Sustainability in Brief

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Growing and aging population and higher living standardsThe growing global population, an aging population, decreasing poverty and rising living standards increase the demand for hy-giene and health products. The increased prevalence of chronic conditions and greater life expectancy of people with chronic conditions are expected to increase demand for incontinence products and medical solutions.

Greater awareness of hygiene and healthGreater awareness of hygiene and health drives market demand for hygiene products. Demand for health care products is also growing as access to health care increases with rising prosperity and urbanization.

Continued focus on sustainabilityThe rising awareness of sustainability issues, including climate

Global Trends and DriversAs a provider of hygiene and health solutions, we analyze our external environment and market as a means of identifying external trends, drivers, opportunities and risks.

change, resource scarcity and considering the entire life cycle of products, mean that every company must integrate these issues into their business models to remain successful in the long term.

DigitalizationDigitalization presents various opportunities to improve all parts of the hygiene and health product value chain, from product development and production, to sales.

The empowered consumerDigitalization today offers consumers limitless opportunities to assess information about different products and services, and for companies to engage with consumers – particularly through social media.

To create value for our stakeholders and society, our sustainability work is driven by three platforms:

Well-being More from less Circularity

Our commitment Our impact

More from lessWe build value using less by enablingbehaviours that support sustainable consumption.

Well-beingFor us at Essity well-being means caring and daring to act boldly on social issues that others fear to champion.

CircularityWe aim to design products and services that fit into a circular society.

Meeting societal needsEssity enables more people to enjoy a fuller life. We develop sustainable products and services for hygiene and health, educating children, consumers, patients and care professionals.

Breaking the silenceEssity works to break the silence around issues such as menstruation and incontinence.

Access to hygiene solutionsEssity improves access to sustainable sanitation and hygiene solutions.

Solutions for sustainable consumptionThis means focusing on resource efficiency in the value chain and smarter product design and usage.

We work to promote sustainable forest operationsWe ensure the use of certified fiber in our products.

Circular solutionsWe want to increase use of renewable and recycled materials and explore reuse and recycling.

Sustainable Development Goals prioritized by Essity

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At Essity we are dedicated

to improving well-being

through leading hygiene and

health solutions.

Essity breaks barriers for improved well-being and contributes to a healthy, sustainable and circular society. Read more about Essity and how we contribute to the Sustainable Development Goals, what we do to break taboos in areas such as menstruation and incontinence and about our educational initiatives: www.essity.com

Essity is a leading global hygiene and health company. We improve well-being through our products and services. Sales are conducted in approximately 150 countries under the leading global brands TENA and Tork, and other strong brands, such as JOBST, Leukoplast, Libero, Libresse, Lotus, Nosotras, Saba, Tempo, Vinda and Zewa. Essity has about 46,000 employees. Net sales in 2019 amounted to approximately SEK 129bn (EUR 12.2bn).

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Creating Sustainable Value Together As a global company providing products and services to hundreds of millions of people every day, we can make a real impact when it comes to people, society and the environment.

We invite our customers and different actors in society to collaborate with us in breaking barriers to well-being. We collaborate to raise awareness and develop standards in health and hygiene. Together we create real impact that improves the lives of millions worldwide.

Through our sustainability platforms – Well-being, More from less and Circularity – we are able to create real value together with our customers, consumers and partners.

United Nations (UN) Sustainable Development Goals (SDGs)

Our contribution to the SDGsWe focus specifically on SDG 3, 5, 6, 12, 13 and 15, as our business can best contribute to these goals. At Essity, our work to actively break barriers and increase knowledge of hygiene and health are important contributions to the SDGs, including activities during the year such as educating children and young people in matters relating to hygiene.

In 2019, for the fourth consecutive year, Essity was the convening partner for the UN Foundation’s annual Global Dialogue to act together with others and make progress regarding the SDGs.

"As a world leader in health, hygiene, and sanitation Essity has long been a valuable ally to the UN and UN Foundation in tackling some of the biggest issues faced by humanity. Essity's exemplary commitment to the Sus-tainable Development Goals is what is needed from the private sector more than ever now for the global community to reach the 2030 agenda." Elizabeth Cousens

President and CEO, United Nations Foundation

As a provider of leading hygiene and health solutions, Essity has an important role to play in contributing to the SDGs.

The UN SDGs provide the global community with a roadmap on how to combat global challenges related to economic, social and environmental sustainability. The goals reflect a growing awareness of the relationship between good hygiene and health, and how this improves well-being, economic and societal progress in the world.

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Well-beingEssity and UNICEF in MexicoEssity with its product brands Saba and Tork, together with UNICEF in Mexico, work to jointly promote awareness of the importance of good hand hygiene, to break taboos around menstruation and to strengthen standards and guidelines to support good hygiene and health. Over the next three years, the collaboration will provide education to thousands of pupils, teachers and parents in Mexico City and Chihuahua aboutattitudes and practices in connection with menstruation and hand washing and discussions will be held with relevant stakeholders who can drive change in Mexico.

More from lessScience Based TargetsOur targets to reduce carbon emissions have been approved by the Science Based Targets initiative and are in line with the ambition in the Paris agreement to reduce global warming. This is a climate initiative driven by CDP, WRI, WWF and UN Global Compact. We see opportunities to work together with both suppliers and customers to reduce our common climate impact.

CircularityEllen MacArthur FoundationEllen MacArthur Foundation was launched to accelerate the transition to a circular economy. Our membership in Ellen MacArthur Foundation provides a space to share, learn and put circularity ideas in practice. We take part in the New Plastic Economy that is in line with Essity’s target to make all packaging 100% recyclable and increase recycled plastics by 2025.

Moving forward, we aim to broaden our collaboration with customers to further improve our understanding of how we can support their sustainability strategies and targets. Ultimately all Essity packaging, products and services will be designed to promote sustainable consumption and circular behavior.

Our Partnerships

Awards, partnerships and memberships

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Objectives, Targets and Outcomes

Enable more people every day to enjoy a fuller lifeEssity aims to enable more people every day to enjoy a fuller life by raising hygiene and health standards around the world.

Contribute to a sustainable and circular societyEssity strives to reduce resource consumption and toward efficient recycling and composting of our hygiene and health products.

Enable our employees to realize their full potential, as part of one winning teamOur employees are our main asset and we strive continuously to develop our corporate culture, expertise and leadership to create the best possible conditions for a successful Essity.

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1) Net sales excluding exchange rate effects, acquisitions and divestments. 2) Excluding items affecting comparability.

Target PolicyOutcome 2019

Annual organic sales growth1)

Capital Structure Policy

Adjusted return on capital employed2) Dividend Policy

>3%Maintain a

solid investment grade rating

Long-term stable and

rising dividends

>15%

4.5%

13.8%

People and nature innovations

Target Outcome 2019

At least 33% 69%

Share of innovations that yielded social and/or environmental improvements

201920182017

42%

59%

69%

Science Based TargetsScope 1 and 2Scope 3

Target TargetOutcome 2019 Outcome 2019

Share of packaging manufactured from renew- able or recycled material

WaterOur sites are to• Reduce levels of suspended solids• Reduce water usage• Reduce organic waste (BOD)

Sourced from suppliers who comply with Essity’s Global Supplier Standard

Production waste subject to material or energy recovery

FSC® or PEFC™ certified fresh fiber

2030

–25%–18%

2020

100%

2025

85%

2020

–10%

2030

100%

100%–5%–3%1)

85%

68%

–26% –2%–29%

63%

79%

1) Outcome of Scope 3 is for 2018.

Employee Health and Safety Decrease in accident frequency rate

Target Outcome 2019

Business ethics and Code of ConductShare of employees who received regular training in the Code of Conduct

2020

–50%

100%

–47%

96%

Decrease in accident frequency rate

201920182017

38% 39%

47%

Generate increased shareholder value through profitable growthEssity focuses on profitable growth in order to generate long-term value for our shareholders.

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Breaking Barriers to Well-beingEvery day, hundreds of millions of people use our products in order to enjoy a fuller life. We break barriers by raising awareness on hygiene and health topics and by stimulating global dialogue to break taboo and stigma.

Raising awarenessWe focus on breaking taboos in areas such as menstruation and incontinence. We highlight the importance of good hand hygiene. Hand hygiene is important for your personal hygiene and crucial in avoiding the spread of infections and to combat antimicrobial resistance. Access to clean water and soap can even save lives. For years we have been educating about the importance of proper handwashing. Educational initiatives are conducted in areas such as hand- washing for children, menstruation and puberty, as well as incontinence care for nurses and caregivers.

Global dialogueEssity promotes a global dialogue to increase awareness of the importance of hygiene and health and their relation to well-being. Together with partner organizations such as United Nations Foundation and the Water Supply & Sanitation Collaborative Council (WSSCC) we strive to inspire decision-makers to drive change in policy or practice and to advocate for raising hygiene standards.

6 7©UNICEF México

Virtual reality app for Hand Hygiene education

The Tork Virtual Reality Clean Hands Training and Education is a solution specifically designed to make

hand hygiene training more engaging and inspiring for healthcare professionals. This new and unique

way of training is a result of our collaboration with university hospitals and world leading

experts in hand hygiene.

TENA campaign applauds aged women’s bodies#ageless, a newly launched campaign aims to change perceptions of what it means to be a woman living with incontinence. The campaign aims at destigmatizing incontinence and the aging of the female body.

Medical SolutionsWe offer products and services in wound care, compression therapy and orthopedics. JOBST has a complete assortment of compression therapy solutions for venous and lymphatic conditions, from support compressionfor everyday life to medical wear.

“I live with lymphedema and in my work at Essity in compres-

sion therapy, with our leading brand JOBST,

my colleagues and I help others in a

similar situation.”

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Responsible Sourcing and Resource Efficient ProductionWe work to create customer and consumer value while improving the environmental footprint of our products throughout the product life cycle – from sourcing to waste management.

Customers and consumers who use our products should feel reassured that they are sourced, manufactured and distributed in a responsible way. This is why we are committed to responsible business practices throughout our value chain.

Responsibly sourced materialsAll suppliers are to sign our Global Supplier Standard. It includes requirements on quality, product safety, the environment and chemicals. It also contains a Code of Conduct for Suppliers that covers our expectations as regards human rights (for example, child labor and forced labor) and employee relations as well as health and safety. All our requirements apply to all suppliers of raw materials, finished products and services. Using a risk-based approach, we conduct on-site visits and audits to verify compliance. Essity has an established process to perform continuous risk assessments of the company’s suppliers and sourcing categories.

Climate commitmentBy the end of this decade our target is to reduce greenhouse gas emissions from energy and electricity with 25% and key raw materials, transports and waste with 18%. The targets are approved by the Science Based Targets initiative, which helps companies determine which greenhouse gas emission reductions they need to achieve to decrease the global temperature rise in accordance with the Paris Agreement. This approach will further reduce the carbon footprint of our products and contribute to a better society.

Ambitious waste targetEssity’s target is that all production waste will be subject to material and energy recovery by 2030. In 2019, 63% of our waste was recovered and our production sites are working to reduce and find alternative solutions for their waste. Recycled waste can be used as raw materials for other industries, such as the cement, brickmaking and construction industries, or can also be used for energy extraction or composted.

Renewable fibersMost Essity products contain some sort of renewable fiber; be it fresh wood-based fibers in personal care products or fresh wood-based fiber, recycled fiber and alternative fiber in tissue products. Essity is committed to source wood-based fresh fiber from responsibly managed forests and we use a significant percentage of recycled fiber in our tissue products. Our target for sourcing of fresh fiber is for all wood-based fresh fiber in our products to be FSC®1 or PEFC™2 certified. In 2019, 79% of Essity’s wood-based fresh fiber was FSC® or PEFC™ certified, and the remainder fulfilled FSC’s Controlled Wood standard.

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New fibers from wheat straw Alternative fiber enhance the sustainability performance of our products and provide alternatives to the wood-based fresh fiber and recycled fiber used in our products. We are investing approximately SEK 400m in an integrated facility to produce pulp based on alternative fiber from plant-based agricultural by-products such as wheat straw. The production at Essity’s tissue plant in Mannheim, Germany, is expected to commence in 2021.

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1Forest Stewardship Council2Programme for the Endorsement of Forest Certification

Sustainable value creation in Kostheim Our production facility in Kostheim, Germany is a great example of how Essity constantly looks for new ways to recycle production waste, energy and even used paper towels. Kostheim was one of the first mills with permit and certificate to recycle used hand towels in the production as part of our Tork PaperCircle® recycling service. In 2019, Kostheim reduced the use of plastics for packaging of finished goods by 60% and installed solar panels on the roof of a new converting hall, contributing not only to the energy supply of the facility but also to the surrounding community.

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Sustainable Solutions We want to develop products and services for a sustainable and circular society. This is achieved by reducing consumption during use, developing products with smarter design and superior materials and optimizing resource efficiency in the whole life cycle.

Innovating to get more from lessWith less material use we save resources and waste, while offering the best product performance. Thinner incontinence care, baby care and feminine care products help reduce resource use while delivering the same or even better performance. Coreless toilet paper rolls lead to less transport and waste.

Digital and sustainable innovationsWe continuously develop our offerings to help our customers become more cost-efficient, digital and sustainable. This involves prioritizing the development of services that contribute to more sustainable solutions such as TENA SmartCare™or Tork EasyCube®. Another example is our TENA solutions service that aims to optimize product use, minimize the risk of leakage and reduce waste.

Safe products Essity follows strict requirements to ensure that all materials in our products are safe for consumers, employees and the environment. We have a global product safety policy in place and work closely with our suppliers to ensure that our high standards are met.

Life cycle assessment By integrating life cycle assessments (LCA) into our innovation work, we monitor how we improve the environmental profile of our innovations as well as our product assortments. We follow ISO Standards, specific category rules and use third party verifications to secure credible LCAs. One example is our assortment for TENA Pants and Underwear in Europe, which has a 33% lower carbon footprint than in 2008.

Data driven cleaning Tork EasyCube® is a facility management software providing real-time data on cleaning needs – to inform staff on exactly what is needed, when and where. The solution has enhanced efficiency, staff engagement and user satisfaction for our customers around the world. We have initial indication that the solution results in 24%* fewer cleaning rounds with improved quality and that we save 20% time**. * The weighted average of results achieved by two Tork EasyCube® customers, measured during 158 days, before and after the implementation of Tork EasyCube**Based on the documented results achieved by three Tork EasyCube customers, measured before and after the implementation of Tork EasyCube

Feminine Care PureSensitive™ Through innovation, we want to make an impact on people’s lives and constantly come up with new solutions that address different needs. Feminine Care’s launch of PureSensitive™ for our leading brands Libresse, Bodyform and Nana is one such example. We developed a whole range of feminine care products made from skin friendly ingredients that respect ph balance and intimate sensitive skin. In France, the Nana PureSensitive™ panty liner was named Product of the Year 2020.

TENA SmartCare™ This range of digital solutions is another example of innovative Essity products, to help revolutionizing elderly care. TENA SmartCare™ Change Indicator helps both caregiving relatives and professionalcaregivers to know when to change incontinence protection without manually checking it. This improves comfort, dignity and well-being. Fewer manual checks means less intrusion, enables truly individualized care and optimum use of resources. It also reduces risk for leakage and unnecessary skin exposure to urine.

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Better solutions with lower carbon footprintAn assortment LCA includes the majority of all products sold in a region. This means that we can measure the environmental improvements from innovations, sustainability targets and step by step improvements from daily operations for the whole assortment over the years.

Libero® diapersAll Libero® diapers are developed to deliver great well-being for the baby as well as the parent. Libero® diapers offer a skin-friendly choice; they are dermatologically tested and are recommended by the association Asthma Allergy Nordic. Furthermore, our diapers are certified by The Nordic Ecolabel and we only use FSC®-certified wood-based fibers in our products. With ambitious efforts, Libero® in Europe has managed to decrease climate impact from diapers by up to 25% since 2008.

Professional Hygiene 2011–2019, %

Tork napkins –92011–2017, %

Tork papers hand towels -18

Carbon footprint reduction, %

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Incontinence Products 2008–2019, %

TENA Flex –18TENA Pads and Liners –33TENA Comfort –19TENA Men –20TENA Pants and Underwear –33TENA Slip –20TENA Bed –11

The life cycle assessments performed by Essity have been verified by the Swedish Environmental Research Institute (IVL). The table is updated every second year and existing results relate to the range of products in Europe.

Feminine Care

Feminine Ultra towels –17

Consumer Tissue 2011–2018, %

Toilet paper –10Household towels –19

Baby Care 2008–2017, %

Libero and Lotus open diaper –25Libero and Lotus pant diaper –16

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Circularity After Use Essity’s ambition is to design products and services for a circular society. We want to be part of a system where less goes to waste. This calls for creative thinking, new business models and partnerships.

A life cycle perspectiveAccess to hygiene and health products is essential for people around the world. We aim to take responsibility for the entire life cycle, even after the products are used. We already use recycled fibers for a high proportion of tissue products and we have continuously made personal care products thinner, with less materials and reduced waste.

Essity is committed to reducing plastic pollutionEssity makes hygiene and health products that respond to specific needs. In some of our products and packaging we use plastics to guarantee that they are clean, safe to use and fulfill the hygiene purpose. Over time, we use less and less materials in our products and we are increasing renewable or recycled plastics in our packaging. Essity is committed to working toward 100% recyclable packaging and to increase renewable and recycled plastic in our plastic packaging. We achieved 68% renewable or recycled materials in our packaging during 2019.

Creating new resources Tissue products are made of renewable wood-based fresh, recycled or alternative fibers. After use, tissue products can contribute to renewable energy through incineration. They can also be composted or recycled. Together with customers and consumers we work to increase recycling and the availability of secondary raw material, such as recycled fibers. The world’s first recycling service for used paper hand towels, Tork PaperCircle®, is a one example of a collaboration on circularity, helping our customers and consumers to become more sustainable.

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*Results of a life cycle assessment (LCA) conducted by Essity Tork and verified by IVL, Swedish Environmental Research Institute in 2017, where the avoided processes have been taken into account

Tork PaperCircle® Tork PaperCircle® is one-of-a-kind recycling service for used paper hand towels. We help our business and customers go circular by collecting and recycling used paper hand towels into new tissue products. Tork PaperCircle® is a complete solution that helps our customers to meet their sustainability targets by reducing waste with up to 20% and cut the carbon emission by up to 40%* compared to other after use waste management.

Renewable materials in packagingWe are committed to increase the use of renewable or recycled plastics in our packaging. Early 2020 we introduced packaging made of renewable materials on a significant part of our portfolio, for example feminine liners, Ultra towels and Maxi towels. Our towels plastic bags are now made from at least 50% renewable sources, using responsibly grown sugar cane and our liners paper packaging is made from 100% renewable fibers.

Coreless toilet paperLotus Moltonel Sans Tube is Essity’s first coreless toilet paper roll, which creates less waste as it has no tube to dispose of. It also means there is more paper on the roll and therefore it does not need to be changed as often.

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Responsible BusinessEssity’s Beliefs and Behaviors and Code of Conduct provides guidance on our way of doing business.

Essity’s Code of Conduct is the Group’s steering document for responsible business operations. The Code of Conduct is based on the UN Declaration of Human Rights, the ILO Core Conventions, the OECD Guidelines for Multinational Enterprises, the UN Global Compact Principles and related legislation.

Employees and the CodeIn 2019, we launched an updated Code of Conduct, which 96% of our employees have completed a new training course on. The Code is an important part of fostering a culture where it is natural to do the right thing and to speak up about ethical concerns. Here supporting our leaders to champion the Code and reinforce Essity’s ways of working is essential, as well as arranging employee workshops on the Code.

Our work with anti-corruptionEssity’s Code of Conduct, as well as its Anti-bribery and Corruption Policy, represent the most important steering documents in the area of anti-corruption. The anti-corruption program is regularly assessed and includes third-party reviews of suppliers and distributors. An anti-corruption e-learning course is part of Essity’s onboarding program, and sales and purchasing employees undergo special training tailored for their activities.

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Whistleblower systemEssity provides employees with a dedicated reporting channel for serious breaches or violations of laws in all countries in which the company has operations. The whistleblower system is operated by an external third party and is open 24/7. Employees have the option of filing a report over the phone or online in 25 different languages to facilitate the process.

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Human rightsEssity’s approach for ensuring respect for human rights in conjunction with the company’s operations is built on the UN Guiding Principles on Business and Human Rights (UNGP). In accordance with this framework, due diligence audits are conducted regarding the management of the company’s impact on human rights. Essity also conducts regular Group-wide and local risk assessments to evaluate the risks and effects on human rights. In 2020 a local risk assessment was carried out in India with the focus on human right risks in the supply chain.

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Our Response to COVID-19Caring for hygiene, health and well-being is key for Essity. Our approach follows three underlying principles:

• Contribute to society by producing essential products and through collaboration with other organizations

• Care for our people by minimizing risk of infection or transmission • Secure business success by continuing to serve our customers and consumers

We care for communities by donating products and resources on local and global levelTo help fight the COVID-19 disease, Essity have made a lot of local donations and support. We have also donated $200,000 to the United Nations Foundation’s COVID-19 Solidarity Response Fund. The fund aims to support the World Health Organization’s life-saving work to help all countries to prevent, detect and respond to the pandemic, as well as finding a vaccine. In addition, local efforts have been done from all over the world.

With these three principles in mind we will help in the fight against COVID-19.

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A Collaborative and Caring Culture  Essity’s corporate culture is based on our Beliefs & Behaviors: We are committed, We care, We collaborate, and We have courage. These express what is required of us all in order to develop Essity and are regularly followed up in employee surveys. Our “Beliefs & Behaviors” are supplemented by Essity’s Code of Conduct. Employees receive training in the Code on how we conduct our business in a responsible manner, which benefits the company, society and the environment.  

Work With Impact and a Powerful PurposeEssity is dedicated to improving well-being through leading hygiene and health solutions – necessities that play an essential role in improving well-being for every-one, everywhere. We inspire employees across the company to join our purpose and be dedicated to improving people’s well-being. We drive a global dialogue around menstruation, incontinence, wound care and other stigma-laden topics. We challenge our employees to bring their perspective, think differently and to embrace challenges. The better we perform as individuals and as a company, the more impact we create for our society. We act with courage, taking conscious risks and challenging status quo. Together, we are people who make a difference. 

Be a storyteller and win Essity experiences and prizes! Grab your camera or smartphone and capture what makes us great and unique as a company, and participate in the competition!

We care for our customers, consumers, the environment and each other.

We have the courage totake the lead.

We collaborate across teams, functions and businesses.

We are committedto deliveringsuperior results.

Enabling Employees to Realize Their Full PotentialOur employees are key for our future success and we continuously strive to develop our corporate culture, expertise and leadership to create the best possible conditions for a successful Essity. We offer career opportunities in a leading global hygiene and health company that is breaking barriers to well-being in the world.

We act quickly and innovate to produce surgical masks for health and elderly care as well as for our employeesEmployees at Essity’s production facility outside Gothenburg have, over the course of just a few weeks, redirected production and developed a surgical mask for healthcare use. This has been carried out in close dialogue and collaboration with the Swedish government, authorities and the independent test institute RISE. In Sweden, the US and Mexico, we are investing in new machines for the production of surgical masks and face masks for the healthcare sector and our employees.

Sustainable Working LifeOur long-term framework to promote healthy, flexible and sustainable workplaces and help our employees to realize their full potential is being supported by a new health assessment tool. The tool assesses physical, mental and social health efforts as well as marking these from a reactive, preventative and proactive way of working. The tool will enable local as well as group-wide strategic data driven decision making over time. 

Health and Safety PriorityThe health and safety of our employees is a top priority and our aim is for zero workplace accidents. Managers, employees and external partners receive training on a regular basis and all Essity facilities have plans in place to improve safety.

Individual Learning & Career Growth At Essity, we believe every career is unique. Our philosophy is that the most effective way to develop your capabilities is through a combination of learning by experience, theory and through others. Your development is not one dimensional;it can be experienced in different ways. We want employees to feel empowered and impacting their career path and to continuously learn and develop. We encourage all employees to drive their own development, based on your performance and interest and we support you in making it happen. Together, we’ll find the right blend of our business needs and your personal aspirations. Our aim is to support you in realizing your full potential.

Beliefs & Behaviors

Care for Our People

Contributeto Society

SecureBusinessSuccess

20 Follow Essity:www.essity.com

The name Essity stems from the words essentials and necessities. We are a leading global hygiene and health

company that offers products and services that are necessities in everyday life. Hygiene and health are central to people’s well-being.

Improved hygiene and health are preconditions for a better life and play an essential role in well-being.

That is why we are called Essity.