Statement of commitment on human rights and impact assessment

Supply chains

Kesko’s supply chains

Kesko has more than 20,000 suppliers of goods and services from whom annual purchases amount to at least EUR 1,000. Around 80% of the goods purchased annually by the Finnish companies of Kesko Group are sourced from suppliers operating in Finland, and less than 20% from elsewhere.

Kesko complies with its ethical principles for purchasing, which are based on the fundamental principles and rights at work adopted by the International Labour Organization (ILO), the United Nations Universal Declaration of Human Rights, and the Convention on the Rights of the Child. Kesko’s grocery trade is committed to the principles of good trading practice in the European food chain.

Impact assessment

In 2025, Kesko carried out a human rights impact assessment focusing on supply chains. The assessment is aligned with the UN Guiding Principles on Business and Human Rights (UNGPs). Conducted together with a partner, the assessment focused primarily on Kesko’s own brand products, own imports, and high-risk service categories. The analysis covered all of Kesko’s divisions - grocery trade, building and technical trade, car trade - as well as indirect service procurement such as cleaning and security services.

The assessment combined internal interviews, supplier and audit data, and international research to identify the most significant human rights risks. Potential impacts were assessed in accordance with international standards based on severity and likelihood.

The results of the assessment and the actions required are reviewed by business division. The impact assessment is updated annually, and the related actions are assessed each year.

The most significant potential impacts in Kesko’s supply chains are described in the document below. The 2025 impact assessment was carried out at a more detailed level than before, and the results are presented by product category, geographical risk area, and vulnerable group. In addition, the table describes the measures we have implemented.

Management of impacts

Kesko requires its suppliers of goods and services to commit to the requirements set out in the K Code of Conduct for business partners. The K Code of Conduct commits business partners to respecting human rights and complying with labour-related requirements. Kesko offers an online K Code of Conduct training for business partners, particularly suppliers, to help ensure that our suppliers understand and comply with K Group’s sustainability principles.

Kesko manages the human rights impacts it has identified through social responsibility audits and certifications. Our principle is to cooperate only with direct suppliers in risk countries that are covered by social responsibility audits. In Kesko’s grocery trade, audits may also be required from own brand suppliers on a risk basis when the product is manufactured in a risk country.

Kesko primarily uses amfori BSCI audits based on the amfori BSCI Code of Conduct in the social responsibility assessment of suppliers in risk countries. We also accept other assessment systems if their criteria correspond to those of amfori BSCI auditing and the audit has been conducted by an independent third party. The audits provide information on workers’ working conditions, including occupational safety in production, wages and working hours, and the implementation of freedom of association and collective bargaining rights.

Kesko steers the sourcing of products containing raw materials identified as critical from a social responsibility perspective through its sustainability guidelines. Through our guidelines for sourcing cocoa, coffee, tea, palm oil, soy, textiles, and wood and paper, we seek to reduce the human rights challenges related to their production. These guidelines guide the sourcing of own brand products and their raw materials to ensure they are produced primarily in accordance with internationally recognised certification systems. Certification standards include criteria for workers’ conditions and respect for human rights. New guidelines are developed as needed.

For example, for textile products, Kesko is a signatory to the International Accord for Health and Safety in the Textile and Garment Industry, which promotes occupational health and safety in Bangladeshi garment and textile factories. We require Bangladeshi factories manufacturing own brand clothing and home textiles to participate in the International Accord process.

Memberships and collaborations

Kesko is a member of amfori, an association promoting sustainable trade, and uses amfori BSCI audits in its supply chains. We actively participate in the activities of amfori’s Finnish network.

Kesko is committed to the UN Global Compact and is a member of its Finnish network. The UN Global Compact is the United Nations’ corporate responsibility initiative and the world’s largest corporate responsibility network. We actively participate in events and sustainability training organised by the UN Global Compact.

Kesko works with The Centre for Child Rights and Business, an organisation promoting children’s rights. As a member of the organisation’s working group, Kesko receives up-to-date information on child labour and its prevention in regular meetings.

Kesko’s grocery trade division has had a broad cooperation agreement with Fairtrade Finland for more than 20 years. Cooperation with Fairtrade focuses on global agricultural supply chains and reducing risks in primary production.

Employees

The views of employees have been examined based on, e.g., the results of the employee engagement survey. Unit-specific action plans are prepared based on the results and their implementation is monitored.

The table below presents selected questions from the employee survey that are particularly related to the implementation of human rights.

*Includes questions:
1. I have a fair chance to show my talent and capabilities at work.
2. I feel accepted and part of the work community as myself.
3. Diverse opinions and ideas are valued in our work community.
4. My manager treats me fairly and with respect.
5. People of diverse backgrounds are valued and treated equally in our work community.

Impact assessment

Kesko’s salient impacts on employees are described in the document below.

Monitoring and corrective actions

Customers

Customers are heard through daily customer interactions (around 2 million/day), customer feedback channels and K-Consumer Service, as well as through customer surveys.

Kesko provides various feedback channels to its customers, including the K-Plussa customer service, K-consumer service and chain-specific feedback channels. Although these channels are intended for feedback on everyday customer issues, they occasionally also receive feedback on human rights related matters.

Employees

Employees are heard in day-to-day managerial work, through development discussions and employee surveys, and via occupational safety representatives and employee representatives. Kesko has many employee forums where dialogue between employees and the employer takes place regularly. Discussions are held directly with employees, their representatives, and supervisors. Kesko does not restrict employees’ freedom of association.

K Code of Conduct training is part of Kesko’s induction programme. In addition, we have online training programmes for familiarising with and revising responsible practices, which are mandatory for all employees. We also regularly offer events for employee representatives to discuss responsible practices and the K Code of Conduct.

Viva Engage on Kesko’s intranet acts as an electronic feedback forum for employees, through which employees can give feedback and ask questions about any matter related to the operations of Kesko or its subsidiaries. Messages may also be anonymous. All feedback and responses are published on the channel so that other employees can also follow the discussions. All feedback is carefully examined and used in developing Kesko’s operations.

SpeakUp reporting channel

SpeakUp is a confidential reporting channel of the K Group. The reporting channel is an important tool to uphold employees', customers' and stakeholders' trust in Kesko’s and K Group's business. Employees of K Group, as well as suppliers, customers and other stakeholders can report suspected criminal offences or misconduct concerning Kesko or K Group or actions against the K Code of Conduct. The channel enables fully anonymous reporting.

Read more about the SpeakUp reporting channel

Supply chains

We screen our suppliers using a screening tool to identify any links to sanctions, corruption, crime, or adverse media. In addition, ongoing media monitoring covers topics related to various ESG related regulations and OECD guidelines, including human rights and labour standards.

Corrective actions and their follow-up are included in the social responsibility audit process. In 2025, 81 sites of our suppliers covered by amfori BSCI audits had a mitigation plan in place. The plans most commonly included measures to improve occupational health and safety and to develop the social responsibility management system. The amfori BSCI audit process includes a Zero Tolerance protocol that is applied when the auditor identifies a particularly critical finding during the audit. If child labour is identified in Kesko’s value chain, the corrective action model of The Centre for Child Rights and Business is applied.

For serious violations of human rights and working conditions, Kesko follows its handling process. In accordance with the process, serious violations are addressed in collaboration with the Kesko Group’s Governance, Compliance & Ethics function. The primary aim is to remedy the issues through corrective actions agreed with the supplier. The effectiveness of corrective actions is assessed, for example, through follow-up audits. If a supplier does not commit to resolving the identified non-compliances within the agreed timeframe, the relationship may be suspended or terminated. Decisions are documented and reported to relevant members of senior management.

Kesko’s ability to communicate information about the K Group’s own reporting channel to workers in supply chains located outside Kesko’s operating countries is limited. Together with its suppliers, local trade unions, civil society organisations, and authorities, Kesko must seek to establish effective grievance mechanisms.

In addition to Kesko’s own reporting channel, amfori’s grievance mechanism, amfori Speak For Change, is available to workers in Vietnam, Türkiye, Bangladesh, and four regions in India, at the factories of Kesko’s suppliers that are covered by amfori BSCI audits.

Communication and reporting

As part of its annual report, Kesko publishes a sustainability statement each year. Kesko’s sustainability statement has been prepared in accordance with the principles of the EU Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS). The social impacts of Kesko’s operations in relation to its own workforce, value chain workers, and consumers are reported in accordance with the ESRS S standards.

In addition, we report on the human rights work of our Norwegian operations in accordance with Norwegian national legislation (Transparency Act LOV-2021-18-99).

Further actions and reviews

Kesko’s first human rights assessment prepared in accordance with the UN Guiding Principles was published in 2016. The human rights assessment is reviewed every three years by the Group Sustainability Management Team and updated accordingly on Kesko.fi.

In global supply chains, living wages and incomes are a major and complex problem. In emerging countries, statutory minimum wages are often insufficient to cover the normal expenses of workers and their families, such as housing, nutritional food and education.

As a result of inadequate wages and incomes, workers and their families live in poverty and many work overtime to secure their livelihoods. A low wage level is a risk to the wellbeing of workers and their families and increases the risk of child and forced labour, for example. (source: amfori living wage briefing)

To achieve a living wage, each player in the supply chain needs to support a living wage in their own capacity, including standard systems, retailers, brands, supplier companies, unions and other labour groups, industry organisations, governments, civil society, and academia. (source: Global Living Wage Coalition). Promoting workers’ rights of freedom of association and collective bargaining is particularly important.

Kesko’s work to promote a living wage and income in its supply chains

• Internal training
  We will include the subject of living wages and incomes in our training on responsible purchasing and will increase our competence on the subject.
  
  
• Cooperation with amfori BSCI
  Kesko utilises global social responsibility assessment systems, primarily amfori BSCI audits, in the assessment of working conditions at factories and plantations in risk countries. Kesko has been a member of the amfori organisation for sustainable business since 2005 and is committed to promoting the principles of the amfori BSCI Code of Conduct in its supply chains. The principles of the amfori BSCI Code of Conduct include fair remuneration, decent working hours and the rights of freedom of association and collective bargaining, and the implementation of these principles is assessed through amfori BSCI audits. The amfori BSCI audits investigate the minimum wage paid by a supplier to its workers and estimate the living wages for each region.
  
  
• Cooperation with Fairtrade
  Kesko’s grocery trade selections have included Fairtrade products since 1999. Fairtrade's goal is to ensure a living income for farmers and workers and fair trading conditions. Fairtrade’s tools – criteria, independent audits, guaranteed minimum price that protects against global market price fluctuation, the Fairtrade premium and training for farmers and workers – reinforce the livelihood of producers and their opportunities for influencing their working conditions and other factors that concern them.
  
  
• Sustainability guidelines
  We guide the sourcing of products containing raw materials that have been identified critical from a social and environmental responsibility perspective through our sustainability guidelines. Among the initiatives mentioned in the policies, Rainforest Alliance, RSPO and PEFC include requirements regarding living wages or incomes.
  

Definition of a living wage and a living income

While there is no formal definition of a living wage, there is broad consensus around what constitutes a living wage. Kesko defines a living wage in supply chains in accordance with the Anker Methodology. The Anker Methodology is widely accepted and recognised by the international Global Living Wage Coalition. Kesko’s major stakeholders amfori and Fairtrade also use Anker’s definition.

According to the Anker Methodology, a living wage is:

The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.

The concept of a living wage applies to hired workers. A living wage is not the same as a statutory minimum wage, which in many countries does not guarantee a living income. The estimate is carried out locally in a particular region, and the calculation takes into account the fact that families often have more than one working adult (Source: Global Living Wage Coalition)

A comparable definition for self-employed entrepreneurs and farmers refers to a living income. According to Fairtrade, a living income is:

A living income is defined as sufficient income to afford a decent standard of living for all household members – including a nutritious diet, clean water, decent housing, education, health care and other essential needs, plus a little extra for emergencies and savings – once farm costs are covered.