Committed to sustainable development and technology leadership The year 2022 has been marked by turbulence and uncertainty. The COVID-19 pandemic continued, energy and component shortage caused challenges globally, inflation increased, and above all, Russia’s military attack against Ukraine shocked us all. As the war is against everything we stand for, Vaisala ceased all its business in Russia and Belarus as of early March. 2022 was a year of record growth for Vaisala. We succeeded well in meeting our customers’ needs in all markets despite a challenging market environment and a shortage of components. Sustainability and climate commitment at the core of Vaisala In addition to facing a tough business environment, the global climate situation continued to be ever more alarming. The impacts of climate change are being felt across the globe. We continued working towards our purpose Observations for a better world, enabling our customers' business-critical operations and decisions that help solve the great sustainability challenges of our time. In March 2022, Vaisala committed to setting science-based targets to reduce greenhouse gas emissions, aligned with the requirements of the Science-Based Targets initiative (SBTi). The aim is to set targets to decrease Vaisala’s direct Scope 1 and especially indirect Scope 3 emissions by 2030. During the year, we calculated the full greenhouse gas inventory of our emissions and built a better understanding of the emissions in the entire value chain. In 2023, we will formulate the emissions reduction targets and roadmap, focusing especially on our products’ energy consumption and the supply chain emissions. Our aim is to get SBTi validation for the targets by 2024. Vaisala’s business is at the intersection of multiple global megatrends that are tightly intertwined with the United Nation’s Sustainable Development Goals (SDGs). In 2022, we continued integrating the Sustainable Development Goals to our strategic planning and product development. We continue our commitment to the UN Global Compact initiative and its 10 principles regarding human rights, labor standards, environment, and anti-corruption. Once again, our sustainability work gained outstanding recognition. Vaisala was ranked fifth in the Financial Times list of European Climate Leaders 2022. We also received the Carnegie Sustainability Award acknowledging both our sustainable business practices and the positive handprint of the business, generated by our products. Moreover, Sustainalytics assessed our ESG Risk Rating to be 9.7 (negligible risk), placing Vaisala in the 2nd percentile in the electronics equipment industry. Building success upon technology leadership and innovation Product and technology leadership, from our own sensor technology to digital solutions, is a key success driver in Vaisala’s strategy. To further improve our market leader position and meet the needs of a sustainable future, our high investments into research and development continued. In 2022, these investments made up 12% of our net sales. During the year, we launched several new products both in Weather and Environment as well as Industrial Measurements business areas. We also took action to accelerate the growth of Vaisala’s weather and environmental data business. In January, we closed the acquisition of US-based software company AerisWeather providing comprehensive weather data for a wide range of industries. In September, we launched Vaisala Xweather, a suite of Solution as a Service and Data as a Service services providing real-time and hyperlocal weather and environmental data. "In Vaisala, advancing diversity, equity, and inclusion (DEI) is important from the points of view of employee well-being, attracting new talent, and creating new innovations, for example. In 2022, we launched our DEI strategy, which creates the foundation for systematic development work and multi-level activities to ensure an inclusive work community." Engaged and diverse talent makes our future Talented and engaged employees are vital to drive growth and innovation. In 2022, we also grew in terms of our number of people, welcoming a total of 357 permanent colleagues. Navigating in the new hybrid work environment, we have focused on finding the best working conditions for our employees to innovate and collaborate, while managing a healthy work-life balance. As we are dedicated to being a great place to grow for brilliant minds, it is important that we keep fostering an inclusive community where everyone feels that they belong. For this, diversity, equity, and inclusion (DEI) are an integral part. During 2022, we finalized our diversity, equity, and inclusion strategy and set ambitious targets for increasing diversity. The strategy is realized on four levels, ranging from a compelling vision and building awareness to practical processes and quantitative key performance indicators. Solving challenges together The year 2023 will see a continued need for accelerated climate action, and the uncertainty in the business environment remains. In this context, it is more important than ever to work together to solve the great challenges of both today and tomorrow. Successfully closing this year and entering a new one, we want to thank our employees, customers, partners, and other stakeholders for the invaluable contribution and collaboration in 2022. Together with all of you, we look forward to continuing our journey towards a more sustainable future. Ville Voipio Chair of the Board Kai Öistämö President and CEO
