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RESPONSIBLE CONSUMPTION AND PRODUCTION

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CLIMATE ACTIONS

CLIMATE ACTIONS

PRODUCT LIFE CYCLE

Our product portfolio consists of technical products designed for professional hair stylists and hair products sold to consumers. From the Four Reasons product portfolio, it’s easy to find suitable hair products for all hair types and the needs for all types of hair and scalp. Four Reasons products are made of vegan raw materials, and their packaging is as environmentally friendly as possible. The quality, safety and sustainability of our products is important for us. We engage in long-term work to ensure and develop the sustainability of our procurement chain, raw materials and packaging.

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Our goal is to enable sustainable choices for our customer, taking into account environmental aspects from the entire lifecycle of the product.

RAW MATERIALS

GOALS AND INDICATORS

Goal: 100% vegan products.

Indicator: The percentage of vegan Four Reasons products out of the entire Four Reasons product line

WHAT DOES VEGAN MEAN IN HAIR COSMETICS?

Vegan cosmetics refer to products that do not contain any animal or animal-derived ingredients. Typical animal ingredients used in hair cosmetics include silk, keratin, collagen, lanolin, beeswax and animal-derived proteins and extracts. These raw materials are used for their conditioning and repairing qualities that add sheen to the hair as well as to add a certain structure to the product consistency. However, there have been vegan, plant-based or synthetic alternatives for animal ingredients used in hair cosmetics for a long time.

Vegan ingredients should not be confused with cruelty-free ingredients. Vegan refers to the origin of the raw material whereas the latter refers to the testing and development process of the ingredient. In our products, we use raw materials from known European suppliers. According to EU legislation, testing these raw materials on animals has been banned since 2009. We do not test, and we do not have anyone else test Four Reasons products or their ingredients, on animals.

The ingredients used in hair cosmetics have been listed in the INCI list as per the EU cosmetics regulations. It’s good to be aware that the INCI name of the ingredient doesn’t necessarily indicate whether the ingredient is animal-derived, vegan, plant-based or synthetic: they all can have the same INCI name.

ANNUAL REPORT 2020

In 2018, we set a goal of giving up animal ingredients in our products by the end of 2020. This meant replacing hydrolyzed keratin, hydrolyzed silk protein and lanolin with vegan ingredients. Keratin and lanolin are ingredients extracted from wool. Hydrolyzed silk protein, on the other hand, comes from the cocoon of the silk butterfly’s larvae.

In 2020, we introduced to the market the Four Reasons No Nothing product line, which we had transformed into 100% vegan, and also completed the renewal of the Four Reasons Original product line. Our other product lines were either already vegan or their composition was renewed to be vegan before the start of the year. This means that by the end of the year, the entire Four Reasons product line had been renewed to be vegan.

However, in late 2020, our own product selection still featured some non-vegan products whose manufacturing had been discontinued previously. These products will be removed from our selection once the stocks have run out. Non-vegan products in our stock: KC Professional Color Mask Treatment products (contain hydrolyzed keratin) Conditioner of KC Professional Four Reasons Take Away Color products (contains hydrolyzed keratin) KC Perm Keratin 0, 1 and 2 (contains hydrolyzed keratin) KC Bleach Cream (contains beeswax)

”By the end of the year, the entire Four Reasons product line had been renewed to be vegan.”

ACTIONS IN 2021

In 2021, we will develop replacing products for the market for our KC Perm Keratin curling products and clear our stock of already discontinued products that contain non-vegan ingredients.

We will continue to develop and produce new vegan hair cosmetics innovations by growing the 100% vegan Four Reasons hair product line.

PACKAGING

GOALS AND INDICATORS

Goal 1: Decreasing the amount of packaging waste

Indicator: The amount of packaging waste in relation to turnover

Goal 2: Promoting the circular economy For our Four Reasons products, we select only 100% recyclable packaging materials.

Goal 3: Decreasing the use of virgin materials For our Four Reasons products, we select only packaging materials that are made of recyclable materials, bio-based or based on other renewable resources.

Indicator: Percentage of Four Reasons products packed in bio-based packaging or packaging decreasing the use of fossil virgin plastic/other virgin material.

OUR ACCOMPLISHMENTS IN 2020

In 2020, we continued the brand renewal work that we started already in 2018, during which our KC Professional products are moved under the Four Reasons brand. An important part of this project has been our mission to find the most environmentally friendly alternatives for all our product packaging without compromising the products’ characteristics or user experience.

We study packaging alternatives from the perspective of the packaging material’s environmental friendliness as well as recyclability, aiming at decreasing the use of virgin materials and 100% recyclability. By the end of 2020, the packaging of our entire product portfolio had undergone the renewal process, 99% of our packaging were recyclable when empty and 35% of the plastic packaging of our retail products were either recycled or bioplastic.

In addition to the plastic waste generated by our product packaging, we aim to minimize other waste caused by our operations. For instance, we have replaced the plastic shrink film used in sales batch packaging with a box made of recycled cardboard. Cardboard boxes used in product shipments are also 85% recycled cardboard, the printed reclaimed paper used to fill the transportation boxes is 100% made of recycled materials and the packaging tape is recycled paper. Our shipments may not be the prettiest but it’s not our style to spoil the environment to please the eye – beauty doesn’t come in one shape and size, and this applies to packaging, too!

USE OF PLASTIC IN RETAIL PRODUCTS

Cleanse and care products and some styling products are typically packed in plastic. Plastic has many qualities that speak for its use in hair cosmetics packaging. It’s light, durable, flexible and fairly cheap – these are qualities that facilitate in the transport of the product and improve the user experience. However, plastic doesn’t break down and degrade in nature and oil is used as its main raw material, which make it an environmental issue.

Over the past years, more environmentally friendly plastic alternatives to virgin, oil-based plastic have entered the market. These include packaging made of partially or entirely out of recycled plastic and plastic packaging made of different bio-based raw materials. Reusing plastic is already one solution to the world’s waste problem, and the raw materials of bio-based plastic can be used to significantly decrease the carbon dioxide emissions from packaging.

The Four Reasons product portfolio uses plastic in the packaging of cleanse and care products as well as some styling and finishing products, such as hair waxes and styling sprays. Since the packaging renewal initiated in 2018, we have moved on to using recycled plastic, bioplastic or plastic reclaimed from the sea in all plastic packaging, if possible. In 2020, we cut the use of virgin packaging plastic by producing approximately 270,000 packages made of recycled or bioplastic.

In 2020, we launched the renewed Four Reasons No Nothing product line, in which all plastic packaging is made of sugarcane-based bioplastic. In practice, all shampoos, conditioners, the styling spray and hair wax of the line were dressed up in new bioplastic packaging. The Four Reasons Original product packaging went through the same renewal: sugarcane-based bioplastic was selected also as the material for the line’s plastic bottles, jars and tubes. At the same time, communications promoting the recycling of the products were added to the packaging.

THE USE OF PLASTIC IN THE FOUR REASONS PRODUCT PACKAGING IN LATE 2020

FOUR REASONS PROFESSIONAL

• Bottles for cleanse and care products and Salt Mist are made of 100% recycled plastic but we will move gradually to bio-based sugarcane-based packaging • Wax jars are made of bio-based sugarcane plastic • Plastic parts in packaging of styling and finishing products are made 100% of recyclable plastic • Packaging is 100% recyclable FOUR REASONS NATURE

• All bottles are made of recycled plastic and packaging adhesives of cellulose-based plastic • The Rebuild Treatment jar is made of bio-based sugarcane plastic • Packaging is 100% recyclable FOUR REASONS NO NOTHING

• The bottles of cleanse and care products and Stylish Mist are made of bio-based sugarcane plastic • The wax jar is made of bio-based sugarcane plastic • Plastic parts in packaging of styling and finishing products are made 100% of recyclable plastic • Packaging is 100% recyclable FOUR REASONS ORIGINAL

• The bottles of cleanse and care products are made of bio-based sugarcane plastic • The plastic bottles and caps of styling and finishing products are made of bio-based sugarcane plastic • Packaging is 100% recyclable FOUR REASONS COLOR MASK

• No corresponding alternative has been found for virgin plastic packaging without compromising the product’s qualities or user experience • Packaging is 100% recyclable

USE OF PLASTIC IN TECHNICAL PRODUCTS

In hair cosmetics, technical products refer to the products used by professional hair stylists, such as hair colors, developers and bleaching and curling agents. When measured by sales volume, hair colors are the largest product group, and they are typically packed in an aluminum tube. When coloring hair, the developer, or hydrogen peroxide, mixed with the hair color is often packed in plastic, which is excellent for protecting the product and maintaining its qualities during transport and storage. Plastic and different combinations of plastic and other packaging materials are most often used also in the packaging of other technical products.

The packaging of the Four Reasons technical products use plastic in the caps of hair color tubes, developers and bleaching and curling agents. The use of plastic in these packaging is supported by many factors: the purpose of the packaging is to protect the product and for these products, plastic has been deemed to have the best qualities for that, at least for now. However, our goal is to cut the use of virgin plastic also in our technical products and to increase the use of recycled materials. In 2020, we renewed the packaging of our bleach products into packaging that reduces the use of plastic and improves recyclability. CASE: THE PACKAGING RENEWAL OF FOUR REASONS BLEACHES

The packaging materials of ing waste compared to the bags. our bleaches to be launched in To improve the environmental 2021 were updated in 2020. Of friendliness of our products, we our bleaches, Ultralift 9+ and decided to give up the branded Multibleach were packed in bleach packaging completely, resealable bags made of alumi- because their issues included num and plastic. The bag had a plastic consumption and poor durable structure, and packing it recyclability. We replaced them in freight boxes was effective since with 100% recyclable, light and the product didn’t take up a lot of air-tight transport packages from space. However, the bag made of which the bleaching powder is aluminum and plastic was mixed emptied into each bleach’s own, waste, so it could not be sorted as We replaced them reusable container in the metal or plastic with 100% recyclable, hair salon. recycling. light and air-tight The packagKC Bleach was sold in two transport packages. ing renewal decreases kinds of packages: in plastic bags both the use of plastic and the and jars. The plastic bag was carbon dioxide emissions from light to transport but broke easily transport as the packaging fits during transportation, which is into a smaller space than before. why it had to be double packed in With the renewal, we will also siganother plastic bag. The bleach nificantly decrease the amount of jars, on the other hand, accumu- mixed waste accumulated in hair lated significantly more packag- salons.

OUR ACTIONS IN 2021

Our journey towards more sustainable packaging continues. Charting environmentally friendly packaging is part of our product development process, whether it concerns launching a new product or renewing the packaging of existing products.

In 2021, we will introduce to the market the Four Reasons Original product line packed in bioplastic, the Four Reasons Original Scalp product line packed in recycled plastic and PEFC certified cardboard and the Four Reasons Original Takeaway Color product line packed in FSC certified cardboard.

We will continue to chart especially the packaging materials of our technical products from the environmental perspective. We will begin replacing the aluminum in the Four Reasons Optima hair color tubes with recycled aluminum in 2021.

PRODUCTION

GOALS AND INDICATORS

Goal 1: All plants that produce Four Reasons products have ISO 22716 certification that ensures that all stages of the production and after it are conducted according to the standards of good manufacturing practice.

Goal 2: 100% of our suppliers are committed to our Supplier Code of Conduct by 2025.

Goal 3: We aim to increase local manufacturing and production at plants with ISO 14001 environmental certification.

OUR ACCOMPLISHMENTS IN 2020

The quality of our products and production according to good manufacturing practice is the starting point of our product development. We manufacture products only at ISO 22716 certified plants, which can verify operations according to good manufacturing practice. In addition, the majority of Four Reasons products made in 2020 were produced in plants with ISO 9001 certification and/or ISO 14001 environmental certification.

CASE STUDY: TRANSMERI LOGISTICS MANUFACTURES WITH RENEWABLE ENERGY

Four Reasons cleanse and care products are produced in Finland at the Transmeri Logistics Oy plant, which transferred to using 100% certified wind power in 2020.

OUR ACTIONS IN 2021

In 2021, we will chart opportunities for local production on a productspecific basis. We communicate our Code of Conduct to all of our suppliers and ensure that our production chain is committed to our ethical principles.

PRODUCT USE

GOALS AND INDICATORS

A product that matches your needs and is used until the last drop is a sustainable purchase. Our goal is to reduce the number of hitand-miss purchases by our customers to help them choose the correct product.

OUR ACCOMPLISHMENTS IN 2020

During the year, we renewed our product packaging and using our four reasons, we clarified the hair problems the product can be used to solve and for what kind of hair it is best suited. We also renewed our website we use to communicate the different characteristics and purpose of use of products to consumers.

We initiated regular free-of-charge online trainings for professional hair stylists to support the use of our products in the daily work at hair salons. A total of 35 online trainings were organized, and they were attended by 6,200 people. In addition to digital trainings, we trained approximately 500 professional hair stylists in their own salons to use our products. Alongside product training courses, we also provided different trainings and showcases that maintain and develop hair stylists’ expertise. They were attended by approximately 1,500 Finnish professional hair stylists.

In addition to our main market area Finland, we are also ensuring the sufficient product knowledge of the sales, marketing and training organizations in our export countries by producing production information in English and organizing training courses and meetings.

OUR ACTIONS IN 2021

In 2021, we will launch a new video training set for our Four Reasons Luxima hair color line and bleach products in Finnish and English. Video trainings enable correct use of our products, which decreases hair dying mistakes at hair salons and resulting excessive use of products.

We will continue to provide free-of-charge online trainings for professional hair stylists regularly every other week, and we’ll also provide business training courses and other training events supporting the use of our products. In addition to our training selection, we produce social media content supporting the use of our products on an almost daily basis and help in the daily life of hair salon work through our multi-channel customer service.

We also aim to decrease the number of consumers’ hit-and-miss purchases by producing content on our website, social media and product sales points to help consumers choose the correct products and use them as instructed.

DISPOSING OF OUR PRODUCTS

GOALS AND INDICATORS

Goal 1: We minimize loss caused by our operations

Indicator: Comparing the number of products disposed of at an annual level

Goal 2: We promote the circular economy by drawing up recycling instructions for all of our products in our product packaging and/or website

Indicator: Percentage of products with recycling instructions in the product packaging and the percentage of products with recycling instructions on our website

OUR ACCOMPLISHMENTS IN 2020

In 2020, we reached the final stretch of the brand renewal work we started already in 2018 during which our KC Professional products are moved under the Four Reasons brand. In addition to the brand renewal, products have been discontinued and renewed systematically to minimize waste during the project.

In connection with the packaging renewal of our products, we added symbols that facilitate recycling to our product packaging. We always add information about packaging material and the recyclability of the packaging in new packages. SHAMPOOS AND CONDITIONERS

STYLING PRODUCTS, PLASTIC PACKAGING • Recycled as plastic waste after a quick rinse

• Pumps are sorted as mixed waste

• Recycled as plastic waste after a quick rinse

• Packages containing product belong to mixed waste

STYLING PRODUCTS, ALUMINUM PACKAGING • Completely empty aerosol packaging can be placed in metal recycling • Aerosol bottles containing the product must be sorted as hazardous waste

HAIR COLORS • Hair color tubes must be completely emptied using a tube squeezer, after which they can be placed in metal recycling • Liquid hair color is hazardous waste, dried hair color mixed waste

• Cardboard boxes of hair colors can be placed in cardboard recycling

BLEACHES • Recycled as plastic waste after a quick rinse

CURLING AGENTS • Products containing curling agents are hazardous waste

• A completely empty and washed package can be placed in plastic recycling

DEVELOPERS • Products containing curling agents are hazardous waste

• A completely empty and washed package can be placed in plastic recycling

TRANSPORT BOXES AND PACKAGING MATERIALS • Packaging cardboard and tape as well as brown paper can be sorted as cardboard recycling • Packing lists, campaign ads and other paper material belongs to paper recycling

OUR ACTIONS IN 2021

We will continue the packaging renewal connected to our brand renewal, and we will take our stocks into account in the scheduling of the packaging renewal’s scheduling and aim to minimize packaging and product loss. We will add recycling symbols to all of our product packaging that is renewed this year. We will continue our communications that promote product recycling and add product-specific recycling instructions on our website alongside the general recycling instructions.

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