Procurement

• Subcontracting services
• Premises rents and costs
• Information and communication technology (ICT)
• Pharmaceuticals
• Marketing and communications
• Human resources (HR)
• Healthcare equipment and supplies
• Other administrative expenses

Terveystalo's procurement operations are guided by the Group's Code of Conduct, and it is supported by a separate procurement policy, procurement guideline, and supplier management handbook. Together, these documents form a framework that ensures responsibility and transparency in all procurement processes.

The procurement policy defines how procurement is managed and implemented at Terveystalo. At its core is a commitment to responsible practices, good business conduct, and industry quality standards. The procurement guideline and the supplier management handbook specify the principles of the policy and describe the procedures related to managing supplier relationships and risks, including the identification and management of sustainability risks.

The Terveystalo Group's Supplier Code of Conduct defines the minimum requirements that all suppliers and partners must meet to do business with Terveystalo and its subsidiaries. The coverage of the Supplier Code of Conduct is one of our Targets and achievements | Terveystalo.

The Supplier Code of Conduct includes, among other things, guidelines and requirements related to supply chain management, product safety and compliance, business ethics such as anti-corruption and anti-bribery, competition law, conflicts of interest, and data protection, as well as guidelines and requirements related to human rights, fundamental labor rights, occupational health and safety, taxation, and environmental responsibility.

Read more about Terveystalo's key operating principles and Ethical business | Terveystalo.

Terveystalo is committed to promoting responsibility in all its operations, and responsible procurement is a key part of this commitment. Terveystalo has defined its material sustainability topics in collaboration with its key stakeholders. Based on a double materiality assessment, a responsible supply chain and respect for human rights are, among other topics, material sustainability themes for Terveystalo.

Our procurement activities are based on our ethical principles, strategic goals, and public commitments. We want to promote transparency and sustainable procurement throughout our entire supply chain. We actively strive to identify, prevent, and manage risks and negative impacts in our value chain that may affect, for example, the climate or employees.

Read more about responsible procurement and stakeholder collaboration in our sustainability report.

Identifying sustainability risks: We conduct regular ESG risk assessments of our supply chain, covering approximately 80% of our procurement volume. Although our direct contractual partners operate mainly in low-risk countries, such as Finland and other Nordic countries, we have identified sustainability risks in subcontracting chains in countries where legislation and its enforcement are weaker.

Managing sustainability risks: We manage risks by integrating sustainability aspects into our procurement processes. We target ESG verifications, such as surveys and audits, particularly at higher sustainability risk procurements as part of competitive bidding and supplier management. Higher sustainability risk procurements include, for example, cleaning, laundry, and security services, certain healthcare supplies, and IT equipment. Any identified non-conformities are addressed together with the supplier, and a corrective action plan is created, the implementation of which is systematically monitored.

Supplier collaboration and dialogue: The primary means of engaging suppliers is Terveystalo's Supplier Code of Conduct. We require all our contract suppliers to commit to complying with these guidelines, which are based on international standards such as the UN Global Compact principles and the ILO fundamental conventions. We also maintain an active dialogue with suppliers as part of our Supplier Relationship Management (SRM) model and arrange regular meetings where we also address topics related to responsibility.

Terveystalo is committed to reducing its climate impacts based on science throughout its value chain, including Scope 3 emissions, which mainly originate from our supply chain. Our short- and long-term targets have been approved by the Science Based Targets initiative. Our suppliers play a significant role in reducing these emissions, and we actively involve our key partners.

It is important to us that our suppliers share the ambition to promote more sustainable healthcare and transparency in our value chain. Transparency and collaboration are key as we strive towards a carbon-neutral future. We especially expect our significant partners to be ready for a joint emission reduction journey.

Read more about Responsible consumption and climate action | Terveystalo.

We expect all our partners to commit to responsible and ethical business practices. Our minimum requirements for all suppliers are:

• Compliance with legislation: Operations must comply with all laws and regulations applicable to the business.
• Requirements of Terveystalo's General Procurement Terms: The terms cover, among other things, liability insurance, the right to audit, and requirements related to information security and data protection.
• Acceptance of the Supplier Code of Conduct: To become a Terveystalo supplier, the supplier must be registered in Terveystalo's eSourcing portal and accept our Supplier Code of Conduct.

In addition to the above, we expect the following from our significant and higher sustainability risk suppliers:

• Cooperation and transparency: We expect suppliers to actively participate in risk management, commit to common goals, and be prepared to increase transparency.

An important part of Terveystalo's culture of doing the right thing is that every person, customer, partner, or supplier acting in the name of or with the Terveystalo Group can raise their suspicions of misconduct and trust that Terveystalo will take appropriate action. For procurement-related matters, the primary contact channel is always Terveystalo's Procurement.

In addition, there is a reporting channel open to everyone for reporting observations or suspicions of serious misconduct. The reporting channel allows for anonymous and confidential reporting, for example, due to the sensitive nature of the matter.

The reporter has the opportunity to file a report on topics including, but not limited to: money laundering, taxation, activities contrary to procurement legislation, unfair competition, environmental protection, product safety and compliance, and violations related to industry-specific regulation.