201-103 Management Approach - Economic

For more than 90 years, Boliden has been exploring, extracting and processing base metals and precious metals. Production is based on experience, innovation and modern technology, developed in collaboration with Nordic technology and engineer­ing companies. Today, Boliden is an industry leader in terms of sustainable metal production, from deposits to recycling used metals. The locations of Boliden’s operations are determined by the localization of mineral resources and the ability to explore and expand operations in connection therewith. Good community relations and mutual understandings are a prerequisite for Boliden’s success and in enabling the business to grow.

The economic topics identified as material to Boliden are ­economic performance, market presence, indirect economic impact, anti-­corruption, and anti-competitive behavior. All of these topics are closely linked to Boliden’s overall performance. They are both the result of and a precondition for trust from the local communities where Boliden operates. By considering these topics and performing well in respect of them, Boliden maintains its license to operate and the ability to develop the business.

Boliden’s Code of Conduct provides a non-exhaustive framework for what Boliden considers responsible conduct. The employees should always strive to exercise good judgement, care, and due consideration in their work for Boliden. The Code of Conduct applies to all employees in all countries and ­subsidiaries throughout the Group and to the members of the Board of ­Directors of Boliden AB.

Economic performance

Economic performance is material, because Boliden contributes to the welfare in the society through the generation and distribution of economic value e.g. by paying wages, taxes, interest rates, and dividends. These impacts occur throughout Boliden’s value chain and affect several stakeholder groups and all Boliden sites.

Boliden’s contribution to the community is multifaceted and includes investing in education and engaging with students, nurturing competence, and enabling conversion from one occupation to another to make people employable; sponsoring local organizations; making investments that benefit the company and the community, etc. These matters support job creation and strengthen rural communities’ contribution to national economic stability. Several of Boliden’s most important locations and locations where major investments have been made are in regions where growth injections are needed. Boliden is aware of the company’s role and significance as what is often the biggest employer in the community and a generator of positive trickle-down effects, such as tax income to finance public services, and as a foundation for a private service sector. This status brings both privileges and responsibilities.

Salaries are an important part of the economic compensation to the community. In general, the entry-level wages for ­employees are set higher than the minimum wage, and average salaries and wages are often higher than the national industrial average. For blue-collar employees, there is an entry-level wage stated within the local salary agreements used for new employees. For white-collar employees hired directly out of universities, Boliden applies entry-level wages, depending on the level of education needed for different jobs.

Social impact assessments are conducted in order to assess the consequences for the local community in connection with both expansions of and other significant changes to operations, and in conjunction with the closure of operations.

The Annual and Sustainability Reports contain further details of the ways in which Boliden manages, follows up on, and monitors its performance in relation to these aspects.

Market presence

Protecting local communities’ interests and maintaining good relationships with employees, neighbors, authorities and business partners is an important part of being a responsible company. It also strengthens the ability to attract skilled labor and contributes to the development of the business.

Boliden has a considerable impact on local employment levels, trade, and industry by generating purchasing power and providing a critical base for social services. At the year-end, Boliden had 5,818 employees, in eight countries. Although the industry is cyclically sensitive, Boliden has had stable employment over several business cycles, and the workforce has increased by 1,411 people in the past 10 years, mainly due to the acquisitions of the Kylylahti and Kevitsa mines.

Boliden currently operates in countries where the infrastructure is well developed and the need for Boliden to contribute to society by directly investing in and developing infrastructure and social services is limited.

Boliden is, however, often one of the bigger companies in the local area, paying taxes in the areas in which Boliden operates, and its contribution can, therefore, be considered significant. In many places, Boliden is the biggest private employer and its ­employees and families are essential if infrastructure, public services, shops and other activities are to function.

Just as Boliden’s companies are important to the development of the society, society is important to Boliden. Maintaining an ongoing open dialogue with local inhabitants and other parties with interests in the operations is a given, as is collaborating with local operators and sponsoring various associations and events. Boliden encourages visits to our mines and smelting plants.

When expanding our operations or setting up in a new location, it is also important that Boliden maintains a dialogue with all concerned stakeholders, in order to ensure that Boliden’s negative environmental impact is minimized.

Informing everyone affected by our operations of planned developments is an important component of Boliden’s work. In the case of major changes, Boliden also holds consultations to gather opinions from stakeholders. Boliden regularly measures PM, atmospheric shock waves, vibration and particulate fallout in the environment, for example, and shares this information publicly.

Indirect economic impact

A large proportion of Boliden’s staff live close to the workplace, and the company, therefore, has a major impact on local ­employment and local business through increased purchasing power and as a basis for important social services. Boliden’s market presence in Sweden, Finland, Norway and Ireland contributes to society by creating approximately 30,000 jobs, either directly or indirectly, through subcontractors, suppliers or through the impact of employee expenses. It is calculated that four additional jobs are created in connection with the business for every one Boliden employee.

Boliden’s operations affect and touch the lives of many people – sometimes entire communities. Value creation depends on the ability to show consideration for people, society, and the environment throughout the value chain. Boliden aims to make a positive contribution to the development of communities, regions, and countries in which they operate.

Contribution to tax revenue

Boliden also contributes to tax revenues in the areas which the Group operates. Tax payments totalled SEK 2,286 m in 2018. Boliden’s direct tax payments include, furthermore, social security contributions, property taxes, fuel taxes and VAT. Boliden’s ­total contribution to public finances through taxes (direct, in­direct and induced) was approximately SEK 14.0 billion.

Bcause – Boliden’s Charitable Foundation

Metals contribute to the development and modernization of societies around the world. Boliden and its business operations have been part of this process for over 90 years and has, for many years, had a local level commitment to associations and non-profit organizations. In 2014, the charity fund Bcause was launched as part of our global level contribution. Bcause is based on voluntary monthly contributions from Boliden’s employees. Boliden doubles every krona donated.

Anti-corruption

Anti-competitive behavior

Employees and Board members shall comply with applicable anti-trust and competition laws, Boliden’s Code of Conduct, and Boliden’s competition policy and guidelines. Sharing, discussing or disclosing information that may be sensitive from a competition viewpoint is prohibited.

Measurement of environmental and social impacts

Boliden has evaluated the Natural Capital Protocol during 2018. The intention is to create a methodology that will enhance the credibility of Boliden’s sustainability work, and enable more informed decision-making, by improving the way in which ­environmental and social impacts are measured and managed.

Boliden has used metal equivalents factors for many years, although these had a narrow focus on toxicity. The NCP ­methodology is better suited to Boliden’s operations and allows the evaluation of both environmental and societal impacts.

Successful NCP pre-study

Boliden completed a NCP pre-study at a Boliden smelter site during 2018. The study demonstrated how we could enhance our measurement and follow-up work and improve our social and environmental impacts. Following the study, Boliden’s Group Management decided to continue with a pre-study on a mine site in 2019.

Developing how we manage sustainability

NCP will enable us to better understand, compare and ­evaluate our various impacts internally. Using common metrics and research that is reviewed and accepted by NCP will also give our sustainability work greater credibility. NCP has, for example, already provided Boliden with new factors that are based on more credible research and industry-approved data.

The results from NCP can be used to present our societal impacts to internal and external stakeholders. The Dow Jones Sustainability Index, which supports the NCP, is one example of this.

How Boliden will use NCP in 2019 and beyond

Boliden will gradually expand the impacts it evaluates with NCP, starting with metal emissions. We plan to include other environmental impacts, such as climate impact, waste and landfill, as well as social issues, such as human health and impacts on the built constructions. NCP will allow us to prioritize which impacts we should work with and evaluate different investment alternatives in our operations for the benefit of both our business and society and the environment.

Boliden will further develop its NCP methodology in 2019 by establishing an impact valuation process, and by defining a monetization model for investment calculations. A pilot study for mines is in the pipeline, together with plans to develop guidelines on how to embed environmental impact into investment calculation tools.

What is natural capital?

Natural capital is our planet’s stock of natural assets, including geology, soil, air, water and all living things – which provide humans with various ecosystem services
that make human life possible.

What is the Natural Capital Protocol (NCP)?

The NCP provides businesses with a credible and standardized framework to identify and measure their natural capital impacts and dependencies – to enable better
decision- making for business, society and the environment. The NCP was developed and launched in 2016 by the Natural Capital Coalition, which is a collaboration
between 38 organizations, including the World Business Council for Sustainable Development (WBCSD).