transfor-
mation, a project to build an electrolysis unit to produce
green hydrogen is proceeding and is expected to start in
2026. At our Rotterdam refinery, we are demonstrating
renewable hydrogen production in the MultiPLHY proj-
ect, which aims at the installation and integration of an
electrolyzer demonstration unit into the refinery.
Regarding our indirect value chain emissions (scope
3), we significantly improved the reduction of GHG emis-
sions from shipping through digital tools and further
automatization during 2023. Additionally, we tightened
our collaboration and partnerships with our suppliers in
the upstream of our value chain and started to enhance
our view on supplier capabilities, data quality and poten-
tials for scope 3 emission reductions.
In addition, our climate commitments remain con-
nected with the remuneration of Neste’s key personnel,
as they are a performance measure in Neste’s long-term
incentives (LTIs). The purpose of this performance mea-
sure is to further drive the commitment and implemen-
tation of actions across the organization. In 2023, we
Since 2020, evaluating the production carbon footprint
(scope 1 & 2) emission impact of every investment deci-
sion has been mandatory at Neste. As we have devel-
oped our climate commitments to cover also for example
the use phase emission intensity of sold products (part
of scope 3), we have introduced new criteria and guide-
lines to enable our project teams to evaluate all potential
climate impacts of the possible investments. The pur-
pose of these guidelines and criteria is to increase trans-
parency to the different GHG emission impacts of our
investments.
To align our investment decisions to support our cli-
mate commitments, Neste applies an internal carbon
price for our scope 1 & 2 GHG emissions in investment
calculations, business case evaluations and in strategic
Evaluation of GHG emission and other sustainability aspects
integrated into Neste investment processes
planning. In 2023, we increased Neste’s internal carbon
price to 100 EUR/tCO
2
e in the short term. The internal
carbon price will increase to above 120 EUR/tCO
2
e by
2030. We regularly review our internal carbon price as
part of our strategic planning process, and utilize various
references, for example the EU ETS allowance price and
forecasts, in the process.
In 2023, Neste updated its investment process
and criteria to include more detailed checklists for cli-
mate-related evaluations for different project phases. At
the same time, we also added similar checklists for bio-
diversity, human rights, and supply chain sustainability
evaluations that need to be reviewed in different project
phases.
increased our internal carbon price to further steer our stra-
tegic planning and investment decisions to support meeting
our climate targets. We also introduced a new internal policy
to further strengthen the requirements and understanding of
the GHG impacts of investments.
1)
Includes additional market-based renewable electricity instruments (e.g. I-RECs) through which Neste has supported the use of renewable energy for electricity production in South-East Asia, but which cannot be used for Neste’s scope 2 market-based accounting. Martinez Renewables excluded from reported
renewable electricity share as Neste does not control electricity supply agreements for the joint operations
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Our pathway toward
carbon neutral production
Our target is to reduce production (scopes 1 & 2) emis-
sions by 50% by 2030 compared to 2019, and reach car-
bon neutral production by 2035. We believe that these
commitments are in line with global climate ambitions
and the objectives of the Paris Agreement. In 2023, our
production (scopes 1 & 2) emissions totaled 2.8 MtCO
2
,
which is 19% smaller than in 2019 (baseline year). The
emissions from production were slightly higher than in
2022 as the Singapore refinery expansion and the Mar-
tinez Renewables refinery, 50% of which is owned by
Neste, started operations in 2023.
In 2023, we continued progress with the short-term
actions on our production climate roadmap, such as
increasing the share of renewable electricity. As an exam-
ple, we signed a purchase agreement for solar power
supply to the Porvoo refinery in Finland with the renew-
able energy company CPC Finland Oy in late 2023.
Solar power supply is expected to start in spring 2024.
The total annual volume of the agreement is approxi-
mately 24 GWh. In 2023, the share of grid-connected
renewable electricity was 89.3% (93.8%). Our aim was
to reach 100% renewable electricity by 2023. With
so-called additional measures
1)
we were able to cover
99.6% of Neste’s total purchased electricity.
In addition to renewable electricity, we continued to
work towards a higher share of renewable steam with
the local energy producers. These GHG emission reduc-
tion measures related to purchased energy (scope 2) are
estimated to have a reduction potential of around 20% of
our 2019 production carbon footprint baseline by 2030.
Towards climate neutral production by 2035
Our climate roadmap to reduce our production (scopes 1 & 2) emissions by 50%
by 2030 and reach carbon neutral production by 2035.
Short-term
measures
For example,
renewable
electricity
Long-term
measures
Scaling up lower emission
technologies and innovations
with focus on green hydrogen
Climate change
mitigation beyond
our value chain
Any residual production
emissions that cannot
be mitigated will be
compensated through
credible methods to
reach carbon neutral
production
Medium-term measures
For example, continuous energy efficiency
improvements, electrification investments,
and working with suppliers to leverage
renewable energy for heat & steam
2.0
0.0
3.0
1.0
2019 2021
2022
2023 2025 2030 20352020
3.4
2.9
2.3
2.8
2.5
Carbon
neutral
production
1.7
50%
reduction
in scopes 1 & 2
by 2030
MtCO
2
/a
1)
Additional measures include available market-based renewable electricity instruments (e.g. I-RECs) through which Neste has supported the use of renewable energy for electricity production in South-East Asia, but which cannot be used for Neste’s scope 2 market-based accounting. Martinez Renewables
excluded from reported renewable electricity share as Neste does not control electricity supply agreements for the joint operations.
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In the medium term, the focus will be on continu-
ous energy efficiency improvement and electrification
measures. Many of these measures are in implemen-
tation planning, for example as part of refinery mainte-
nance breaks. As part of the Singapore refinery expan-
sion, improvements were implemented at the site to
more effectively utilize the renewable refinery off-gasses
for different purposes. The estimated emission reduc-
tion potential of our planned energy efficiency measures
is approximately 10% by 2030 of Neste’s scope 1 & 2
emissions compared to the 2019 baseline year.
Longer term actions on our climate roadmap include
scaling up new technologies and innovations, with focus
on renewable hydrogen. As part of the Porvoo transfor-
mation, a project to produce renewable hydrogen with
a 120 MW electrolysis unit has proceeded and is in the
basic engineering phase. The prerequisites for the deci-
sion to build a green hydrogen unit are expected to be
ready during 2024. Green hydrogen production could
start in 2026 if the project has proceeded to execution.
Renewable hydrogen and other new technologies are
estimated to have a reduction potential of 20% or more
of the 2019 scope 1 & 2 emission baseline by 2030.
Reducing the GHG emissions
in the value chain
The main emission source in the value chain (scope 3) is
the GHG emissions caused by the use of the products
we produce and sell. Neste has set a target of reducing
the use phase GHG emission intensity of sold products
50% by 2040. To meet this target, we are increasing
the share of renewable products in our product portfolio
through capacity expansions, innovation initiatives, and
tranforming our Porvoo refinery into a leading renewable
and circular solutions refining hub.
Neste’s refinery in Porvoo, Finland is among the most
efficient and versatile refineries in Europe. It processes
both crude oil and renewable raw materials into more
than 100 end products for customers globally. Neste’s
ambition is to make the Porvoo refinery the most sus-
tainable refinery in Europe by 2030. In 2023 we com-
pleted the strategic study on transforming the Por-
voo refinery into a leading renewable and circular
solutions refining hub in the mid-2030.
The Porvoo refinery transformation will significantly
support actions to reduce GHG emissions across
Neste’s scopes 1–3. The majority of Neste’s scope 1
& 2 GHG emissions are caused by the Porvoo refinery,
and the planned transformation is estimated to lead to
a large reduction of GHG emissions from the Porvoo
refinery, especially when combined with the actions
already listed on Neste’s climate roadmap by 2030.
Also, the GHG emissions from the use of the sold
products in Neste’s scope 3 originate mainly from
Aiming to be the most sustainable refinery in Europe
the produced and sold fossil fuels. Transitioning from
crude oil to renewable and circular raw materials would
therefore lead to significant reduction of both the use
phase emission intensity as well as the absolute emis-
sions caused by the use of products produced and
sold by Neste.
Furthermore, the transformation of the Porvoo refin-
ery will have an impact on the other scope 3 categories
for Neste. The main impact is likely on the emissions
related to the purchased goods, where the production
of the crude oil currently purchased by Neste is one of
the main emission sources.
With the planned transformation of the Porvoo refin-
ery, combined with other initiatives across all refineries
and the entire value chain, we firmly believe that we
are aligned with the scientific 1.5°C pathway. Through
our clear plans and concrete actions, we are showing
an example on how to enable reaching net zero GHG
emissions globally by 2050 or sooner.
As we continue to proceed with reducing the use
phase GHG emission intensity of sold products, we
are increasing the focus on reducing other value chain
emissions. This is where partnerships and the suppliers
we collaborate with play a key role. In 2023, we con-
tinued to detail the climate roadmap for scope 3 and
have already moved forward with first steps. We have
increased our understanding of the currently available
data sources, the quality of the data and reviewing the
possibilities of utilizing a higher share of primary data in
our GHG accounting. This also enables us to proceed
towards setting credible targets for other scope 3 cat-
egories aligned with the latest climate frameworks, and
identifying emissions reduction measures with our part-
ners and suppliers.
We are increasing the share of renewable
products through capacity expansions, innovation
initiatives, and transitioning our Porvoo refinery
into a leading renewable and circular solutions
refining hub.
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Reducing the use phase
emission intensity of sold products
The use phase emission intensity of sold products
(gCO
2
e/MJ) is an indicator of the GHG emissions from
the use of Neste’s products divided by the total amount
of energy sold. These are the GHG emissions generated
when the products that we sell are used – for fuels, this
means combustion. Reducing the use phase emission
intensity of sold products indicates how Neste is trans-
forming the product portfolio to have a larger share of
renewable and circular products. This is based on the
approach that CO
2
emissions from the use of renewable
fuel amount to zero
1)
, as the amount of bio-based CO
2
released upon combustion equals the amount that the
renewable raw material has absorbed earlier. Thus, no
new carbon is added to the atmosphere by the com-
bustion of biofuels.
In 2023, the use phase emission intensity of fuel prod-
ucts was 58 gCO
2
e/MJ, which is at the same level as the
2020 baseline (58 gCO
2
e/MJ). The main initiatives related
to the use phase emission intensity in 2023 were the
1)
The calculation methodology is aligned with the EU Renewable Energy Directive (EU RED II 2018/2001/EU) and US California LCFS.
Reducing the use phase GHG emission intensity of sold products
Key drivers
beyond 2030
• Increasing renewable and
circular capacity at Porvoo
• Ending crude oil refining at Porvoo
• Innovation
Key drivers by 2030
• Singapore expansion
• Martinez Renewables
• Co-processing of renewable
raw materials at Porvoo refinery
• Rotterdam expansion
30
50
60
40
2021 2022
2023
2030
20402035
2020
Estimated
reduction
of over
30%
by 2030
gCO
2
e
/MJ
50%
reduction
by 2040
5858
55
57
10
0
20
start-up of Singapore Expansion and Martinez Renew-
ables. The absolute GHG emissions related to the use
of sold products in scope 3 were 47.7 MtCO
2
e in 2023,
which is 23% higher than in 2020 (38.7 MtCO
2
e). The
increase is mainly due to the impact of including traded
fuels to the calculation from 2023 onward as part of our
efforts to increase the coverage of our scope 3 inventory.
By 2030, we estimate to be able to reduce the use
phase GHG emission intensity of sold products by over
30%, the main driver being the increased sales of renew-
able products. As our Singapore expansion and Martinez
Renewables continue to ramp-up, we expect the use
phase emission of sold products to continue decreasing
already in 2024. Further reductions are enabled by our
Rotterdam expansion, which is expected to start opera-
tions in 2026, as well as increased share of co-process-
ing of renewable raw materials at our Porvoo refinery.
Beyond 2030, the main driver for decreasing the use
phase emission intensity of sold products will be the tran-
sition of our Porvoo refinery to a renewable and circular
site. In a scenario where crude oil refining is ended by
the mid-2030s, we estimate to be able to even exceed
our 2040 target. This is supported by our further growth
in renewable solutions, such as utilizing new innovative
raw materials.
Read more about Neste MY Renewable Diesel
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Working with suppliers and
partners to reduce GHG emissions
across the value chain
In addition to sold products, the other key focus points
for reducing the GHG emissions across our value chain
are purchased goods and services, such as raw mate-
rials, and the product and material transportation and
distribution. To showcase our leadership, we have also
committed to reduce the climate impact of our own busi-
ness traveling.
With purchased products and services, the sustain-
ability of our raw material portfolio is an area we are
constantly developing, and in which we are identifying
opportunities for emissions reductions. For example,
Neste continues to focus on waste and residue in sourc-
ing renewable raw materials, and at the end of 2023,
Neste reduced its refinery inputs of conventional palm
oil to zero.
We are aiming to further understand our suppliers’
capabilities and maturity levels with climate change
management, which further guides the formulation of
our supply chain decarbonization approach. Our tar-
get is to make climate a key criterion in supplier selec-
tion, and create an environment for our suppliers where
they are encouraged and capable of improving their cli-
mate performance. For example, in 2023 we introduced
contractual clauses related to climate with first suppli-
ers, and started to request more detailed GHG emission
information about the products and services purchased
by Neste. Upskilling, training and sharing knowledge are
also ways to help our suppliers in their emissions reduc-
tion journeys and increase our own internal capabilities
as well.
In 2023, we continued scope 3 workshops with our
procurement teams and held introductory meetings with
selected suppliers.
Regarding transportation of our raw materials and
products, we are constantly exploring solutions to
improve the optimization of our logistics network and
enhance our understanding of logistics emissions
sources. Our ambition is to expand the adoption of
low-emission solutions and improve fuel efficiency in
collaboration with our logistics partners.
In 2023, we started to use lower-emission marine fuel
in two vessels transporting renewable diesel to Sweden.
The initiative aligns with the International Maritime Orga-
nization’s emission reduction targets to combat climate
change. The marine fuel, Neste Marine™ 0.1 Co-pro-
cessed, offers up to 80% lower greenhouse gas emis-
sions over its life cycle compared to fossil fuel.
Improving measurement accuracy
within indirect procurement
In 2023, we started to work on improving our under-
standing and the measurement accuracy of the
scope 3 emissions arising from indirect procurement.
This has been done in collaboration with suppliers
by requesting product carbon footprint calculations
with the aim of better understanding current calcu-
lation methodologies, assumptions, supplier capa-
bilities and readiness, quality of data and potential
third-party validation of suppliers’ calculations.
Read more about indirect procurement
on page 89.
Digital solutions used as a tool to
cut shipping emissions
The use of digital technology and data is essen-
tial for GHG emissions management throughout
Neste’s value chain.
Neste has further developed the digital tools for
shipping optimization and has thus gained a 11,000
tCO
2
reduction from shipping operations during
2023. This reduction has been gained by utilizing
the just-in-time arrival system and by enhancing
optimization algorithms for fleet rotation planning.
Advancing toward more automated fleet usage
optimization will continue to decrease the environ-
mental footprint of logistics.
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Climate change mitigation
beyond our value chain
Neste develops its climate commitments and roadmap
by analyzing and following the development of the lat-
est climate science and the best practices for corpo-
rate climate targets. Thus, making substantial emission
reductions within our own production and throughout
the value chain remains the primary means to achieve
our climate targets.
Nevertheless, it is recognized
1)
that companies
must also play a part in emission reduction efforts that
extend beyond their immediate value chain to miti-
gate any remaining emissions. Any production emis-
sions that cannot be effectively reduced will be matched
with beyond value chain mitigation actions, which can
reduce or avoid greenhouse gas emissions, or remove
them from the atmosphere with durable storage. Con-
sequently, to achieve carbon neutral production, various
Scope 3 pilot kicked off
to refine understanding of
hot spots and critical suppliers
In 2023, we continued to assess our scope 3 hotspots,
and kicked off an internal pilot to identify our critical sup-
pliers and partners. The aim is to evaluate suppliers’
capabilities and maturity in terms of climate, as well as
refine emission abatement levers and identify detailed
emission reduction activities.
This work helps Neste to understand the potential
for emission reduction levels especially in the upstream
value chain and identify those partners who will play a
key role in supporting our efforts towards a carbon neu-
tral value chain by 2040.
1)
Science Based Targets initiative, Corporate Net Zero Standard, Version 1.1, April 2023.
2)
Neutralization refers to the activities aimed to remove carbon from the atmosphere and permanently store it to counterbalance
the impact of GHG emissions that have not been abated. Science Based Targets initiative, Corporate Net Zero Standard,
Version 1.1, April 2023.
beyond value chain mitigation actions will serve as the
final tool on our climate roadmap, with increasing focus
on removal methods and neutralization
2)
of our remain-
ing production emissions.
In 2023, we continued to develop and review our
beyond value chain mitigation approach in the light of
emerging developments in the market and refined qual-
ity standards and criteria, for example the Core Carbon
Principles (CCPs) by the Integrity Council for the Volun-
tary Carbon Market. Similarly, we have paid close atten-
tion to the development of the EU carbon removal cer-
tification framework. These developments are welcome
to create robustness and credibility to the voluntary car-
bon market and help fighting greenwashing.
Companies must also play a part in emission reduction
efforts that extend beyond their immediate value chain
to mitigate any remaining emissions.
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Neste Flies with SAF
Since 2020, Neste has committed to cover the corpo-
rate flights of its employees with our own Neste MY Sus-
tainable Aviation Fuel (SAF). The purpose of the Neste
Flies with SAF program (NFWS) is to mitigate the climate
impact of our corporate flights, and show an example
of how other companies can use SAF as a method to
reduce the climate impact of their corporate flights. In
addition, we minimize the climate impact of our busi-
ness travel by carefully considering the need for travel-
ling in the first place. This requirement is included in our
corporate-wide business travel standard.
We are implementing the Neste Flies with SAF pro-
gram in collaboration with our partner airlines. In 2023,
we delivered approximately 170 tons of SAF to our part-
ner airlines, which include for example Finnair, Lufthansa
and Norwegian, to cover our 2022 corporate flights.
Due to supply constraints, in 2024, we will continue
to deliver SAF to our partner airlines to cover the climate
impact caused by our 2022 and 2023 corporate flights.
No regulatory incentives are leveraged for the SAF
supplied under the NFWS program, thus leading to
additional climate benefits beyond all direct or indirect
regulatory obligations for biofuels in aviation or any other
sector. The delivery model for the SAF under the NFWS
program is based on the principles stated in the SBTi
Aviation guidance
1)
.
Neste Flies with SAF (NFWS) program
Impact category
Metric
2022
tCO
2
e
2023
tCO
2
e
Baseline for GHG emissions
from Neste’s corporate flights
1)
Tank-to-Wake (TTW)
2)
3,500 4,300
Well-to-Tank (WTT) 700 900
Well-to-Wake (WTW) 4,300 5,100
Impact from NFWS GHG reduction from delivered SAF compared to fossil jet fuel
3)
(WTW basis)
500 0
Expected GHG reduction from committed
4)
SAF deliveries compared
to fossil jet fuel (WTW basis)
3,800 5,100
Impact from NFWS for Neste
when SAF is considered to fully
cover the fuel need by Neste’s
corporate flights
5)
Estimated GHG reduction compared to fossil jet fuel (WTW basis)
incl. delivered & committed SAF covering Neste’s own travel
3,500 4,200
Additional impact from NFWS
outside of Neste’s corporate flights
Estimated GHG reduction compared to fossil jet fuel (WTW basis)
incl. delivered & committed SAF beyond Neste’s own travel
800 900
1)
Calculations are based on UK Government GHG Conversion Factors for Company Reporting (“DEFRA”) published in 2022 and 2023 to calculate the 2022
and 2023 baseline for GHG emissions, respectively.
2)
Due to the lack of consensus on the topic in the scientific community, the estimated Tank-to-Wake GHG emissions do not include a radiative forcing (RF)
multiplier, the purpose of which is to estimate the effect of high altitude emissions to global warming
3)
The estimated GHG reduction of SAF is calculated against the fossil aviation fuel baseline of 89 gCO
2
e/MJ defined by ICAO in the CORSIA Methodology
for Calculating Actual Life Cycle Emissions Values (June 2022)
4)
Late delivery due to supply chain constrants; deliveries scheduled for H1/2024
5)
Neste MY Sustainable Aviation Fuel has up to 80% lower GHG emissions compared to fossil fuel across the fuel lifecycle (calculated with established life
cycle assessment (LCA) methodologies, such as CORSIA methodology)
1)
Science Based Targets initiative - Science-based target setting for the aviation sector, Version 1.0, August 2021
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Biodiversity
We aim to achieve a nature positive
value chain by 2040, which means positive
biodiversity impacts outweigh negative ones.
Biodiversity loss and ecosystem collapse is viewed as
one of the fastest growing global risks over the next
decade
1)
. Natural ecosystems are significantly impacted
by the effects of climate change, unsustainable water
use, and land use practices driving habitat loss, among
other impact drivers.
Governments around the world have adopted the
Kunming-Montreal Global Biodiversity Framework, with
the goals of halting and reversing global biodiversity loss
by 2050, substantially increasing the area of natural eco-
systems, and significantly reducing the risk of extinction
to species.
Our business depends on natural resources. Operat-
ing in a landscape in which ecosystems are at risk of
declining condition poses a high risk for Neste’s stable
and secure operations and supply of raw materials. For
our planet and our business to thrive and be resilient, the
prerequisite is restoring and protecting healthy ecosys-
tems. We aim to drive a positive impact on biodiversity
and achieve a nature positive value chain by 2040.
1)
The Global Risks Report 2023 by World Economic Forum
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Our approach to protecting biodiversity
We aim to avoid and minimize all negative impacts,
and eventually restore and compensate for the residual
impacts from our own operations. With this mitigation
hierarchy, we are shifting our operations toward hav-
ing a net positive impact on biodiversity. In addition, we
need to create ways to effectively collaborate with both
our supply chain partners and downstream customers
to avoid impacts on biodiversity and to create a nature
positive value chain.
Roadmap to achieve
our biodiversity vision
The scope of “Net positive impact” (NPI) and “No net loss” (NNL) vision is set for Neste’s own operations. No net loss means net zero impact on biodiversity. “Own” means Neste´s direct operations
covering activities over which Neste has direct operational control. NPI and NNL aim to address impacts through a mitigation hierarchy: avoiding and minimizing losses by restoring affected areas
and finally by compensating the residual impacts, so that no biodiversity loss remains, and a positive impact is created.
Nature positive
value chain by 2040
Neste will drive a positive impact
on biodiversity and achieve a nature
positive value chain by 2040.
A nature positive value chain means
that throughout our value chain,
we are creating more positive
impacts on nature than
causing adverse
ones.
O
w
n
o
p
e
r
a
t
i
o
n
s
Net positive impacts
Aim to create net positive
impacts (NPI) for biodiversity
from new activities from
2025 onward.
Biodiversity
vision
launched
No net loss
Target no net loss
(NNL) of biodiversity
from all ongoing
activities by 2035.
2025
2021
2035
2040
S
u
p
p
l
y
a
n
d
p
r
o
d
u
c
t
c
h
a
i
n
a
c
t
i
v
i
t
i
e
s
We apply the mitigation
hierarchy to our biodiversity
impacts: We aim to avoid and
minimize all negative impacts,
and eventually restore and
compensate for the residual
impacts from our own
operations.
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Our transition toward our vision
In 2023, we continued to develop our roadmap toward
our biodiversity vision of a nature positive value chain in
close collaboration with Fauna & Flora. We have started
to create a systematic in-depth approach for our pro-
cesses to achieve no net loss (NNL) and a net positive
impact (NPI) in our own direct operations. In 2023, we
started the internal engagement by introducing the NPI
approach to various Neste teams to increase expertise
on biodiversity topics.
We have mapped the prioritized in-house processes
and started to implement the biodiversity NPI criteria
for them in practice: We have now included biodiversity
along with climate and other topics in our sustainability
vision in our major investment decision making process.
A comprehensive set of sustainability criteria was there-
fore considered and taken into account in the ongo-
ing Rotterdam refinery expansion investment. In addi-
tion, we have conducted NPI approach implementation
pilot projects with Fauna & Flora, in which we are learn-
ing what is required to execute our biodiversity vision in
business activities.
In 2023, Neste was selected to the initial target valida-
tion group for science-based targets (SBTs) for nature,
by the Science Based Targets Network (SBTN), which
is aiming to set the global standard for ambitious and
measurable corporate action on nature.
Neste also continued to participate in the World Busi-
ness Council for Sustainable Development’s (WBCSD)
Nature projects, focusing on collaboration in biodiver-
sity metrics development. This work has been especially
important for promoting biodiversity with our novel vege-
table oils (NVO) from regenerative agricultural practices.
On our sites in Porvoo and Naantali, we complemented
the biodiversity baseline inventory we conducted in 2022.
The most recent assessment was associated with the
planned development projects on the sites. Information
about the current biodiversity state, forming a baseline
for the sites to reach our biodiversity vision, helps us
understand the impact of any land use change.
Our evaluation of the biodiversity status on our sites
indicates that we have some vulnerable species and
habitats to protect on our land in Porvoo and Naantali,
even though the land is for the most part not considered
areas of high biodiversity value. Within the Naantali refin-
ery area, we have some areas that we have protected in
the past. The area is forest, voluntarily protected under
national legislation. The protected area is three hectares
of the total 300 hectares in Naantali. The other opera-
tional sites we own are in more industrial areas, with a low
likelihood of impacting areas of high biodiversity value.
Developing our NPI approach
with Fauna & Flora
As part of the no net loss (NNL) and net positive
impact (NPI) method development in 2023, we
conducted an NPI method pilot in two investment
projects. The pilots aimed to test our approach in
practice and collect lessons for preparing for the
larger implementation of the NPI methodology in
future investment projects. Piloting the approach
that we have developed with Fauna & Flora since
2022 is a key step on the path toward our vision of
creating net positive impacts for biodiversity from
new activities from 2025 onward. The implemen-
tation of the NPI approach and further develop-
ment of the methodology will be among the key
activities in the partnership with Fauna & Flora
in 2024.
Biodiversity risks
We have gained more understanding on biodiversity-re-
lated risks and opportunities through the transition of
our processes toward the vision of nature positive value
chains, and through a holistic materiality analysis, includ-
ing our direct operations and the value chain impacts.
The risk could materialize in raw material acceptability by
stakeholders or regulatory limitations that lead to a lack of
sufficient volumes of raw materials. Future requirements
for e.g., restoring and protecting biodiversity may also
impact on our operations and value chains. Our road-
map toward our biodiversity vision gives us an opportu-
nity to align our business with future requirements and
mitigate risks.
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Our approach to water risks
We follow the current water risk status with several tools.
The most recent water risk evaluation of Neste sites and
terminal locations was undertaken in 2023, based on the
WWF water risk filter tool, which enables both a site-spe-
cific and global review of the water risks at the physical,
regulatory and reputational levels. In addition to oper-
ational site evaluations, water risk evaluations covered
the raw material supply chains when water risks were
included in the biodiversity impact evaluations that were
started in 2021.
Neste has been evaluating the water stress status of
our own sites using a conservative approach. The results
indicate that there are several separate risk indicators
related to Neste locations that are at an elevated level.
These indicators include risks such as flooding, water
quality, ecosystem services and biodiversity importance.
However, the overall physical risks are at a low or mod-
erate level in all Neste operated sites.
The risks related to our operations have been assessed
to be low, but the potential pressure caused in the pricing
We find it indispensable to remain in dialog with key
external stakeholders to have a robust and practi-
cal approach for protecting biodiversity in business
activities.
In addition to our NPI methodology development,
Neste has followed the global methodology devel-
opment and participated in the Science Based Tar-
gets Network’s (SBTN) Corporate Engagement Pro-
gramme since 2021.
In 2023, Neste was selected for the initial target
validation group for science based targets (SBTs)
for nature by SBTN, which aims to set the global
standard for ambitious and measurable corporate
action on nature. Globally, only 17 companies are
invited to the target validation group to pilot a global
framework for setting targets, and measuring and
validating organizations’ nature work.
We have been applying the pilot methodol-
ogy and testing its feasibility in close collabora-
tion with SBTN, and scoped the opportunities for
future target setting according to the framework’s
pilot requirements. We completed our materiality
Neste selected for the initial target validation group
for science-based targets for nature
analysis according to SBTN guidance for upstream
and direct operations, and concluded that freshwa-
ter and land use aspects are material for biodiversity
and nature in Neste´s value chain.
Our priority is to ensure that the framework will be
practical so that it can be applied in the manufac-
turing industry and that it helps identify and mea-
sure the key impacts. It is essential for us that the
framework is well aligned with other initiatives, e.g.,
EU CSRD, and that the potential trade-offs are well
evaluated before targets are set. For example, the
transformation toward renewable and circular solu-
tions will often include the modification of existing
refineries, which is likely to require new land to be
brought into use within the refinery area. In such
cases, biodiversity impacts need to be considered
with other sustainability topics such as GHG emis-
sions reductions.
Neste will continue to participate in the SBTN ini-
tial target validation pilot in 2024.
Our most material nature
and environment topics
Water
Neste relies on water, and we recognize our role in work-
ing to protect freshwater ecosystems and improve water
access and efficiency. We believe that by implement-
ing water stewardship, we can also build more resilient
operations. Water-related aspects have been identified
as a material topic for us in the biodiversity materiality
assessment for our own operations and for our supply
chains. We are therefore working to update our approach
to water and related targets to complement our vision of
the nature positive value chain by 2040. In 2023, we
have been assessing our water-related impacts in each
site, as well as upstream, as part of our SBTN Initial Tar-
get Validation Pilot work. Understanding our impacts at
a local level is the first step toward meaningful action in
the future.
Water is used at our refineries in many ways. The pro-
cess water comes from freshwater sources. The rest of
the withdrawn water is used for cooling and is recircu-
lated to the source in a similar condition, only at a slightly
elevated temperature. Most of the water used for cool-
ing is brackish water. Neste does not undertake water
withdrawal from groundwater.
New wastewater treatment units were installed in Por-
voo in 2019 and in Singapore in 2023. A similar invest-
ment is under construction in Rotterdam and is expected
to be completed by the end of 2024. In Singapore, most
of the used process water is discharged into a public
sewer system for purification and further reuse.
In Neste’s supply chain, water is mostly used in raw
material extraction and cultivation and in raw material
processing. As part of our SBTN pilot work, we have
been mapping and evaluating our upstream freshwater
impacts.
of water resources, both water intake and wastewater
treatment, has been considered in operational finan-
cial planning in the long term. According to our com-
pany wide Environmental Management Principle, major
investment projects include an Environmental Compli-
ance Analysis and a compliance review when building
new production capacity or increasing current capacity.
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Land use
As a part of the SBTN Initial Target Validation Pilot group
work, we have been assessing and prioritizing our
land-related environmental impacts and estimating our
contributions to key environmental pressures across our
operations and value chains. Land-related aspects have
been identified as a material topic for us based on the
materiality assessment for both our own operations and
our supply chains. Neste’s raw material base relies on
sustainable use of natural resources, and the approach
to land use and, e.g., deforestation are the main aspects
that we need to develop with our stakeholders.
In developing the cultivation concepts for our novel
vegetable oils (NVO), we aim to avoid creating additional
demand for agricultural land. We have also been devel-
oping the sustainability indicators for the NVOs from
regenerative agricultural practices, in which protecting
and restoring the cultivation area biodiversity has been
identified as one of the main targets of these cultivation
concepts.
Mitigating deforestation risk in our supply chains
Neste takes a clear stand against any actions that cause
deforestation. We are committed to preventing defor-
estation in our own supply chains and require the same
of all our raw material suppliers. Neste actively strives
to manage its deforestation risk, and this effort is regu-
larly evaluated by the non-profit CDP, among others.
Neste is a member of the Consumer Goods Forum
Forest Positive Coalition, driving strengthened collab-
oration to prevent deforestation. We welcome further
collaboration over industry boundaries and with all our
stakeholders to ensure deforestation-free supply chains.
In 2023, Neste joined efforts with NGOs Proforest,
Solidaridad and Imaflora to promote more sustainable
and inclusive landscapes in the municipality of Novo
Repartimento, Para, a region in Northern Brazil that has
been affected by deforestation. Lasting until 2027, the
objectives of The Transamazonica Connections land-
scape initiative include reducing deforestation and GHG
emissions, preserving biodiversity, improving the liveli-
hoods of cattle producer families, meeting the require-
ments of the Brazilian Forest Code, and promoting bet-
ter agricultural practices. Thus far, Solidaridad has led
two forums, successfully bringing together a wide range
of actors, including ranchers, unions, cooperatives, the
town hall, secretariats and other public authorities. The
objective is to create together a roadmap to implement
more sustainable agricultural practices that will increase
efficiency and profit while keeping the forest intact.
We have been part of the Siak Pelalawan Landscape
Programme (SPLP) with the goal of protecting and
enhancing forests, peatlands and natural ecosystems in
Indonesia. The project has had several interventions —
for example, SPLP amplifies local initiatives by actively
supporting the community in the protection of commu-
nity forests, focusing on initiatives to secure the social
forestry status of the area and protect it from fire.
Neste works with expert organizations such as CORE
(the Consortium of Resource Experts) to continuously
manage its deforestation risks not only in its own supply
chain but more widely in the palm oil industry. Neste is
also cooperating with smallholders in the palm indus-
try to further develop their sustainability awareness and
expertise, as well as to improve traceability.
Read more about our engagement and
traceability within the palm oil sector on page 93.
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Environmental compliance
Environmental Management
Principle update
In 2023, Neste’s Environmental Management Princi-
ple was reviewed and amended to improve compliance
assurance and environmental performance in our oper-
ations by increasing the level of ambition in environmen-
tal management. In addition, the principle was updated
based on the Corporate Sustainability Reporting Direc-
tive (CSRD) requirements.
Environmental monitoring
Continuous ambient air quality monitoring and other
environmental programs like marine and groundwater
monitoring continued in the vicinity of the Porvoo refin-
ery and Naantali terminal.
Furthermore, according to the long-term ambient air
quality monitoring results, we expect to meet even the
most stringent air quality guideline values of the WHO
(2021) in the vicinity of the Porvoo refinery during nor-
mal operations. The EU is currently revising the Ambient
Air Quality Directive’s limit values, in which the long-term
ambition is to meet the WHO (2021) guideline values as
a part of the zero pollution vision for 2050.
The decommissioning of the Naantali refinery process
area was completed in 2023. Extended soil and ground-
water evaluations were started in cooperation with the
local authorities.
Material and energy efficiency
Our aim is to use energy, as well as other utilities, as
efficiently as possible. Energy efficiency plays a key role
especially in our production and logistics.
In Finland, we have made a commitment to the national
voluntary energy efficiency agreement scheme. During
the 2017–2025 agreement period, we aim to save 500
GWh compared to the 2014 level. In 2023, our energy
saving measures totaled 27.2 (42.6) GWh.
1)
Neste is continuously developing ways to use mate-
rials more effectively and finding solutions to minimize
and recover the amount of generated waste.
Waste in our own operations is handled by contracted
third parties locally, and our waste reporting is based
on data provided by them. We follow the local waste
legislation in our operations and are also continuously
seeking new opportunities to minimize the waste sent to
landfill and find new waste recovery solutions.
Environmental permit violations
In 2023, we had 13 environmental permit-related inci-
dents at refineries (10), terminals (2) and retail sites (1)
with limited local environmental impact only. One of the
incidents is related to different elements included in the
environmental permits of the Rotterdam refinery. The envi-
ronmental authorities have imposed orders subject to a
penalty on the Neste Rotterdam site. These orders relate
to certain air emission standards and related reporting
practices; the use and design of the flaring system and
safeguarding the use of scaffolding. No penalties based
on the orders imposed by the environmental authorities
have yet become payable. In addition, two alleged viola-
tions are currently subject to a criminal investigation. In
order to safeguard compliance, Neste makes efforts to
comply with the orders and is in close contact with the
authorities to address any issues relating to regulations
and potential violations.
1)
The savings consist of energy efficiency measures started during 2023, which have been scaled to cover the full year.
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Human rights
In line with the United Nations Guiding Principles on Business
and Human Rights, our Human Rights Principle sets the stan-
dards for a rights-based approach in all of Neste’s business
decisions. We expect all our suppliers and business partners to
respect internationally recognized human rights and to comply
with the minimum human rights requirements set out in Neste’s
Supplier Code of Conduct. Neste encourages and supports its
business partners to continually improve and develop beyond the
minimum to reach the human rights standards and expectations
set out in the Human Rights Principle.
We carry out ongoing human rights due
diligence to identify, assess and address
adverse human rights impacts.
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Our vision for a sustainable future
Neste’s human rights ambition is to create a more equi-
table and inclusive value chain by 2030, in which every-
one works with dignity.
We actively seek opportunities to collaborate with
our stakeholders to advance positive systemic change
and enhance our leverage to address the root causes
of adverse human rights impacts. In 2023, we contin-
ued to engage in the Nordic Business Network for
Human Rights (NBNHR), Consumer Goods Forum’s
(CGF) Human Rights Coalition, and the World Busi-
ness Council for Sustainable Development.
Read more about our collaborative initiatives
in the palm sector on page 93.
Respecting human rights
Ensure respect for human rights across Neste’s operations and value chains by carrying out ongoing human rights
due diligence to identify, assess and address adverse human rights impacts and communicate on our performance.
Reducing inequality
By 2030, reduce inequalities across the value
chain and address the root causes of systemic
human rights issues. Advance diversity, equity
and inclusion in our own businesses and
supply chains.
Living wages
Pay all of our employees at least a living wage,
take action to promote living wages in Neste’s
supply chains, and require strategic contractors
and suppliers to pay their employees a living
wage by 2030.
Children & education
Work together with our stakeholders to increase
children’s access to education by 2030, and
promote respect for children’s rights by actively
supporting and participating in initiatives aimed
at keeping children in school.
Responsible recruitment
Commit to and promote the Employer Pays
Principle, with implementation in high risk areas
by 2030, to ensure that no worker pays for a job
and the costs of recruitment are paid for by the
employer, not the worker.
Embedding respect for human rights
across the business
To meet our responsibility to respect human rights, we
implement an ongoing process of human rights due dil-
igence to identify, assess and address adverse human
rights impacts across our business operations and value
chains.
Stakeholder engagement is a key component of
Neste’s human rights due diligence, extending across
our operations, supply chains and communities. Read
more about the worker voice technology Neste uses to
engage with supply chain workers on page 85.
When assessing human rights risks, we pay special
attention to vulnerable groups such as women, children,
migrant workers and Indigenous peoples. In all cases,
we prioritize the wellbeing of our rightsholders.
1)
1)
Rightsholders are all individuals or social groups whose human rights may be impacted or affected by Neste’s business activities, operations, products or services.
Below we highlight some of our key activities in advanc-
ing respect for human rights throughout 2023.
Focusing on salient issues
Our Human Rights Principle outlines seven priority areas
for human rights at Neste: fair employment; health &
safety; equity, diversity & non-discrimination; children &
young workers; modern slavery; fair treatment; and eco-
nomic, social & cultural rights. These are Neste’s salient
human rights issues, that is, those issues that are at risk
of the most severe negative impacts through our activi-
ties or business relationships.
Every year we analyze the saliency of our human rights
impacts based on severity and likelihood. The assess-
ments evaluate our actual and potential impacts on
people throughout the value chain at a practical level.
Neste’s human rights ambition 2030
This enables us to monitor our progress, account for
any new risks resulting from changes in our business
and accurately focus and prioritize our work. We also
evaluate the effectiveness of our current measures and
assess whether existing practices are sufficient in scale
and complexity to address our salient issues. In 2023,
we held internal workshops to expand the depth and
scope of our saliency assessments for our oil products
and renewable raw material supply chains.
Human rights due diligence
for our own operations
Recognizing that our human rights impacts may change
over time as our business continues to grow and evolve,
we are committed to embedding ongoing human rights
due diligence across our own operations.
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Neste is committed to ensuring 100% of our own oper-
ations are covered by robust human rights due diligence
systems by 2025 in line with the Consumer Goods
Forum’s Maturity Journey Framework. In 2023, we
made progress on this commitment by conducting the
following assessments:
• We completed Sedex self-assessment questionnaire
(SAQ) for our refinery in Porvoo, allowing us to
thoroughly assess gaps in our management
systems and human rights due diligence. The same
assessments are ongoing for our Rotterdam and
Singapore refineries.
• In 2022, we carried out human rights due diligence
maturity assessments for Neste’s shipping
operations, which identified gaps in our visibility of
issues affecting seafarers working on our chartered
vessels. To improve our due diligence, we surveyed
all our time charter vessel partners on their human
rights and labor practices for Neste vessels in 2023.
We continue to use human rights criteria and assess-
ments to inform decision-making on strategic business
development, investments and innovation projects. For
example:
• Neste is evaluating algae pilot production. In 2022–
2023, we conducted human rights risk assessments
as part of the project planning phase. In 2023, we
also evaluated potential human rights risks and
mitigation actions of the possible construction and
operation of a pilot plant. In addition, we established
a feedback channel for local communities.
• In 2023, we partnered with external experts to
assess the human rights risks and impacts in our
potential supply chains for novel vegetable oils
(NVOs). The assessments consisted of in-depth desk
research and fieldwork, stakeholder engagement,
and recommendations for prevention and mitigation
strategies.
Embedding human rights due diligence at Neste
Neste has put in place ongoing management processes to identify,
prevent, mitigate and remedy adverse human rights impacts.
We continuously monitor and track the effectiveness of our
response, with transparent reporting and communication
on how impacts are addressed.
Policy commitment
Identify actual & potential impacts
Remedy adverse impacts Prevent & mitigate adverse impacts
Human rights due diligence for communities
Through our saliency assessments we identified the
need to enhance our understanding of Neste’s commu-
nity impact and engagement. In 2023, we carried out an
internal survey and workshops to map gaps in identify-
ing and mitigating impacts on the local communities sur-
rounding our operations. The survey covered a range of
sustainability topics, including environmental and social
risks, impacts on vulnerable groups such as women and
children, and community engagement and complaints
resolution practices. It also assessed positive practices
and impacts such as community development initiatives.
In 2023, we also carried out a stakeholder study to
engage with the communities surrounding our Porvoo
refinery. The study is conducted biennially to assess
local community perspectives on our refinery’s environ-
mental, social, and safety impacts and communications.
Human rights due diligence
for supply chains
The Neste Supplier Code of Conduct defines minimum
human rights requirements for all our suppliers and busi-
ness partners, who are also required to undergo a robust
human rights assessment before they can partner with
Neste. Our sustainability audits have a strong human
rights focus and prioritize the assessment of impacts on
people. Read more about the audits carried out in 2023,
including a summary of key findings on page 90.
We also assess human rights risks when planning to
enter new sourcing regions for our renewable raw mate-
rials. In 2023, we started collaborating with third-party
experts at the Solidaridad Foundation to assess the
human rights impacts associated with our Brazilian sup-
ply chains. The assessment consists of field research
and gender-sensitive interviews with different groups of
rightsholders, including representatives of Indigenous
communities.
In 2023, we enhanced our due diligence for extractives
suppliers in Neste’s Indirect Procurement supply chains
by expanding our tendering survey to include stronger
human rights criteria. Read more on page 89.
Human rights due diligence for contractors
In 2023, we continued to work proactively to prevent
exploitation and promote respect for labor rights across
our production sites. We pay special attention to safe-
guarding the rights of migrant workers and employees
working for contractors and subcontractors on Neste
sites, especially during peak times such as our expan-
sion projects and turnarounds. We use a range of prac-
tices to uphold worker rights and address their con-
cerns, including contractor social audits, social toolbox
meetings, and worker complaints channels. Read more
on page 84.
Training and capacity building
Understanding that impact assessments and social
audits alone are insufficient for tackling human rights
risks, we are also committed to training our employees
and suppliers in human rights and labor standards. All
our employees are required to complete a mandatory
Code of Conduct e-learning course, which includes top-
ics on advancing respect for human and labor rights.
Human rights training is also integrated into our global
induction for all new Neste employees, as well as our
Supplier Code of Conduct e-learning course for selected
employee groups. We also carry out sustainability capac-
ity building for our suppliers, which covers a variety of
human rights topics. Read more on page 90.
Neste is committed to ensuring 100% of our own operations are
covered by robust human rights due diligence systems by 2025.
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Responsible recruitment
Neste is committed to advancing responsible recruit-
ment in our operations and value chains, to ensure fair,
ethical and transparent recruitment processes that pro-
tect the rights and wellbeing of jobseekers. In 2023,
Neste took various actions to drive responsible recruit-
ment, including:
• Adding no-recruitment-fee clauses to contracts
with recruitment agencies and staffing firms used by
Neste.
• Strictly enforcing Neste’s Supplier Code of Conduct
no-recruitment-fee policy in sustainability audits
conducted on suppliers of renewable raw materials.
For example, in 2022, we identified that workers
employed by one of our suppliers in the Middle East
had paid recruitment fees. We worked closely with
our supplier to develop time-bound remedial actions,
ensuring that by early 2023, all fees had been fully
reimbursed to the affected workers.
• Auditing the migrant worker recruitment agencies
used by one of Neste’s suppliers in both their
sending and receiving countries.
• Using anonymous worker voice surveys to improve
our visibility on recruitment practices affecting supply
chain and contracted workers.
• Using posters, induction training, and regular social
toolbox meetings to educate the migrant workers
employed by contractors operating on Neste sites
about their labor rights and to encourage them to
report concerns directly to Neste.
In addition, through our participation in the Consumer
Goods Forum’s People Positive Palm Project, we pro-
vide training for Neste’s PFAD suppliers to help strengthen
their management systems for responsible recruitment.
As part of this project, we are also engaging in collec-
tive advocacy with the governments of Malaysia and the
sending countries of migrant workers, supported by the
Fair Labor Association (FLA) and the UN International
Organization for Migration (IOM).
Neste supports the elimination of all forms of modern
slavery and we are committed to taking the appropriate
steps to identify vulnerable workers and mitigate modern
slavery risks in our operations and supply chains. Read
more about the steps we are taking to address modern
slavery risks in our annual Modern Slavery Statement.
Site-level complaints
channels for contracted workers
In 2023, Neste established permanent site-level
complaints channels at its refineries to address
concerns of contracted and subcontracted work-
ers, including migrant workers. These channels,
accessible via QR codes on posters discreetly
placed around the sites, enable workers to sub-
mit anonymous complaints directly to Neste. The
posters inform workers of their rights in various
languages and use illustrations and simple termi-
nology to encourage them to report situations in
which they may be experiencing exploitation.
Neste actively promotes the channels and edu-
cates workers on their labor rights during site-en-
try-permit induction and social toolbox meetings.
The complaints are received and managed by
local committees. Workers also have the option
to report concerns directly to supervisors, or to
use Neste’s company-wide Ethics Online whis-
tleblowing channel. All channels guarantee confi-
dentiality and protection from retaliation.
Did you have to pay
someone to get your job?
CONTRACT
Are you being forced to
work without pay?
Has your ID or passport
been taken away?
Are you being verbally or
physically abused or threatened?
Does someone else control
your bank account?
Do you have bad
housing conditions?
All people have the right to be treated with dignity. If you experience any
of these conditions, you may be in a situation of forced labour.
Wszyscy ludzie mają prawo do godnego traktowania. Jeśli dotyczy Cię któryś z poniższych
warunków, możesz znajdować się w sytuacji pracy przymusowej.
Alle mensen hebben het recht om waardig behandeld te worden. Als u één van deze
omstandigheden ervaart, bevindt u zich mogelijk in een situatie van dwangarbeid.
At Neste, We Care
Did you have to pay
someone to get your job?
Czy musiałeś(-aś) komuś zapłacić,
żeby dostać pracę?
Czy jesteś zmuszany(-a)
do pracy bez zapłaty?
Czy odebrano Ci dowód
osobisty / paszport?
Czy doświadczasz słownego
lub fizycznego znęcania lub gróźb?
Czy ktoś inny kontroluje
Twoje konto bankowe?
Masz złe warunki
mieszkalne?
Moest u iemand betalen
om uw baan te krijgen?
Wordt u gedwongen te
werken zonder salaris?
Is uw ID-kaart/paspoort
afgenomen?
Wordt u verbaal/fysiek
mishandeld of bedreigd?
Controleert iemand anders
uw bankrekening?
Leeft u in slechte
woonomstandigheden?
Are you being forced to
work without pay?
Has your ID/passport
been taken away?
Are you being verbally/physically
abused or threatened?
Does someone else control
your bank account?
Are you living in bad
housing conditions?
You can anonymously report
any concern about your
employment or working
conditions using the Neste
complaints channel. To
make a report, scan the QR
code using your phone’s
camera or go to bit.ly. Your
report will be taken seriously
and investigated
confidentially.
Możesz anonimowo zgłosić
jakiekolwiek wątpliwości związane
z Twoim zatrudnieniem lub
warunkami pracy, korzystając z
kanału zażaleń Neste. Aby utworzyć
raport, zeskanuj kod QR, korzystając
z aparatu swojego telefonu,
lub przejdź do bit.ly. Wszystkie
raporty zostaną potraktowane
poważnie i poufnie sprawdzone.
U kunt uw bezorgdheid over
uw arbeidsomstandigheden
anoniem melden via het
Neste-meldpunt. Scan de
QR-code met de camera
van uw telefoon of ga
naar bit.ly om een melding
te maken. Alle meldingen
worden serieus genomen
en vertrouwelijk onderzocht.
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Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Living wages and incomes
In 2023, Neste completed its first internal living wage
gap assessments covering all countries in Neste‘s global
operations, using data provided by the Fair Wage Net-
work. The analysis of the assessment results will con-
tinue in 2024, ensuring a thorough evaluation of diverse
remuneration elements in all locations. We are com-
mitted to a learning-by-doing approach, continuously
enhancing our expertise and refining our methodologies
throughout our living wage journey.
In 2023, we added farmer prosperity KPIs to our pilot
projects for Novel Vegetable Oils (NVOs), and carried out
an assessment to measure the additional farmer income
generated from producing NVO crops, validated through
field research and farmer interviews.
We continue to use living wage data in our onboard-
ing process and sustainability audits for renewable raw
material suppliers, with the dual aim of gaining a better
understanding of our supplier wage practices and rais-
ing awareness to build supplier knowledge of this topic.
Thus far, we have assessed the wage practices of 8
renewable raw material suppliers. In 2023, we hosted a
living wage training session for our PFAD suppliers and
offered them support in starting their own living wage
gap assessments.
Through our participation in the WBCSD Equitable
Livelihoods project, we are collaboratively working to
accelerate action to improve farmers’ incomes in our
global supply chains by participating in workshops and
peer learning, and contributing input to the development
of a Living Income Business Toolkit.
Children and youth
Neste is committed to respecting and supporting chil-
dren’s rights and to implementing the Children’s Rights
and Business Principles throughout our business and
value chains. We were recognized as a Leader in Global
Child Forum’s children’s rights and business benchmark,
The State of Children’s Rights and Business 2023. The
report ranked Neste among the top 15 companies out
of the 795 benchmarked globally, recognizing us for set-
ting a positive example for the whole energy and utilities
sector.
In 2023, we worked in collaboration with SOS Chil-
dren’s Villages India to support vulnerable families and
improve children’s lives through education and life skills
training in Kolkata, Nagapattinam and Bawana. Through
this partnership, SOS Children’s Villages also offers
guidance and local expertise to deepen Neste’s under-
standing of children’s rights issues in our supply chains
in India. In 2023, SOS Children’s Villages conducted
training sessions on children’s rights for Neste employ-
ees. They also reviewed and provided feedback on the
results of our worker voice surveys for renewable raw
material suppliers in India.
Read more about our broader activities to advance
respect for children’s rights throughout our business.
Reducing inequality
Neste has made a commitment to reduce inequality and
address systemic human rights issues across our value
chains.
Worker voice
Engaging directly with workers enhances Neste’s visi-
bility of issues impacting rightsholders on the ground,
enabling more targeted and effective human rights due
diligence. In 2022–2023, we launched and implemented
worker voice technology in Neste’s operations and sup-
ply chains to scale up our worker engagement. The
technology uses an audiovisual survey to enable direct
and anonymous engagement with workers on mobile
devices. The survey provides insights into various topics
affecting workers employed by our suppliers and con-
tractors – for example, inequality, living wages, recruit-
ment fees and children’s access to education, all pri-
ority areas in Neste’s human rights ambition for 2030.
Since launching the technology, we have conducted
215 anonymous worker voice surveys across the Mid-
dle East, US, India and Finland.
Supplier diversity
We understand that inclusive procurement initiatives play
a crucial role in tackling inequality by fostering oppor-
tunities for businesses owned by underrepresented
groups and addressing systemic disparities in access to
resources and opportunities.
In 2023, we started taking steps to understand our
spend on diverse businesses, small businesses and
social enterprises. We initiated a pilot assessment to
map the number of small businesses used in our sourc-
ing of renewable raw materials. We also developed ques-
tions to give our renewable raw material and indirect
procurement suppliers an opportunity to voluntarily dis-
close to Neste if they are diverse businesses. We classify
businesses as diverse if they are at least 51% owned and
operated by individuals from underrepresented groups,
including ethnic and racial minorities, women, LGBTQI+
persons, and people living with disabilities.
WBCSD Business Commission
to Tackle Inequality
Neste is a member of the WBCSD Business Com-
mission to Tackle Inequality (BCTI). In 2022–2023, we
helped shape and develop the BCTI’s flagship report,
Tackling Inequality: An Agenda for Business Action,
outlining key actions for individual companies to take
in contributing to global efforts to address mounting
inequality. Throughout 2023, we were also active in var-
ious BCTI working groups, masterclasses and roundta-
ble discussions, to jointly address systemic issues and
create more impactful solutions for tackling inequality
that go beyond our individual efforts.
Reporting
Since 2021, we have been reporting in accordance with
the United Nations Guiding Principles on Business and
Human Rights (UNGP) Reporting Framework.
Read more about the framework index for 2023
on page 114.
Economic, social
& cultural rights
Fair
treatment
Fair
employment
Children &
young workers
Modern
slavery
Equity, diversity &
non-discrimination
Health &
safety
Our most salient human rights issues
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Supply chain and raw materials
Our vision is to drive a safe and healthy workplace,
fair labor practices and increased commitment to
sustainability across the supply chain.
Our commitments to responsible and ethical business
depend not only on our own people but on forming
relationships with business partners who share these
commitments. Neste’s Supplier Code of Conduct,
updated and implemented in 2020, outlines the basic
requirements Neste expects its suppliers and their first
tier suppliers, contractors and business partners to
adhere to and implement throughout their businesses.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Neste’s Supplier Code of Conduct is included in the
terms of contracts with all suppliers, contractors and
other business partners participating in the delivery of
any raw materials, products, components, materials
or services to Neste, covering both direct and indirect
procurement. Companies consolidated through merg-
ers and acquisitions are also expected to implement the
Neste Supplier Code of Conduct in their sourcing.
In 2023, 100% (99%) of the renewable raw mate-
rial volumes, 86% (84%) of the crude oil and fossil raw
materials volumes and 91% (73%) of overall indirect con-
tracted spend were covered by the Neste Supplier Code
of Conduct or equivalent
1)
.
We carry out training and provide a guide with prac-
tical recommendations to support the implementation
and help our suppliers meet their obligations to comply
with the Supplier Code of Conduct. In 2023, we intro-
duced two new language versions (Spanish and Chi-
nese) of this guide for our suppliers.
We have an e-learning course for our employees out-
lining the main elements of the Supplier Code of Con-
duct and describing how to report potential violations.
Sustainability risk assessment
in our supply chains
Assessing sustainability risks in our supply chains begins
before agreements have been signed or raw materials,
products, components, materials or services are deliv-
ered. To ensure our suppliers’ compliance with the Sup-
plier Code of Conduct, Neste has implemented system-
atic controls for counterparty screening and monitoring,
during which potential business partners undergo auto-
mated screening. Counterparties are screened for
economic sanctions and similar compliance issues
and selected ethical concern categories in third-party
enforcement databases and major news outlet sources.
1)
After the assessment of the supplier’s or business partner’s own policies and principles, Neste may agree that compliance
with their own code of conduct is sufficient for the purpose of complying with the Neste Supplier Code of Conduct.
Neste’s suppliers and
business partners are expected
to comply with requirements
set by Supplier Code of
Conduct for five elements:
Compliance
with laws and
regulations
Business
conduct
Occupational
health, safety
and security
Environmental
impact and climate
change
Human and
labor rights
All Neste’s raw material suppliers are subject to addi-
tional sustainability due diligence. Neste uses a risk-
based approach to determine the type of assessment,
which can include desktop reviews, the mapping of sup-
ply chains and operations, supplier engagement and sus-
tainability audits. The risk-based approach uses country
risk as one element of the risk assessment. Knowing
the origin of our raw materials is a fundamental supplier
requirement. Where possible, our aim is to gain visibility
throughout the raw material supply chain, including our
suppliers’ suppliers.
Assessing country risks
A key element in understanding the sustainability risks
in our supply chains is assessing country risks. We use
a bespoke, industry-leading country risk assessment
methodology from Verisk Maplecroft to identify coun-
tries or geographical areas in which we operate and
have raw material supply chains with high sustainabil-
ity risks. We maintain an up-to-date country risk cate-
gorization based on country risk indices such as ethi-
cal business practices, human and labor rights, health
and safety, and the environment. Our categorization also
includes a list of no-go countries and regions based on
considerations including trade sanctions, conflicts and
sustainability risks. The country risk assessment allows
us to effectively prioritize our activities by identifying the
most significant sustainability risks in certain countries or
geographical areas.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Renewable raw materials sourcing
All our renewable raw material suppliers are subject to
rigorous sustainability due diligence, as stated in Neste’s
Supplier Sustainability Approval Principle. The Princi-
ple applies worldwide to any Neste company which is
establishing a business relationship with a supplier of
renewable raw material for Neste’s renewable prod-
ucts. It sets the minimum sustainability requirements for
approving suppliers through a five-step process, includ-
ing raw material evaluation, risk assessments, counter-
party screening, a sustainability review and audits.
We verify suppliers’ compliance with Neste’s Supplier
Code of Conduct with the sustainability review, encom-
passing a comprehensive range of topics such as gov-
ernance, labor standards and practices, human rights,
the environment and health and safety.
We continue commercial negotiations only with
approved parties that meet our sustainability require-
ments, and all partners must continue to meet these
criteria and commit to developing their operations in
the future. Our overall approach to advancing sustain-
ability due diligence throughout the supplier relation-
ship is to work with our suppliers to drive positive prac-
tices and mutually enhance sustainability performance
through continuous engagement, collaboration and
improvement.
The validity period of the sustainability approval for a
supplier is three or five years, depending on, e.g., coun-
try risk, raw material volumes supplied to Neste and the
outcome of the sustainability review. Once the validity
period expires, the supplier undergoes a new review.
Neste’s sustainability due diligence process is mainly
managed on Neste’s Supplier Sustainability Portal (SSP),
a digital platform that is used to facilitate our evaluation of
potential and existing renewable raw material suppliers,
1.
Raw material
evaluation
2.
Country and
raw material
risk assessment
3.
Counterparty
screening
4.
Sustainability
review
5.
Sustainability
audits
Sustainability due diligence process for renewable raw material suppliers
support performance monitoring and enable active sup-
plier engagement. SSP covers all Neste’s renewable raw
materials suppliers and their data, e.g., on deliveries and
volumes, raw materials, certifications and GHG values.
Suppliers are also required to insert the location of their
own production and processing site(s), and where appli-
cable, their own suppliers’ production and processing
site(s), to SSP. As a minimum, we require our suppliers
to disclose their supply chain actors and locations as
determined by end-market sustainability regulation such
as EU RED and EPA RFS.
Neste’s Supplier Sustainability Portal was implemented
fully in 2020. In 2023, the total number of renewable
raw material suppliers onboarded against sustainability
criteria was 388. In 2023, we introduced an enhanced
sustainability review in SSP to better address suppli-
er-specific sustainability risks. This work will continue in
2024.
Liquefied waste plastics sourcing
In 2023, we continued defining sustainability criteria for
liquefied waste plastic suppliers and onboarded new
suppliers.
In addition to requiring our liquefied waste plastic sup-
pliers to fulfill the requirements in the Neste Supplier
Code of Conduct, we only accept liquefied waste plastic
that is traceable and complies with the ISCC Plus certi-
fication requirements.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Crude oil and other fossil
raw material sourcing
As we are transforming from a traditional oil refiner into
a provider of renewable and circular solutions, we con-
tinue to produce high-quality oil products from crude oil
and condensates at our Porvoo refinery in Finland. In
2023, we completed the strategic study on transitioning
our Porvoo refinery into a leading renewables and circu-
lar solutions refining hub. Read more about this transfor-
mation on page 70.
Neste is purely a buyer of crude oil; we do not own
shares in any company producing crude oil, nor are we
engaged in oil exploration or drilling. Additionally, we do
not purchase crude oil from Arctic sea areas, sanctioned
countries or conflict areas.
The due diligence process for our crude oil and other
fossil raw material suppliers includes a country risk
assessment and a counterparty screening. We also con-
duct a sustainability review of all new suppliers based on
publicly available information regarding topics outlined in
the Neste Supplier Code of Conduct, suppliers’ climate
and environmental commitments, and crude oil produc-
tion-specific issues such as flaring and spills. The sus-
tainability review is renewed for fossil raw material sup-
pliers every three years.
In 2023, a total of 46 suppliers were assessed. We
continued to assess all new suppliers and potential sup-
pliers from countries identified as high risk in our country
risk assessment.
For ethanol suppliers from higher-risk countries, the
sustainability due diligence includes an evaluation on
production plant details and raw material origins.
Read more about Neste’s sustainability due
diligence on page 87.
In 2023, we further continued to develop the sustainabil-
ity due diligence for fossil raw material suppliers. We also
continued to monitor the oil and gas industry’s action
to reduce the carbon intensity (CI) of crude oil produc-
tion, including those grades we purchase and evaluate.
As the data become more transparent and reliable, for
example, with industry analysts developing independent
evaluation methods, we study and analyze how crude
oil carbon intensity can be a factor in evaluating and
choosing different crude oils.
Indirect procurement
Neste’s indirect procurement is responsible for the sourc-
ing, purchasing, contract and supplier management of
goods and services that are not included in the sourcing
and delivery of refined crude oil or renewable and recy-
cled raw materials. In 2023, we further integrated sus-
tainability into indirect procurement, building on prior risk
assessments and studies. Key actions included:
• Mapping strategic priorities and launching a
development plan for embedding sustainability
requirements into each stage of our sourcing,
purchasing, and supplier management process.
• Piloting the use of sustainability due diligence
clauses in supplier contracts.
• Carrying out workshops on sustainability topics,
identifying key human rights risks and opportunities
for supply chain emissions reductions, and mapping
priority actions for improving sustainability due
diligence.
• Developing a standardized sustainability survey
for use in our tendering process, with the aim of
ensuring consistent and comparable sustainability
data in supplier evaluation and selection globally.
• Strengthening our due diligence for extractives
suppliers by incorporating additional environmental
and human rights questions in the tendering process
for high-risk sectors.
• Driving action on Neste’s climate commitments
by directly engaging with suppliers to enhance
our understanding of the measurement accuracy
of scope 3 emissions data and product carbon
footprint (PCF). Read more on page 72.
Sustainability audits
Neste carries out audits to mitigate sustainability risks in
the supply chains. When selecting suppliers to be audited,
we pay special attention to suppliers, raw materials or
countries with the highest sustainability risks. Sustain-
ability audits are one way of verifying that our suppliers
comply with the Neste Supplier Code of Conduct. All the
audits follow the requirements set in the Neste Sustain-
ability Audit Standard, published in 2021. After the audit,
we follow up cases of non-compliance and require our
suppliers to remediate significant open issues within a
specified timeframe. The sustainability audits are con-
ducted either by our own local sustainability specialists
or a third-party auditor. Where possible, we also con-
duct audits on our suppliers’ suppliers (second-tier sup-
pliers or even beyond).
We conduct a sustainability review of all new
crude oil suppliers. The review is renewed for
fossil raw material suppliers every three years.
Crude oil and fossil feedstock
sources by region, million tons
20212020 2022 2023
10
15
0
12.7
11.7
14.0
10.1
Norway
Russia
1)
USA
United Kingdom
Other countries
1)
At the start of the war in Ukraine, Neste decided
to stop using Russian crude oil entirely and
started replacing it with other qualities.
5
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Audit findings – different
sustainability categories
renewable raw material suppliers, %
In 2023, we conducted a total of 154 sustainability
audits: 54 on renewable and recycled raw materials; 31
on terminals; and 69 contractor audits. Of the total, 51
audits were carried out for renewable raw material sup-
pliers, of which 16 were on site, 7 were virtual, and 28
were third-party audits. In 2023, 30 audits were con-
ducted on our direct renewable raw material suppliers
and 21 on our renewable raw material suppliers’ suppli-
ers. The majority of the audit findings recorded in renew-
able raw material supplier audits in 2023 were related to
health & safety.
In 2024, we aim to strengthen sustainability due dili-
gence practices by increasing the number of audits with
a key focus on suppliers with the highest risks and most
significant strategic importance.
Supplier engagement
Neste is committed to driving a safe and healthy work-
place, fair labor practices and increased sustainability
commitment across the supply chain. We understand
that due diligence processes and sustainability audits
alone are insufficient for a positive impact in our value
chain. We therefore engage regularly in capacity building
with our suppliers. The topics covered with our suppliers
over the years have included the Neste Supplier Code
of Conduct requirements, sustainability policy develop-
ment, due diligence, traceability and grievance manage-
ment. We are also committed to training our employees
on our policies.
In 2023, we conducted capacity building training for
our renewable raw material suppliers in Asia, Ocea-
nia, the Americas and EMEA. The main topics this year
focused on environmental management and health and
safety. Neste invited its active suppliers and encouraged
main suppliers to invite their suppliers to the training. A
selection of potential future suppliers was also invited to
participate. For example, health and safety was selected
this year as the main topic of the supplier capacity build-
ing, as the majority of the findings of the renewable raw
material supplier audits in 2022 was related to safety
practices.
Health & Safety
Human and Labor Rights
Environment
Ethical Business Practices
10%
35%
7%
48%
In addition, Neste organized capacity building on the
Neste Supplier Code of Conduct requirements to its main
contractors at the Rotterdam refinery and to selected
renewable raw material suppliers. The training sessions
focused on regulatory compliance, business conduct,
human and labor rights, environmental impact and cli-
mate change, as well as occupational health and safety.
More than 130 raw material suppliers and contractors
joined the different capacity building sessions with over
275 participants globally.
Read more about our engagement
with PFAD suppliers on page 93.
Grievances and concerns
in the supply chain
We take seriously and investigate all complaints and
allegations of suspected sustainability violations. This
includes any suspected breaches of the Neste Sup-
plier Code of Conduct or Responsible Sourcing Prin-
ciple. Engagement and cooperation with our suppliers
and contractors are our primary ways of addressing any
grievances and concerns. Ending purchases does not
necessarily solve the problem, while by working with our
suppliers, we can work for improvements. If the sustain-
ability criteria or contractual requirements included in our
contracts have been verifiably breached, their nature is
considered serious, and progress to resolve those issues
is not made in a reasonable time, we will terminate our
contract with the supplier or contractor in question.
We process the grievances by:
• Reviewing the grievance and its relevance to our
supply chains.
• Conducting a thorough and impartial investigation
of the grievance, and depending on the severity,
selecting the course of action (e.g., engagement
with the supplier, audits).
In 2023, we conducted a total of 154 sustainability
audits on our raw material suppliers, sub-suppliers,
terminals and contractors.
• Implementing immediate actions to address any
urgent or critical issues identified during
the investigation.
• Requiring a detailed plan with a timeline
for corrective actions from the supplier.
• Cooperating with the supplier and other stakeholders
to help develop operations and perform necessary
corrective actions, and monitor the outcomes.
• Reporting on the progress online.
• Ending purchases if we do not see adequate
progress, or if the supplier loses relevant
certifications.
• Reviewing, improving and adjusting our processes
where needed.
We publish monthly grievance log updates related to our
renewable raw materials on our website, and track and
publicly disclose the number and type of grievances that
have been raised in person or via our Ethics Online
whistleblowing channel.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Renewable raw materials
Neste uses a wide variety of sustainably produced
renewable raw materials each year to produce renew-
able fuels, e.g., for the road transport and aviation sec-
tors as well as renewable feedstock for the production
of polymers and chemicals. Neste is particularly focused
on waste and residue raw materials; in 2023, their share
was 92% of Neste’s total renewable raw material inputs
globally.
We source renewable raw materials globally for our
renewables refineries in Finland, the Netherlands and
Singapore, and for our joint operation in California in the
United States. One of our competitive advantages is our
capability of efficiently sourcing, transporting and flexibly
using various mixes of renewable raw materials to pro-
duce a wide range of high-quality renewable products
with our proprietary NEXBTL™ refining technology.
Another advantage is our unique capability of pretreat-
ing low-quality raw materials to remove impurities. This
enables us to use even lower-quality waste and residue
raw materials.
Extensive portfolio provides flexibility
Animal fat from food industry waste, used cooking oil,
and various wastes and residues from vegetable oils
processing represent the top three waste and residue
raw material categories we use, based on their current
and estimated shares of Neste’s total annual renewable
raw material inputs. However, the proportions of individ-
ual raw materials in Neste’s refining, vary from year to
year, depending on their availability, price and specific
market requirements, for example. Other waste and res-
idue raw materials in our portfolio include fish fat from
fish processing waste, tall-oil-based raw materials, tech-
nical corn oil, food waste and acid oils.
In addition to waste and residues, Neste uses smaller
amounts of sustainably produced vegetable oils as
renewable raw materials. The share of vegetable oils
of our renewable material inputs in 2023 was 8%, with
palm oil representing around 2%. In line with its target
communicated in 2021, Neste reduced its refinery inputs
of conventional palm oil (crude and refined palm oil) to
zero at the end of 2023 and does not plan to use them
as raw materials in the future. The share of waste and
residue raw materials is expected to stay above 90%
of Neste’s global renewable raw material inputs in the
coming years, while in the longer term, the growth in
novel vegetable oils’ availability may increase the share
of sustainably produced vegetable oils.
An extensive portfolio of globally sourced renewable
raw materials provides flexibility and allows us to respond
to the needs of different markets and customers. None
of the raw materials in our portfolio individually represent
the majority share of the total annual inputs.
In 2023, we used a total of 4.3 million tons of renew-
able raw materials, with a continued focus on developing
new sources of raw materials and technologies enabling
their use, while growing the existing raw material pool
toward lower-quality grades.
Strengthening our sourcing capability
Neste’s renewable raw material supply was substantially
strengthened in 2023, despite the uncertainties caused
by the volatile raw material market. We continued to
expand our renewable raw material sourcing capabil-
ity in our existing and new markets such as India and
Renewable raw material
inputs globally, million tons
20212020 2022 2023
3
4
5
2
1
0
Waste and residues
Vegetable oils
3.6
4.3
1)
3.7 3.7
The volumes are presented in millions of tons.
The share of the volumes are calculated from exact figures
and consequently the rounded figures presented may
deviate from the share of volumes disclosed.
Brazil. We are focusing on waste and residue raw mate-
rials such as animal fat waste and used cooking oil in
these markets.
In 2023, Neste acquired a used cooking oil collection
and aggregation business from Crimson Renewable
Energy in the United States. In addition, the success-
ful integration and continuous expansion of activities of
Mahoney Environmental, a leading collector and recycler
of used cooking oil, and Agri Trading, one of the largest
independent renewable waste and residue fat and oil
traders in the United States, both acquired by Neste in
2021, has helped us gain access to a substantial vol-
ume of used cooking oil and grow our raw material sup-
ply chain in North America.
In Europe, Neste increased its ownership of Neste
Demeter B.V. to 80% of the company. Neste has also
agreed to acquire the remaining shares of Neste Deme-
ter B.V. over the next few years as agreed with the
minority shareholders. As one of the largest animal fat
waste traders in Europe, Neste Demeter is an important
part of our raw material supply and our strategy of build-
ing a global waste and residue raw material platform to
secure raw material availability and competitiveness.
Neste’s renewable and circular solutions helped to replace
3.0Mt of non-renewable resources in transport, aviation
and polymers and chemicals sectors in 2023.
1)
Includes Neste’s share of raw material inputs for
Martinez Renewables joint operation
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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Vegetable oils
In 2023, the share of conventional
vegetable oils was approximately 8% of our
global renewable raw material inputs. In the
longer term, the growth in novel vegetable
oils’ availability may increase the share of
sustainably produced vegetable oils. Neste
reduced its refinery inputs of conventional
palm oil to zero at the end of 2023.
Extensive portfolio
of renewable raw materials
Used cooking oil (UCO)
UCO consists of oils and fats of a
vegetable or animal origin that have been
used by the food industry or restaurants to
cook food for human consumption. UCO
is considered waste, as it is no longer fit
for human consumption for food hygiene
reasons.
Animal fat from
food industry waste
Animal fat is derived from the food
industry’s meat processing waste. Neste
sources mixed animal fat waste that is
unsuitable for human consumption.
Vegetable oil processing
waste and residues
Many vegetable oil processing wastes and
residues can be used as raw materials
to produce Neste’s renewable products,
including palm fatty acid distillate (PFAD),
spent bleaching earth oil (SBEO), empty
fruit bunch oil (EFBO) and palm oil mill
effluent (POME).
Other waste and residues
Our raw material portfolio also includes
fish fat from fish processing waste, tall oil-
based raw materials, food waste, technical
corn oil and acid oils.
Read more about our renewable raw materials
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Engaging with PFAD suppliers
Neste participates in several collaborative efforts to
advance positive social and environmental impacts in
the palm sector. Neste is a member of the Palm Oil Col-
laboration Group (POCG) and has participated in its
Social Issues Working Group (SIWG) since the initiative
was launched in 2020. Neste is also a member of the
Consumer Goods Forum (CGF) Forest Positive Coali-
tion and Human Rights Coalition. In 2023, Neste contin-
ued to participate in SIWG subgroups advancing action
on Responsible Recruitment in Malaysia, and Human
Rights Due Diligence in Supplier Management Systems.
Neste supports smallholders in the palm oil industry to
develop their sustainability awareness and expertise, as
well as to improve traceability. In 2023, Neste collabo-
rated with its supplier to support a smallholder capacity
building initiative in Indonesia. The program aims to pro-
vide comprehensive support to smallholders and agents
buying from farmers to adopt sustainable agricultural
practices and improve traceability to plantations in the
supply chain. The series of capacity building and men-
toring will teach smallholders to improve their cultiva-
tion methods and prepare them to register for the ISPO
(Indonesian Sustainable Palm Oil) and RSPO (Roundta-
ble on Sustainable Palm Oil) certifications.
Neste is one of the eight companies driving the sus-
tainable palm oil landscape program in the Siak and
Pelalawan districts in Indonesia via the Siak Pelalawan
Landscape Programme (SPLP). The SPLP is a collab-
orative effort at a landscape level that aims to ensure a
positive sustainability impact in the region by addressing
environmental and social issues in the communities. The
work is implemented by Proforest and Daemeter, with
close collaboration with the district governments, as well
as NGOs. In 2023, the work included several sub-proj-
ects covering the environment, biodiversity, human
rights, stakeholder and government engagement.
Read more about the recent activities
in the Siak Pelalawan Programme.
Sustainability workshops
for PFAD suppliers
We have arranged annual workshops for our PFAD and
palm oil suppliers since 2014 to foster dialog and clarify
Neste’s sustainability requirements and expectations.
In August 2023, we arranged our latest two-day sus-
tainability workshop, with more than 20 of our PFAD
suppliers and sub-suppliers from the APAC region
attending the event. This time, we focused heavily on
regulation and compliance such as the EU Regulation
on Deforestation-free Products (EUDR) and Human
Rights Due Diligence (HRDD). Other topics included
the promotion of living wages in our supply chains
and discussing the Neste Responsible Sourcing Prin-
ciple and Supplier Code of Conduct requirements.
Read more on our website.
PFAD supply chain traceability
Since 2017, we have been working toward a target of
developing traceability for our entire PFAD supply chain
to palm oil plantations. This has required us to map large
parts of previously unmapped palm oil supply chains,
and we have made significant progress since we started
the work. When mapping the supply chain to the planta-
tions, publicly available data (e.g., on RSPO, ISCC, ISPO
certifications) and supplier reporting have been used.
During 2023, we were able to independently map and
validate 100% (100%) of our PFAD supply chain to the
supplying palm oil mills and 93% (86%) all the way to
plantations. With the newly adopted European Union
Deforestation Regulation (EUDR), and building on our
long-term work developing PFAD supply chain traceabil-
ity, we are further enhancing our traceability efforts to be
in line with the scope and requirements of the regulation.
1)
Based on risk-calibrated Traceable to Plantation approach. Figures are weighted by refinery volumes supplied to Neste.
% of Neste's PFAD supply traceable to plantation
1)
2017
2018
2019 2020 2021 2022 2023
44%
71%
85% 85%
86%
93%
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Recycled raw materials
Neste is advancing chemical recycling, also known as
advanced recycling, to accelerate the transition to a circu-
lar economy for plastics. Neste’s development of chemi-
cal recycling technologies and capacity with value chain
partners supports Neste’s strategic target of becoming
a global leader in circular solutions, while helping Neste
take steps towards developing its Porvoo refinery into a
renewable and circular solutions hub. It is also aligned
with our target of helping our customers to reduce their
GHG emissions and reducing society’s dependence on
crude oil.
Accelerating the circular economy
through chemical recycling
Chemical recycling complements mechanical recy-
cling by transforming waste plastic into a raw material
for virgin-quality plastics. Through chemical recycling,
hard-to-recycle plastic waste such as colored, mul-
tilayer and mixed-material plastics can be turned into
high-quality feedstock for polymers that can be used for
even demanding applications.
The development of chemical recycling is crucial to
enabling a circular economy for polymers and increasing
recycling for waste plastic. It thereby also helps tackle
the plastic waste pollution challenge and reduces the
need for virgin fossil resources.
Progress on scaling up chemical recycling
Neste has established several partnerships to develop
chemical recycling technologies to enable their commer-
cialization and to accelerate their adoption. For example,
we hold the European rights to US-based Alterra Ener-
gy’s liquefaction technology, and we are also a minority
shareholder of the company.
We aim to gradually increase the volumes of liquefied
waste plastic processing to continue learning about and
developing value chains and processing technologies.
In 2023, Neste made the final investment decision to
commence construction of upgrading facilities for lique-
fied plastic waste at its Porvoo refinery in Finland. With
an investment of 111 million euros, Neste will build the
capacity to upgrade 150,000 tons of liquefied waste
plastic per year. The investment is part of a broader proj-
ect (Project PULSE), which will receive an EU Innovation
Fund grant of 135 million euros if fully implemented. The
project targets a total capacity of 400,000 tons per year.
Liquefied waste plastic
processed at the Porvoo refinery
Neste successfully continued its processing runs with
liquefied waste plastic at industrial scale at its Porvoo
refinery in 2023. During the runs, Neste was able to
gradually upgrade increasing volumes of liquefied waste
plastic into drop-in raw materials for plastic production
and develop related processing capabilities at industrial
scale.
With our partners Wastewise, Borealis and Uponor, we
successfully produced pipes made of cross-linked poly-
ethylene (PEX) which was based on feedstock gained
from chemically recycled post-industrial waste plastic
from PEX pipe production. The pipes can be used in the
construction sector for heating, plumbing and cooling
purposes – as well as for drinking water systems.
Our decades of experience in oil refining, combined
with refining expertise in upgrading low-quality raw mate-
rials, provide a solid foundation for the rapid demonstra-
tion and scaling-up of chemical recycling.
Future raw materials
We continue to work toward increasing the availability
of renewable and recycled raw materials, while devel-
oping technologies to diversify our current portfolio with
new scalable raw materials. This will help us ensure
access to sufficient volumes of raw materials to support
our growing production capacity, which will enable us to
maximize our positive carbon handprint.
We continuously search for even lower-quality waste
and residues for use in the production of fuels, poly-
mers and chemicals. In the short to mid-term, we aim to
increase the availability of emerging lower-quality waste
and residues such as acid oils and wastewater-derived
grease (i.e., “brown grease”). We are also exploring
novel vegetable oils from regenerative agricultural prac-
tices. In the long term, renewable hydrogen, lignocel-
lulosic waste and residues, algae, and municipal solid
waste are all viable sustainable raw material alternatives.
Long-term
Future raw materials
and technologies
Renewable
hydrogen Novel vegetable oils
Acid oils
Brown grease
Algae Lignocellulose
Municipal
solid waste
Power-to-X
Short to mid-term
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Novel vegetable oils (NVO) from
regenerative agricultural practices
As part of our efforts to develop new sustainable sources
of renewable raw materials, Neste is exploring the poten-
tial of regenerative agricultural concepts to produce addi-
tional renewable raw materials. Regenerative agriculture
focuses on restoring soil health. Regenerative farming
practices aim to trap carbon in healthier soils, promote
biodiversity and reduce emissions from agriculture, while
increasing farm productivity. Neste focuses on concepts
such as intermediate cropping that do not create addi-
tional demand for agricultural land.
In 2023, we made significant progress in accelerating
our exploration of potential concepts and partnerships
to drive our NVO development work. We have launched
over 60 field trials across the globe, working with farm-
ers, other value chain partners and research institutions.
We have been studying a variety of crops and regenera-
tive agriculture management practices for both annuals
and perennials to identify the most promising concepts
for scale-up. With promising results, we have set a tar-
get for the availability of novel vegetable oils to reach
20% of Neste’s raw material pool by 2035.
Once available, the use of these additional volumes of
NVO raw materials, e.g., in biofuels production, will fully
comply with all the sustainability requirements and crite-
ria included in the EU RED II (EU) 2018/2001. Besides
being suitable for producing renewable fuels e.g. for
the road transport and aviation sectors, NVOs could be
used to produce our renewable feedstock for the poly-
mers and chemicals sectors.
Read more about novel vegetable oils.
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Lignocellulose
Waste and residue streams from agriculture, forestry
and the forest industry provide viable and sustainable
raw material options for renewable fuels and feedstock
for polymers and chemicals. Our focus is on resources
that are currently underutilized.
We are also exploring site locations to fully develop
the potential of producing advanced biofuels from locally
sourced forestry waste. This includes an assessment
of exploiting technology and raw material potential for
lignocellulose-based advanced biofuels at our Porvoo
refinery in Finland.
In 2023, Neste participated in a project of Natural
Resources Institute Finland (Luke). The project, funded
by Business Finland, focuses on developing Life Cycle
Assessment (LCA) methods for assessing the environ-
mental benefits of bio-based products, raw materials
and sidestreams. Neste’s contribution focused on the
LCA of forestry-based waste and residues.
Read more about lignocellulose.
Microalgae
Photosynthetic microalgae may be cultivated wher-
ever there is water and sunlight, including saline water
and land areas unsuitable for other types of cultivation.
Microalgae may have high oil content, and they are
usually rich in proteins and other valuable compounds.
Through photosynthesis, algae are estimated to gen-
erate up to 50% of oxygen in the atmosphere. Neste
has explored and developed the use of algae for over
15 years and continues to explore algae as a potential
future raw material.
In 2023, Neste advanced the preparation of its algae
pilot production facility in order to further strengthen the
growth of its global raw material pool. The project is in
the planning phase, with a final investment decision yet
to be made.
Read more about microalgae.
Renewable hydrogen
Renewable hydrogen made with electrolysis makes
it possible to reduce refinery greenhouse gas (GHG)
emissions.
At our Rotterdam refinery, we are demonstrating
renewable hydrogen production based on solid oxide
(SOEC) technology. The EU-funded MultiPLHY project
aims to install the world’s first high temperature electro-
lyzer system in multi-MW scale (~2.6 MW) in an indus-
trial environment and integrating it into our refinery. This
is a joint project with the MultiPLHY partners Sunfire,
Paul Wurth, CEA and Engie. The project is in the com-
missioning phase.
At our Porvoo refinery, the renewable hydrogen project
focuses on developing our first industrial-scale renew-
able hydrogen facility. The goal of the 120 MW electro-
lyzer project is to supply the refinery with the renewable
hydrogen produced. The project is in the basic engi-
neering phase, and it is expected to be ready for a final
investment decision during 2024.
In the long term, Neste’s hydrogen projects will also
build a foundation for the use of Power-to-X (PtX) tech-
nologies, which aim to utilize carbon dioxide emissions
with green hydrogen to produce fuels and raw materials
for the petrochemical industry.
Read more about renewable hydrogen and
about PtX technology.
Municipal solid waste
Municipal solid waste is household or industrial derived
waste. Neste is mostly interested in those biogenic frac-
tions (paper, cardboard, wood, greens, textiles) that do
not have any other more valuable use and are not being
recycled.
By turning municipal solid waste into renewable raw
material, several benefits are simultaneously achieved –
the increased availability of lower-emission product to
replace fossil-based products, a reduction of waste, and
reduced reliance on virgin fossil resources, as well as
reduced emissions from the treatment of waste thanks
to circulation of waste into valuable use.
Read more about municipal solid waste.
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Our 2023 Sustainability Report has been
prepared in accordance with the GRI (Global
Reporting Initiative). We use the GRI Universal
Standards 2021, GRI Sector Standards for Oil
and Gas Sector 2021, as well as Topic Standards
with Standard versions indicated in the GRI Index.
Sustainability
reporting in 2023
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An independent third party, KPMG Oy Ab, has assured
the topic-specific GRI disclosures for economic, social
and environmental indicators, as well as General GRI
disclosures 2–7 and 2–30. Information presented about
the Sustainability highlights, Material sustainability KPIs,
Neste creates value, and Performance in figures pages
of the report have also been assured. In our report, we
have aimed to focus on the most essential, based on
our materiality assessment conducted biannually, most
recently in 2022. Our Sustainability Report is published
only in English.
We are committed to the UN Global Compact (UNGC),
United Nations Guiding Principles on Human Rights
(UNGP) and the International Labor Organization (ILO)
Declaration on Fundamental Principles and Rights at
Work. Neste follows the OECD Guidelines for Multina-
tional Enterprises and guidelines for good governance.
Neste has been a signatory of the UNGC Principles
since 2014. Our Annual Report includes information
corresponding to the reporting requirements as we are
committed to complying with the Ten Principles in each
of the UNGC areas for human rights, labor, environment
and anti-corruption. Our Communication of Progress
with Global Compact Principles for 2023 information will
be reported via the new UNGC portal.
Neste is committed to applying the Task Force on
Climate-related Financial Disclosures (TCFD) reporting
principles from 2019 to disclose climate-related financial
risks and opportunities in the reporting. In addition to the
Sustainability Report, part of our TCFD reporting takes
place within the Non-Financial Information Statement in
the Review by the Board of Directors. Our Sustainability
Report includes the TCFD index for navigation purposes
between these sections in the Annual Report. Our inten-
tion is to extend our reporting within the recommended
TCFD implementation time frame.
In 2023 Neste has been preparing for the Corporate
Sustainability Reporting Directive (CSRD) and the Euro-
pean Sustainability Reporting Standards (ESRS) to be
used for the first time in financial year 2024 reporting.
We are actively following various sustainability reporting
framework developments, such as the standards from
the International Sustainability Standards Board (ISSB),
in order to keep our reporting methodologies up to date.
In addition to GRI, in the 2023 Sustainability Report we
report according to SASB Oil & Gas Refining and Mar-
keting Standards where applicable, as Neste is cate-
gorized under this sector standard by SASB. However,
we also aim to report in accordance with SASB Biofuels
Standards in the future as we see this as an even more
relevant sector standard for Neste.
We support the principles of the World Economic
Forum’s (WEF) Stakeholder Capitalism. Our reporting
based on GRI, SASB and TCFD fulfils the requirements
for most of the WEF Stakeholder Capitalism Metrics
(SCM). We therefore report with the GRI supported by
SASB and TCFD, yet pay close attention to any addi-
tional SCM requirements.
Our reporting meets the requirements of the EU Direc-
tive on disclosure of non-financial and diversity informa-
tion and the Finnish Accounting Act as well as the infor-
mation in accordance with the current requirements of
the EU Taxonomy Regulation. The information is dis-
closed in the Non-financial Information Statement. The
required non-financial information is disclosed in the Cor-
porate Governance Statement and the Review by the
Board of Directors, whereas in our Sustainability Report,
we respond to broader stakeholder expectations and
respond to many requirements of international indi-
ces. The Board reviews and approves the sustainability
reporting before it is published. We published our 2022
Annual Report and the included Sustainability Report on
March 3, 2023 in PDF format on our website.
Reporting principles and guidelines
Our financial reporting complies with the international
IFRS accounting standards, and governance-related
reporting complies with the legislation on listed compa-
nies and the Finnish Corporate Governance Code. The
disclosure of environmental costs and liabilities is based
on the Finnish Accounting Act. The reported financial
indicators are based on audited information. The gen-
eral guideline issued by the Accounting Board on the
preparation of review by the Board of Directors is fol-
lowed in calculating the personnel-related figures. Cal-
culations related to safety-related accident frequency
rates comply with the calculation principles of Con-
cawe (the oil companies’ European association for envi-
ronment, health and safety in refining and distribution).
Changes to information disclosed in previous years or
calculation principles are communicated in connection
with the relevant indicators. If restatements of informa-
tion have been made, these are communicated in con-
nection with the relevant indicators. The definitions, cal-
culation principles and formulas of reported indicators
are presented separately under “Principles for calculat-
ing the key indicators”.
Scope of the report
Similarly to the Annual Report, the Sustainability Report’s
reporting period is our financial reporting year, January
1–December 31, 2023. The Sustainability Report is pub-
lished annually. The safety and environmental report-
ing for 2023 covers the refineries in Finland and abroad
in which the company has a holding of 50% or more.
In addition, safety and environmental reporting covers
the company’s terminals, offices, and country-specific
retail companies in alignment with the financial report-
ing scope. As an exception, reporting for the Martinez
Renewables refinery, of which Neste owns 50%, only
covers reporting indicators for GHG emissions (scopes
1, 2 and 3), energy and renewable raw material inputs.
Additionally, environmental figures for Mahoney only
cover GHG emissions (scopes 1, 2 and 3) and energy
due to the ongoing integration process. The company
does not report environmental information about sites in
which the company uses only a minor part of the prem-
ises of an office building. The reporting of safety informa-
tion also covers service providers and contractors. The
average number of personnel includes all operations and
acquisitions. Individual exceptions are communicated in
connection with the relevant indicators.
Reporting systems
Neste collects environmental and safety information
with the HSEQ reporting tool, which supports Neste’s
monthly and annual reporting. Personnel-related indi-
cators are derived from the HR systems. The company
also has other reporting tools for collecting information
required for sustainability reporting.
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2023 2022 2021
Deviations from environmental permits
13 3 2
Emissions into the air, tons
1)
Direct CO
2
emissions (scope 1) 2,291,000 2,075,000 1,828,000
Indirect GHG emissions (scope 2, location-based) 503,000 427,000 519,000
Indirect GHG emissions (scope 2, market-based) 463,000 391,000 509,000
Other indirect GHG emissions (scope 3) 58,000,000 42,000,000 35,000,000
Purchased goods and services
2)
5,800,000 5,000,000 4,900,000
Fuel- and energy-related activities
3)
<50,000 <50,000 100,000
Upstream transportation and distribution
4)
2,000,000 900,000 700,000
Waste generated in operations 400,000 400,000 200,000
Downstream transportation and distribution
5)
700,000 700,000 500,000
Use of sold products
2)
47,700,000 33,600,000 27,600,000
End-of-life treatment of sold products 1,100,000 1,100,000 1,300,000
VOC 2,380 3,160 3,170
NOx 1,210 1,150 1,090
SO
2
2,470 2,430 2,850
Particulate matter 72 78 64
Energy use
Total energy consumption, TWh 12.6 10.9 10.1
Fuels and natural gas, % 74.3 72.7 72.0
Purchased electricity, % 12.9 12.9 13.1
Purchased heat, % 12.9 14.3 14.9
Share of renewable energy of total energy
consumption, %
16.1 17.8 11.6
Energy efficiency, energy saving measures, GWh
6)
27.2 42.6 95.8
Energy intensity, total energy consumption per revenue,
GWh/MEUR
0.6 0.4 0.7
Water, m
3
/a
Total water withdrawal by source 9,402,000 8,788,000
7)
9,263,000
Process water & other water use
Surface water 8,485,000 7,839,000 7,927,000
Third-party water (municipal) 917,000 949,000
7)
1,336,000
Total water discharge by destination 8,720,000 7,899,000 8,522,000
Surface water 148,000 141,000
Seawater 8,024,000 7,241,000
Third-party water (municipal) 548,000 517,000
Effluents to water, tons
Effluents of oil to water 1.8 1.4
7)
2.3
7)
Chemical oxygen demand 399 348 240
Effluents of nitrogen to water 18 19 31
Effluents of phosphorus to water 1.0 1.0 1.0
Waste generated, tons
8)
Non-hazardous
8)
71,200 35,000 23,900
Preparation for reuse 1,400 150 -
Recycling 170 3,000 -
Other recovery operations 63,800 23,000 -
Incineration (with energy recovery) 2,200 2,000 -
Incineration (without energy recovery) 320 550 -
Landfill 3,300 4,300 -
Other disposal operations 40 2,000 -
Hazardous 230,000 259,000 160,600
Preparation for reuse 1,400 160 -
Recycling 5,800 7,300 -
Other recovery operations 14,200 4,500 -
Incineration (with energy recovery) 87,800 70,700 -
Incineration (without energy recovery) 5,200 3,000 -
Landfill 4,700 11,500 -
Other disposal operations 111,000 162,000 -
Number and magnitude of significant releases 1 pc/60 m3 3 pc/1146 m
3
3 pc/45m
3
+ 10 tons
Carbon dioxide recovered, tons 91,800 126,600 130,400
Washing lye sold, tons 6,900 11,100 7,900
2023 2022 2021
Performance in figures Climate and the environment
1)
Scope 1 emissions reporting covers CO
2
emissions. Scope 2 and 3 emissions reporting covers GHG emissions and is reported as CO
2
e.
2)
Calculation principle changed in 2023. Scope 3 inventory include additional activities that have not been in the scope of reporting earlier.
3)
Only natural gas related emissions included.
4)
Part of upstream transportation emissions are accounted in other categories.
5)
Part of downstream transportation emissions are accounted in other categories.
6)
The savings consist of energy efficiency measures started during 2023, which have been scaled to cover the full year.
7)
Figure revised.
8)
Total amount of waste increased due the decommissioning of our Naantali refinery process area.
Calculation principles can be found on page 115.
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Supply chain and raw materials
Use of global renewable raw material inputs, million tons
9)
4.3 3.6 3.7
Share and use of waste and residues of global renewable
raw material inputs
9)
92%
4.0 Mt
95%
3.4 Mt
92%
3.4 Mt
GHG emission reduction achieved with Neste’s renewable products compared to
crude oil-based fuels, million tons
9)
11.0 11.1 10.9
The amount of non-renewable resource use that Neste’s renewable and
circular solutions helped replace in transport, aviation and polymers
and chemicals sectors, Mt
10)
3.0 3.1 3.0
Number of all renewable raw material suppliers 614 557 389
Share and use of certified palm oil from all palm oil use
11)
100%
67kt
100%
135kt
100%
236 kt
The number of CPO smallholders 0 0 13 227
The number of palm oil suppliers 1 4 6
The number of plantations 7 28 69
The number of palm oil mills 4 12 29
Average GHG emission reduction of palm oil based products
10)
78% 80% 80%
The number of renewable raw material suppliers’
sustainability assessments and their outcome
12)
Total: 388
New approved suppliers: 249
All approved: 279
Pending: 102
Rejected: 7
Total: 325
New approved suppliers: 223
All approved: 236
Pending: 74
Rejected: 15
Total: 223
New approved suppliers: 171
All approved: 186
Pending: 33
Rejected: 4
Crude oil and fossil feedstock sources by region, million tons 11.7 12.7 10.1
Norway 8.3 7.1 1.3
USA 1.1 0.6 0.04
United Kingdom 0.8 0.6 0.0
Russia
13)
0.0 3.1 7.8
Other countries 1.5 1.3 1.0
2023 2022 2021
Performance in figures Climate and the environment
9)
The volumes are presented in millions of tons. The share of the volumes are calculated from exact figures and consequently the rounded figures presented may deviate from the share of volumes disclosed.
10)
Calculation principles can be found on page 115.
11)
Contains the use of conventional palm oil that has been earlier processed into renewable products and sold to market.
12)
Figures include existing suppliers, which undergo a sustainability assessment process every 3–5 years. Supplier data includes only main contractual parties, excluding second-tier suppliers.
13)
At the start of the war in Ukraine, Neste decided to stop using Russian crude oil entirely and started replacing it with other qualities.
Calculation principles can be found on page 115.
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Neste Personnel and Contractor Safety Performance
as of 31 December 2023
2023 2022 2021
Total recordable injury frequency (TRIF) total 2.3 2.0 1.4
- TRIF own employees 1.7 0.8 1.1
- TRIF contractors 3.2 3.7 1.6
Lost workday injury frequency (LWIF) total 1.8 1.9 1.0
- LWIF own employees 1.1 0.7 1.1
- LWIF contractors 2.8 3.6 0.7
Process safety event rate (PSER) total 1.2 1.4 1.4
- PSER 1 0.4 0.6 0.6
- PSER 2 0.9 0.9 0.8
Safe Days 278 314 306
Fatalities 0 0 0
Average number
of personnel
(5,244)
6,018
Average training hours per employee
as of 31 December 2023
Women Men
All employees 23.1 28.5
Blue-collar 40.9 32.5
White-collar and
senior management 22.3
26.3
Managers 32.1 33.4
Senior managers 9.2 18.0
Permanent 23.2 28.6
Temporary 21.2 19.3
F
ull-time 23.4 28.6
Part-time 17.3 22.1
Personnel by segment
as of 31 December 2023, %
Renewable Products 25.4% (28.7%)
Oil Products 25.0% (22.0%)
Engineering Solutions 14.4% (15.4%)
Marketing & Services 8.1% (6.8%)
Innovation 7.8% (8.2%)
Other functions 19.3% (18.9%)
Personnel by personnel group
as of 31 December 2023, %
White-collar and
senior management
74.8% (75.5%)
Blue-collar
25.2% (24.6%)
Personnel by country
as of 31 December 2023, %
Finland 63.6% (66.7%)
The USA 15.7% (12.9%)
Singapore 7.7% (7.8%)
The Netherlands 7.6% (6.7%)
Other countries 5.5% (5.9%)
Performance in figures People
40
30
20
10
0
Employee breakdown by age
as of 31 December 2023, %
< 30
years
30–39
years
40–49
years
50–59
years
60–
years
11.5
11.0
33.0
33.3
29.2 29.2
20.9
20.6
5.4
6.0
2023 2022
Employment length of employees
as of 31 December 2023, %
40
30
20
10
0
1–4
years
5–9
years
Less than
1 year
10–19
years
20–29
years
30–
years
6.8
32.0
16.0
20.3
15.6
37.9
16.8
18.3
6.7
4.7
19.1
5.9
2023 2022
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Information on employees and governance bodies by gender ratio as of 31 December 2023, %
Women Men
2023 2022 2023 2022
All employees 32.6 32.2 67.4 67.8
Blue-collar 5.5 1.3 94.5 23.3
White-collar and senior management 41.7 30.9 58.3 44.5
Managers 33.3 31.1 66.7 68.9
Senior managers 28.7 27.7 71.3 72.3
Neste Executive Committee 33.3 25.0 66.7 75.0
Board of Directors 25.0 33.3 75.0 66.7
Permanent 32.1 31.5 66.7 66.4
Temporary 0.5 0.8 0.7 1.4
Full-time 31.4 30.9 66.6 67.0
Part-time 1.3 1.4 0.8 0.7
Total Finland USA Singapore The Netherlands Other countries
Women Men Women Men Women Men Women Men Women Men Women Men
All employees 32.6 67.4 35.6 64.4 22.9 77.1 31.4 68.6 19.3 80.7 45.7 54.3
- under 30 4.3 6.7 4.8 6.6 3.0 8.8 4.1 6.1 1.8 7.0 4.9 2.4
- 30–50 21.0 44.1 22.3 42.1 14.4 45.8 24.0 52.2 13.6 49.5 30.8 42.4
- over 50 7.4 16.6 8.5 15.7 5.5 22.5 3.3 10.4 3.9 24.3 10.1 9.5
Hiring rate of permanent employees, all 14.4 15.7 11.3 9.9 19.9 25.4 27.5 29.4 31.8 21.4 12.6 20.5
Proportion of permanent hires 30.6 69.4 38.6 61.4 18.9 81.1 29.8 70.2 25.7 74.3 33.3 66.7
- under 30 4.0 6.4 4.5 6.1 3.0 8.7 4.2 6.2 1.6 6.9 4.4 2.5
- 30–50 21.0 44.4 22.4 42.5 14.5 45.8 24.2 53.0 13.3 49.8 30.4 43.0
- over 50 7.4 16.7 8.6 15.8 5.5 22.5 2.9 9.7 4.0 24.4 10.0 9.7
Leaving rate of permanent employees, all 7.0 10.9 6.0 7.5 13.9 21.7 4.9 14.7 9.4 9.0 5.6 10.8
Proportion of permanent leavers 23.4 76.6 30.7 69.3 16.0 84.0 13.2 86.8 19.5 80.5 29.6 70.4
- under 30 4.0 6.4 4.5 6.1 3.0 8.7 4.2 6.2 1.6 6.9 4.4 2.5
- 30–50 21.0 44.4 22.4 42.5 14.5 45.8 24.2 53.0 13.3 49.8 30.4 43.0
- over 50 7.4 16.7 8.6 15.8 5.5 22.5 2.9 9.7 4.0 24.4 10.0 9.7
Permanent employees 32.1 66.7 35.1 63.6 22.9 76.9 30.7 67.8 18.6 79.9 43.6 53.7
Temporary employees 0.6 0.7 0.5 0.8 0.0 0.2 0.7 0.9 0.7 0.9 2.1 0.6
Full-time employees 31.4 66.6 34.3 63.6 22.9 77.0 31.4 68.6 15.5 78.1 43.6 54.3
Part-time employees 1.3 0.8 1.3 0.8 0.0 0.1 0.0 0.0 3.7 2.6 2.1 0.0
Employee distribution and turnover as of 31 December 2023, %
Performance in figures People
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
103
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI Content Index
GRI 1: Foundation 2021
GRI 11: Oil and Gas Sector 2021
GRI 2: General Disclosures 2021
1. The organization and its reporting practices
2-1 Organizational details
23-24 HQ in Espoo, Finland. Countries of operations: Finland, Australia, Belgium, China, Estonia, Germany, India, Ireland,
Latvia, Lithuania, the Netherlands, Singapore, Spain, Sweden, Switzerland, the USA. (R)
2-2 Entities included in the organization’s sustainability
reporting
97-98
2-3 Reporting period, frequency and contact point
97-98
Safety and Environment
contacts
2-4 Restatements of information
97-98
2-5 External assurance 117-118
2. Activities and workers
2-6 Activities, value chain and other business relationships
9-10, 86-96, 153-154 In 2023, Neste increased its ownership of Demeter B.V. and now holds 80 % of their shares. Neste acquired
SeQuential Environmental Services, LLC, and Pure SQ, LLC from Crimson Renewable Energy Holdings, LLC. Through
the transaction, Neste acquired used cooking oil collection and aggregation business in US West Coast. (R)
2-7 Employees
101-102, 116 Neste reports only total number of employees. (O)
2-8 Workers who are not employees
55 Neste is reviewing the consolidation of worker information to align with relevant reporting requirements. (O)
3. Governance
2-9 Governance structure and composition
30-31, 121-127, 131-133
2-10 Nomination and selection of the highest governance body 121-124
2-11 Chair of the highest governance body
125-126
2-12 Role of the highest governance body in overseeing the
management of impacts
30-31
2-13 Delegation of responsibility for managing impacts
30-31, 155
2-14 Role of the highest governance body in sustainability
reporting
30-31, 155 The Sustainability Report is reviewed by the senior executives and the highest governance body. Sustainability
information, including the material topics, are also disclosed in the Board Review’s Non-Financial Information
statement. (R)
2-15 Conflicts of interest
121-124
2-16 Communication of critical concerns
32, 42, 169
2-17 Collective knowledge of the highest governance body 30-31, 105
2-18 Evaluation of the performance of the highest governance
body
124
2-19 Remuneration policies
140-144
2-20 Process to determine remuneration 140-144
2-21 Annual total compensation ratio
144 Neste reports the average total compensation for employees and the total compensation of the CEO. (O)
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Neste Oyj has reported in accordance with the GRI Standards for the period 1 January–31 December 2023.
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
104
Business review Sustainability Governance Review by the Board of Directors Financial Statements
4. Strategy, policies and practices
2-22 Statement on sustainable development strategy
6-8
2-23 Policy commitments 30-31, 81-85, 86-96,
97-98, 164-169
Neste Policies and
Principles
2-24 Embedding policy commitments
30-31, 81-85, 86-96,
97-98, 164-169
Neste Policies and
Principles
2-25 Processes to remediate negative impacts
81-85, 164-169
2-26 Mechanisms for seeking advice and raising concerns 32, 83, 90, 131, 166, 169
2-27 Compliance with laws and regulations
80 One incident related to different elements included in the environmental permits of the Rotterdam refinery. (R)
2-28 Membership associations 44-46
Commitments and
engagements
5. Stakeholder engagement
2-29 Approach to stakeholder engagement
33-34, 43-48
2-30 Collective bargaining agreements 3,985 persons, 66%. In addition to complying with local legal requirements, Neste is committed to respecting the
internationally recognized human and labor rights and ensuring fair terms of employment for all employees, as set out
in the Neste Code of Conduct and Human Rights Principle. (R)
GRI 3: Material Topics 2021
3-1 Process to determine material topics
33-34
3-2 List of material topics
33-37
3-3 Management of material topics 30-31, 32, 43-48, 50-53,
54-56, 60-65, 66-74, 75-80,
81-85, 86-96, 163
11.1.1, 11.2.1, 11.3.1,
11.4.1, 11.5.1, 11.6.1,
11.7.1, 11.8.1, 11.9.1,
11.10.1, 11.11.1,
11.12.1, 11.13.1,
11.14.1, 11.15.1,
11.16.1, 11.17.1,
11.18.1, 11.19.1,
11.20.1, 11.21.1,
11.22.1
GRI 200: Economic
GRI 201: Economic Performance 2016
201-1 Direct economic value generated and distributed
49
Value creation
11.14.2 & 11.21.2
201-2 Financial implications and other risks and opportunities
due to climate change
57-74, 164-165, 183 11.2.2
201-4 Financial assistance received from government
12, 151, 200 11.21.3
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
105
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI 202: Market Presence 2016
202-2 Proportion of senior management hired from the local
community
Indicator is not considered relevant for Neste as business is led from function or business area level. Neste provides
equal employment opportunities for all applicants and employees. (O)
11.11.2 & 11.14.3
GRI 203: Indirect Economic Impacts 2016
203-1 Infrastructure investments and services supported
36, 48, 49 11.14.4
203-2 Significant indirect economic impacts
49 11.4.5 & 11.14.5
GRI 204: Procurement practices 2016
204-1 Proportion of spending on local suppliers Data undisclosed due to business sensitivity. Neste is committed to operating with integrity towards its Suppliers and
treating them fairly, and equally, always based on objective factors and excluding personal preferences or interest.
Neste aims for long-term and mutually beneficial business relationships with our key suppliers. Neste welcomes
innovations and is always open for feedback from Suppliers. (O)
11.14.6
GRI 205: Anti-corruption 2016
205-1 Operations assessed for risks related to corruption
169 Neste regularly assesses its operations’ risks including ia. risks of corruption and bribery. Numeric data not
applicable. (R/O)
11.20.2
205-2 Communication and training about anti-corruption
policies and procedures
32, 87-88, 169 Neste Board Audit Committee receives regular updates on Neste compliance program and compliance activities,
including such related to anti-corruption. All members of Neste Board of Directors have completed the Code of
Conduct (CoC) e-learning. Neste’s Anti-corruption Principle and related guidance is available in Neste’s global
intranet and further communicated and trained via anti-corruption e-learning issued to all office workers, and via
regular newsletters. Neste ExCo members and targeted employees are required to complete an Annual Compliance
Acknowledgement confirming their compliance with i.a. the CoC and Anti-corruption Principle. Neste regularly raises
awareness and trains in its Code of Conduct, including a Code of Conduct e-learning mandatory for all employees,
which latest version was issued in 2021. The CoC e-learning is part of global induction training and therefore, the
completion fluctuates. We also require our suppliers and other business partners to comply with applicable laws
and expect them to follow equivalent ethical business standards as stated in the CoC (including zero tolerance to
corruption), as further described in our Supplier Code of Conduct. We are continuously developing our anti-corruption
training processes and aspire to extend the reporting with the remaining indicator requirements related to training
when applicable. (R/O)
11.20.3
205-3 Confirmed incidents of corruption and actions taken
32, 42, 169 No confirmed incidents during the reporting period. (R) 11.20.4
GRI 206: Anti-competitive Behaviour 2016
206-1 Legal actions for anticompetitive behavior, anti-trust, and
monopoly practices
No cases during the reporting period (R). 11.19.2
GRI 207: Tax 2019
207-1 Approach to tax
Neste's tax footprint 11.21.4
207-2 Tax governance, control, and risk management Neste’s tax footprint 11.21.5
207-3 Stakeholder engagement and management of concerns
related to tax
Neste’s tax footprint 11.21.6
207-4 Country-by-country reporting
Neste’s tax footprint Neste discloses tax information for countries representing 90% of the external revenue of the group. (O) 11.21.7
GRI 300: Environmental
GRI 301: Materials
Neste
indicator
Volume of liquefied waste plastic processed (t/a)
41, 94
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
106
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI 302: Energy 2016
302-1 Energy consumption within the organization
38, 80, 99, 115 11.1.2
302-2 Energy consumption outside of the organization Neste has partially gathered relevant energy consumptions in the value chain. Across Neste’s value chain, the majority
of energy use outside the organization is occurring through the use of products sold by Neste. (R/O)
11.1.3
302-3 Energy intensity
99, 115 11.1.4
302-4 Reduction of energy consumption 38, 69-70, 80, 99, 115 Energy savings consists of different initiatives in our production covering steam and cooling. (R)
GRI 303: Water and effluents 2018
303-1 Interactions with water as a shared resource
78 11.6.2
303-2 Management of water discharge-related impacts 78, 115 11.6.3
303-3 Water withdrawal
78, 99, 115 Neste will be assessing its relevant water reporting categories for potential later use. (O) 11.6.4
303-4 Water discharge
78, 99, 115 11.6.5
303-5 Water consumption
78, 99, 115 11.6.6
GRI 304: Biodiversity 2016
304-1 Operational sites owned, leased, managed in, or adjacent
to, protected areas and areas of high biodiversity value
outside protected areas
77 11.4.2
304-2 Significant impacts of activities, products, and services
on biodiversity
38, 78-79 11.4.3
304-3 Habitats protected or restored
77 11.4.4
304-4 IUCN Red List species and national conservation list
species with habitats in areas affected by operations
The information on species not disclosed due to ongoing review of the reporting requirements globally. (O) 11.4.5
GRI 305: Emissions 2016
305-1 Direct (scope 1) GHG emissions
38, 97-98, 99, 115 11.1.5
305-2 Energy indirect (scope 2) GHG emissions
38, 97-98, 99, 115 11.1.6
305-3 Other indirect (scope 3) GHG emissions
99, 115 11.1.7
305-4 GHG emissions intensity 38, 71 Emissions used in the calculation: scope 3 Use of sold products. (R) 11.1.8
305-5 Reduction of GHG emissions
38, 57-74 11.2.3
305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other
significant air emissions
99, 115 Neste considers the reported emissions as significant. (R/O) 11.3.2
GRI 306: Effluents and Waste 2016
306-3 Significant spills
80, 99 No significant environmental impacts identified. (R). 11.8.2
GRI 306: Waste 2020
306-1 Waste generation and significant waste-related impacts
80 11.5.2
306-2 Management of significant waste-related impacts
80, 94, 99 11.5.3
306-3 Waste generated 99, 115 11.5.4
306-4 Waste diverted from disposal
99 11.5.5
306-5 Waste directed to disposal 99 11.5.6
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
107
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI 308: Supplier Environmental Assessment 2016
308-1 New suppliers that were screened using environmental
criteria
86-90 100% of Neste’s renewable raw material suppliers and all of fossil raw material suppliers screened using
environmental criteria. Screening process for indirect procurement suppliers is being standardized and hence, data is
currently not available. (R/O)
GRI 400: Social
GRI 401: Employment 2016
401-1 New employee hires and employee turnover
40, 49, 51, 102 11.10.2
401-2 Benefits provided to full-time employees that are not
provided to temporary or part-time employees
Neste’s temporary and part-time employees are not excluded from the benefits that are provided to the full-time
employees in Finland. Reporting will be extended to other significant locations in the coming years. Neste complies
with minimum local regulations and with local variations most often beyond. (R/O)
11.10.3
401-3 Parental leave All Neste employees are entitled to parental leave at a minimum according to the local legislation. All together 335
employees took parental leave in 2023, of which 112 were women and 223 were men. 302 employees returned to
work from parental leave during 2023, of which 91 were women and 211 were men. Neste does not disclose return to
work and retention rates. (R/O)
11.10.4 & 11.11.3
GRI 402: Labor/Management Relations 2016
402-1 Minimum notice periods regarding operational changes
51 Neste follows the local laws and when applicable, bargaining agreements regarding operational changes. (R) 11.7.2 & 11.10.5
GRI 403: Occupational Health and Safety 2018
403-1 Occupational health and safety management system
54-56 11.9.2
403-2 Hazard identification, risk assessment, and incident
investigation
54-56 Neste’s OEMS Hazard Identification, Risk Assessment and Control Principle includes processes and policies for
workers to identify, assess and control workplace hazards. Key common requirements include the Process Hazard
analysis standard consisting of standards for process risk classification, process safety information and work risk
management. Neste applies the hierarchy of controls to guide hazard elimination and control. Neste’s OEMS Incident
Learning Standard underpins the process by which workers can report hazardous situations, engage in incident
learning and identify improvement actions. All Neste’s employees and contractors have Stop Work Authority which
authorises anyone to stop work and remove personnel from hazardous situations. (R)
11.9.3
403-3 Occupational health services
53, 54-56 11.9.4
403-4 Worker participation, consultation, and communication on
occupational health and safety
55 Neste’s OEMS Safety Leadership Principle sets requirements for it businesses to engage the workforce in:
occupational health and safey issues, development of work practices, investigation of incidents and risk assessments
throughout Neste globally. Practices and fulfillment of requirements are followed through OEMS audit practices.
In addition to to Safety Leadership Principle the local statutory requirements are identified and followed to engage
personnel in occupational health and safety issues. (R)
11.9.5
403-5 Worker training on occupational health and safety
54-56 11.9.6
403-6 Promotion of worker health
44-46, 53 11.9.7
403-7 Prevention and mitigation of occupational health and
safety impacts directly linked by business relationships
54-56 11.9.8
403-8 Workers covered by an occupational health and safety
management system
55 11.9.9
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
108
Business review Sustainability Governance Review by the Board of Directors Financial Statements
403-9 Work-related injuries 55, 101, 115-116 In 2013 Neste defined its Life Saving Rules based on high-risk activities which have caused fatalities and seriour
injuries at Neste and in other, similar, high hazard industries. The purpose of the Life Saving Rules (Working at
heights, Confined spaces, Equipment isolation, Work permit and Traffic hazards) is to help save lives and prevent
serious injuries. In addition to Life Saving Rules related injuries we monitor comprehensively factors related injuries
such as lenght of absence, injury types etc.
In 2023 Neste launched its Process Safety Fundamentals - nine fundamentals have been defined aimed to support
leaders and front line workers to prevent process safety incidents in daily operational activities. The purpose of the
Process Safety Fundamentals is to support front line workers, supervisors and operational management to draw
attention to situations that could lead to a release of a hazardous chemical with potential for severe consequences
and existing good practices that prevent process safety events.
Neste also identifies High Potential (HiPo) events to guide and enable the prioritisiation of learning resources for
accidents and Near Miss events which could cause high-consequnce injuries.
In 2023 we had TRIF 2.3 which was way above our target. Majority (23 of 41) of injuries happened to contractors.
In 2023 we did not have any injury that would have resulted permanent effect on health. All together we had four
cases which resulted in long absences from work. Main injury types slips, strips and falls, cuts and scratches or
overextertions caused by single straining motion at work, are the same both in employees and contractors. Total
amount of working hours was cirka 10,600,000 hours for employees and 7,100,000 hours for contractors.
11.9.10
403-10 Work-related ill health
55, 101, 115-116 Neste records all work-related injuries. Occupational diseases are recorded separately. Neste has defined and
implements practices in the Operations Excellence Management System (OEMS) to minimize hazards and to mitigate
risks relating to any work-related ill health or injuries. (R/O)
11.9.11
GRI 404: Training and Education 2016
404-1 Average hours of training per year per employee
101 11.10.6 & 11.11.7
404-2 Programs for upgrading employee skills and transition
assistance programs
44-46, 49, 51-52 Transition assistance programs not disclosed in accordance with indicator requirements. (R/O) 11.7.3 & 11.10.7
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies and employees
40, 49, 52-53, 102, 124 11.11.4
405-2 Ratio of basic salary and remuneration of women to men Women’s mean basic salary in relation to men’s by pay grade and employee category in Finland: blue-collars 90%–
111% and whitecollars 90%–108%. Finland is reported as it is significant with over 63% weight of employees in total
personnel. (R/O)
11.11.5
GRI 406: Non-discrimination 2016
406-1 Incidents of discrimination and corrective actions taken
42, 169 11.11.6
GRI 407: Freedom of Association and Collective Bargaining 2016
407-1 Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk
81-85, Neste Human
Rights Principle,
Neste Supplier Code
of Conduct,
Modern Slavery Statement
The Neste Human Rights Principle outlines our commitment to respect the rights to freedom of association and
collective bargaining in Neste’s global operations, and our Supplier Code of Conduct includes minimum requirements
for our suppliers and business partners to recognize and respect these rights. These policies are implemented
through our ongoing due diligence processes. We use a bespoke, industry leading, country risk assessment
methodology from Verisk Maplecroft to identify countries or geographic areas with the highest risks to freedom of
association and collective bargaining in our global operations and supply chains. Specific geographic areas and
operation types considered as high risk not disclosed publicly. (R)
11.13.2
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
109
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI 408: Child Labor 2016
408-1 Operations and suppliers at significant risk of incidents of
child labor
81-85, Neste Human
Rights Principle,
Neste Supplier Code
of Conduct,
Modern Slavery Statement
The Neste Human Rights Principle outlines our commitment to respect children’s rights, and our Supplier Code of
Conduct includes minimum requirements regarding child labor. These policies are implemented through our ongoing
due diligence processes. We use a bespoke, industry leading, country risk assessment methodology from Verisk
Maplecroft to identify countries or geographic areas with the highest risks of child labor. Further details regarding
management approach, high risk operations and supply chains, and measures taken by Neste to assess and address
child labor risks available in Neste’s annual Modern Slavery Statement. (R)
GRI 409: Forced or Compulsory Labor 2016
409-1 Operations and suppliers at significant risk of incidents of
forced or compulsory labor
81-85, Neste Human
Rights Principle,
Neste Supplier Code
of Conduct,
Modern Slavery Statement
The Neste Human Rights Principle outlines our commitment to identify, assess and address forced labor risks in
our global operations, and our Supplier Code of Conduct includes minimum requirements regarding forced and
compulsory labor. These policies are implemented through our ongoing due diligence processes. We use a bespoke,
industry leading, country risk assessment methodology from Verisk Maplecroft to identify countries or geographic
areas with the highest risks of forced labor. Further details regarding management approach, high risk operations and
supply chains, and measures taken by Neste to assess and address forced labor risks available in Neste’s annual
Modern Slavery Statement. (R)
11.12.2
GRI 410: Security Practices 2016
410-1 Security personnel trained in human rights policies or
procedures
100% of Neste group security personnel have received formal training on Neste human rights policies through Neste’s
Code of Conduct e-learning. (R)
11.18.2
GRI 411: Rights of Indigenous Peoples 2016
411-1 Incidents of violations involving rights of indigenous
peoples
Neste respects the rights of Indigenous Peoples set out in the United Nations Declaration on the Rights of Indigenous
Peoples (UNDRIP), and carries out due diligence to avoid infringing on human rights. In 2023, there were 0 incidents
of violations involving the rights of Indigenous peoples reported via Neste’s available reporting channels, including
Ethics Online. (R)
11.17.2
GRI 412: Human Rights Assessment 2016
412-1 Operations that have been subject to human rights
reviews or impact assessments
82-83 All Neste operations reviewed as part of our 2023 corporate-wide human rights saliency assessments to evaluate
the risk of Neste being associated with or complicit in adverse human rights impacts. We assess country risk using a
bespoke, industry leading, country risk assessment methodology from Maplecroft to map sustainability risks for the
countries in which we operate and have supply chains. (R)
412-2 Employee training on human rights policies or procedures
39, 83 In 2023, 2,667 (1,390) hours were used for training on human rights policies and processes relevant to Neste’s
business operations and supply chains. 85% (51%) of Neste employees were trained on topics related to Neste’s
human rights policies and processes during 2023. 86% (86%) of the new employees hired in 2023 were trained on
topics related to Neste’s human rights policies and processes. (R)
GRI 204: Procurement Practices 2016
413-1 Operations with local community engagement, impact
assessments, and development programs
45, 78-80, 81-85
Neste Human
Rights Principle
For 100% of our operations, local communities can formally raise grievances to Neste using Ethics Online, or
alternatively contact us using local channels such as refinery websites and phone numbers. We engage regularly with
local stakeholders, including, for example, a biennial stakeholder study to engage with communities surrounding our
Porvoo refinery covering environmental, social, and safety impacts. All Neste refineries are certified as having an ISO
14001 environmental management system in place, and have undergone various environmental impact and permitting
assessments, with ongoing monitoring. (R)
11.15.2
413-2 Operations with significant actual and potential negative
impacts on local communities
45, 78-80, 81-85
Neste Human
Rights Principle
All Neste refineries (Porvoo, Rotterdam and Singapore) are situated on industrial sites and the closest residential
communities are 5-10 kms away. Potential risks to the local communities include air and water emissions, as well as
noise and light pollution from the refineries and site traffic. All of our refineries are required to with comply with strict
environmental permits and other legal requirements and have put preventive and mitigation measures in place to
prevent refinery operations from causing harm to people or the environment. (R)
11.15.3
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
110
Business review Sustainability Governance Review by the Board of Directors Financial Statements
GRI 414: Supplier Social Assessment 2016
414-1 New suppliers that were screened using social criteria
49, 86-90 100% of Neste’s renewable raw material suppliers and all fossil raw material suppliers screened using social criteria.
Screening process for indirect procurement suppliers is being standardized and hence, data is currently not available.
(R/O)
11.10.8 & 11.12.3
414-2 Negative social impacts in the supply chain and actions
taken
280 actions initiated to advance supply chain workers’ human and labor rights in Neste raw material supplier
sustainability audits. (R)
11.10.9
GRI 415: Public Policy 2016
415-1 Political contributions Neste does not make political contributions. (R) 11.22.2
GRI 416: Customer Health and Safety 2016
416-1 Assessment of the health and safety impacts of product
and service categories
56 Neste has assessed all (100 %) of its products according to health and environmental impacts. This is a regulatory
requrement for chemicals. Results of these assessments are documented in eg. the chemical safety data sheet that
is supplied to customers. Also the feedstock used in manufacturing of Neste products are assessed for health and
safety impacts. (R)
11.3.3
416-2 Incidents of non-compliance concerning the health and
safety impacts of products and services
No cases of non-compliance relating to chemicals legislation that would have had consequences like fines, penalties
or warnings. We follow closely also those cases where we ourselves have noticed something to correct and we make
the corrective actions independently. (R)
GRI 417: Marketing and Labeling 2016
417-3 Incidents of non-compliance concerning marketing
communications
In total three cases in Estonia, Latvia and Lithuania, which were closed in 2023 and resulted in no fines. Two cases
from 2022 in Lithuania resulted in no fines during 2023. (R)
Innovation and Partnerships
Neste
indicator
Research and development expenditure
41, 153
Neste
indicator
Number of granted patents and pending patent
applications
41, 49
Neste
indicator
Collaborations with research institutions and universities
41
GRI Standards Disclosure
Location in the report
or our webpage Reporting (R) / Omission (O)
Oil&Gas Sector
Standard REF #
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
111
Business review Sustainability Governance Review by the Board of Directors Financial Statements
TCFD Recommendations Disclosure Location in the report
Governance
Disclose the organization’s
governance around climate-
related risks and opportunities.
a) Describe the board’s oversight of climate related risks and opportunities.
30-31, 136, 154-155
b) Describe management’s role in assessing and managing climate related risks and opportunities. 30-31, 136, 154-155
Strategy
Disclose the actual and potential
impacts of climate-related risks
and opportunities on the
organization’s businesses,
strategy, and financial planning
where such information is
material.
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
57-59, 137, 164, 183
b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.
9-10, 13-17, 49, 57-59,
164, 183
c) Describe the resilience of the organization’s strategy, taking into consideration different climate related scenarios, including a 2°C or lower scenario.
57-59, 164, 183
Risk Management
Disclose how the organization
identifies, assesses, and manages
climate-related risks.
a) Describe the organization’s processes for identifying and assessing climate-related risks.
31, 58-59, 135-137,
154-155, 164
b) Describe the organization’s processes for managing climate-related risks.
31, 58-59, 135-137,
154-155, 164
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.
31, 58-59, 135-137,
154-155, 164
Metrics and Targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks and
opportunities where such
information is material.
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.
27, 38-42, 49, 57-74, 80,
99-100, 115-116, 140,
156-162
b) Disclose scope 1, scope 2, and, if appropriate, scope 3 greenhouse gas (GHG) emissions, and the related risks.
99, 38, 66-74, 115-116
c) Describe the targets used by the organization to manage climate related risks and opportunities and performance against targets. 27, 38-42, 49, 57-74, 80
TCFD Recommendations Disclosure
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
112
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SASB Content Index
GHG Emissions
EM-RM-110a.1 Gross global scope 1 emissions, percentage covered under emissions-limiting regulations Metric tons (t) CO
2
-e,
Percentage (%)
99, 115 90% covered under EU ETS. (R)
EM-RM-110a.2 Discussion of long-term and short-term strategy or plan to manage scope 1 emissions,
emissions reduction targets, and an analysis of performance against those targets
n/a
38, 57-74
Air Quality
EM-RM-120a.1 Air emissions of the following pollutants: (1) NOx (excluding N
2
O), (2) SOx, (3) particulate
matter (PM10), (4) H
2
S, and (5) volatile organic compounds (VOCs)
Metric tons (t)
99, 115
EM-RM-120a.2 Number of refineries in or near areas of dense population Number All 3 refineries operated by Neste located in or near (within 49km) an urbanized area. (R)
Water management
EM-RM-140a.1 (1) Total fresh water withdrawn, (2) percentage recycled, (3) percentage in regions with
High or Extremely High Baseline Water Stress
Thousand cubic meters
(m³), Percentage (%)
99, 115 Neste’s water withdrawal from areas with water stress is not significant and seen as not
material. Percentage for recycled water is not calculated separately, as most of the water
withdrawn for cooling is discharged back to the source in similar condition as when
withdrawn. (R)
EM-RM-140a.2 Number of incidents of non-compliance associated with water quality permits, standards,
and regulations
Number
80 No incidents of non-compliance associated with water quality permits, standards, and
regulations. (R)
Hazardous Materials Management
EM-RM-150a.1 Amount of hazardous waste generated, percentage recycled Metric tons (t),
Percentage (%)
99 230,000 metric tons (t), recycled 9% (R)
EM-RM-150a.2 (1) Number of underground storage tanks (USTs), (2) number of UST releases requiring
cleanup, and (3) percentage in states with UST financial assurance funds
Number, Percentage (%) 25 underground storage tanks for petroleum products. No UST releases. Reporting based
on Neste’s environmental permits. (R)
Workforce Health and safety
EM-RM-320a.1 (1) Total recordable incident rate (TRIR), (2) fatality rate, and (3) near miss frequency rate
(NMFR) for (a) full-time employees and (b) contract employees
Rate
56, 101, 115-116 1) and (2) Neste reports the most relevant OHS performance figures in its own operations
(TRIF, LWIF, PSER, Safe Days, Fatalities). (3) NMFR 106.1. (R)
EM-RM-320a.2 Discussion of management systems used to integrate a culture of safety n/a
54-56, 107-108
Product Specifications & Clean Fuel Blends
EM-RM-410a.1 Percentage of Renewable Volume Obligation (RVO) met through: (1) production of
renewable fuels, (2) purchase of separated renewable identification numbers (RIN)´
Percentage (%) (1) 5%, (2) 95%. (R)
EM-RM-410a.2 Total addressable market and share of market for advanced biofuels and associated
infrastructure
Reporting currency,
Percentage (%)
15, 148-149
Pricing Integrity & Transparency
EM-RM-520a.1 Total amount of monetary losses as a result of legal proceedings associated with price
fixing or price manipulation
Reporting currency,
Percentage (%)
No legal proceedings. (R)
Neste disclosure of SASB Sustainability Accounting Standards for Oil and Gas Refining and Marketing
Code Accounting metric Unit of measure
Location in
the report or
our webpage Additional SASB reporting information Reporting (R) / Omission (O)
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Management of the Legal & Regulatory Environment
EM-RM-530a.1 Discussion of corporate positions related to government regulations and/or policy
proposals that address environmental and social factors affecting the industry
n/a
47, 59, 65, 66-74,
81-85, 92-93,
114, 137, 154,
164, Position
statement
Critical Incident Risk Management
EM-RM-540a.1 Process Safety Event (PSE) rates for Loss of Primary Containment (LOPC) of greater
consequence (Tier 1) and lesser consequence (Tier 2)
Rate
101, 115-116 Neste reports PSER1 and PSER2 rates as described in Principles for calculating the
key indicators. (R)
EM-RM-540a.2 Challenges to Safety Systems indicator rate (Tier 3) Rate Rate 70.4. Tier 3 Challenges to Safety Systems indicator are included in Neste’s
PSE3. (R)
EM-RM-540a.3 Discussion of measurement of Operating Discipline and Management System
Performance through Tier 4 Indicators
n/a
54-56 Process safety management system weaknesses that may cause in the future PSE1/2
events. They are reported as part of PSE4 indicator at Neste. (R)
Code Activity metrics Unit of measure
Location in the
report or our
webpage Additional SASB reporting information
EM-RM-000.A Refining throughput of crude oil and other feedstocks Barrels of oil equivalent
(BOE)
Oil Products 87 MMBOE (R)
EM-RM-000.B Refining operating capacity Million barrels per
calendar day (MBPD)
16 Oil Products 0.25 MBPD (R)
Code Accounting metric Unit of measure
Location in
the report or
our webpage Additional SASB reporting information Reporting (R) / Omission (O)
Highlights 2023 Sustainability at Neste Climate Biodiversity Human rights Supply chain and raw materials Performance and reporting
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PART C: Management of Salient Human Rights Issues
C1 Specific Policies
C1 Neste Human Rights Principle, Code of Conduct, Supplier Code of Conduct,
Sustainability Policy, Sustainability Principle, Responsible Sourcing Principle,
People Policy, Equality and Non-Discrimination Principle, Misconduct
Investigation Standard, Neste Life Saving Rules, Operations Excellence Policy,
Operational Safety Principle, Occupational Health Principle, Reproductive Health
Standard, Privacy Principle, Cyber Security Principle
p. 7-9
C1.1
p. 52-53, 55-56, 82-85 p. 18-19
C2 Stakeholder Engagement
C2
p. 33-34, 39-40, 43-46, 48, 51, 55, 82-85, 93, Neste Human Rights Principle
(p.11)
p. 20-22
C2.1
p. 33-34, 43-46, 48, 51, 55, 82-85, 93, Neste Human Rights Principle (p.11) p. 20-22
C2.2
p. 33-34, 39-40, 43-46, 48, 51, 55, 82-85, 93 p. 20-22
C2.3
p. 33-34, 39-40, 43-46, 48, 51, 55, 82-85, 93 p. 10-11, 20-22
C3 Assessing Impacts
C3
p. 38-42, 55-56, 82-85, 87-90, 93, 108-109, 131 p. 9, 10-16, 22
C3.1
p. 38-42, 56, 82-85, 90, 107-109 p. 15-16
C3.2
p. 38-42, 56, 82-85, 108-109, Renewable Raw Material Grievance Log p. 11
C4 Integrating Findings and Taking Action
C4
p. 82-85 p. 10-16
C4.1
Cross-functional collaboration e.g. 30-31, 53, 81-85 p. 7-8, 11
C4.2
p. 81, 90, Neste Human Rights Principle sec.5.7.1 (p.8) p. 11, 17
C4.3
p. 39-42, 44-46, 51-53, 55-56, 82-85, 86-90, 93, 107-109 p. 7-22
C5 Tracking Performance
C5
p. 39-42, 44-46, 53, 55-56, 83-85, 88-90 p. 15-16, 22
C5.1
p. 39-42, 44-46, 53, 55-56, 83-85, 88-90 p. 15-16, 22
C6 Remediation
C6
p. 81-85, 89-90, 131, Neste Human Rights Principle (p. 7) p. 9, 17, 22
C6.1
p. 84-85, 90, 131 p. 9, 17, 22
C6.2
p. 42, Renewable Raw Material Grievance Log p. 22
C6.3
p. 42, 90, 131, Grievance Process; Renewable Raw Material Grievance Log,
Human Rights Principle (p. 7)
p. 9, 17, 22
C6.4
p. 42, Renewable Raw Material Grievance Log N/A
C6.5
p. 42, Renewable Raw Material Grievance Log N/A
1)
Page numbers provided for 2022 Modern Slavery Statement, as the 2023 statement will only be published in Q2, 2024.
PART A: Governance of Respect for Human Rights
A1 Policy Commitment
A1
p. 81-83; Neste Human Rights Principle. p. 7-8
A1.1
p. 82; Neste Human Rights Principle. Neste’s Human Rights Principle was updated in
2022, incorporating extensive consultation with topic experts, NGOs, government
representatives, and trade union experts.
p. 7-8
A1.2
All of Neste’s rights-holders as defined on p. 13 of the Human Rights Principle
A1.3
p. 39, 83, 87, 90, 109. Neste Human Rights Principle is published on our company
website and internally accessible on the Neste intranet. It is communicated to employees
via e-learnings, and to business partners via Neste's Supplier Code of Conduct
Guidance and capacity building workshops.
p. 7, 18-19
A2 Embedding Respect for Human Rights
A2
p. 29, 30-31, 81-85, NBNHR Joint Statement, Neste Human Rights Principle (p. 9-10) p. 3, 7-8, 20-21
A2.1
Described under section 6.1 of the Neste Human Rights Principle (p. 9-10) p. 7-8
A2.2
p. 30-32, 53, 128, 136, Neste Human Rights Principle (p. 9-10) p. 23
A2.3
p. 83, 84, 90, Neste Code of Conduct (p. 7) p. 7-8, 18-19
A2.4
p. 81-85, 87-90, 93, Neste Supplier Code of Conduct Guidance (p. 13-21) p. 7, 12-17,
18-19
A2.5
p. 81-85, 89-90, 93 p. 7-9, 11-12
15, 18-20, 22
PART B: Defining the Focus of Reporting
B1 Statement of salient issues
p. 82, 85; Neste Human Rights Principle (p. 2-9) p. 9
B2 Determination of salient issues
p. 82 p. 9
B3 Geographical focus N/A p. 10-11
B4 Additional severe impacts N/A N/A
Section of the
Framework Location in annual report or website
Page location in 2022
Modern Slavery Statement
1)
UN Guiding Principles Reporting Framework Index
The UN Guiding Principles Reporting Framework provides comprehensive guidance for companies to report on human rights issues in line
with their responsibility to respect human rights. For full details on the framework, please visit www.ungpreporting.org
UN Guiding Principles Reporting Framework Index
Section of the
Framework Location in annual report or website
Page location in 2022
Modern Slavery Statement
1)
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Principles for calculating the key indicators
Environment
Energy: The energy consumption figures cover Neste’s
refineries, terminals, offices, the company’s own sta-
tion business and time-chartered ships. The figures are
based on the data provided by these units. Consump-
tion is calculated based on invoicing and meters. Stan-
dard conversion factors are used (SI). Neste follows
the Energy Efficiency Agreement for Industries which
is an agreement between the Government and indus-
trial associations on the efficient use of energy, providing
also guiding methodology for energy efficiency calcula-
tions. Energy intensity is calculated as the ratio of total
energy consumption to Neste’s revenue.
Carbon dioxide (CO
2
) or Greenhouse gas emis-
sions (GHG): Neste applies a financial control approach
for consolidating the CO
2
or GHG emission indicators.
For the scope 1 emissions, the emission factors com-
pliant with the fuel classification published by Statistics
Finland were used in addition to Neste’s in-house lab-
oratory measurement data. Scope 2 covers emissions
from indirect purchased electricity, steam and heat pro-
duction. Market-based scope 2 emissions are based on
energy supplier-specific or residual grid mix emission
factors. Location-based scope 2 emissions are based
on country-specific emission factors (e.g. IEA, Motiva).
Scope 1 accounting and reporting is based on CO
2
,
scope 2 includes other GHGs where available (the esti-
mated share of other GHG is negligible compared to
CO
2
).
Scope 3 calculation is based on the principles of the
GHG protocol. The calculation of scope 3 emissions
is based on internal data sources (e.g. sales and sup-
ply data), information available from public sources
(e.g. Renewable Energy Directive) and Neste’s accred-
ited in-house calculation data have been used as the
emission factors. Scope 3 emissions reporting covers
GHG emissions and is reported as CO
2
e. Only relevant
scope 3 categories are included in the report.
GHG emission reduction calculation method
complies with the EU Renewable Energy Directive II
(EU) 2018/2001 and the California LCFS methodology,
which has been applied in the GHG reporting for vol-
umes sold in the US since the beginning of 2022. Neste
regularly updates its GHG emission factors in line with
the updates in legislation and the certification schemes.
Average GHG emission reduction of sourced palm oil
contains the use of conventional palm oil that we have
sold within the year 2023. GHG emission reduction com-
parisons are made by comparing the achieved Neste’s
annual greenhouse gas (GHG) emission reduction with
publicly available emission data from road transportation
and aviation sector.
VOC, NOx, SO
2
, PM: Other emissions to air (exclud-
ing CO
2
) are measured with direct measurements (on-line
or periodic) or with indirect monitoring methods. On-line
measurement is typically done on major emission points.
Both direct measurements and indirect monitoring is
based on the site environmental permit or other local
environmental regulation. Relevant process parame-
ters linked to pollutant emissions are monitored too. All
emission monitoring is done in accordance with stan-
dards. If EN standards are not available, ISO, national or
other international standard/method is used to ensure
the provision of data of high scientific quality.
Water withdrawal: The water withdrawal volumes
are based on the company’s own measurements or on
invoicing. Neste’s water risk assessment is based on
WWF Water Risk Filter. Neste annually updates the risk
assessment.
Wastewater discharges: Neste reports the waste-
water volumes, chemical oxygen consumption, as well
as the oil, nitrogen, and phosphorus releases. The figures
are calculated on the basis of refinery- or terminal-spe-
cific data based on sampling or continuous metering.
The figures do not include the loading values of waste-
water treated in municipal or other external wastewater
treatment plants. Neste operates according to local dis-
charge permits and requirements. Our process waters
are always treated to meet the requirements before they
are safely discharged.
Waste generated: The waste volumes are based on
the invoicing data.
Non-renewable resource use: The amount of
non-renewable resource use that Neste’s renewable
and circular solutions helped replace in transport, avia-
tion and polymers and chemicals sectors. Calculations
include fossil resource usage over renewable and circu-
lar production life cycles. An energy-based comparison
is made with relevant fossil references. The difference is
expressed as the energy content of crude oil.
Safety
Total Recordable Injury Frequency (TRIF): Accidents at
work resulting in absence from work, restricted work,
medical treatment, or fatality are included in the acci-
dent frequency figures. The formula for calculating acci-
dent frequency (number of accidents at work per mil-
lion working hours): total number of accidents at work
× 1,000,000 / hours worked. The calculation includes
in-house personnel, contractors and service providers
working at Neste’s sites.
Workplace accidents: Accidents that occur at work/
while performing work duties.
Safe Day: A day without any personal safety accident
(TRI), process safety incident (PSE 1 and PSE 2), fires,
leaks, environmental permit violations, traffic accidents
or marine safety incidents.
Hours worked: The hours worked by the whole per-
sonnel and the service providers during the period under
review. When recording the working hours of service
providers, an estimate (e.g. accounting hours) can be
used if the accurate number of hours is not known.
TRI (Total Recordable Injuries): All recorded acci-
dents at work: the number of accidents at work result-
ing in absence from work, restriction to work or medical
treatment.
LWIF (Lost Workday injury frequency): The num-
ber of accidents at work resulting in lost workdays, rela-
tive to a million hours worked.
Process safety event rate (PSER): Rate of process
safety events per million hours worked.
PSE1 (Process Safety Event): An unplanned and
uncontrolled release of any material, including nontoxic
and non-flammable materials from a process, resulting
in consequences according to the PSE1 classification.
Possible consequences:
• Workplace accident leading to absence (LWI, RWI)
or fatality.
• Fires or explosions with direct expenses (excluding
loss of production) higher than EUR 25,000.
• Evacuation or taking cover indoors.
• A leak exceeding the reporting threshold during a
certain period, threshold according to Concawe
(European Oil Company Organisation for
Environment, Health and Safety).
• A pressure relief device (PRD) discharge with above-
mentioned consequences.
General disclaimer
The figures in the sustainability report may be subject to rounding, which may cause some differences in aggregate totals calculated from exact figures.
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PSE2 (Process Safety Event): An unplanned and
uncontrolled release of any material, including nontoxic
and non-flammable materials from a process, resulting
in consequences according to the PSE2 classification.
Possible consequences:
• Workplace accident requiring medical treatment
(MTC).
• Fires or explosions with direct expenses (excluding
loss of production) higher than EUR 2,500.
• A leak exceeding the reporting threshold during a
certain period, threshold according to Concawe.
• A pressure relief device (PRD) discharge with
abovementioned consequences.
Fatalities: An workplace accident or an accident during
a work-related travel causing an injury resulting in death
within one year of the day of the accident.
HSEQ: Health, safety, environment and quality.
Personnel
Reporting of personnel numbers: The personnel
numbers are calculated as numbers of employees, and
include, as a rule, all personnel with active contracts of
employment or employees on leave. Temporary hourly
paid employees are not included as their numbers of
working hours vary greatly, and their number in propor-
tion to other employees is very small. Unless otherwise
specified, the personnel numbers are reported as at
December 31.
Number of permanent employees leaving the
company: The number of employees leaving a perma-
nent contract of employment from Jan 1 to Dec 31/the
number of permanent employees on Dec 31 (including
all reasons for ending the employment).
Number of permanent employees joining the
company: The number of employees entering a per-
manent contract of employment from Jan 1 to Dec 31/
the number of permanent employees on Dec 31.
Training costs: The training costs include exter-
nal training-related costs, such as the fees of external
trainers, and the participation fees for external training
events, but not, for example, the salaries of participants
or the company’s own trainers.
Innovation
Clean revenue means revenue from all goods and ser-
vices which have a clear environmental and/or social
benefits. Clean investments are investments in such
benefits consisting of Clean CAPEX, Clean R&D and
Clean M&A. Clean Revenue and Clean Investments
include for example revenue from, and investments in,
clean transition as well as low-carbon and circular econ-
omy solutions.
Clean Investments (%): Clean CAPEX+Clean R&D+-
Clean Acquisitions/Total CAPEX+R&D+Acquisitions.
Clean Revenue (%): Clean Revenue/Total Revenue.
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To the Board of Directors
of Neste Corporation
We have been engaged by the Management of Neste
Corporation (hereafter “Neste”) to provide limited assur-
ance on selected numerical sustainability disclosures pre-
sented in the “Sustainability section” of Neste’s Annual
Report 2023 (hereafter “Selected Numerical Sustainabil-
ity Information”) for the year ended 31 Dec 2023.
The Selected Numerical Sustainability Information
consists of selected economic, social and environmen-
tal sustainability closures listed within the GRI (Global
Reporting Initiative) Standards Topic-Specific Disclo-
sures and General Disclosures 2–7 and 2–30 as well as
information presented in the “Sustainability highlights
2023”, “Material sustainability KPIs”, “Value creation”,
and “Performance in figures” sections in Neste’s Annual
Report 2023. Reporting requirements under the Taxon-
omy Regulation have been included under our limited
assurance review scope.
Management’s responsibilities
The Management of Neste is responsible for the prepa-
ration and presentation of the Selected Numerical Sus-
tainability Information in accordance with the reporting
criteria, i.e. GRI Standards, as well as reporting require-
ments under the Taxonomy Regulation (EU 2020/852)
and Commission Delegated Acts (EU 2021/2178 and
EU 2023/2486). The Management is also responsible
for determining Neste’s objectives regarding sustain-
able development performance and reporting, including
the identification of stakeholders and material issues,
and for establishing and maintaining appropriate perfor-
mance management and internal control systems from
which the reported performance information is derived.
Independent Practitioners’ Assurance Report
Our responsibilities
Our responsibility is to carry out a limited assurance
engagement and to express a conclusion based on the
work performed. We conducted our assurance engage-
ment on the Selected Numerical Sustainability Informa-
tion in accordance with International Standard on Assur-
ance Engagements (ISAE) 3000 (Revised), Assurance
Engagements other than Audits or Reviews of Historical
Financial Information, issued by the International Audit-
ing and Assurance Standards Board IAASB. That Stan-
dard requires that we plan and perform the engagement
to obtain limited assurance about whether the Selected
Numerical Sustainability Information is free from material
misstatement.
The nature, timing and extent of the assurance pro-
cedures selected depend on professional judgement,
including the assessment of material misstatement due
to irregularity or error. We believe that the evidence we
obtain is sufficient and appropriate to provide a basis for
our conclusion on limited assurance.
We are independent of the company in accordance
with the ethical requirements applicable in Finland to the
engagement we have undertaken and have fulfilled our
other ethical obligations under those requirements.
KPMG Oy Ab applies International Standard on Qual-
ity Management ISQM 1 and accordingly maintains a
comprehensive system of quality control including doc-
umented policies and procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Procedures performed
A limited assurance engagement on Selected Numerical
Sustainability Information consists of making inquiries,
primarily of persons responsible for the preparation of
information presented in the Selected Numerical Sus-
tainability Information, and applying analytical and other
evidence gathering procedures, as appropriate. In the
engagement, we have performed the following proce-
dures, among others:
• Interviewed the members of Neste’s senior
management and relevant staff responsible for
providing the Selected Numerical Sustainability
Information;
• Assessed the application of the GRI Standards
reporting principles in the presentation of the
Selected Numerical Sustainability Information;
• Assessed data management processes, information
collecting and working methods used to gather and
consolidate the Selected Numerical Sustainability
Information;
• Conducted site sessions to review the Corporate
Sustainability Information on Neste sites.
• Reviewed the presented Selected Numerical
Sustainability Information and assessed its quality
and reporting boundary definitions and;
• Assessed the Selected Numerical Sustainability
Information’s data accuracy and completeness
through a review of the original documents and
systems on a sample basis.
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The procedures performed in a limited assurance
engagement vary in nature and timing from, and are less
in extent than for, a reasonable assurance engagement.
Consequently, the level of assurance obtained in a lim-
ited assurance engagement is substantially lower than
the assurance that would have been obtained had a
reasonable assurance engagement been performed.
Inherent limitations
Inherent limitations exist in all assurance engagements
due to the selective testing of the information being
examined. Therefore fraud, error or non-compliance may
occur and not be detected. Additionally, non-financial
data may be subject to more inherent limitations than
financial data, given both its nature and the methods
used for determining, calculating and estimating such
data.
Conclusion
Our conclusion has been formed on the basis of, and is
subject to, the matters outlined in this report.
We believe that the evidence we have obtained is
sufficient and appropriate to provide a basis for our
conclusions.
Based on the procedures performed and the evidence
obtained, as described above, nothing has come to our
attention that causes us to believe that the information
subject to the limited assurance engagement is not pre-
sented, in all material respects, in accordance with the
GRI Sustainability Reporting Standards.
In accordance with the terms of our engagement, this
independent limited assurance report on the Selected
Numerical Sustainability Information has been prepared
for Neste Corporation in connect with reporting to Neste
Corporation and for no other purpose or in any other
context.
Restriction of use of our report
Our report should not be regarded as suitable to be used
or relied on by any party wishing to acquire rights against
us other than Neste Corporation for any purpose or in
any other context. Any party other than Neste Corpora-
tion who obtains access to our report or a copy thereof
and chooses to rely on our report (or any part thereof)
will do so at its own risk. To the fullest extent permitted
by law, we accept or assume no responsibility and deny
any liability to any party other than Neste Corporation for
our work, for this independent assurance report, or for
the conclusions we have reached.
Our report is released to Neste Corporation on the
basis that it shall not be copied, referred to or disclosed,
in whole (save for Neste Corporation’s own internal pur-
poses) or in part, without our prior written consent.
Helsinki, 1 March 2024
KPMG Oy Ab
Leenakaisa Winberg Tomas Otterström
Authorized Public Partner, Advisory
Accountant
Annual Report 2023
Governance
Corporate Governance Statement Risk management Remuneration report
120
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Governance
Corporate Governance Statement 121
Risk management 135
Remuneration report 140
Corporate Governance Statement Risk management Remuneration report
121
Business review Sustainability Governance Review by the Board of Directors Financial Statements
This Corporate Governance Statement has been pre-
pared pursuant to the 2020 Corporate Governance
Code, Chapter 7, Section 7 of the Securities Markets
Act, as well as Section 7 of the Ministry of Finance’s
Decree on the Regular Duty of Disclosure of an Issuer
of a Security. The Corporate Governance Statement
is issued separately from the Review by the Board of
Directors and it can be found, in addition to the Annual
Report, at neste.com/investors.
Regulatory framework
Neste Corporation (“Neste” or the “Company”) observes
good corporate governance practices in accordance
with the laws and regulations applicable to Finnish
listed companies, the Company’s own Articles of Asso-
ciation, and the Finnish 2020 Corporate Governance
Code. The Corporate Governance Code can be found
at cgfinland.fi/en/. Neste also complies with the rules of
Nasdaq Helsinki Ltd, where it is listed, and the rules and
regulations of the Finnish Financial Supervisory Authority.
Neste’s Audit Committee has reviewed the Corporate
Governance Statement, and the Company’s Auditor,
KPMG Oy Ab, has monitored that it has been issued,
and that the description of the main features of the inter-
nal control and risk management related to the financial
reporting process included in the statement match the
Financial Statements.
Neste issues Consolidated Financial Statements and
interim reports in accordance with the International
Financial Reporting Standards (IFRS), as adopted by the
EU, the Securities Market Act, as well as the appropriate
Financial Supervisory Authority standards, and Nasdaq
Helsinki Ltd’s rules. The Review by the Board of Direc-
tors and the Parent Company’s Financial Statements are
prepared in accordance with the Finnish Accounting Act
and the opinions and guidelines of the Finnish Account-
ing Board.
Corporate Governance Statement 2023
*
Marketing & Services is led through an internal board and its EVP is not a member of the Executive Committee
Shareholders / Annual General Meeting
Shareholders’ Nomination Board
President & CEO
Executive Committee
Neste’s governance bodies
External
Audit
Internal
Audit
Board of Directors
Audit Committee Personnel and Remuneration Committee
Assurance Functions
Risk Management Compliance Internal Controls
Renewable Products Oil Products Marketing & Services* Functions
Renewables Supply Chain and Sustainability
Finance, Strategy and IT
Technology and Projects
HR, Safety and Communications
Legal
Governance Bodies
The control and management of Neste is split between
the Annual General Meeting of Shareholders (AGM), the
Board of Directors, and the President and Chief Execu-
tive Officer (President and CEO). Ultimate decision-mak-
ing authority lies with the shareholders at the AGM, which
appoints the members of the Board of Directors and the
Auditor. The Board of Directors is responsible for Neste’s
strategy and overseeing and monitoring the Company’s
business. The Board of Directors appoints the President
and CEO. The President and CEO, assisted by the Exec-
utive Committee (ExCo), is responsible for managing the
Company’s business and implementing its strategic and
operational targets.
Neste’s headquarters is located in Espoo, Finland.
Corporate Governance Statement Risk management Remuneration report
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Annual General Meeting
Under the Finnish Companies Act, shareholders exer-
cise their decision-making power at General Meetings of
Shareholders, and attend meetings in person or through
an authorized representative. Each share entitles the
holder to one vote. Shareholders at the AGM make deci-
sions on matters including:
• the approval of the Financial Statements;
• the distribution of profit for the year detailed in the
Balance Sheet;
• discharging the members of the Board of Directors
and the President and CEO from liability;
• if necessary, the approval of the Remuneration
Policy;
• the approval of the Remuneration Report; and
• the election and remuneration of the Chair, the Vice
Chair, and the members of the Board of Directors
and the Auditor.
The AGM is held annually before the end of June. An
Extraordinary General Meeting of Shareholders address-
ing specific matters can be held when considered nec-
essary by the Board of Directors, or when requested in
writing by the Company’s Auditor or by shareholders
representing at least one tenth of all Company shares.
Under the Articles of Association, an invitation to a
General Meeting of Shareholders must be delivered to
shareholders by publishing it on the Company’s website
neste.com no earlier than two months, and no later than
three weeks, prior to a meeting, but at least nine days
before the record date set for the meeting under the
terms of the Companies Act. In addition, the Company
may, if the Board of Directors decides, publish details
on the date and time and location of the meeting, with
the address of the Company’s website, in one or more
newspapers.
Neste is unaware of any shareholders’ agreements
regarding the Company’s shares.
2023
Neste Corporation’s Annual General Meeting (AGM)
was held on 28 March 2023 at Messukeskus, Hel-
sinki Expo and Convention Centre. The AGM sup-
ported all the proposals presented to the meeting
and approved the remuneration report. The AGM
adopted the Company’s Financial Statements and
Consolidated Financial Statements for 2022 and
discharged the Board of Directors and the Presi-
dent and CEO from liability for 2022.
The AGM approved the Board of Directors’ pro-
posal that an ordinary dividend of EUR 1.02 per
share will be paid on the basis of the approved bal-
ance sheet for 2022 plus an extraordinary dividend
of EUR 0.25 per share, i.e., EUR 1.27 per share in
total. It was decided to pay the ordinary dividend in
two installments. In addition, in accordance with the
proposal by the Board of Directors, the AGM autho-
rized the Board to decide, at its discretion, on the
payment of a second extraordinary dividend of EUR
0.25 per share by 31 October 2023. The Board
expected that this discretionary second extraordi-
nary dividend would be paid unless there was a sig-
nificant deterioration in the business environment
during 2023.
The AGM decided that the first installment of the
ordinary dividend, EUR 0.51 per share, and the
extraordinary dividend of EUR 0.25 per share, i.e.,
a total of EUR 0.76 per share, would be paid to
shareholders registered in the shareholders’ regis-
ter of the Company on the record date for the div-
idend payment, which was 30 March 2023. It was
decided that the first installment of the ordinary div-
idend and the extraordinary dividend would be paid
on 6 April 2023.
It was decided that the second installment of the
ordinary dividend, EUR 0.51 per share, would be
paid to shareholders registered in the shareholders’
register of the Company on the record date for the
second installment of the ordinary dividend, which
was 29 September 2023. It was decided that the
second installment of the ordinary dividend would be
paid on 6 October 2023.
Based on the above authorization, the Board of
Directors decided on 27 September 2023 on the pay-
ment of a second extraordinary dividend of EUR 0.25
per share. The second extraordinary dividend was paid
to a shareholder registered in the Company’s share-
holder register on the record date for the payment of
the second extraordinary dividend on 29 September
2023. The second extraordinary dividend was paid on
6 October 2023.
In accordance with the proposal made by the
Shareholders’ Nomination Board, the AGM confirmed
the number of members of the Board of Directors at
nine. The AGM decided the composition of the Board
of Directors and the remuneration to be paid to the
members of the Board of Directors, and appointed
the Auditor. The AGM also approved the Board’s pro-
posals to the AGM.
Shareholders’ Nomination Board
Following the proposal by the Board of Directors, the
2013 AGM decided to establish a permanent Share-
holders’ Nomination Board to be responsible for draft-
ing and presenting proposals covering the remunera-
tion and number of members of the Company’s Board
of Directors and for presenting candidates as poten-
tial Chair, Vice Chair, and members of the Board to the
AGM and to an Extraordinary General Meeting of Share-
holders when required. The Shareholders’ Nomination
Board is also responsible for identifying successors for
existing Board Members.
The Shareholders’ Nomination Board must consist
of four members, three of whom are appointed by the
Company’s three largest shareholders, who appoint one
member each. The Chair of the Company’s Board of
Directors serves as the fourth member.
The Company’s largest shareholders entitled to elect
members to the Shareholders’ Nomination Board is
determined annually based on the registered holdings
in the Company’s list of shareholders held by Euroclear
Finland Ltd as of the first weekday in September in the
year concerned.
The Chair of the Company’s Board of Directors
requests each of the three largest shareholders estab-
lished on this basis to nominate one member to the
Shareholders’ Nomination Board. In the event that
a shareholder does not wish to exercise their right to
appoint a representative, the right passes to the next-
largest shareholder who would not otherwise be entitled
to appoint a member.
The Chair of the Board of Directors convenes the first
meeting of the Shareholders’ Nomination Board, which
is responsible for electing a Chair from among its mem-
bers; the Shareholders’ Nomination Board’s Chair is
responsible for convening subsequent meetings. When
the Shareholders’ Nomination Board has been selected,
the Company issues a release to this effect.
The Shareholders’ Nomination Board serves until fur-
ther notice unless a General Meeting of Shareholders
decides otherwise. Its members are appointed annually,
and their term of office ends when new members are
appointed to replace them.
The Shareholders’ Nomination Board forwards its pro-
posals for the AGM to the Company’s Board of Directors
annually by 31 January, prior to the holding of the AGM.
Proposals intended for a possible Extraordinary General
Meeting of Shareholders are forwarded to the Compa-
ny’s Board of Directors in time for them to be included
in the invitation to the meeting sent out to shareholders.
Corporate Governance Statement Risk management Remuneration report
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Composition of the Shareholders’ Nomination
Board prior to the 2024 AGM
On 6 September 2023 the following members were
appointed to Neste’s Shareholders’ Nomination Board:
the Chair, Senior Ministerial Adviser, Financial Affairs
Maija Strandberg of the Ownership Steering Department
in the Prime Minister’s Office of Finland; Timo Sallinen,
Senior Vice President, Investments of Varma Mutual
Pension Insurance Company; President and CEO Jouko
Pölönen of Ilmarinen Mutual Pension Insurance Com-
pany; and Matti Kähkönen, Chair of Neste’s Board of
Directors.
Activities
The Shareholders’ Nomination Board makes proposals
for the next AGM concerning the following:
• the number of members of the Board of Directors;
• the Chair, the Vice Chair and the members of the
Board of Directors; and
• the remuneration to be paid to the Chair, the Vice
Chair and the members of the Board of Directors.
The nomination process of the Shareholders’ Nomina-
tion Board, its composition, and activities are detailed in
its Charter.
The Shareholders’ Nomination Board convened 9 times
between 31 January 2023 and 31 January 2024, and
the members of the Shareholders’ Nomination Board
attended each meeting as follows:
Composition of the Shareholders’ Nomination
Board prior to the 2023 AGM
On 6 September 2022, the following members were
appointed to Neste’s Shareholders’ Nomination Board:
the Chair, Director General Kimmo Viertola of the Own-
ership Steering Department in the Prime Minister’s Office
of Finland; Timo Sallinen, Senior Vice President, Invest-
ments of Varma Mutual Pension Insurance Company;
President and CEO Jouko Pölönen of Ilmarinen Mutual
Pension Insurance Company; and Matti Kähkönen, the
Chair of Neste’s Board of Directors. As of 23 December
2022, Senior Ministerial Adviser, Financial Affairs Maija
Strandberg of the Ownership Steering Department in
the Prime Minister’s Office of Finland, was appointed as
the Chair.
The Shareholders’ Nomination Board convened 10
times between the 2022 AGM and 31 January 2023.
The Shareholders’ Nomination Board presented its pro-
posal covering the members of the Board of Directors
on 27 January 2023.
Maija Strandberg
M.Sc. (Econ.),
Chair of the Shareholders’ Nomination Board.
Born in 1969
Senior Ministerial Adviser, Financial Affairs of the Own-
ership Steering Department in the Prime Minister’s
Office of Finland.
1)
Member of the Board and Audit
Committee of SSAB Ab. Member of the Board, Audit
and Risk and People and Remuneration Committee
of Fortum Oyj. Member of the Nomination Committee
of Kuntarahoitus Oyj.
Holdings in Neste Corporation on 31 December
2023: 00 holdings.
2)
Prime Minister’s Office:
340,107,618 shares.
3)
Timo Sallinen
M.Sc. (Econ.),
Member of the Shareholders’ Nomination Board.
Born in 1970
Senior Vice President, Investments of Varma Mutual
Pension Insurance Company. Member of the Share-
holders’ Nomination Board of Nordea, Nokian Ren-
kaat, Finnair, Alma Media, Atria, Raisio, Robit and
Vincit.
Holdings in Neste Corporation on 31 December
2023: 00 holdings.
2)
Varma Mutual Pension Insurance Company
13,081,622 shares.
3)
Shareholders’ Nomination Board members
Jouko Pölönen
eMBA, M.Sc. (Econ. & Bus. Adm.),
ember of the Shareholders’ Nomination Board
Born in 1970
President and CEO, Ilmarinen Mutual Pension Insur-
ance Company. Member of the Board of Directors of
Nokian Tyres plc. Member of the Board of Directors of
the Finnish Pension Alliance TELA. Chair of the Board
of the Finnish Foundation for Share Promotion. Mem-
ber of the Board of Directors of Excellence Finland
Ltd. Member of the Board of Directors of Finance Fin-
land FFI.
Holdings in Neste Corporation on 31 December
2023: 2,400 shares.
2)
Ilmarinen Mutual Pension Insurance Company
9,357,202 shares.
3)
Matti Kähkönen
M.Sc. (Engineering),
Member of the Shareholders’ Nomination Board.
Born in 1956
Senior Advisor, Metso Corporation 2017–2019. Chair
of the Board of Neste Oyj. Chair of the Board of Direc-
tors at Kemira. Chair of Neste’s Personnel and Remu-
neration Committee.
Holdings in Neste Corporation on 31 December
2023: 13,945 shares.
2)
Holdings in Neste Corporation on 31 December 2023:
1)
Director General, Prime Minister’s office, ownership steering department as of 1 February 2024
2)
Own holdings and controlled entities.
3)
Shareholder’s holdings represented by the member of the Shareholders’ Nomination Board.
Attendance
Maija Strandberg 9/9
Timo Sallinen 9/9
Jouko Pölönen 9/9
Matti Kähkönen 9/9
Decisions on the proposals for the 2024 AGM were made by the
members of the Shareholders’ Nomination Board in a manner set
out in more detail in the stock exchange release published on
31 January 2024.
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Board of Directors
Under the Company’s Articles of Association, the Board
of Directors consists of five to ten members elected at
the Annual General Meeting for a term ending at the fol-
lowing AGM.
Diversity of the Board of Directors
In planning the composition of a skilled, competent, expe-
rienced, and effective Board of Directors, the Sharehold-
ers’ Nomination Board also follows the following diver-
sity principles defined by the Company. A cooperative
and functional Board of Directors requires diversity for
it to be able to respond to the requirements set out in
Neste’s business and strategic objectives and to sup-
port and challenge the company’s operational manage-
ment proactively and constructively.
Significant factors concerning the composition of the
Board of Directors include a variety of competences that
complement the other members of the Board, educa-
tion and experience in different professional and indus-
trial fields, and in business operations and management
in different development phases, as well as the personal
qualities of each member, all of which add diversity to the
Board of Directors. The diversity of the Board of Direc-
tors is also supported by experience in industrial fields
and markets that are strategically significant for Neste,
experience and abilities in technologies and the interna-
tional operating environment, and by a diverse age and
gender distribution so that both genders are always ade-
quately represented in the Board of Directors. In con-
sidering the composition of the Board of Directors, it is
important to pay attention to Neste’s current and evolv-
ing needs, and to ensure that the Board of Directors, as
a whole, enables the current and future business devel-
opment of Neste, which diversity also supports.
Neste’s Board of Directors was composed of nine
members after the 2023 AGM. Jari Rosendal served
on Neste’s Board of Directors until 31 July 2023, after
which Neste’s Board of Directors consisted of eight
members. All the Board of Directors’ members hold a
university-level degree, and one has a doctorate. These
degrees are from various fields, with technical fields and
economics in the majority. A majority of members of the
Board of Directors has international work experience in
different types of positions and has worked or is work-
ing in the Board of Directors or the management of listed
or unlisted companies. Two members have worked in
managerial positions at major international petrochemi-
cal companies. The Board of Directors is also diverse in
terms of cultural background: the members come from
three different countries and speak four different native
languages. Women comprise 25% of all members of the
Board of Directors. Regarding age, the members of the
Board of Directors are divided evenly between 50 and
67 years of age. The duration of the terms of office of the
Board members is divided as follows: Three members
have been on the Board of Directors for three or more
years, while five members have been on the Board of
Directors for less than three years.
Activities of the Board of Directors
The Board must have at least eight regular meetings
annually, all scheduled in advance, with extraordinary
meetings when necessary. Extraordinary meetings, if
requested by a Board Member or the President and
CEO, are convened by the Chair, or, if the Chair is pre-
vented from attending, by the Vice Chair, or if deemed
necessary by the Chair. The Board constitutes a quorum
if more than half its members are present. The Board is
responsible for preparing an operating plan for itself for
its period of office between Annual General Meetings,
including a timetable of meetings and the most import-
ant matters to be addressed at each meeting. The Board
evaluates its performance annually to determine whether
it is functioning effectively after the end of each financial
year.
Duties of the Board of Directors
The Board’s responsibilities and duties are defined in
detail in the Charter approved by the Board. A member
of the Board of Directors may not take part in decision
making in matters regarding (i) agreements between
such member and any entity within the Neste Group, (ii)
agreements between any entity within the Neste Group
and third parties where such a member has a mate-
rial interest in the matter which may conflict with the
The 2023 AGM confirmed the membership of the
Board of Directors at nine members, and the follow-
ing were re-elected to serve until the end of the next
AGM: Matti Kähkönen; John Abbott; Nick Elmslie;
Just Jansz; Jari Rosendal; Eeva Sipilä; and Johanna
Söderström. Heikki Malinen and Kimmo Viertola
were elected as new members. Matti Kähkönen was
re-elected as Chair, and Eeva Sipilä was elected as
Vice Chair. Jari Rosendal served on Neste’s Board of
Directors until 31 July 2023, after which Neste’s Board
of Directors consisted of eight members.
The Board convened 10 times in 2023. The atten-
dance rate at the meetings was 97.6%.
In 2023, the Board focused on the Company’s
long-term strategy by means of, e.g., the continued
scale-up of the Company’s renewables businesses
and the expansion of the Company’s renewables feed-
stock platform. The strategy topics also included the
gradual long-term transformation of the Company’s
Porvoo refinery as well as an investment in liquefied
waste plastics capabilities in Porvoo. The Board also
monitored the production ramp-up relating to the Sin-
gapore expansion project and the Martinez Renew-
ables joint operation in the US as well as the on-going
Rotterdam expansion project. The Board also dealt
with the Company’s announced plans to simplify its
structure to improve efficiency, including changes in
senior management. In addition to the above and
matters set out in the Board Charter, the Board further
supervised strategy execution, as well as evaluating
the changes in the long-term operational environment
and their impact on the Company’s business opera-
tions. The Board continuously monitored the Compa-
ny’s safety, financial and operational performance, as
well as risk management.
interests of Neste or any other entity within the Neste
Group, and (iii) agreements between any entity within
the Neste Group and a legal entity at which such mem-
ber may represent, either individually or with any other
person; provided however, that this point (iii) does not
apply where the party contracting with Neste is a com-
pany within the Neste Group. The term “agreement” as
used here includes litigation or other legal proceedings
arising from or related to such agreements.
2023
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125
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The shareholdings of the members of the Board of Directors are presented below their CVs. The remuneration paid to the members of the Board of Directors is detailed in the Remuneration Report.
Board of Directors, 31 December 2023
Position Born Education Main Occupation
Independent
of the company
Independent
of major
shareholders
Personnel and
Remuneration
Committee
Audit
Committee
Attendance
at meetings
Board Committees
Matti Kähkönen Chair 1956 M.Sc. (Eng.) Non-Executive Director
• • •
10/10 5/5
John Abbott Member 1960 B.Sc. (Chem. eng.) Non-Executive Director
• • •
9/10 5/5
Nick Elmslie Member 1957 B.Sc. (Chem.) Non-Executive Director
• • •
10/10 4/4
Just Jansz Member 1957
Ph.D. (Chemical
Metallurgy)
Independent board member and advisor,
Managing Director of Expertise Beyond
Borders
• • •
10/10 6/6
Heikki Malinen Member 1962 M.Sc. (Econ.) President and CEO, Outokumpu Oyj
• • •
8/8 4/4
Eeva Sipilä Member 1973 M.Sc. (Econ.), CEFA
Chief Financial Officer, Deputy to CEO,
Metso Corporation
• • •
10/10 6/6
Johanna Söderström Member 1971 M.Sc. (Econ.)
EVP, Chief Human Resources Officer
at Tyson Foods Inc
• • •
10/10 4/4
Kimmo Viertola Member 1961 M.Sc. (Econ.)
Senior Ministerial Adviser, Financial
Affairs, Finnish Ownership Steering
Department in the Prime Minister’s Office
• •
8/8 5/5
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Members of the Board of Directors
Matti Kähkönen
(born in 1956)
M.Sc. (Engineering)
Chair of the Board since 2018
Member of the Board since 2017
Independent member
Senior Advisor, Metso Corporation 2017–2019.
President and CEO, Metso Corporation 2011–2017.
Executive Vice President and Deputy to the CEO,
Metso Corporation 2010–2011. President, Mining and
Construction Technology, Metso Corporation 2008–
2011. President, Metso Minerals 2006–2008. President,
Metso Automation, 2001–2006. President, Metso
Automation, Field Systems Division, 1999–2001. Prior
to 1999, various managerial and development positions
in Neles-Jamesbury and Rauma-Repola. Chair of the
Board of Directors at Kemira, 2022–. Chair of the Board
of Directors at the Finnish Fair Corporation 2020–2023.
Chair of Neste’s Personnel and Remuneration Committee.
Holdings in Neste Corporation on 31 Dec 2023:
13,945 shares.
1)
John Abbott
(born in 1960)
B.Sc. First Class Honours, Chemical Engineering
Member of the Board since 2021
Independent member
Downstream Director and a Member of the Executive
Committee of Royal Dutch Shell plc, 2013–2019.
Executive Vice President of Global Manufacturing at
Shell, 2012–2013. Executive Vice President of Shell’s
Upstream Americas Heavy Oil business, based in Calgary,
Canada, 2008–2012. Vice President Manufacturing
(Refining and Chemicals) Excellence and Support at Shell
based in Houston, USA, 2006–2008. Various positions
at Shell in the UK, Singapore, Thailand, The Netherlands,
Canada, and the USA, predominantly in the areas of
Global Manufacturing (Refining and Chemicals) as well
as Supply, Trading and Distribution, 1981–2006. In 1994,
he was also seconded to the British Government for a
short assignment. Non-Executive Director of Fiat Chrysler
Automobiles 2018–2021. Senior Non-Executive Director
of the Intercontinental Exchange (ICE) Futures Europe
2021–. Non-Executive Director of ICE Clear Europe
2023–. Advisor and participant at Mobility Impact Partners
(MIP) 2020–. Member of Neste’s Audit Committee.
Holdings in Neste Corporation on 31 Dec 2023:
784 shares.
1)
Nick Elmslie
(born in 1957)
B.Sc. (Chemistry)
Member of the Board since 2020
Independent member
Chief Executive, BP Global Petrochemicals based in
Shanghai 2011–2015. Controller, Head of Finance
Function, BP Downstream 2006–2011. Various directorial
positions at BP plc., including Chief Executive, Acetyls
Business and Business Unit Leader, Head of Chemicals
Strategy and CFO, Polymers & Olefins 1992–2006.
Various positions at BP plc 1978–1992. Member of the
Board and Investor at 3FBio Ltd 2017–, Chair 2023–.
Member of the Supervisory Board of OTI Greentech AG
2017–. Member of the Board of Fosroc Group Holdings
Limited 2009–. Member of Neste’s Personnel and
Remuneration Committee.
Holdings in Neste Corporation on 31 Dec 2023:
2,784 shares.
1)
Just Jansz
(born in 1957)
Ph.D. (Chemical Metallurgy), M.Sc.
(Mineral Engineering)
Member of the Board since 2022
Independent member
Independent board member and advisor 2011–.
Managing Director of Expertise Beyond Borders 2011–.
President Technology Business, Basell / LyondellBasell
2004–2010. Senior Vice President, Advanced Polyolefins,
Basell 2001–2004. Various managerial positions at Shell
affiliate companies 1989–2000. Member of the Board at
Circular Plastics NL (Dutch National Growth Fund) 2022–
2023. Member of Neste’s Audit Committee.
Holdings in Neste Corporation on 31 Dec 2023:
784 shares.
1)
1)
Holdings in Neste Corporation: own holdings and controlled entities.
Corporate Governance Statement Risk management Remuneration report
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Members of the Board of Directors
Eeva Sipilä
(born in 1973)
M.Sc. (Econ.), CEFA
Vice Chair of the Board since 2023
Member of the Board since 2022
Independent member
Chief Financial Officer, Deputy to CEO, Metso Corporation
2016–, (Metso Outotec Corporation 2020–2023).
Executive Vice President, Chief Financial Officer,
Cargotec Corporation 2008–2016. Senior Vice President,
Communications and Investor Relations, Cargotec
Corporation 2005–2008. Various positions at Metso
Corporation, Mandatum Stockbrokers part of Sampo
Group and Arkwright AB 1997–2005. Supervisory
Board Member, Varma, 2021–. Chair of Neste’s Audit
Committee.
Holdings in Neste Corporation on 31 Dec 2023:
1,900 shares.
1)
Johanna Söderström
(born in 1971)
M.Sc. (Econ.)
Member of the Board since 2020
Independent member
Executive Vice President, Chief People Officer at Tyson
Foods Inc. 2020–. Senior Vice President, Chief Human
Resources Officer at the Dow Chemical Company
2014–2019. Vice President, Center of Expertise Human
Resources at the Dow Chemical Company 2012–
2014. Various directorial HR positions at Dow Chemical
Company, Dow Europe GmbH and Dow Chemical
Handels- und Vertriebsgesellschaft mbH 2007–2012.
Head of Global Compensation & Benefits at Huhtamäki
Oyj 2006–2007. Various specialist and managerial
positions at Dow Europe GmbH, Dow Chemical Handels-
und Vertriebsgesellschaft mbH and Dow Suomi Oy
1999–2006. Prior to 1999, various specialist positions at
Oy L M Ericsson Ab. Member of Neste’s Personnel and
Remuneration Committee.
Holdings in Neste Corporation on 31 Dec 2023:
3,784 shares.
1)
Kimmo Viertola
(born in 1961)
M.Sc. (Econ.)
Member of the Board since 2023
Non-independent member of the company’s significant
shareholder (the State of Finland)
Senior Ministerial Adviser, Financial Affairs, Finnish
Ownership Steering Department in the Prime Minister’s
Office 10/2023–. Director General, Finnish Ownership
Steering Department in the Prime Minister’s Office
10/2018–10/2023. Senior Ministerial Adviser, Financial
Affairs, Finnish Ownership Steering Department in the
Prime Minister’s Office 1–10/2018. Director, Finnish
Industry Investment Ltd (FII) 1998–2017. Director, Price
Waterhouse 1995–1998. Several managerial and analyst
roles, Industrialisation Fund of Finland, FennoScandia
Bank and Skopbank Group 1987–1994. Chair of the
Nomination Committee, Finnair 2023–. Member of the
Nomination Committee, SSAB 2021–. Board member and
member of the Nomination and Remuneration Committee,
Fortum 2022–2023. Deputy Chair of the Bureau, OECD
Working Party on State Ownership and Privatisation
Practices 2020–. Member of Neste’s Audit Committee.
Holdings in Neste Corporation on 31 Dec 2023:
410 shares.
1)
1)
Holdings in Neste Corporation: own holdings and controlled entities.
Martina Flöel
(born in 1960)
M.Sc. (Chemistry), Ph.D. (Chemistry)
Member of the Board since 2017
Independent member
– Member of the Board until 28 March 2023
Marco Wirén
(born in 1966)
M.Sc. (Econ.)
Vice Chair of the Board since 2019
Member of the Board since 2015
Independent member
– Member of the Board until 28 March 2023
Jari Rosendal
(born in 1965)
M.Sc. (Eng.)
Member of the Board since 2018
Independent member
– Member of the Board until 31 July 2023
Heikki Malinen
(born in 1962)
M.Sc. (Econ.), MBA (Harvard)
Member of the Board since 2023
Independent member
President and CEO, Outokumpu Oyj 2020–. President
and CEO, Posti Group Corporation 2012–2019. President
and CEO, Pöyry PLC 2008–2012. Executive Vice
President, Strategy, member of the Executive Team,
UPM-Kymmene Corporation 2006–2008. President, UPM
North America 2004–2005. President of Sales, UPM
North America 2002–2003. Managing Partner, Jaakko
Pöyry Consulting, New York, USA 2000–2001. Several
directorial and managerial roles at ie. McKinsey & Co
and UPM 1986–1999. Vice Chair, EK, Confederation of
Finnish Industries 2023–. Vice Chair, Technology Finland
2023–. Member of Neste’s Personnel and Remuneration
Committee.
Holdings in Neste Corporation on 31 Dec 2023:
857 shares.
1)
Other Board members
during 2023
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128
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Board Committees
The Board has established an Audit Committee, which
has five members, and a Personnel and Remuneration
Committee, which has four members. A quorum exists
when more than two members, including the Chair, are
present. All members are elected from among the mem-
bers of the Board for a one-year term. The tasks and
responsibilities of each committee are defined in their
Charters, which are approved by the Board. The sched-
ule and frequency of committee meetings are deter-
mined by the Chair and committee members. In addi-
tion, the Board of Directors can appoint committees as
needed, for example, for significant investment projects
or other special tasks. Committees meet at least twice
a year. Each committee reports regularly on its meetings
to the Board. Reports include a summary of the matters
addressed and the measures undertaken. Each com-
mittee conducts an annual self-evaluation of its perfor-
mance and submits a report to the Board.
Audit Committee
Under its Charter, the Audit Committee consists of a
minimum of three Board members who are independent
of the Company and its subsidiaries, and at least one of
whom must be independent of Neste’s major sharehold-
ers. Members are required to have sufficient knowledge
of accounting practices and the preparation of finan-
cial statements and other qualifications that the Board
deems necessary. The Audit Committee is permitted
to use external consultants and experts when deemed
necessary.
Duties
The responsibilities and duties of the Audit Commit-
tee are defined in detail in the Charter approved by the
Board.
Personnel and Remuneration Committee
The Personnel and Remuneration Committee consists
of the Chair of the Board and at least two non-executive
members of the Board.
Duties
The responsibilities and duties of the Personnel and
Remuneration Committee are defined in detail in the
Charter approved by the Board.
President and CEO
Neste’s President and CEO, Matti Lehmus (b. 1974,
eMBA, M.Sc., Chemical Technology and Polymer Tech-
nology), manages the Company’s business operations
in accordance with the Finnish Companies Act and
instructions issued by the Board of Directors. The Pres-
ident and CEO oversees the executive management of
the Company in accordance with instructions and orders
given by the Board of Directors, and is responsible for
ensuring that the Company’s accounts are in compli-
ance with the law ,and that its financial affairs have been
reliably arranged.
The President and CEO is appointed by the Board of
Directors, which evaluates the performance of the Pres-
ident and CEO annually and approves his remuneration
based on a proposal from the Personnel and Remu-
neration Committee. Information about the remunera-
tion of the President and CEO can be found in the 2023
Remuneration Report.
2023
Starting from 28 March 2023, the Audit Committee
comprised Eeva Sipilä (Chair), John Abbott, Just
Jansz, Jari Rosendal and Kimmo Viertola. In 2023,
the Audit Committee convened six times, and the
attendance rate was 100%. Jari Rosendal served
on Neste’s Audit Committee until 31 July 2023 after
which Neste’s Audit Committee consisted of four
members.
As part of the tasks specified in its Charter, the
Audit Committee supervised and reviewed during
2023 external and internal audit activities, and the
Company’s financial and other reporting. The Audit
Committee also focused on risk and compliance
management, including in relation to financial, mar-
ket and geopolitical risks, but also certain other risk
areas such as IT systems and cybersecurity. The
Audit Committee also monitored, e.g., legal and
tax matters, as well the Company’s readiness for
upcoming sustainability reporting requirements.
2023
Starting from 28 March 2023, the Personnel and
Remuneration Committee comprises Matti Käh-
könen (Chair), Nick Elmslie, Heikki Malinen and
Johanna Söderström. The Personnel and Remu-
neration Committee convened five times in 2023,
and the attendance rate was 100%.
During 2023, the Personnel and Remuneration
Committee continued to focus on reviewing and
developing Neste’s total remuneration and talent
management and development to support the Com-
pany’s operational and strategic targets. In line with
the duties in its Charter, the Personnel and Remu-
neration Committee also followed up the ongoing
performance period 2023 and outcomes of reward-
ing based on 2022 results. In addition, the Person-
nel and Remuneration Committee followed up the
personnel engagement level based on the Compa-
ny’s Forward survey and Pulse survey results.
Executive Committee
The Executive Committee assists the President and CEO
in managing the Company and in the deployment of the
Company’s strategic and operational goals. Members
are appointed by the Board of Directors. The Executive
Committee meets regularly, on average once a month.
Information about the remuneration of the members of
the Executive Committee can be found at neste.com.
2023
The Executive Committee had 12 meetings during
the year. It also met regularly outside such meetings
in relation to specific themes.
In addition to supporting the President and CEO
in the fulfillment of his general duties, the Execu-
tive Committee continued during 2023 to work on
the development and execution of the Company’s
strategy aiming for global leadership in renewable
and circular solutions. In such a context, the stra-
tegic focus areas included the continued scale-up
of the Company’s renewables businesses, as well
as the expansion of the Company’s renewables
feedstock platform. The Executive Committee also
focused on the expansion of the production capa-
bilities, including the production ramp-up relating
to the Singapore expansion project and the Mar-
tinez Renewables joint operation in the US as well
as the on-going Rotterdam expansion project. The
gradual long-term transformation of the Company’s
Porvoo refinery as well as an investment in liquefied
waste plastics capabilities in Porvoo were also on
the agenda of the Executive Committee. In addi-
tion, several other matters were given special atten-
tion during the year, including efficiency improve-
ment initiatives, IT and cybersecurity matters, data
and digitalization matters as well as the Compa-
ny’s readiness for upcoming sustainability reporting
requirements. The Company’s safety, financial and
operational performance, as well as sustainability,
risk and compliance matters, were regularly moni-
tored by the Executive Committee.
Corporate Governance Statement Risk management Remuneration report
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Matti Lehmus
(born 1974)
President and CEO,
Chair of the Executive Committee
eMBA, M.Sc.
(Chemical Technology and Polymer Technology)
President and CEO since 2022
Joined the company in 1998. Previously responsible
for the Renewables Platform 2019–2022 and for the Oil
Products business area 2014–2019. Has also served
as Executive Vice President of the Oil Products and
Renewables business area 2011–2014, Executive Vice
President of the Oil Products business area 2009–2010,
Vice President of the Base Oils business in the Specialty
Products Division 2007–2009, Vice President of Oil
Refining Business Development in 2007 and Gasoline
Exports and Trading Manager 2004–2007 in the Oil
Refining Division. Member of the National Emergency
Supply Council 2018–.
Holdings in Neste Corporation on 31 Dec 2023:
26,182 shares.
1)
Katja Wodjereck
(born 1976)
Executive Vice President,
Renewable Products business unit
eMBA, M.Sc. (Business Administration,
European Business Management)
Member of the Executive Committee since 1 April 2023
Joined the company 1 April 2023. Responsible for the
Renewable Products business unit. Previously responsible
for the Renewable Road Transportation business unit
4–10/2023. Served as an acting Executive Vice President
for Renewable Polymers and Chemicals 8–10/2023.
Previously served as the President D/A/CH, Italy and
Commercial Director, Industrial Solutions EMEAI in
Switzerland 2022–2023, Commercial Director EMEAI,
Industrial Solutions in Switzerland 2018–2021, Commercial
Director EMEAI, Energy and Microbial Technologies, Dow
Europe GmbH in Switzerland 2017–2018, Sales Director
Northern Europe, Packaging & Specialty in Belgium
2015–2017, Product Manager, Packaging & Specialties
Plastics EMEA in Switzerland 2012–2015, Asset Manager
Polyethylene (LDPE, LLDPE) for Latin America in Brazil
2011–2012, and several managerial positions in Dow
Chemical 2002–2010. Member of the Board of EPCA The
European Petrochemical Association 2018–. Member of
the Board of American Chamber of Germany (Amcham)
2022–. Member of the Board of Management, Member
of the Executive Committee, Chair of the Sustainability
Advisory Forum of Cefic (European Chemical Industry
Council) 2023–.
Holdings in Neste Corporation on 31 Dec 2023:
0 shares.
1)
Carl Nyberg
(born 1979)
Executive Vice President,
Renewables Supply Chain and Sustainability
M.Sc. (Economics and Business Administration)
Member of the Executive Committee since 2019
Joined the company in 2005. Responsible for
Renewables Supply Chain and Sustainability. Previously
responsible for the Renewables Platform unit 2022–2023
and Renewable Road Transportation business unit 2019–
2022. Previously also served in various other positions
at Neste, most recently as Vice President of Sales
Scandinavia of the Renewable Products business area
2016–2019, Vice President, Supply, Oil Products at Neste
Geneva 2014–2016 and Trading Manager, Crude Oil
2013–2014. Managing Director of Neste AB 2017–2019.
Member of the Board of eFuel Alliance e.V. 2021–2023.
Member of the Board of Martinez Renewables 2022–.
Holdings in Neste Corporation on 31 Dec 2023:
12,153 shares.
1)
Markku Korvenranta
(born 1966)
Executive Vice President,
Oil Products business unit
M.Sc. (Eng)
Member of the Executive Committee since 2021
Joined the company in 2021. Responsible for the Oil
Products business unit. Previously served as SVP,
Group Portfolio Development at Marquard & Bahls, in
Germany 2019–2021. EVP, Base Chemicals and Member
of Executive Board at Borealis in Austria 2010–2018.
Before that had several directorial and managerial roles at
Borealis in Austria, Finland, Denmark and Belgium 1994–
2010. Has also served in various roles at Neste Chemicals
in Finland 1990–1994. Member of the Board of Directors
of Oiltanking in Germany 2021–.
Holdings in Neste Corporation on 31 Dec 2023:
0 shares.
1)
1)
Holdings in Neste Corporation: own holdings and controlled entities.
Members of the Executive Committee
Corporate Governance Statement Risk management Remuneration report
130
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Members of the Executive Committee
Other ExCo members
during 2023
Hannele Jakosuo-Jansson
(born 1966)
Executive Vice President,
Human Resources, Safety and Communications
M.Sc. (Eng.)
Member of the Executive Committee since 2006
Joined the company in 1990. Responsible for Human
Resources, Safety and Communications. Previously
responsible for the Group’s Human Resources, Safety
and Procurement corporate functions. Served as Vice
President, Human Resources at Oil Refining 2004–2005
and Laboratory and Research Manager at the Technology
Center 1998–2004. Chair of the Skills and Competence
Committee of the Chemical Industry Federation of Finland.
Vice Chair of the Skilled Workforce Committee at the
Confederation of Finnish Industries EK. Member of the
Board of Directors of Finnair, Chair of the People and
Remuneration Committee of the Finnair Board Plc 2021–.
Directors’ Institute of Finland, Senior Advisor 2023–.
Holdings in Neste Corporation on 31 Dec 2023:
38,846 shares.
1)
Bart Leenders
(born 1969)
Executive Vice President,
Technology and Projects
M.Sc. (Mechanical Engineering)
Member of the Executive Committee since 2023
Joined the company in 2010. Responsible for Technology
and Projects. Previously responsible for Investment
Management and Execution functions, including
Engineering Solutions and procurement 1–10/2023.
Previously also served in various other positions at Neste,
most recently as Vice President, Global Production,
Renewable Platform 2015–2022, Interim Managing
Director, Neste Singapore 2015 and Managing Director,
Neste Netherlands, Renewables Business unit 2010–
2015. Before that served as Manufacturing Manager
Downstream Operations, Huntsman 2005–2010. Member
of the Circular Task Force of the Economic Board Zuid-
Holland 2021–2023. Member of the Executing Committee
of national Climate Agreement Mobility and Executing
Committee of national Aviation Agreement 2018–. Chair
of the Dutch Association for Sustainable Biofuels (NVDB)
2013–. Board member of Deltalinqs 2010–, Enterprise
Association for Mainport Rotterdam, representing
Renewables and Chair of the safety domain. Member of
the Board of Martinez Renewables 2023–.
Holdings in Neste Corporation on 31 Dec 2023:
7,583 shares.
1)
Christian Ståhlberg
(born 1974)
General Counsel, Executive Vice President,
Legal
LL.M.
Member of the Executive Committee since 2017
Joined the company in 2017. Responsible for the Group’s
legal affairs and compliance. Secretary to the Executive
Committee, the Board of Directors, the Audit Committee,
the Shareholders’ Nomination Board and to the
Stakeholder Advisory Panel. Previously served as General
Counsel of Rettig Group Ltd 2015–2017, Director, Legal
in Pohjola Bank plc 2011–2014, Senior Legal Counsel in
Neste Oil Corporation 2007–2011 and Senior Associate
in Roschier Attorneys Ltd 1998–2007. Member of the
Board of Directors and member of the Personnel and
Responsibility Committee of Olvi plc 2023–. Member of
the Legal Committee of Finland Chamber of Commerce
2020–.
Holdings in Neste Corporation on 31 Dec 2023:
7,201 shares.
1)
1)
Holdings in Neste Corporation: own holdings and controlled entities.
Martti Ala-Härkönen
(born 1965)
CFO, Executive Vice President,
Finance, Strategy and IT
Dr.Sc. (Econ.), Lic.Sc. (Tech.)
Member of the Executive Committee since 2022
Joined the company in 2022. Responsible for Finance,
Strategy and IT. Previously served as Executive Vice
President, Chief Financial Officer (Finance, M&A and IT)
at Caverion Corporation 2016–2022, Chief Financial
Officer (Finance & Development) at Cramo Plc 2006–
2016, Senior Vice President, Finance and Administration
(CFO) at WM-data Ltd 2004–2006, Chief Financial Officer
(Finance & Development) and Senior Vice President
Business Development at Novo Group Plc 1998–
2004 and as Finance Manager and Corporate Finance
Manager at Postipankki Plc 1995–1998. Member of the
Supervisory Board of Mutual Pension Insurance Company
Ilmarinen 2022–. Member of the Board of Directors of
Digia Plc 2016–, Vice Chair 2023–, Chair of the Audit
Committee, Member of the Nomination Committee.
Member of the Board of Martinez Renewables 2022–,
Chair 2023–.
Holdings in Neste Corporation on 31 Dec 2023:
6,267 shares.
1)
Thorsten Lange
(born 1963)
M.Sc.
Executive Vice President,
Renewable Aviation
Member of the Executive Committee from
2020 until 5 April 2023
– stepped down from the Executive
Committee and left the company
5 April 2023.
Mercedes Alonso
(born 1966)
M.Sc. (Chem)
Executive Vice President,
Renewable Polymers and Chemicals
Member of the Executive Committee from
2019 until 31 July 2023
– resigned from the company as of 31 July
2023 to continue her career outside Neste.
Panu Kopra
(born 1972)
BBA, MBA
Executive Vice President,
Marketing & Services
Member of the Executive Committee from
2016 until 31 October 2023
– stepped down from the Executive
Committee due to the organizational changes
announced 1 November 2023.
Minna Aila
(born 1966)
LL.M.
Executive Vice President,
Sustainability and Corporate Affairs
Member of the Executive Committee from
2020 until 31 October 2023
- stepped down from the Executive
Committee due to the organizational changes
announced 1 November 2023.
Lars Peter Lindfors
(born 1964)
Ph.D. (Tech.), MBA
Executive Vice President, Innovation
Member of the Executive Committee from
2009 until 31 October 2023
– stepped down from the Executive
Committee due to the organizational changes
announced 1 November 2023.
Corporate Governance Statement Risk management Remuneration report
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Company Auditor
The AGM elects the Auditor annually. The Auditor’s
term of office ends at the end of the next AGM following
election.
The Auditor is responsible for auditing the Company’s
accounts, its financial statements and Neste’s admin-
istration. The Auditor’s Report covers the Consolidated
Financial Statements and the Parent Company’s Finan-
cial Statements, and can be found in the Financial State-
ments section of the Annual Report
Internal Audit
Neste’s Internal Audit provides independent and objec-
tive assurance and advisory services designed to add
value and improve the operations of Neste. As a com-
ponent in the corporate governance process, it supports
the organization by bringing a systematic approach to
evaluating and improving the effectiveness of gover-
nance, risk management and control processes.
Internal Audit’s activities encompass objective exam-
inations for the purpose of providing assessments to
Neste’s Board’s Audit Committee and management
of the adequacy and effectiveness of governance, risk
management and control processes at Neste. The
scope of Internal Audit assessments includes evaluat-
ing that risk management practices are in place, signifi-
cant risks are appropriately identified and managed, key
policies and guidelines exist and are documented and
effectively implemented, organizational structures and
governance models enable efficient decision making,
2023
The 2023 AGM elected KPMG Oy Ab as the Com-
pany’s auditor, and Authorized Public Accountant
Leenakaisa Winberg acted as the auditor with prin-
cipal responsibility.
The statutory audit fees in 2023 were EUR 1.6
million, and other fees charged amounted to EUR
1.1 million.
2023
Internal Audit performed internal audits set out in the
Internal Audit Plan 2023, and reported audit results
to the senior management and the Board Audit
Committee. The Internal Audit function continued
to strengthen cooperation with other Neste assur-
ance functions such as compliance, risk manage-
ment and internal controls with an aim of integrat-
ing activities and reporting to management. Neste’s
strategic investments, top risks and key business
processes were the focus during 2023, includ-
ing cybersecurity, privacy, the Rotterdam Capacity
Growth Project and operations at Neste’s foreign
subsidiaries.
the steering system, roles and responsibilities are clear,
and the results of operations and programs are consis-
tent with established goals and objectives.
Internal Audit work is carried out based on an annual
Internal Audit Plan. Neste’s strategic priorities, key proj-
ects and identified risks are key elements in the audit
planning process. The Vice President of Internal Audit
reports periodically to the senior management and the
Board Audit Committee Internal Audit’s activities relative
to the annual plan, including audit recommendations
and action plans established by organizations aiming for
the continuous improvement and mitigation of risks.
Internal Audit is also responsible for conducting spe-
cial assignments on behalf of management or the Board
Audit Committee. As a member of Neste’s Investiga-
tion Group, the Vice President of Internal Audit partici-
pates in the investigation of suspected misconduct and
breaches of Neste’s policies, principles, and applicable
laws and regulations. To assure an effective, efficient and
value-adding process, Internal Audit actively cooperates
with other Neste’s assurance service functions (Corpo-
rate Risk Management, Internal Control and Compli-
ance) and top management and shares best practices
from a process and governance perspective.
Internal Audit follows the mandatory elements of the
Institute of Internal Auditors’ International Professional
Practices Framework, including the Professional Prac-
tice of Internal Auditing. The Internal Audit reports directly
to the Board of Directors’ Audit Committee and adminis-
tratively to the President and CEO. The Board of Direc-
tors is responsible for approving the Internal Audit Char-
ter and the annual Internal Audit Plan. The Internal Audit
Charter includes the determination regarding the Internal
Audit position, operational model, process and reporting
lines. Internal Audit holds a non-executive meeting with
the Audit Committee members and the Audit Commit-
tee Chair at least annually. The Vice President of Internal
Audit is responsible for the internal audit activities spec-
ified in the Internal Audit Charter.
Compliance function
Neste is committed to high ethical standards and con-
ducts its business and operates in compliance with
applicable laws, regulations and generally accepted
good corporate governance practice. Neste’s Code of
Conduct sets the framework for Neste’s global busi-
ness operations and establishes the ethical practices
to guide Neste employees in their day-to-day business
activities and decisions. Neste also requires suppliers
and other business partners to comply with applica-
ble laws and expects them to follow equivalent ethical
business standards as stated in the Code of Conduct
and further described in our Supplier Code of Conduct.
More information about Neste’s Code of Conduct is in
Neste’s Sustainability Report and on Neste’s external
web pages.
The purpose of Neste’s Compliance function is
to develop, establish, facilitate and oversee compli-
ance procedures and programs aimed at ensuring that
Neste’s global organizations have effective systems and
processes in place for identifying, preventing, detecting
and correcting non-compliance with applicable laws,
regulations and Neste’s internal rules. The function sup-
ports Neste’s management in their responsibility for
overall compliance risk management, as well as Neste’s
organizational unit management in their responsibilities
to identify and manage compliance risks related to their
operations. The compliance function works in close col-
laboration with Neste’s business units, functions and
other internal assurance organizations, in particular the
Risk Management, Internal Control and Internal Audit
functions. The compliance function is headed by the
Chief Compliance Officer (CCO), who reports to Neste’s
General Counsel. The CCO reports regularly on compli-
ance activities to the Executive Committee and the Board
of Directors’ Audit Committee. Neste also has an Ethics
and Compliance Committee, which oversees and steers
the management of the ethics and compliance program
in Neste. Reports on suspected misconduct received
via the Company’s externally operated reporting system
and other reporting channels are investigated in accor-
dance with applicable laws and Neste’s internal Miscon-
duct Investigation Standard. More information about the
Misconduct Investigation Standard and reported sus-
pected incidents of misconduct can be found in the NFI
and Sustainability Report.
In addition to other reporting channels, Neste has an
externally operated misconduct reporting system, Eth-
ics Online, available to all Neste’s internal and exter-
nal stakeholders, including various actors in its supply
chains. Ethics Online serves as a grievance mechanism
and enables Neste’s stakeholders to raise concerns
related to alleged misconduct in Neste’s practices.
Neste’s Investigation Group is responsible for evaluat-
ing and investigating such reported cases. Neste has
a non-retaliation policy for concerns reported in good
faith. Neste’s main principles and policy followed in inter-
nal misconduct investigations is described in the Com-
pany’s internal Misconduct Investigation Standard. Any
irregularities or misconduct are reported regularly to the
Board of Directors’ Audit Committee.
Insider administration procedures
Neste complies with the EU Market Abuse Regulation
(596/2014), including related regulation, as well as Nas-
daq Helsinki Ltd’s Insider Guideline as a minimum stan-
dard on insider matters. In addition, the Board of Direc-
tors has approved the Company’s own Guidelines for
Insiders.
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132
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The Company’s General Counsel is responsible for the
coordination and supervision of insider matters, along
with the insider register manager, the insider communi-
cation manager and individuals responsible as heads of
project-specific registers. All the above individuals have
their own deputies. In addition, the head of each orga-
nizational unit is responsible for supervising insider mat-
ters within their organization. The Company arranges
training related to the insider guidelines.
The creation and maintenance of a project-specific
insider register is the responsibility of the head of such
a register, who is named in the relevant project-specific
insider register.
The Company has defined, as persons discharging
managerial responsibilities, the members of the Board
of Directors and its secretary, the President and CEO,
as well as the members of the Executive Committee and
its secretary. These managerial persons and their closely
associated persons must report their own transactions
conducted with the Company’s financial instruments or
financial derivatives to the Company and the Financial
Supervisory Authority without delay, and no more than
three business days of completing the business transac-
tion. Reports to the Company and the Financial Supervi-
sory Authority can be made by following the instructions
on neste.com/trading.
The Company has also named certain other persons
as core persons, as they have better or more information
about the Company than the market. These individuals
are typically those who prepare the Company’s Interim
Reports and Financial Statements, persons responsi-
ble for the Company’s finances, financial reporting or
communication, or persons who have access to said
information, as well as certain individuals in executive
positions.
Persons discharging managerial responsibilities and
core persons may not trade with or conduct business
with the Company’s financial instruments for themselves
or a third party, directly or indirectly during the period from
the closing date of an interim or annual accounting period
to the date of publication of the interim report or financial
statements for that period. The minimum period con-
cerned is always 30 days prior to the date of publication
of the interim report or the financial statements, includ-
ing the date of publication (“closed window”).
The Company also maintains a project- or event-spe-
cific list of insiders for all individuals that have access to
insider information and who are employed by the Com-
pany or otherwise perform tasks that provide them with
access to insider information. Individuals who partici-
pate in the development and preparation of projects or
events that involve insider information, such as mergers
and acquisitions, are considered project- or event-spe-
cific insiders. Project-specific insiders may not trade or
conduct other business using the Company’s financial
instruments during the project.
Related party transactions
Neste has identified its related parties, and it is regu-
larly engaged in transactions with some of these parties.
These transactions relate to the Company’s normal busi-
ness operations and are in line with the purpose of the
company and executed on market or market equivalent
terms and practices generally observed and accepted
within the industry in question.
The related party transactions are monitored in coop-
eration with Finance and Legal functions as a part of the
Company’s normal reporting and control procedures.
The Board of Directors is responsible for overseeing
the processes established for monitoring related party
transactions. Information about material transactions
concluded between the Company and its related par-
ties is disclosed annually in the notes on the Company’s
consolidated financial statements. When required under
the applicable laws and regulations, material transac-
tions conducted with related parties are also published
via a stock exchange release.
Internal controls
The objective of internal controls at Neste is to provide
reasonable assurance concerning the reliability of the
financial reporting and the preparation of the financial
statements. Additionally, internal controls support the
business in the achievement of its operational and stra-
tegic objectives by acting as performance accelerators
in business processes.
The system of internal controls at Neste is based on
the Committee of Sponsoring Organizations framework
(the “COSO framework,” 2013).
Neste’s internal control requirements are defined in
the Neste Internal Control Principle, Access Risk Man-
agement Principle and related standards.
The Neste Internal Control function leads Group-wide
control development and monitors the internal controls
throughout Neste. The Internal Controls function pro-
vides the necessary guidance for designing and per-
forming the controls effectively.
Control environment
The Board of Directors is responsible for ensuring that
there is adequate control over the Company’s accounts
and finances. Responsibility for arranging this control is
delegated to the President and CEO, who is required to
ensure that the Company’s accounts are in compliance
with the law, and that its financial management has been
reliably arranged.
The internal control at Neste is based on the corpo-
rate structure, whereby the operations are organized into
organizational units. The heads of business units and
the finance function are responsible for establishing and
maintaining appropriate, up-to-date, effective and ade-
quate controls of financial reporting. Operational man-
agement owns the risks and controls and is responsible
for ensuring controls and deficiency-related corrective
actions are implemented.
The Internal Control Principle emphasizes the impor-
tance of internal controls and clarifies the responsibilities
of the Three Lines for establishing effective controls in
business processes. Neste’s values and management
system containing the formal Code of Conduct are the
foundation of the control environment. The President
and CEO and corporate management are responsible
for emphasizing the importance of ethical principles and
correct financial reporting.
Risk assessment
As a prerequisite for risk assessment, the organization’s
objectives need to be established. With respect to finan-
cial reporting, the general objective is to have reliable
reporting and ensure that transactions are recorded and
reported completely and correctly. The assessment of
risk includes risks related to fraud.
Additional information about risk management princi-
ples is available in the Risk Management section of the
Annual Report.
Control activities
Neste control activities include instructions, guidelines
and procedures to ensure that the actions identified by
management to address the relevant risks are carried
out effectively. The most important guidelines related
to financial reporting systems and practices are docu-
mented in the Neste Internal Control Principle, Access
Risk Management Principles, the Controls over Finan-
cial Reporting standard (COFR), Internal Control Pro-
cess Standard, Process charts, month end workflows
and detailed Finance Instructions.
Key control activities are documented in a global con-
trol catalog covering each business or financial process.
Group-level policies and guidelines are documented in
the Neste Management System. The control catalog is
maintained in SAP GRC, the platform used for internal
control management.
Information and communication
Neste corporate-level communication practices support
the completeness and correctness of financial reporting.
Neste personnel have access to adequate information
and communication regarding accounting and report-
ing principles and control guidelines, including clarity
on control responsibility and accountability. The main
means of communicating the relevant matters for appro-
priate financial reporting consist of internal control train-
ing, detailed Finance Instructions containing accounting
principles and guidelines for forecasting and reporting,
information sessions, on-the-job training, process walk-
throughs, and postings on internal channels and pages.
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Neste business units prepare regular financial and
management reports for the management review, includ-
ing analysis of and comments on financial performance.
The Executive Committee and the Board of Directors
receive financial reports monthly. Interim Reports and
Financial Statements are reviewed at Audit Committee
meetings, and thereafter by the Board of Directors.
Monitoring
The Audit Committee oversees the Company’s finances,
financial reporting, risk management, as well as the
Internal Control and Internal Audit functions, as part of
the Company’s corporate governance. Internal control
deficiencies are communicated in a timely manner to
those parties responsible for taking corrective action,
and to management and the Board’s Audit Committee
as appropriate.
The Internal Control function acts on behalf of the
stakeholders to monitor the performance and assess
the adequacy of the controls. Results are reported reg-
ularly to the Executive Committee.
Corporate Internal Audit assesses the operational
model and practices of internal control over Neste’s
financial reporting as part of business and process-level
audits.
2023
In 2023, core business process controls and all
financial process controls were recorded in the new
system, SAP GRC Process Control. Nete has built
a significant number of Continuous Control Moni-
toring automated procedures, and it will continue
to look for more automation opportunities in control
development.
In addition to SAP, Neste has also developed Pow-
erBI Management Dashboards that provide holistic
information about control performance, issue reme-
diation and the segregation of duties.
The focus in 2024 will be on the completion of the
framework by developing controls in the key ERP
programs related to the Marketing & Services and
Investment programs.
Assurance of the ESG reporting according to
CSRD and double materiality requirements has been
set as a high internal control priority. Work related to
data and process governance, as well as the perfor-
mance of control gap analysis, has already started
and will be completed during 2024.
Training and communication
Neste personnel have access to
adequate information regarding
accounting and reporting
principles and control guidelines.
Remediation
Implementation of
management actions
to strengthen the
control environment.
Scope
Defined based on
Strategy, Regulatory
requirements and Risk
assessment.
Monitoring, testing
and reporting
Management uses
various approaches
such as Continuous
Control Monitoring,
separate Internal
Control assessments,
management testing, etc.
The findings are reported
to relevant stakeholders.
Control development
Define and enhance
the controls. Increase
control automation and
continuous monitoring.
Internal
Control activity
Focus on controls over nancial
reporting and fraud prevention.
Building effective Internal Control is an ongoing process
driven by strategy and control objectives
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Performance Management Process
Neste’s Performance Management Process plays an
essential role in helping the Group attain its strategic
goals and reinforcing its performance-driven mindset.
Neste has taken a step change in developing its perfor-
mance leadership into a more agile model supporting
daily operations.
Performance management comprises daily leader-
ship, through which individuals, teams, units and the
Company can achieve selected strategic priorities and
develop organizational capability. Performance leader-
ship is used to ensure that everyone knows the values
and objectives of the Company, and their short- and
long-term objectives, and what kind of competence is
needed and developed to achieve these objectives.
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Results Wellbeing
at work
Renewal
Performance Management Process
Leading performance in daily work
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eam members – current topics
Individual and team objectives are based on Neste’s
strategy and way of working. There is a clear link between
wellbeing at work and good leadership performance.
The key elements in the Neste daily performance lead-
ership approach are:
• setting challenging objectives and following them
through;
• supporting the achievement of objectives with
regular feedback;
• evaluating one’s own performance and results;
• developing ways of working and taking responsibility
for one’s own competence development; and
• holding regular personal development discussions
and check-in discussions that support day-to-day
work.
From a financial outlook and reporting perspective, the
Neste Performance Management Process consists of
long-term financial projections based on the strategy
and Performance Planning covering the midterm (3-year)
outlook. During the year, performance is evaluated in
weekly Management Reporting, the monthly Business
Review and the bi-annual Common Functions Review.
Financials and KPI-related information is evaluated
against the strategic goals and business plans, and
required actions are steered and followed throughout
the year.
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Risk management objectives and scope
Neste recognizes risk management as an integral part of
sound management practice and an essential element
of good corporate governance. As an element of uncer-
tainty (opportunity or threat), risk is an inevitable compo-
nent of running the business. Systematic risk manage-
ment practices are the means to ensure that Neste is
successful in achieving the set strategic goals and busi-
ness objectives and can maintain continuous operations
in a changing business environment. Neste’s risk man-
agement practices can be characterized by the follow-
ing statements:
• The company emphasizes a risk aware culture and
proactive management of risks;
• Risk management is a continuous process that is
subject to improvement to reflect changes in the
external and internal environment;
• The purpose of risk management is to analyze
and manage all opportunities and threats the
company may encounter. By exploiting opportunities
and reducing threats, Neste gains a competitive
advantage;
• Risks are managed as an integrated part of planning,
decision making, and operational processes with a
defined structure of roles and responsibilities; and
• The sufficiency of risk treatment actions and controls
is monitored systematically.
Risk management framework
and principles
Framework and principles for risk management have
been defined in the Neste Corporate Risk Management
policy, which has been approved by the Board of Direc-
tors. The policy is supplemented by risk management
principles, guidelines and instructions for specific risk
disciplines. Neste’s risk management framework and
processes are aligned with the internationally recognized
best practices for risk management (COSO: Enterprise
Risk Management – Integrating with Strategy and Per-
formance; and ISO 31000 standard).
In Neste’s risk model, risks are classified as external,
strategic and preventable risks that are more operational
in nature.
• External risks are exposures that Neste cannot
fully influence or control. The main risk classes are
changes in the external environment and risks in the
extended enterprise;
• Strategic risks relate to strategic choices,
strategy implementation and risks in the planning
and execution of major projects (e.g., refinery
turnarounds). Strategic risks are not inherently
undesirable, as they typically contain both upside
and downside risk potential; and
• The third category of risks, preventable risks,
consists of various risk classes that arise within the
organization and are mostly controllable. In general,
Neste does not gain strategic benefits from taking
these risks.
Risk management
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Risk governance
The Neste Board of Directors has the ultimate account-
ability for risk oversight. Among other duties, the Board
is in this role responsible for setting the Group’s risk
appetite and for approving the Corporate Risk Manage-
ment Policy. The practical implementation, development
and monitoring of risk management processes is based
on the three lines of defense model. The model distin-
guishes between:
President and CEO and
Executive Committee
1st Line of Defense
Ownership for risk taking
and risk treatment
2nd Line of Defense
Risk management support, facilitation,
and consultation
3rd Line of Defense
Independent assurance
Risk governance
Board of Directors
Audit Committee
Ethics and Compliance
Committee, CFO
Internal
Control
Risk coordination team,
CRO
Risk
management
Compliance Internal Audit
Risk champions
1st line of defense
The first line of defense is responsible for setting the
objectives, managing day-to-day performance and rein-
forcing risk responses to achieve the set targets. At
Neste, the first-line actors include Business Units and
Functions in their first-line roles. As a part of the first line
of defense, Neste’s President and CEO and the Neste
Executive Committee have the overall accountability for
appropriate risk management practices.
In practice, Business Units and Functions own and
manage risks with the help of a dedicated network of
risk champions and coordinators. The role of the risk
champions/coordinators is to represent different risk dis-
ciplines and to ensure that risk discussions are embed-
ded in everyday management routines.
2nd line of defense
The role of the actors in the second line of defense is to
provide guidance, support, facilitation and consultation
for risk management. The second line of defense needs
to have some degree of independence from the first line
of defense to be able to challenge the first line in man-
aging performance and making risk-informed decisions.
At Neste, the second line of defense includes Functions
in their second-line roles and specialist teams (corporate
risk management, compliance and internal controls). In
addition, Neste has established a separate Ethics and
Compliance Committee that aims to increase manage-
ment oversight of compliance- and ethics-related issues
within the Group. The Committee also ascertains the
adequacy of mitigation actions in higher-risk compliance
areas.
The Chief Risk Officer (CRO) assisted by corporate risk
management team has the overall responsibility to con-
firm that risk management activities are carried out con-
sistently throughout Neste Group and all risk classes.
Corporate risk management also drives the overall
development of risk management practices and tools.
The team is supported by the network of risk champions
and coordinators.
3rd line of defense
As an independent team, Internal Audit evaluates the
effectiveness and efficiency of the corporate-level risk
governance model and related risk management pro-
cesses, including the effectiveness of internal controls
and other risk treatment actions in the scope of each
audit. Internal Audit also provides recommendations for
improvement areas.
Risk reporting
Risk reporting aims for the transparent, consistent and
comprehensive communication of risk status in different
areas. As a result of risk reporting, the Company’s risk
profile can be compared with the defined risk appetite,
and it can be concluded whether additional risk treat-
ment actions are needed.
Communication regarding the most important risk
issues takes place along the strategic planning and per-
formance management cycle. Formal risk reporting is
directed to the Business Unit and Function management
teams, the Neste Executive Committee, the Audit Com-
mittee and the Board of Directors. The corporate risk
management team is responsible for aggregating risk
information for reporting to different internal and external
audiences.
Risk management focus in 2023
In 2023, special risk management initiatives focused on
sustainability risk management, cyber risk management
and business continuity management. Risk manage-
ment support for major investments, projects and busi-
ness model changes also continued. Additional empha-
sis was placed on the development of risk management
practices and tools.
Risks related to Neste’s business
In the pursuit of its objectives and targets, Neste is
exposed to various risk factors that stem from the exter-
nal environment, internal decision making, operating
processes and systems in use. The most significant risk
factors relate to the areas mentioned below. Any one
of the risks, either singly or in the aggregate, may have
a material adverse effect on Neste’s business, financial
condition, operating results and future prospects.
Functions
Business Units
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Risk type Risk level
External
Economic conditions Despite some easing of the macroeconomic outlook, e.g., a decline in the headline inflation, overall economic activity still falls short of full recovery, and growth expectations are low. Continued
slowing economic growth and elevated inflation could have an indirect impact on the demand for Neste’s products. While governments have shifted attention to the mitigation of the higher
cost of living, the market has seen temporary reductions in climate ambition and targets. It has also slowed down the implementation of climate policies that would also support demand
for Neste’s solutions. Inflation could also increase the operating costs and costs of ongoing capital investments related to the sourcing of feedstock, utilities, labor, services, equipment and
materials.
Volatility in the oil refining margins is expected to continue. In 2023, refining margins were impacted by geopolitics, tight monetary policies, the post-Covid recovery and restricted Russian
oil trading. Moreover, changes in the global crude oil quality associated with the OPEC+ supply cut, as well as unplanned refinery outages driven by weather events, further amplified the
margin volatility.
In the renewable fuels market, risks relate more to balancing of fuel supply and demand in the face of changing regulation, both on the feedstock and product side. An increase in supply
volumes was seen in 2023. The European renewable fuel market was slightly oversupplied as a result of large import volumes of Chinese double-countable biodiesel. Although imports have
come down significantly since their peak in the spring, a delayed effect combined with stagnant demand growth has continued to place pressure on renewable fuel prices in Europe. At the
US federal level, short term mandates grew at a slower pace than supply build-up in the biofuels sector, leading to a narrowed margin.
Geopolitics Geopolitical tensions such as the continuing war in Ukraine, conflicts in Middle Eastern countries, and other emerging military or trade conflicts could have adverse effects on international
trade and finance. If geopolitical tensions increase and lead to the imposition of additional or more comprehensive trade restrictions, there could be a material adverse effect on Neste’s ability
to access feedstocks, deliver products and complete investment projects. For example, US–China trade tensions could increase volatility in the renewable feedstock and oil products markets.
Climate change Neste’s strategic ambition is to be the global leader in renewable and circular solutions. Growing pressure to combat climate change and reduce greenhouse gas emissions is therefore
primarily a positive driver for Neste’s business. However, political and societal focus on the low-carbon transition and the energy sector’s carbon footprint also creates risks. The indirect
economic and political consequences of climate change may contribute to the general uncertainty in the business environment and hence have an adverse effect on Neste’s business. Various
governments have shifted their attention to the mitigation of the higher cost of living, and the market has seen temporary reductions in climate ambition and targets as a result. It has also
slowed down the implementation of the climate policies that support demand for Neste’s solutions. In addition, changes in carbon emission trading schemes or similar initiatives at EU-, US-
or individual Member-State-level may have a significant effect on Neste’s business.
Laws and regulation Changing regulation presents both an opportunity and a threat to Neste’s business. Neste’s business units mainly benefit from increased support for biofuels and renewable fuels (for example,
requirements related to renewable content in diesel and gasoline). However, changes in regulation, especially in the European Union and the United States, also create uncertainties, as
these may influence the speed at which the demand for renewable products develops, and new raw materials sources are brought into use. For renewable products, a significant source of
uncertainty is the fragmented regulation around the acceptability and use of waste and residue feedstock.
Risk management
Low to moderate risk level and potential impact on the
execution of set targets and objectives. Efficient risk
mitigating actions and controls in place.
Moderate risk level and potential impact on the
execution of set targets and objectives. Limited risk
mitigation possibilities, area of risk management focus.
Substantial risk level and potential impact on the execution
of set targets and objectives. Limited risk mitigation
possibilities, area of risk management focus.
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Risk type Risk level
Strategic
Technology Neste’s competitive position in the selected key markets is good. Neste’s proprietary NEXBTL production technology is a proven technology for producing high-quality diesel from renewable
raw materials. However, there is no assurance that this competitive position will continue as new players enter the market, and current competitors develop their technologies or preferences,
either customer or legislative, for clean mobility change. The more rapid than anticipated development of alternative feedstocks and production technologies for liquid fuels, the evolution
and adoption of engine technologies, and the introduction of alternative powertrains could increase competition for NEXBTL, which may decrease demand and lower margins for Neste’s
products. Furthermore, the demand for and margins of Neste’s products could be adversely affected by regulatory preferences for technologies or products that compete with Neste’s.
Competition Increases in global renewable refining capacity relative to growth in demand for the renewable products may have a material adverse effect on Neste. Staying ahead of the competition
requires continuous improvement, the ability to challenge current business models and a strong focus on innovations such as new production technologies and feedstock platforms. Neste’s
ability to source sustainable feedstocks at quantities sufficient for its production targets and at acceptable prices is vital to achieving its strategic objectives. If new competitor capacities lead
to supplies of renewable products exceeding demand, or if Neste’s renewable products become less competitive, it may reduce Neste’s refining margins for renewable products.
Project risks Successful projects play a key role in Neste’s strategy deployment, operational development and the digitization of processes. Possible delays in growth projects or in the ramp-up of new
production facilities pose a risk to Neste. In 2023, delays in the ramp-up of the new production line in Singapore had an adverse impact on the production and sales volumes of renewable
diesel and SAF. Significant delays in project planning or execution may also reduce operational efficiency or impair Neste’s ability to secure its competitive position in the future.
Talent management Strong governance practices and the continued contributions of Neste’s senior management, personnel and partners are vital for the company’s success. Due to fierce competition for
talent, there is a risk that Neste may not be able to recruit and retain the highly skilled employees who are needed for strategy deployment and successful operations in the future.
Preventable
Business continuity The importance of business continuity management has been highlighted in the changing environment. Neste has continued with the design and implementation of strategic and operational
business continuity measures. At the company level, scenario work has also played an important role, e.g., in testing resilience to various climate change scenarios.
At the operational level, Neste’s business performance greatly depends on the continuous reliability of refining activities in Finland (Porvoo), Singapore and the Netherlands (Rotterdam). Any
shutdown of Neste’s operations, whether planned or unplanned, could have a material adverse effect on Neste’s business. In addition to the planned maintenance turnarounds, disruptions in
the supply of utilities or breakdown of critical machinery could cause unexpected shutdowns that would affect Neste’s ability to fulfill demand for end products. Likewise, interruptions in the
supply chain and logistics network are a risk for Neste. For example, the vessels owned, leased or chartered by Neste are subject to inherent risks, including the risks of maritime disaster,
damage to the environment, and loss of or damage to cargo and property. Such events may be caused by mechanical failure, human error, adverse weather conditions, warfare or piracy,
among other factors, in the areas where the vessels operate.
Neste is subject to operational risks common in the renewable fuel and oil industry and has insurance in place to reduce the financial impact of property damage, business interruption, and
maritime disasters. However, insurance does not cover all potential losses, and Neste could therefore be seriously harmed by operational catastrophes or deliberate sabotage.
Quality Neste’s products and services must continuously meet customer requirements related, e.g., to product quality and sustainability. Evolving customer requirements, with more complex sourcing
and logistics networks and production methods, increase the exposure to quality risks that need to be managed well to maintain the high-quality brand image. As risk mitigation, Neste has
implemented systematic quality management measures, both in its own operations and in partner networks.
Low to moderate risk level and potential impact on the
execution of set targets and objectives. Efficient risk
mitigating actions and controls in place.
Moderate risk level and potential impact on the
execution of set targets and objectives. Limited risk
mitigation possibilities, area of risk management focus.
Substantial risk level and potential impact on the execution
of set targets and objectives. Limited risk mitigation
possibilities, area of risk management focus.
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Risk type Risk level
Preventable
Market risks
Despite market stabilization and decreasing energy and utility prices in 2023, there is a continuing risk of market volatility and increasing prices. This could have direct impacts on Neste’s
operating and project costs. On the feedstock side, it is expected that the high demand for different waste and residue feedstock streams will continue, as competitors are increasing their
production capacity for renewable products.
Neste’s financial results are primarily affected by the price differential, or margin, between refined petroleum and renewable product prices; and the prices for the crude oil, different vegetable
oils and other feedstock used. Historically, refining margins have been volatile, and they are likely to continue to be so in the future. The main factors that may affect the refining margins
include:
• Changes in the aggregate demand for and supply of raw materials and products;
• Changes in the demand for and supply of specific raw materials and products;
• Raw materials and product price fluctuations; and
• The evolution of worldwide refining capacity, and especially the development of refining capacity related to petroleum and renewable products similar to Neste’s.
As a part of risk management, Neste uses derivative instruments to protect its position against fluctuations in commodity prices. Neste is exposed to foreign exchange risks because most
of the sales are denominated in US dollars, whereas operating expenses (except the purchase of raw materials) are recorded in euros. Neste limits the uncertainties related to changes in
foreign exchange rates by hedging its currency risks in contracted and forecasted cash flows and balance sheet exposures. More information about market risks can be found in the Financial
Statements Note 3 section of the Annual Report.
External compliance Neste’s refining operations and products are subject to extensive regulation (incl. environmental, health and safety, sustainability). General regulatory requirements in areas like commodity
trading and data protection have also contributed to the formalization of operating procedures. As Neste’s supply base has become more fragmented and diversified, and global supply
chains have expanded, there is an increased exposure to regulatory requirements, as well as business conduct and sustainability risks. It is critical that Neste stays at all times compliant with
various regulatory acts related to feedstock eligibility and product characteristics. Non-compliance with applicable regulation or external requirements would have both adverse financial and
reputational impact on Neste.
Counterparty
and credit risks
Counterparty risk arises from all business relationships where Neste is exposed to the counterparty’s failure to perform according to Neste’s requirements and contractual commitments.
The extent of counterparty risk has increased along the continued diversification of Neste’s supply base and customer segments. To manage the risk, Neste has implemented systematic
controls for counterparty screening and monitoring. Especially on the sales side, Neste is also exposed to credit risk, i.e., the potential failure of a counterparty to meet its contractual payment
obligations. Risk magnitude depends on the size of the exposure concerned and the counterparty’s creditworthiness, which is assessed systematically both during onboarding and during
the relationship.
Sustainability risks
The most significant sustainability risks that relate to Neste’s own operations or to the extended enterprise have been reported in line with the requirements of the Non-Financial Reporting
Directive as a part of the Review by the Board of Directors.
Information
security and cyber
The operation of Neste’s core processes depends on functioning information technology systems and the availability of key data. Neste’s information technology system architecture is
being continuously developed to provide better support for operations and take advantage of digitalization and emerging technologies. At the same time, the increasing sophistication of
cyberattacks and generally rising frequency of attacks targeted at oil and gas companies also poses a threat to Neste.
The reliability of key information technology systems and partnerships is essential for continuous business operations. Prolonged processing disruptions or the unavailability of key systems,
data or information leaks, violations of data privacy regulations, intentional cyberattacks targeted at Neste’s operational core systems or production automation systems, or any other malicious
attempt to exploit Neste’s systems or data could limit Neste’s ability to conduct its business operations in a profitable, efficient and controlled manner.
Low to moderate risk level and potential impact on the
execution of set targets and objectives. Efficient risk
mitigating actions and controls in place.
Moderate risk level and potential impact on the
execution of set targets and objectives. Limited risk
mitigation possibilities, area of risk management focus.
Substantial risk level and potential impact on the execution
of set targets and objectives. Limited risk mitigation
possibilities, area of risk management focus.
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Dear Shareholder,
On behalf of Neste’s Personnel and Remuneration Com-
mittee (the “Committee”), I am pleased to present our
2023 Remuneration Report outlining the remuneration
of the members of the Board of Directors and the Pres-
ident and CEO (the CEO) for the financial year 2023
and describing how the Remuneration Policy approved
by the 2020 Annual General Meeting of Shareholders
(AGM) has been implemented in practice. This Remu-
neration Report has been prepared in accordance with
the Finnish Corporate Governance Code 2020, and the
requirements set forth in the Finnish Limited Liability
Companies Act, the Finnish Securities Markets Act and
the Decree of the Ministry of Finance. The report will be
presented at the 2024 AGM of Neste for an advisory
shareholder vote.
Our approach to remuneration
and link to sustainability
Our purpose as a Personnel and Remuneration Com-
mittee is to ensure that remuneration programs at Neste
reflect our longstanding remuneration principles of sup-
porting the business strategy, paying for performance
and thereby supporting Neste’s long-term financial suc-
cess, encouraging value-based behavior and individual
accountability, and paying competitively and fairly.
Based on our remuneration principles, we have
designed our remuneration policies, practices and pro-
cesses to ensure that we can compete and retain the
best workforce, talents and senior management in the
diverse markets in which we operate. We believe that
our performance-based remuneration programs, com-
bined with selecting the right individuals for key posi-
tions, versatile career progression, proactive succession
planning and appropriate market competitive rewarding,
are also key to our future success.
Neste’s safety culture has been developed systemat-
ically for several years, and the measures related to the
improvement in both process and personnel safety con-
stitute at least 20% of the short-term incentives’ mea-
sures. Similarly, Neste’s commitment to our strategic
sustainability targets is also reflected in our long-term
incentives plan, in which 20% of measures are based on
our combined Greenhouse Gas impact.
Our remuneration structure aims to reinforce and sup-
port our key strategic target to deliver outstanding value
with renewable and circular solutions, which will support
sustainable long-term value creation for all stakehold-
ers. For our President and CEO, a significant proportion
of remuneration is derived from variable pay to ensure
that there is a strong alignment between sustainable
value creation for shareholders, company performance
and reward. The Board of Directors sets the targets for
both short- and long-term incentives, and the variable
payouts are directly linked to both operational, ESG and
strategic measures.
Neste performance in 2023
On a global scale the year was marked by a volatile busi-
ness environment, geopolitical turbulence and a number
of regulatory changes. Despite a challenging business
environment we were able to deliver a strong financial
result. Neste was able to deliver a comparable EBITDA
of EUR 3,458 million and take important steps in execut-
ing its growth strategy.
The main performance measure for the Performance
Share Plan (PSP) 2021–2023 has been relative Total
Shareholder Return (relative TSR) of Neste shares com-
pared to the STOXX Europe 600 index between 2021
and 2023 (weight 80%). The Neste Total Shareholder
Return was compared to the index at the 7.7th percen-
tile. In addition, another performance measure was com-
bined Greenhouse Gas impact (weight 20%).
Neste Remuneration Report 2023
Application of the Remuneration
Policy in 2023
The remuneration for the Board of Directors and the CEO
during the financial year 2023 was executed in accor-
dance with the 2020 Remuneration Policy. No devia-
tions from the Remuneration Policy have been made,
and no remuneration of the Board of Directors or the
CEO has been reclaimed or restated during the financial
year 2023.
Advisory Shareholder vote regarding the
Remuneration Report 2022 and shareholder
engagement
At the Annual General meeting in 2023, 94,28% of the
Neste Shareholders supported the Neste Remuneration
Report 2022.
At Neste, we believe in transparent business practices,
and as part of our efforts to further improve remunera-
tion transparency, we have improved our disclosure of
achieved STI and LTI payout in the Remuneration Report
2023 by adding actual achievement rates per individual
performance measure.
Looking ahead to 2024
We aim to continue to utilize the company’s short- and
long-term incentive programs to drive company per-
formance, long-term financial success, and ensure our
competitiveness and attractiveness as an employer
in the international markets in which Neste operates.
During 2024, we will design a new long-term incentive
program, as the current one is coming to the end of its
implementation period.
Matti Kähkönen
Chair of the Personnel and Remuneration Committee
Neste Personnel and
Remuneration Committee
Matti Kähkönen
Chair of the Personnel and Remuneration
Committee
Committee members until 28 March 2023:
• John Abbott
• Martina Flöel
• Johanna Söderström
Committee members from 28 March 2023:
• Nick Elmslie
• Heikki Malinen
• Johanna Söderström
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141
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The Annual General Meeting decides on the remuneration for the members of the Board, based on the proposal of
the Shareholders’ Nomination Board, for one period at a time until the closure of the next AGM. On 28 March 2023,
the 2023 AGM confirmed the following annual fees for the members of the Board of Directors. 97.79% of the votes
cast were in favor of the proposal of the Shareholders’ Nomination Board.
Meeting fees were paid based on attendance, plus compensation for expenses in accordance with the Company’s
travel guidelines.
The meeting fee for meetings held over the telephone or through other means of data communication was paid
according to the fee payable for meetings held in each member’s home country. The meeting attendance fees include
meeting fees paid due to special tasks set by the Board of Directors, but not travel expenses.
Details of the shareholdings of the Board of Directors are shown on the web pages.
Remuneration of the Board of Directors for the previous financial year
Annual fee, 40% of the annual fixed fee paid to be paid in the form of Neste shares,
and the remainder in cash.
Chair 95,000 EUR per annum
Vice Chair 60,000 EUR per annum
Member 45,000 EUR per annum
Chair of Audit Committee
1)
60,000 EUR per annum
Committee fees
Member of the Audit Committee 5,000 EUR per annum
Chair of the Personnel and Remuneration Committee 6,000 EUR per annum
Member of the Personnel and Remuneration Committee 2,500 EUR per annum
Chair of another committee established based on Board decision 6,000 EUR per annum
Members of another committee established based on a Board decision 2,500 EUR per annum
Meeting fees
Meeting held in the member’s home country 1,000 EUR
Meeting held in the same continent as the member’s home country 2,000 EUR
Meeting held outside the same continent as the member’s home country 3,000 EUR
1)
If person does not simultaneously act as Chair or Vice Chair of the Board
EUR Annual fee
1)
Committee and
meeting fees
2)
Total
Matti Kähkönen, Chair 95,000 24,400 119,400
Eeva Sipilä, Vice Chair 60,000 19,400 79,400
Marco Wirén, Vice Chair
4)
- 4,000 4,000
John Abbott 45,000 31,200 76,200
Nick Elmslie 45,000 29,500 74,500
Martina Flöel
4)
- 2,400 2,400
Just Jansz 45,000 28,400 73,400
Heikki Malinen
3)
45,000 18,500 63,500
Jari Rosendal
5)
45,000 16,400 61,400
Johanna Söderström 45,000 28,900 73,900
Kimmo Viertola
3)
45,000 22,000 67,000
1)
The total annual fee for the Board membership 2023–2024 was paid in May 2023, and 40% of the annual fee was paid in shares
and 60% in cash. Neste has paid the transfer tax for share purchase, and it has been handled as taxable income for each member.
2)
Meeting and committee fees include an annual committee fee for the Board membership period 2023-2024 and fees based
on attendance during 2023.
3)
Member of Board since 28 March, 2023
4)
Member of the Board until 28 March, 2023
5)
Member of the Board until 31 July, 2023.
Remuneration has been paid from the parent company.
Remuneration paid to the members of the Board in 2023
The AGM 2023 decided that 40% of the fixed annual fee was to be paid in the form of shares, and the remainder in
cash. The shares were purchased directly on behalf of the Board members within two weeks of the publication of
the interim report for the period January 1 to 31 March 2023 from the market at a price formed in public trading. The
Company has paid all costs and transfer tax related to the purchase of Company shares. The total cash part of the
annual Board fee and committee fees for the Board membership period 2023–2024 were paid in May 2023. Meeting
fees were paid during the year after the meetings.
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Neste’s Board of Directors decides on the remuneration of the President and CEO based on the proposal by the
Board’s Personnel and Remuneration Committee. The available remuneration elements are defined in Neste’s Remu-
neration Policy and are aligned with market practices. The remuneration of the CEO consists of a fixed annual remu-
neration, including a base salary and fringe benefits, and variable remuneration, including short- and long-term incen-
tives plans and a supplementary pension.
The supplementary pension of the President and CEO is a defined contribution plan with an annual contribution
of 16% of the fixed annual salary and a retirement age of 62 years. This supplementary pension benefit is originally
based on his previous positions as a member of the Neste Executive Committee. Those Executive Committee mem-
bers who started in their position after 1 January 2009 but before 31 August 2018, are eligible for a defined contribu-
tion (DC) pension scheme (based on a retirement age of 62, 63 or as prescribed under Finnish pension legislation).
No other financial benefits were paid to the President and CEO in 2023.
The table below includes the taxable value of the remuneration:
Short-term incentives
The President and CEO’s short-term incentives, including the terms and conditions for these plans, are determined
by Neste’s Board of Directors. The Board of Directors annually sets and evaluates targets for the President and CEO.
The maximum short-term incentive for the President and CEO was 80% of annual base salary in 2022 and 2023.
In 2022, Matti Lehmus’ award was based on the CEO period May–December 2022. The total incentive payment of
423,551 EUR was paid in March in 2023, and the achievement ratio for CEO period was 61.6% of annual base sal-
ary. The achievement ratio for 2023 is 54.4% of the annual salary, and the incentive payment of 501,125 EUR will be
paid in March 2024.
Details of the short-term incentive plan awards 2022 and 2023 for the President and CEO:
Remuneration of the President and CEO in 2023
CEO’s total remuneration Paid during 2023 (EUR)
Fixed annual salary
1)
996,702
Short-term incentive plan
2)
423,551
Long-term incentive plan
3)
447,752
Supplementary pension 146,260
Total 2,014,265
Proportion of fixed and variable remuneration (supplementary pension excluded) 53% and 47%
1)
Benefits, vacation pay and service years reward included in the fixed remuneration.
2)
Based on the previous position 1–4/2022 and the CEO position 5–12/2022.
3)
LTI vested value paid in 2023 reflects the PSP 2020–2022 grant, which was allocated to his previous position.
Remuneration has been paid from the parent company.
2022 2023
Performance measure Weight
Performance outcome %
Threshold 50%
Target 100%
Maximum 200%
Performance outcome %
Threshold 50%
Target 100%
Maximum 200%
Group comparable EBITDA 50% 200 112
Free Cash Flow 20% 105 200
Comparable ROACE 10% 200 169
Group Safety (TRIF) 10% 0 70
Group Process Safety (PSER) 10% 133 167
Total weighted outcome
1)
100% 154 136
Details of the short-term incentive plan award for the President and CEO for 2024, potential reward payment in
March 2025:
Performance measure Weight
Renewable products EBITDA comparable 30%
Oil Products EBITDA comparable 20%
Free Cash Flow 20%
Comparable ROACE 10%
Group Safety (TRIF) 10%
Group Process Safety (PSER) 10%
1)
With performance measure outcomes without roundings.
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Long-term incentives
The Board of Directors decides on and implements Neste’s long-term incentive plans and the earning opportunity for the President and CEO. The purpose of these plans is to drive Neste’s long-term performance and success.
President and CEO Matti Lehmus is entitled to the following long-term incentive plans allocated during his previous position:
President and CEO Matti Lehmus is entitled to the following ongoing long-term incentive plans:
Performance
Share Plan Performance measure Weight
Performance
Measure
outcome %
Total weighted
Performance
outcome % Grant date Vesting date
PSP 2020–2022 Relative Total Shareholder Return (TSR) compared to the STOXX Europe 600 Index 100% 100 100 12 Dec. 2019 March 2023
PSP 2021–2023 Relative Total Shareholder Return (TSR) compared to the STOXX Europe 600 Index 80% 0
9 11 Dec. 2020 March 2024
Combined Greenhouse Gas Impact 2021–2023 20% 45
Performance
Share Plan Performance measure Weight Grant date
Number of shares
originally granted Vesting date
PSP 2022–2024 Relative Total Shareholder Return (TSR) compared to the STOXX Europe 600 Index 80% 9 Feb. 2022 26,400 March 2025
Combined Greenhouse Gas Impact 2022–2024 20%
PSP 2023–2025 Relative Total Shareholder Return (TSR) compared to the STOXX Europe 600 Index 80% 13 Dec. 2022 23,600 March 2026
Combined Greenhouse Gas Impact 2023–2025 20%
PSP 2024–2026 Relative Total Shareholder Return (TSR) compared to the STOXX Europe 600 Index 80% 7 Feb. 2024 33,700 March 2027
Combined Greenhouse Gas Impact 2024–2026 20%
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Remuneration and company performance over the last five financial years
Average compensation, EUR 2019 2020 2021 2022 2023
Average compensation of Members of the Board
1)
50,272 44,386 51,368 72,512 63,191
President and CEO
(taxable value of the remuneration in each year)
Peter Vanacker
(from 11/2018 until 4/2022) 2,131,983 1,804,816 2,046,357 704,465 -
Matti Lehmus
(from 5/2022) - - - 731,441 2,014,265
Average compensation of Neste employee
2)
57,906 70,751
3)
77,529
4)
86,367
5)
88,551
Average compensation of Neste employee in Finland
2)
65,067 66,225
3)
72,478
4)
75,742
5)
76,965
Company performance
Comparable EBITDA (MEUR) 2,452 1,929 1,920 3,537 3,458
1)
Includes all fees paid to the members (annual board fees, meeting fees, committee fees).
2)
Includes all wages and salaries incl. incentive payments (LTI based on accounting value) without indirect employee costs (social security costs, pension costs, other costs) divided
by the average number of personnel during the year.
3)
Cost provision for personnel arrangements related to the Naantali refinery closure of EUR 22 million has been eliminated from wages and salaries before calculating the average.
4)
The unused amount of cost provision reversal for personnel arrangements related to the Naantali refinery closure of EUR 11 million has been eliminated from wages and salaries before calculating the
average. The average compensation between 2019 and 2020 has increased partly due to the divestment of Neste operations in Russia in 2019 covering 1,133 employees, and between 2020 and 2021, due
to personnel decreases related to the closure of the Naantali refinery. Simultaneously, the strategic headcount increase has focused on white-collar and higher employee cost markets.
5)
The unused amount of cost provision reversal for personnel arrangements related to the Naantali refinery closure of EUR 500,000 was eliminated from wages and salaries before calculating the average.
The average compensation has increased, partly due to a strategic headcount increase in higher employee cost markets. Simultaneously, the short-term incentive provision is higher than in the previous
year.
Annual Report 2023
Review by
the Board
of Directors
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Review by the
Board of Directors
Review by the Board of Directors 147
Key gures 171
Calculation of key gures 173
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2023 2022
Comparable EBITDA 3,458 3,537
- inventory valuation gains/losses -827 -352
- changes in the fair value of open commodity and currency derivatives -98 -131
- capital gains/losses 7 10
- other adjustments 8 -16
EBITDA 2,548 3,048
Revenue 2023 2022
Renewable Products 8,466 9,905
Oil Products 13,285 14,596
Marketing & Services 5,168 5,876
Others 100 147
Eliminations -4,094 -4,816
Total 22,926 25,707
Review by the Board of Directors 2023
Neste ended the year 2023 with strong results in all business units although the year was impacted by geopolitical tensions and
high inflation. The market environment was most favorable in the third quarter, after which the market, particularly in Renewable
Products, weakened towards the end of the year. Full-year comparable EBITDA reached EUR 3,458 (3,537) million. As to the
Group’s financial targets, Comparable ROACE reached 23.9% over the last 12 months and the leverage ratio was 22.7% at the
end of the year, both clearly meeting Neste’s financial target levels. Cash flow before financing activities was a clear highlight,
reaching EUR 751 million, supported by successful working capital management and significantly exceeding the previous year’s
level of EUR -390 million. Neste’s solid financial position enables the continued implementation of the growth strategy going
forward.
Sales volumes in renewable diesel and SAF were 3.3 (3.0) million tons, impacted by the delayed ramp-up of the Singapore
expansion and the Martinez joint operation. The share of waste and residue feedstocks remained high throughout the year and
averaged 92% (95%) of our total renewable material inputs in 2023.
In December, Neste announced a gradual long-term transformation of Neste’s crude oil refinery in Porvoo, Finland into a leading
renewable and circular solutions refining hub. The planned transformation requires multiple separate investment decisions before
targeted completion in the mid 2030s. The long-term capacity potential after the transformation is expected to be approximately
3 million tons of renewable and circular products.
Neste initiated a savings program in the second half of 2023, which supported the decrease of the fixed costs growth rate
during the second half of the year. In November, Neste announced a plan to simplify our organizational structure and operational
model to secure the execution of our growth strategy and to strengthen our long-term competitiveness. The planned program is
estimated to result in total annual cost savings of approximately EUR 50 million, the majority to be realized in 2024. Compared
to the baseline year 2022, Neste is on track with our Neste Excellence program to reach over EUR 350 million in value creation
by the end of 2026.
Figures in parentheses refer to the financial statements for 2022, unless otherwise noted.
The Group’s results for 2023
Neste’s full-year 2023 revenue totaled EUR 22,926 (25,707) million. Higher sales volumes had a positive impact of approximately
EUR 1.1 billion, but revenue decreased due to lower market and sales prices, which had a negative impact of approximately -4.3
billion. A weaker US dollar had a negative impact of approximately EUR -0.5 billion on the revenue and the increasing trading
volumes mainly in Oil Products impacted positively on the revenue by approximately EUR 0.9 billion.
The Group’s comparable EBITDA was EUR 3,458 (3,537) million. Renewable Products’ comparable EBITDA was EUR 1,906
(1,762) million, mainly due to the higher sales margin and higher sales volume while the increased fixed costs and a weaker US
dollar year-over-year had a negative impact on the result. Oil Products’ full-year comparable EBITDA was EUR 1,434 (1,654)
million, mainly as a result of lower refining market, higher sales volumes, increased fixed costs and a weaker US dollar than in
2022. Marketing & Services’ comparable EBITDA was EUR 118 (126) million. The Others segment’s comparable EBITDA was
EUR -2 (-4) million.
The Group’s EBITDA was EUR 2,548 (3,048) million, which was impacted by inventory valuation losses of EUR -827 (-352)
million and changes in the fair value of open commodity and currency derivatives totaling EUR -98 (-131) million, mainly related
to margin and utility price hedging. Profit before income taxes was EUR 1,596 (2,279) million, and net profit EUR 1,436 (1,891)
million. Comparable earnings per share were EUR 2.88 (3.04), and earnings per share EUR 1.87 (2.46).
Comparable EBITDA 2023 2022
Renewable Products 1,906 1,762
Oil Products 1,434 1,654
Marketing & Services 118 126
Others -2 -4
Eliminations 2 -1
Total 3,458 3,537
Operating profit 2023 2022
Renewable Products 568 1,046
Oil Products 1,068 1,337
Marketing & Services 84 98
Others -41 -70
Eliminations 2 -1
Total 1,682 2,410
Group key figures, MEUR
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Financial targets
Comparable return on average capital employed after tax (Comparable ROACE) and leverage ratio are Neste’s key financial
targets. The company’s long-term Comparable ROACE target is over 15%, and the leverage ratio target is below 40%. At the
end of December, Comparable ROACE calculated over the last 12 months was 23.9%, and leverage ratio remained well within
the target area at 22.7%.
Cash flow, investments, and financing
The Group’s net cash generated from operating activities totaled EUR 2,279 (1,197) million during 2023. The increase compared
to last year mainly resulted from net working capital change not tying cash in 2023 compared to 2022. Cash flow before financing
activities was EUR 751 (-390) million during 2023 and the Group’s net working capital in days outstanding was 41.0 days (35.4
days) on a rolling 12-month basis at the end of the fourth quarter.
Cash-out investments totaled EUR 1,621 (1,758) million, and were EUR 1,431 (990) million excluding M&A in 2023. Maintenance
investments accounted for EUR 305 (249) million and productivity and strategic investments for EUR 1,316 (1,509) million.
According to Neste’s strategy, significant growth investments continued into Renewable Products where investments amounted
to EUR 1,365 (1,553) million. Oil Products’ investments amounted to EUR 208 (130) million, and Marketing & Services’ investments
totaled EUR 16 (21) million. Investments in the Others segment were EUR 32 (55) million, concentrating on IT and business
infrastructure upgrades.
In order to support further business growth, Neste established in 2023 a Euro Medium Term Note (EMTN) program and
completed three green bond issues (altogether EUR 1.6 billion) under the program. These were the first transactions for Neste
as a rated A3 issuer. The bonds have maturities of 2029, 2031 and 2033 and pay a fixed coupon of 3.875 per cent (2029 and
2031) and 4.250 per cent (2033). Neste also completed a tender offer for the bond maturing in 2024 and bought back EUR 199
million in aggregate nominal amount of notes.
31 Dec 2023 31 Dec 2022
Comparable return on average capital employed after tax
(Comparable ROACE), % 23.9 30.1
Leverage ratio (net debt to capital), % 22.7 13.9
2023 2022
EBITDA 2,548 3,048
Capital gains/losses 0 0
Other adjustments 108 -55
Change in net working capital 21 -1,357
Finance cost, net -91 -42
Income taxes paid -307 -398
Net cash generated from operating activities 2,279 1,197
Capital expenditure -1,607 -1,757
Other investing activities 79 170
Free cash flow (Cash flow before financing activities) 751 -390
Interest-bearing net debt was EUR 2,488 million at the end of December 2023, compared to EUR 1,344 million at the end of
2022. The average interest rate of borrowing at the end of December was 3.6% (2.3%) and the average maturity 5.1 (2.5) years.
At the end of the fourth quarter the Net debt to EBITDA ratio was 1.0 (0.4) over the last 12 months. The leverage ratio was 22.7%
at the end of December (31 Dec 2022: 13.9%).
The Group’s liquid funds and committed, unutilized credit facilities amounted to EUR 3,480 million at the end of December (31
Dec 2022: 2,871 million). There are no financial covenants in the Group companies’ existing loan agreements.
In accordance with its hedging policy, Neste hedges a large part of its net foreign currency exposure for the next 12 months,
mainly using forward contracts and currency options. The most important hedged currency is the US dollar. At the end of
December, the Group’s foreign currency hedging ratio was approximately 55% of the sales margin for the next 12 months.
Segment reviews
Neste’s businesses are grouped into four reporting segments: Renewable Products, Oil Products, Marketing & Services, and
Others.
Renewable Products
US dollar exchange rate 2023 2022
EUR/USD, market rate 1.08 1.05
EUR/USD, effective rate
1)
1.06 1.11
1)
The effective rate includes the impact of currency hedges.
Key financials 2023 2022
Revenue, MEUR 8,466 9,905
EBITDA, MEUR 1,049 1,328
Comparable EBITDA, MEUR 1,906 1,762
Operating profit, MEUR 568 1,046
Net assets, MEUR 8,069 6,433
Return on net assets
1)
, % 7.5 18.6
Comparable return on net assets
1)
, % 18.9 26.6
Comparable sales margin, USD/ton
2)
863 779
1)
Last 12 months
2)
Calculation formula has been adjusted effective 1 January 2023; and the figures for 2022 restated. Q4/22 comparable sales margin
with the previous calculation reached USD 783/ton and 2022 USD 804/ton.
Key drivers 2023 2022
Biomass-based diesel (D4) RIN, USD/gal 1.35 1.69
California LCFS Credit, USD/ton 73 99
Palm oil price
1)
, USD/ton 833 1,116
Waste and residues’ share of total feedstock, % 92 95
1)
CPO BMD 3rd, Crude Palm Oil Bursa Malaysia Derivatives 3rd month futures price
2)
Calculation formula has been adjusted to include also Martinez joint operations Neste’s share of feedstock
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Production 2023 2022
Renewable Diesel
1)
, 1,000 ton 3,267 2,831
SAF, 1,000 ton 251 158
Other products, 1,000 ton 210 249
Utilization rate
2)
, own production, % 98 91
1)
Including production from Martinez joint operation.
2)
Based on a nameplate capacity of 3.3 Mton/a
Sales 2023 2022
Renewable Diesel, 1,000 ton 3,164 2,927
SAF, 1,000 ton 139 105
Other products, 1,000 ton 79 95
Share of sales volumes to Europe, % 61 67
Share of sales volumes to North America, % 39 33
Renewable Products’ full-year comparable EBITDA was EUR 1,906 (1,762) million. The comparable sales margin was higher
than in 2022 and reached USD 863 (779). The higher sales margin had a positive impact of EUR 374 million on the comparable
EBITDA year-on-year. The BTC contribution was EUR 417 (312) million during 2023. Sales volumes increased and had an impact
of EUR 83 million year-over-year. The weaker US dollar had a negative impact of EUR -79 million on the segment’s comparable
EBITDA compared to the previous year. The segment’s fixed costs were EUR 233 million higher than in 2022, as Neste continued
to build up its capabilities to support its growth strategy.
During the year, feedstock prices were supported mid-year especially by strong US demand. However, towards the end of the
year, feedstock prices were affected by low US credit price levels, especially RINs, and started to decline. The D4 RIN started the
year at USD 1.7 and ended the year at USD 0.8. The California Low Carbon Fuel Standard (LCFS) credit price also decreased
to about USD 70/ton due to further growing credit bank mainly due to the increasing Renewable Diesel production. Also, the
European renewable diesel spot premium levels and bioticket prices weakened clearly during the second half of the year.
In 2023, the European Union (EU) launched investigations on Asian biodiesel imports to the EU which could have an impact
on these flows and also on the price of biofuels in the EU going forward.
Key drivers impacting the comparable sales margin in Renewable Products include feedstock and middle distillate market
prices, the development of renewable diesel price premiums, bioticket and renewable credit price levels, SAF and Martinez sales
volume development as well as margin hedging.
Oil Products’ full-year comparable EBITDA was EUR 1,434 (1,654) million. The total refining margin averaged USD 21.1/bbl
(23.4/bbl) in 2023. The slightly lower total refining margin had a negative impact of EUR -138 million on the comparable EBITDA
compared to the previous year. Sales volumes were higher year-over-year and this had a positive impact of EUR 69 million on
the comparable EBITDA. The weaker US dollar had a negative impact of EUR -78 million on the comparable EBITDA, and the
segment’s fixed costs were EUR 37 million higher than in 2022.
Crude oil prices were volatile during 2023, and Brent dated traded between USD 72/bbl and USD 98/bbl. During the first half of
the year the price was following a weakening macroeconomic outlook. During the autumn crude oil prices were trending upwards
as OPEC’s voluntary cuts, the summer driving and cooling season demand together with improved investor risk sentiment
boosted prices to an almost USD 100/bbl level. Support faded away towards the year end as the demand outlook turned softer
again, and crude oil price ended the year at USD 78/bbl, close to the level at the start of the year.
Overall, European refining margins were volatile but strong during 2023. Towards the year-end high margins came downwards
as refinery outages eased and seasonally softer demand started to have an impact. On average, both diesel and gasoline cracks
were above their long-term averages. Key utility prices were clearly lower year-on-year and supported refining economics in
Europe.
Oil Products
Key financials 2023 2022
Revenue, MEUR 13,285 14,596
EBITDA, MEUR 1,375 1,619
Comparable EBITDA, MEUR 1,434 1,654
Operating profit, MEUR 1,068 1,337
Net assets, MEUR 2,384 2,652
Return on net assets
1)
, % 42.6 46.6
Comparable return on net assets
1)
, % 45.0 48.0
Total refining margin, USD/bbl 21.1 23.4
1)
Last 12 months
Production 2023 2022
Refinery
Production, 1,000 ton 11,148 11,176
Utilization rate, % 88 85
Refinery production costs, USD/bbl 6.6 7.5
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Sales from in-house production, by product category (1,000 t) 2023 % 2022 %
Middle distillates
1)
5,631 47 5,403 48
Light distillates
2)
4,430 37 4,438 39
Heavy fuel oil 1,321 11 930 8
Base oils 283 2 296 3
Other products 220 2 244 2
Total 11,885 100 11,310 100
1)
Diesel, jet fuel, heating oil, low sulphur marine fuels
2)
Motor gasoline, gasoline components, LPG
Sales from in-house production, by market area (1,000 t) 2023 % 2022 %
Baltic Sea area
1)
6,976 59 6,843 61
Other Europe 3,110 26 2,897 26
North America 1,038 9 943 8
Other areas 762 6 627 6
1)
Finland, Sweden, Estonia, Latvia, Lithuania, Poland, Denmark
Marketing & Services
Sales volumes by main product categories, million liters 2023 2022
Gasoline, station sales 620 600
Diesel, station sales 1,590 1,620
Heating oil 793 907
Net sales by market area, MEUR 2023 2022
Finland 4,114 4,601
Baltic countries 1,054 1,275
Key financials 2023 2022
Revenue, MEUR 5,168 5,876
EBITDA, MEUR 117 127
Comparable EBITDA, MEUR 118 126
Operating profit, MEUR 84 98
Net assets, MEUR 236 227
Return on net assets
1)
, % 34.6 40.8
Comparable return on net assets
1)
, % 35.2 40.5
1)
Last 12 months
Marketing & Services segment’s full-year comparable EBITDA was EUR 118 (126) million. Sales volumes were lower compared
to the same period last year, which had a negative impact of EUR -5 million on the comparable EBITDA. Average unit margins
were slightly higher and this had a positive impact of EUR 4 million on the result year-over-year. The segment’s fixed costs were
EUR 6 million higher compared to 2022, driven by inflation and IT development costs.
According to its strategy, Marketing & Services also continued rolling out electric charging at its largest stations.
The Others segment consists of Engineering Solutions and common corporate costs. The full-year comparable EBITDA of the
Others segment totaled EUR -2 million (-4 million).
Others
Key financials 2023 2022
Comparable EBITDA, MEUR -2 -4
Operating profit, MEUR -41 -70
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Shares, share trading, and ownership
Neste’s shares are listed at NASDAQ Helsinki Ltd. The share price closed the fourth quarter at EUR 32.21, up by 0.25% compared
to the end of the third quarter. At its highest during the quarter, the share price reached EUR 48.50, while the lowest share price
was EUR 28.55. Market capitalization was EUR 24.8 billion as of 31 December 2023. An average of 1.37 million shares were
traded daily, representing 0.2% of the company’s shares.
At the end of December 2023, Neste held 1,011,311 treasury shares. Neste’s share capital registered with the Trade Register
totaled EUR 40 million, and the total number of shares was 769,211,058.
The Board of Directors has no authorization to issue convertible bonds or share options.
As of 31 December 2023, the State of Finland owned directly 44.2% (35.9% at the end of 2022) of outstanding shares,
reflecting the Finnish Government’s decision to return the Climate Fund’s (Ilmastorahasto Oy) 8.31% shareholding in Neste
Corporation to direct state ownership executed in the third quarter. Foreign institutions owned 36.8% (39.7%), Finnish institutions
10.6% (16.8%), and households 8.4% (7.6%) of outstanding shares.
Largest shareholders as of 31 December 2023
Shareholder Shares % of shares
State of Finland / Prime Minister's Office 340,107,618 44.22%
Varma Mutual Pension Insurance Company 13,081,622 1.70%
Ilmarinen Mutual Pension Insurance Company 9,357,202 1.22%
The Finnish Social Insurance Institution 6,100,272 0.79%
City of Kurikka 4,652,625 0.60%
Elo Mutual Pension Insurance Company 4,571,000 0.59%
The State Pension Fund 3,600,000 0.47%
OP-Finland 1,837,802 0.24%
Danske Invest Finnish Equity Fund 1,512,990 0.20%
Evli Finland Select Fund 1,420,000 0.18%
Seligson & Co OMX Helsinki 25 Exchange Traded Fund (ETF) 1,346,504 0.18%
Säästöpankki Kotimaa Mutual Fund 1,206,370 0.16%
Nordea Nordic Fund 1,055,000 0.14%
Stiftelsen för Åbo Akademi 1,016,514 0.13%
Neste Oyj 1,011,311 0.13%
Nordea Fennia Fund 977,676 0.13%
Samfundet Folkhälsan i Svenska Finland 941,300 0.12%
Aktia Capital Mutual Fund 883,000 0.11%
OP-Henkivakuutus Ltd. 867,960 0.11%
FIM Fenno Mutual Fund 667,530 0.09%
20 largest shareholders total 396,214,296 51.51%
Nominee registered 282,386,858 36.71%
Others 90,609,904 11.78%
Number of shares, total 769,211,058 100.00%
Breakdown of share ownership as of 31 December 2023
No. of shares
No. of
shareholders
% of
shareholders
Total no.
of shares
% of
shares
1–100 77,212 52.14 2,872,272 0.37
101–500 43,443 29.34 10,964,754 1.43
501–1,000 12,493 8.44 9,164,508 1.19
1,001–5,000 12,684 8.57 26,322,628 3.42
5,001–10,000 1,379 0.93 9,436,051 1.23
10,001–50,000 740 0.50 13,981,038 1.82
50,001–100,000 62 0.04 4,236,913 0.55
100,001–500,000 47 0.03 9,234,939 1.20
500,001+ 34 0.02 682,997,955 88.79
Total 148,094 100.0% 769,211,058 100.0%
of which nominee registered 10 282,386,858 36.7%
By the owner sector % of shares
State of Finland 44.2%
Non-Finnish shareholders 36.8%
Households 8.4%
General government 5.5%
Financial and insurance companies 2.1%
Corporations 1.6%
Non-profit organizations 1.5%
Total 100.0%
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Corporate governance
The control and management of Neste Corporation is divided between shareholders, the Board of Directors, and the President
and Chief Executive Officer (CEO). The General Meeting of Shareholders appoints the Board of Directors based on a proposal
made by the Shareholders’ Nomination Board. The term of office of the Board of Directors will expire at the end of the next
Annual General Meeting of Shareholders (AGM) following its election. Neste’s President and CEO is appointed and expelled by
the Board of Directors.
Changes to the company’s Articles of Association can be made at the General Meeting of Shareholders based on a proposal
by the Board of Directors.
Neste Corporation’s Annual General Meeting (AGM) was held on 28 March 2023 at Messukeskus, Helsinki Expo and Convention
Centre. The AGM supported all the proposals presented to the meeting and approved the remuneration report. The AGM adopted
the company’s Financial Statements and Consolidated Financial Statements for 2022 and discharged the Board of Directors and
the President & CEO from liability for 2022.
Dividend payment
The AGM approved the Board of Directors’ proposal that an ordinary dividend of EUR 1.02 per share would be paid plus an
extraordinary dividend of EUR 0.25 per share, i.e., EUR 1.27 per share in total. It was decided to pay the ordinary dividend in two
installments. In addition, in accordance with the proposal by the Board of Directors, the AGM authorized the Board to decide,
in its discretion, on the payment of a second extraordinary dividend of EUR 0.25 per share, by 31 October 2023. The Board
expected this discretionary second extraordinary dividend to be paid, unless there was a significant deterioration in the business
environment during 2023.
The first installment of the ordinary dividend, EUR 0.51 per share, and the extraordinary dividend of EUR 0.25 per share, i.e.,
altogether EUR 0.76 per share, was paid to shareholders registered in the shareholders’ register of the Company on the record
date for the dividend payment, which was 30 March 2023. The first installment of the ordinary dividend and the extraordinary
dividend was paid on 6 April 2023.
The second installment of the ordinary dividend, EUR 0.51 per share, was paid to shareholders registered in the shareholders’
register of the Company on the record date for the second installment of the ordinary dividend, which was 29 September 2023.
The second installment of the ordinary dividend was paid on 6 October 2023.
Based on the above authorization, the Board of Directors decided on 27 September 2023 on the payment of a second
extraordinary dividend of EUR 0.25 per share. The second extraordinary dividend was paid to a shareholder registered in the
Company’s shareholder register on the record date for the payment of the second extraordinary dividend on 29 September
2023. The second extraordinary dividend was paid on 6 October 2023.
Composition and remuneration of the Board of Directors
In accordance with the proposal made by the Shareholders’ Nomination Board, the AGM confirmed the number of members of
the Board of Directors at nine.
The AGM decided that the following were re-elected to serve until the end of the next AGM: Matti Kähkönen, John Abbott,
Nick Elmslie, Just Jansz, Jari Rosendal, Eeva Sipilä and Johanna Söderström. Heikki Malinen and Kimmo Viertola were elected
as new members.
Matti Kähkönen was re-elected as Chair and Eeva Sipilä was elected as Vice Chair.
The AGM decided on the remuneration to the Board for the term starting at the end of the 2023 AGM and ending at the end of
the 2024 AGM as follows:
• Chair: EUR 95,000
• Vice Chair: EUR 60,000
• Chair of Audit Committee: EUR 60,000 if he or she does not simultaneously act as Chair or Vice Chair of the Board
• Member: EUR 45,000
The AGM decided on the remuneration for committee work as follows:
• other members of the Audit Committee than its Chair will, for such position, be paid EUR 5,000
• the Chair of the Personnel and Remuneration Committee will, for such position, be paid EUR 6,000, and its members will, for
such position, be paid EUR 2,500
• the Chair of another committee established based on Board decision will, for such position, be paid EUR 6,000, and its
members will, for such position, be paid EUR 2,500.
The AGM decided on the remuneration for participation in Board or committee meetings:
• EUR 1,000 for meetings held in the member’s home country;
• EUR 2,000 for meetings held in the same continent as the member’s home country; and
• EUR 3,000 for meetings held outside the same continent as the member’s home country.
• The meeting fee for meetings held over the telephone or through other means of data communication is paid according to the
fee payable for meetings held in each member’s home country.
• In addition, compensation for expenses is paid in accordance with the Company’s travel guidelines.
The AGM decided that a portion of 40% of the fixed annual fee will be paid in the form of shares and the remainder in cash.
Committee and meeting fees will be paid in cash. The shares will be purchased directly on behalf of the Board members within
two weeks as of the first trading day of the Helsinki Stock Exchange following the publication of the interim report for the period
1 January to 31 March 2023. If the shares are not purchased and/or delivered based on a reason pertaining to the Company or
the Board member, the fee will be in cash in its entirety. The Company is responsible for any transfer tax potentially levied on the
purchase.
Company Auditor
In accordance with a proposal by the Board of Directors, KPMG Oy Ab, Authorized Public Accountants, were re-elected as
the company’s Auditor, with Authorized Public Accountant Leenakaisa Winberg as the principally responsible auditor for Neste
Corporation, until the end of the next AGM. Payment for their services shall be made in accordance with their invoice approved
by the Company.
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Authorizing the Board of Directors to decide the buyback of Company shares
The AGM approved the authorization, under which the Board is authorized to decide the purchase of and/or take as security a
maximum of 23,000,000 Company shares using the Company’s unrestricted equity. The number of shares shall be equivalent to
approximately 2.99% of the Company’s total shares.
Shares may be purchased in one or more lots. The purchase price shall be at least the lowest price paid for Company shares
in regulated trading at the time of purchase and no more than the highest price paid for Company shares in regulated trading at
the time of purchase. In connection with the buyback of Company shares, derivative, share lending, or other agreements that
are normal within the framework of capital markets may take place in accordance with legislative and regulatory requirements
and at a price determined by the market. The authorization shall allow the Board to decide to purchase shares otherwise than in
proportion to shareholders’ current holdings (directed buyback).
Shares so purchased can be used as consideration in possible acquisitions or in other arrangements that are part of the
Company’s business, to finance investments, as part of the Company’s incentive program, or be retained, conveyed, or canceled
by the Company.
The Board of Directors shall decide the other terms related to the buyback of Company shares. The Buyback authorization
shall remain in force for eighteen (18) months from the decision taken by the AGM.
Authorizing the Board of Directors to decide on share issue
The AGM approved the authorization, under which the Board is authorized to take one or more decisions on the issuance of new
shares and/or the conveyance of treasury shares held by the Company, provided that the number of shares thereby issued and/
or conveyed totals a maximum of 23,000,000 shares, equivalent to approximately 2.99% of all the Company’s shares.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed to the Company’s
shareholders in proportion to the shares they already own or through a directed share issue that bypasses shareholders’ pre-
emptive rights if the Company has a weighty financial reason for doing so, such as using the shares in question as consideration
in possible acquisitions or in other arrangements that are part of the Company’s business, to finance investments, or as part of
the Company’s incentive program.
The new shares may be issued and/or the treasury shares held by the Company may be conveyed against payment or free
of charge. A directed share issue may only be made free of charge if there is a particularly weighty financial reason, with respect
to the Company’s interests and those of all of its shareholders, for doing so. The new shares may also be issued free of charge
to the Company itself.
The Board shall decide on other terms and conditions of share issue. The authorization shall remain in force for eighteen (18)
months from the decision taken by the AGM.
Amendment of Sections 3 and 10 of the Articles of Association
The AGM approved the Board’s proposal to amend Articles 3 and 10 of the Company’s Articles of Association. A technical
amendment was made to Article 3 to the effect that the outdated reference to the 1991 Finnish Act on Book-entry Securities
System was deleted. Article 10 was amended to the effect that General Meetings of Shareholders can, instead of a physical
meeting venue, also be held remotely without a meeting venue if the Board of Directors so decides.
Innovation
Neste’s innovation expenditure totaled EUR 94 million (85 million) in 2023. In 2023, the focus was especially on optimizing and
widening the renewable and circular raw material selection and enhancing product optionality. In order to further strengthen its
R&D and innovation capabilities globally, Neste established an Innovation Center in Singapore that has been operational since
early 2023.
In recognition of its innovation work, a group of Neste inventors was honored with the prestigious European Inventor Award
2023 in the industry category. The award was granted by the European Patent Office (EPO) for work on converting waste and
residues into high-quality renewable solutions.
Developing co-operations and preparing for technology demonstrations for scalable sustainable raw material sources continued
in the Innovation business platforms, focusing on raw material pools such as lignocellulose, algae, carbon dioxide and renewable
electricity utilization for green hydrogen production.
During 2023, the MultiPLHY project demonstrating renewable hydrogen production at Neste’s Rotterdam refinery proceeded
to the commissioning phase. Another renewable hydrogen project of the company focuses on investing in production capacity
of renewable hydrogen at the Porvoo refinery. This project entered the basic engineering phase. In November 2023, the Ministry
of Economic Affairs and Employment in Finland granted an energy investment aid of EUR 1.96 million for heat recovery from
hydrogen production.
Expanding the use of renewable waste and residues continued in 2023. Approximately 4.0 million tons (3.5 Mt) of waste and
residue raw materials were used during the year and the share totaled 92%
1)
of Neste’s renewable raw material inputs in 2023.
Neste continued to advance its research efforts dedicated to increasing the use of challenging raw materials and novel vegetable
oils (NVO).
Neste’s R&D efforts are instrumental in supporting the transformation of the Porvoo refinery into a renewables and circular
solutions refining hub. R&D efforts supported bio co-processing as well as the company’s efforts to scale-up chemical recycling.
In December 2023, Neste announced that it had already processed more than 6,000 tons of liquefied waste plastic.
Main events published during 2023
On 27 January, Neste announced that the Shareholders’ Nomination Board had forwarded to the Board of Directors of the
Company its proposals to the 2023 AGM. The Nomination Board proposed that Matti Kähkönen be re-elected as the Chair of
the Board of Directors. In addition, the current members of the Board, John Abbott, Nick Elmslie, Martina Flöel, Just Jansz, Jari
Rosendal, Eeva Sipilä and Johanna Söderström are proposed to be re-elected for a further term of office. The Nomination Board
proposed that Eeva Sipilä shall be elected as the Vice Chair of the Board. Further, the Nomination Board proposed that the Board
shall have ten members and that Heikki Malinen and Kimmo Viertola shall be elected as new members.
On 6 March, Neste announced that it invited the holders of the EUR 400,000,000 1.50 per cent. notes due June 2024 (ISIN:
FI4000261201), issued by Neste Corporation, to tender their notes for cash on the terms and conditions set out in the tender
offer memorandum dated 6 March 2023. Neste also announced its intention to issue new euro-denominated fixed rate notes.
On 10 March, Neste announced that Martina Flöel, a member of the Board of Directors of Neste Corporation, will not be
available for re-election in the Annual General Meeting (AGM) on 28 March 2023. The reason for this is a potential conflict of
interest relating to Flöel’s other engagements which has arisen after the proposal by Neste’s Shareholders’ Nomination Board. The
Nomination Board had, according to the stock exchange release published on 27 January 2023, proposed Flöel to be re-elected
as a member of the Board and that the Board shall have ten members. The Nomination Board has after Flöel’s announcement
decided to keep its proposal valid in all other respects. This means that according to the proposal of the Nomination Board, the
Board shall have nine members instead of ten.
On 14 March, Neste announced the results of the invitation to the holders of its EUR 400,000,000 1.50 per cent. notes due June
2024 (ISIN: FI4000261201) to tender their notes for cash on the terms and conditions set out in the tender offer memorandum
dated 6 March 2023. At the Expiration Deadline of 4:00 p.m. (Finnish time) on 13 March 2023, valid Tender Instructions of EUR
198,800,000 in aggregate nominal amount of notes were received pursuant to the Tender Offer. The Company announced that
it will accept for purchase EUR 198,800,000 in aggregate nominal amount of the notes pursuant to the Tender Offer.
1)
Calculation formula has been adjusted to include also Martinez joint operations Neste’s share of feedstock
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On 15 March, Neste announced that it has transferred a total of 112,310 treasury shares without consideration to the participants
of Neste Group’s Performance Share Plan 2020–2022 and the Restricted Share Plan 2020–2022 as share rewards based on the
terms and conditions of these plans. The plans are part of the share-based incentive scheme 2019 of Neste, announced with
a stock exchange release on 11 December 2018. The transfer of own shares is implemented as a directed share issue without
consideration based on a decision made by the Board of Directors of Neste Corporation. The decision of the Board of Directors
is based on a share issue authorization granted by the Annual General Meeting of Shareholders on 18 May 2020. After this
transfer of own shares Neste Corporation holds 1,015,578 own shares.
On 5 April, Neste announced a change in the Neste Executive committee. Mr Thorsten Lange, Executive Vice President,
Renewable Aviation since January 2020, steps down as a member of the Executive Committee and leaves the company. The
search for his successor has been initiated. Mr Sami Jauhiainen, Vice President, Renewable Aviation, APAC, will take the lead in
the Renewable Aviation business on an interim basis. Mr Jauhiainen will not be a member of the Executive Committee but will
report directly to the President and CEO Matti Lehmus.
On 22 May, Neste announced that it has on 22 May 2023 transferred 4,267 treasury shares to a key person participating in the
Performance Share Plan 2020–2022 and Restricted Share Plan 2020–2022 of Neste Corporation. The shares were transferred
as a share reward without consideration in accordance with the terms and conditions of the plans.
On 16 June, Neste announced a change in the Neste’s executive committee. Mercedes Alonso, Executive Vice President of
Neste’s Renewable Polymers and Chemicals business unit has decided to leave the company to pursue other opportunities, and
she will step down by the beginning of the fourth quarter.
On 19 June, Neste announced that it is holding a Capital Markets Day 2023 in London on 20 June 2023, featuring presentations
on company strategy, market outlook and value creation. Neste also announced that its dividend policy has been updated as
follows: “Neste’s target is to pay a competitive and over time growing dividend.” The former dividend policy was that the company
distributes at least 50% of the company’s comparable net profit for the year in the form of dividends.
On 2 August, Neste announced that Jari Rosendal, a member of the Board of Directors of Neste Corporation, had died after a
short illness. Rosendal served on Neste’s Board of Directors as of 2018. Neste’s Board of Directors will for the time being consist
of eight members.
On 6 September, Neste announced the people appointed to the Shareholders’ Nomination Board. The following members
had been appointed to Neste’s Shareholders’ Nomination Board: The Chair, Senior Ministerial Adviser, Financial Affairs Maija
Strandberg of the Ownership Steering Department in the Prime Minister’s Office of Finland; Timo Sallinen, Senior Vice President,
Investments of Varma Mutual Pension Insurance Company; President and CEO Jouko Pölönen of Ilmarinen Mutual Pension
Insurance Company and Matti Kähkönen, the Chair of Neste’s Board of Directors.
On 12 September, Neste updated its third-quarter 2023 outlook regarding Oil Products and the status of its Singapore new line
ramp-up. The new updated outlook was: Neste’s Oil Products’ third-quarter total refining margin is expected to be significantly
higher than in the second quarter of 2023 (USD 16.7/bbl). Following the restart of the renewable diesel and sustainable aviation
fuel (SAF) production at the Singapore refinery expansion in August, the ramp-up had been slowed down due to a recent
shutdown at the new line for additional equipment inspection and repair works.
On 26 September, Neste received a notification under Chapter 9, Section 10 of the Finnish Securities Market Act (FSMA).
According to the notification by the Finnish Climate Fund (Ilmastorahasto Oy), the holding of the entity referred to therein in
Neste Corporation has on 22 September 2023 decreased below 5% of the total number of shares and voting rights of Neste
Corporation.
On 27 September, Neste announced that the Board of Directors decided on payment of a second extraordinary dividend
installment. After having considered the current business environment, the Board of Directors decided on the payment of a
second extraordinary dividend of EUR 0.25 per share.
On 1 November, Neste announced its plans to simplify its organizational structure to improve efficiency and strengthen long-
term competitiveness. Renewable Aviation, Renewable Road Transportation and Renewable Polymers and Chemicals business
units will be merged into one Renewable Products business unit covering all renewables businesses. Furthermore, the company
plans to align its functions to better support business-driven ways of working. The organizational changes had also an effect on
the structure and composition of the Executive Committee of Neste.
Events after the reporting period
On 30 January, Neste announced that the Porvoo refinery processes would be brought into a safe state for the duration of the
political strike that took place on 1 and 2 February 2024. All releases and news are available at
https://www.neste.com/media/releases-and-news
Personnel
Neste employed an average of 6,018 (5,244) employees during 2023, of whom 2,114 (1,642) were based outside Finland. At the
end of December, the company had 6,014 (5,428) employees, of whom 2,190 (1,810) were based outside Finland.
Risk Management
Neste considers risk management an integral part of daily management processes and good corporate governance. Systematic
risk management practices are the means to ensure that Neste is successful in achieving its strategic targets and business
objectives and can maintain continuous operations. Neste’s risk management framework and processes are aligned with
internationally recognized best practices: the COSO Enterprise Risk Management framework; and the International Standard for
risk management, ISO 31000.
Neste’s risk management framework and risk management principles have been defined in the Corporate Risk Management
Policy, approved by the Neste Board of Directors. The Risk Management Policy is supplemented by risk management principles,
guidelines and instructions for specific risk disciplines. Communication regarding the most important risks takes place during
the strategic planning and performance management cycle. Formal risk reporting is directed to the business management and
function management teams, the Neste Executive Committee, the Audit Committee and the Board of Directors.
Risks related to Neste’s business
Neste’s growth and financial performance may be impacted by macroeconomic, security-related and political uncertainties, which
include high inflation in Europe and the US, high interest rates, trade tension, the continuing war in Ukraine, an escalation of the
crisis in the Middle East and regulatory changes at the European Union or individual member state level or in North America.
Other risks potentially affecting Neste’s financial results in the next 12 months include regulatory risks, changes in market prices
and the competitive situation, counterparty risks, scheduled or unexpected shutdowns at Neste’s refineries, potential strikes,
cyber and IT-related risks, and the outcome of legal proceedings.
Sustainability risks
The Neste Corporate Risk Management Policy and supporting principles, requirements and processes also apply to sustainability
risks, which are managed as a specific risk category in quarterly risk reviews. The assessment considers short-, medium- and
long-term perspectives. In addition to regular sustainability risks, the assessment also takes into account emerging topics like
inequality and just transition, as well as land use and biodiversity, which are discussed in the related sections below.
Sustainability risks, including risks related to climate change, are identified and assessed twice a year to determine which
risks and opportunities could have a substantive financial, strategic or reputational impact. Communication regarding the most
important sustainability risk issues takes place during the strategic planning and performance management cycle.
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For more detailed information about Neste’s risks and risk management, please refer to Risk Management in the Annual
Report’s Governance chapter and the Notes to the Financial Statements. For more information about Neste’s sustainability risks,
please see risk chapters in the Non-Financial Information Statement below.
Non-Financial Information Statement
Neste fulfills the requirements of the EU Directive on the disclosure of non-financial and diversity information, and the amendments
to the Finnish Accounting Act. Information in accordance with the current requirements of the EU Taxonomy Regulation is
disclosed in this non-financial information statement. In addition, the Neste 2023 Sustainability Report has been prepared in
accordance with the GRI (Global Reporting Initiative) and includes SASB Oil & Gas Refining and Marketing indicators where
applicable. Neste is committed to applying the Task Force on Climate-Related Financial Disclosures (TCFD) reporting principles
in disclosing climate-related financial risks and opportunities in the reporting. Part of Neste’s TCFD reporting takes place within
this Non-Financial Information (NFI) Statement in addition to the Sustainability Report, which also includes the TCFD index to
assist with navigation between these sections. Neste’s Sustainability Report 2023 information is assured by a third-party in
accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other
than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board,
IAASB. For more information about Neste’s sustainability, see Neste’s Sustainability Report 2023 and Neste’s website.
Business model
Neste employed an average of 6,018 (5,244) employees during 2023, of whom 2,114 (1,642) were based outside Finland. At the
end of December, the company had 6,014 (5,428) employees, of whom 2,190 (1,810) were based outside Finland.
Neste is the world’s leading producer of sustainable aviation fuel, renewable diesel and renewable feedstock solutions for
various polymers and chemicals industry uses. Neste is also a technologically advanced refiner of high-quality oil products,
exploring ways to start using waste plastics as a raw material to produce new plastics, and developing chemical recycling to
combat the plastic waste challenge.
Neste’s businesses are grouped into four reporting segments: Renewable Products (RP), Oil Products (OP), Marketing &
Services (M&S), and Others. The renewables businesses are Renewable Aviation, Renewable Polymers and Chemicals, and
Renewable Road Transportation. Neste has integrated sustainability into its business strategy to secure the long-term success
of its business.
The Renewable Products segment produces, markets and sells renewable diesel, sustainable aviation fuel, renewable solvents
and feedstock for bioplastics to the domestic and international wholesale markets. Neste’s refineries in Finland, the Netherlands
and Singapore produce renewable products entirely from renewable raw materials. The raw material supply chains for Neste’s
renewable products are extensive and global. Neste procures raw materials from suppliers across Europe, North America, South
America, Asia, Africa and Australia.
The Oil Products segment produces, markets and sells high-quality oil products and related services for the road transportation,
non-road uses, aviation and marine sectors, as well as products for the oil and petrochemical industries. The product range
includes diesel, gasoline, aviation and marine fuels, light and heavy fuel oils, gasoline components, and special fuels such as
small-engine gasoline, solvents, liquid gases and bitumens. Neste’s oil products are refined at Neste’s refinery in Porvoo, Finland.
Neste Shipping chartering operations are included in the Oil Products segment. In 2023, the company’s major crude oil and fossil
feedstock source was Norway.
Neste’s Marketing & Services offers sustainable, low-emission and digital solutions for the needs of consumers, companies
and partners via its station network and a wide variety of B2B customers and partners. Neste seeks to develop a diverse range
of services aiming to provide the best customer experience. The Marketing & Services segment markets and sells petroleum
products and associated services to consumers, transportation service, customers in aviation, shipping, industrial and agricultural
sectors, municipalities, heating customers and distributors. Traffic fuels are marketed through Neste’s own service station network
and direct sales.
At Neste, we set high standards for sustainability. Neste’s purpose is to create a healthier planet for our children, with a vision
of leading the way toward a sustainable future together. The company’s broadened sustainability vision is an integral part of the
new wave of Neste’s transformation: We lead the transformation towards a carbon neutral value chain, and have set aspirational
targets for biodiversity, human rights, as well as our supply chain and raw materials.
Sustainably-produced solutions are Neste’s most significant contribution to the implementation of the Paris Agreement, as
well as the United Nations’ Sustainable Development Goals (SDG). Neste has an ambition to make its Porvoo refinery the most
sustainable refinery in Europe and to reach carbon neutral production by 2035. In 2023 we completed the strategic study on
transitioning our refinery in Porvoo, Finland into a leading renewable and circular solutions refining hub in the mid-2030s.
Neste creates value for society by helping its customers reduce greenhouse gas emissions by sustainably developing lower-
emission solutions for road transportation, aviation and marine uses, as well as renewable and circular solutions for the chemical
and plastics industries. The company is introducing renewable and recycled raw materials such as liquefied waste plastic as
refinery raw materials. Neste’s NEXBTL refining technology enables the flexible use of various renewable raw materials, including
low-quality waste and residue oils and fats. Renewable waste and residue fats and oils will be indispensable in delivering
greenhouse gas emission reductions in the near and longer-term future. Novel vegetable oils (such as cover crops cultivated
on existing agricultural land during the off-season) will be an increasingly important source of raw material for further scaling up
solutions such as renewable diesel, as well as sustainable aviation fuel production. In addition, new conversion technologies will
enable the use of currently untapped raw material pools such as municipal solid waste and lignocellulosic biomass. In the long
term, fuel produced from electricity and waste CO
2
, so-called e-fuels (or power-to-liquids), will also increasingly play a role. The
potential of these technologies could be substantial if innovation activities successfully enhance technology maturity and bring
down costs. Securing the supply of renewable raw materials is considered essential for the success of Neste’s growth strategy.
Neste’s value creation is also based on its high-quality products, a global business model for raw material sourcing and
product sales, in-depth knowledge of regulations and global customer requirements for both renewable and fossil products, and
continuous innovation and development of products and solutions. Neste also focuses on providing excellent customer service,
as well as flexible and reliable customer solutions. In 2023, we operated refineries in Porvoo, Rotterdam and Singapore. We also
have a 50/50 joint operation in a renewable diesel refinery in California in the US. Non-financial assets, e.g., production, sales
and sourcing expertise, are an essential part of Neste’s value creation. A substantial effort is made to maintain and develop the
company’s skills base. Neste is investing in developing its corporate culture to deeply ingrain customer satisfaction, safety and
operational efficiency in daily operations. Please see Neste’s value creation map in the Sustainability Report 2023.
See also: Outlook
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EU taxonomy
Proportion of taxonomy-aligned economic activities
The EU taxonomy is a classification system for sustainable economic activities. It aims to provide robust definitions and transparent
reporting to support increased finance for activities that substantially contribute to solving the climate and environmental crisis.
Large undertakings such as Neste that are required to publish non-financial information pursuant to the Non-Financial Reporting
Directive (NFRD) are required to disclose information about how and to what extent business activities are associated with
environmentally sustainable economic activities as defined in the Taxonomy Regulation. The EU taxonomy is reported in financial
terms as the proportion of economic activities that is determined to be non-eligible, eligible and aligned in turnover, Capital
Expenditure (CapEx) and Operating Expenditure (OpEx).
Taxonomy eligibility for an activity is determined by the activity description in the Annexes of the climate and environmental
delegated acts in the Taxonomy Regulation. Taxonomy alignment for an activity is evaluated by the technical screening criteria for
substantial contribution and “do no significant harm” (DNSH), as set out in the relevant Annexes. An activity is taxonomy-aligned
when it substantially contributes to at least one environmental objective while doing no significant harm to the other environmental
objectives set by the technical screening criteria. Additionally, an entity needs to comply with the minimum safeguards.
The EU Commission has published technical screening criteria for all six environmental objectives. New activities included in the
delegated acts to the taxonomy have not resulted in any changes to Neste’s taxonomy reporting, as Neste has operations that
contribute to the climate change mitigation objective. Neste is committed to the transformation to a carbon neutral value chain
and contributes substantially to the stabilization of greenhouse gas concentrations in the atmosphere at a level which prevents
dangerous anthropogenic interference with the climate system, consistent with the Paris Agreement’s long-term temperature
goal.
Assessment of compliance with the Taxonomy Regulation
Neste has carried out assessments to identify the activities within the scope of the taxonomy. The identified economic activities
have been evaluated based on their contribution to the climate change mitigation objective set out in the Climate Delegated
Act. The assessments have been coordinated by the Sustainability Reporting and Finance teams and are supported by several
functions in the organization. The assessments include all Neste’s business units and innovation initiatives. Eligible activities
are identified based on the description of the activity in Annex I of the Climate Delegated Act of the Taxonomy Regulation. The
substantial contribution and DNSH criteria have been evaluated for each activity identified according to the technical screening
criteria to recognize the share of taxonomy-aligned economic activities. Based on this process, the following activities in the
taxonomy have been identified as relevant for Neste:
4.13 Manufacture of biogas and biofuels for use in transport and of bioliquids
• Manufacture of renewable fuels
• Bio co-processing of fuels
6.15 Infrastructure enabling low-carbon road transport and public transport
• Electric vehicle charging services
9.1 Close to market research, development and innovation
• R&D activities in Neste’s innovation business platforms, including renewable hydrogen and Power-to-X
Neste also has economic activities that are currently not covered by the EU taxonomy while contributing to circularity and climate
goals. For example, Neste provides circular economy solutions and renewable feedstocks for the chemical industry that are not
currently covered in the activities listed in the EU taxonomy. Neste is engaged in further developing the taxonomy framework and
supports its role in enabling the transition to a climate neutral and circular economy. As the EU taxonomy continues to develop
and is subject to interpretation, Neste will continuously re-evaluate its activities’ contribution to the taxonomy’s environmental
objectives.
Substantial contribution of our core business
The EU taxonomy refers to the manufacture of biofuels for use in transport as a sustainable activity, and we have assessed Neste’s
manufacturing of renewable fuels for the road transport and aviation sectors, as well as the bio co-processing of fuels to be
taxonomy-relevant economic activities based on the Climate Delegated Act of the regulation. The Renewable Road Transportation
and Renewable Aviation businesses offer renewable fuels for the road transport and aviation sectors. The Renewables Platform
enables Neste’s renewable raw materials sourcing, global renewables production and delivery of renewables to our global
customer base. Bio co-processing aims to replace crude oil input in the production of fuels used in various transport sectors.
Our taxonomy-relevant activities represent climate change mitigation solutions and are well in line with our ambitious climate
commitments.
The EU taxonomy technical screening criteria for the Climate Delegated Act including climate change mitigation establishes
criteria for the “Manufacture of biogas or biofuels for use in transport and of bioliquids” activity. The recognized activities,
manufacturing biofuels and bio co-processing of fuels, make a substantial contribution to climate change mitigation. The
substantial contribution criteria sets the threshold for greenhouse gas (GHG) emission savings from the manufacture of biofuels
and biogas for use in transport to at least 65% in relation to the GHG emission saving methodology and the relative fossil fuel
comparator in accordance with Directive (EU) 2018/2001. Additionally, the criteria require that no food and feed crops are used
in the manufacturing. The share of manufacturing of waste and residue raw materials is therefore included in our alignment
figures for this activity. The alignment figures for biofuel sales outside the EU are reported separately because the GHG emission
calculation and verification methodologies differ. Neste complies with local legislation, and the sales of biofuels meet the GHG
emission saving and other sustainability requirements for each market, such as the Low Carbon Fuel Standard in California, US.
The activity “Infrastructure enabling low-carbon road transport and public transport” includes our electric vehicle charging
services. The electric charging stations serve both companies and consumers and are another solution in Neste’s portfolio for
supporting the transition to low-emission transport. The activity is fully eligible for the taxonomy, as the evaluation of DNSH
criteria has not been finalized.
Neste’s innovation focuses on scalable, sustainable raw materials and the required technologies for their conversion to fuels,
polymers and chemicals. The R&D activities reported under the “Close to market research, development and innovation” activity
meet the activity-specific taxonomy alignment criteria and include projects in our portfolio related to renewable hydrogen and
Power-to-X. Innovations and R&D that support our taxonomy-eligible and -aligned activities are accounted for in the taxonomy
figures of the activity which they support.
The relevant activity-specific DNSH criteria from Annex I have been evaluated for each taxonomy-aligned economic activity.
Neste has established and implemented procedures to minimize any adverse impacts of our operations on the environment
and complies with all relevant environmental requirements applicable to our operations. Neste’s approach to environmental
management, including biodiversity, pollution and water, is described in more detail in our Sustainability Report, as well as in the
Non-Financial Information (NFI) Statement paragraphs below. The identification of climate risks, including physical climate risks,
is included in Neste’s annual risk management cycle. The identified climate risks are included in our Enterprise Risk Management
(ERM) process, and risk mitigation plans are implemented where appropriate. Neste’s climate-related risks are further described
in our NFI Statement.
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Compliance with the minimum safeguards has been assessed at the group level based on the Report on Minimum Safeguards
published by the EU Platform on Sustainable Finance in October 2022. Neste has assessed its operations to be compliant
with the minimum safeguards as determined in our Code of Conduct, which includes the topics of human rights, including
workers’ rights, bribery and corruption, taxation and fair competition. No violations have been identified with the safeguards. We
respect internationally recognized human rights as set out in the International Bill of Human Rights and the principles concerning
fundamental rights set out in the ILO Declaration on Fundamental Principles and Rights at Work. Neste implements an ongoing
human rights due diligence process to identify, prevent, mitigate and account for how it addresses adverse human rights impacts
on people in accordance with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD
Guidelines for Multinational Enterprises. Neste’s approach to human rights and anti-corruption is described in more detail in our
NFI Statement. More information about our compliance program, including competition law compliance, can be found in our
Sustainability Report. Neste also publishes a Tax Footprint annually.
Accounting policy
The definitions of taxonomy key performance indicators (KPIs) are based on the Disclosures Delegated Act, which supple-
ments the Taxonomy Regulation and follows requirements that apply to the disclosures under Article 8(2) of Regulation (EU)
2020/852. The taxonomy reporting scope covers Neste’s global operations, and the calculations follow general materiality
principles. Taxonomy KPIs are calculated using the financial information presented in Notes to the Consolidated Financial
Statements in Neste’s Annual Report 2023. To avoid double counting in the reported figures, allocations were made for
each activity separately based on reporting structures, and a reconciliation has been carried out for the final figures. Neste
does not present a table for the extent of eligibility and alignment per environmental objective, as 100% of the KPIs are
related to the climate change mitigation objective.
Turnover
In calculating the proportion of turnover from products associated with taxonomy-eligible and -aligned economic activities, Neste
includes revenue from goods and services which have a clear relationship with the identified economic activities. Turnover for
the manufacture of biofuels and co-processing includes sales of bio-based fuels, biofuel credits related to the physical product
and exchange rate hedges. Turnover for infrastructure enabling low-carbon road transport activity includes sales from electric
charging services. The denominator is Neste’s total sales and refers to Note 5 Revenue in the consolidated financial statements.
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Economic activities
Codes
Turnover (MEUR)
Proportion of Turnover (%)
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimun safeguards
Proportion of Taxonomy
aligned (A.1) or eligible (A.2)
turnover (%)
Category enabling activity (E)
Category transitional activity (T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 4,059 18 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 18
Manufacture of biogas and biofuels for use in transport and of bioliquids
1)
CCM 4.13 2,455 11 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 11
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1) 6,514 28 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 29
Of which Enabling 0 0 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0
Of which Transitional 0 0 0% Y Y Y Y Y Y Y 0
A.2. Taxonomy-Eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 862 4 EL N/EL N/EL N/EL N/EL N/EL 3
Infrastructure enabling low-carbon road transport and public transport CCM 6.15 1 0 EL N/EL N/EL N/EL N/EL N/EL 0
Turnover of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 863 4 100% 0% 0% 0% 0% 0% 3
A. Turnover of Taxonomy eligible activities (A.1+A.2) 7,377 32 100% 0% 0% 0% 0% 0% 32
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities 15,549 68
Total (A+B) 22,926 100
1)
Share of waste & residue based renewable fuels sold outside of the EU
Turnover
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Capital Expenditure
Capital Expenditure (CapEx) includes investments related to activities identified as taxonomy-eligible or -aligned. The CapEx
figures consist mainly of investments enabling Neste’s renewable production capacity growth. To provide an accurate allocation
of CapEx for taxonomy-aligned activities, Neste has used the share of taxonomy-aligned production volumes to allocate the
proportion to the CapEx alignment figures. For example, allocations for the manufacture of biofuels activity are made based on
production volumes which fulfill the GHG emission savings and raw material criteria outlined in the technical screening criteria for
the activity.
The breakdown of the CapEx figures is based on the Disclosures Delegated Act and includes taxonomy-eligible and -aligned
CapEx. These taxonomy CapEx figures refer to additions in Note 13 Intangible assets (IAS38) and Note 14 Property, plant and
equipment (IAS16) and Right-of-use assets refers to Note 29 Leases (IFRS16) in the consolidated financial statements. However,
the taxonomy figures only include the proportion of the investments within the scope of the EU taxonomy and therefore cannot
be directly derived from the Notes. CapEx also covers additions to tangible and intangible assets resulting from business
combinations. Goodwill is excluded from the CapEx calculations.
Based on the Disclosures Delegated Act, companies can report aligned CapEx, when it is a part of a plan to expand taxonomy-
aligned economic activities or to allow taxonomy-eligible economic activities to become taxonomy-aligned, as part of a so-called
CapEx plan. Neste’s taxonomy figures include investments made to expand the production capacity of existing taxonomy-aligned
economic activities, which contribute to the climate change mitigation objective. Allocations to taxonomy-aligned CapEx for these
activities are made based on the production volumes. The taxonomy requires figures to be restated if the current allocation to
taxonomy-aligned CapEx is not fulfilled in the scope of the CapEx plan. The status of the CapEx plan will be followed up annually.
Breakdown of the CapEx KPI
Taxonomy-aligned activities
(A.1)
Taxonomy-eligible but not
taxonomy-aligned activities
(A.2)
Additions to property, plant and equipment 912 126
Additions to intangible assets 0 0
Additions to capitalized right-of-use assets 597 78
Additions related to acquisitions
1)
0 0
Total CapEx (A.1 + A.2) 1,508 204
1)
Goodwill excluded 104 MEUR
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Economic activities
Codes
CapEx (MEUR)
Proportion of CapEx (%)
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimun safeguards
Proportion of Taxonomy
aligned (A.1) or eligible (A.2)
CapEx (%)
Category enabling activity (E)
Category transitional activity (T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 723 32 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 24
Manufacture of biogas and biofuels for use in transport and of bioliquids
1)
CCM 4.13 779 35 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 51
Close to market research, development and innovation CCM 9.1 7 0 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 0 E
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1) 1,508 68 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 75
Of which Enabling 7 0 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0 E
Of which Transitional 0 0 0% Y Y Y Y Y Y Y 0
A.2. Taxonomy-Eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 197 9 EL N/EL N/EL N/EL N/EL N/EL 10
Infrastructure enabling low-carbon road transport and public transport CCM 6.15 7 0 EL N/EL N/EL N/EL N/EL N/EL 0
CapEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 204 9 100% 0% 0% 0% 0% 0% 10
A. CapEx of Taxonomy eligible activities (A.1+A.2) 1,712 77 100% 0% 0% 0% 0% 0% 85
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities 517 23
Total (A+B) 2,229 100
1)
Share of waste & residue based renewable fuels sold outside of the EU
CapEx
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Operating Expenses
Taxonomy-eligible and -aligned Operating Expenses (OpEx) cover direct non-capitalized expenses related to research and
development, short-term leases (IFRS 16) and maintenance and repair. OpEx figures also include costs related to personnel,
identified as other direct expenses related to the day-to-day servicing required to maintain tangible fixed assets. The allocation
of OpEx to activities that are partially taxonomy-aligned follows the same methodology as Neste uses in the taxonomy CapEx
calculation, and the expenses are therefore allocated using the share of taxonomy-aligned production volumes.
Neste’s taxonomy OpEx figures include expenses presented in Note 9 Other expenses, although the figures only include the
proportion of expenses within the scope of the Taxonomy Regulation.
Breakdown of the OpEx KPI
Taxonomy-aligned activities
(A.1)
Taxonomy-eligible but not
taxonomy-aligned activities
(A.2)
Costs of R&D 46 3
Costs of short-term leases 12 2
Costs of maintenance and repair 82 11
Total OPEX (A.1 +A.2) 139 16
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Economic activities
Codes
OpEx (MEUR)
Proportion of OpEx (%)
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change mitigation
Climate change adaptation
Water
Pollution
Circular economy
Biodiversity
Minimun safeguards
Proportion of Taxonomy
aligned (A.1) or eligible (A.2)
OpEx (%)
Category enabling activity (E)
Category transitional activity (T)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 72 21 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 17
Manufacture of biogas and biofuels for use in transport and of bioliquids
1)
CCM 4.13 59 17 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 8
Close to market research,development and innovation CCM 9.1 9 3 Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 4 E
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1) 139 40 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 28
Of which Enabling 9 6 6% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 13 E
Of which Transitional 0 0 0% Y Y Y Y Y Y Y 0
A.2. Taxonomy-Eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of biogas and biofuels for use in transport and of bioliquids CCM 4.13 15 4 EL N/EL N/EL N/EL N/EL N/EL 4
Infrastructure enabling low-carbon road transport and public transport CCM 6.15 0 0 EL N/EL N/EL N/EL N/EL N/EL 0
OpEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 16 4 100% 0% 0% 0% 0% 0% 4
A. OpEx of Taxonomy eligible activities (A.1+A.2) 155 45 100% 0% 0% 0% 0% 0% 32
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 190 55
Total (A+B) 345 100
1)
Share of waste & residue based renewable fuels sold outside of the EU
OpEx
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Fossil gas related activities
Template 1 Nuclear and fossil gas related activities
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities
Row Economic activities Proportion of turnover
(CCM+CCA)
Climate change
mitigation
Climate change
adaptation
Amount % Amount % Amount %
5 4.30. High-efficiency co-generation of heat/
cool and power from fossil gaseous fuels 40 38 40 38 - -
7 Amount and proportion of other taxonomy-
eligible but not taxonomy-aligned economic
activities not referred to in rows 1 to 6 above
in the denominator of turnover 65 62 65 62 - -
8 Total amount and proportion of taxonomy
eligible but not taxonomy-aligned economic
activities in the denominator of turnover 105 100 105 100 - -
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.
NO
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.
NO
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.
NO
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.
NO
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.
YES
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.
NO
Neste reports its fossil gas related activities in accordance with the Complementary Climate Delegated Act (2022/1214).
Neste has exposures to natural gas related activities through its 40% ownership of Kilpilahti Power Plant Ltd, which is a joint
venture company operating a combined heat and power plant. Taxonomy-eligible turnover for the activity 4.30. High-efficiency
co-generation of heat/cool and power from fossil gaseous fuel includes Neste’s sales of natural gas to Kilpilahti Power Plant.
Other fossil gas related turnover relates to Neste’s natural gas sales to other parties, and refers to Note 24 and Note 25 in the
parent company financial statements.
Taxonomy-eligible OpEx related to natural gas should cover direct expenses in accordance with the definitions in the Disclosures
Delegated Act. As there have been no significant operating expenditures during the reporting period and the information is
financially immaterial, Neste does not disclose the template for natural gas related OpEx.
Additionally, CapEx template related to natural gas is not disclosed because the investments related to the Kilpilahti Power
Plant are not included in Neste’s total capital expenditure. Neste did not recognize any nuclear related activities as defined in the
Complementary Climate Delegated Act.
Materiality
This NFI Statement focuses on the most material sustainability topics for Neste and its stakeholders in relation to value creation
and risk management. Neste has conducted a materiality assessment once every two years in accordance with the Global
Reporting Initiative (GRI) reporting framework guidelines. The most recent GRI materiality assessment was conducted in 2022.
Neste’s 2023 sustainability reporting is based on the recent GRI assessment, which followed an initial “double materiality”
approach, combining impact materiality and financial materiality. During 2023, Neste started the preparations for the Corporate
Sustainability Reporting Directive (CSRD) reporting for the 2024 financial year by conducting a double materiality assessment
based on European Sustainability Reporting Standards (ESRS) which will be updated on an annual basis.
The most material topics identified for Neste in the GRI-based materiality assessment are based on their business and stakeholder
influence, the outward impact on the economy, environment and people and the estimated magnitude of their impacts. The
materiality assessment identified eleven material topics providing the framework for Neste’s sustainability agenda. The eleven
topics are: carbon handprint; carbon footprint; protecting biodiversity, air, water and soil; stakeholder engagement, communication
and transparency; innovation; partnerships; sustainable products and services; safety, health and wellbeing; modern slavery;
diversity, equity and inclusion; and an engaged and talented workforce. Several of the material topics are relevant in both our own
operations and in our value chain. Hence, the supply chain and raw material sustainability are seen as an underlying theme that
needs to be considered for each of the eleven topics’ impacts. Similar underlying themes are economic responsibility and ethics,
compliance and corporate governance. These themes are the cornerstones of our sustainability agenda. Our materiality matrix
describes the significance of sustainability topics from the perspective of our business operations and stakeholders.
Neste’s eleven material topics are related to all four themes in the non-financial reporting requirements: Environmental matters;
social and employee matters; respect for human rights; and anti-corruption and anti-bribery.
Neste’s sustainability policies and principles apply to the company as a whole and guide all its operations. In addition, international
conventions and commitments underlie Neste’s work. In 2023, Neste was included in the Dow Jones Sustainability Index for
the 17th consecutive time. Neste was included in both DJSI World and DJSI Europe. Neste received the industry’s best score
in climate strategy, and also performed well in human rights, environmental policy and management as well as the transparency
and reporting categories. Neste achieved an AAA rating in the MSCI ESG Rating Index measuring companies resilience to long-
term ESG risks, and continues to be the leading energy company on the Global 100 list of most sustainable companies by the
Corporate Knights.
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Climate and Environment
Policies and principles
Neste’s climate commitments are a key part of the company strategy. They are discussed at the Executive Committee at least
twice a year and by the Board of Directors at least once a year. The Neste Executive Committee decided to strengthen governance
with regular reviews in 2019. Key risks related to climate change are presented to the Audit Committee in connection with the
risk reviews. The responsibility for climate issue management belongs to the EVP, Renewables Supply Chain and Sustainability,
who, with the sustainability organization, is responsible for managing climate-related risks and opportunities and presenting them
to the Board as part of the meetings.
Climate and biodiversity are two of the cornerstones of Neste’s sustainability vision. Our key policies and principles concerning
environmental matters related to our own operations are our Sustainability Policy, Sustainability Principle and Environmental
Management Principle. All Neste’s refineries and the company-managed security stockpiles have been certified in accordance
with the requirements of the ISO 9001, ISO 14001 and ISO 45001 standards. All Neste’s renewable product refineries have
EU-compliant International Sustainability and Carbon Certification (ISCC) certificates. In the United States, the sustainability of
Neste’s renewable fuels is monitored based on the Environmental Protection Agency’s (EPA) sustainability requirements. We have
committed to preventing deforestation in our supply chains, and to avoiding the conversion of habitats with valuable biodiversity
for biomass production. We require the same of all our suppliers.
We have reported relevant climate and environment metrics in the 2023 Sustainability Report. For climate, the metrics include
the GHG emission reduction by our customers with our renewable products, scopes 1, 2, and 3 GHG emissions and the use
phase emission intensity of sold products. For biodiversity, the reporting is aligned with our vision to achieve a nature positive
value chain by 2040 and the shorter-term ambition to develop net positive impacts (NPI) and no net loss (NNL) for our own
operations. In addition, metrics include more specific environmental topics like the availability of pollution prevention technology
and the number of permit violations.
Climate-related risks and opportunities
Climate change poses both business risks and opportunities for Neste. Neste is therefore committed to applying the Task Force
for Climate-Related Financial Disclosures (TCFD) reporting framework to understand and evaluate the potential implications of
climate change to its business.
Neste uses scenario analysis to assess the resilience and adaptability of Neste’s strategy to climate change. We base our
scenario analysis on the internationally acknowledged climate pathways that represent objective and well-established benchmarks
for the energy industry, published by the International Energy Agency (IEA), for example. We complement our scenarios through
internal analysis and identifying trends and factors relevant to our business. In 2023, we analyzed the implications for Neste of
three climate scenarios: Net Zero World 2050, which is in line with the 1.5°C pathways; Net Zero EU and North America by 2050,
consistent with a 2 °C trajectory; and Compromised climate targets, reflecting global warming of 2.5 °C – 3 °C or more by the
end of the century.
The focus in Neste’s strategic planning is the next 10 years, with an emphasis on the transportation, petrochemicals and refining
sectors. In the scenario work, a time horizon until 2050 is used as the effects of climate change become more imminent in the
longer term. Climate change – and actions to mitigate and adapt to it – pose both transition and physical risks and opportunities
to companies. In the climate context, topics such as energy transition, regulation, competition and customer preferences are
relevant for Neste’s business. The potential impact of such drivers on Neste are evaluated in short-, medium- and long-term time
horizons, with varying degrees of certainty.
Neste will continue to build on its climate actions so that they are in line with the 1.5°C emission scenarios but refers to the
“most likely” scenario reflecting a trajectory of 2°C global warming by the end of the century as the base case. For example, we
calculate the impacts and test Neste’s strategy resilience against the scenarios by estimating the impact on Neste’s profitability
compared to the base case. This is to ensure the key drivers underlying our strategy are robust under the varying assumptions
across the pathways.
Risks associated with the transition to a lower-carbon economy may entail changes for Neste. Policy and legal risks include,
but are not limited to, less favorable development of greenhouse gas emissions pricing, unforeseen regulatory development for
GHG reductions, and the acceptability of reduction technologies. Technology risks include for example lower-than-expected
availability of, or higher-than-expected costs of, key GHG reduction technologies. Relevant market risks are stakeholder and
customer attitudes moving in a less favorable direction, shifts in our products’ supply and demand and services and raw
materials, increased raw material or utilities costs and scarcity of renewable raw materials. Both acute physical risks, such as
extreme weather events and chronic physical risks, such as changes in precipitation patterns or rises in the sea level, may cause
disruptions in our supply chain and the availability of different raw materials, as well as operating issues or damage to Neste’s
sites. The identification of physical risks like extreme weather events also takes the long-term scenario into account, with different
probabilities evaluated for different climate scenarios.
The adaptability and resilience of Neste’s strategy to climate change also creates opportunities by contributing to the transition
to a lower-carbon economy. Our strategy has been influenced by opportunities related to renewable and circular products, and
we see increasing global climate ambitions and related regulations continuing to increase the demand for these products.
The results of the scenario assessment provide valuable information about the adaptability and resilience of Neste’s strategy.
They are used to support Neste’s strategy development and financial planning. Identified climate risks are included in our
Enterprise Risk Management (ERM) process, and risk mitigation plans are implemented where appropriate.
Biodiversity- and environment-related risks and opportunities
Biodiversity loss including a destruction of natural capital, ranging from reductions in genetic diversity to the collapse of entire
ecosystems, is mainly the result of human activities like deforestation and soil degradation. Biodiversity loss is a global concern
that affects Neste’s stable and secure operations and supply of raw materials. The risk may be materialized in the acceptability of
raw materials to stakeholders, or in regulatory limitations that lead to a lack of sufficient raw material volumes. Future requirements
for restoring and protecting biodiversity may also have impacts on our operations and value chains.
Neste is subject to a wide array of laws and regulations targeting safe operations and a reduced environmental impact. In
addition, transitioning to a lower-carbon economy entails additional requirements that affect Neste’s approach to managing
refining assets and place more emphasis on the efficient use of different utilities such as water and energy. To ensure continuous
compliance with the applicable laws and regulations, Neste has implemented certified management systems that reflect the
international standards issued by the ISO. In 2023, a comprehensive set of leading environmental performance indicators was
used in business units to reduce the risk of environmental permit violations or emissions and incidents.
Neste’s operations carry an inherent risk of fires, explosions, leaks and releases of hazardous materials or other hazards that
may result in soil, groundwater, air or seawater contamination. At worst, maritime accidents would have a catastrophic impact on
the surrounding environment. Neste has implemented systematic risk management actions to minimize the probability of chemical
hazards. Actions taken include ship vetting, systematic safety procedures, partner selection and performance management, and
training in Neste’s own operations.
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Outcomes and key performance indicators
We are well on track with our commitment to help our customers reduce their greenhouse gas emissions by at least 20 million tons
of CO
2
e annually by 2030. Neste’s performance against this target is reported in the table below. Neste is committed to reducing
its production (scopes 1 & 2) emissions by 50 % by 2030 (compared to 2019) and reaching carbon neutral production by 2035.
Renewable electricity remains as a key initiative in the short-term, and Neste for example signed a purchase agreement for solar
power supply in Finland. The key long-term initiative, the renewable hydrogen project aiming to build a 120 MW electrolysis unit
in Porvoo proceeded to the basic engineering phase.
These two climate performance indicators, GHG emission reduction achieved by our customers with our renewable products
(“GHG handprint”) and our scopes 1 & 2 emissions (“production GHG footprint”), are included in the long-term incentives for
Neste’s key personnel.
Neste has also set a concrete target for scope 3 emissions to reduce the use phase emission intensity of sold products by
50% by 2040 compared to 2020 levels. The main driver for reducing the use phase emission intensity of sold products for Neste
is to continue to increase the share of renewable products in our portfolio through strategic investments.
We are also committed to working with suppliers and partners to reduce the GHG emissions across our value chain (scope 3).
In 2023, we continued to detail the climate roadmap for scope 3 and have already taken the first steps. We have increased our
understanding of the currently available data sources and the quality of the data and reviewed the possibilities of utilizing a larger
share of primary data in our GHG accounting.
Emissions from operations at Neste’s refineries were in substantial compliance at all sites during 2023. 13 (3) non-compliance
incidents occurred at Neste’s operations with limited local environmental impact only. These include non-compliance in
environmental permits of the Rotterdam refinery.
No serious environmental incidents resulting in pollution liability occurred at Neste’s refineries or other production sites.
Other climate-related metrics for GHG emissions (scopes 1, 2, and 3 emissions, as well as the use phase of the emission
intensity of sold products) are reported in the 2023 Sustainability Report, along with the principles for calculating them. Their
associated risks are discussed in the climate-related risks above.
Key figures 2023 2022
Energy efficiency, energy saving measures GWh.
1)
Target: Reduce Neste’s energy consumption
by 500 GWh during 2017–2025
27.2 GWh 42.6 GWh
GHG emissions reduction achieved with Neste’s
renewable products compared to fossil fuel, million tons
2)
Target: 20 MtCO
2
e annually by 2030
11.0 MtCO
2
e 11.1 MtCO
2
e
Emission limits and overruns:
All deviations from environmental permits
Long-term target for OP, RP and M&S: zero permit violations
Permit violations:
13, of which 6 in OP,
6 in RP and 1 in M&S.
Permit violations:
3, of which 2 in OP
and 1 in RP
1)
The savings consist of energy efficiency measures started during 2023, which have been scaled to cover the full year.
2)
Annual greenhouse gas (GHG) reduction achieved with Neste’s renewable products compared to 100% crude oil based fuel. The
calculation method complies with the EU Renewable Energy Directive II (EU) 2018/2001 and the California LCFS methodology,
which has been applied in the GHG reporting for volumes sold in the US since the beginning of 2022.
Neste’s biodiversity vision was launched in 2021: We aim to achieve a nature positive value chain by 2040, meaning that positive
biodiversity impacts outweigh negative ones. We have also set the ambition level to support the vision: We aim to create net
positive impacts (NPI) for biodiversity from new activities from 2025 onward, and we target no net loss (NNL) of biodiversity from
all ongoing activities by 2035.
In 2023, we joined the Science Based Targets Network (SBTN) Initial Target Validation pilot and started to evaluate opportunities
to set science-based targets for nature. We completed the materiality analysis for our supply chain and own operations as a part
of the pilot work. We have previously concluded that water aspects are significant for biodiversity, and we will develop our water
approach going forward.
We continued to develop our Net Positive Impact (NPI) methodology and conducted an NPI method pilot for two investment
projects. We developed our internal engagement by introducing the NPI approach to different Neste teams. We have now
included biodiversity along with climate and other topics in our sustainability vision in our major investment decision making
process. We also continued to complement a biodiversity baseline inventory at our refineries to help us understand the impact
of any land use change.
Sustainable Supply Chain
Policies and principles
We expect all our business partners and suppliers to uphold Neste’s policies and principles, including our Supplier Code of
Conduct, which is a key element of Neste’s supplier management system. Neste’s Supplier Code of Conduct was updated and
implemented in 2020. The Supplier Code of Conduct is included in the terms of contract with all suppliers, contractors and other
business partners participating in the delivery of products, components, materials or services to Neste, covering both direct
and indirect procurement. Additionally, our renewable raw material suppliers are expected to meet the requirements of Neste’s
Responsible Sourcing Principle.
Neste has undertaken several initiatives to identify and understand how risks may be present in our operations and supply
chains. To ensure our suppliers’ compliance with the Supplier Code of Conduct, Neste has implemented systematic controls
for counterparty screening and monitoring in which potential business partners undergo automated pre-screening. All Neste’s
raw material suppliers are subject to additional sustainability due diligence. A key element of understanding sustainability risks
in our supply chains is assessing country risks. Our overall approach to sustainability due diligence is to work with our suppliers
to drive positive practices and mutually enhance sustainability performance through continuous engagement, collaboration and
improvement.
All our raw material suppliers for our renewable products are subject to rigorous sustainability due diligence, as stated in
Neste’s Supplier Sustainability Approval Principle. The Principle applies worldwide to any Neste company which is establishing a
business relationship with a supplier of renewable raw material for Neste’s renewable products. It sets the minimum sustainability
requirements for approving suppliers. We continue commercial negotiations only with approved parties who meet our sustainability
requirements, and all partners must continue to meet these criteria and commit to developing their operations in the future.
The due diligence process for our crude oil and other fossil raw material suppliers includes a country risk assessment and a
counterparty screening. We also assess all new suppliers based on publicly available information about environmental, social
and governance (ESG) topics that include governance, labor standards and practices, human rights, environment, health and
safety and crude oil production-specific issues, such as flaring and spills. This sustainability review was developed in 2021 to
complement the existing due diligence process for our fossil raw material suppliers.
As part of our due diligence process for liquefied waste plastic suppliers, they are required to fulfill the requirements of the
Neste Supplier Code of Conduct. We only accept liquefied waste plastic that is traceable and complies with the ISCC Plus
certificate requirements.
Neste’s key policies and principles concerning environmental matters related to the sourcing of renewable raw materials are
the Neste Supplier Code of Conduct and the Responsible Sourcing Principle. Additionally, the Sustainability Principle sets out
our core sustainability commitments and describes how sustainability is managed at Neste. All Neste’s palm oil suppliers are
committed to No-Deforestation policies. Since 2015, this has also been extended to cover their third-party suppliers. All the palm
oil we have used has been fully traceable to the plantation level since 2007 and 100% certified since 2013.
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Supply chain risks
The main renewable raw materials used in Neste’s refineries include animal fats, used cooking oils, and wastes and residues
from vegetable oil processing, as well as some vegetable oils and crude oils. In recent years, the use of palm oil has created a
reputational risk, as the sustainability of palm oil sourcing has given rise to public discussion and concerns among NGOs and
customers. Neste is committed to ensuring sustainable palm oil sourcing and has implemented several measures to improve
transparency in its supply chain, as described above in Climate and Environmental matters. Neste reduced its refinery inputs of
conventional palm oil to zero at the end of 2023.
We assess and monitor our human rights impacts in both our own operations and our supply chains. To effectively prioritize
our activities, our risk assessment includes the mapping of supply chains and operations, country risk assessments, desk-based
research, supplier self-assessment questionnaires, engagement with suppliers and supply chain workers, and discussions with
expert stakeholders. Our Sustainability Audits have a strong human rights focus and prioritize the assessment of impacts on
people. Read more in the Human Rights section below.
Outcomes and key performance indicators
Neste continues to focus on waste and residues as raw materials. The share of waste and residue raw materials is expected to
stay above 90% of Neste’s global renewable raw material inputs globally in the coming years, while in the longer term, the growth
in novel vegetable oils availability may increase the share of sustainably produced vegetable oils.
In 2023, we updated our Neste Traceability Dashboard to provide the latest data on our palm oil and palm fatty acid distillate
(PFAD) supply chains. By the end of 2023, we had mapped our PFAD supply chain to the palm oil mills supplying the palm
oil refineries where PFAD is extracted during vegetable oil refining. In 2023, we continued our PFAD supply chain mapping
efforts in collaboration with palm oil suppliers and sustainability specialists from the Consortium of Resource Experts (CORE)
and Earthqualizer. We also embarked on a new partnership with a satellite monitoring service provider, Satelligence. With the
sustainability experts, we continued to conduct risk assessments of palm oil mills supplying palm oil to refineries and engaged
with suppliers to further enhance their No-Deforestation, Peat and Exploitation (NDPE) pledge. These additional tools provide us
with a venue to better monitor our vast supply chains for deforestation and any grievances further upstream to the plantations.
In addition, we collaborate with our partners and suppliers to drive awareness of and compliance with the new EU Deforestation
Regulation. We continued to develop our Supplier Due Diligence and Supplier Sustainability Portal to digitalize renewable raw
material supplier evaluation, monitoring and engagement.
Neste has established procedures for tracking and processing grievances in our supply chains for renewable raw materials.
Neste defines renewable raw material grievances as concerns, allegations or complaints sent to us about an alleged breach of
Neste’s Supplier Code of Conduct or the Neste Responsible Sourcing Principle. When a renewable raw material grievance is
brought to our attention, the grievance is channeled to the Neste Sustainability Investigation Group, a cross-functional team which
considers all relevant factors and viewpoints to reach a fair and well-informed resolution, while ensuring speed and consistency
in our management of grievance cases. We maintain a publicly available log of grievances raised in our raw materials supply
chains on our website. The grievance log is updated on a monthly basis to include new grievances, as well as to provide status
updates on the remediation of existing grievances and how they are being addressed or monitored by Neste. Today, these are
mostly palm oil industry-related cases, but the system is one that Neste uses for all renewable raw materials.
Key figures 2023 2022
The number of renewable raw material supplier’s sustainability
assessment and their outcome
1)
Total:
388
New approved
suppliers:
249
All approved:
279
Pending:
102
Rejected:
7
Total:
325
New approved
suppliers:
223
All approved:
236
Pending:
74
Rejected:
15
1)
Figures include existing suppliers, which undergo a sustainability assessment process every 3–5 years. Supplier data includes
only main contractual parties, excluding second-tier suppliers.
Safety and our employees
Policies and principles
Safety is integral to our values. The foundations of safety excellence and continuous improvement are defined by Neste’s
Operations Excellence Policy and Operations Excellence Management System (OEMS), which includes Operations Excellence
Principles and supplementary detailed Standards. The requirements of the OEMS apply not only to Neste’s own employees but
also to suppliers and partners.
Systematic OEMS self-assessments and audits continued in 2023 to ensure the requirements were fulfilled. We performed
23 on-site OEMS audits within our operations. Our safety management prioritized the identification, analysis and mitigation of
high-potential incidents with severe consequences. Incorporating safety into projects such as investments, change initiatives and
turnarounds remained our focus in 2023. We placed significant emphasis on organizational learning to ensure our success in
this area. The Singapore expansion project, concluded in 2023, achieved an overall Total Recordable Injury Frequency (TRIF) of
0.5. This was well within our target, and high-consequence work-related injuries were avoided. The Naantali refinery demolition
project, also completed in 2023, safely navigated its unique challenges without high-consequence work-related injuries.
At Neste, we aim to continuously improve contractor safety performance with our contractors through auditing, regular
performance evaluation, mutual feedback and a focus on subcontracting. In 2023, the implementation of the contractor safety
management model continued.
Neste’s key principles concerning social and employee matters are included in our People Policy. All the human resources (HR)
principles and standards meet the Neste Management System (NMS) requirements, as well as the needs of the changing business
environment, international growth and employment compliance. NMS combines unified policies, principles, standards and work
procedures in one transparent structure. Globally, Neste now has one HR policy, ten HR principles and 13 HR standards in use.
The key principles included in the People Policy are: emphasizing the importance of the continuous development of leadership
and corporate culture; acting in line with the company’s values and underlining everyone’s responsibility for their professional
development as a means of achieving excellent results; guaranteeing equal rights and opportunities regardless of gender, ethnic
origin, age, religion, political convictions, and other similar issues; promoting a workplace in which everyone understands the
importance of their work in achieving common goals; and providing equal and fair compensation based on individual and team
performance. One of Neste’s central principles is to abide by all laws, statutes and official regulations wherever the company
operates and in all aspects of its operations, and to follow clear ethical standards and good practices.
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Risk of safety incidents and social matters
In process safety, Neste continues to make considerable investments to improve the process safety of fixed assets. Neste is also
continuously developing its process safety practices covering leadership, competence development, performance management
and learning from experience. In 2023, one of the safety priority areas was to develop and implement Neste Process Safety
Fundamentals, which are learning resources with best practices for enhancing process safety understanding among frontline
workers, supervisors and managers in their daily tasks.
Rising inequality is a systemic issue that creates risks for businesses and climate transition goals. It threatens the social and
economic stability on which business depends to operate, innovate and grow. It erodes trust in political and economic systems,
fuels civil and political unrest, limits economic growth and undermines companies’ collective capacity to tackle complex global
challenges. Neste is committed to reducing inequalities across the value chain and addressing the root causes of systemic
human rights issues, e.g., by paying and promoting living wages, preparing people for the future of work, providing safe and
secure employment, and creating an equitable and inclusive workplace and value chain.
Outcomes and key performance indicators
In 2023, Neste continued to invest organizational resources into improving safety outcomes through dedicated improvement
programs in business areas. Oil Products “No Harm. Together.”, Marketing & Services’ Contractor Safety Roadmap and Mahoney
Environmental’s Safety Roadmap are stand out examples, delivering tangible field safety improvements in the long term.
In 2023, Neste’s occupational safety performance (TRIF, or rate of accidents requiring medical treatment per million hours
worked, including contractors) was 2.3 (2.0 in 2022) which did not meet the target level (2.0) for 2023. Mahoney Environmental
TRIF statistics were integrated into Neste’s performance indicators for the first time in 2023.
Process safety performance (PSER, or the rate of process safety events per million hours worked) was 1.2 in 2023 (1.4 in
2022). This was better than the 2023 target level (1.4) and was the best year on record.
Diversity, equity and inclusion form a key part of Neste’s values-led culture, human rights work and sustainability vision. Neste
drives equality and non-discrimination and provides career and development opportunities for all applicants and employees
based on their experience, expertise, skills and values through structured process and job criteria, regardless of their personal
attributes.
Neste fosters diversity while building new business opportunities globally. We need different perspectives, backgrounds and
insights to perform, innovate and execute our strategy. To benefit from increasing diversity and make people feel valued and
supported, Neste pursues the development of inclusive leadership and a values-led culture.
We measure our employee engagement in various ways. In addition to a broad employee engagement survey, we measure
change through short quarterly surveys and other surveys targeted at specific employee groups.
Other forms of engagement include many types of development programs, team and individual discussions, surveys gathering
onboarding and offboarding experiences, internal info sessions, and town hall meetings. Topics include the Neste strategy and
values, sustainability and climate commitments, and health, safety and wellbeing.
Key figures 2023 2022
Total recordable injury frequency, TRIF
1)
2.3 2.0
Process safety event rate, PSER
2)
1.2 1.4
New employee hires and employee
turnover
Leaving rate of permanent employees
9.6%. Hiring rate of permanent
employees 15.3%.
Leaving rate of permanent employees
10.2%. Hiring rate of permanent
employees 18.3%.
Employee engagement
3)
Target:
Maintain a good level
of employee engagement.
According to the employee
engagement survey conducted early
2023, the employee engagement
index score was 70. Majority of
employees thought favorably of
working at Neste and would
recommend Neste as a workplace.
73% felt happy working at Neste,
84% understood how their own work
contributes to Neste’s success, 79%
thought Neste acts in a responsible
way, 82% said their team has
everything they need to be safe at
work and 83% felt comfortable being
themselves at work.
According to the employee
engagement survey conducted early
2022, the employee engagement
index score was 66. Majority of
employees thought favorably of
working at Neste and would
recommend Neste as a workplace.
66% felt happy working at Neste,
80% understood how own work
contributes to company’s success,
75% thought Neste acts in a
responsible way, 76% felt safety is
never compromised at Neste.
1)
Total Recordable Incident Frequency, number of cases per million hours worked. Includes both Neste’s and contractors’
personnel, except for Demeter, Walco and SeQuential, and green-field expansion projects, which were internally reported and
followed up separately in 2023.
2)
Process Safety Event Rate, number of cases per million hours worked. The figure includes all operations in applicable facilities
at Neste.
3)
Demeter, Mahoney, SeQuential and Agri Trading not included.
See also: Diversity of the Board of Directors
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Human Rights
Policies and principles
Neste has made a commitment to respect human rights and remediate adverse human rights impacts throughout its business
operations and value chains. Neste demonstrates and meets this commitment by implementing and acting in accordance with the
United Nations Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines for Multinational Enterprises.
The Neste Human Rights Principle applies to the entire Neste Group. It describes how Neste meets its responsibilities to respect
human rights and conduct ongoing human rights due diligence. It outlines seven priority areas for human rights at Neste: Fair
Employment, Health & Safety, Equity, Diversity & Non-Discrimination, Children & Young Workers, Modern Slavery, Fair Treatment,
and Economic, Social & Cultural Rights – including respect for the rights of minority groups and Indigenous Peoples. These are
Neste’s salient human rights issues, that is, those issues which may cause severe negative impacts through our activities or
business relationships.
The Neste Code of Conduct applies to the entire Neste Group and contains the key human rights requirements and expectations
with which all Neste employees are to comply in their daily work. For example, all employees are expected to be aware of how
their work impacts the human rights of people in Neste’s operations, value chain and communities, understand how to recognize
potential human rights risks in their daily work and decision making, and know how to recognize and report signs of modern
slavery.
The minimum human rights requirements for Neste’s business partners including suppliers, contractors and service providers,
are set out in the Neste Supplier Code of Conduct. Neste encourages and supports its business partners to continuously
improve and develop beyond the minimum, to reach the human rights standards and expectations set out in the Neste Human
Rights Principle.
Neste supports the elimination of all forms of modern slavery. We recognize that modern slavery is a growing global issue from
which no industry is immune, and we are committed to taking the appropriate steps to identify vulnerable groups and mitigate
modern slavery risks in our operations and supply chains. Our Modern Slavery Statement, updated annually, details the actions
we are taking to prevent modern slavery and human trafficking across our business operations and value chains.
We are committed to respecting and supporting children’s rights, and to implementing the Children’s Rights and Business
Principles throughout our business and value chains, including in our workplace, marketplace and communities. More information
about the specific measures we take and the projects in which we are involved is available on our website.
Risk of adverse human rights impacts
Neste has undertaken several initiatives to ensure the proper management of human rights related risks across our business. To
embed respect for human rights throughout our business operations and value chains, we carry out ongoing human rights due
diligence to identify and assess risks to human rights, take action to prevent and mitigate them, track the effectiveness of our
measures, and provide a remedy when required. In assessing human rights risks, we engage with affected stakeholders and pay
special attention to vulnerable groups such as women, children, migrant workers and Indigenous Peoples.
Every year we analyze the saliency of our human rights impacts based on severity and likelihood. The assessments evaluate our
actual and potential impacts on people throughout the value chain at a practical level. This enables us to monitor our progress,
account for any new risks resulting from changes in our business and accurately focus and prioritize our work. In 2023, we held
internal workshops to expand the depth and scope of our saliency assessments for our oil products and renewable raw material
supply chains.
We actively monitor and assess risks to people in our own operations. In 2023, we completed Sedex self-assessment for
our refinery in Porvoo, allowing us to thoroughly assess gaps in our management systems and human rights due diligence.
The same assessments are ongoing for our Rotterdam and Singapore refineries. We also established permanent site-level
complaints channels at our refineries to address the concerns of contracted and subcontracted workers, including migrant
workers. These channels, accessible via QR codes on posters discreetly placed around the sites, enable workers to submit
anonymous complaints directly to Neste. The posters inform workers of their rights in various languages and use illustrations and
simple terminology to encourage them to report situations in which they may be experiencing exploitation.
In 2023, to improve our due diligence in Neste’s shipping operations, we surveyed Neste’s time charter vessel partners on their
human rights and labor practices, enhancing our visibility in the issues impacting seafarers working on our chartered vessels.
We continued to strengthen our due diligence for sourcing products and services under Indirect Procurement. In 2023, we
conducted workshops to identify risks in three major Indirect Procurement sourcing categories, added “no-recruitment fee”
clauses to contracts with recruitment agencies and staffing firms used by Neste, and improved our tendering surveys to include
stronger human rights criteria for extractives suppliers.
In 2022–2023, we launched and implemented worker voice technology in Neste’s operations and supply chains to scale up
our worker engagement. The technology uses an audiovisual survey to enable direct and anonymous engagement with workers
on mobile devices. Since launching the technology, we have conducted anonymous worker voice surveys across the Middle
East, USA, India, and Finland with 215 workers. The survey provides insights into various topics affecting workers employed by
our suppliers and contractors such as inequality, living wages, recruitment fees and children’s access to education.
Human rights topics are included in our global induction for all new Neste employees, as well as our Code of Conduct and
Supplier Code of Conduct e-learning courses. We engage in capacity building with suppliers and contractors in high-risk sectors
and geographies to drive positive human rights impacts throughout the supply chain.
Outcomes and key performance indicators
In recognizing that our human rights impacts may change over time as our operations and value chains continue to evolve, we
are committed to embedding human rights due diligence across our business as an ongoing, iterative process. This year, we
continued to conduct human rights due diligence within our supply chains and operations to prevent, mitigate and remediate
adverse human rights impacts where necessary.
Key figures 2023 2022
Human Rights Due Diligence carried out
for key business areas/functions.
Target: To strengthen Neste’s capacity to
identify, assess, and address human
rights risks in our operations and supply
chains.
Four major assessments/initiatives
undertaken in 2023:
1) Corporate-wide assessment to
review Neste’s salient issues and
mitigation actions.
2) Surveyed Neste’s time charter
vessel partners on their human
rights and labor practices.
3) Living wage gap assessments
completed for Neste’s own
employees globally.
4) Sedex assessments completed for
our Porvoo refinery, and ongoing
for Rotterdam and Singapore
refineries.
Four major assessments/initiatives
undertaken in 2022:
1) Corporate-wide assessment to
review Neste’s salient issues and
their mitigation.
2) Human Rights Risk Assessments
completed for Neste Indirect
Procurement.
3) Living wage gap assessment
completed for Neste’s own
employees in Finland.
4) CGF human rights due diligence
assessments completed for
Production (Singapore) and
Shipping.
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Anti-Corruption
Policies and principles
Neste and its management are committed to conducting the company’s global operations ethically and with integrity. As stated
in the company’s Code of Conduct, Neste has zero tolerance of corruption and bribery of any kind in connection with Neste’s
operations, whether committed by Neste employees or third parties acting on behalf of Neste. Neste also requires its external
business partners acting for or on behalf of the company to be aware of and share the commitment to zero tolerance of corruption.
Neste’s key policies and principles concerning anti-corruption and anti-bribery are the Code of Conduct, Anti-Corruption Principle,
and Supplier Code of Conduct. More information about the Code of Conduct can be found in the Sustainability Report.
Risk of corruption and bribery
Risks of corruption and bribery are typically treated as inherent risks in the oil and gas sector due to its global nature, contractual
relationships with local governments, and involvement in complex networks with various suppliers and contractors. Neste
regularly assesses its operations’ risks, including risks of corruption and bribery. As a preventive measure, Neste has developed
a compliance program which includes policy statements (Code of Conduct, Anti-Corruption Principle), dedicated eLearning
packages, an annual compliance acknowledgment, regular communication and Ethics Online for the reporting of suspected
misconduct. Neste’s counterparties are required to comply with the Supplier Code of Conduct and/or their own equivalent
principles and undergo a compliance clearance and counterparty risk assessment. As stated in the Code of Conduct, Neste
has processes in place to carry out due diligence on its business partners. The compliance clearance and counterparty risk
assessment covers the following risks: trade sanctions; politically exposed persons; money laundering; corruption and bribery.
Outcomes and key performance indicators
In addition to the Code of Conduct, Neste has an Anti-Corruption Principle, which sets the rules for preventing corruption in
connection with Neste’s business operations and provides more detailed guidance on responsible business practices. Anti-
Corruption topics are regularly communicated and trained to the organization, including an Anti-Corruption e-learning course
re-issued to office workers in 2022. The e-learning course also includes a requirement for employees to report observed or
suspected violations of Neste’s Anti-Corruption Principle to their own manager, Neste’s HR, and the Compliance or Internal
Audit functions. Employees may also report their concerns anonymously via Neste’s externally operated misconduct reporting
system, Ethics Online, which can be used by phone or via the website. Ethics Online is available for both employees and external
stakeholders. More information about Neste’s grievance process and the related Misconduct Investigation Standard is available
in the Corporate Governance Statement.
Neste also has an Anti-Money Laundering and Counter-Terrorist Financing (CTF) Standard in place, detailing Neste’s guidance
and process in relation to preventing money laundering risks. A related Anti-Money Laundering e-learning was re-issued in 2023
to targeted employees, as further described in the Sustainability Report’s Compliance section.
Neste regularly raises awareness of and trains in its Code of Conduct, including a Code of Conduct e-learning, the latest
version of which was issued in 2021. The e-learning course also covers anti-corruption topics and guidelines on how to report
observed or suspected violations of Neste’s Code of Conduct. The e-learning course is included in the training package for all
new employees. Furthermore, Neste carried out targeted Code of Conduct workshops for management in 2023.
A total of 30 suspected misconduct incidents were reported during 2023. As 4 reports concerned the same incident there
were a total of 27 suspected misconduct investigations in 2023. 17 of these 30 reports came via the EthicsOnline system.
Confirmed misconduct by Neste employees was identified in 5 of the completed investigations, all leading to further action
and/or process improvements. No confirmed misconduct was related to corruption or bribery. Furthermore, no misconduct
was found in 19 completed investigations. 3 investigations are pending. Neste’s Investigation Group investigates the received
reports and reports the number of reported cases per category to the Board of Directors’ Audit Committee and to the Ethics and
Compliance Committee, consisting of Neste Executive Committee members, the Chief Compliance Officer and the VP, Internal
Audit. In 6 investigations in 2023, the Neste Investigation Group retained independent external forensic and/or legal expertise to
conduct the investigation.
Targeted training in anti-corruption, anti-money laundering, competition law compliance, trade sanction compliance and privacy
was conducted with defined target groups.
Key figures 2023 2022
Number of suspected misconducts
reported in person or via the
whistleblowing system to the
Investigations Group.
Target: To further encourage employees
and external stakeholders to report
observed or suspected misconducts.
Number of suspected misconducts
reported in person or via the available
reporting channels including
EthicsOnline to the Investigation
Group was in total 30 (4 concerning
the same issue) of which employment
matters 10 reports, discrimination
and harassment 6, fraud 3, supplier/
business partner misconduct/
unethical behavior 4, conflict of
interest 3, inappropriate behavior 2,
sustainability 1 and unethical conduct
towards clients/suppliers/business
contacts 1. Misconduct by Neste
employees confirmed in 5 cases,
related to theft/fraud, leadership
oversight, manager conduct and/or
inappropriate behavior. All leading to
further actions and/or process
improvements. 3 investigations are
pending. The confirmed cases of
misconduct were not related to
corruption, bribery or facilitation
payments. Renewable raw material
Supply chain related external
grievances are reported separately by
the Sustainability team on the
Neste website.
Number of suspected misconducts
reported in person or via the available
reporting channels including
EthicsOnline to the Investigation
Group was in total 14 of which
employment matters 2 reports,
discrimination and harassment 2,
fraud 4, bribery, corruption and
facilitation payment 1, theft, asset
misuse & embezzlement 3, supplier/
business partner misconduct/
unethical behavior 1and 1 report
belongs to category “other”.
Misconduct by Neste employees
confirmed in 2 cases, related to
manager conduct, substance abuse
and/or inappropriate behavior.
Misconduct by a third party
confirmed in 1 case, related to
attempted fraud. All leading to further
actions and process improvements.
Four investigations are pending. The
confirmed cases of misconduct were
not related to corruption, bribery or
facilitation payments. Renewable raw
material Supply chain related external
grievances are reported separately by
the Sustainability team on the
Neste website.
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Outlook
Short term market outlook
The uncertainty in the global economic outlook and geopolitical situation continues. We expect market volatility in Renewable
Products and Oil Products to remain high. In Renewable Products, bioticket and renewable credit prices have decreased to a
lower level in early 2024 compared to 2023. In Oil Products, the refining market has stayed relatively stable during the beginning
of 2024.
Guidance
Renewable Products’ total sales volume is expected to increase from 2023 and to reach approximately 4.4 Mt (+/- 10%) in 2024,
out of which SAF sales volume is expected to be 0.5–1.0 Mt. Renewable Products’ full-year 2024 average comparable sales
margin is expected to be in the range of USD 600–800/ton.
Oil Products’ total sales volume in 2024 is expected to be lower than in 2023, impacted by the planned Porvoo major
turnaround in the second quarter. Oil Products’ full-year 2024 total refining margin is expected to be lower than in 2023.
Additional information
In Renewable Products, Singapore is scheduled to have a 6-week and Rotterdam a 4-week maintenance shutdown in the third
quarter. Singapore’s new line is also scheduled to have an 8-week maintenance shutdown in the fourth quarter. Renewable
Products’ full-year sales volume is impacted by the planned maintenance shutdowns and the ramp-up timeline of Martinez and
the Singapore new line to reach full capacity. In Singapore, stable SAF production was reached in the fourth quarter and SAF
sales are expected to increase from the second quarter onwards. Martinez Renewables facility is currently operating at slightly
below 50% of nameplate capacity, following the fire at the end of 2023. Work is ongoing to proceed with repairs to ensure safe
and reliable operations.
In Oil Products, the Porvoo major turnaround is scheduled for the second quarter with an estimated capex of EUR 390
million and a comparable EBITDA impact of approximately EUR 190 million for Oil Products and EUR 40 million for Renewable
Products. The two-day strike at the beginning of February had an impact on customer deliveries from Porvoo refinery and
affected production over a 5-7 days period.
In Marketing & Services the sales volumes and unit margins are expected to follow the previous years’ seasonality pattern.
The Group’s total fixed costs in 2024 are expected to be somewhat higher than in 2023 due to the Porvoo major turnaround
and the build-up of resources for the growth projects under construction. The fixed costs growth trend is expected to level out
compared to 2023 due to cost saving and efficiency measures.
The Group’s full-year 2024 cash-out capital expenditure excluding M&A is estimated to be approximately EUR 1.4–1.6 billion.
The share of maintenance and strategic capex is expected to represent approximately 40% and 60%, respectively, as the Porvoo
major turnaround increases maintenance capex.
Dividend distribution proposal
Neste’s policy is to pay a competitive and over time growing dividend. The parent company’s distributable equity as of 31
December 2023 amounted to EUR 3,835 million, and there have been no material changes in the company’s financial position
since the end of the financial year.
The Board of Directors proposes to the AGM that a dividend of EUR 1.20 per share shall be paid on the basis of the approved
balance sheet for 2023. The dividend shall be paid in two installments.
The first installment of the dividend, EUR 0.60 per share will be paid to shareholders registered in the shareholders’ register of
the Company maintained by Euroclear Finland Ltd on the record date for the dividend payment, which shall be 2 April 2024. The
Board proposes to the AGM that the first installment of the dividend would be paid on 9 April 2024.
The second installment of the dividend, EUR 0.60 per share, will be paid to shareholders registered in the shareholders’ register
of the Company maintained by Euroclear Finland Ltd on the record date for the second installment of the dividend, which shall
be 2 October 2024. The Board proposes to the AGM that the second installment of the dividend would be paid on 9 October
2024. The Board of Directors is authorized to set a new dividend record date and payment date for the second installment of the
dividend, in case the rules and regulations on the Finnish book-entry system would be changed, or otherwise so require.
The proposed total dividend EUR 1.20 per share represents a yield of 3.7% (at year-end 2023 share price of EUR 32.21)
and 41.6% of the comparable earnings per share in 2023. The total dividend payout in 2024 amounts to approximately
EUR 922 million.
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Key figures
Income statement 2023 2022 2021
Revenue EUR million 22,926 25,707 15,148
EBITDA EUR million 2,548 3,048 2,607
- of revenue % 11.1 11.9 17.2
Operating profit EUR million 1,682 2,410 2,023
- of revenue % 7.3 9.4 13.4
Profit before income taxes EUR million 1,596 2,279 1,962
- of revenue % 7.0 8.9 13.0
Profit for the period EUR million 1,436 1,891 1,774
- of revenue % 6.3 7.4 11.7
Comparable EBITDA EUR million 3,458 3,537 1,920
Comparable net profit EUR million 2,216 2,336 1,179
Profitability
Return on equity (ROE) % 17.9 25.1 28.5
Comparable return on average capital
employed, after tax (Comparable ROACE) % 23.9 30.1 18.3
Financing and financial position
Interest-bearing net debt EUR million 2,488 1,344 41
Leverage ratio % 22.7 13.9 0.6
Equity-to-assets ratio % 53.1 56.3 56.6
Net Debt to EBITDA % 1.0 0.4 0.0
Other indicators
Capital employed EUR million 12,532 10,942 8,742
Net working capital in days outstanding 41.0 35.4 33.3
Capital expenditure and investments in shares EUR million 2,351 2,218 1,535
- of revenue % 10.3 8.6 10.1
Research and development expenditure EUR million 94 85 67
- of revenue % 0.4 0.3 0.4
Average number of personnel 6,018 5,244 4,872
1)
Board of Directors’ proposal to the Annual General Meeting. 2022 key figures include an ordinary dividend of EUR 1.02 per share,
an extraordinary dividend of EUR 0.25 per share, and a discretionary second extraordinary dividend of EUR 0.25 per share.
Share-related indicators 2023 2022 2021
Earnings per share (EPS) EUR 1.87 2.46 2.31
Comparable earnings per share EUR 2.88 3.04 1.54
Equity per share EUR 11.02 10.83 9.09
Cash flow per share EUR 2.97 1.56 2.60
Price / earnings ratio (P/E) 17.26 17.50 18.79
Dividend per share EUR 1.20
1)
1.52 0.82
Dividend payout ratio % 64.3
1)
61.8 35.5
Dividend yield % 3.7
1)
3.5 1.9
Share prices
Closing price EUR 32.21 43.02 43.36
Average price EUR 37.66 42.26 50.99
Lowest price EUR 28.55 30.81 41.17
Highest price EUR 48.50 52.18 64.74
Market capitalization EUR million 24,776 33,091 33,353
Trading volumes
Number of shares traded 1,000 242,189 270,643 246,647
- of weighted average number of shares % 32 35 32
Weighted average number of
shares outstanding 768,175,637 768,060,103 767,643,112
Number of shares outstanding
at the end of the period 768,199,747 768,083,170 767,969,396
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Reconciliation of key figures to IFRS Financial Statements
Reconciliation between comparable EBITDA, EBITDA and operating profit is presented in Note 4, Segment information.
EUR million 2023 2022 2021
Comparable EBITDA 3,458 3,537 1,920
IS
Depreciation, amortization and impairments -866 -638 -584
Items in depreciation, amortization and impairments
affecting comparability 0 27 5
IS
Total financial income and expenses -86 -131 -61
IS
Income tax expense -160 -388 -188
IS
Non-controlling interests -3 -3 -2
Tax on items affecting comparability -128 -68 89
Comparable net profit 2,216 2,336 1,179
Reconciliation of comparable return on average capital employed, after tax (Comparable ROACE), %
EUR million 2023 2022 2021
Comparable EBITDA, last 12 months 3,458 3,537 1,920
IS
Depreciation, amortization and impairments -866 -638 -584
Items in depreciation, amortization and impairments
affecting comparability 0 27 5
IS
Financial income 45 9 4
IS
Exchange rate and fair value gains and losses -9 -80 -10
IS
Income tax expense -160 -388 -188
Tax on other items affecting Comparable ROACE -145 -76 82
Comparable net profit, net of tax 2,324 2,391 1,229
Capital employed average 11,514 9,823 7,952
Assets under construction average -1,789 -1,880 -1,250
Return on comparable average capital employed,
after tax (Comparable ROACE), % 23.9 30.1 18.3
Reconciliation of equity-to-assets ratio, %
EUR million 2023 2022 2021
BS Total equity 8,463 8,327 6,985
BS Total assets 15,983 14,917 12,417
Advances received -39 -138 -86
Equity-to-assets ratio, % 53.1 56.3 56.6
Reconciliation of net working capital in days outstanding
EUR million 2023 2022 2021
Operative receivables 1,788 1,902 1,561
BS Inventories 3,366 3,648 2,618
Operative liabilities -2,581 -3,057 -2,795
Net working capital 2,573 2,494 1,384
IS Revenue 22,926 25,707 15,148
Net working capital in days outstanding 41.0 35.4 33.3
Reconciliation between comparable EBITDA and comparable net profit
IS
OCI
BS
CF
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Calculation of key figures
Neste presents Alternative Performance Measures to enhance comparability between financial periods as well as to reflect operational performance and financial risk level. These indicators should be examined together with the IFRS-compliant performance
indicators.
Key figure Calculation Reason for use
EBITDA = Operating profit + depreciation, amortization and impairments
EBITDA is an indicator to measure the operational performance and cash flow
generation.
Comparable EBITDA =
EBITDA -/+ inventory valuation gains/losses -/+ changes in the fair value of open
commodity and currency derivatives -/+ capital gains/losses - insurance and other
compensations -/+ other adjustments
Comparable EBITDA describes underlying operational performance and cash flow
generation.
1)
Items affecting comparability =
Inventory valuation gains/losses, changes in the fair value of open commodity and
currency derivatives, capital gains/losses, insurance and other compensations,
impairments and other adjustments
Items affecting comparability are linked to unpredictability events of a significant
nature that do not form part of normal day-to-day business.
1)
Comparable net profit =
Comparable EBITDA - depreciation, amortizations and impairments -/+ items in
depreciation, amortization and impairments affecting comparability - total financial income
and expense - income tax expense - non-controlling interests - tax on items affecting
comparability
Comparable net profit is used to provide additional financial performance indicators
to support meaningful comparison of underlying net profitability between periods.
Return on equity (ROE), % = 100 x
Profit before income taxes - income tax expense, last 12 months
Return on equity provides additional information on the profitability of operations.
Total equity average, 5 quarters end values
Comparable return on average
capital employed, after-tax
(Comparable ROACE), %
= 100 x
Comparable EBITDA - depreciation, amortizations and impairments -/+ items in
depreciation, amortization and impairments affecting comparability + financial income +
exchange rate and fair value gains and losses - income tax expense - tax on other items
affecting Comparable ROACE, last 12 months
Comparable return on average capital employed after-tax (Comparable ROACE) is
one of Neste’s key financial targets. It is a long-term over the cycle indicator
measuring Neste’s profitability and efficiency of capital usage.
Capital employed average - assets under construction average, 5 quarters end values
Capital employed = Total equity + interest bearing liabilities
Capital employed is primarily used to determine the comparable return on average
capital employed (Comparable ROACE) which is Neste’s key financial target.
Interest-bearing net debt = Interest-bearing liabilities - cash and cash equivalents - current investments Interest-bearing net debt is an indicator to measure the total external debt financing.
Leverage ratio, % = 100 x
Interest-bearing net debt
Leverage ratio is one of Neste’s key financial targets. It provides useful information
regarding Neste’s capital structure and financial risk level.
Interest bearing net debt + total equity
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Equity-to-assets ratio, % = 100 x
Total equity
Equity-to-assets ratio provides useful information regarding financial risk level.
Total assets - advances received
Net working capital in days outstanding = 365 x
Net working capital
Net working capital in days outstanding measures efficiency in turning net working
capital into revenue.
Revenue, last 12 months
Net Debt to EBITDA =
Interest-bearing net debt
Net debt to EBITDA measures capital structure and ability to cover debt.
EBITDA, last 12 months
Return on net assets, % = 100 x
Segment operating profit, last 12 months
Neste uses return on net assets to follow the operational performance of its
operating segments.
Average segment net assets, 5 quarters end values
Comparable return on net assets, % = 100 x
Segment comparable EBITDA, last 12 months - depreciation, amortization and
impairments +/- items in depreciation, amortization and impairments affecting
comparability
Neste uses comparable return on net assets to follow the underlying operational
performance of its operating segments.
Average segment net assets, 5 quarters end values
Segment net assets =
Property, plant and equipment + goodwill + intangible assets + investments in associates
and joint ventures + inventories + interest-free receivables and liabilities - provisions -
pension liabilities allocated to the business segment
Segment net assets are primarily used to determine the return on net assets and
comparable return on net assets.
Calculation of share-related indicators
Earnings per share (EPS) =
Profit for the period attributable to the owners of the parent
Weighted average number of shares outstanding during the period
Comparable earnings per share =
Comparable net profit
Weighted average number of shares outstanding during the period
Equity per share =
Shareholder's equity attributable to the owners of the parent
Number of shares outstanding at the end of the period
Cash flow per share =
Net cash generated from operating activities
Weighted average number of shares outstanding during the period
Price / earnings ratio (P/E) =
Share price at the end of the period
Earnings per share
Key figure Calculation Reason for use
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Dividend payout ratio, % = 100 x
Dividend per share
Earnings per share
Dividend yield, % = 100 x
Dividend per share
Share price at the end of the period
Average share price =
Amount traded in euros during the period
Number of shares traded during the period
Market capitalization = Number of shares at the end of the period x share price at the end of the period
Calculation of key drivers
Oil Products total refining margin (USD/bbl) =
Comparable sales margin x average EUR/USD exchange rate for the period
x standard refinery yield
Oil Products total refining margin measures the segment's comparable sales margin
per refined unit sold. USD/bbl is a standard unit used in the oil industry.
Refined sales volume x standard barrels per ton
Renewable Products comparable sales
margin (USD/ton)
=
Comparable sales margin x average EUR/USD exchange rate for the period
Renewable Products comparable sales margin measures the sales margin
per unit sold.
Sales volumes of renewable diesel, sustainable aviation fuel and other products
1)
In the business environment where Neste operates, commodity prices and foreign exchange rates are volatile and can cause significant fluctuations in inventory values and operating profit. Comparable EBITDA eliminates both the inventory valuation gains/
losses generated by the volatility in raw material prices and changes in open derivatives, and better reflects the company’s underlying operational performance. Also, it reflects Neste’s operational cash flow, where the change in operating profit caused by
inventory valuation is mostly compensated by changing net working capital. Items affecting comparability are linked to unpredictability events of a significant nature that do not form part of normal day-to-day business. They include among others impairment
losses and reversals, gains and losses associated with the combination or termination of businesses, restructuring costs, and gains and losses on the sales of assets. Only items having an impact of more than EUR 1 million on Neste’s result will be classified as
items affecting comparability.
Key figure Calculation Reason for use
Annual Report 2023
Financials
177
Business review Sustainability Governance Review by the Board of Directors Financial Statements
Financial Statements
Consolidated Statement of Income 178
Consolidated Statement of Comprehensive Income 178
Consolidated Statement of Financial Position 179
Consolidated Cash Flow Statement 180
Consolidated Statement of Changes in Equity 181
Notes to the Consolidated Financial Statements 182
Parent company Income Statement 237
Parent company Balance Sheet 237
Parent company Cash Flow Statement 238
Parent company Notes to the Financial Statements 239
Proposal for the distribution of earnings and
signing of the Review by the Board of Directors
and the Financial Statements 258
Auditor’s Report 259
178
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1
7
8
9
2
4
3
5
6
10
11
12
13
14
15
16
24
17
25
18
26
19
27
20
28
21
29
22
30
23
31
Consolidated Statement of Income
EUR million Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Revenue 4, 5 22,926 25,707
Other income 6 55 54
Share of profit (loss) of associates and joint ventures 15 1 2
Materials and services 7 -19,098 -21,648
Employee benefit costs 8 -642 -545
Depreciation, amortization and impairments 4 -866 -638
Other expenses 9 -695 -522
Operating profit 1,682 2,410
Financial income and expenses 10
Financial income 45 9
Financial expenses -122 -60
Exchange rate and fair value gains and losses -9 -80
Total financial income and expenses -86 -131
Profit before income taxes 1,596 2,279
Income tax expense 11 -160 -388
Profit for the period 1,436 1,891
Profit attributable to
Owners of the parent 1,433 1,888
Non-controlling interests 3 3
Earnings per share from profit attributable to
owners of the parent (in euro per share) 12
Basic earnings per share 1.87 2.46
Diluted earnings per share 1.87 2.46
Consolidated Statement of Comprehensive Income
EUR million 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Profit for the period 1,436 1,891
Other comprehensive income net of tax
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit plans 11 18
Net change of other investments at fair value -3 -5
Total 8 13
Items that may be reclassified subsequently to profit or loss
Translation differences -66 -56
Cash flow hedges
recorded in equity 50 19
transferred to income statement -85 90
Share of other comprehensive income of investments
accounted for using the equity method -4 17
Total -105 70
Other comprehensive income for the period, net of tax -97 82
Total comprehensive income for the period 1,339 1,973
Total comprehensive income attributable to:
Owners of the parent 1,336 1,970
Non-controlling interests 3 3
The notes are an integral part of these consolidated financial statements.
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1
7
8
9
2
4
3
5
6
10
11
12
13
14
15
16
24
17
25
18
26
19
27
20
28
21
29
22
30
23
31
Consolidated Statement of Financial Position
EUR million Note 31 Dec 2023 31 Dec 2022
ASSETS
Non-current assets
Goodwill 13 496 401
Intangible assets 13 185 169
Property, plant and equipment 14 7,786 6,570
Investments in associates and joint ventures 15 58 63
Non-current receivables 17 126 103
Deferred tax assets 11 127 59
Derivative financial instruments 16, 19 26 5
Other financial assets 17 54 44
Total non-current assets 8,858 7,413
Current assets
Inventories 18 3,366 3,648
Trade and other receivables 17 1,913 2,138
Current tax assets 76 40
Derivative financial instruments 16, 19 190 406
Current investments 17 5 0
Cash and cash equivalents 17 1,575 1,271
Total current assets 7,125 7,504
Total assets 15,983 14 917
EQUITY
Capital and reserves attributable to the owners
of the parent 20
Share capital 40 40
Other equity 8,423 8,282
Total 8,463 8,322
Non-controlling interests 0 5
Total equity 8,463 8,327
LIABILITIES
Non-current liabilities
Interest-bearing liabilities 21 3,487 1,964
Deferred tax liabilities 11 317 336
Provisions 22 187 200
Pension liabilities 23 93 119
Derivative financial instruments 16, 19 6 12
Other non-current liabilities 21 42 43
Total non-current liabilities 4,132 2,674
Current liabilities
Interest-bearing liabilities 21 581 651
Current tax liabilities 15 43
Derivative financial instruments 16, 19 212 200
Trade and other payables 21 2,580 3,022
Total current liabilities 3,388 3,916
Total liabilities 7,520 6,590
Total equity and liabilities 15,983 14,917
The notes are an integral part of these consolidated financial statements.
EUR million Note 31 Dec 2023 31 Dec 2022
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1
7
8
9
2
4
3
5
6
10
11
12
13
14
15
16
24
17
25
18
26
19
27
20
28
21
29
22
30
23
31
Consolidated Cash Flow Statement
EUR million Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Cash flows from operating activities
Profit before income taxes 1,596 2,279
Adjustments for
Share of profit (loss) of associates and joint ventures 4, 15 -1 -2
Depreciation, amortization and impairments 4 866 638
Other non-cash income and expenses 109 -53
Financial expenses - net 10 86 131
Profit / loss from disposal of fixed assets and shares 0 0
Cash flow before change in net working capital 2,656 2,994
Change in net working capital
Decrease (+) / increase (-) in trade and other receivables 99 -322
Decrease (+) / increase (-) in inventories 261 -1,037
Decrease (-) / increase (+) in trade and other payables -338 2
Change in net working capital 21 -1,357
Cash generated from operations 2,677 1,637
Interest and other finance cost paid -109 -59
Interest income received 34 6
Realized foreign exchange gains and losses -17 11
Income taxes paid -307 -398
Finance cost and income taxes paid -398 -440
Net cash generated from operating activities 2,279 1,197
Cash flows from investing activities
Purchases of property, plant and equipment -1,403 -1,670
Purchases of intangible assets 13 -27 -73
Acquisitions of subsidiaries -176 -14
Proceeds from sales of shares in subsidiaries, joint
arrangements and business operations 0 157
Proceeds from capital repayments in joint arrangements 15 0 13
Proceeds from sales of property, plant and equipment 0 30
Changes in long-term receivables and other financial assets 78 -31
Cash flows from investing activities -1,528 -1,588
Cash flow before financing activities 751 -390
Cash flows from financing activities
Payment of (-) / proceeds from (+) current interest-bearing liabilities -380 260
Proceeds from non-current interest-bearing liabilities 1,591 899
Repayments of non-current interest-bearing liabilities -209 -407
Repayments of lease liabilities -254 -157
Transactions with non-controlling interests -18 0
Dividends paid to the owners of the parent -1,168 -630
Dividends paid to non-controlling interests -3 -2
Cash flows from financing activities -441 -37
Net decrease (-) / increase (+)
in cash and cash equivalents 311 -427
Cash and cash equivalents at beginning of the period 1,271 1,696
Exchange gains (+) / losses (-) on cash and cash equivalents -7 3
Cash and cash equivalents at end of the period 17 1,575 1,271
The notes are an integral part of these consolidated financial statements.
EUR million Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
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7
8
9
2
4
3
5
6
10
11
12
13
14
15
16
24
17
25
18
26
19
27
20
28
21
29
22
30
23
31
Consolidated Statement of Changes in Equity
EUR million Note
Share
capital
Reserve
fund
Reserve of
invested
unrestricted
equity
Treasury
shares
Fair value
and other
reserves
Actuarial
gains and
losses
Translation
differences
Retained
earnings
Owners of
the parent
Non-
controlling
interests
Total
equity
Total equity at 1 January 2023 40 7 16 -5 98 -78 -66 8,309 8,322 5 8,327
Profit for the period 1,433 1,433 3 1,436
Other comprehensive income for the period, net of tax -43 11 -66 -97 0 -97
Total comprehensive income for the period 0 0 0 0 -43 11 -66 1,433 1,336 3 1,339
Transactions with the owners in their capacity as owners
Dividend decision -1,168 -1,168 -3 -1,171
Transactions with non-controlling interests -27 -27 -4 -31
Share-based compensation 1 0 1 1
Transfer from retained earnings 0 0 -1 -1
Total equity at 31 December 2023 20 40 7 16 -5 56 -67 -131 8,548 8,463 0 8,463
EUR million Note
Share
capital
Reserve
fund
Reserve of
invested
unrestricted
equity
Treasury
shares
Fair value
and other
reserves
Actuarial
gains and
losses
Translation
differences
Retained
earnings
Owners of
the parent
Non-
controlling
interests
Total
equity
Total equity at 1 January 2022 40 19 16 -6 -22 -96 -10 7,040 6,981 4 6,985
Profit for the period 1,888 1,888 3 1,891
Other comprehensive income for the period, net of tax 120 18 -56 82 0 82
Total comprehensive income for the period 0 0 0 0 120 18 -56 1,888 1,970 3 1,973
Transactions with the owners in their capacity as owners
Dividend decision -630 -630 -2 -632
Share-based compensation 1 -1 0 0
Transfer from retained earnings -12 0 12 0 0
Total equity at 31 December 2022 20 40 7 16 -5 98 -78 -66 8,309 8,322 5 8,327
The notes are an integral part of these consolidated financial statements.
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Notes to the Consolidated Financial Statements
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Renewable
Products
Oil
Products
Marketing &
Services
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Financial statements
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237
Business review Sustainability Governance Review by the Board of Directors Financial Statements
1
9
5
13
3
11
7
15
19
22
24
2
10
6
14
18
21
4
12
8
16
17
20
23
25
EUR million Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Revenue 2 15,768 19,231
Change in product inventories -235 367
Other operating income 3 31 28
Materials and services 4 -13,173 -17,075
Personnel expenses 5 -355 -275
Depreciation, amortization and write-downs 6 -211 -248
Other operating expenses 7 -509 -445
Operating profit/loss 1,317 1,583
Financial income and expenses 8 27 385
Financial income and expenses total 27 385
Profit/loss before appropriations and taxes 1,343 1,967
Appropriations 9 97 -49
Income tax expenses 10 -262 -291
Profit for the year 1,178 1,628
Parent company income statement
Parent company balance sheet
EUR million Note 31 Dec 2023 31 Dec 2022
ASSETS
Fixed assets and other long-term investments 11, 12
Intangible assets 116 123
Tangible assets 1,878 1,886
Other long-term investments 4,071 3,404
Fixed assets and other long-term investments total 6,064 5,413
Current assets
Inventories 13 1,518 1,914
Long-term receivables 14 64 43
Short-term receivables 15 2,702 3,349
Cash and cash equivalents 1,328 806
Current assets total 5,611 6,113
Total assets 11,676 11,526
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 16
Share capital 40 40
Other funds and reserves
Invested non-restricted equity fund 19 19
Fair value reserve 24 69
Other funds and reverses total 43 88
Retained earnings 2,649 2,189
Profit for the year 1,178 1,628
Shareholders' equity total 3,911 3,945
Accumulated appropriations 17 1,163 1,140
Provisions for liabilities and charges 18 103 117
Liabilities 19
Long-term liabilities 2,823 1,969
Short-term liabilities 3,676 4,355
Liabilities total 6,499 6,324
Total equity and liabilities 11,676 11,526
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
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21
4
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20
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25
EUR million 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Cash flows from operating activities
Profit/loss before approriations and taxes 1,343 1,967
Adjustments:
Depreciation, amortization and write-downs 211 248
Other non-cash income and expenses
1)
119 -99
Financial income and expenses -27 -385
Divesting activities, net 0 -13
Operating cash flow before change in working capital 1,647 1,719
Change in working capital
Decrease (+)/increase (-) in interest-free receivables 499 -824
Decrease (+)/increase (-) in inventories 396 -615
Decrease (-)/increase (+) in interest-free liabilities -969 -49
Change in working capital -74 -1,487
Cash generated from operations 1,573 232
Interest and other financial expenses paid, net -35 -16
Dividends received 122 420
Income taxes paid -257 -306
Realized foreign exchange gains and losses, net -20 -33
Net cash from operating activities 1,384 297
Parent company cash flow statement
Cash flows from investing activities
Capital expenditure -148 -185
Proceeds from sale of fixed assets 0 0
Investments in shares in subsidiaries -810 -1,014
Investments in shares in other shares -1 -1
Proceeds from shares in subsidiaries 0 17
Proceeds from other shares 0 0
Change in other investments, increase (-)/decrease (+) 182 13
Net cash used in investing activities -777 -1,170
Cash flow before financing activities 607 -873
Cash flows from financing activities
Proceeds from long-term liabilities 1,671 899
Payments of long-term liabilities -209 -491
Change in short-term liabilities -380 248
Dividends paid -1,168 -630
Group contributions, net 0 128
Cash flow from financing activities -86 155
Net increase (+)/decrease (-) in cash and cash equivalents 521 -719
Cash and cash equivalents at the beginning of the period 806 1,492
Cash and cash equivalent increases from merger 0 33
Cash and cash equivalents at the end of the period 1,328 806
Net increase (+)/decrease (-) in cash and cash equivalents 521 -719
EUR million 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
1)
Other non-cash income and expenses consists of change in FX derivatives, change in commodity derivatives, change in
provisions and adjustments to realized FX gains/losses.
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4
12
8
16
17
20
23
25
Buildings and structures 20–40 years
Production machinery and equipment, including special spare parts 15–20 years
Other equipment and vehicles 3–15 years
Other tangible assets 20–40 years
Goodwill and Intangible assets
1)
3–10 years
1)
Intangible assets include capitalized development expenditures
1 Accounting policies
The financial statements of Neste Corporation (Parent company) are prepared in accordance with Finnish GAAP. The financial
statements are presented in millions of euros unless otherwise stated. The figures in the tables are exact figures and consequently
the sum of individual figures may deviate from the sum presented.
Neste Oyj prepares separate natural gas sale and network financial statements that is published in Neste Oyj’s consolidated
financial statements.
Visibility in the global economy continues to be low due to high inflation, reduced economic growth expectations and continued
geopolitical uncertainty. We expect volatility in the oil products and renewable feedstock markets to remain high. Neste Oyj does
not have subsidiaries in Russia nor in Ukraine. Neste Oyj’s financial position remained strong.
Revenue
Revenue include sales revenues from actual operations less discounts, indirect taxes such as value added tax and excise tax
payable by the manufacturer and statutory stockpiling fees. Revenue is recognised on accrual accounting basis.
Other operating income
Other operating income includes gains on the sales of fixed assets and contributions received as well as all other operating
income not related to the sales of products or services, such as rents.
Foreign currency items
Transactions denominated in foreign currencies have been valued using the exchange rate at the date of the transaction.
Receivables and liabilities denominated in foreign currencies outstanding on the balance sheet date have been valued using the
exchange rate quoted on the balance sheet date. Exchange rate gains and losses related to operative items are recognized as
adjustments to operative income and expenses in the income statement. Net exchange rate differences related to financial items
are reported under financial income and expenses.
Financial assets and liabilities
Derivative financial instruments are initially recognised at fair value on the trade date and are subsequently re-measured at their
fair value on the balance sheet date. Other financial assets and liabilities are measured at amortized cost and recognized initially
at fair value on the settlement date.
Loans and receivables consist of cash and cash equivalents, loans granted together with trade and other receivables. Other
financial liabilities include interest-bearing liabilities together with trade and other payables. Due to the nature of short-term trade
and other receivables their carrying amount is expected to be equal to their fair value.
Changes in the fair value of derivatives, for which hedge accounting is not applied, are recognized in the income statement.
The effective portion of the changes in the fair value of derivative financial instruments that are designated and qualified as cash
flow hedges are recognized in equity.
Derivative financial instruments
The company uses derivative financial instruments mainly to hedge commodity price, foreign exchange and interest rate exposures.
Derivatives not qualified for hedge accounting are recognized in the income statement either in operating profit or financial income
and expenses, depending on the underlying hedged item.
Current investments
Current investments includes deposits held at banks and other liquid investments with original maturities from three months to
12 months.
Hedge accounting
The company applies hedge accounting on certain forward foreign exchange contracts, options and interest rate derivatives.
Fair value hedges
The company applies fair value hedge accounting to reduce exposure to fair value fluctuations of interest-bearing liabilities due
to changes in interest rates. Changes in fair value of derivatives designated and qualifying as fair value hedges, together with any
changes in the fair value of hedged liabilities attiributable to the hedged risk, are recognized in financial income and expenses.
Cash flow hedges
The company applies cash flow hedge accounting to reduce exposure of currency and interest rates fluctuations. The result of
foreign currency derivative contracts hedging future cash flows and qualifying for hedge accounting is recognized once matured
and when the hedged item affects the income statement. Gains or losses for interest rate swaps used to hedge the interest rate
risk exposure are accrued over the period to maturity and are recognized as an adjustment to the interest income or expense of
the underlying liabilities.
Fixed assets and other long-term investments
The balance sheet value of fixed assets consists of historical costs less depreciation according to plan and other possible write-
offs, plus revaluation permitted by local regulations. Fixed assets are depreciated using straight-line depreciation based on the
expected useful life of the asset. Land areas are not depreciated.
The depreciation is based on the following expected useful lives:
Investments in subsidiaries and other companies are measured at acquisition cost, or fair value in case the fair value is lower
than cost.
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20
23
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Inventories
Inventories are stated at either cost or net realizable value, whichever is the lowest. Cost is determined using the weighted
average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs,
and related production overheads (based on normal operating capacity). Net realizable value is the estimated selling price in the
ordinary course of business, less applicable variable selling expenses. Inventories held for trading purposes are measured at fair
value less selling expenses. Standard spare parts are carried as inventory and recognized in profit or loss as consumed.
Research and development
Research expenditure is recognized as an expense as incurred and included in other operating expences in the income statement.
Expenditure on development activities is capitalized only when it fulfills tight criteria e.g. development relates to new products that
are techincally and commercially feasible. The majority of the company’s development expenditure does not meet the criteria for
capitalization and are recognized as expences as incurred.
Cash pool receivables/liabilities
Cash pool items are presented as short-term receivables or liabilities.
Pension expenses
An external pension insurance company manages the pension plan.The pension expenses are booked to income statement
during the year they occur.
Appropriations
Appropriations consist of received or given group contributions from or to Neste Group companies and depreciation above the
plan.
Deferred taxes
Deferred taxes are determined on the basis of temporary differences between the financial statement and tax bases of assets
and liabilities. Deferred income tax is determined using tax rates that have been enacted at the balance sheet date and are
expected to apply.
Provisions
Foreseeable future expenses and losses that have no corresponding revenue and which Neste Corporation is committed or
obliged to settle, and whose monetary value can reasonably be assessed, are entered as expenses in the income statement
and included as provisions in the balance sheet. These items include expenses relating to the pension liabilities, guarantee
obligations, restructuring provisions, expenses relating to the future clean-up of proven environmental damage and obligation to
return emission allowances. Provisions are recorded based on management estimates of the future obligation.
2 Revenue
3 Other operating income
Revenue by segment 2023 2022
Renewable Products 4,985 5,918
Oil Products 10,582 13,149
Marketing & Services -7 -2
Other 208 165
15,768 19,231
2023 2022
Rental income 3 5
Gain on sale of intangible and tangible assets 0 0
Gain on sale of subsidiary shares 0 13
Insurance compensations 7 0
Government grants 14 7
Other 7 4
Other operating income total 31 28
Revenue by market area 2023 2022
Finland 4,668 5,813
Other Nordic countries 2,867 3,859
Baltic Rim 1,465 1,846
Other European countries 4,770 5,843
North and South America 1,420 1,202
Other countries 578 669
15,768 19,231
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2
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20
23
25
2023 2022
Depreciation according to plan 207 216
Write-offs 4 32
Depreciations, amortization and write-downs total 211 248
2023 2022
Operating leases and other property costs 19 26
Repairs and maintenance 117 102
Planning and consulting services 40 58
IT services 149 105
Other 183 155
Other operating expenses total 509 445
Fees charged by the statutory auditor
EUR thousands 2023 2022
Authorised Public Accountants KPMG KPMG
Auditor's fees 680 604
Tax advisory 204 1
Other advisory services 295 141
1,179 746
4 Materials and services 6 Depreciation, amortization and write-downs
7 Other operating expenses
5 Personnel expenses
2023 2022
Materials and supplies
Purchases during the period 12,420 16,800
Change in inventories 162 -247
12,581 16,552
External services 592 523
Materials and services total 13,173 17,075
2023 2022
Wages, salaries and remunerations 286 221
Restructuring provisions related to Naantali refining operations closure
1)
0 -1
Indirect employee costs
Pension costs 69 49
Other indirect employee costs 12 9
Wages and salaries capitalized in fixed assets -11 -4
Personnel expenses total 355 275
1)
Includes reversed unused provision of Naantali refinery closure in 2022.
Average number of employees 2023 2022
White-collar 2,919 2,081
Blue-collar 743 729
3,661 2,810
Salaries and remuneration
Key management compensations are presented in Note 25 in the Neste Group consolidated financial statements.
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8
16
17
20
23
25
2023 2022
Dividend income
From Group companies 122 420
Dividend income total 122 420
Interest income from long-term loans and receivables
From Group companies 1 7
From others 5 4
Interest income from long-term loans and receivables total 6 11
Other interest and financial income
From Group companies 18 3
Other 39 5
Gain on merger 0 0
Other interest and financial income total 57 7
Write-downs on long-term investments
Write-downs on long-term investments (receivables) 0 -3
Return of write-downs on long-term investments
1)
0 45
Write-drowns of other long-term investments 0 -5
Write-downs on long-term investments total 0 37
Interest expenses and other financial expenses
To Group companies -46 -10
Other -76 -22
Interest expenses and other financial expenses total -122 -33
Exchange rate differences -36 -58
Financial income and expenses total 27 385
Total interest income and expenses 2023 2022
Interest income 62 18
Interest expenses -120 -29
Net interest expenses -57 -11
2023 2022
Change in depreciation difference
Difference between depreciation according to plan
and depreciation in taxation -23 -49
Group contributions
Group contributions received 120 0
Appropriations total 97 -49
2023 2022
Income taxes on regular business operations 261 291
Taxes for prior periods -1 0
Change in deferred tax assets 3 0
Income tax expense total 262 291
8 Financial income and expenses
9 Appropriations
10 Income tax expense
1)
Consists of Neste Bahrain’s loan receivables repayment
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20
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Intangible assets Goodwill Other intangible assets Total
Acquisition cost as of 1 January 2023 1 358 359
Increases 0 24 24
Decreases 0 0 0
Transfers between items 0 0 0
Acquisition cost as of 31 December 2023 1 382 383
Accumulated amortization and write-downs as of 1 January 2023 1 235 236
Amortization for the period 0 32 32
Accumulated amortization and write-downs as of 31 December 2023 1 266 268
Balance sheet value as of 31 December 2023 0 116 116
Intangible assets Goodwill Other intangible assets Total
Acquisition cost as of 1 January 2022 1 303 304
Increases 0 52 52
Decreases 0 -6 -6
Transfers between items 0 5 5
Increases from merger 0 4 4
Acquisition cost as of 31 December 2022 1 358 359
Accumulated amortization and write-downs as of 1 January 2022 1 200 201
Amortization for the period 0 31 31
Amortization for the period from merger 0 4 4
Accumulated amortization and write-downs as of 31 December 2022 1 235 236
Balance sheet value as of 31 December 2022 0 123 123
11 Fixed assets and long-term investments
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2
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4
12
8
16
17
20
23
25
Tangible assets Land areas
Buildings
and structures
Machinery
and equipment
Other
tangible assets
Advances paid and
construction in progress Total
Acquisition cost as of 1 January 2023 26 1,453 3,323 102 167 5,072
Increases 0 23 32 1 116 172
Decreases 0 0 -14 0 -1 -15
Transfers between items 0 10 66 1 -78 0
Acquisition cost as of 31 December 2023 26 1,487 3,408 103 204 5,228
Accumulated depreciation and write-downs as of 1 January 2023 0 840 2,323 50 0 3,213
Accumulated depreciation and write-downs of decreases and transfers 0 0 -12 0 0 -11
Depreciation and write-downs for the period 0 39 135 2 0 176
Accumulated depreciation and write-downs as of 31 December 2023 0 879 2,446 51 0 3,377
Revaluations 6 21 0 0 0 27
Balance sheet value as of 31 December 2023 31 629 961 52 204 1,878
Balance sheet value of machinery and equipments used in production 961
Tangible assets Land areas
Buildings
and structures
Machinery
and equipment
Other
tangible assets
Advances paid and
construction in progress Total
Acquisition cost as of 1 January 2022 26 1,487 3,676 102 109 5,400
Increases 0 1 18 0 106 125
Decreases 0 -37 -392 -22 -22 -472
Transfers between items 0 3 18 22 -26 17
Increases from merger 0 0 3 0 0 3
Acquisition cost as of 31 December 2022 26 1,453 3,323 102 167 5,072
Accumulated depreciation and write-downs as of 1 January 2022 0 835 2,567 48 0 3,451
Accumulated depreciation and write-downs of decreases and transfers 0 -34 -391 0 0 -425
Depreciation and write downs for the period 0 39 144 2 0 185
Write-downs of Naantali refining operations closure 0 0 3 0 0 3
Accumulated depreciation and write-downs as of 31 December 2022 0 840 2,323 50 0 3,213
Revaluations 6 21 0 0 0 27
Balance sheet value as of 31 December 2022 31 634 1,000 53 167 1,886
Balance sheet value of machinery and equipments used in production 736
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14
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4
12
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16
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20
23
25
Other long-term investments
Shares in
group companies
Receivables from
group companies
Shares in
associated
companies
Receivables
from associated
companies
Other shares
and holdings
Other
receivables Total
Acquisition cost as of 1 January 2023 3,130 170 7 82 21 3 3,413
Increases 810 0 0 26 1 0 837
Decreases 0 -170 0 -1 0 0 -171
Acquisition cost as of 31 December 2023 3,939 0 7 107 23 3 4,079
Accumulated depreciation and write-downs as of 1 January 2023 0 0 0 0 5 3 8
Decreases 0 0 0 0 0 0 0
Accumulated depreciation and write-downs as of 31 December 2023 0 0 0 0 5 3 8
Balance sheet value as of 31 December 2023 3,939 0 7 107 17 0 4,071
Other long-term investments
Shares in
group companies
Receivables from
group companies
Shares in
associated
companies
Receivables
from associated
companies
Other shares
and holdings
Other
receivables Total
Acquisition cost as of 1 January 2022 2,145 39 7 37 20 3 2,251
Increases 1,306 284 0 69 2 2 1,663
Decreases -322 -153 0 -24 0 -1 -501
Acquisition cost as of 31 December 2022 3,130 170 7 82 21 3 3,413
Accumulated depreciation and write-downs as of 1 January 2022 0 0 0 0 0 0 0
Decreases 0 0 0 0 5 3 8
Accumulated depreciation and write-downs as of 31 December 2022 0 0 0 0 5 3 8
Balance sheet value as of 31 December 2022 3,130 170 7 82 16 0 3,404
Interest-bearing and interest-free receivables, EUR million 2023 2022
Interest-bearing receivables 107 252
107 252
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20
23
25
12 Revaluations
13 Inventories
14 Long-term receivables
15 Short-term receivables
Revaluations as of
Jan 1 2023 Increases Decreases
Revaluations as of
Dec 31 2023
Land areas 6 0 0 6
Buildings 21 0 0 21
Revaluations total 27 0 0 27
2023 2022
Raw materials and supplies 687 848
Products/finished goods 831 1,066
Advance payments on inventories 0 1
Inventories total 1,518 1,914
Replacement value of inventories 1,607 1,968
Book value of inventories 1,518 1,914
Difference 89 54
2023 2022
Long-term receivables from others
Long-term advance payments 16 19
Other receivables 32 17
Deferred tax assets 16 7
Long-term receivables total 64 43
Short-term accrued income and prepaid expenses, EUR million 2023 2022
Accrued interest 6 0
Derivative financial instruments 280 521
Current investments 5 0
Other 48 47
Total 338 568
2023 2022
Receivables from Group companies
Trade receivables 712 998
Loan receivables 85 4
Group contribution receivables 120 0
Other receivables 588 667
Accrued income and prepaid expenses 127 120
Total 1,633 1,789
Receivables from associated companies
Trade receivables 22 51
Other receivables 0 0
Total 22 51
Receivables from others
Trade receivables 666 773
Loan receivables 0 0
Other receivables 170 287
Accrued income and prepaid expenses 211 448
Total 1,047 1,509
Short-term receivables total 2,702 3,349
Policies and principles for revaluations and evaluation methods
The revaluations are based on fair values at the moment of revaluation.
Deferred taxes have not been booked on revaluations.
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16 Changes in shareholders' equity
17 Accumulated appropriations
18 Provisions for liabilities and charges
2023 2022
Share capital at 1 January 40 40
Share capital at 31 December 40 40
Fair value reserve at 1 January 69 -32
Increases 3,265 5,100
Decreases -3,310 -5,000
Fair value reserve at 31 December 24 69
Restricted shareholders equity 64 109
Invested non-restricted equity fund at 1 January 19 19
Invested non-restricted equity fund at 31 December 19 19
Retained earnings at 1 January 3,817 2,819
Dividends paid -1,168 -630
Profit for the year 1,178 1,628
Retained earnings at 31 December 3,827 3,817
Non-restricted shareholders equity 3,847 3,836
Capitalized development expenditure 12 12
Distributable equity 3,835 3,824
The amount of own shares is presented in the group’s consolidated financial statements in Note 20.
2023 2022
Depreciation difference 1,163 1,140
2023 2022
at 1 Jan Increase Decrease at 31 Dec at 1 Jan Increase Decrease at 31 Dec
Restructuring provisions 0 0 0 0 2 0 1 0
Provision for environment 1 0 0 1 1 0 0 1
Provision for environment for Naantali refining operations closure 111 0 12 99 112 4 5 111
Other provisions 4 3 4 3 0 4 0 4
Total 117 3 16 103 115 8 6 117
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20
23
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19 Liabilities
Long-term liabilities 2023 2022
Bonds 2,110 895
Loans from financial institutions 609 615
Advanced payments 18 18
Liabilities to Group companies
Other long-term liabilities 80 429
Accruals and deferred income 6 12
Long-term liabilities total 2,823 1,969
Interest-bearing liabilities due after five years 2023 2022
Loans from financial institutions 93 94
Bonds 1,587 495
1,680 589
Short-term liabilities 2023 2022
Bonds 201 0
Loans from financial institututions 6 5
Advances received 11 25
Trade payables 689 890
Liabilities to Group companies
Advances received 0 0
Trade payables 692 661
Other short-term liabilities 1,119 1,317
Accruals and deferred income 71 119
Total 1,881 2,097
Liabilities to associated companies
Trade payables 9 22
Total 9 22
Other short-term liabilities 530 1,014
Accruals and deferred income 348 301
Short-term liabilities total 3,676 4,355
Short-term accruals and deferred income 2023 2022
Salaries and indirect employee costs 95 90
Accrued interests 43 9
Derivative financial instruments 277 317
Other short-term accruals and deferred income 4 4
419 420
Interest-bearing and interest-free liabilities 2023 2022
Long-term liabilities
Interest-bearing liabilities 2,799 1,936
Interest-free liabilities 24 33
2,823 1,969
Short-term liabilities
Interest-bearing liabilities 1,322 1,695
Interest-free liabilities 2,354 2,660
3,676 4,355
Listed bond issues
Issued/Maturity
Interest
basis
Interest
rate, % Currency
Nominal,
million
Carrying
amount,
EUR million
2017/2024 Fixed 1.500 EUR 201 201
2021/2028 Fixed 0.750 EUR 500 496
2023/2029 Fixed 3.875 EUR 500 498
2023/2031 Fixed 3.875 EUR 600 605
2023/2033 Fixed 4.250 EUR 500 511
Total outstanding carrying amount 31 December 2023 2,301 2,311
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20 Contingent liabilities
Contingent liabilities 2023 2022
Contingent liabilities given on own behalf
Real estate mortgages 26 26
Pledged assets 0 0
Other contingent liabilities 23 27
Total 47 52
Contingent liabilities given on behalf of Group companies
Guarantees 206 409
Total 206 409
Contingent liabilities given on behalf of associated companies
Pledged assets 114 89
Total 114 89
Contingent liabilities given on behalf of others
Guarantees 1 1
Total 1 1
Other contingent liabilities
The Company is obliged to adjust VAT deductions made from real estate investments if the taxable utilization of real estate will
decrease during a 10 years control period.
Operating lease liabilities 2023 2022
Due within a year 10 22
Due after a year 8 19
Total 19 41
Capital commitments 2023 2022
Commitments for purchase of property,
plant and equipment and intangible assets 100 38
Other commitments 8 8
Total 108 46
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31 Dec 2023 31 Dec 2022
Nominal value by maturity Fair Value Nominal value by maturity Fair Value
< 1 year > 1 year Positive Negative Net < 1 year > 1 year Positive Negative Net
Foreign exchange derivatives
Foreign exchange derivatives, forwards 1,944 0 33 3 30 2,984 0 99 18 81
Foreign exchange options
Purchased 0 0 0 0 0 84 0 5 0 5
Written 0 0 0 0 0 84 0 0 0 0
Derivatives designated as cash flow hedges 1,944 0 33 3 30 3,153 0 104 18 86
Interest rate swaps 0 550 26 0 26 0 0 0 0 0
Derivatives designated as fair value hedges 0 550 26 0 26 0 0 0 0 0
Foreign exchange derivatives, forwards 2,766 0 38 7 31 3,853 3 119 24 96
Intra-group forward foreign exchange contracts 1,350 0 5 22 -17 1,550 3 24 20 4
Currency options
Purchased 0 0 0 0 0 0 0 0 0 0
Written 0 0 0 0 0 0 0 0 0 0
Intra-group currency options
Purchased 0 0 0 0 0 0 0 0 0 0
Written 0 0 0 0 0 0 0 0 0 0
Non-hedge accounting 4,117 0 43 29 15 5,403 6 143 43 100
21 Derivative financial instruments
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31 Dec 2023 31 Dec 2022
Nominal value by maturity Fair Value Nominal value by maturity Fair Value
< 1 year > 1 year Positive Negative Net < 1 year > 1 year Positive Negative Net
Commodity derivatives
1)
Oil and vegetable oil derivatives
Sold forwards, million bbl 25 0 74 26 48 25 0 65 66 -1
Purchased forwards, million bbl 25 0 13 122 -109 18 0 59 67 -8
Intra-group oil and vegetable oil derivatives
Sold forwards, million bbl 11 0 33 17 16 11 0 32 36 -4
Purchased forwards, million bbl 11 0 35 29 6 12 0 37 27 10
Electricity and gas derivatives
Sold forwards, GWh 0 0 0 0 0 18 0 2 0 2
Purchased forwards, GWh 2,172 767 1 57 -57 1,996 620 62 36 26
Intra-group electricity and gas derivatives
Sold forwards, GWh 1,282 531 54 0 54 1,328 489 34 38 -4
Non-hedge accounting 3,526 1,298 210 252 -42 3,408 1,109 291 270 21
Derivatives Total 312 283 29 538 332 206
of which
Current derivative financial instruments 280 277 3 521 317 204
Non-current derivative financial instruments 32 6 26 17 15 2
1)
Commodity derivative contracts with non-hedge accounting status include oil, vegetable oil, electricity and gas derivative contracts. They consist of trading derivative contracts and cash flow hedges without hedge accounting status.
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Fair value hierarchy of derivatives, EUR million 2023 2022
Financial assets Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Non-current derivative financial instruments
Interest rate derivatives 0 26 0 26 0 0 0 0
Currency derivatives 0 0 0 0 0 0 0 0
Commodity derivatives 0 6 0 6 0 17 0 17
Other financial assets 0 0 0 0 0 0 0 0
Current derivative financial instruments
Currency derivatives 0 76 0 76 0 247 0 247
Commodity derivatives 69 134 0 204 32 242 0 274
Financial liabilities
Non-current derivative financial instruments
Currency derivatives 0 0 0 0 0 0 0 0
Commodity derivatives 0 6 0 6 0 15 0 15
Current derivative financial instruments
Currency derivatives 0 31 0 31 0 62 0 62
Commodity derivatives 71 175 0 246 54 201 0 255
Financial instruments that are measured in the balance sheet at fair value are presented according to following fair value measurement hierachy:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted price included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e derived from prices)
Level 3: inputs for the assets or liablity that is not based on obervable market data (unobservable inputs).
Fair value estimations
Derivative financial instruments are initially recognized and subsequently re-measured at their fair values i.e.the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participant and the measurement
date.
The fair value of exchange traded commodity futures and option contracts is determined using the forward exchange market quotations as per last business day of financial year. The fair value of over-the-counter derivative contracts is calculated using the net
present value of the forward derivative contracts quoted market prices as per last business day of financial year.
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1
9
5
13
3
11
7
15
19
22
24
2
10
6
14
18
21
4
12
8
16
17
20
23
25
Country of
incorporation No of shares Holding -%
Subsidiary shares
Kiinteistö Oy Espoon Keilaranta 21 Finland 16,000 100.00
Navidom Oy Finland 50 50.00
Neste (Suisse) S.A. Swizerland 200 100.00
Neste AB Sweden 2,000,000 100.00
Neste Affiliate B.V. Netherlands 26,090 100.00
Neste Belgium NV Belgium 615 100.00
Neste Canada Canada 30,000 100.00
Neste Components Finance B.V. Netherlands 40 100.00
Neste Eesti AS Estonia 10,000 100.00
Neste Germany GmbH Germany 25,000 100.00
Neste Insurance Limited Guernsey 7,000,000 100.00
Neste Italy S.R.L. Italy 1 100.00
Neste Markkinointi Oy Finland 210,560 100.00
Neste Netherlands B.V. Netherlands 18,000 100.00
Neste Pretreatment Rotterdam B.V. Netherlands 18,000 100.00
Neste Renewable Products Inc USA 5,000 100.00
Neste Renewable Solutions US. Inc. USA 1,000 100.00
Neste RPC Solutions US. Inc. USA 1,000 100.00
Neste Shipping Oy Finland 101 100.00
Neste Singapore Pte. Ltd. Singapore 1,727,535,875 100.00
Neste US. Inc. USA 1,000 100.00
Neste Spain S.L. Spain 3,000 100.00
Associated companies
A/B Svartså Vattenverk - Mustijoen Vesilaitos O/Y Finland 14 40.00
Kilpilahti Powerplant Ltd. Finland 20,000 40.00
Neste Arabia Co. Ltd. Saudi Arabia 480 48.00
22 Shares and holdings
23 Disputes and potential litigations
Other shares and holdings
Circularise B.V. Netherlands 9,586
CLEEN Oy Finland 100
Kiinteistö Oy Anttilankaari 8 Finland 51
Kiinteistö Oy Himoksen Aurinkopaikka Finland 51
Kiinteistö Oy Katinkullan Hiekkaniemi Finland 102
Kiinteistö Oy Katinkultaniemi Finland 51
Kiinteistö Oy Kotkan Klubi Finland 30
Kiinteistö Oy Kuusamon Tähti 1 Finland 51
Kiinteistö Oy Laavutieva Finland 51
Kiinteistö Oy Lapinniemi & Osakeyhtiö Lapinniemi Finland 24
Posintra Oy Finland 190
Recycling Technologies Ltd. United Kingdom 3,122,666
St Laurence Golf Oy, B-osake Finland 3
Sunfire GmbH Germany 264,121
Telephone shares
Elisa Oyj Finland 1
Osuuskunta PPO Finland 1
Pietarsaaren Seudun Puhelin Oy Finland 3
Savonlinnan Puhelinosuuskunta SPY Finland 1
Country of
incorporation No of shares
Neste Corporation is involved in legal proceedings and disputes incidental to its business. In management’s opinion, the outcome
of these cases is difficult to predict but not likely to have material effect on the Neste’s financial position.
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5
13
3
11
7
15
19
22
24
2
10
6
14
18
21
4
12
8
16
17
20
23
25
24 Unbundling of natural gas network operations
INCOME STATEMENT 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Revenue 9 9
Other operating income
Utility income 7 4
Materials and services 0 0
External services
Network service fees -16 -13
Personnel expenses
Wages, salaries and remunerations 0 0
Depreciation, amortization and write-downs
Depreciation according to the plan
Planned depreciation of natural gas network assets 0 0
Other operating expenses 0 -1
Operating loss 0 0
Financial income and expenses 0 0
Loss before appropriations and taxes 0 0
Loss for the year 0 0
BALANCE SHEET 31 Dec 2023 31 Dec 2022
ASSETS
Fixed assets and other long-term investments
Tangible assets
Tangible assets of natural gas network 0 0
0 0
Current assets
Inventories 0 0
Receivables
Long-term receivables 0 0
Short-term receivables
Trade receivables 3 2
Other receivables 0 0
Cash and cash equivalents 0 0
3 2
Total assets 3 2
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 0 0
Other funds and reserves 0 0
Retained earnings -1 -1
Loss for the year 0 0
-1 -1
Accumulated appropriations 0 0
Provisions for liabilities and charges 0 0
Long-term liabilities
Short-term liabilities 0 0
Short-term interest-fee liabilities
Other short-term liabilities 4 3
4 3
Total equity and liabilities 3 2
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9
5
13
3
11
7
15
19
22
24
2
10
6
14
18
21
4
12
8
16
17
20
23
25
Accounting policies
According to the Natural Gas Market Act, business transactions and balance sheet items are booked in to the income
statements and balance sheets of businesses in accordance with the accrual principle. The netting of VAT receivables and
payables occur at the company level. The remaining balance sheet difference will be equalized in the balance sheet to the
point ‘Other short-term liabilities’.
Tangible assets Natural gas network
Acquisition cost as of 1 January 2023 0
Increases 0
Decreases 0
Acquisition cost as of 31 December 2023 0
Accumulated depreciation and write-downs as of 1 January 2023 0
Depreciation and write-downs for the period 0
Accumulated depreciation and write-downs as of 31 December 2023 0
Balance sheet value as of 31 December 2023 0
Tangible assets Natural gas network
Acquisition cost as of 1 January 2022 0
Increases 0
Decreases 0
Acquisition cost as of 31 December 2022 0
Accumulated depreciation and write-downs as of 1 January 2022 0
Depreciation and write-downs for the period 0
Accumulated depreciation and write-downs as of 31 December 2022 0
Balance sheet value as of 31 December 2022 0
Natural gas network’s xed assets net investments Natural gas network’s return on investment
2023 2022
Return on investment, % -5.74 -2.58
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5
13
3
11
7
15
19
22
24
2
10
6
14
18
21
4
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8
16
17
20
23
25
25 Unbundling of natural gas network operations
INCOME STATEMENT 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022
Revenue 105 236
Other operating income
Utility income 78 109
Materials and services
Materials, supplies and goods
Purchases during the period -184 -345
Personnel expenses
Wages, salaries and remunerations 0 0
Depreciation, amortization and write-downs 0 0
Other operating expenses 0 0
Operating loss/profit -1 0
Financial income and expenses 0 0
Loss/profit before appropriations and taxes -1 0
Loss/profit for the year -1 0
BALANCE SHEET 31 Dec 2023 31 Dec 2022
ASSETS
Fixed assets and other long-term investments 0 0
Current assets
Inventories 0 0
Receivables
Long-term receivables 0 0
Short-term receivables
Trade receivables 25 38
Other receivables 1 0
Cash and cash equivalents 9 0
35 38
Total assets 35 38
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders' equity
Share capital 0 0
Other funds and reserves 0 0
Retained earnings 5 4
Loss/profit for the year -1 0
4 5
Accumulated appropriations 0 0
Provisions for liabilities and charges 0 0
Liabilities
Long-term liabilities 0 0
Short-term liabilities
Short-term interest-fee liabilities
Trade payables 31 31
Other short-term liabilities 0 2
31 33
Total equity and liabilities 35 38
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7
15
19
22
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2
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6
14
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21
4
12
8
16
17
20
23
25
Accounting policies
According to the Natural Gas Market Act, business transactions and balance sheet items are booked in to the income
statements and balance sheets of businesses in accordance with the accrual principle. The netting of VAT receivables and
payables occur at the company level. The remaining balance sheet difference will be equalized in the balance sheet to the
point ‘Cash and cash equivalents’.
The effect of financial instruments in the income statement 2023 2022
Materials and services; Derivatives
Realized gain 0 0
Realized loss 0 0
Unrealized loss 0 0
Currency derivatives
Realized and unrealized gains and losses on currency derivatives related to the sale of natural gas are booked in the materials
and services group on the income statement in the sale of natural gas.
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Business review Sustainability Governance Review by the Board of Directors Financial Statements
Proposal for the distribution of earnings and signing
of the Review by the Board of Directors and the Financial Statements
Espoo, 7 February 2024
Matti Kähkönen John Abbott
Nick Elmslie Just Jansz
Heikki Malinen Eeva Sipilä
Johanna Söderström Kimmo Viertola
Matti Lehmus
President and CEO
The Parent company’s distributable equity as of 31 December 2023 stood at EUR 3,835 million. The Board of Directors proposes
Neste Corporation to pay a dividend of EUR 1.20 per share for 2023, totalling EUR 922 million, and that any remaining distributable
funds be allocated to retained earnings.
The Auditor’s Note
A report on the audit performed has been issued today.
Helsinki, 7 February 2024
KPMG Oy Ab
Authorised Public Accountants
Leenakaisa Winberg
Authorized Public Accountant
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This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Neste Corpora-
tion (business identity code 1852302-9) for the year ended
December 31, 2023. The financial statements comprise the
consolidated statement of financial position, income state-
ment, statement of comprehensive income, statement of
changes in equity, statement of cash flows and notes, includ-
ing material accounting policy information, as well as the par-
ent company’s balance sheet, income statement, statement
of cash flows and notes.
In our opinion
• the consolidated financial statements give a true and fair
view of the group’s financial position, financial performance
and cash flows in accordance with IFRS Accounting
Standards as adopted by the EU
• the financial statements give a true and fair view of the parent
company’s financial performance and financial position in
accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply
with statutory requirements.
Our opinion is consistent with the additional report submitted
to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing
practice in Finland. Our responsibilities under good auditing
practice are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that
are applicable in Finland and are relevant to our audit, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and
group companies are in compliance with laws and regulations
applicable in Finland regarding these services, and we have
not provided any prohibited non-audit services referred to in
Article 5(1) of regulation (EU) 537/2014. The non-audit ser-
vices that we have provided have been disclosed in note 9 to
the consolidated financial statements.
We believe that the audit evidence we have obtained is suf-
ficient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application of
materiality. The materiality is determined based on our profes-
sional judgement and is used to determine the nature, timing
and extent of our audit procedures and to evaluate the effect
of identified misstatements on the financial statements as a
whole. The level of materiality we set is based on our assess-
ment of the magnitude of misstatements that, individually or
in aggregate, could reasonably be expected to have influence
on the economic decisions of the users of the financial state-
ments. We have also taken into account misstatements and/
or possible misstatements that in our opinion are material for
qualitative reasons for the users of the financial statements.
Auditor’s Report
To the Annual General Meeting of Neste Corporation
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the finan-
cial statements of the current period. These matters were
addressed in the context of our audit of the financial state-
ments as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. The
significant risks of material misstatement referred to in the EU
Regulation No 537/2014 point (c) of Article 10(2) are included
in the description of key audit matters below.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there
was evidence of management bias that represented a risk of
material misstatement due to fraud.
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THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Martinez Renewables Joint Arrangement
(reference to the note 2: accounting policies and note 26 in the consolidated financial statements)
During 2022 Neste finalized a transaction to establish a
joint arrangement (Martinez Renewables) for production of
renewable fuels together with Marathon Petroleum.
At the time of making the investment, Neste made the
interpretation to treat the establishment and initial
investment into the joint arrangement as an asset
acquisition. After the initial investment, Neste classified the
joint arrangement as a joint operation reflecting that Neste
and Marathon Petroleum have a joint control over the
arrangement’s relevant activities, and that the production
output will be divided evenly between Neste and
Marathon Petroleum.
As a result of the joint operation classification, Neste
recognizes its 50% share of Martinez Renewables’ assets,
liabilities, revenues and expenses.
Due to the significant impact on Neste growth strategy
and unusual nature of the joint operations arrangement, it
is considered as a key audit matter.
Our audit procedures related to Martinez Renewables joint
arrangement operation included:
• Evaluating the accounting policies applied in relation to
the IFRS standards.
• Providing instructions to the auditors of joint operation
to carry out appropriate controls testing and substantive
procedures.
• Evaluating the findings reported by the auditors of joint
operation including discussion with the auditors.
• On going communications with the management
regarding arrangements over the joint arrangement’s
governance model.
In addition, we have assessed the appropriateness of the
Group’s disclosures in respect of the transaction and the
joint arrangement operation.
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Biofuel credits
(reference to notes 5 and 18 in the consolidated financial statements)
Renewable Products revenue includes income deriving
from biofuel credits which Neste earns its sales operations
especially in the USA. Neste’s biofuel credits relate to the
import and sale of renewable fuels in the USA in the form
of Renewable Identification Number (RINs) and Low
Carbon Fuel Standard (LCFSs) and Blenders Tax Credits
(BTC).
RINs and LCFSs are accounted for as government
grants upon receipt of the product inventory in the USA
and are recognized as a revenue when biofuel credits are
sold to a third party. RINs and LCFSs are accounted for
as inventory to the extent they have been separated from
the physical goods, which happens when renewable fuel
is blended with fossil fuel.
As there is a risk relating to accuracy of biofuel credits
it has been considered as a key audit matter.
Our audit procedures related to biofuel credits included:
• Evaluating the appropriateness of the accounting
policies applied when recording biofuel credits in relation
to underlying IFRS principles.
• Evaluation of the process for registering biofuel credits
and for reconciling balances to the eligible credits.
• Comparing of the registered balances against the
systems administered by the Environmental Protection
Agency (EPA) in the USA.
In addition, our test of details included the following
procedures to confirm accuracy of biofuel credits:
• Testing of revenue recognition on a sample basis
based on the sales agreements and system generated
documents.
• Comparing the valuation of RINs and LCFSs accounted
for as inventory to quoted market prices.
• Comparing of the value of the BTC to that confirmed by
the authorities in the USA.
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THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Valuation of inventories
(reference to note 18 in the consolidated financial statements)
The company has significant inventory balances both in
the Renewable Products and Oil Products segments. The
inventory is valued at the lower of cost or net realizable
value. The cost of inventory in the Renewable Products
segment reflects purchase prices, which are impacted by
the market prices of different feedstocks as well as the
mix of feedstocks purchased.
Inventory management, stocktaking routines and
costing of inventories are underlying key factors in
determining the value of inventories.
Due to complexity of the inventory valuation
calculations for Renewable Products the valuation of
inventories in Renewable Product segment is considered
as a key audit matter.
Our audit procedures related to valuation of Renewable
Products’ inventories included:
• Evaluating the appropriateness of the accounting
policies applied in relation to IFRS standards.
• Testing of controls over inventory management and
valuation.
• Performing substantive audit procedures in order to test
the accuracy of inventory valuation at the lower of cost
or net realization value at reporting date by testing on a
sample basis accuracy of relevant components related
to valuation.
In addition, we have assessed the appropriateness of the
Group’s disclosures in respect of inventory valuation.
Responsibilities of the Board of Directors
and the Managing Director for the Financial
Statements
The Board of Directors and the Managing Director are respon-
sible for the preparation of consolidated financial statements
that give a true and fair view in accordance with IFRS Account-
ing Standards as adopted by the EU, and of financial state-
ments that give a true and fair view in accordance with the laws
and regulations governing the preparation of financial state-
ments in Finland and comply with statutory requirements. The
Board of Directors and the Managing Director are also respon-
sible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Direc-
tors and the Managing Director are responsible for assess-
ing the parent company’s and the group’s ability to continue
as a going concern, disclosing, as applicable, matters relat-
ing to going concern and using the going concern basis of
accounting. The financial statements are prepared using the
going concern basis of accounting unless there is an intention
to liquidate the parent company or the group or cease opera-
tions, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of
the Financial Statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasona-
ble assurance is a high level of assurance but is not a guaran-
tee that an audit conducted in accordance with good audit-
ing practice will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic deci-
sions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing prac-
tice, we exercise professional judgment and maintain profes-
sional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the parent
company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
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• Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the parent company’s or the group’s ability
to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the parent company or the group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events so that the financial statements
give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the group to express an opinion on the consolidated
financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of
the audit and significant audit findings, including any signifi-
cant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical require-
ments regarding independence and communicate with them
all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such
communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General
Meeting on March 30, 2021 and our appointment represents
a total period of uninterrupted engagement of 3 years.
Other Information
The Board of Directors and the Managing Director are respon-
sible for the other information. The other information com-
prises the report of the Board of Directors and the informa-
tion included in the Annual Report but does not include the
financial statements or our auditor’s report thereon. We have
obtained the report of the Board of Directors prior to the date
of this auditor’s report, and the Annual Report is expected to
be made available to us after that date. Our opinion on the
financial statements does not cover the other information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above
and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be
materially misstated. With respect to the report of the Board of
Directors, our responsibility also includes considering whether
the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board
of Directors is consistent with the information in the finan-
cial statements and the report of the Board of Directors has
been prepared in accordance with the applicable laws and
regulations.
If, based on the work we have performed on the other infor-
mation that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We
have nothing to report in this regard.
Other Opinions Based on Statutory Law
Based on our audit, it is our responsibility to express an opin-
ion on the matters required by the Finnish Natural Gas Market
Act Chapter 13, Section 64.
The unbundled income statements, balance sheets and the
supplementary information of the natural gas business opera-
tions are prepared in accordance with the Finnish Natural Gas
Market Act and the rules and regulations issued thereunder.
Other Statements
We support that the financial statements and the consolidated
financial statements should be adopted. The proposal by the
Board of Directors regarding the use of the profit shown in
the balance sheet is in compliance with the Limited Liability
Companies Act. We support that the Members of the Board
of Directors and the Managing Director of the parent com-
pany should be discharged from liability for the financial period
audited by us.
Helsinki February 7, 2024
KPMG OY AB
LEENAKAISA WINBERG
Authorised Public Accountant, KHT
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Independent Auditor’s Reasonable Assurance Report on Neste Corporation’s
ESEF Financial Statements
To the Board of Directors of Neste Corporation
We have undertaken a reasonable assurance engagement
in respect of whether the consolidated financial statements
for the year ended 31 December, 2023 included in the dig-
ital financial statements 5493009GY1X8GQ66AM14-2023-
12-31-en.zip of Neste Corporation (Business ID 1852302-9)
have been marked up with iXBRL markups in accordance
with the requirements of Article 4 of EU Delegated Regulation
2018/815 (ESEF RTS).
The Responsibility of the Board of Directors
and Managing Director
The Board of Directors and Managing Director are responsible
for preparing the report of the Board of Directors and financial
statements (ESEF financial statements) that comply with the
requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF financial statements in XHTML format
in accordance with Article 3 of the ESEF RTS
• marking up the primary statements and the notes to the
consolidated financial statements, and the company
identification data included in the ESEF financial
statements with iXBRL tags in accordance with Article 4 of
the ESEF RTS; and
• ensuring consistency between ESEF financial statements
and audited financial statements.
The Board of Directors and the Managing Director are also
responsible for such internal control as they deem necessary
to prepare the ESEF financial statements in accordance with
the requirements of the ESEF RTS.
Auditor’s Independence and
Quality Management
We are independent of the company in accordance with the
ethical requirements applicable in Finland, which apply to
the engagement we have performed, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements.
The auditor applies International Standard on Quality Man-
agement ISQM 1, which requires the firm to design, imple-
ment and operate a system of quality management includ-
ing policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and
regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibil-
ity is to express an opinion on whether the marking up of the
consolidated financial statements included in the ESEF finan-
cial statements comply in all material respects with the Arti-
cle 4 of the ESEF RTS. We conducted our reasonable assur-
ance engagement in accordance with International Standard
on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence
whether;
• the primary statements of the consolidated financial
statements included in the ESEF financial statements are,
in all material respects, marked up with iXBRL tags in
accordance with Article 4 of the ESEF RTS, and;
• whether the notes to the consolidated financial statements
and the company identification data included in the ESEF
financial statements data, have been marked up, in all
material respects, with iXBRL tags in accordance with
Article 4 of the ESEF RTS; and
• whether the ESEF financial statements and the audited
financial statements are consistent with each other.
The nature, timing and the extent of procedures selected
depend on practitioner’s judgement. This includes the assess-
ment of the risks of material departures from the requirements
set out in the ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated
financial statements, the notes to the consolidated financial
statements and the company identification data included in
the ESEF financial statements of Neste Corporation identified
as 5493009GY1X8GQ66AM14-2023-12-31-en.zip for the
year ended 31 December, 2023 are, in all material respects,
marked up in compliance with the ESEF Regulatory Technical
Standard.
Our audit opinion on the audit of the consolidated finan-
cial statements of Neste Corporation for the year ended 31
December, 2023 is set out in our Auditor’s Report dated 7
February, 2024. In this report, we do not express any audit
opinion or other assurance conclusion on the consolidated
financial statements.
Helsinki 29 February, 2024
KPMG OY AB
Leenakaisa Winberg
Authorised Public Accountant, KHT
